Edgar Filing: CBL & ASSOCIATES PROPERTIES INC

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K


x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2008

Or

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to _________________

Commission File Number 1-12494

CBL & ASSOCIATES PROPERTIES, INC.
(Exact Name of Registrant as Specified in Its Charter)


Delaware	62-1545718
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2030 Hamilton Place Blvd, Suite 500
Chattanooga, TN	37421
(Address of principal executive office)	(Zip Code)

Registrant’s telephone number, including area code: 423.855.0001

Securities registered pursuant to Section 12(b) of the Act:


Title of each Class		Name of each exchange on which registered

Common Stock, $0.01 par value		New York Stock Exchange
7.75% Series C Cumulative Redeemable Preferred Stock, $0.01 par value		New York Stock Exchange
7.375% Series D Cumulative Redeemable Preferred Stock, $0.01 par value		New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes o No x

Indicate by check mark whether the registrant (1) 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 (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) 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. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Act. (Check one):


Large accelerated filer x	Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes o No x

The aggregate market value of the 60,880,419 shares of common stock held by non-affiliates of the registrant as of June 30, 2008 was $1,390,508,770, based on the closing price of $22.84 per share on the New York Stock Exchange on June 30, 2008. (For this computation, the registrant has excluded the market value of all shares of its common stock reported as beneficially owned by executive officers and directors of the registrant; such exclusion shall not be deemed to constitute an admission that any such person is an “affiliate” of the registrant.)

As of February 24, 2009, 66,409,599 shares of common stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s Proxy Statement for the 2009 Annual Shareholder’s Meeting are incorporated by reference in Part III.

TABLE OF CONTENTS


		Page


Cautionary Statement Regarding Forward-Looking Statements		2

	PART I

1.	Business	2
1A.	Risk Factors	12
1B.	Unresolved Staff Comments	25
2.	Properties	25
3.	Legal Proceedings	46
4.	Submission of Matters to a Vote of Security Holders	46

	PART II

5.	Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	47
6.	Selected Financial Data	48
7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	49
7A.	Quantitative and Qualitative Disclosures About Market Risk	74
8.	Financial Statements and Supplementary Data	75
9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	75
9A.	Controls and Procedures	75
9B.	Other Information	76

	PART III

10.	Directors, Executive Officers and Corporate Governance	77
11.	Executive Compensation	77
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	77
13.	Certain Relationships and Related Transactions, and Director Independence	77
14.	Principal Accounting Fees and Services	77

	PART IV

15.	Exhibits, Financial Statement Schedules	78

Signatures		79

Index to Financial Statements and Schedules		80

Index to Exhibits		138

Cautionary Statement Regarding to Forward-Looking Statements

Certain statements included or incorporated by reference in this Annual Report on Form 10-K may be deemed “forward looking statements” within the meaning of applicable federal securities laws. In many cases, these forward looking statements may be identified by the use of words such as “will,” “may,” “should,” “could,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “projects,” “goals,” “objectives,” “targets,” “predicts,” “plans,” “seeks,” or similar expressions. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we cannot give assurance that these expectations will be attained, and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties. Including the risk factors discussed in Part I, Item 1A. of this report, such risks and uncertainties include, without limitation, general industry, economic and business conditions, interest rate fluctuations, costs of capital and capital requirements, availability of real estate properties, inability to consummate acquisition opportunities, competition from other companies and retail formats, changes in retail rental rates in our markets, shifts in customer demands, tenant bankruptcies or store closings, changes in vacancy rates at our properties, changes in operating expenses, changes in applicable laws, rules and regulations, the ability to obtain suitable equity and/or debt financing and the continued availability of financing in the amounts and on the terms necessary to support our future business. The Company disclaims any obligation to update or revise any forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking information.

Part I

ITEM 1. BUSINESS

Background

CBL & Associates Properties, Inc. (“CBL”) was organized on July 13, 1993, as a Delaware corporation, to acquire substantially all of the real estate properties owned by CBL & Associates, Inc., and its affiliates (“CBL’s Predecessor”), which was formed by Charles B. Lebovitz in 1978. On November 3, 1993, CBL completed an initial public offering (the “Offering”). Simultaneous with the completion of the Offering, CBL’s Predecessor transferred substantially all of its interests in its real estate properties to CBL & Associates Limited Partnership (the “Operating Partnership”) in exchange for common units of limited partnership interest in the Operating Partnership. The interests in the Operating Partnership contain certain conversion rights that are more fully described in Note 8 to the consolidated financial statements. The terms “we”, “us”, “our” and the “Company” refer to CBL and its subsidiaries.

The Company’s Business

We are a self-managed, self-administered, fully integrated real estate investment trust (“REIT”). We own, develop, acquire, lease, manage, and operate regional shopping malls, open-air centers, community centers and office properties. Our properties are located in 27 domestic states and in Brazil, but are primarily in the southeastern and midwestern United States. We have elected to be taxed as a REIT for federal income tax purposes.

We conduct substantially all of our business through the Operating Partnership. We are the 100% owner of two qualified REIT subsidiaries, CBL Holdings I, Inc. and CBL Holdings II, Inc. CBL Holdings I, Inc. is the sole general partner of the Operating Partnership. At December 31, 2008, CBL Holdings I, Inc. owned a 1.6% general partnership interest and CBL Holdings II, Inc. owned a 55.1% limited partnership interest in the Operating Partnership, for a combined interest held by us of 56.7%.

As of December 31, 2008, we owned:


	•	interests in 84 regional malls/open-air centers (the “Malls”), 33 associated centers (the “Associated Centers”), twelve community centers (the “Community Centers”), one mixed-use center and 19 office buildings, including our corporate office (the “Office Buildings”);

	•	interests in two shopping center expansions and four community centers that are currently under construction (the “Construction Properties”), as well as options to acquire certain shopping center development sites; and

	•	mortgages on 14 properties, 13 that are secured by first mortgages and one that is secured by a wrap-around mortgage on the underlying real estate and related improvements (the “Mortgages”).

The Malls, Associated Centers, Community Centers, Construction Properties, Mortgages and Office Buildings are collectively referred to as the “Properties” and individually as a “Property.”

We conduct our property management and development activities through CBL & Associates Management, Inc. (the “Management Company”) to comply with certain technical requirements of the Internal Revenue Code of 1986, as amended.

The Management Company manages all but four of the Properties. Governor’s Square and Governor’s Plaza in Clarksville, TN, Kentucky Oaks Mall in Paducah, KY, and Plaza Macaé in Macaé, Brazil are all owned by joint ventures and are managed either by the third party managing general partner or a property manager that is affiliated with the third party managing general partner. The managing partner or property manager performs the property management and leasing services for these Properties and receives fees for their services. The managing partners of the Properties control the cash flow distributions, although our approval is required for certain major decisions.

Revenues are primarily derived from leases with retail tenants and generally include base minimum rents, percentage rents based on tenants’ sales volumes and reimbursements from tenants for expenditures related to property operating expenses, real estate taxes, insurance and maintenance and repairs, as well as certain capital expenditures. We also generate revenues from advertising, sponsorships, sales of peripheral land at the Properties and from sales of operating real estate assets when it is determined that we can realize a premium value for the assets. Proceeds from such sales are generally used to pay off related construction loans or reduce borrowings on our credit facilities.

The following terms used in this annual report on Form 10-K will have the meanings described below:


	•	GLA – refers to gross leasable area of retail space in square feet, including anchors and mall tenants

	•	Anchor – refers to a department store or other large retail store

	•	Freestanding – property locations that are not attached to the primary complex of buildings that comprise the mall shopping center

	•	Outparcel – land used for freestanding developments, such as retail stores, banks and restaurants, on the periphery of the Properties

Significant Markets and Tenants

Top Five Markets

Our top five markets, in terms of revenues, were as follows for the year ended December 31, 2008:


Market	Percentage of Total Revenues

St. Louis, MO	8.9	%
Nashville, TN	4.2	%
Greensboro, NC	3.3	%
Kansas City (Overland Park), KS	3.0	%
Chattanooga, TN	2.6	%

Top 25 Tenants

Our top 25 tenants based on percentage of total revenues were as follows for the year ended December 31, 2008:


Tenant	Number of Stores		Square Feet		Annual Gross Rentals (1)		Percentage of Total Revenues

Limited Brands, LLC		160		789,265	$	32,608,199	2.86	%
Foot Locker, Inc.		182		696,075		28,524,645	2.50	%
The Gap Inc.		103		1,085,866		26,852,838	2.36	%
Abercrombie & Fitch, Co.		98		659,673		24,137,962	2.12	%
AE Outfitters Retail Company		85		490,380		22,434,607	1.97	%
Signet Group plc (2)		120		210,955		19,865,357	1.74	%
Zale Corporation		147		156,023		17,097,659	1.50	%
Finish Line, Inc.		90		442,033		16,881,695	1.48	%
Luxottica Group, S.P.A. (3)		153		334,977		16,802,174	1.47	%
Genesco Inc. (4)		183		251,471		15,722,052	1.38	%
New York & Company, Inc.		58		420,875		15,443,954	1.35	%
Express Fashions		51		427,356		14,697,777	1.29	%
Dick’s Sporting Goods, Inc.		17		1,024,973		14,412,196	1.26	%
JC Penney Co. Inc. (5)		75		8,528,507		14,294,938	1.25	%
Charlotte Russe Holding, Inc.		52		360,274		13,092,435	1.15	%
The Regis Corporation		211		248,655		12,891,079	1.13	%
Aeropostale, Inc.		76		258,465		10,865,496	0.95	%
Christopher & Banks, Inc.		87		297,169		10,405,514	0.91	%
Sun Capital Partners, Inc. (6)		60		876,722		10,367,377	0.91	%
Charming Shoppes, Inc. (7)		52		297,806		9,896,691	0.87	%
The Buckle, Inc.		50		246,746		9,872,004	0.87	%
Pacific Sunwear of California		70		256,017		9,870,955	0.87	%
The Children’s Place Retail Stores, Inc.		54		227,570		9,389,416	0.82	%
Claire’s Stores, Inc.		121		143,024		9,134,720	0.80	%
Tween Brands, Inc. (8)		65		263,019		8,882,745	0.78	%

		2,420		18,993,896	$	394,444,485	34.59	%


(1)	Includes annual minimum rent and tenant reimbursements based on amounts in effect at December 31, 2008.
(2)	Signet Group plc operates Kay Jewelers, Marks & Morgan, JB Robinson, Shaw’s Jewelers, Osterman’s Jewelers, LeRoy’s Jewelers, Jared Jewelers, Belden Jewelers and Rogers Jewelers.
(3)	Luxottica Group, S.P.A. operates Lenscrafters, Sunglass Hut and Pearl Vision.
(4)	Genesco Inc. operates Journey’s, Jarman, Underground Station, Hat World, Lids, Hat Zone and Cap Factory stores.
(5)	JC Penney Co. Inc. owns 30 of these stores.
(6)	Sun Capital Partners, Inc. operates Anchor Blue, Fazoli’s, Friendly’s, Life Uniform, Shopko, Smokey Bones, Souper Salad and The Limited.
(7)	Charming Shoppes, Inc. operates Lane Bryant, Fashion Bug and Catherine’s.
(8)	Tween Brands, Inc. operates Limited Too and Justice.

Growth Strategy

Our objective is to achieve growth in funds from operations by maximizing cash flows through a variety of methods as further discussed below.

Leasing, Management and Marketing

Our objective is to maximize cash flows from our existing Properties through:


	•	aggressive leasing that seeks to increase occupancy and facilitate an optimal merchandise mix,

	•	originating and renewing leases at higher base rents per square foot compared to the previous lease,

	•	merchandising, marketing, sponsorship and promotional activities and

	•	actively controlling operating costs and resulting tenant occupancy costs.

Redevelopments and Renovations

Redevelopments represent situations where we capitalize on opportunities to add incremental square footage or increase the productivity of previously occupied space through aesthetic upgrades, retenanting and/or changing the retail use of the space. Many times, redevelopments result from acquiring possession of anchor space and subdividing it into multiple spaces. The following presents a redevelopment that we completed during 2008, as well as a redevelopment that is scheduled to be completed in 2009:


Property	Location	Total Project Square Feet	Opening Date

Completed in 2008:
Parkdale Mall - Former Dillards (Phases I & II)	Beaumont,TX	70,220	January/Fall


Scheduled for 2009:
West County - Former Lord & Taylor	St. Louis, MO	90,620	Spring

Renovations usually include renovating existing facades, uniform signage, new entrances and floor coverings, updating interior décor, resurfacing parking lots and improving the lighting of interiors and parking lots. Renovations can result in attracting new retailers, increased rental rates and occupancy levels and maintaining the Property’s market dominance. During 2008, we completed renovations at Georgia Square in Athens, GA and Brookfield Square in Brookfield, WI. There are no renovations currently scheduled for completion in 2009.

Development of New Retail Properties and Expansions

In general, we seek development opportunities in middle-market trade areas that we believe are under-served by existing retail operations. These middle-markets must also have sufficient demographics to provide the opportunity to effectively maintain a competitive position. The following presents the new developments we opened during 2008 and those under construction at December 31, 2008:


Property	Location		Total Project Square Feet		Opening Date

Completed in 2008:
Alamance Crossing - Theater		Burlington, NC		82,997		Spring
Brookfield Square - Corner Development		Brookfield, WI		19,745		Winter
CBL Center II		Chattanooga, TN		74,598		January
Pearland Town Center (Retail, Hotel, Residential and Office)		Pearland, TX		884,774		Summer
Statesboro Crossing		Statesboro, GA		160,166		Fall

				1,222,280

Currently under construction:
Hammock Landing (Phase I and Phase 1A)		West Melbourne, FL		463,153		Spring 2009/ Fall 2010
Settlers Ridge (Phase I)		Robinson Township, PA		389,773		Fall 2009
						Fall 2009/
The Pavilion at Port Orange (Phase I and Phase 1A)		Port Orange, FL		495,669		Summer 2010
The Promenade		D’Iberville, MS		681,317		Fall 2009

				2,029,912

We can also generate additional revenues by expanding a Property through the addition of department stores, mall stores and large retail formats. An expansion also protects the Property’s competitive position within its market. The following presents the expansions that we completed during 2008 and expansions that were under construction at December 31, 2008 and are scheduled to be completed in 2009:


Property	Location		Total Project Square Feet		Opening Date

Completed in 2008:
Brookfield Square - Claim Jumpers		Brookfield, WI		12,000		Summer
Cary Towne Center - Mimi’s Café		Cary, NC		6,674		Spring
Coastal Grand - JCPenney		Myrtle Beach, SC		103,395		Spring
Coastal Grand - Ulta Cosmetics		Myrtle Beach, SC		10,000		Spring
High Pointe Commons - Christmas Trees Shops		Harrisburg, PA		34,938		Fall
Laurel Park Place - Food Court		Detroit, MI		30,031		Winter
Southpark Mall - Food Court		Colonial Heights, VA		17,150		Summer

				214,188


Scheduled for 2009:
Asheville Mall - Barnes & Noble		Asheville, NC		40,000		Spring
Oak Park Mall - Barnes & Noble		Kansas City, KS		35,539		Spring

				75,539

Our total investment in the new and expanded Properties opened in 2008 was $237.6 million and our total investment upon completion in the Properties under construction as of December 31, 2008 is projected to be $342.5 million.

Acquisitions

We believe there is opportunity for growth through acquisitions of regional malls and other associated properties. We selectively acquire regional mall and open-air properties where we believe we can increase the value of the property through our development, leasing and management expertise. Effective February 1, 2008, we entered into a 50/50 joint venture, CBL-TRS Joint Venture II, LLC, affiliated with CBL-TRS Joint Venture, LLC (collectively, “CBL-TRS”), both of which are joint venture partners with Teachers’ Retirement System of

the State of Illinois (“TRS”). During the first quarter of 2008, CBL-TRS acquired Renaissance Center, located in Durham, NC, and an anchor parcel at Friendly Center, located in Greensboro, NC to complete the joint ventures’ acquisitions from the Starmount Company or its affiliates (the “Starmount Company”). The joint ventures are recorded using the equity method of accounting.

Environmental Matters

A discussion of the current effects and potential future impacts on our business and Properties of compliance with federal, state and local environmental regulations is presented in Item 1A of this Annual Report on Form 10-K under the subheading “Risks Related to Real Estate Investments.”

Competition

The Properties compete with various shopping facilities in attracting retailers to lease space. In addition, retailers at our Properties face competition from discount shopping centers, outlet malls, wholesale clubs, direct mail, television shopping networks, the internet and other retail shopping developments. The extent of the retail competition varies from market to market. We work aggressively to attract customers through marketing promotions and campaigns.

Seasonality

The shopping center business is, to some extent, seasonal in nature with tenants typically achieving the highest levels of sales during the fourth quarter due to the holiday season, which generally results in higher percentage rent income in the fourth quarter. Additionally, the Malls earn most of their “temporary” rents (rents from short-term tenants) during the holiday period. Thus, occupancy levels and revenue production are generally the highest in the fourth quarter of each year. Results of operations realized in any one quarter are not likely to be indicative of the results to be experienced over the course of our fiscal year.

Recent Developments

Acquisitions

During the first quarter of 2008, CBL-TRS, a combination of two 50/50 joint ventures that we account for using the equity method of accounting, acquired Renaissance Center, located in Durham, NC, for $89.6 million and an anchor parcel at Friendly Center, located in Greensboro, NC, for $5.0 million to complete the joint ventures’ acquisitions from the Starmount Company. The aggregate purchase price consisted of $58.1 million in cash contributed equally by us and TRS and the assumption of $36.5 million of non-recourse debt that bears interest at a fixed interest rate of 5.61% and matures in July 2016.

Dispositions

During 2008, we completed the sale of seven community centers and two office properties, along with a parcel adjacent to one of the office properties, for an aggregate sales price of $67.1 million and recognized gains of $3.8 million and a deferred gain of $0.3 million related to these sales, as follows:

In April 2008, we completed the sale of five community centers located in Greensboro, NC to three separate buyers for an aggregate sales price of $24.3 million. In June 2008, we completed the sale of a Greensboro, NC office property for $1.2 million. In August 2008, we completed the sale of an additional community center located in Greensboro, NC for $19.5 million. In December 2008, we completed the sale of an additional office property and adjacent, vacant development land located in Greensboro, NC for $14.6 million. We recorded gains of $2.3 million and a deferred gain of $0.3 million during the year ended December 31, 2008 attributable to these sales. Proceeds received from the dispositions were used to retire a portion of the outstanding balance on the unsecured term facility that was obtained to purchase these properties. These

properties were originally purchased in the fourth quarter of 2007. They were classified as held-for-sale as of March 31, 2008, prior to their disposition, and their results are included in discontinued operations for the years ended December 31, 2008 and 2007.

In June 2008, we sold Chicopee Marketplace III, a recently constructed expansion property in Chicopee, MA to a third party for a sales price of $7.5 million and recognized a gain on the sale of $1.6 million. The results of operations of this property have been reclassified to discontinued operations for the years ended December 31, 2008 and 2007.

Investments in Joint Ventures

In September 2008, we entered into a condominium partnership agreement with several individual investors to acquire a 60% interest in a new retail development in Macapa, Brazil. During the fourth quarter of 2008, we incurred total funding of $0.2 million. Tenco Realty (“Tenco”), a retail owner, operator and developer based in Belo Horizonte, Brazil, will develop and manage the center. Subsequent to December 31, 2008, we negotiated a divestment agreement with our Macapa partners obligating the Company to fund an additional $0.6 million to reimburse the other partners for previously incurred land acquisition costs in exchange for the termination of any future obligations on our part to fund development costs, and to provide the other partners the option to purchase our interest in this partnership for an amount equal to our investment balance.

In April 2008, we entered into a 50/50 joint venture, TENCO-CBL Servicos Imobiliarios S.A. (the “Service Company”), with TENCO Realty S.A. to form a property management services organization in Brazil. We obtained our 50% interest in the joint venture by contributing cash of $2.0 million, and agreeing to contribute, as part of the purchase price, any future dividends up to $1.0 million. TENCO Realty S.A. will be responsible for managing the joint venture. Net cash flow and income (loss) will be allocated 50/50 between us and TENCO Realty S.A. We record our investment in this joint venture using the equity method of accounting. Subsequent to December 31, 2008, we negotiated the exercise of our put option right to divest our portion of the investment in the joint venture pursuant to the governing agreement of the Service Company, under which agreement TENCO Realty S.A. would pay us $0.25 million on March 31, 2009, pay monthly installments beginning January 2010 totaling $0.2 million annually with an interest rate of 10% and pay the remaining principal in the form of a balloon payment totaling approximately $1.3 million on December 31, 2011.

In April 2008, we entered into an 85/15 joint venture, The Promenade at D’Iberville, LLC with certain affiliates of Forum Development Group, LLC (“Forum”) to develop The Promenade, a community center in D’Iberville, MS. We obtained our 85% interest in the joint venture by contributing cash of $36.6 million. We will develop and manage The Promenade. Under the terms of the joint venture agreement, any additional capital contributions are to be funded by us. Likewise, the joint ventures’ net cash flows and income (loss) will be allocated first to any joint venture partner whose capital contributions exceed the pro rata share of ownership in the joint venture and then 85/15 to us and Forum. We record our investment in this joint venture using the consolidation method of accounting, with any interests of Forum reflected as minority interest.

CBL-TRS, collectively two 50/50 joint ventures, one of which was entered into effective February 1, 2008, CBL-TRS Joint Venture II, LLC, and one of which was entered into effective November 30, 2007, CBL-TRS Joint Venture, both of which are joint venture partnerships with TRS, acquired Renaissance Center, located in Durham, NC, and an anchor parcel at Friendly Center, located in Greensboro, NC during the first quarter of 2008 to complete the joint ventures’ acquisitions from the Starmount Company. The aggregate purchase price consisted of a total of $58.1 million in cash contributed equally by us and TRS and the assumption of $36.5 million of non-recourse debt that bears interest at a fixed interest rate of 5.61% and matures in July 2016. As a result of the terms of the transaction, Renaissance Center is the sole property that is held in CBL-TRS Joint Venture II, LLC. All other properties purchased by the joint ventures from the Starmount Company, including the anchor parcel at Friendly Center and the properties purchased in November 2007, are held in CBL-TRS Joint Venture, LLC. Under the terms of the joint venture agreements, neither partner is generally required to make additional capital contributions and the joint ventures’ net cash flows and

income (loss) will be allocated 50/50 between us and TRS. We record our investments in these joint ventures using the equity method of accounting.

Effective January 30, 2008, we entered into two 50/50 joint ventures, West Melbourne I, LLC and West Melbourne II, LLC, with certain affiliates of Benchmark Development (“Benchmark”) to develop Hammock Landing, an open-air shopping center in West Melbourne, Florida that will be developed in two phases. We obtained our 50% interests in the joint ventures by contributing cash of $9.7 million. We will develop and manage Hammock Landing. Under the terms of the joint venture agreement, any additional capital contributions are to be funded on a 50/50 basis. Likewise, the joint ventures’ net cash flows and income (loss) will be allocated 50/50 between us and Benchmark. We record our investments in these joint ventures using the equity method of accounting.

We have guaranteed 100% of the construction loan for the development of Hammock Landing, of which the maximum guaranteed amount is $67.0 million. The total amount outstanding as of December 31, 2008 on the loan was $31.2 million. The guaranty will expire upon repayment of the debt. The loan is schedule to mature in August 2010. We have recorded an obligation of $0.7 million in the accompanying consolidated balance sheet as of December 31, 2008 to reflect the estimated fair value of this guaranty.

Effective January 30, 2008, we entered into two 50/50 joint ventures, Port Orange I, LLC and Port Orange II, LLC, with Benchmark to develop The Pavilion at Port Orange (the “Pavilion”), an open-air shopping center in Port Orange, Florida that will be developed in two phases. We obtained our 50% interests in the joint ventures by contributing cash of $13.8 million. We will develop and manage the Pavilion. Under the terms of the joint venture agreement, any additional capital contributions are to be funded on a 50/50 basis. Likewise, the joint ventures’ net cash flows and income (loss) will be allocated 50/50 between us and Benchmark. We record our investments in these joint ventures using the equity method of accounting.

We have guaranteed 100% of the construction loan for the development of the Pavilion, of which the maximum guaranteed amount is $112.0 million. The total amount outstanding at December 31, 2008 on the loan was $33.4 million. The guaranty will expire upon repayment of the debt. The loan is schedule to mature in June 2011. We have recorded an obligation of $1.1 million in the accompanying consolidated balance sheet as of December 31, 2008 to reflect the estimated fair value of this guaranty.

In May 2007, we entered into a joint venture, Village at Orchard Hills, LLC, with certain third parties to develop and operate The Village at Orchard Hills, a lifestyle center in Grand Rapids Township, MI. We hold a 50% ownership interest in the joint venture. We determined that our investment represented a variable interest entity and that we were the primary beneficiary. As a result, we consolidated the joint venture, with the interests of the third parties reflected as minority interest. During the second quarter of 2008, we reconsidered whether this entity was a variable interest entity and determined that it was not. As a result, we ceased consolidating the entity and began accounting for it as an unconsolidated affiliate using the equity method of accounting. During the fourth quarter of 2008, the Company determined that it would not currently pursue the development of this property. As a result, the Company has written down its investment in this joint venture to its net realizable value of $0.7 million, which represents the estimated realizable value of the land.

In 2003, we formed Galileo America, a joint venture with Galileo America, Inc., the U.S. affiliate of Australia-based Galileo America Shopping Trust, to invest in community centers throughout the United States. In 2005, we transferred all of our ownership interest in the joint venture to Galileo America. In conjunction with this transfer, we sold our management and advisory contracts with Galileo America to New Plan Excel Realty Trust, Inc. (“New Plan”). New Plan retained us to manage nine properties that Galileo America had recently acquired from a third party for a term of 17 years beginning on August 10, 2008 and agreed to pay us a management fee of $1.0 million per year. Subsequent to the date of this agreement, New Plan was acquired by

an affiliate of Centro Properties Group (“Centro”). In October 2007, we received notification that Centro had determined to exercise its right to terminate the management agreement by paying us a termination fee, payable on August 10, 2008. Due to uncertainty regarding the collectibility of the fee, we did not recognize the fee as income at that time. In August 2008, we received the termination fee of $8.0 million, including the final installment of an annual advisory fee of $1.0 million, and recorded the amount as management fee income at that time.

Financings

During 2008, we entered into seven additional construction loans totaling $251.1 million. Of the seven construction loans, two represent the capacity available for the development of The Pavilion at Port Orange, a community center under development in Port Orange, FL, totaling $120.3 million and two represent the capacity available for the development of Hammock Landing, a community center under development in West Melbourne, FL, totaling $64.6 million. These loans have variable interest rates and mature in June 2011 and August 2010, respectively. The loans do not have extension options available. These properties are held in 50/50 joint ventures, but we have guaranteed 100% of the debt. The remaining three construction loans are attributable to Phase III of Gulf Coast Town Center in Fort Myers, FL, a lifestyle addition to West County Center in St. Louis, MO and the development of Statesboro Crossing, a community center located in Statesboro, GA. The stated maturity dates on these loans range from April 2010 through June 2011. However, including avaiable extension options on each of the loans, which are at the Company's election, the outside maturity dates range from June 2011 through August 2013.

In addition, in December 2008, we entered into a loan agreement with the Mississippi Business Finance Corporation (“MBFC”) under which we received access to $79.1 million from the issuance of Gulf Opportunity Zone Industrial Development Revenue Bonds (“GO ZONE Bonds”) by the MBFC. The GO ZONE Bonds are fully supported by a letter of credit that we obtained specifically for that purpose. The loan accrues interest payable monthly at a variable rate based on the USD-SIFMA Municipal Swap Index. The GO ZONE Bonds are subject to redemption at our discretion and mature on December 1, 2038. We will repay the GO ZONE Bonds in accordance with the terms stipulated in the loan agreement and the bond issuance proceeds must be used to finance the construction of our interest in a community center development located in the state of Mississippi. As of December 31, 2008, approximately $31.4 million had been drawn from the available funds. The balance of the proceeds, approximately $47.7 million, are currently held in trust and will be released to us as further capital expenditures on the development project are incurred. These funds are recorded in other assets as restricted cash in our consolidated balance sheet as of December 31, 2008.

During the fourth quarter of 2008, we obtained a loan totaling $40.0 million secured by Meridian Mall in Lansing, MI that matures in November 2010. While the loan bears interest at the London Interbank Offered Rate (“LIBOR”) plus a margin of 3.00%, we have entered into a $40.0 million pay fixed/receive variable swap to effectively fix the interest rate at 5.175%. The property had a previous loan of $84.6 million that was repaid in September 2008 and had a fixed interest rate of 4.52%.

During the third quarter of 2008, we obtained two separate loans totaling $251.5 million. The first loan represents a new $164.0 million, ten-year non-recourse loan maturing in October 2018 secured by Hanes Mall in Winston-Salem, NC. The loan bears interest at a fixed rate of 6.99% and replaces a previous loan on the property of $97.6 million that had a fixed interest rate of 7.31%. The second loan represents a new $87.5 million three-year term loan secured by RiverGate Mall and the The Village at Rivergate in Nashville, TN. The loan matures in September 2011, has two, one-year extension options for an outside maturity date in September 2013 and is 50% recourse. While the loan bears interest at LIBOR plus 2.25%, we have entered into an $87.5 million pay fixed/receive variable swap to effectively fix the interest rate at 5.85%. We also entered into a loan modification agreement to modify and extend our existing $36.6 million loan secured by Hickory Hollow Mall and The Courtyard at Hickory Hollow Mall in Nashville, TN. The loan was extended for ten years, maturing in October 2018, is fully recourse and bears interest at a fixed rate of 6.00%. The net proceeds from these loans, combined with the loan modification, replaced an existing $153.2 million loan bearing an interest rate of 6.77% secured by RiverGate Mall, The Village at Rivergate, Hickory Hollow Mall, and The Courtyard at Hickory Hollow.

During the second quarter of 2008, we announced that we had entered into a one-year extension of our $39.6 million, non-recourse loan secured by Oak Hollow Mall in High Point, NC. The extension maintained the fixed interest rate of 7.31% and extended the maturity date to February 2009. We are currently in discussions with the lender to renegotiate the terms and maturity of the loan on a more favorable basis.

In April 2008, we entered into a new unsecured term facility with total availability of $228.0 million that bears interest at LIBOR plus a margin of 1.50% to 1.80% based on our leverage ratio, as defined in the agreement to the facility. The agreement to the facility contains default provisions customary for transactions of this nature and also contains cross-default provisions for defaults of our $560.0 million unsecured line of credit, the $524.9 million secured line of credit and the unsecured term facility with a balance of $209.5 million as of December 31, 2008 that was used for the acquisition of certain properties from the Starmount Company. The balance outstanding on the new unsecured term facility as of December 31, 2008 was $228.0 million. The facility matures in April 2011 and has two one-year extension options with an outside maturity date of April 2013, which are at our election. The facility was used to pay down outstanding balances on our unsecured line of credit.

Interest Rate Hedging Activity

We entered into an $80.0 million interest rate cap agreement, effective December 4, 2008, to hedge the risk of changes in cash flows on the letter of credit supporting the GO ZONE Bonds equal to the then-outstanding cap notional. The interest rate cap protects us from increases in the hedged cash flows attributable to overall changes in the USD-SIFMA Municipal Swap Index above the strike rate of the cap on the debt. The strike rate associated with the interest rate cap is 4.00%. The interest rate cap had a nominal value as of December 31, 2008 and matures on December 3, 2010.

We entered into a $40.0 million pay fixed/receive variable interest rate swap agreement, effective November 19, 2008, to hedge the interest rate risk exposure on the borrowings of one of our operating properties equal to the swap notional amount. This interest rate swap hedges the risk of changes in cash flows on our designated forecasted interest payments attributable to changes in 1-month LIBOR, the designated benchmark interest rate being hedged, thereby reducing exposure to variability in cash flows relating to interest payments on the variable-rate debt. The interest rate swap effectively fixes the interest payments on the portion of debt principal corresponding to the swap notional amount at 5.175%. The swap was valued at ($0.8) million as of December 31, 2008 and matures on November 7, 2010.

We entered into an $87.5 million pay fixed/receive variable interest rate swap agreement, effective October 1, 2008, to hedge the interest rate risk exposure on the borrowings of one of our operating properties equal to the swap notional amount. This interest rate swap hedges the risk of changes in cash flows on our designated forecasted interest payments attributable to changes in 1-month LIBOR, the designated benchmark interest rate being hedged, thereby reducing exposure to variability in cash flows relating to interest payments on the variable-rate debt. The interest rate swap effectively fixes the interest payments on the portion of debt principal corresponding to the swap notional amount at 5.85%. The swap was valued at $(3.8) million as of December 31, 2008 and matures on September 23, 2010.

On January 2, 2008, we entered into a $150.0 million pay fixed/receive variable interest rate swap agreement to hedge the interest rate risk exposure on an amount of borrowings on our largest secured line of credit equal to the swap notional amount. This interest rate swap hedges the risk of changes in cash flows on our designated forecasted interest payments attributable to changes in 1-month LIBOR, the designated benchmark interest rate being hedged, thereby reducing exposure to variability in cash flows relating to interest payments on the variable-rate debt. The interest rate swap effectively fixes the interest payments on the portion of debt principal corresponding to the swap notional amount at 4.353%. The swap was valued at $(4.0) million as of December 31, 2008 and matures on December 30, 2009.

Other

In November 2008, we announced that we would reduce the quarterly dividend rate, effective with the fourth quarter 2008 declaration, on our common stock to $0.37 per share from $0.545 per share. The revised quarterly cash dividend equates to an annual dividend of $1.48 per share compared with the previous annual dividend of $2.18 per share.

During the year ended December 31, 2008, we recognized other-than-temporary impairments on certain marketable securities totaling $17.2 million. These write-downs resulted in the reduction of the carrying value of those investments to their fair value of $4.2 million as of December 31, 2008.

Financial Information About Segments

See Note 11 to the consolidated financial statements for information about our reportable segments.

Employees

CBL does not have any employees other than its statutory officers. Our Management Company currently has 748 full-time and 628 part-time employees. None of our employees are represented by a union.

Corporate Offices

Our principal executive offices are located at CBL Center, 2030 Hamilton Place Boulevard, Suite 500, Chattanooga, Tennessee, 37421 and our telephone number is (423) 855-0001.

Available Information

There is additional information about us on our web site at cblproperties.com. Electronic copies of our Annual Report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, as well as any amendments to those reports, are available free of charge by visiting the “investor relations” section of our web site. These reports are posted as soon as reasonably practical after they are electronically filed with, or furnished to, the Securities and Exchange Commission. The information on the web site is not, and should not be considered, a part of this Form 10-K.

ITEM 1A. RISK FACTORS

Set forth below are certain factors that may adversely affect our business, financial condition, results of operations and cash flows. Any one or more of the following factors may cause our actual results for various financial reporting periods to differ materially from those expressed in any forward-looking statements made by us, or on our behalf. See “Cautionary Statement Regarding Forward-Looking Statements” contained herein on page 1.

RISKS RELATED TO REAL ESTATE INVESTMENTS

Real property investments are subject to various risks, many of which are beyond our control, that could cause declines in the operating revenues and/or the underlying value of one or more of our Properties.

A number of factors may decrease the income generated by a retail shopping center property, including:


	•	National, regional and local economic climates, which may be negatively impacted by loss of jobs, production slowdowns, adverse weather conditions, natural disasters, acts of violence, war or terrorism, declines in residential real estate activity and other factors which tend to reduce consumer spending on retail goods.

	•	Local real estate conditions, such as an oversupply of, or reduction in demand for, retail space or retail goods, and the availability and creditworthiness of current and prospective tenants.

	•	Increased operating costs, such as increases in repairs and maintenance, real property taxes, utility rates and insurance premiums.

	•	Delays or cost increases associated with the opening of new or renovated properties, due to higher than estimated construction costs, cost overruns, delays in receiving zoning, occupancy or other governmental approvals, lack of availability of materials and labor, weather conditions, and similar factors which may be outside our ability to control.


	•	Perceptions by retailers or shoppers of the safety, convenience and attractiveness of the shopping center.

	•	The willingness and ability of the shopping center’s owner to provide capable management and maintenance services.

	•	The convenience and quality of competing retail properties and other retailing options, such as the Internet.

In addition, other factors may adversely affect the value of our Properties without affecting their current revenues, including:


	•	Adverse changes in governmental regulations, such as local zoning and land use laws, environmental regulations or local tax structures that could inhibit our ability to proceed with development, expansion, or renovation activities that otherwise would be beneficial to our Properties.

	•	Potential environmental or other legal liabilities that reduce the amount of funds available to us for investment in our Properties.

	•	Any inability to obtain sufficient financing (including construction financing and permanent debt), or the inability to obtain such financing on commercially favorable terms, to fund repayment of maturing loans, new developments, acquisitions, and property expansions and renovations which otherwise would benefit our Properties.

	•	An environment of rising interest rates, which could negatively impact both the value of commercial real estate such as retail shopping centers and the overall retail climate.

Illiquidity of real estate investments could significantly affect our ability to respond to adverse changes in the performance of our Properties and harm our financial condition.

Substantially all of our total consolidated assets consist of investments in real properties. Because real estate investments are relatively illiquid, our ability to quickly sell one or more properties in our portfolio in response to changing economic, financial and investment conditions is limited. The real estate market is affected by many factors, such as general economic conditions, availability of financing, interest rates and other factors, including supply and demand for space, that are beyond our control. We cannot predict whether we will be able to sell any property for the price or on the terms we set, or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We also cannot predict the length of time needed to find a willing purchaser and to close the sale of a property.

Before a property can be sold, we may be required to make expenditures to correct defects or to make improvements. We cannot assure you that we will have funds available to correct those defects or to make those improvements, and if we cannot do so, we might not be able to sell the property, or might be required to sell the property on unfavorable terms. In acquiring a property, we might agree to provisions that materially restrict us from selling that property for a period of time or impose other restrictions, such as limitations on the amount of debt that can be placed or repaid on that property. These factors and any others that would impede our ability to respond to adverse changes in the performance of our Properties could adversely affect our financial condition and results of operations.

We may elect not to proceed with certain development or expansion projects once they have been undertaken, resulting in charges that could have a material adverse effect on our results of operations for the period in which the charge is taken.

We intend to pursue development and expansion activities as opportunities arise. In connection with any development or expansion, we will incur various risks, including the risk that development or expansion opportunities explored by us may be abandoned for various reasons including, but not limited to, credit disruptions that require the Company to conserve its cash until the capital markets stabilize or alternative credit

or funding arrangements can be made. Developments or expansions also include the risk that construction costs of a project may exceed original estimates, possibly making the project unprofitable. Other risks include the risk that we may not be able to refinance construction loans which are generally with full recourse to us, the risk that occupancy rates and rents at a completed project will not meet projections and will be insufficient to make the project profitable, and the risk that we will not be able to obtain anchor, mortgage lender and property partner approvals for certain expansion activities.

When we elect not to proceed with a development opportunity, the development costs ordinarily are charged against income for the then-current period. Any such charge could have a material adverse effect on our results of operations for the period in which the charge is taken.

Certain of our Properties are subject to ownership interests held by third parties, whose interests may conflict with ours and thereby constrain us from taking actions concerning these properties which otherwise would be in the best interests of the Company and our stockholders.

We own partial interests in 24 malls, eleven associated centers, six community centers and eight office buildings. We manage all but four of these properties. Governor’s Square, Governor’s Plaza, Kentucky Oaks and Plaza Macaé are all owned by joint ventures and are managed by either a third party managing general partner or a property manager that is affiliated with the third party managing general partner (the “managing partners”). The managing partners perform the property management and leasing services for these four Properties and receive fees for their services. The managing partners of the Properties control the cash flow distributions, although our approval is required for certain major decisions.

Where we serve as managing general partner of the partnerships that own our Properties, we may have certain fiduciary responsibilities to the other partners in those partnerships. In certain cases, the approval or consent of the other partners is required before we may sell, finance, expand or make other significant changes in the operations of such Properties. To the extent such approvals or consents are required, we may experience difficulty in, or may be prevented from, implementing our plans with respect to expansion, development, financing or other similar transactions with respect to such Properties.

With respect to those Properties for which we do not serve as managing general partner, we do not have day-to-day operational control or control over certain major decisions, including leasing and the timing and amount of distributions, which could result in decisions by the managing partners that do not fully reflect our interests. This includes decisions relating to the requirements that we must satisfy in order to maintain our status as a REIT for tax purposes. However, decisions relating to sales, expansion and disposition of all or substantially all of the assets and financings are subject to approval by the Operating Partnership.

We may incur significant costs related to compliance with environmental laws, which could have a material adverse effect on our results of operations, cash flow and the funds available to us to pay dividends.

Under various federal, state and local laws, ordinances and regulations, a current or previous owner or operator of real estate may be liable for the costs of removal or remediation of petroleum, certain hazardous or toxic substances on, under or in such real estate. Such laws typically impose such liability without regard to whether the owner or operator knew of, or was responsible for, the presence of such substances. The costs of remediation or removal of such substances may be substantial. The presence of such substances, or the failure to promptly remove or remediate such substances, may adversely affect the owner’s or operator’s ability to lease or sell such real estate or to borrow using such real estate as collateral. Persons who arrange for the disposal or treatment of hazardous or toxic substances may also be liable for the costs of removal or remediation of such substances at the disposal or treatment facility, regardless of whether such facility is owned or operated by such person. Certain laws also impose requirements on conditions and activities that may affect the environment or the impact of the environment on human health. Failure to comply with such requirements could result in the imposition of monetary penalties (in addition to the costs to achieve compliance) and potential liabilities to third parties. Among other things, certain laws require abatement or removal of friable and certain non-friable

asbestos-containing materials in the event of demolition or certain renovations or remodeling. Certain laws regarding asbestos-containing materials require building owners and lessees, among other things, to notify and train certain employees working in areas known or presumed to contain asbestos-containing materials. Certain laws also impose liability for release of asbestos-containing materials into the air and third parties may seek recovery from owners or operators of real properties for personal injury or property damage associated with asbestos-containing materials. In connection with the ownership and operation of properties, we may be potentially liable for all or a portion of such costs or claims.

All of our Properties (but not properties for which we hold an option to purchase but do not yet own) have been subject to Phase I environmental assessments or updates of existing Phase I environmental assessments. Such assessments generally consisted of a visual inspection of the Properties, review of federal and state environmental databases and certain information regarding historic uses of the property and adjacent areas and the preparation and issuance of written reports. Some of the Properties contain, or contained, underground storage tanks used for storing petroleum products or wastes typically associated with automobile service or other operations conducted at the Properties. Certain Properties contain, or contained, dry-cleaning establishments utilizing solvents. Where believed to be warranted, samplings of building materials or subsurface investigations were undertaken. At certain Properties, where warranted by the conditions, we have developed and implemented an operations and maintenance program that establishes operating procedures with respect to asbestos-containing materials. The cost associated with the development and implementation of such programs was not material. We have also obtained environmental insurance coverage at certain of our Properties.

We believe that our Properties are in compliance in all material respects with all federal, state and local ordinances and regulations regarding the handling, discharge and emission of hazardous or toxic substances. We have recorded in our financial statements a liability of $2.6 million related to potential future asbestos abatement activities at our Properties which are not expected to have a material impact on our financial condition or results of operations. We have not been notified by any governmental authority, and are not otherwise aware, of any material noncompliance, liability or claim relating to hazardous or toxic substances in connection with any of our present or former Properties. Therefore, we have not recorded any liability related to hazardous or toxic substances. Nevertheless, it is possible that the environmental assessments available to us do not reveal all potential environmental liabilities. It is also possible that subsequent investigations will identify material contamination, that adverse environmental conditions have arisen subsequent to the performance of the environmental assessments, or that there are material environmental liabilities of which management is unaware. Moreover, no assurances can be given that (i) future laws, ordinances or regulations will not impose any material environmental liability or (ii) the current environmental condition of the Properties has not been or will not be affected by tenants and occupants of the Properties, by the condition of properties in the vicinity of the Properties or by third parties unrelated to us, the Operating Partnership or the relevant Property’s partnership.

Possible terrorist activity or other acts of violence could adversely affect our financial condition and results of operations.

Future terrorist attacks in the United States, and other acts of violence, including terrorism or war, might result in declining economic activity, which could harm the demand for goods and services offered by our tenants and the values of our Properties, and might adversely affect an investment in our securities. A decrease in retail demand could make it difficult for us to renew or re-lease our Properties at lease rates equal to or above historical rates. Terrorist activities also could directly affect the value of our Properties through damage, destruction or loss.

RISKS RELATED TO OUR BUSINESS AND THE MARKET FOR OUR STOCK

The current decline in economic conditions, including increased volatility in the capital and credit markets, could adversely affect our business, results of operations and financial condition.

The United States is in the midst of an economic recession with the capital and credit markets experiencing extreme volatility and disruption. The current economic environment has been affected by dramatic declines in the stock and housing markets, increases in foreclosures, unemployment and costs of living, as well as limited access to credit. This deteriorating economic situation has impacted and is expected to continue to impact consumer spending levels, which can result in decreased revenues for our tenants and related decreases in the values of our Properties. A sustained economic downward trend could impact our tenants’ ability to meet their lease obligations due to poor operating results, lack of liquidity, bankruptcy or other reasons. Our ability to lease space and negotiate rents at advantageous rates could also be affected in this type of economic environment. Additionally, if current levels of market volatility continue to worsen, access to capital and credit markets could be disrupted over a more extended period, which may make it difficult to obtain the financing we may need for future growth and/or to meet our debt service obligations as they mature. Any of these events could harm our business, results of operations and financial condition.

Competition from other retail formats could adversely affect the revenues generated by our Properties, resulting in a reduction in funds available for distribution to our stockholders.

There are numerous shopping facilities that compete with our Properties in attracting retailers to lease space. In addition, retailers at our Properties face competition for customers from:


	•	Discount shopping centers

	•	Outlet malls

	•	Wholesale clubs

	•	Direct mail

	•	Telemarketing

	•	Television shopping networks

	•	Shopping via the Internet

Each of these competitive factors could adversely affect the amount of rents and tenant reimbursements that we are able to collect from our tenants, thereby reducing our revenues and the funds available for distribution to our stockholders.

Increased operating expenses and decreased occupancy rates may not allow us to recover the majority of our common area maintenance (CAM) and other operating expenses from our tenants, which could adversely affect our financial position, results of operations and funds available for future distributions.

Energy costs, repairs, maintenance and capital improvements to common areas of our Properties, janitorial services, administrative, property and liability insurance costs and security costs are typically allocable to our Properties’ tenants. Our lease agreements typically provide that the tenant is liable for a portion of the CAM and other operating expenses. While historically our lease agreements provided for variable CAM provisions, the majority of our current leases require an equal periodic tenant reimbursement amount for our cost recoveries which serves to fix our tenants’ CAM contributions to us. In these cases, a tenant will pay a single specified rent amount, or a set expense reimbursement amount, subject to annual increases, regardless of the actual amount of operating expenses. The tenant’s payment remains the same even if operating expenses increase, causing us to be responsible for the excess amount. As a result, the CAM and tenant reimbursements that we receive may not allow us to recover a substantial portion of these operating costs.

Additionally, in the event that our Properties are not fully occupied, we would be required to pay the portion of any operating, redevelopment or renovation expenses allocable to the vacant space(s) that would otherwise typically be paid by the residing tenant(s).

The loss of one or more significant tenants, due to bankruptcies or as a result of ongoing consolidations in the retail industry, could adversely affect both the operating revenues and value of our Properties.

Regional malls are typically anchored by well-known department stores and other significant tenants who generate shopping traffic at the mall. A decision by an anchor tenant or other significant tenant to cease operations at one or more Properties could have a material adverse effect on those Properties and, by extension, on our financial condition and results of operations. The closing of an anchor or other significant tenant may allow other anchors and/or tenants at an affected Property to terminate their leases, to seek rent relief and/or cease operating their stores or otherwise adversely affect occupancy at the Property. In addition, key tenants at one or more Properties might terminate their leases as a result of mergers, acquisitions, consolidations, dispositions or bankruptcies in the retail industry. The bankruptcy and/or closure of one or more significant tenants, if we are not able to successfully re-tenant the affected space, could have a material adverse effect on both the operating revenues and underlying value of the Properties involved, reducing the likelihood that, if decided, we would be able to sell the Properties, or we may be required to incur redevelopment costs in order to successfully obtain new anchors or other significant tenants when such vacancies exist.

Our Properties may be subject to impairment charges which can adversely affect our financial results.

We periodically evaluate long-lived assets to determine if there has been any impairment in their carrying values and record impairment losses if the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts or if there are other indicators of impairment. If it is determined that an impairment has occurred, the amount of the impairment charge is equal to the excess of the asset’s carrying value over its estimated fair value, which could have a material adverse effect on our financial results in the accounting period in which the adjustment is made. Our estimates of undiscounted cash flows expected to be generated by each property are based on a number of assumptions that are subject to economic and market uncertainties including, but not limited to, demand for space, competition for tenants, changes in market rental rates and costs to operate each property. As these factors are difficult to predict and are subject to future events that may alter our assumptions, the future cash flows estimated in our impairment analyses may not be achieved.

Inflation or deflation may adversely affect our financial condition and results of operations.

Increased inflation could have a pronounced negative impact on our mortgage and debt interest and general and administrative expenses, as these costs could increase at a rate higher than our rents. Also, inflation may adversely affect tenant leases with stated rent increases, which could be lower than the increase in inflation at any given time. Inflation could also have an adverse effect on consumer spending which could impact our tenants’ sales and, in turn, our percentage rents, where applicable.

Deflation can result in a decline in general price levels, often caused by a decrease in the supply of money or credit. The predominant effects of deflation are high unemployment, credit contraction and weakened consumer demand. Restricted lending practices could impact our ability to obtain financings or refinancings for our properties and our tenants’ ability to obtain credit. Decreases in consumer demand can have a direct impact on our tenants and the rents we receive.

Certain agreements with prior owners of Properties that we have acquired may inhibit our ability to enter into future sale or refinancing transactions affecting such Properties, which otherwise would be in the best interests of the Company and our stockholders.

Certain Properties that we originally acquired from third parties had unrealized gain attributable to the difference between the fair market value of such Properties and the third parties’ adjusted tax basis in the Properties immediately prior to their contribution of such Properties to the Operating Partnership pursuant to our acquisition. For this reason, a taxable sale by us of any of such Properties, or a significant reduction in the debt encumbering such Properties, could result in adverse tax consequences to the third parties who contributed these Properties in exchange for interests in the Operating Partnership. Under the terms of these transactions, we have generally agreed that we either will not sell or refinance such an acquired Property for a number of years in any transaction that would trigger adverse tax consequences for the parties from whom we acquired such Property, or else we will reimburse such parties for all or a portion of the additional taxes they are required to pay as a result of the transaction. Accordingly, these agreements may cause us not to engage in future sale or refinancing transactions affecting such Properties which otherwise would be in the best interests of the Company and our stockholders, or may increase the costs to us of engaging in such transactions.

Uninsured losses could adversely affect our financial condition, and in the future our insurance may not include coverage for acts of terrorism.

We carry a comprehensive blanket policy for general liability, property casualty (including fire, earthquake and flood) and rental loss covering all of the Properties, with specifications and insured limits customarily carried for similar properties. However, even insured losses could result in a serious disruption to our business and delay our receipt of revenue. Furthermore, there are some types of losses, including lease and other contract claims, as well as some types of environmental losses, that generally are not insured or are not economically insurable. If an uninsured loss or a loss in excess of insured limits occurs, we could lose all or a portion of the capital we have invested in a Property, as well as the anticipated future revenue from the Property. If this happens, we, or the applicable Property’s partnership, may still remain obligated for any mortgage debt or other financial obligations related to the Property.

The general liability and property casualty insurance policies on our Properties currently include coverage for loss resulting from acts of terrorism, whether foreign or domestic. While we believe that the Properties are adequately insured in accordance with industry standards, the cost of general liability and property casualty insurance policies that include coverage for acts of terrorism has risen significantly subsequent to September 11, 2001. The cost of coverage for acts of terrorism is currently mitigated by the Terrorism Risk Insurance Act (“TRIA”). If TRIA is not extended beyond its current expiration date of December 31, 2014, we may incur higher insurance costs and greater difficulty in obtaining insurance that covers terrorist-related damages. Our tenants may also experience similar difficulties.

The U.S. federal income tax treatment of corporate dividends may make our stock less attractive to investors, thereby lowering our stock price.

The maximum U.S. federal income tax rate for dividends received by individual taxpayers has been reduced generally from 38.6% to 15.0% (currently effective from January 1, 2003 through 2010). However, dividends payable by REITs are generally not eligible for such treatment. Although this legislation did not have a directly adverse effect on the taxation of REITs or dividends paid by REITs, the more favorable treatment for non-REIT dividends could cause individual investors to consider investments in non-REIT corporations as more attractive relative to an investment in a REIT, which could have an adverse impact on the market price of our stock.

RISKS RELATED TO DEBT AND FINANCIAL MARKETS

The deterioration of the capital and credit markets could adversely affect our ability to access funds and the capital needed to refinance debt or obtain new debt.

We are significantly dependent upon external financing to fund the growth of our business and ensure that we meet our debt servicing requirements. Our access to financing depends on the willingness of lending institutions to grant credit to us and conditions in the capital markets in general. The United States is in the midst of an economic recession with the capital and credit markets experiencing extreme volatility and disruption. If current levels of market volatility continue to worsen, access to capital and credit markets could be disrupted over an extended period of time, which may make it difficult to obtain the financing we may need for future growth and/or to meet our debt service obligations as they mature. As of December 31, 2008, our total share of consolidated and unconsolidated debt maturing in 2009 and 2010, as though all extension options available have been exercised, is $354.5 million and $1.0 billion, respectively. Although we have successfully obtained debt for refinancings of our maturing debt, acquisitions and the construction of new developments in the past, we cannot make any assurances as to whether we will be able to obtain debt in the future, or that the financing options available to us will be on favorable or acceptable terms.

We rely upon our largest secured and unsecured credit facilities as sources of funding for numerous transactions. Our access to these funds is dependent upon the ability of each of the participants to the credit facilities to meet their funding commitments. Given the tightening of the credit markets, the massive losses suffered recently by many financial institutions, steep declines in the stock markets and the need for government intervention through “bail-out” procedures, many financial institutions simply do not have the available capital to meet their previous commitments. The failure of one or more significant participants to our credit facilities to meet their funding commitments could have an adverse affect on our financial condition and results of operations.

We have a substantial amount of debt that could adversely impact our future operations.

Our total share of consolidated and unconsolidated debt as of December 31, 2008 was $6.6 billion. As a result of this substantial amount of indebtedness, we are subject to the risks normally associated with debt financing. We are required to use a material portion of our cash flow to service principal and interest on our debt, which limits the amount of cash flow available for other business uses. In addition, our cash flows from operations may be insufficient to meet required debt service levels in the event that we experience reductions in income or cash flows at our Properties contributed by, but not limited to, an economic recession, high unemployment levels, increased tenant bankruptcies, lack of consumer confidence, losses of major tenants or the entry of new competitors. The occurrence of these or similar factors may adversely affect our financial positions and results of operations. Many of our Properties are mortgaged to secure payments of indebtedness, and if income from the Properties is insufficient to pay that indebtedness, the Properties could be foreclosed upon by the mortgagees resulting in a loss of income and a decline in our total asset value.

Rising interest rates could both increase our borrowing costs, thereby adversely affecting our cash flow and the amounts available for distributions to our stockholders, and decrease our stock price, if investors seek higher yields through other investments.

An environment of rising interest rates could lead holders of our securities to seek higher yields through other investments, which could adversely affect the market price of our stock. One of the factors that may influence the price of our stock in public markets is the annual distribution rate we pay as compared with the yields on alternative investments. Numerous other factors, such as governmental regulatory action and tax laws, could have a significant impact on the future market price of our stock. In addition, increases in market interest rates could result in increased borrowing costs for us, which may adversely affect our cash flow and the amounts available for distributions to our stockholders.

Certain of our credit facilities, the loss of which could have a material, adverse impact on our financial condition and results of operations, are conditioned upon the Operating Partnership continuing to be managed by certain members of its current senior management and by such members of senior management continuing to own a significant direct or indirect equity interest in the Operating Partnership.

Certain of the Operating Partnership’s lines of credit are conditioned upon the Operating Partnership continuing to be managed by certain members of its current senior management and by such members of senior management continuing to own a significant direct or indirect equity interest in the Operating Partnership (including any shares of our common stock owned by such members of senior management). If the failure of one or more of these conditions resulted in the loss of these credit facilities and we were unable to obtain suitable replacement financing, such loss could have a material, adverse impact on our financial position and results of operations.

RISKS RELATED TO GEOGRAPHIC CONCENTRATIONS

Since our Properties are located principally in the Southeastern and Midwestern United States, our financial position, results of operations and funds available for distribution to shareholders are subject generally to economic conditions in these regions.

Our Properties are located principally in the southeastern and midwestern United States. Our Properties located in the southeastern United States accounted for approximately 52.0% of our total revenues from all Properties for the year ended December 31, 2008 and currently include 43 malls, 20 associated centers, 6 community centers and 18 office buildings. Our Properties located in the midwestern United States accounted for approximately 30.5% of our total revenues from all Properties for the year ended December 31, 2008 and currently include 27 malls and 4 associated centers. Our results of operations and funds available for distribution to shareholders therefore will be subject generally to economic conditions in the southeastern and midwestern United States. We will continue to look for opportunities to geographically diversify our portfolio in order to minimize dependency on any particular region; however, the expansion of the portfolio through both acquisitions and developments is contingent on many factors including consumer demand, competition and economic conditions.

Our financial position, results of operations and funds available for distribution to shareholders could be adversely affected by any economic downturn affecting the operating results at our Properties in the St. Louis, MO, Nashville, TN, Greensboro, NC, Kansas City (Overland Park), KS, and Chattanooga, TN metropolitan areas, which are our five largest markets.

Our Properties located in the St. Louis, MO, Nashville, TN, Greensboro, NC, Kansas City (Overland Park), KS, and Chattanooga, TN metropolitan areas accounted for approximately 8.9%, 4.2%, 3.3%, 3.0% and 2.6%, respectively, of our total revenues for the year ended December 31, 2008, respectively. No other market accounted for more than 2.6% of our total revenues for the year ended December 31, 2008. Our financial position and results of operations will therefore be affected by the results experienced at Properties located in these metropolitan areas.

RISKS RELATED TO INTERNATIONAL INVESTMENTS

We have ownership interests in certain property investments and joint ventures outside the United States that present numerous risks that differ from those of our domestic investments.

We hold ownership interests in joint ventures and properties in Brazil and China, respectively, that are currently immaterial to our consolidated financial position. International development and ownership activities yield additional risks that differ from those related to our domestic properties and operations. These additional risks include, but are not limited to:


•	Impact of adverse changes in exchange rates of foreign currencies;

•	Difficulties in the repatriation of cash and earnings;

•	Differences in managerial styles and customs;

•	Changes in applicable laws and regulations in the United States that affect foreign operations;

•	Changes in foreign political, legal and economic environments; and

•	Differences in lending practices.

Our international activities are currently limited in their scope. However, should our investments in international joint ventures and property investments grow, these additional risks could increase in significance and adversely affect our results of operations.

RISKS RELATED TO DIVIDENDS

Our ability to pay dividends on our stock may be limited.

In the event that we are unable to refinance our debt on acceptable terms, we will be required to repay such debt or pay higher debt service costs in connection with, most likely, less attractive financing terms. In order to obtain the necessary cash for such payments, we may be compelled to take a number of actions, including the reduction of dividends to an amount equal to the minimum amount that is required to maintain our qualification as a REIT or paying dividends through the issuance of a combination of our common stock and cash.

RISKS RELATED TO FEDERAL INCOME TAX LAWS

We conduct a portion of our business through taxable REIT subsidiaries, which are subject to certain tax risks.

We have established several taxable REIT subsidiaries including our management company. Despite our qualification as a REIT, our taxable REIT subsidiaries must pay income tax on their taxable income. In addition, we must comply with various tests to continue to qualify as a REIT for federal income tax purposes, and our income from and investments in our taxable REIT subsidiaries generally do not constitute permissible income and investments for these tests. While we will attempt to ensure that our dealings with our taxable REIT subsidiaries will not adversely affect our REIT qualification, we cannot provide assurance that we will successfully achieve that result. Furthermore, we may be subject to a 100% penalty tax, or our taxable REIT subsidiaries may be denied deductions, to the extent our dealings with our taxable REIT subsidiaries are not deemed to be arm’s length in nature.

If we fail to qualify as a REIT in any taxable year, our funds available for distribution to stockholders will be reduced.

We intend to continue to operate so as to qualify as a REIT under the Internal Revenue Code. Although we believe that we are organized and operate in such a manner, no assurance can be given that we currently qualify and in the future will continue to qualify as a REIT. Such qualification involves the application of highly technical and complex Internal Revenue Code provisions for which there are only limited judicial or administrative interpretations. The determination of various factual matters and circumstances not entirely within our control may affect our ability to qualify. In addition, no assurance can be given that legislation, new regulations, administrative interpretations or court decisions will not significantly change the tax laws with respect to qualification or its corresponding federal income tax consequences. Any such change could have a retroactive effect.

If in any taxable year we were to fail to qualify as a REIT, we would not be allowed a deduction for distributions to stockholders in computing our taxable income and we would be subject to federal income tax on our taxable income at regular corporate rates. Unless entitled to relief under certain statutory provisions, we also

would be disqualified from treatment as a REIT for the four taxable years following the year during which qualification was lost. As a result, the funds available for distribution to our stockholders would be reduced for each of the years involved. This would likely have a significant adverse effect on the value of our securities and our ability to raise additional capital. In addition, we would no longer be required to make distributions to our stockholders. We currently intend to operate in a manner designed to qualify as a REIT. However, it is possible that future economic, market, legal, tax or other considerations may cause our board of directors, with the consent of a majority of our stockholders, to revoke the REIT election.

Any issuance or transfer of our capital stock to any person in excess of the applicable limits on ownership necessary to maintain our status as a REIT would be deemed void ab initio, and those shares would automatically be transferred to a non-affiliated charitable trust.

To maintain our status as a REIT under the Internal Revenue Code, not more than 50% in value of our outstanding capital stock may be owned, directly or indirectly, by five or fewer individuals (as defined in the Internal Revenue Code to include certain entities) during the last half of a taxable year. Our certificate of incorporation generally prohibits ownership of more than 6% of the outstanding shares of our capital stock by any single stockholder determined by vote, value or number of shares (other than Charles Lebovitz, our Chief Executive Officer, David Jacobs, Richard Jacobs and their affiliates under the Internal Revenue Code’s attribution rules). The affirmative vote of 66²/₃% of our outstanding voting stock is required to amend this provision.

Our board of directors may, subject to certain conditions, waive the applicable ownership limit upon receipt of a ruling from the IRS or an opinion of counsel to the effect that such ownership will not jeopardize our status as a REIT. Absent any such waiver, however, any issuance or transfer of our capital stock to any person in excess of the applicable ownership limit or any issuance or transfer of shares of such stock which would cause us to be beneficially owned by fewer than 100 persons, will be null and void and the intended transferee will acquire no rights to the stock. Instead, such issuance or transfer with respect to that number of shares that would be owned by the transferee in excess of the ownership limit provision would be deemed void ab initio and those shares would automatically be transferred to a trust for the exclusive benefit of a charitable beneficiary to be designated by us, with a trustee designated by us, but who would not be affiliated with us or with the prohibited owner. Any acquisition of our capital stock and continued holding or ownership of our capital stock constitutes, under our certificate of incorporation, a continuous representation of compliance with the applicable ownership limit.

In order to maintain our status as a REIT and avoid the imposition of certain additional taxes under the Internal Revenue Code, we must satisfy minimum requirements for distributions to shareholders, which may limit the amount of cash we might otherwise have been able to retain for use in growing our business.

To maintain our status as a REIT under the Internal Revenue Code, we generally will be required each year to distribute to our stockholders at least 90% of our taxable income after certain adjustments. However, to the extent that we do not distribute all of our net capital gain or distribute at least 90% but less than 100% of our REIT taxable income, as adjusted, we will be subject to tax on the undistributed amount at ordinary and capital gains corporate tax rates, as the case may be. In addition, we will be subject to a 4% nondeductible excise tax on the amount, if any, by which certain distributions paid by us during each calendar year are less than the sum of 85% of our ordinary income for such calendar year, 95% of our capital gain net income for the calendar year and any amount of such income that was not distributed in prior years. In the case of property acquisitions, including our initial formation, where individual Properties are contributed to our Operating Partnership for Operating Partnership units, we have assumed the tax basis and depreciation schedules of the entities’ contributing Properties. The relatively low tax basis of such contributed Properties may have the effect of increasing the cash amounts we are required to distribute as dividends, thereby potentially limiting the amount of cash we might otherwise have been able to retain for use in growing our business. This low tax basis may also have the effect of reducing or eliminating the portion of distributions made by us that are treated as a non-taxable return of capital.

RISKS RELATED TO OUR ORGANIZATIONAL STRUCTURE

The ownership limit described above, as well as certain provisions in our amended and restated certificate of incorporation and bylaws, our stockholder rights plan, and certain provisions of Delaware law may hinder any attempt to acquire us.

There are certain provisions of Delaware law, our amended and restated certificate of incorporation, our bylaws, and other agreements to which we are a party that may have the effect of delaying, deferring or preventing a third party from making an acquisition proposal for us. These provisions may also inhibit a change in control that some, or a majority, of our stockholders might believe to be in their best interest or that could give our stockholders the opportunity to realize a premium over the then-prevailing market prices for their shares. These provisions and agreements are summarized as follows:


•	The Ownership Limit – As described above, to maintain our status as a REIT under the Internal Revenue Code, not more than 50% in value of our outstanding capital stock may be owned, directly or indirectly, by five or fewer individuals (as defined in the Internal Revenue Code to include certain entities) during the last half of a taxable year. Our certificate of incorporation generally prohibits ownership of more than 6% of the outstanding shares of our capital stock by any single stockholder determined by value (other than Charles Lebovitz, David Jacobs, Richard Jacobs and their affiliates under the Internal Revenue Code’s attribution rules). In addition to preserving our status as a REIT, the ownership limit may have the effect of precluding an acquisition of control of us without the approval of our board of directors.

•	Classified Board of Directors; Removal for Cause – Our certificate of incorporation provides for a board of directors divided into three classes, with one class elected each year to serve for a three-year term. As a result, at least two annual meetings of stockholders may be required for the stockholders to change a majority of our board of directors. In addition, our stockholders can only remove directors for cause and only by a vote of 75% of the outstanding voting stock. Collectively, these provisions make it more difficult to change the composition of our board of directors and may have the effect of encouraging persons considering unsolicited tender offers or other unilateral takeover proposals to negotiate with our board of directors rather than pursue non-negotiated takeover attempts.

•	Advance Notice Requirements for Stockholder Proposals – Our bylaws establish advance notice procedures with regard to stockholder proposals relating to the nomination of candidates for election as directors or new business to be brought before meetings of our stockholders. These procedures generally require advance written notice of any such proposals, containing prescribed information, to be given to our Secretary at our principal executive offices not less than 60 days nor more than 90 days prior to the meeting.

•	Vote Required to Amend Bylaws – A vote of 66 ²/₃% of the outstanding voting stock is necessary to amend our bylaws.

•	Stockholder Rights Plan – We have a stockholder rights plan, which may delay, deter or prevent a change in control unless the acquirer negotiates with our board of directors and the board of directors approves the transaction. The rights plan generally would be triggered if an entity, group or person acquires (or announces a plan to acquire) 15% or more of our common stock. If such transaction is not approved by our board of directors, the effect of the stockholder rights plan would be to allow our stockholders to purchase shares of our common stock, or the common stock or other merger consideration paid by the acquiring entity, at an effective 50% discount.

•	Delaware Anti-Takeover Statute – We are a Delaware corporation and are subject to Section 203 of the Delaware General Corporation Law. In general, Section 203 prevents an “interested stockholder”


	(defined generally as a person owning 15% or more of a company’s outstanding voting stock) from engaging in a “business combination” (as defined in Section 203) with us for three years following the date that person becomes an interested stockholder unless:


	(a) before that person became an interested holder, our board of directors approved the transaction in which the interested holder became an interested stockholder or approved the business combination;

	(b) upon completion of the transaction that resulted in the interested stockholder becoming an interested stockholder, the interested stockholder owns 85% of our voting stock outstanding at the time the transaction commenced (excluding stock held by directors who are also officers and by employee stock plans that do not provide employees with the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer); or

	(c) following the transaction in which that person became an interested stockholder, the business combination is approved by our board of directors and authorized at a meeting of stockholders by the affirmative vote of the holders of at least two-thirds of our outstanding voting stock not owned by the interested stockholder.

Under Section 203, these restrictions also do not apply to certain business combinations proposed by an interested stockholder following the announcement or notification of certain extraordinary transactions involving us and a person who was not an interested stockholder during the previous three years or who became an interested stockholder with the approval of a majority of our directors, if that extraordinary transaction is approved or not opposed by a majority of the directors who were directors before any person became an interested stockholder in the previous three years or who were recommended for election or elected to succeed such directors by a majority of directors then in office.

Certain ownership interests held by members of our senior management may tend to create conflicts of interest between such individuals and the interests of the Company and our Operating Partnership.


•	Tax Consequences of the Sale or Refinancing of Certain Properties – Since certain of our Properties had unrealized gain attributable to the difference between the fair market value and adjusted tax basis in such Properties immediately prior to their contribution to the Operating Partnership, a taxable sale of any such Properties, or a significant reduction in the debt encumbering such Properties, could cause adverse tax consequences to the members of our senior management who owned interests in our predecessor entities. As a result, members of our senior management might not favor a sale of a property or a significant reduction in debt even though such a sale or reduction could be beneficial to us and the Operating Partnership. Our bylaws provide that any decision relating to the potential sale of any property that would result in a disproportionately higher taxable income for members of our senior management than for us and our stockholders, or that would result in a significant reduction in such property’s debt, must be made by a majority of the independent directors of the board of directors. The Operating Partnership is required, in the case of such a sale, to distribute to its partners, at a minimum, all of the net cash proceeds from such sale up to an amount reasonably believed necessary to enable members of our senior management to pay any income tax liability arising from such sale.

•	Interests in Other Entities; Policies of the Board of Directors – Certain entities owned in whole or in part by members of our senior management, including the construction company that built or renovated most of our properties, may continue to perform services for, or transact business with, us and the Operating Partnership. Furthermore, certain property tenants are affiliated with members of our senior management. Accordingly, although our bylaws provide that any contract or transaction between us or the Operating Partnership and one or more of our directors or officers, or between us or the Operating Partnership and any other entity in which one or more of our directors or officers are directors or officers or have a financial interest, must be approved by our disinterested directors or stockholders


	after the material facts of the relationship or interest of the contract or transaction are disclosed or are known to them, these affiliations could nevertheless create conflicts between the interests of these members of senior management and the interests of the Company, our shareholders and the Operating Partnership in relation to any transactions between us and any of these entities.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Item 7 for additional information pertaining to the Properties’ performance.

Malls

We own a controlling interest in 75 Malls (including large open-air centers) and non-controlling interests in nine Malls. We also own a controlling interest in two Mall expansions that are currently under construction. The Malls are primarily located in middle markets and generally have strong competitive positions because they are the only, or dominant, regional mall in their respective trade areas.

The Malls are generally anchored by two or more department stores and a wide variety of mall stores. Anchor tenants own or lease their stores and non-anchor stores (20,000 square feet or less) lease their locations. Additional freestanding stores and restaurants that either own or lease their stores are typically located along the perimeter of the Malls’ parking areas.

We classify our regional malls into two categories – malls that have completed their initial lease-up are referred to as stabilized malls and malls that are in their initial lease-up phase and have not been open for three calendar years are referred to as non-stabilized malls. Alamance Crossing in Burlington, NC, which opened in August 2007, is our only non-stabilized mall as of December 31, 2008.

We own the land underlying each Mall in fee simple interest, except for Walnut Square, Westgate Mall, St. Clair Square, Brookfield Square, Bonita Lakes Mall, Meridian Mall, Stroud Mall, Wausau Center, Chapel Hill Mall, Eastgate Mall and Eastland Mall. We lease all or a portion of the land at each of these Malls subject to long-term ground leases. We lease all or a portion of the land at Monroeville Mall subject to a short-term ground lease.

The following table sets forth certain information for each of the Malls as of December 31, 2008:


Mall / Location	Year of Opening/ Acquisition	Year of Most Recent Expansion	Our Ownership		Total GLA (1)		Total Mall Store GLA (2)		Mall Store Sales per Square Foot (3)			Percentage Mall Store GLA Leased (4)		Anchors & Junior Anchors


Non-Stabilized Malls:

Alamance Crossing Burlington, NC	2007	N/A	100	%		601,461		206,032		$	190	83	%	Belk, Barnes & Noble, Carousel Cinemas, Dillard’s, JC Penney


Stabilized Malls:
Arbor Place Atlanta (Douglasville), GA	1999	N/A	100	%		1,176,454		378,368		$	337	98	%	Bed Bath & Beyond, Belk, Borders, Dillard’s, JC Penney, Macy’s, Old Navy, Sears

Asheville Mall Asheville, NC	1972/2000	2000	100	%		948,500		288,045			337	98	%	Belk, Dillard’s, Dillard’s West, JC Penney, Old Navy, Sears

Bonita Lakes Mall(5) Meridian, MS	1997	N/A	100	%		634,104		185,963			242	94	%	Belk, Dillard’s, JC Penney, Sears

Brookfield Square(6) Brookfield, WI	1967/2001	2007	100	%		1,089,758		343,797			397	98	%	Barnes & Noble, Boston Store, JC Penney, Old Navy, Sears

Burnsville Center Burnsville, MN	1977/1998	N/A	100	%		1,088,321		433,519			362	97	%	Dick’s Sporting Goods, JC Penney, Macy’s, Old Navy, Sears, Steve & Barry’s (19)

Cary Towne Center Cary, NC	1979/2001	1993	100	%		1,014,155		298,596			275	94	%	Belk, Dillard’s, JC Penney, Macy’s, Sears

Chapel Hill Mall (7) (10) Akron, OH	1966/2004	1995	62.7	%		863,406		278,072			278	96	%	JC Penney, Macy’s, Old Navy, Sears, Steve & Barry’s (19)

CherryVale Mall Rockford, IL	1973/2001	2007	100	%		849,086		334,501			344	98	%	Barnes & Noble, Bergner’s, JC Penney, Macy’s, Sears

Chesterfield Mall (10) Chesterfield, MO	1976/2007	2006	62.7	%		1,326,031		557,795			296	84	%	AMC Theaters, Borders, Dillard’s, H & M, Macy’s, Old Navy, Sears

Citadel Mall Charleston, SC	1981/2001	2000	100	%		1,138,527		350,356			220	84	%	Belk, Dillard’s, JC Penney, Old Navy, Sears, Sportsman’s Warehouse, Target

Coastal Grand-Myrtle Beach Myrtle Beach, SC	2004	2007	50	%		1,173,910		403,547			330	98	%	Bed Bath & Beyond, Belk, Books A Million, Dick’s Sporting Goods, Dillard’s, Old Navy, Sears, JC Penney

College Square Morristown, TN	1988	1999	100	%		486,196		162,372			248	90	%	Belk, Goody’s, JC Penney, Kohl’s, Sears


Mall / Location	Year of Opening/ Acquisition	Year of Most Recent Expansion	Our Ownership		Total GLA (1)		Total Mall Store GLA (2)		Mall Store Sales per Square Foot (3)		Percentage Mall Store GLA Leased (4)		Anchors & Junior Anchors

Columbia Place Columbia, SC	1977/2001	N/A	100	%		1,098,401		329,194		217	91	%	Burlington Coat Factory, Dillard’s (20), Macy’s, Old Navy, Sears, Steve & Barry’s (19)

CoolSprings Galleria Nashville, TN	1991	1994	100	%		1,118,319		363,683		407	98	%	Belk, Dillard’s, JC Penney, Macy’s, Sears

Cross Creek Mall Fayetteville, NC	1975/2003	2000	100	%		1,048,571		253,639		527	97	%	Belk, JC Penney, Macy’s, Sears

East Towne Mall Madison, WI	1971/2001	2004	100	%		830,315		340,318		330	98	%	Barnes & Noble, Boston Store, Dick’s Sporting Goods, Gordman’s, JC Penney, Sears, Steve & Barry’s (19)

Eastgate Mall (8) Cincinnati, OH	1980/2003	1995	100	%		921,304		274,446		293	97	%	Dillard’s, JC Penney, Kohl’s, Sears, Steve & Barry’s (19)

Eastland Mall Bloomington, IL	1967/2005	N/A	100	%		768,862		226,207		332	96	%	Bergner’s, JC Penney, Kohl’s, Macy’s, Old Navy, Sears

Fashion Square Saginaw, MI	1972/2001	1993	100	%		797,251		318,055		275	94	%	JC Penney, Macy’s, Sears, Steve & Barry’s (19)

Fayette Mall Lexington, KY	1971/2001	1993	100	%		1,214,135		366,061		478	100	%	Dick’s, Dillard’s, JC Penney, Macy’s, Sears

Foothills Mall Maryville, TN	1983/1996	2004	95	%		481,801		155,105		231	97	%	Belk for Women, Belk for Men Kids & Home, Goody’s, JC Penney, Sears, TJ Maxx

Friendly Shopping Center and The Shops at Friendly Center Greensboro, NC	1957/ 2006/ 2007	1996	50	%		1,244,078		574,198		383	82	%	Barnes & Noble, Belk, Macy’s, Old Navy, Sears, Harris Teeter, REI

Frontier Mall Cheyenne, WY	1981	1997	100	%		538,560		215,274		270	89	%	Dillard’s I, Dillard’s II, Gart Sports, JC Penney, Sears

Georgia Square Athens, GA	1981	N/A	100	%		671,934		250,380		237	99	%	Belk, JC Penney, Macy’s, Sears

Governor’s Square Clarksville, TN	1986	1999	47.5	%		732,999		301,374		312	99	%	Belk, Borders, Dillard’s, JC Penney,Old Navy, Sears

Greenbrier Mall (10) Chesapeake, VA	1981/2004	2004	62.7	%		897,626		305,197		339	87	%	Dillard’s, JC Penney, Macy’s, Sears


Mall / Location	Year of Opening/ Acquisition	Year of Most Recent Expansion	Our Ownership		Total GLA (1)		Total Mall Store GLA (2)		Mall Store Sales per Square Foot (3)		Percentage Mall Store GLA Leased (4)		Anchors & Junior Anchors

Gulf Coast Town Center Ft. Meyers, FL	2005	N/A	50	%		1,228,360		312,280		254	88	%	Babies R Us, Bass Pro Outdoor World, Belk, Best Buy, Borders, Golf Galaxy, JC Penney, Jo-Ann Fabrics, Marshall’s, Petco, Ron Jon Surf Shop, Ross, Staples, Target

Hamilton Place Chattanooga, TN	1987	1998	90	%		1,170,821		346,941		369	99	%	Dillard’s for Men Kids & Home, Dillard’s for Women, JC Penney, Belk for Men Kids & Home, Belk for Women, Sears, Barnes & Noble

Hanes Mall Winston-Salem, NC	1975/2001	1990	100	%		1,548,512		553,324		315	98	%	Belk, Dillard’s, JC Penney, Macy’s, Old Navy, Sears

Harford Mall Bel Air, MD	1973/2003	2007	100	%		506,460		204,524		390	98	%	Macy’s, Old Navy, Sears

Hickory Hollow Mall Nashville, TN	1978/1998	1991	100	%		1,105,295		426,358		187	82	%	Macy’s, Sears, Steve & Barry’s (19)

Hickory Point Mall Decatur, IL	1977/2005	N/A	100	%		825,484		198,510		225	85	%	Bergner’s, JC Penney, Kohl’s, Old Navy, Sears, Von Maur

Honey Creek Mall Terre Haute, IN	1968/2004	1981	100	%		680,003		188,488		339	94	%	Elder-Beerman, JC Penney, Macy’s, Sears, Steve & Barry’s (19)

Imperial Valley Mall El Centro, CA	2005	N/A	60	%		762,637		269,780		348	96	%	Dillard’s, JC Penney, Macy’s, Sears

Janesville Mall Janesville, WI	1973/1998	1998	100	%		616,861		169,031		315	96	%	Boston Store, JC Penney, Kohl’s, Sears

Jefferson Mall Louisville, KY	1978/2001	1999	100	%		953,656		258,017		340	99	%	Dillard’s, JC Penney, Macy’s, Old Navy, Sears

Kentucky Oaks Mall Paducah, KY	1982/2001	1995	50	%		1,135,427		391,645		283	89	%	Best Buy, Dillard’s, Elder-Beerman, JC Penney, Sears, Hobby Lobby, Circuit City, Office Max, Toys R Us, Shopko, Service Merchandise

The Lakes Mall Muskegon, MI	2001	N/A	90	%		593,432		262,190		259	94	%	Bed Bath & Beyond, Dick’s Sporting Goods, JC Penney, Sears, Younkers

Lakeshore Mall Sebring, FL	1992	1999	100	%		488,880		141,052		238	93	%	Beall’s (9), Belk, JC Penney, Kmart, Sears


Mall / Location	Year of Opening/ Acquisition	Year of Most Recent Expansion	Our Ownership		Total GLA (1)		Total Mall Store GLA (2)		Mall Store Sales per Square Foot (3)		Percentage Mall Store GLA Leased (4)		Anchors & Junior Anchors

Laurel Park Place Livonia, MI	1989/2005	1994	70	%		502,142		203,332		340	95	%	Parisian, Von Maur

Layton Hills Mall Layton, UT	1980/2006	1998	100	%		635,800		192,242		389	100	%	JCPenney, Macy’s, Mervyn’s (21), Sports Authority

Madison Square Huntsville, AL	1984	1985	100	%		930,713		297,878		265	86	%	Belk, Dillard’s, JC Penney, Sears, Steve & Barry’s (19)

Mall del Norte Laredo, TX	1977/2004	1993	100	%		1,099,829		373,562		514	94	%	Beall Bros. (9), Circuit City, Dillard’s, JC Penney, Joe Brand, Macy’s, Macy’s Home Store, Mervyn’s (21), Sears

Mall of Acadiana (10) Lafayette, LA	1979/2005	2004	62.7	%		990,546		298,283		439	95	%	Dillard’s, JCPenney, Macy’s, Sears

Meridian Mall (11) Lansing, MI	1969/1998	2001	100	%		978,129		418,611		264	80	%	Bed Bath & Beyond, Dick’s Sporting Goods, JC Penney, Macy’s, Old Navy, Schuler Books, Younkers, Steve & Barry’s (19)

Mid Rivers Mall (11) St. Peters, MO	1987/2007	1999	62.7	%		1,268,514		315,380		318	95	%	Borders, Dillard’s, JC Penney, Macy’s, Sears, Dick’s Sporting Goods, Inc., Wehrenberg Theaters

Midland Mall Midland, MI	1991/2001	N/A	100	%		514,252		196,978		286	96	%	Barnes & Noble, Elder-Beerman, JC Penney, Sears, Target

Monroeville Mall (12) Pittsburgh, PA	1969/2004	2003	100	%		1,180,167		456,621		305	90	%	Boscov’s, JC Penney, Macy’s

Northpark Mall Joplin, MO	1972/2004	1996	100	%		967,464		372,291		295	88	%	JC Penney, Macy’s, Macy’s Home Store, Old Navy, Sears, TJ Maxx, Steve & Barry’s (19)

Northwoods Mall Charleston, SC	1972/2001	1995	100	%		780,701		298,224		299	97	%	Belk, Books A Million, Dillard’s, JC Penney, Sears

Oak Hollow Mall High Point, NC	1995	N/A	75	%		1,262,440		252,087		188	68	%	Belk, Dillard’s, JC Penney, Sears, Steve & Barry’s (19)

Oak Park Mall Overland Park, KS	1974/2005	1998	100	%		1,525,888		454,774		430	99	%	Dillard’s North, Dillard’s South, JC Penney, Macy’s, Nordstrom, XXI Forever

Old Hickory Mall Jackson, TN	1967/2001	1994	100	%		547,601		167,506		315	88	%	Belk, JC Penney, Macy’s, Sears


Mall / Location	Year of Opening/ Acquisition	Year of Most Recent Expansion	Our Ownership		Total GLA (1)		Total Mall Store GLA (2)		Mall Store Sales per Square Foot (3)		Percentage Mall Store GLA Leased (4)		Anchors & Junior Anchors

Panama City Mall Panama City, FL	1976/2002	1984	100	%		605,260		222,953		231	95	%	Dillard’s, JC Penney, Linens N Things (18), Sears

Park Plaza (10) Little Rock, AR	1988/2004	N/A	62.7	%		568,977		243,612		438	94	%	Dillard’s I, Dillard’s II, XXI

Parkdale Mall Beaumont, TX	1972/2001	1986	100	%		1,331,940		367,485		326	88	%	Beall Bros. (9), Books A Million, Dillard’s, JC Penney, Macy’s, Old Navy, Sears, XXI Forever, Steve & Barry’s (19)

Parkway Place Huntsville, AL	1957/1998	2002	50	%		631,028		276,217		301	92	%	Dillard’s, Belk

Pemberton Square Vicksburg, MS	1985	1999	100	%		351,444		133,641		148	61	%	Belk, Dillard’s, JC Penney

Plaza del Sol Del Rio, TX	1979	1996	50.6	%		261,150		98,713		165	91	%	Beall Bros. (9), Dress For Less, Federal Public Defenders, JC Penney, Ross

Post Oak Mall College Station, TX	1982	1985	100	%		775,000		287,474		327	94	%	Beall Bros. (9), Dillard’s, Dillard’s South, JC Penney, Macy’s, Sears

Randolph Mall Asheboro, NC	1982/2001	1989	100	%		379,097		143,904		222	98	%	Belk, Books A Million, Dillard’s, JC Penney, Sears

Regency Mall Racine, WI	1981/2001	1999	100	%		854,132		267,290		265	92	%	Boston Store, JC Penney, Sears, Steve & Barry’s (19), Target, Burlington Coat Factory

Richland Mall Waco, TX	1980/2002	1996	100	%		709,606		205,481		314	95	%	Beall Bros. (9), Dillard’s I, Dillard’s II, JC Penney, Sears, XXI Forever

River Ridge Mall Lynchburg, VA	1980/2003	2000	100	%		765,603		223,886		306	96	%	Belk, JC Penney, Macy’s, Sears

Rivergate Mall Nashville, TN	1971/1998	1998	100	%		1,130,763		348,932		284	92	%	Dillard’s, JC Penney, Linens N Things (18), Macy’s, Sears

South County Center St. Louis, MO (10)	1963/2007	2001	62.7	%		1,042,097		328,811		368	93	%	Dillard’s, JC Penney, Macy’s, Sears

Southaven Towne Center Southaven, MS	2005	N/A	100	%		495,084		230,316		303	100	%	Circuit City, Books A Million, Cost Plus, Dillard’s, Gordman’s, JC Penney, Linens N Things (18)

Southpark Mall Colonial Heights, VA	1989/2003	2007	100	%		685,796		213,514		304	99	%	Dillard’s, JC Penney, Macy’s, Sears

St. Clair Square (10) (13) Fairview Heights, IL	1974/1996	1993	62.7	%		1,108,851		290,765		396	96	%	Dillard’s, JC Penney, Macy’s, Sears

Stroud Mall (14) Stroudsburg, PA	1977/1998	2005	100	%		419,059		168,876		282	94	%	JC Penney, Sears, The Bon-Ton


Mall / Location	Year of Opening/ Acquisition	Year of Most Recent Expansion	Our Ownership		Total GLA (1)		Total Mall Store GLA (2)		Mall Store Sales per Square Foot (3)			Percentage Mall Store GLA Leased (4)		Anchors & Junior Anchors

Sunrise Mall Brownsville, TX	1979/2003	2000	100	%		755,851		332,394			407	92	%	Beall Bros. (9), Dillard’s, JC Penney, Sears

Towne Mall Franklin, OH	1977/2001	N/A	100	%		457,571		153,959			207	49	%	Elder-Beerman, Sears

Triangle Town Center Raleigh, NC	2002/2005	N/A	50	%		1,273,206		332,819			313	96	%	Barnes & Noble, Belk, Dillard’s, Macy’s, Sak’s Fifth Avenue, Sears

Turtle Creek Mall Hattiesburg, MS	1994	1995	100	%		847,298		224,204			333	99	%	Belk I, Belk II, Dillard’s, Goody’s, JC Penney, Sears

Valley View Mall Roanoke, VA	1985/2003	2007	100	%		877,065		317,276			355	92	%	Barnes & Noble, Belk, JC Penney, Macy’s, Old Navy, Sears

Volusia Mall Daytona Beach, FL	1974/2004	1982	100	%		1,058,501		239,958			347	94	%	Dillard’s East, Dillard’s West, Dillard’s South, JC Penney, Macy’s, Sears

Walnut Square (15) Dalton, GA	1980	1992	100	%		449,239		169,943			242	94	%	Belk, Belk Home & Kids, Goody’s, JC Penney, Sears

Wausau Center (16) Wausau, WI	1983/2001	1999	100	%		423,833		150,633			260	95	%	JC Penney, Sears, Younkers

West County Center Des Peres, MO (10)(12)	1969/2007	2002	62.7	%		1,138,813		398,792			458	97	%	Barnes & Noble, JC Penney, Macy’s, Nordstrom

West Towne Mall Madison, WI	1970/2001	2004	100	%		915,663		271,757			473	99	%	Boston Store, Dick’s Sporting Goods, JC Penney, Sears, Steve & Barry’s (19)

WestGate Mall (17) Spartanburg, SC	1975/1995	1996	100	%		952,790		341,091			261	92	%	Bed Bath & Beyond, Belk, Dick’s Sporting Goods, Dillard’s, JC Penney, Sears

Westmoreland Mall (10) Greensburg, PA	1977/2002	1994	62.7	%		1,013,578		390,848			314	97	%	JC Penney, Macy’s, Macy’s Home Store, Old Navy, Sears, The Bon-Ton

York Galleria York, PA	1989/1999	N/A	100	%		769,437		232,220			322	97	%	Bon Ton, Boscov’s, JC Penney, Sears

Total Stabilized Malls						72,000,350		23,915,735		$	331	93	%

Grand total						72,601,811		24,121,767		$	331	93	%


(1)	Includes total square footage of the anchors (whether owned or leased by the anchor) and mall stores. Does not include future expansion areas.
(2)	Excludes anchors.
(3)	Totals represent weighted averages.
(4)	Includes tenants paying rent for executed leases as of December 31, 2008.
(5)	Bonita Lakes Mall - We are the lessee under a ground lease for 82 acres, which extends through June 30, 2035, including four five-year renewal options. The annual base rent for 2008 was $25,581.
(6)	Brookfield Square – Ground rent is $109,826 per year.
(7)	Chapel Hill Mall - Ground rent is $10,000 per year.
(8)	Eastgate Mall - Ground rent is $24,000 per year.
(9)	Lakeshore Mall, Mall del Norte, Parkdale Mall, Plaza del Sol, Post Oak Mall, Richland Mall, and Sunrise Mall - Beall Bros. operating in Texas is unrelated to Beall’s operating in Florida.
(10)	Mid Rivers Mall, Chapel Hill Mall, Chesterfield Mall, Greenbrier Mall, Mall of Acadiana, Park Plaza Mall, South County Center, St. Clair Square, West County Center, Westmoreland Mall: These properties are owned by a Company-controlled entity of which the Company owns all of the common stock and is entitled to receive 100% of each Property’s cash flow after payment of operating expenses, debt service payments and preferred distributions to its third-party partner.
(11)	Meridian Mall - We are the lessee under several ground leases in effect through March 2067, with extension options. Fixed rent is $18,700 per year plus 3% to 4% of all rents.
(12)	Monroeveille Mall - Ground rent is $563,866 per year.
(13)	St. Clair Square - We are the lessee under a ground lease for 20 acres, which extends through January 31, 2073, including 14 five-year renewal options and one four-year renewal option. The rental amount is $40,500 per year. In addition to base rent, the landlord receives .25% of Dillard’s sales in excess of $16,200,000.
(14)	Stroud Mall - We are the lessee under a ground lease, which extends through July, 2089. The current rental amount is $60,000 per year, increasing by $10,000 every ten years through 2059. An additional $100,000 is paid every 10 years.
(15)	Walnut Square - We are the lessee under several ground leases, which extend through March 14, 2078, including six ten-year renewal options and one eight-year renewal option. The rental amount is $149,450 per year. In addition to base rent, the landlord receives 20% of the percentage rents collected. The Company has a right of first refusal to purchase the fee.
(16)	Wausau Center - Ground rent is $76,000 per year plus 10% of net taxable cash flow.
(17)	Westgate Mall - We are the lessee under several ground leases for approximately 53% of the underlying land. The leases extend through October 31, 2084, including six ten-year renewal options. The rental amount is $130,300 per year. In addition to base rent, the landlord receives 20% of the percentage rents collected. The Company percentage rents collected. The Company has a right of first refusal to purchase the fee.
(18)	Linen’s N Things closed all stores December 31, 2008.
(19)	Steve & Barry’s closed all stores December 31, 2008.
(20)	Closed as of December 31, 2008.
(21)	Mervyn’s closed all stores December 31, 2008.

Anchors

Anchors are an important factor in a Mall’s successful performance. The public’s identification with a mall property typically focuses on the anchor tenants. Mall anchors are generally a department store whose merchandise appeals to a broad range of shoppers and plays a significant role in generating customer traffic and creating a desirable location for the mall store tenants.

Anchors may own their stores and the land underneath, as well as the adjacent parking areas, or may enter into long-term leases with respect to their stores. Rental rates for anchor tenants are significantly lower than the rents charged to mall store tenants. Anchors account for 10.5% of the total revenues from our Properties. Each anchor that owns its store has entered into an operating and reciprocal easement agreement with us covering items such as operating covenants, reciprocal easements, property operations, initial construction and future expansion.

During 2008, we added the following anchors and junior anchor boxes (i.e., non-traditional anchors) to the following Malls:


Name	Property	Location

Ashley HomeStore	Bonita Crossing	Meridian, MS
Sportsman’s Warehouse	Citadel Mall	Charleston, SC
JC Penney	Coastal Grand-Myrtle Beach	Myrtle Beach, SC
Barnes & Noble	Hamilton Place	Chattanooga, TN
Dick's Sporting Goods	Mid Rivers Mall	St. Peters, MO
XXI Forever	Oak Park Mall	Overland Park, KS
XXI Forever	Parkdale Mall	Beaumont, TX
Burlington Coat Factory	Regency Mall	Racine, WI
XXI Forever	Richland Mall	Waco, TX
Hobby Lobby	Statesboro Crossing	Statesboro, GA
T.J. Maxx	Statesboro Crossing	Statesboro, GA
Barnes & Noble	West County Center	Des Peres, MO
Hamrick’s	WestGate Crossing	Spartanburg, SC
Laurel Highlands Event Center	Westmoreland Crossing	Greensboro, PA

As of December 31, 2008, the Malls had a total of 457 anchors and junior anchors including 28 vacant anchor locations. The mall anchors and junior anchors and the amount of GLA leased or owned by each as of December 31, 2008 is as follows:


Anchor	Number of Stores		Leased GLA		Owned GLA		Total GLA

JCPenney		74		3,992,213		4,422,693		8,414,906
Sears		71		2,081,127		7,303,144		9,384,271
Dillard’s		55		442,897		7,471,158		7,914,055
Sak’s		1		—		83,066		83,066
Macy’s		47		1,596,928		5,497,422		7,094,350

Belk
Belk		36		976,282		3,371,330		4,347,612
Parisian		1		148,810		—		148,810
*Subtotal*		37		*1,125,092*		*3,371,330*		*4,496,422*

Bon-Ton
Bon-Ton		3		186,824		131,915		318,739
Bergner’s		3		—		385,401		385,401
Boston Store		5		96,000		599,280		695,280
Younkers		4		269,060		106,131		375,191
Elder-Beerman		4		194,613		117,888		312,501
*Subtotal*		19		*746,497*		*1,340,615*		*2,087,112*

Babies R Us		1		30,700		—		30,700
Barnes & Noble		11		317,309		—		317,309
Bass Pro Outdoor World		1		130,000		—		130,000
Beall Bros.		6		229,467		—		229,467
Beall’s (Fla)		1		45,844		—		45,844
Bed, Bath & Beyond		5		154,835		—		154,835
Best Buy		2		64,326		—		64,326
Books A Million		5		85,265		—		85,265
Borders		5		116,732		—		116,732
Boscov’s		2		—		384,538		384,538
Burlington Coat Factory		2		141,664		—		141,664
Circuit City (1)		2		55,652		—		55,652
Cost Plus		1		18,243		—		18,243
Dick’s Sporting Goods		9		521,886		—		521,886
Gart Sports		1		24,750		—		24,750
Golf Galaxy		1		15,096		—		15,096


Anchor	Number of Stores		Leased GLA		Owned GLA		Total GLA

Goody’s (1)		4		121,154		—		121,154
Gordman’s		2		107,303		—		107,303
H&M		1		20,350		—		20,350
Harris Teeter		1		72,757		—		72,757
Jo-Ann Fabrics		1		35,330		—		35,330
Joe Brand		1		29,413		—		29,413
Kmart		1		86,479		—		86,479
Kohl’s		5		357,091		68,000		425,091
Marshall’s		1		32,996		—		32,996
Nordstrom		2		—		385,000		385,000
Old Navy		21		411,913		—		411,913
Petco		1		15,256		—		15,256
REI		1		24,427		—		24,427
Ron Jon Surf Shop		1		12,000		—		12,000
Ross Dress For Less		2		60,494		—		60,494
Schuler Books		1		24,116		—		24,116
Shopko/K’s Merchandise Mart		1		—		85,229		85,229
Sports Authority		1		16,537		—		16,537
Staples		1		20,388		—		20,388
Steve & Barry’s (1)		9		471,169		—		471,169
Target		4		—		490,476		490,476
TJ Maxx		2		56,886		—		56,886
Von Maur		2		—		233,280		233,280
XXI Forever		4		94,873		—		94,873