The following discussion is based on the consolidated financial statements of the Company as of March 31, 2009 and 2008 and for the three months then ended. This information should be read in conjunction with the accompanying consolidated financial statements and notes thereto.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this report constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results performance or achievements expressed or implied by such forward-looking statements. Such factors are set forth under the heading "Item 1A. Risk Factors" in our Form 10-K for the year ended December 31, 2008 and Item 1A of Part II of this Form 10-Q and include, among others, the following: general economic and business conditions, which will, among other things, affect demand for rental space, the availability and creditworthiness of prospective tenants, lease rents and the availability of financing; adverse changes in our real estate markets, including, among other things, competition with other companies; risks of real estate development and acquisition; governmental actions and initiatives; and environmental/safety requirements. Except as required by law, we do not undertake any obligation to update or revise any forward-looking statements contained in this Form 10-Q.

OVERVIEW

As of March 31, 2009, we operated 80 properties, which we own or have an ownership interest in, within our Core Portfolio or within our three Opportunity Funds. Our Core Portfolio consists of those properties either 100% owned by, or partially owned through joint venture interests by the Operating Partnership, or subsidiaries thereof, not including those properties owned through our Opportunity Funds. These 80 properties consist of commercial properties, primarily neighborhood and community shopping centers, self-storage and mixed-use properties with a retail component. The properties we operate are located primarily in the Northeast, Mid-Atlantic and Midwestern regions of the United States. Our Core Portfolio consists of 35 properties comprising approximately 5.5 million square feet. Fund I has 21 properties comprising approximately 1.0 million square feet. Fund II has 10 properties, six of which (representing 1.1 million square feet) are currently operating, two are under construction, and two are in design phase. The Fund II portfolio will approximate 2.0 million square feet upon completion of all current construction and anticipated redevelopment activities. Fund III has 14 properties totaling approximately 1.8 million square feet, of which 11 locations representing 0.9 million net rentable square feet are self storage facilities. The majority of our operating income is derived from rental revenues from these 80 properties, including recoveries from tenants, offset by operating and overhead expenses. As our RCP Venture invests in operating companies, we consider these investments to be private-equity style, as opposed to real estate, investments. Since these are not traditional investments in operating rental real estate, the Operating Partnership invests in these through a taxable REIT subsidiary ("TRS").

Our primary business objective is to acquire and manage commercial retail properties that will provide cash for distributions to shareholders while also creating the potential for capital appreciation to enhance investor returns. We focus on the following fundamentals to achieve this objective:

- Own and operate a Core Portfolio of community and neighborhood shopping centers and main street retail located in markets with strong demographics and generate internal growth within the Core Portfolio through aggressive redevelopment, re-anchoring and or leasing activities

- Maintain a strong and flexible balance sheet through conservative financial practices while ensuring access to sufficient capital to fund future growth

- Generate external growth through an opportunistic yet disciplined acquisition program. The emphasis is on targeting transactions with high inherent opportunity for the creation of additional value through redevelopment and leasing and/or transactions requiring creative capital structuring to facilitate the transactions. These transactions may include other types of commercial real estate besides those types we invest in through our Core Portfolio. These may also include joint ventures with private equity investors for the purpose of making investments in operating retailers with significant embedded value in their real estate assets

BUSINESS OUTLOOK

The U.S. economy is currently in a recession, which has resulted in a significant decline in retail sales due to reduced consumer spending. Many financial and economic analysts are predicting that this business recession will extend through 2009 and perhaps beyond. Although the occupancy and net operating income within our portfolio has not been materially adversely affected through March 31, 2009, should retailers continue to experience deteriorating sales performance, the likelihood of tenant bankruptcy filings may increase which would negatively impact our results of operations. In addition to the impact on retailers, the economic recession has had an unprecedented impact on the U.S. credit markets. Traditional sources of financing, such as the commercial-mortgage backed security market, have become severely curtailed. If these conditions continue, our ability to finance new acquisitions will be adversely affected. Accordingly, our ability to generate external growth in income could be limited.

CRITICAL ACCOUNTING POLICIES

Management's discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. Management bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe there have been no material changes to the items that we disclosed as our critical accounting policies under Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," in our 2008 Form 10-K.

RESULTS OF OPERATIONS

Comparison of the three months ended March 31, 2009 ("2009") to the three months ended March 31, 2008 ("2008")

Revenues


                                                     2009                                                          2008
                          ----------------------------------------------------------    ----------------------------------------------------------
                             Core         Opportunity       Storage                        Core         Opportunity       Storage
(dollars in millions)      Portfolio         Funds         Portfolio      Other (1)      Portfolio         Funds         Portfolio      Other (1)
                          -----------    -------------    -----------    -----------    -----------    -------------    -----------    -----------
Minimum rents             $      12.6    $         7.2    $       1.5    $         -    $      12.7    $         4.3    $       1.3    $         -
Percentage rents                  0.2                -              -              -            0.2                -              -              -
Expense reimbursements            4.1              1.4              -              -            4.2              0.3              -              -
Other property income             0.2                -            0.3              -            0.1                -            0.1              -
Management fee income               -                -              -            0.8              -                -              -            2.0
Interest income                     -                -              -            5.1              -                -              -            2.8
Other income                      1.7                -              -              -              -                -              -              -
                          -- --------    --- ---------    --- -------    --- -------    -- --------    --- ---------    --- -------    --- -------

Total revenues            $      18.8    $         8.6    $       1.8    $       5.9    $      17.2    $         4.6    $       1.4    $       4.8
                          -- --------    --- ---------    --- -------    --- -------    -- --------    --- ---------    --- -------    --- -------

(1) Includes fees earned by the Company as general partner/managing member of the Opportunity Funds that are eliminated in consolidation. These fees are adjusted in noncontrolling interests. Reference is made to Note 14 to the Notes to Consolidated Financial Statements in Part 1, Item 1 of this Form 10-Q for an overview of our four reportable segments.

The increase in minimum rents in the Opportunity Funds primarily relates to additional rents following the acquisition of Cortlandt Towne Center ("2009 Fund Acquisition") of $1.4 million and Fordham Place being partially placed in service in the second half of 2008 of $1.5 million.

Expense reimbursements in the Opportunity Funds increased for both real estate taxes and common area maintenance as a result of the 2009 Fund Acquisition as well as Pelham Manor Shopping Center and Fordham Place being partially placed in service in the second half of 2008.

Management fee income decreased primarily as a result of lower fees earned of $1.0 million from the City Point development project.

The increase in interest income was the result of higher interest earning assets in 2009, primarily from a new preferred equity investment and a note receivable originated during the later part of 2008.

Other income in the Core Portfolio increased $1.7 million as a result of a sales contract deposit forfeited duirng 2009.

Operating Expenses


                                                        2009                                                     2008
                                -----------------------------------------------------    -----------------------------------------------------
                                   Core         Opportunity       Storage                   Core         Opportunity       Storage
(dollars in millions)            Portfolio         Funds         Portfolio     Other      Portfolio         Funds         Portfolio     Other
                                -----------    -------------    -----------    ------    -----------    -------------    -----------    ------
Property operating              $       3.4    $         2.1    $       1.9    $    -    $       3.3    $         1.2    $       0.6    $    -
Real estate taxes                       2.3              0.9            0.5         -            2.3              0.3            0.1         -
General and administrative              6.9              4.1              -      (4.9 )          6.7              4.5            0.1      (5.2 )
Depreciation and amortization           4.2              3.4            1.0         -            3.9              1.9            0.4         -
                                -- --------    --- ---------    --- -------    - ----    -- --------    --- ---------    --- -------    - ----
Total operating expenses        $      16.8    $        10.5    $       3.4    $ (4.9 )  $      16.2    $         7.9    $       1.2    $ (5.2 )
                                -- --------    --- ---------    --- -------    - ----    -- --------    --- ---------    --- -------    - ----

The increase in property operating expenses in the Opportunity Funds was primarily the result of the 2009 Fund Acquisition. The increase in property operating expenses in the Storage Portfolio relates to the February 2008 acquisition of the Storage Post Portfolio ("2008 Storage Acquisition").

The increase in real estate taxes in the Opportunity Funds was attributable to the 2009 Fund Acquisition. The increase in real estate taxes in the Storage Portfolio relates to the 2008 Storage Acquisition.

The increase in general and administrative expense in the Core Portfolio was primarily attributable to severance costs in 2009 associated with staff reductions. This increase was partially offset by employee terminations in the second half of 2008. The decrease in general and administrative expense in the Opportunity Funds primarily relates to the reduction in Promote expense attributable to Fund I and Mervyns I. The increase in general and administrative expense in Other primarily relates to the elimination of the Fund I and Mervyns I Promote expense for consolidated financial statement presentation purposes.

Depreciation expense in the Core Portfolio increased $0.4 million as a result of Ledgewood Mall being reclassified as a continuing operation in 2009 as opposed to being held for sale, or a discontinued operation in 2008. Depreciation expense increased $1.1 million in the Opportunity Funds due to the 2009 Fund Acquisition as well as Pelham Manor Shopping Plaza and Fordham Plaza being partially placed in service in the second half of 2008. Amortization expense increased $0.4 million in the Opportunity Funds as a result of additional amortization of loan costs related to Pelham and Fordham Plaza being partially placed in service in the second half of 2008. Depreciation expense and amortization expense increased $0.6 million in the Storage Portfolio as a result of the 2008 Storage Acquisition.

Other


                                                      2009                                                     2008
                             ------------------------------------------------------    -----------------------------------------------------
                                Core         Opportunity       Storage                    Core         Opportunity       Storage
(dollars in millions)         Portfolio         Funds         Portfolio      Other      Portfolio         Funds         Portfolio     Other
                             -----------    -------------    -----------    -------    -----------    -------------    -----------    ------
Equity in earnings from
unconsolidated affiliates    $       0.1    $        (3.4 )  $         -    $     -    $         -    $        13.2    $         -    $    -
Interest expense                    (5.1 )           (1.5 )         (1.2 )        -           (4.8 )           (1.4 )         (0.4 )
Gain on extinguishment of
debt                                 3.2                -              -          -              -                -              -         -
Income tax provision                 0.5                -              -          -            1.8                -              -         -
Income from discontinued
operations                             -                -              -        5.8              -                -              -       0.7
Loss (income) attributable
to noncontrolling
interests in subsidiaries
- Continuing operations             (0.2 )            7.5            0.1        1.1            0.1             (6.5 )            -       1.4
Loss (income) attributable
to noncontrolling
interests in subsidiaries
- Discontinued operations              -             (4.9 )            -          -              -             (0.2 )            -         -

Total interest expense in the Core Portfolio increased $0.3 million in 2009. This was the result of a $0.4 million increase attributable to higher average outstanding borrowings in 2009 offset by a $0.1 million decrease attributable to lower average interest rates in 2009. Interest expense in the Opportunity Fund increased $0.1 million in 2009. This was the result of an increase of $1.0 million due to higher average outstanding borrowings in 2009 and $0.5 million of lower capitalized interest in 2009. These increases were offset by a $1.4 million decrease related to lower average interest rates in 2009. Interest expense in the Storage Portfolio increased $0.8 million as a result of the 2008 Storage Acquisition.

The gain on extinguishment of debt of $3.2 million is attributable to the purchase of our convertible debt at a discount in 2009.

The variance in income tax provision in the Core Portfolio primarily relates to income taxes at the taxable REIT subsidiary ("TRS") level for our share of gains from the sale of Mervyns locations in 2008.

Income from discontinued operations represents activity related to properties sold in 2009 and 2008.

Loss (income) attributable to noncontrolling interests in subsidiaries - Continuing operations for the Opportunity Funds primarily represents the noncontrolling interests' share of all Opportunity Fund activity and ranges from a 77.8% interest in Fund I to an 80.1% interest in Fund III. The variance between 2009 and 2008 represents the noncontrolling interests' share of all the Opportunity Funds variances discussed above. Loss (income) attributable to noncontrolling interests in subsidiaries - Continuing operations in Other relates to the noncontrolling interests' share of capitalized construction, leasing and legal fees.

Loss (income) attributable to noncontrolling interests in subsidiaries - Discontinued operations for the Opportunity Funds primarily represents the noncontrolling interests' share of activity related to properties sold in 2009 and 2008.

Funds from Operations

Consistent with the National Association of Real Estate Investment Trusts ("NAREIT") definition, we define funds from operations ("FFO") as net income attributable to Common Shareholders (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciated property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.

We consider FFO to be an appropriate supplemental disclosure of operating performance for an equity REIT due to its widespread acceptance and use within the REIT and analyst communities. FFO is presented to assist investors in analyzing our performance. They are helpful as they exclude various items included in net income that is not indicative of the operating performance, such as gains (or losses) from sales of property and depreciation and amortization. However, our method of calculating FFO may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. FFO does not represent cash generated from operations as defined by GAAP and are not indicative of cash available to fund all cash needs, including distributions. FFO should not be considered as an alternative to net income for the purpose of evaluating our performance or to cash flows as measures of liquidity.

The reconciliation of net income to FFO for the three months ended March 31, 2009 and 2008 is as follows:

                                                                 Three months ended
                                                                     March 31,
                                                               ----------------------

(dollars in millions)                                             2009         2008
                                                               ----------    --------
Net income attributable to Common Shareholders                 $     10.3    $    8.2
Depreciation of real estate and amortization of leasing
costs (net of noncontrolling interests' share)
Consolidated affiliates                                               4.4         3.6
Unconsolidated affiliates                                             0.4         0.5
Gain on sale (net of noncontrolling interests' share)                (0.9 )         †
Income attributable to noncontrolling interest in Operating
Partnership (1)                                                       0.1         0.1
                                                               -- -------    - ------
Funds from operations                                          $     14.3    $   12.4
                                                               -- -------    - ------

Cash flows provided by (used in):
Operating activities                                           $     19.1    $   (5.3 )
Investing activities                                                (88.7 )    (157.3 )
Financing activities                                                 98.8       135.1

Notes:

(1) Does not include distributions paid to Series A and B Preferred OP Unit holders.

Our principal uses of liquidity are expected to be primarily for (i) distributions to our shareholders and OP unit holders, (ii) investments which include the funding of our capital committed to our Opportunity Funds and property acquisitions and redevelopment/re-tenanting activities within our Core Portfolio, and (iii) debt service and loan repayments, including the repurchase of our Convertible Notes.

Distributions

In order to qualify as a REIT for Federal income tax purposes, we must currently distribute at least 90% of our taxable income to our shareholders. For the three months ended March 31, 2009, we paid dividends and distributions on our Common Shares and Common OP Units totaling $6.9 million. In addition, in December of 2008, our Board of Trustees approved a special dividend of approximately $0.55 per share, or $18.0 million in the aggregate, which was associated with taxable gains arising from property dispositions in 2008, which was paid on January 30, 2009, to shareholders of record as of December 31, 2008. 90% of the special dividend was paid through the issuance of 1.3 million Common Shares and 10%, or $1.8 million, was paid in cash. Recognizing the need to maintain maximum financial flexibility in light of the current state of the economy and the capital markets, and considering the increased dividend requirements that would be necessary to maintain the current per share level of dividends on an increased number of shares issued in connection with our issuance of Common Shares during April 2009 (See SOURCES OF LIQUIDITY), we expect our per share dividend payments on our Common Shares for the balance of 2009 to be reduced. We expect that our current cash dividend per share of $0.84 on an annualized basis will be reduced based on the 5.75 million Common Shares issued during April 2009. We expect to maintain our current aggregate annualized cash dividend of approximately $28.6 million for 2009, including the dividend paid for the three months ended March 31, 2009. Notwithstanding the foregoing, the decision to declare and pay dividends on our Common Shares in the future, as well as the timing, amount and composition of any such future dividends will be at the sole discretion of our Board of Trustees.

Investments

Fund I and Mervyns I

Reference is made to Notes 1 and 7 to the Notes to Consolidated Financial
Statements in Part 1, Item 1 in this Form 10-Q for an overview of Fund I and
Mervyns I. Fund I has returned all invested capital and accumulated preferred
return thus triggering our Promote in all future Fund I earnings and
distributions. Fund I currently owns, or has ownership interest in, 21 assets
comprising approximately 1.0 million square feet as follows:


 Shopping Center                          Location         Year acquired          GLA
 --------------------------------   --------------------   -------------          ---

 New York Region

 New York
 Tarrytown Shopping Center               Tarrytown
                                    (Westchester County)       2004            35,291

 Mid-Atlantic Region

 Ohio
 Granville Centre                         Columbus             2002           134,997
 Michigan
 Sterling Heights Shopping Center         Detroit              2004           154,835

 Various Regions
 Kroger/Safeway Portfolio                 Various              2003           709,400
                                                                           ----------
 Total                                                                      1,034,523
                                                                           ----------

In addition, we, along with our Fund I investors have invested in Mervyns as discussed in Note 7 in the Notes to Consolidated Financial Statements in Part 1, Item 1 in this Form 10-Q under the RCP Venture below.

Fund II and Mervyns II

Reference is made to Notes 1 and 7 to the Notes to Consolidated Financial Statements in Part 1, Item 1 in this Form 10-Q for an overview of Fund II and Mervyns II. To date, Fund II's primary investment focus has been in the New York Urban/Infill Redevelopment Initiative and the Retailer Controlled Property Venture.

Reference is made to Note 7 in the Notes to Consolidated Financial Statements in Part 1, Item 1 in this Form 10-Q for a discussion of RCP investments made to date.

New York Urban Infill Redevelopment Initiative

In September 2004, we, through Fund II, launched our New York Urban Infill Redevelopment initiative. During 2004, Fund II, together with an unaffiliated partner, P/A Associates, LLC ("P/A"), formed Acadia P/A Holding Company, LLC ("Acadia P/A") for the purpose of acquiring, constructing, developing, owning, operating, leasing and managing certain retail real estate properties in the New York City metropolitan area. P/A has agreed to invest 10% of required capital up to a maximum of $2.2 million and Fund II, the managing member, has agreed to invest the balance to acquire assets in which Acadia P/A agrees to invest. Operating cash flow is generally to be distributed pro-rata to Fund II and P/A until each has received a 10% cumulative return and then 60% to Fund II and 40% to P/A. Distributions of net refinancing and net sales proceeds, as defined, follow the distribution of operating cash flow except that unpaid original capital is returned before the 60%/40% split between Fund II and P/A, respectively. Upon the liquidation of the last property investment of Acadia P/A, to the extent that Fund II has not received an 18% internal rate of return ("IRR") on all of its capital contributions, P/A is obligated to return a . . .