• adverse economic and other developments in the Dallas-Fort Worth-Arlington area, where we have a high concentration of properties;

• general volatility of the capital and credit markets and the market price of our Class A common stock;

• changes in our business strategy;

• defaults on, early terminations of or non-renewal of leases by tenants;

• bankruptcy or insolvency of a major tenant or a significant number of smaller tenants;

• increased interest rates or operating costs;

? declining real estate valuations and impairment charges;

• availability, terms and deployment of capital;

• our failure to obtain necessary outside financing;

• our expected leverage;

• decreased rental rates or increased vacancy rates;

• our failure to generate sufficient cash flows to service our outstanding indebtedness;

• difficulties in identifying properties to acquire and completing acquisitions;

• risks of real estate acquisitions, dispositions and redevelopment, including the cost of construction delays and cost overruns;

• our failure to successfully operate acquired properties and operations;

• our projected operating results;

• our ability to manage our growth effectively;

• our ability to successfully transition certain corporate office functions from previously-related parties to third parties or to us;

• estimates relating to our ability to make distributions to our shareholders in the future;

• impact of changes in governmental regulations, tax law and rates and similar matters;

• our failure to qualify as a REIT;

• future terrorist attacks in the U.S.;

• environmental uncertainties and risks related to natural disasters;

• lack or insufficient amounts of insurance;

• availability of and our ability to attract and retain qualified personnel;

• retention of our senior management team;

• changes in real estate and zoning laws and increases in real property tax rates; and

• our ability to comply with the laws, rules and regulations applicable to companies.

For a further discussion of these and other factors that could impact our future results, performance or transactions, see Item 1A. "Risk Factors." Readers should not place undue reliance on any forward-looking statements, which are based only on information currently available to us (or to third parties making the forward-looking statements). We undertake no obligation to publicly release any revisions to such forward-looking statements to reflect events or circumstances after the date of this Annual Report on Form 10-K, except as required by applicable law.
The following discussion and analysis compares the years ended December 31, 2012, 2011 and 2010, and should be read in conjunction with our consolidated financial statements and the related notes included in this report. Executive Summary
We are a fully-integrated, self-administered and self-managed REIT formed to own and operate high quality, strategically located shopping centers. We are one of the largest owners and operators of shopping centers in the United States. As of December 31, 2012, our retail operating portfolio consisted of 230 properties with approximately 32,671,000 square feet of GLA, was geographically diversified across 35 states and included power centers, community centers, neighborhood centers and lifestyle centers, as well as single-user retail properties. Our retail properties are primarily located in retail districts within densely populated areas in highly visible locations with convenient access to interstates and major thoroughfares. Our retail properties have a weighted average age, based on ABR, of approximately 10.5 years since the initial construction. As of December 31, 2012, our retail operating portfolio was 89.9% occupied and 92.4% leased, including leases signed but not commenced. In addition to our retail operating portfolio, as of December 31, 2012, we also held interests in 10 office properties, two industrial properties, 22 retail operating properties held by three unconsolidated joint ventures, three retail properties under development and three retail operating properties classified as held for sale. The following summarizes our consolidated operating portfolio as of December 31, 2012:

                                                                              Percent Leased
                              Number of           GLA                        Including Leases
       Description            Properties     (in thousands)    Occupancy        Signed (a)
Retail
Wholly-owned                        230             32,671         89.9 %              92.4 %

Office/Industrial
Wholly-owned                         12              2,185        100.0 %             100.0 %
Total consolidated
operating portfolio                 242             34,856         90.5 %              92.9 %

(a) Includes leases signed but not commenced.

As of December 31, 2012, over 90% of our shopping centers, based on GLA, were anchored or shadow anchored by a grocer, discount department store, wholesale club or retailer that sells basic household goods or clothing, including Target, TJX Companies, PetSmart, Best Buy, Bed Bath & Beyond, Home Depot, Kohl's, Wal-Mart, Publix and Lowe's. Overall, we have a broad and highly diversified retail tenant base that includes approximately 1,500 tenants with no one tenant representing more than 3.3% of the total ABR generated from our retail operating properties, or our retail ABR.

2012 Company Highlights
Leasing Activity
We are encouraged by the leasing activity we achieved during 2012 in our retail operating portfolio, including our pro rata share of unconsolidated joint ventures, having signed 672 new and renewal leases for approximately 3,573,000 square feet, achieving a renewal rate of 76.6%. Rental rate changes have varied by market during 2012 as certain markets are stabilizing or increasing, while other markets continue to experience a decline in market rates. Overall, rental rates for new leases signed in 2012 appear to be stabilizing, remaining nearly flat over previous rental rates for comparable leases, and rental rates on renewal leases signed in 2012 continued to improve, increasing by 5.63% over previous rental rates for comparable renewals. We expect similar market activity to continue during 2013.
The following table summarizes the leasing activity in our retail operating portfolio, including our pro rata share of unconsolidated joint ventures, as of December 31, 2012. Leases of less than 12 months have been excluded.

                                                                                        % Change
                      Number of    GLA Signed    New Contractual                          over      Weighted
                       Leases         (in        Rent per Square   Prior Contractual     Prior      Average          Tenant
                       Signed      thousands)    Foot (PSF) (a)       Rent PSF (a)      ABR (a)    Lease Term   Improvements PSF
Comparable Renewal
Leases                    406          2,025     $       17.46     $          16.53      5.63  %       4.91     $          1.39
Comparable New
Leases                     84            438             18.51                18.54     (0.16 )%       8.32               32.57
Non-Comparable New
and Renewal Leases
(b)                       182          1,110             14.60                  n/a       n/a          8.10               26.64
Total                     672          3,573     $       17.65     $          16.89      4.50  %       6.24     $         13.06

(a) Total excludes the impact of Non-Comparable Leases.

(b) Includes leases signed on units that were vacant for over 12 months, leases signed without fixed rental payments and leases signed where the previous and the current lease do not have a consistent lease structure.

Capital Markets and Balance Sheet Activity In 2012, we continued to focus on strengthening our balance sheet by raising capital and deleveraging through asset dispositions and capital markets transactions. Specifically, we:
• completed a public offering of 36,570 shares of Class A common stock, resulting in gross proceeds of $292,560, or $272,081, net of the underwriting discount ($266,454, net of the underwriting discount and offering costs), and the listing of our Class A common stock on the NYSE under the symbol RPAI;

• completed a public offering of 5,400 shares of 7.00% Series A cumulative redeemable preferred stock, resulting in gross proceeds of $135,000, or $130,747, net of the underwriting discount ($130,289, net of the underwriting discount and offering costs);

• sold 31 operating properties, including one single-user office property that was transferred to the lender in a deed-in-lieu of foreclosure transaction, aggregating 4,420,300 square feet for total consideration of $475,631, resulting in net proceeds of $211,381 and debt extinguishment of $254,306;

• repaid $175,000, net of borrowings, on our senior unsecured revolving line of credit, obtained mortgages payable proceeds of $319,691, made mortgages and notes payable repayments of $953,494 (excluding principal amortization of $34,989) and received forgiveness of debt of $27,449 (including $23,570 of debt extinguishment presented in the preceding bullet); and

• liquidated our entire investments in securities portfolio, resulting in gains on sales of marketable securities of $25,840.

We plan to continue to pursue opportunistic dispositions of non-retail properties, free standing triple-net retail properties and non-strategic multi-tenant properties to focus our portfolio on well located, high quality shopping centers.
Joint Ventures
On February 7, 2012, we paid a nominal amount to acquire the remaining 13.3% noncontrolling interest in the Lake Mead Crossing joint venture, increasing our ownership interest in that venture from 86.7% as of December 31, 2011 to 100%.

On February 15, 2012, we transferred our entire interest in our Britomart unconsolidated joint venture to our partner in a consolidated joint venture, resulting in the noncontrolling interest holder's ownership interest being fully redeemed. Refer to Note 13 in the accompanying footnotes to the consolidated financial statements for further discussion.
On February 23, 2012, our RioCan joint venture acquired a 134,900 square foot multi-tenant retail property located in Southlake, Texas from our MS Inland joint venture for a purchase price of $35,366. We did not recognize our proportionate share of the gain realized by the MS Inland joint venture upon disposition due to our continuing involvement in the property. As part of the transaction, we made net cash contributions of $2,738 to the RioCan joint venture representing our share of the acquisition price, net of customary prorations and net of mortgage proceeds. We received $2,723 in cash distributions from the MS Inland joint venture representing our proportionate share of the proceeds realized upon disposition after payoff of the outstanding mortgage.
On April 26, 2012, we paid $55,397, representing the agreed upon repurchase price and accrued but unpaid preferred return, to repurchase the 23% ownership interest in IW JV. Such payment increased our ownership interest in IW JV from 77% to 100%.
During 2012, our Hampton joint venture sold a single-user retail property and a multi-tenant retail property aggregating 86,700 square feet for a combined sales price of $5,450. Proceeds from the sales were used to pay down $5,035 of the joint venture's debt.
Distributions
We declared quarterly distributions totaling $0.66 per share of common stock during 2012.
Results of Operations
We believe that net operating income (NOI) is a useful measure of our operating performance. We define NOI as operating revenues (rental income, tenant recovery income, other property income, excluding straight-line rental income, amortization of lease inducements and amortization of acquired above and below market lease intangibles) less property operating expenses (real estate tax expense and property operating expense, excluding straight-line ground rent expense and straight-line bad debt expense). Other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REITs.
This measure provides an operating perspective not immediately apparent from GAAP operating income or net (loss) income. We use NOI to evaluate our performance on a property-by-property basis because NOI allows us to evaluate the impact that factors such as lease structure, lease rates and tenant base, which vary by property, have on our operating results. However, NOI should only be used as an alternative measure of our financial performance. For reference and as an aid in understanding our computation of NOI, a reconciliation of NOI to net (loss) income available to common shareholders as computed in accordance with GAAP has been presented.
Comparison of the years ended December 31, 2012 and December 31, 2011 The following table presents operating information for our same store portfolio consisting of 239 operating properties acquired or placed in service prior to January 1, 2011, along with reconciliation to net operating income. The number of properties in our same store portfolio decreased to 239 as of December 31, 2012 from 250 as of September 30, 2012 as a result of the fourth quarter sales of eight investment properties, excluding the two properties classified as held for sale as of September 30, 2012 that subsequently sold in the fourth quarter of 2012, and the three properties classified as held for sale as of December 31, 2012, all of which qualified as discontinued operations. The properties in "Other investment properties" include our development properties, some of which became operational during the periods presented, two additional phases of existing properties acquired during the third quarter of 2011, two operating properties that were not stabilized for both periods presented and one property that was partially sold to our RioCan joint venture during the third quarter of 2011, which did not qualify for discontinued operations accounting treatment. In addition, we have included University Square, the property for which we have ceased making the monthly debt service payment and for which we have attempted to negotiate with the lender, in "Other investment properties" due to the uncertainty of the timing of transfer of ownership of this property.

                                               2012          2011         Impact      Percentage
Revenues:
Same store investment properties
(239 properties):
Rental income                               $ 439,021     $ 434,680     $   4,341           1.0
Tenant recovery income                        104,711       103,317         1,394           1.3
Other property income                           9,239         9,776          (537 )        (5.5 )
Other investment properties:
Rental income                                   9,455        13,296        (3,841 )
Tenant recovery income                          1,985         3,622        (1,637 )
Other property income                             459           319           140
Expenses:
Same store investment properties
(239 properties):
Property operating expenses                   (89,198 )     (90,766 )       1,568           1.7
Real estate taxes                             (71,622 )     (71,404 )        (218 )        (0.3 )
Other investment properties:
Property operating expenses                    (2,830 )      (4,595 )       1,765
Real estate taxes                              (4,571 )      (5,176 )         605
Net operating income:
Same store investment properties              392,151       385,603         6,548           1.7
Other investment properties                     4,498         7,466        (2,968 )
Total net operating income                    396,649       393,069         3,580           0.9

Other income (expense):
Straight-line rental income, net                  809          (109 )         918
Amortization of acquired above and below
market lease intangibles, net                   1,415         1,611          (196 )
Amortization of lease inducements                 (71 )         (29 )         (42 )
Straight-line ground rent expense              (3,784 )      (3,801 )          17
Depreciation and amortization                (217,303 )    (218,833 )       1,530
Provision for impairment of investment
properties                                     (1,323 )      (7,650 )       6,327
Loss on lease terminations                     (6,872 )      (8,590 )       1,718
General and administrative expenses           (26,878 )     (20,605 )      (6,273 )
Dividend income                                 1,880         2,538          (658 )
Interest income                                    72           663          (591 )
Gain on extinguishment of debt                  3,879        15,345       (11,466 )
Equity in loss of unconsolidated joint
ventures, net                                  (6,307 )      (6,437 )         130
Interest expense                             (179,237 )    (216,423 )      37,186
Co-venture obligation expense                  (3,300 )      (7,167 )       3,867
Recognized gain on marketable securities       25,840           277        25,563
Other income, net                                 296         2,032        (1,736 )
Total other expense                          (410,884 )    (467,178 )      56,294          12.0

Loss from continuing operations               (14,235 )     (74,109 )      59,874          80.8
Discontinued operations:
Loss, net                                     (24,196 )     (28,884 )       4,688
Gain on sales of investment properties, net    30,141        24,509         5,632
Income (loss) from discontinued operations      5,945        (4,375 )      10,320         235.9
Gain on sales of investment properties, net     7,843         5,906         1,937
Net loss                                         (447 )     (72,578 )      72,131          99.4
Net income attributable to noncontrolling
interests                                           -           (31 )          31
Net loss attributable to the Company             (447 )     (72,609 )      72,162          99.4
Preferred stock dividends                        (263 )           -          (263 )
Net loss available to common shareholders   $    (710 )   $ (72,609 )   $  71,899          99.0

Total net operating income increased by $3,580, or 0.9%. Total rental income, tenant recovery and other property income decreased by $140, or 0.0%, and total property operating expenses and real estate taxes decreased by $3,720, or 2.2%, for the year ended December 31, 2012, as compared to December 31, 2011. Same store net operating income increased by $6,548, or 1.7%.
Rental income. Rental income increased $4,341, or 1.0%, on a same store basis from $434,680 to $439,021. The same store increase is primarily due to:

• an increase of $5,078 consisting of $20,136 resulting from contractual rent increases and new tenant leases replacing former tenants, partially offset by a decrease of $15,058 from early terminations and natural expirations of certain tenant leases, partially offset by

• a decrease of $654 due to reduced rent as a result of co-tenancy provisions in certain leases, reduced percentage rent as a result of decreased tenant sales, and increased rent abatements as a result of efforts to increase occupancy.

Overall rental income increased $500, or 0.1%, from $447,976 to $448,476, due to the increase in the same store portfolio described above partially offset by a decrease of $3,841 in other investment properties, which primarily consisted of a decrease of $5,411 related to one property partially sold to our RioCan joint venture during the third quarter of 2011. This decrease was partially offset by an increase of $1,570 from two additional phases of existing properties acquired in 2011 as well as increased occupancy at our non-stabilized operating and development properties.
Tenant recovery income. Tenant recovery income increased $1,394, or 1.3%, on a same store basis from $103,317 to $104,711, primarily due to adjustments to the 2011 tenant recovery income estimates as a result of the completion of common area maintenance and real estate tax expense reconciliations during the year ended December 31, 2012, partially offset by decreases in tenant recoveries resulting from decreases in recoverable property operating expenses and real estate tax expense.
Total tenant recovery income decreased $243, or 0.2%, from $106,939 to $106,696, primarily due to a decrease in recovery income resulting from the property partially sold to our RioCan joint venture during the third quarter of 2011 and a decrease in recovery income at University Square, partially offset by increases related to our development and non-stabilized operating properties and from two additional phases of existing properties acquired during the third quarter of 2011 and the increase in the same store portfolio described above. Property operating expenses. Property operating expenses decreased $1,568, or 1.7%, on a same store basis from $90,766 to $89,198. The same store decrease is primarily due to decreases in certain recoverable property operating expenses of $2,543, primarily due to reduced snow removal expenses resulting from milder winter seasons in 2012 and a decrease in bad debt expense of $520, partially offset by an increase in certain non-recoverable property operating expenses of $1,495.
Total property operating expenses decreased $3,333, or 3.5%, from $95,361 to $92,028, primarily due to the decrease in the same store portfolio described above and decreases in certain recoverable and non-recoverable property operating expenses and bad debt expense in other investment properties of $1,151, $44 and $570, respectively.
Real estate taxes. Real estate taxes increased $218, or 0.3%, on a same store basis from $71,404 to $71,622. This increase is primarily due to:
• a net increase of $1,655 representing changes in prior year estimates adjusted based on actual real estate taxes paid;

• an $855 decrease in real estate tax refunds received, partially offset by

• a net decrease of $1,992 in current period expense primarily due to decreases in assessed values; and

• a decrease in tax consulting fees of $300.

Overall, real estate taxes decreased $387, or 0.5%, from $76,580 to $76,193 primarily due to a decrease in real estate tax expense of $1,193 related to the property partially sold to our RioCan joint venture during the third quarter of 2011, partially offset by an increase of $428 from University Square, an increase of $165 from two additional phases of existing properties acquired during the third quarter of 2011 and the increase in the same store portfolio described above.
Other income (expense). Total other expense decreased $56,294, or 12.0%, from $467,178 to $410,884, primarily due to:
• a $37,186 decrease in interest expense primarily consisting of:

•         a $26,870 decrease in interest on mortgages payable and construction
          loans due to the repayment of mortgage debt;


•         a net increase of $4,181 in mortgage premium amortization related to
          the repayment of a cross-collateralized pool of mortgages in 2012;

• a decrease in amortization of loan fees of $2,651;

•         a decrease in interest on our credit facility of $1,988 due to lower
          interest rates following the February 2012 amendment and restatement of
          the facility;

•         a $992 decrease in interest on our derivative liabilities primarily due
          to the reclassification of $1,445 of previously deferred accumulated
          other comprehensive income into earnings in 2011; and


•         a $733 decrease in interest on notes payable due to the repayment of a
          $13,900 mezzanine note in July 2012.

The significant decrease in interest expense was primarily due to a reduction in overall leverage. We expect a decrease in interest expense in 2013, but a smaller decrease than the 2012 decrease, based on continued execution of our strategic initiatives.
• a $25,563 increase in recognized gain on marketable securities due to the sales of our remaining marketable securities portfolio in 2012;

• a $6,327 decrease in provision for impairment of investment properties. Based on the results of our evaluations for impairment (see Notes 17 and 18 to the consolidated financial statements), we recognized impairment charges of $1,323 and $7,650 for the years ended December 31, 2012 and 2011, respectively. In addition to those properties that were impaired, 10 of our properties, excluding properties sold, classified as held for sale or owned by an unconsolidated joint venture, had impairment indicators at . . .