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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
     
þ   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2009
OR
     
o   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 001-31817
CEDAR SHOPPING CENTERS, INC.
(Exact name of registrant as specified in its charter)
     
Maryland   42-1241468
(State or other jurisdiction of incorporation or organization)   (I.R.S. Employer Identification Number)
     
44 South Bayles Avenue, Port Washington, NY   11050-3765
(Address of principal executive offices)   (Zip Code)
Registrant’s telephone number, including area code: (516) 767-6492
Securities registered pursuant to Section 12(b) of the Act:
     
    Name of each exchange on
Title of each class   which registered
Common Stock, $0.06 par value
  New York Stock Exchange
8-7/8% Series A Cumulative Redeemable Preferred Stock, $25.00 Liquidation 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 þ
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 þ
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 þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. 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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
             
Large accelerated filer o   Accelerated filer þ   Non-accelerated filer o   Smaller reporting company o
        (Do not check if a smaller reporting company)    
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ
Based on the closing sales price on June 30, 2009 of $4.52 per share, the aggregate market value of the voting stock held by non-affiliates of the registrant was approximately $196,177,000.
The number of shares outstanding of the registrant’s Common Stock $.06 par value was 62,007,366 on February 28, 2010.
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the registrant’s definitive proxy statement relating to its 2010 annual meeting of shareholders are incorporated herein by reference.
 
 

 


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CEDAR SHOPPING CENTERS, INC.
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (AS AMENDED)
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009
Cedar Shopping Centers, Inc. (the “Company”) is issuing revised historical financial statements and certain related data that had been included in its Annual Report on Form 10-K for the year ended December 31, 2009 for the matters described below. The effect of such matters was reflected, retroactively as appropriate, in the Company’s consolidated financial statements included in each of the Company’s Quarterly Reports on Form 10-Q for the periods ended March 31, 2010 (the “First Quarterly Report”) and June 30, 2010 (the “Second Quarterly Report”). Such Annual Report was filed with the Securities and Exchange Commission (the “SEC”) on March 15, 2010 (the “Original Filing”); the Company filed its First Quarterly Report on May 10, 2010 and its Second Quarterly Report on August 5, 2010.
Subsequent to December 31, 2009, the Company determined that at the time it acquired certain properties during 2003 through 2009, it had underprovided for certain identifiable intangible lease liabilities relating to fixed-price renewal options that were at below-market rates. At the time such properties were acquired, the Company determined the fair value of such renewal options to be immaterial, based upon the Company’s assessment of a very low probability that any of such renewal options would be exercised. Accordingly, the Company assigned a zero value to such renewal options. The Company has reconsidered these determinations and has concluded that option renewal periods should have been valued with respect to certain of the leases, as further described in Note 2 in the notes to the consolidated financial statements. Using the updated assumptions, the Company determined that the December 31, 2009 carrying amounts of unamortized intangible lease liabilities and real estate, net, were understated by $8,429,000 and $7,688,000, respectively (the latter amount net of $741,000, representing the cumulative understated depreciation expense for the period 2003 through 2009). In addition, total equity and limited partners’ interest in the Operating Partnership were overstated by $723,000 and $18,000, respectively, as of December 31, 2009, reflecting the aforementioned cumulative depreciation adjustment. The Company determined that the aforementioned adjustments were immaterial to any full year’s consolidated financial statements; however, the Company did determine that recording the adjustments entirely in the quarterly period ended March 31, 2010 would have been material to the consolidated statement of operations for that period. Accordingly, as provided by the SEC’s Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements”, such adjustments were reflected retroactively in the consolidated financial statements included in the First Quarterly Report (including revisions of prior-period amounts to conform to the 2010 presentation). Under SEC requirements, these revisions are required for previously-issued annual financial statements for each of the three years shown in the Original Filing if those financial statements are incorporated by reference in subsequent filings made under the Securities Act of 1933, as amended.

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In addition, subsequent to December 31, 2009, the Company sold or has treated as “held for sale” two properties, one each reflected in the consolidated financial statements included in the First and Second Quarterly Reports. In compliance with the provisions of Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the results of operations of these two properties were reported as components of “discontinued operations” for each of the periods presented (including reclassifications of prior-period amounts to conform to the 2010 presentation), as further described in Note 3 in the notes to consolidated financial statements. Under SEC requirements, the same retroactive reclassifications are required for previously-issued annual financial statements for each of the three years shown in the Original Filing, if those financial statements are incorporated by reference in subsequent filings made under the Securities Act of 1933, as amended.
This Report on Form 10-K/A is being filed to revise the information contained in Items 1 and 2 in Part I, Items 6, 7, 7A and 8 in Part II, and the financial statement schedule in Part IV of the Original Filing in their entirety to conform to the 2010 presentations included in the First and Second Quarterly Reports. This Report on Form 10-K/A does not attempt to modify or update any other disclosures set forth in the Original Filing, except as required to reflect the aforementioned amended information. In addition, except for the amended information included herein, this Form 10-K/A speaks as of the filing date of the Original Filing and does not update or discuss any other developments affecting the Company subsequent to the date of the Original Filing.
         
Item No.   Page No.
PART I
    4  
 
       
PART II
 
       
    13  
    15  
    32  
    34  
 
       
PART IV
    87  
 EX-23.1
 EX-31.1
 EX-31.2
 EX-32.1
 EX-32.2

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Part I.
Items 1 and 2. Business and Properties
General
     Cedar Shopping Centers, Inc. (the “Company”), organized in 1984, is a fully-integrated real estate investment trust which focuses primarily on ownership, operation, development and redevelopment of supermarket-anchored shopping centers in mid-Atlantic and Northeast coastal states. At December 31, 2009, the Company owned and managed (both wholly-owned and in joint venture) a portfolio of 117 operating properties totaling approximately 12.8 million square feet of gross leasable area (“GLA”), including 93 wholly-owned properties comprising approximately 9.3 million square feet, 13 properties owned in joint venture (consolidated) comprising approximately 1.7 million square feet, seven properties transferred or to be transferred to a managed joint venture (unconsolidated) comprising approximately 1.2 million square feet, and four ground-up developments comprising approximately 0.6 million square feet. Excluding the four ground-up development properties, the 113 property portfolio was approximately 91% leased at December 31, 2009; the 99 property “stabilized” portfolio was approximately 95% leased at that date. The Company also owned approximately 196 acres of land parcels, a significant portion of which is under development. In addition, the Company has a 76.3% interest in another unconsolidated joint venture, which it does not manage, which owns a single-tenant office property in Philadelphia, Pennsylvania.
     The Company has elected to be taxed as a real estate investment trust (“REIT”) under applicable provisions of the Internal Revenue Code of 1986, as amended (the “Code”). To qualify as a REIT under those provisions, the Company must have a preponderant percentage of its assets invested in, and income derived from, real estate and related sources. The Company’s objectives are to provide to its shareholders a professionally-managed, diversified portfolio of commercial real estate investments (primarily supermarket-anchored shopping centers), which will provide substantial cash flow, currently and in the future, taking into account an acceptable modest risk profile, and which will present opportunities for additional growth in income and capital appreciation.
     The Company, organized as a Maryland corporation, has established an umbrella partnership structure through the contribution of substantially all of its assets to Cedar Shopping Centers Partnership L.P. (the “Operating Partnership”), organized as a limited partnership under the laws of Delaware. The Company conducts substantially all of its business through the Operating Partnership. At December 31, 2009, the Company owned 96.3% of the Operating Partnership and is its sole general partner. The approximately 2,006,000 limited Operating Partnership Units (“OP Units”) are economically equivalent to the Company’s common stock and are convertible into the Company’s common stock at the option of the holders on a one-to-one basis.
     The Company derives substantially all of its revenues from rents and operating expense reimbursements received pursuant to long-term leases. The Company’s operating results therefore depend on the ability of its tenants to make the payments required by the terms of their leases. The Company focuses its investment activities on supermarket-anchored community shopping centers. The Company believes that, because of the need of consumers to purchase food and other staple goods and services generally available at such centers, its type of “necessities”-based properties should provide

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relatively stable revenue flows even during difficult economic times.
     In connection with the transactions with RioCan (more fully described below), the Company will seek to acquire primarily stabilized supermarket-anchored properties in its primary market areas during the next two years in a joint venture owned 20% by the Company. The Company has historically sought opportunities to acquire properties suited for development and/or redevelopment, and, to a lesser extent than in the past, stabilized properties, where it can utilize its experience in shopping center construction, renovation, expansion, re-leasing and re-merchandising to achieve long-term cash flow growth and favorable investment returns.
     The Company, the Operating Partnership, their subsidiaries and affiliated partnerships are separate legal entities. For ease of reference, the terms “we”, “our”, “us”, “Company” and “Operating Partnership” (including their respective subsidiaries and affiliates) refer to the business and properties of all these entities, unless the context otherwise requires. The Company’s executive offices are located at 44 South Bayles Avenue, Port Washington, New York 11050-3765 (telephone 516-767-6492). The Company also currently maintains property management, construction management and/or leasing offices at several of its shopping-center properties. The Company’s website can be accessed at www.cedarshoppingcenters.com, where a copy of the Company’s Forms 10-K, 10-Q, 8-K and other filings with the Securities and Exchange Commission (“SEC”) can be obtained free of charge. These SEC filings are added to the website as soon as reasonably practicable. The Company’s Code of Ethics, corporate governance guidelines and committee charters are also available on the website.
Recent Developments and Significant Transactions
Public Offering of Common Stock
     On February 5, 2010, the Company concluded a public offering of 7,500,000 shares of its common stock at $6.60 per share, and realized net proceeds after offering expenses of approximately $47.0 million. On March 3, 2010, the underwriters exercised their over-allotment option to the extent of 697,800 shares, and the Company realized additional net proceeds of $4.4 million. In connection with the offering, RioCan (see below) acquired 1,350,000 shares of the Company’s common stock, including 100,000 shares acquired in connection with the exercise of the over-allotment option, and the Company realized net proceeds of $8.9 million.
Reinstatement of Dividend
     In December 2009, following a review of the state of the economy and the Company’s financial position, the Company’s Board of Directors determined to resume payment of a quarterly cash dividend in the amount of $0.09 per share ($0.36 per share on an annualized basis) on the Company’s common stock, which was paid on January 20, 2010 to shareholders of record as of the close of business on December 31, 2009.

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RioCan
     On October 26, 2009, the Company entered into definitive agreements with RioCan Real Estate Investment Trust of Toronto, Canada, a publicly-traded Canadian real estate investment trust listed on the Toronto Stock Exchange (“RioCan”), pursuant to which the Company (1) sold to RioCan 6,666,666 shares of the Company’s common stock at $6.00 per share in a private placement for an aggregate of $40 million (RioCan agreeing that it would not sell any of such shares for a period of one year), (2) issued to RioCan warrants to purchase 1,428,570 shares of the Company’s common stock at an exercise price of $7.00 per share, exercisable over a two-year period, (3) entered into an 80% (RioCan) and 20% (Cedar) joint venture (i) initially for the purchase of seven supermarket-anchored properties presently owned by the Company, and (ii) then to acquire additional primarily supermarket-anchored properties in the Company’s primary market areas during the next two years, in the same joint venture format, and (4) entered into a “standstill” agreement with respect to increases in RioCan’s ownership of the Company’s common stock for a three-year period. In addition, subject to certain exceptions, the Company has agreed that it will not issue any new shares of common stock unless RioCan is offered the right to purchase an additional number of shares that will maintain its pro rata percentage ownership, on a fully diluted basis. In connection with the formation of the joint venture, the Company recorded an impairment charge of $23.6 million relating to the seven properties transferred or to be transferred to the joint venture.
     The private placement investment by RioCan and the issuance of the warrants by the Company were concluded on October 30, 2009. Two of the properties (Blue Mountain Commons located in Harrisburg, Pennsylvania and Sunset Crossing located in Dickson City, Pennsylvania) were transferred to the joint venture on December 10, 2009, resulting in proceeds to the Company of approximately $33 million (in connection with the closing, a repayment of $25.9 million was required under the Company’s secured revolving development property credit facility). The remaining five properties are subject to mortgage loans payable aggregating approximately $94 million. Two of the properties (Columbus Crossing Shopping Center located in Philadelphia, Pennsylvania and Franklin Village Plaza located in Franklin, Massachusetts) were transferred to the joint venture in January and February 2010, resulting in net proceeds to the Company of approximately $16 million. The remaining three properties (Loyal Plaza Shopping Center located in Williamsport, Pennsylvania, Shaw’s Plaza located in Raynham, Massachusetts, and Stop & Shop Plaza located in Bridgeport, Connecticut) are to be transferred during the first half of 2010, resulting in net proceeds to the Company of an additional approximately $16 million.
     In connection with the transfers of the seven properties to the joint venture and the private placement transactions, the Company will have received aggregate net proceeds of approximately $105 million, after estimated closing and transaction costs, which have been or will be used to repay/reduce the outstanding balances under the Company’s secured revolving credit facilities.
Amended and Restated Credit Facility
     On November 10, 2009, the Company closed an amended and restated secured revolving stabilized property credit facility in the amount of $265 million (subsequently increased to $285 million), with Bank of America, N.A. continuing as administrative agent, together with three other lead lenders and other participating banks. The facility, as amended, is expandable to $400 million

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subject to certain conditions, including acceptable collateral. This amended and restated facility replaced the existing facility that was due to expire on January 30, 2010, and will continue to be available to fund acquisitions, certain development and redevelopment activities, capital expenditures, mortgage repayments, dividend distributions, working capital and other general corporate purposes. The new facility has a maturity date of January 31, 2012, subject to a one-year extension option. As a result of the application of the net proceeds from, among other things, the transfers of two of the remaining properties to the RioCan joint venture and the sales of shares of the Company’s common stock in February and March 2010, the Company’s availability under this facility has increased to approximately $104 million as of March 3, 2010.
Joint Venture With PCP
     On January 30, 2009, a newly-formed 40% Company-owned joint venture acquired the New London Mall in New London, Connecticut, an approximate 259,000 square foot supermarket-anchored shopping center, for a purchase price of approximately $40.7 million. The purchase price included the assumption of an existing $27.4 million first mortgage bearing interest at 4.9% per annum and maturing in 2015. The total joint venture partnership contribution was approximately $14.0 million, of which the Company’s 40% share ($5.6 million) was funded from its secured revolving stabilized property credit facility. The Company is the managing partner of the venture and receives certain acquisition, property management, construction management and leasing fees. In addition, the Company will be entitled to a “promote” fee structure, pursuant to which its profits participation would be increased to 44% if the venture reaches certain income targets. The Company’s joint venture partners are affiliates of Prime Commercial Properties PLC (“PCP”), a London-based real estate/development company.
     On February 10, 2009, a second newly-formed (also with affiliates of PCP) 40% Company-owned joint venture acquired San Souci Plaza in California, Maryland, an approximate 264,000 square foot supermarket-anchored shopping center, for a purchase price of approximately $31.8 million. The purchase price included the assumption of an existing $27.2 million first mortgage bearing interest at 6.2% per annum and maturing in 2016. The total joint venture partnership contribution was approximately $5.8 million, of which the Company’s 40% share ($2.3 million) was funded from its secured revolving stabilized property credit facility. The Company is the managing partner of the venture and receives certain acquisition, property management, construction management and leasing fees. In addition, the Company will be entitled to a “promote” fee structure, pursuant to which its profits participation would be increased to 44% if the venture reaches certain income targets.
Discontinued Operations
     During 2009 and subsequent to December 31, 2009, the Company sold, or has treated as “held for sale”, 11 of its properties (primarily drug store/convenience centers), located in Ohio, Maryland and New York, aggregating 416,000 square feet of GLA, including the 6,000 square foot McDonalds/Waffle House, located in Medina, Ohio, the 10,000 square foot CVS property located in Westfield, New York, the 24,000 square foot Staples property located in Oswego, New York, the 32,000 square foot Discount Drug Mart Plaza located in Hudson, Ohio, the 38,000 square foot Discount Drug Mart Plaza located in Dover, Ohio, the 84,000 square foot Gabriel Brothers property located in Kent, Ohio, the 40,000 square foot Discount Drug Mart Plaza located in Carrollton, Ohio, the 20,000 square foot Pondside Plaza located in Geneseo, New York, the 50,000 square foot Discount Drug Mart Plaza located in Powell,

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Ohio, the 7,000 square foot Family Dollar convenience center located in Zanesville, Ohio, and the 105,000 square foot Long Reach Village property located in Columbia, Maryland. The aggregate of the sales prices for the 11 properties is approximately $33.3 million, and the properties are subject to property-specific mortgage loans payable of approximately $22.4 million. In connection with these transactions, the Company recorded impairment charges aggregating $6.5 million (including $3.0 million subsequent to December 31, 2009), and has realized gain on sales of $727,000 (including $170,000 subsequent to December 31, 2009). The carrying values of the assets and liabilities of these properties, principally the net book values of the real estate and the related mortgage loans payable, have been reclassified as “held for sale” on the Company’s consolidated balance sheets at December 31, 2009 and 2008. In addition, the properties’ results of operations have been classified as “discontinued operations” for all periods presented.
The Company’s Properties
     The following tables summarize information relating to the Company’s properties as of December 31, 2009:
                                                                         
                                                            Unconsolidated        
                                                            joint venture     Real estate to  
    Number of     GLA             Building and             Accumulated     Net book     managed     be transferred  
State   properties     (Sq. ft.)     Land     improvements     Total cost     depreciation     value     properties     to a joint venture  
Pennsylvania
    52       6,645,891       168,934,000       683,956,000     $ 852,890,000       88,133,000     $ 764,757,000       8,638,000       53,417,000  
Massachusetts
    8       1,486,033       27,231,000       115,543,000       142,774,000       11,128,000       131,646,000             76,815,000  
Connecticut
    9       1,217,789       33,426,000       128,636,000       162,062,000       16,208,000       145,854,000             9,511,000  
Virginia
    13       815,969       28,878,000       102,531,000       131,409,000       15,316,000       116,093,000              
Ohio
    20       710,444       18,165,000       78,230,000       96,395,000       10,838,000       85,557,000              
Maryland
    7       835,972       28,843,000       78,867,000       107,710,000       8,150,000       99,560,000              
New Jersey
    4       825,276       13,764,000       74,865,000       88,629,000       9,615,000       79,014,000              
New York
    3       226,043       13,809,000       38,418,000       52,227,000       3,196,000       49,031,000              
Michigan
    1       77,688       2,443,000       9,813,000       12,256,000       1,295,000       10,961,000              
     
 
                                                                       
Total operarting portfolio
    117       12,841,105       335,493,000       1,310,859,000       1,646,352,000       163,879,000       1,482,473,000       8,638,000       139,743,000  
 
                                                                       
Projects under development and land held for future expansion and development
    n/a       n/a       20,873,000       5,456,000       26,329,000             26,329,000              
     
 
                                                                       
Total portfolio
    117       12,841,105     $ 356,366,000     $ 1,316,315,000     $ 1,672,681,000     $ 163,879,000     $ 1,508,802,000       8,638,000     $ 139,743,000  
 
                                                     
Unconsolidated joint venture — not managed (a)
                                                            5,475,000          
 
                                                                     
Total unconsolidated joint ventures
                                                          $ 14,113,000          
 
                                                                     
 
(a)   The Company has a 76.3% interest in an unconsolidated joint venture, which it does not manage, which owns a single-tenant office property located in Philadelphia, PA.

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    Number                             Annualized     Percentage of  
    of             Percentage     Annualized     Base rent     annualized  
Tenant (a)   stores     GLA     of GLA     base rent     per sq. ft.     base rents  
Top ten tenants (b):
                                               
Giant Foods (c)
    22       1,328,000       10.3 %     21,503,000     $ 16.19       16.1 %
Farm Fresh (c)
    6       364,000       2.8 %     3,880,000       10.66       2.9 %
Stop & Shop (c)
    5       325,000       2.5 %     3,494,000       10.75       2.6 %
Discount Drug Mart
    14       346,000       2.7 %     3,280,000       9.48       2.5 %
Shaw’s (c)
    4       241,000       1.9 %     2,716,000       11.27       2.0 %
L.A. Fitness
    4       168,000       1.3 %     2,496,000       14.86       1.9 %
CVS
    10       113,000       0.9 %     2,335,000       20.66       1.7 %
Food Lion (c)
    7       243,000       1.9 %     1,921,000       7.91       1.4 %
Staples
    7       145,000       1.1 %     1,821,000       12.56       1.4 %
Shop Rite
    2       118,000       0.9 %     1,599,000       13.55       1.2 %
 
                                   
Sub-total top ten tenants (d)
    81       3,391,000       26.4 %     45,045,000       13.28       33.7 %
Remaining tenants
    1,171       8,184,000       63.7 %     88,464,000       10.81       66.3 %
 
                                   
Sub-total all tenants
    1,252       11,575,000       90.1 %     133,509,000       11.53       100.0 %
Vacant space (e)
    n/a       1,266,000       9.9 %     n/a       n/a       n/a  
 
                                   
Total (including vacant space)
    1,252       12,841,000       100.0 %     133,509,000       10.40       n/a  
 
                                   
 
(a)   Incudes unconsolidated managed joint venture properties.
 
(b)   Based on annualized base rent.
 
(c)   Several of the tenants listed above share common ownership with other tenants including, without limitation, (1) Giant Foods and Stop & Shop, (2) Farm Fresh, Shaw’s, Shop ‘n Save (GLA of 53,000; annualized base rent of $495,000), Shoppers Food Warehouse (GLA of 120,000; annualized base rent of $1,206,000) and Acme (GLA of 172,000; annualized base rent of $756,000), and (3) Food Lion and Hannaford (GLA of 43,000; annualized base rent of $405,000).
 
(d)   Includes tenants at ground-up development properties.
 
(e)   Includes vacant space at properties undergoing development and/or redevelopment activities.

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                                            Percentage  
    Tenants             Percentage     Annualized     Annualized     of annualized  
Year of lease   with leases     GLA     of GLA     expiring     expiring base     expiring  
expiration (a)   expiring     expiring     expiring     base rents     rents per sq. ft.     base rents  
Month-to-Month
    81       211,000       1.8 %   $ 2,759,000     $ 13.08       2.1 %
2010
    160       800,000       6.9 %     9,731,000       12.16       7.3 %
2011
    179       1,013,000       8.8 %     11,498,000       11.35       8.6 %
2012
    174       838,000       7.2 %     9,700,000       11.58       7.3 %
2013
    141       752,000       6.5 %     9,207,000       12.24       6.9 %
2014
    148       1,347,000       11.6 %     12,785,000       9.49       9.6 %
2015
    100       1,046,000       9.0 %     9,661,000       9.24       7.2 %
2016
    48       605,000       5.2 %     5,838,000       9.65       4.4 %
2017
    37       487,000       4.2 %     6,191,000       12.71       4.6 %
2018
    40       723,000       6.2 %     8,590,000       11.88       6.4 %
2019
    37       562,000       4.9 %     6,127,000       10.90       4.6 %
2020
    29       932,000       8.1 %     7,621,000       8.18       5.7 %
Thereafter
    78       2,259,000       19.5 %     33,801,000       14.96       25.3 %
 
                                   
All tenants (b)
    1,252       11,575,000       100.0 %     133,509,000       11.53       100.0 %
Vacant space (c)
    n/a       1,266,000       n/a       n/a       n/a       n/a  
 
                                   
Total portfolio
    1,252       12,841,000       n/a     $ 133,509,000     $ 10.40       n/a  
 
                                   
 
(a)   Incudes unconsolidated managed joint venture properties.
 
(b)   Includes tenants at ground-up development properties.
 
(c)   Includes vacant space at properties undergoing development and/or redevelopment activities.
     The terms of the Company’s retail leases generally vary from tenancies at will to 25 years, excluding renewal options. Anchor tenant leases are typically for 10 to 25 years, with one or more renewal options available to the lessee upon expiration of the initial lease term. By contrast, smaller store leases are typically negotiated for 5-year terms. The longer terms of major tenant leases serve to protect the Company against significant vacancies and to assure the presence of strong tenants which draw consumers to its centers. The shorter terms of smaller store leases allow the Company under appropriate circumstances to adjust rental rates periodically for non-major store space and, where possible, to upgrade or adjust the overall tenant mix.
     Most leases contain provisions requiring tenants to pay their pro rata share of real estate taxes, insurance and certain operating costs. Some leases also provide that tenants pay percentage rent based upon sales volume generally in excess of certain negotiated minimums.
     Giant Food Stores, LLC (“Giant Foods”), which is owned by Ahold N.V., a Netherlands corporation, leased approximately 10%, 9% and 9% of the Company’s GLA at December 31, 2009, 2008 and 2007, respectively, and accounted for approximately 12%, 12% and 13% of the Company’s total revenues during 2009, 2008 and 2007, respectively. Giant Foods, in combination with Stop & Shop, Inc., which is also owned by Ahold N.V., accounted for approximately 15%, 15% and 15% of the Company’s total revenues during 2009, 2008 and 2007, respectively. Of these amounts, 3%,

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respectively, were attributable to Giant Foods’ revenues at the seven properties transferred or to be transferred to the RioCan joint venture, for each of the periods presented. No other tenant leased more than 10% of GLA at December 31, 2009, 2008 or 2007, or contributed more than 10% of total revenues during 2009, 2008 or 2007. No individual property had a net book value equal to more than 10% of total assets at December 31, 2009, 2008 or 2007.
     Depreciation on all of the Company’s properties is calculated using the straight-line method over the estimated useful lives of the respective real properties and improvements, which range from three to forty years.
     The Company’s executive offices are located at 44 South Bayles Avenue, Port Washington, New York, in which it presently occupies approximately 8,600 square feet leased from a partnership owned 43.6% by the Company’s Chairman. Under the terms of the lease, as amended, which will expire in February 2020, the Company will add an additional 6,400 square feet by the end of 2010. The Company believes that the terms of its lease are at market.
Competition
     The Company believes that competition for the acquisition and operation of retail shopping and convenience centers is highly fragmented. It faces competition from institutional investors, public and private REITs, owner-operators engaged in the acquisition, ownership and leasing of shopping centers, as well as from numerous local, regional and national real estate developers and owners in each of its markets. It also faces competition in leasing available space at its properties to prospective tenants. Competition for tenants varies depending upon the characteristics of each local market in which the Company owns and manages properties. The Company believes that the principal competitive factors in attracting tenants in its market areas are location, price and other lease terms, the presence of anchor tenants, the mix, quality and sales results of other tenants, and maintenance, appearance, access and traffic patterns of its properties.
Environmental Matters
     Under various federal, state, and local laws, ordinances and regulations, an owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances or other contaminants at property owned, leased, managed or otherwise operated by such person, and may be held liable to a governmental entity or to third parties for property damage, and for investigation and clean up costs in connection with such contamination. The cost of investigation, remediation or removal of such substances may be substantial, and the presence of such substances, or the failure to properly remediate such conditions, may adversely affect the owner’s, lessor’s or operator’s ability to sell or rent such property or to arrange financing using such property as collateral. In connection with the ownership, operation and management of real estate, the Company may potentially become liable for removal or remediation costs, as well as certain other related costs and liabilities, including governmental fines and injuries to persons and/or property.
     The Company believes that environmental studies conducted at the time of acquisition with respect to all of its properties have not revealed environmental liabilities that would have a material adverse affect on its business, results of operations or liquidity. However, no assurances can be given

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that existing environmental studies with respect to any of the properties reveal all environmental liabilities, that any prior owner of or tenant at a property did not create a material environmental condition not known to the Company, or that a material environmental condition does not otherwise exist at any one or more of its properties. If a material environmental condition does in fact exist, it could have an adverse impact upon the Company’s financial condition, results of operations and liquidity.
Employees
     As of December 31, 2009, the Company had 102 employees (95 full-time and 7 part-time). The Company believes that its relations with its employees are good.

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Part II.
Item 6. Selected Financial Data (a)
                                         
    Years ended December 31,  
    2009     2008     2007     2006     2005  
Operations data:
                                       
 
                                       
Total revenues
  $ 180,115,000     $ 168,943,000     $ 148,952,000     $ 122,356,000     $ 76,931,000  
 
                             
Expenses:
                                       
Property operating expenses
    54,815,000       47,868,000       39,269,000       34,053,000       21,866,000  
General and administrative
    10,166,000       8,586,000       9,041,000       6,086,000       5,132,000  
Impairments
    23,636,000                          
Terminated projects and acquisition transaction costs
    4,367,000       855,000                    
Depreciation and amortization
    54,044,000       48,488,000       40,637,000       33,550,000       19,870,000  
 
                             
Total expenses
    147,028,000       105,797,000       88,947,000       73,689,000       46,868,000  
 
                                       
Operating income
    33,087,000       63,146,000       60,005,000       48,667,000       30,063,000  
 
                                       
Non-operating income and expense:
                                       
Interest expense and amortization of deferred financing costs
    (49,504,000 )     (44,646,000 )     (38,203,000 )     (33,524,000 )     (15,858,000 )
Equity in income of unconsolidated joint ventures
    1,098,000       956,000       634,000       70,000        
Gain on sales of real estate
    521,000                   141,000        
Interest income
    63,000       284,000       788,000       641,000       91,000  
 
                             
Total non-operating income and expense
    (47,822,000 )     (43,406,000 )     (36,781,000 )     (32,672,000 )     (15,767,000 )
 
                                       
(Loss) income before discontinued operations
    (14,735,000 )     19,740,000       23,224,000       15,995,000       14,296,000  
 
                                       
(Loss) income from discontinued operations
    (2,833,000 )     1,058,000       643,000       851,000       430,000  
Gain on sales of discontinued operations
    557,000                          
 
                             
 
                                       
Net (loss) income
    (17,011,000 )     20,798,000       23,867,000       16,846,000       14,726,000  
 
                                       
Minority interests in consolidated joint ventures
    (772,000 )     (2,157,000 )     (1,415,000 )     (1,202,000 )     (1,270,000 )
Limited partners’ interest in Operating Partnership
    912,000       (468,000 )     (627,000 )     (389,000 )     (296,000 )
 
                             
 
                                       
Net (loss) income attributible to Cedar Shopping Centers, Inc.
    (16,871,000 )     18,173,000       21,825,000       15,255,000       13,160,000  
 
                                       
Preferred distribution requirements
    (7,876,000 )     (7,877,000 )     (7,877,000 )     (7,877,000 )     (7,186,000 )
 
                             
 
                                       
Net (loss) income attributable to common shareholders
  $ (24,747,000 )   $ 10,296,000     $ 13,948,000     $ 7,378,000     $ 5,974,000  
 
                             
 
                                       
Per common share (basic and diluted) attributable to common shareholders:
                                       
Continuing operations
  $ (0.49 )   $ 0.21     $ 0.30     $ 0.20     $ 0.23  
Discontinued operations
    (0.05 )     0.02       0.02       0.02       0.02  
 
                             
 
  $ (0.54 )   $ 0.23     $ 0.32     $ 0.22     $ 0.25  
 
                             
 
                                       
Amounts attributable to Cedar Shopping Centers, Inc. common shareholders, net of limited partners’ interest
                                       
(Loss) income from continuing operations
  $ (22,552,000 )   $ 9,284,000     $ 13,333,000     $ 6,570,000     $ 5,564,000  
(Loss) income from discontinued operations
    (2,195,000 )     1,012,000       615,000       808,000       410,000  
 
                             
Net (loss) income
  $ (24,747,000 )   $ 10,296,000     $ 13,948,000     $ 7,378,000     $ 5,974,000  
 
                             
 
                                       
Dividends to common shareholders
  $ 9,742,000     $ 40,027,000     $ 39,775,000     $ 29,333,000     $ 20,844,000  
Per common share
  $ 0.2025     $ 0.9000     $ 0.9000     $ 0.9000     $ 0.9000  
 
                                       
Weighted average number of common shares outstanding:
                                       
Basic
    46,234,000       44,475,000       44,193,000       32,926,000       23,988,000  
 
                             
Diluted
    46,234,000       44,475,000       44,197,000       33,055,000       24,031,000  
 
                             

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Item 6. Selected Financial Data (a) (continued)
                                         
    Years ended December 31,  
    2009     2008     2007     2006     2005  
Balance sheet data:
                                       
 
                                       
Real estate, net
  $ 1,508,802,000     $ 1,412,783,000     $ 1,297,860,000     $ 974,032,000     $ 795,537,000  
Real estate to be transferred to a joint venture
    139,743,000       194,952,000       165,277,000       166,639,000       124,005,000  
Real estate held for sale — discontinued operations
    21,380,000       42,267,000       43,911,000       44,050,000       33,079,000  
Investment in unconsolidated joint ventures
    14,113,000       4,976,000       3,757,000       3,644,000        
Other assets
    101,080,000       80,050,000       92,290,000       66,797,000       46,623,000  
 
                             
Total assets
  $ 1,785,118,000     $ 1,735,028,000     $ 1,603,095,000     $ 1,255,162,000     $ 999,244,000  
 
                             
 
                                       
Mortgages and loans payable
  $ 945,974,000     $ 913,430,000     $ 757,979,000     $ 474,072,000     $ 460,506,000  
Mortgage loans payable — real estate to be transferred to a joint venture
    94,018,000       77,307,000       70,458,000       70,599,000       56,874,000  
Mortgage loans payable — discontinued operations
    12,455,000       22,736,000       23,077,000       23,402,000       10,411,000  
Other liabilities
    106,269,000       116,361,000       105,654,000       74,206,000       47,477,000  
 
                             
Total liabilities
    1,158,716,000       1,129,834,000       957,168,000       642,279,000       575,268,000  
Limited partners’ interest in Operating Partnership
    12,638,000       14,257,000       15,570,000       19,608,000       16,657,000  
Equity:
                                       
Cedar Shopping Centers, Inc. shareholders’ equity
    538,456,000       523,521,000       557,849,000       574,311,000       390,164,000  
Noncontrolling interests
    75,308,000       67,416,000       72,508,000       18,964,000       17,155,000  
 
                             
Total equity
    613,764,000       590,937,000       630,357,000       593,275,000       407,319,000  
 
                             
Total liabilities and equity
  $ 1,785,118,000     $ 1,735,028,000     $ 1,603,095,000     $ 1,255,162,000     $ 999,244,000  
 
                             
 
                                       
Weighted average number of common shares:
                                       
Shares used in determination of basic earnings per share
    46,234,000       44,475,000       44,193,000       32,926,000       23,988,000  
Additional shares assuming conversion of OP Units (basic)
    2,014,000       2,024,000       1,985,000       1,737,000       1,202,000  
 
                             
Shares used in determination of basic FFO per share
    48,248,000       46,499,000       46,178,000       34,663,000       25,190,000  
 
                             
 
                                       
Shares used in determination of diluted earnings per share
    46,234,000       44,475,000       44,197,000       33,055,000       24,031,000  
Additional shares assuming conversion of OP Units (diluted)
    2,014,000       2,024,000       1,990,000       1,747,000       1,206,000  
 
                             
Shares used in determination of diluted FFO per share
    48,248,000       46,499,000       46,187,000       34,802,000       25,237,000  
 
                             
 
                                       
Other data:
                                       
Funds From Operations (“FFO”) (b)
  $ 24,581,000     $ 56,859,000     $ 56,190,000     $ 41,954,000     $ 25,923,000  
 
                                       
Per common share (assuming conversion of OP Units) (basic and diluted):
  $ 0.51     $ 1.22     $ 1.22     $ 1.21     $ 1.03  
 
                                       
Cash flows provided by (used in):
                                       
Operating activities
  $ 51,942,000     $ 60,815,000     $ 53,503,000     $ 40,858,000     $ 26,738,000  
Investing activities
  $ (70,026,000 )   $ (151,390,000 )   $ (192,432,000 )   $ (190,105,000 )   $ (323,225,000 )
Financing activities
  $ 27,017,000     $ 75,517,000     $ 143,735,000     $ 158,011,000     $ 296,823,000  
 
                                       
Square feet of GLA
    12,840,000       12,035,000       11,897,000       9,949,000       8,435,000  
Percent leased (including development/redevelopment and other non-stabilized properties)
    91 %     92 %     93 %     93 %     91 %
Average annualized base rent per leased square foot
  $ 11.53     $ 11.03     $ 10.74     $ 10.53     $ 10.40  
 
(a)   The data presented reflect certain reclassifications of prior period amounts to comform to the 2009 presentation, principally (i) the retrospective reclassification, for all periods presented, of the balances related to minority interests in consolidated joint ventures and limited partners’ interest in the Operating Partnership into the consolidated equity accounts, as appropriate, (ii) to refelect the reclassifications of the assets and liabilities of the properties transferred and to be transferred to the RioCan joint venture as “real estate to be transferred to a joint venture”, (iii) to reflect the reclassifications of the assets, liabilities and operating results for the sale and/or treatment as “held for sale” of certain operating properties and the treatment thereof as “discontinued operations”, and (iv) to reflect the retroactive valuation adjustments related to lease renewal options. The reclassifications and retroactive adjustments had no material impact on the previously-reported net income atttributable to common shareholders or earnings per share.
 
(b)   See Item 7 — “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a reconciliation of Funds From Operations (“FFO”) to net (loss) income attributable to common shareholders.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
     The following discussion should be read in conjunction with the Company’s consolidated financial statements and related notes thereto included elsewhere in this report.
Executive Summary
          The Company is a fully-integrated real estate investment trust which focuses primarily on ownership, operation, development and redevelopment of supermarket-anchored shopping centers in mid-Atlantic and Northeast coastal states. At December 31, 2009, the Company owned and managed (both wholly-owned and in joint venture) a portfolio of 117 operating properties totaling approximately 12.8 million square feet of gross leasable area (“GLA”), including 93 wholly-owned properties comprising approximately 9.3 million square feet, 13 properties owned in joint venture (consolidated) comprising approximately 1.7 million square feet, seven properties transferred or to be transferred to a managed joint venture (unconsolidated) comprising approximately 1.2 million square feet, and four ground-up developments comprising approximately 0.6 million square feet. Excluding the four ground-up development properties, the 113 property portfolio was approximately 91% leased at December 31, 2009; the 99 property “stabilized” portfolio was approximately 95% leased at that date. The Company also owned approximately 196 acres of land parcels, a significant portion of which is under development. In addition, the Company has a 76.3% interest in another unconsolidated joint venture, which it does not manage, which owns a single-tenant office property in Philadelphia, Pennsylvania.
     The Company, organized as a Maryland corporation, has established an umbrella partnership structure through the contribution of substantially all of its assets to the Operating Partnership, organized as a limited partnership under the laws of Delaware. The Company conducts substantially all of its business through the Operating Partnership. At December 31, 2009, the Company owned 96.3% of the Operating Partnership and is its sole general partner. OP Units are economically equivalent to the Company’s common stock and are convertible into the Company’s common stock at the option of the holders on a one-to-one basis.
     The Company derives substantially all of its revenues from rents and operating expense reimbursements received pursuant to long-term leases. The Company’s operating results therefore depend on the ability of its tenants to make the payments required by the terms of their leases. The Company focuses its investment activities on supermarket-anchored community shopping centers. The Company believes that, because of the need of consumers to purchase food and other staple goods and services generally available at such centers, its type of “necessities”-based properties should provide relatively stable revenue flows even during difficult economic times. In January 2009, the Company’s Board of Directors reduced the quarterly dividend payable in February by one-half to an annual rate of $0.45 per share and in April 2009 suspended the dividend for the balance of the year for a projected annual saving of approximately $37 million. This decision was in response to the then current state of the economy, the difficult retail environment, the constrained capital markets and the need to renew the Company’s secured revolving stabilized property credit facility. In December 2009, following a review of the state of the economy and the Company’s financial position, the Company’s Board of Directors determined to resume payment of a cash dividend in the amount $0.09 per share ($0.36 per share on an annualized basis) on the Company’s common stock, which was paid on January 20, 2010 to shareholders of record as of the close of business on December 31, 2009.

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     In connection with the RioCan transactions (more fully described below), the Company will seek to acquire primarily stabilized supermarket-anchored properties in its primary market areas during the next two years in a joint venture owned 20% by the Company. The Company has historically sought opportunities to acquire properties suited for development and/or redevelopment, and, to a lesser extent than in the past, stabilized properties, where it can utilize its experience in shopping center construction, renovation, expansion, re-leasing and re-merchandising to achieve long-term cash flow growth and favorable investment returns.
Significant Transactions
RioCan
     On October 26, 2009, the Company entered into definitive agreements with RioCan Real Estate Investment Trust of Toronto, Canada, a publicly-traded Canadian real estate investment trust listed on the Toronto Stock Exchange (“RioCan”), pursuant to which the Company (1) sold to RioCan 6,666,666 shares of the Company’s common stock at $6.00 per share in a private placement for an aggregate of $40 million (RioCan agreeing that it would not sell any of such shares for a period of one year), (2) issued to RioCan warrants to purchase 1,428,570 shares of the Company’s common stock at an exercise price of $7.00 per share, exercisable over a two-year period (valued at $1,643,000), (3) entered into an 80% (RioCan) and 20% (Cedar) joint venture (i) initially for the purchase of seven supermarket-anchored properties presently owned by the Company, and (ii) then to acquire additional primarily supermarket-anchored properties in the Company’s primary market areas during the next two years, in the same joint venture format, and (4) entered into a “standstill” agreement with respect to increases in RioCan’s ownership of the Company’s common stock for a three-year period. In addition, subject to certain exceptions, the Company has agreed that it will not issue any new shares of common stock unless RioCan is offered the right to purchase that additional number of shares that will maintain its pro rata percentage ownership, on a fully diluted basis. In connection with the formation of the joint venture, the Company recorded an impairment charge of $23.6 million relating to the seven properties transferred or to be transferred to the joint venture.
     The private placement investment by RioCan and the issuance of the warrants by the Company were concluded on October 30, 2009. Two of the properties (Blue Mountain Commons located in Harrisburg, Pennsylvania and Sunset Crossing located in Dickson City, Pennsylvania) were transferred to the joint venture on December 10, 2009, resulting in proceeds to the Company of approximately $33 million (in connection with the closing, a repayment of $25.9 million was required under the Company’s secured revolving development property credit facility). The remaining five properties are subject to mortgage loans payable aggregating approximately $94 million. Two of the properties (Columbus Crossing Shopping Center located in Philadelphia, Pennsylvania and Franklin Village Plaza located in Franklin, Massachusetts) were transferred to the joint venture in January and February 2010, resulting in net proceeds to the Company of approximately $16 million. The remaining three properties (Loyal Plaza Shopping Center located in Williamsport, Pennsylvania, Shaw’s Plaza located in Raynham, Massachusetts, and Stop & Shop Plaza located in Bridgeport, Connecticut) are to be transferred during the first half of 2010, resulting in net proceeds to the Company of an additional approximately $16 million.

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     In connection with the transfers of the seven properties to the joint venture and the private placement transactions, the Company will have received aggregate net proceeds of approximately $105 million, after estimated closing and transaction costs, which have been or will be used to repay/reduce the outstanding balances under the Company’s secured revolving credit facilities. In connection with these transactions, the Company incurred costs and fees of approximately $6.0 million, including fees to the Company’s investment advisor ($3.5 million), the value assigned to the warrants ($1.6 million), and other costs and expenses aggregating $0.9 million. In addition, the Company agreed to pay to its investment advisor a fee of 1% of the gross cost of future acquisitions made by the joint venture for a two-year period, up to a maximum of $3.0 million.
Amended and Restated Credit Facility
     On November 10, 2009, the Company closed an amended and restated secured revolving stabilized property credit facility in the amount of $265 million (subsequently increased to $285 million), with Bank of America, N.A. continuing as administrative agent, together with three other lead lenders and other participating banks. The facility, as amended, is expandable to $400 million, subject to certain conditions, including acceptable collateral. This amended and restated facility replaced the existing facility that was due to expire on January 30, 2010, and will continue to be available to fund acquisitions, certain development and redevelopment activities, capital expenditures, mortgage repayments, dividend distributions, working capital and other general corporate purposes. The new facility has a maturity date of January 31, 2012, subject to a one-year extension option. As a result of the application of the net proceeds from, among other things, the transfers of two of the remaining properties to the RioCan joint venture and the sales of shares of the Company’s common stock in February and March 2010, the Company’s availability under this facility has increased to approximately $104 million as of March 3, 2010.
Joint Venture With PCP
     On January 30, 2009, a newly-formed 40% Company-owned joint venture acquired the New London Mall in New London, Connecticut, an approximate 259,000 square foot supermarket-anchored shopping center, for a purchase price of approximately $40.7 million. The purchase price included the assumption of an existing $27.4 million first mortgage bearing interest at 4.9% per annum and maturing in 2015. The total joint venture partnership contribution was approximately $14.0 million, of which the Company’s 40% share ($5.6 million) was funded from its secured revolving stabilized property credit facility. The Company is the managing partner of the venture and receives certain acquisition, property management, construction management and leasing fees. In addition, the Company will be entitled to a “promote” fee structure, pursuant to which its profits participation would be increased to 44% if the venture reaches certain income targets. The Company’s joint venture partners are affiliates of Prime Commercial Properties PLC (“PCP”), a London-based real estate/development company.
     On February 10, 2009, a second newly-formed (also with affiliates of PCP) 40% Company-owned joint venture acquired San Souci Plaza in California, Maryland, an approximate 264,000 square foot supermarket-anchored shopping center, for a purchase price of approximately $31.8 million. The purchase price included the assumption of an existing $27.2 million first mortgage bearing interest at 6.2% per annum and maturing in 2016. The total joint venture partnership contribution was approximately $5.8 million, of which the Company’s 40% share ($2.3 million) was funded from its

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secured revolving stabilized property credit facility. The Company is the managing partner of the venture and receives certain acquisition, property management, construction management and leasing fees. In addition, the Company will be entitled to a “promote” fee structure, pursuant to which its profits participation would be increased to 44% if the venture reaches certain income targets.
Discontinued Operations
     During 2009 and subsequent to December 31, 2009, the Company sold, or has treated as “held for sale”, 11 of its properties (primarily drug store/convenience centers), located in Ohio, Maryland and New York, aggregating 416,000 square feet of GLA, including the 6,000 square foot McDonalds/Waffle House, located in Medina, Ohio, the 10,000 square foot CVS property located in Westfield, New York, the 24,000 square foot Staples property located in Oswego, New York, the 32,000 square foot Discount Drug Mart Plaza located in Hudson, Ohio, the 38,000 square foot Discount Drug Mart Plaza located in Dover, Ohio, the 84,000 square foot Gabriel Brothers property located in Kent, Ohio, the 40,000 square foot Discount Drug Mart Plaza located in Carrollton, Ohio, the 20,000 square foot Pondside Plaza located in Geneseo, New York, the 50,000 square foot Discount Drug Mart Plaza located in Powell, Ohio, the 7,000 square foot Family Dollar convenience center located in Zanesville, Ohio, and the 105,000 square foot Long Reach Village property located in Columbia, Maryland. The aggregate sales prices for the 11 properties are approximately $33.3 million and the properties are subject to property-specific mortgage loans payable of approximately $22.4 million. In connection with these transactions, the Company recorded impairment charges aggregating $6.5 million (including $3.0 million subsequent to December 31, 2009), and has realized gain on sales of $727,000 (including $170,000 subsequent to December 31, 2009). The carrying values of the assets and liabilities of these properties, principally the net book values of the real estate and the related mortgage loans payable, have been reclassified as “held for sale” on the Company’s consolidated balance sheets at December 31, 2009 and 2008. In addition, the properties’ results of operations have been classified as “discontinued operations” for all periods presented.
Summary of Critical Accounting Policies
     The preparation of the consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition and the allowance for doubtful accounts receivable, real estate investments and purchase accounting allocations related thereto, asset impairment, and derivatives used to hedge interest-rate risks. Management’s estimates are based both on information that is currently available and on various other assumptions management believes to be reasonable under the circumstances. Actual results could differ from those estimates and those estimates could be different under varying assumptions or conditions.
     The Company has identified the following critical accounting policies, the application of which requires significant judgments and estimates:

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Revenue Recognition
     Rental income with scheduled rent increases is recognized using the straight-line method over the respective terms of the leases. The aggregate excess of rental revenue recognized on a straight-line basis over base rents under applicable lease provisions is included in straight-line rents receivable on the consolidated balance sheet. Leases also generally contain provisions under which the tenants reimburse the Company for a portion of property operating expenses and real estate taxes incurred; such income is recognized in the periods earned. In addition, certain operating leases contain contingent rent provisions under which tenants are required to pay a percentage of their sales in excess of a specified amount as additional rent. The Company defers recognition of contingent rental income until those specified targets are met.
     The Company must make estimates as to the collectibility of its accounts receivable related to base rent, straight-line rent, expense reimbursements and other revenues. Management analyzes accounts receivable by considering tenant creditworthiness, current economic conditions, and changes in tenants’ payment patterns when evaluating the adequacy of the allowance for doubtful accounts receivable. These estimates have a direct impact on net income, because a higher bad debt allowance would result in lower net income, whereas a lower bad debt allowance would result in higher net income.
Real Estate Investments
     Real estate investments are carried at cost less accumulated depreciation. The provision for depreciation is calculated using the straight-line method based on estimated useful lives. Expenditures for maintenance, repairs and betterments that do not materially prolong the normal useful life of an asset are charged to operations as incurred. Expenditures for betterments that substantially extend the useful lives of real estate assets are capitalized. Real estate investments include costs of development and redevelopment activities, and construction in progress. Capitalized costs, including interest and other carrying costs during the construction and/or renovation periods, are included in the cost of the related asset and charged to operations through depreciation over the asset’s estimated useful life. The Company is required to make subjective estimates as to the useful lives of its real estate assets for purposes of determining the amount of depreciation to reflect on an annual basis. These assessments have a direct impact on net income. A shorter estimate of the useful life of an asset would have the effect of increasing depreciation expense and lowering net income, whereas a longer estimate of the useful life of an asset would have the effect of reducing depreciation expense and increasing net income.
     A variety of costs are incurred in the acquisition, development and leasing of a property, such as pre-construction costs essential to the development of the property, development costs, construction costs, interest costs, real estate taxes, salaries and related costs, and other costs incurred during the period of development. After a determination is made to capitalize a cost, it is allocated to the specific component of a project that is benefited. The Company ceases capitalization on the portions substantially completed and occupied, or held available for occupancy, and capitalizes only those costs associated with the portions under construction. The Company considers a construction project as substantially completed and held available for occupancy upon the completion of tenant improvements, but not later than one year from cessation of major development activity. Determination of when a development project is substantially complete and capitalization must cease involves a degree of judgment. The effect of a longer capitalization period would be to increase capitalized costs and would result in higher net income, whereas the effect of a shorter capitalization period would be to reduce capitalized costs and would result in lower net income.

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     The Company allocates the fair value of real estate acquired to land, buildings and improvements. In addition, the fair value of in-place leases is allocated to intangible lease assets and liabilities. The principal impact on the Company’s financial statements of the adoption of recent updated accounting guidance related to business combinations, which became effective January 1, 2009, is that the Company has expensed most transaction costs relating to its acquisition activities.
     The fair value of the tangible assets of an acquired property is determined by valuing the property as if it were vacant, which value is then allocated to land, buildings and improvements based on management’s determination of the relative fair values of such assets. In valuing an acquired property’s intangibles, factors considered by management include an estimate of carrying costs during the expected lease-up periods, such as real estate taxes, insurance, other operating expenses, and estimates of lost rental revenue during the expected lease-up periods based on its evaluation of current market demand. Management also estimates costs to execute similar leases, including leasing commissions, tenant improvements, legal and other related costs.
     The values of acquired above-market and below-market leases are recorded based on the present values (using discount rates which reflect the risks associated with the leases acquired) of the differences between the contractual amounts to be received and management’s estimate of market lease rates, measured over the terms of the respective leases that management deemed appropriate at the time of the acquisitions. Such valuations include a consideration of the non-cancellable terms of the respective leases as well as any applicable renewal period(s). The fair values associated with below-market rental renewal options are determined based on the Company’s experience and the relevant facts and circumstances that existed at the time of the acquisitions. The values of above-market leases are amortized to rental income over the terms of the respective non-cancelable lease periods. The portion of the values of below-market leases associated with the original non-cancelable lease terms are amortized to rental income over the terms of the respective non-cancelable lease periods. The portion of the values of the leases associated with below-market renewal options that are likely of exercise are amortized to rental income over the respective renewal periods. The value of other intangible assets (including leasing commissions, tenant improvements, etc.) is amortized to expense over the applicable terms of the respective leases. If a lease were to be terminated prior to its stated expiration or not renewed, all unamortized amounts relating to that lease would be recognized in operations at that time.
     Management is required to make subjective assessments in connection with its valuation of real estate acquisitions. These assessments have a direct impact on net income, because (i) above-market and below-market lease intangibles are amortized to rental income, and (ii) the value of other intangibles is amortized to expense. Accordingly, higher allocations to below-market lease liability and other intangibles would result in higher rental income and amortization expense, whereas lower allocations to below-market lease liability and other intangibles would result in lower rental income and amortization expense.
     Management reviews each real estate investment for impairment whenever events or circumstances indicate that the carrying value of a real estate investment may not be recoverable. The review of recoverability is based on an estimate of the future cash flows that are expected to result from the real estate investment’s use and eventual disposition. These estimates of cash flows consider factors such as expected future operating income, trends and prospects, as well as the effects of leasing demand,

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competition and other factors. If an impairment event exists due to the projected inability to recover the carrying value of a real estate investment, an impairment loss is recorded to the extent that the carrying value exceeds estimated fair value. A real estate investment held for sale is carried at the lower of its carrying amount or estimated fair value, less the cost of a potential sale. Depreciation and amortization are suspended during the period the property is held for sale. Management is required to make subjective assessments as to whether there are impairments in the value of its real estate properties. These assessments have a direct impact on net income, because an impairment loss is recognized in the period that the assessment is made.
Stock-Based Compensation
     The Company’s 2004 Stock Incentive Plan (the “Incentive Plan”) establishes the procedures for the granting of incentive stock options, stock appreciation rights, restricted shares, performance units and performance shares. The maximum number of shares of the Company’s common stock that may be issued pursuant to the Incentive Plan, as amended, is 2,750,000, and the maximum number of shares that may be granted to a participant in any calendar year is 250,000. Substantially all grants issued pursuant to the Incentive Plan are “restricted stock grants” which specify vesting (i) upon the third anniversary of the date of grant for time-based grants, or (ii) upon the completion of a designated period of performance for performance-based grants. Time–based grants are valued according to the market price for the Company’s common stock at the date of grant. For performance-based grants, the Company engages an independent appraisal company to determine the value of the shares at the date of grant, taking into account the underlying contingency risks associated with the performance criteria. These value estimates have a direct impact on net income, because higher valuations would result in lower net income, whereas lower valuations would result in higher net income. The value of such grants is being amortized on a straight-line basis over the respective vesting periods, as adjusted for fluctuations in the market value of the Company’s common stock.
Results of Operations
     Differences in results of operations between 2009 and 2008, and between 2008 and 2007, respectively, were primarily the result of the Company’s property acquisition/disposition program and continuing development/redevelopment activities. During the period January 1, 2008 through December 31, 2009, the Company acquired six shopping and convenience centers aggregating approximately 790,000 square feet of GLA, purchased the joint venture minority interests in four properties, and acquired approximately 181.7 acres of land for development, expansion and/or future development, for a total cost of approximately $189.0 million. In addition, the Company placed into service six ground-up developments having an aggregate cost of approximately $194.3 million. The Company sold or treated as “held for sale” 11 properties (primarily drug store/convenience centers) aggregating approximately 416,000 square feet of GLA for an aggregate sales price of approximately $33.3 million. In addition, in connection with the RioCan transactions, the Company has transferred or will be transferring seven properties to a joint venture with RioCan, aggregating approximately 1,167,000 square feet of GLA, and in connection with which it will have realized approximately $65 million in proceeds. Net (loss) income was ($17.0) million, $20.8 million and $23.9 million for 2009, 2008 and 2007, respectively.

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Comparison of 2009 to 2008
                                                 
                                            Properties
                    Increase   Percent   Acquisitions   held in
    2009   2008   (decrease)   change   and other (ii)   both years
Total revenues
  $ 180,115,000     $ 168,943,000     $ 11,172,000       7 %   $ 11,888,000       (716,000 )
Property operating expenses
    54,815,000       47,868,000       6,947,000       15 %     4,284,000       2,663,000  
Depreciation and amortization
    54,044,000       48,488,000       5,556,000       11 %     7,548,000       (1,992,000 )
General and administrative
    10,166,000       8,586,000       1,580,000       18 %     n/a       n/a  
Impairment charges
    23,636,000             23,636,000       n/a       n/a       n/a  
Terminated projects and acquisition transaction costs
    4,367,000       855,000       3,512,000       n/a       n/a       n/a  
Non-operating income and expense, net (i)
    47,822,000       43,406,000       4,416,000       10 %     n/a       n/a  
Discontinued operations:
                                               
Income from discontinued operations
    726,000       1,058,000       (332,000 )     n/a       n/a       n/a  
Impairment charges
    3,559,000             3,559,000       n/a       n/a       n/a  
Gain on sales of discontinued operations
    557,000             557,000       n/a       n/a       n/a  
 
(i)   Non-operating income and expense consists principally of interest expense (including amortization of deferred financing costs), equity in income of unconsolidated joint ventures, and gain on sales of land parcels.
 
(ii)   Includes principally (a) the results of properties acquired after January 1, 2008, (b) unallocated property and construction management compensation and benefits (including stock-based compensation), (c) results of a property in Wyoming, Michigan where the then existing building improvements were demolished in the second quarter of 2008 as part of the redevelopment plans for the property and (d) results of ground-up development and re-development properties recently placed into service.
     Properties held in both periods. The Company held 100 properties throughout 2009 and 2008.
     Total revenues decreased primarily as a result of (i) a decrease in non-cash straight-line rents primarily as a result of early lease terminations ($1.1 million), (ii) a decrease in non-cash amortization of intangible lease liabilities primarily as a result of the completion of scheduled amortization at certain properties ($0.9 million) (which also resulted in a decrease in depreciation and amortization expense), (iii) a decrease in percentage rent ($153,000), and (iv) a decrease in base rents ($56,000), partially offset by (v) an increase in tenant recoveries ($1.2 million), predominately the result of an increase in billable property operating expenses, and (vi) an increase in other income ($258,000), predominately the result of lease termination income of $800,000 received in December 2009. In connection with the worsening economic climate beginning in the latter part of 2008 and continuing into 2009, the Company received a number of requests from tenants for rent relief. While the Company did in fact grant such relief in selected limited circumstances, the aggregate amount of such relief granted had a limited impact on results of operations. However, there can be no assurance that the amount of such relief will not become more significant in future periods.
     Property operating expenses increased primarily as a result of (i) a net increase ($1.5 million) in expenses billable to tenants, primarily as a result of (a) an increase in real estate taxes from reassessments at recently-acquired or redeveloped properties ($1.4 million), (b) an increase in snow

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removal costs ($1.3 million), partially offset by (c) a decrease in insurance expense ($0.4 million), (d) a decrease in repairs and maintenance expenses ($0.2 million), (e) a decrease in landscaping expense ($0.1 million), and (f) a decrease in a number of smaller operating expense categories ($0.5 million), and (ii) an increase in the provision for doubtful accounts primarily as a result of the more challenging economic conditions in 2009 for a number of non-core tenants ($1.5 million), which is partially offset by (iii) a decrease in expenses not billable to tenants ($0.3 million).
     Depreciation and amortization expenses included under “acquisitions and other” reflects the acceleration of depreciation expense ($6.1 million) at two properties at which the Company demolished portions of buildings as part of the redevelopment plans for those properties.
     General and administrative expenses increased primarily as a result of increases in stock-based compensation expense through increased amortization of an increased number of restricted stock grants and mark-to-market adjustments relating to stock-based compensation.
     Impairments for 2009 relates to the net impairment charges recorded in connection with the seven properties transferred or to be transferred to the RioCan joint venture, as more fully discussed elsewhere in this report.
     Terminated projects and acquisition transaction costs for 2009 includes (i) the acquisition transaction costs associated with the two acquisitions completed during 2009 ($1.3 million, of which the noncontrolling interests’ share was $0.8 million), (ii) the decision to terminate potential development opportunities in Milford, Delaware and Ephrata, Pennsylvania (an aggregate of $2.8 million), and (iii) the costs primarily associated with a cancelled acquisition. Terminated projects and acquisition transaction costs for 2008 include (i) the decision to terminate potential development opportunities primarily in Ephrata, Pennsylvania and Roanoke, Virginia (an aggregate of $652,000) and (ii) costs incurred related to a canceled potential joint venture ($203,000).
     Non-operating income and expense, net, increased primarily a result of (i) higher amortization of deferred financing costs ($1.9 million) resulting from (a) extending the secured revolving stabilized property credit facility, originally in January 2009 and again in November 2009, and (b) the secured revolving development property credit facility and the property-specific construction facility, having closed in June 2008 and September 2008, respectively, being outstanding throughout all of 2009, (ii) higher loan balances outstanding principally to fund the equity portions of acquisitions and development activities ($3.0 million), and (iii) reduction in interest income ($0.2 million), partially offset by (iv) gain on sales of land parcels ($0.5 million) and (v) an increase in equity in income of unconsolidated joint venture ($0.1 million).
     Discontinued operations for 2009 and 2008 include the results of operations and, where applicable, gain on sales ($557,000) and impairment charges ($3.6 million), for properties (primarily drug store/convenience centers) which the Company sold or treated as “held for sale” during 2009 and subsequent to December 31, 2009, located in Ohio, Maryland and New York, aggregating 416,000 square feet of GLA, as more fully discussed elsewhere in this report.

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Comparison of 2008 to 2007
                                                 
                                            Properties
                    Increase   Percent   Acquisitions   held in
    2008   2007   (decrease)   change   and other (ii)   both years
Total revenues
  $ 168,943,000     $ 148,952,000     $ 19,991,000       13 %   $ 21,174,000       (1,183,000 )
Property operating expenses
    47,868,000       39,269,000       8,599,000       22 %     7,080,000       1,519,000  
Depreciation and amortization
    48,488,000       40,637,000       7,851,000       19 %     7,887,000       (36,000 )
General and administrative
    8,586,000       9,041,000       (455,000 )     -5 %     n/a       n/a  
Terminated projects and acquisition transaction costs
    855,000             855,000       n/a       n/a       n/a  
Non-operating income and expense, net (i)
    43,406,000       36,781,000       6,625,000       18 %     n/a       n/a  
Discontinued operations:
                                               
Income from discontinued operations
    1,058,000       643,000       415,000       n/a       n/a       n/a  
 
(i)   Non-operating income and expense consists principally of interest expense (including amortization of deferred financing costs), equity in income of an unconsolidated joint venture.
 
(ii)   Includes principally (a) the results of properties acquired after January 1, 2007, (b) unallocated property and construction management compensation and benefits (including stock-based compensation), (c) results of a property in Wyoming, Michigan where the then existing building improvements were demolished in the second quarter of 2008 as part of the redevelopment plans for the property and (d) results of ground-up development and re-development properties recently placed into service.
Properties held in both periods. The Company held 79 properties throughout 2008 and 2007.
     Total revenues decreased primarily as a result of (i) a decrease in tenant recoveries primarily due to a higher collection rate in 2007 due to billing system improvements made in 2006 and 2007 ($681,000), (ii) a decrease in percentage rent ($589,000), (iii) a net decrease ($16,000) in non-cash amortization of intangible lease liabilities (iv) a decrease in straight-line rental income ($1,046,000), which is partially offset by an increase in base rent ($932,000), and (v) an increase in other income ($217,000). In connection with the worsening economic climate beginning in the latter part of 2008 and continuing into 2009, the Company received a number of requests from tenants for rent relief. While the Company did in fact grant such relief in selected limited circumstances, the aggregate amount of such relief granted had a limited impact on results of operations.
     Property operating expenses increased as a result of (i) an increase in real estate and other property-related taxes, related principally to reassessments of properties previously acquired and completed development and re-developed projects ($545,000), (ii) an increase in the provision for doubtful accounts primarily due to a higher collection rate in 2007 due to billing system improvements made in 2006 and 2007 ($827,000), (iii) an increase in non-billable expenses ($401,000), (iii) an increase in a number of other operating expenses ($190,000), which is partially offset by (iv) a decrease in snow removal costs ($444,000).
     General and administrative expenses decreased primarily as a result of the retirement of a senior executive in 2007 and the initial compensation/relocation costs of his replacement ($1,535,000 in

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the aggregate), off-set by increased compensation costs, increased professional fees and the Company’s continued growth in 2008.
     Terminated projects and acquisition transaction costs for 2008 includes (i) the decision to terminate potential development opportunities primarily in Ephrata, Pennsylvania and Roanoke, Virginia (an aggregate of $652,000) and (ii) costs incurred related to a canceled potential joint venture ($203,000).
     Non-operating income and expense, net, increased primarily as a result of (i) increased interest costs from borrowings related to property acquisitions and acquisitions of a joint venture partner’s interest ($5,885,000), (ii) higher amortization of deferred financing costs ($556,000), (iii) lower interest income ($505,000) as a result of lower prevailing interest rates and a change in the cash management plan, partially off-set by (iv) earnings from an unconsolidated joint venture acquired in November 2006 and an additional investment in the unconsolidated joint venture made in April 2008 ($321,000).
     Discontinued operations for 2008 and 2007 include the results of operations for properties (primarily drug store/convenience centers) which the Company sold or treated as “held for sale” during 2009 and subsequent to December 31, 2009, located in Ohio, Maryland and New York, aggregating 416,000 square feet of GLA, as more fully discussed elsewhere in this report.
Liquidity and Capital Resources
     The Company funds operating expenses and other short-term liquidity requirements, including debt service, tenant improvements, leasing commissions, collateralization of certain interest rate swap obligations, preferred and common dividend distributions, if made, and distributions to minority interest partners, primarily from operations. The Company has also used its secured revolving stabilized property credit facility for these purposes. The Company expects to fund long-term liquidity requirements for property acquisitions, development and/or redevelopment costs, capital improvements, and maturing debt initially with its credit facilities and construction financing, and ultimately through a combination of issuing and/or assuming additional mortgage debt, the sale of equity securities, the issuance of additional OP Units, and the sale of properties or interests therein (including joint venture arrangements).
     Throughout most of 2009 there has been a fundamental contraction of the U.S. credit and capital markets, whereby banks and other credit providers have tightened their lending standards and severely restricted the availability of credit. Accordingly, for this and other reasons, there can be no assurance that the Company will have the availability of mortgage financing on completed development projects, additional construction financing, net proceeds from the contribution of properties to joint ventures, or proceeds from the refinancing of existing debt.
     In April 2009, the Company’s Board of Directors determined to suspend payment of cash dividends with respect to its common stock and OP Units for the balance of 2009 (the quarterly dividends paid in February had already been reduced by one-half). Based on the number of shares of common stock and OP Units outstanding at the time, the cash savings throughout 2009 was estimated to aggregate approximately $37 million. This decision was in response to the state of the economy, the difficult retail environment, the constrained capital markets and the need to renew the Company’s

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secured revolving stabilized property credit facility. In December 2009, following a review of the state of the economy and the Company’s financial position, the Company’s Board of Directors determined to resume payment of a cash dividend in the amount $0.09 per share ($0.36 per share on an annualized basis) on the Company’s common stock, which was paid on January 20, 2010 to shareholders of record as of the close of business on December 31, 2009.
     In November 2009, the Company closed an amended and restated secured revolving stabilized property credit facility with Bank of America, N.A., continuing as agent, together with three other lead lenders and other participating banks, with commitments from participants of $265.0 million (increased to $285.0 million in January 2010). The facility, as amended, is expandable to $400 million, subject to certain conditions, including acceptable collateral. The principal terms of the new facility include (i) an availability based primarily on appraisals, with a 67.5% advance rate, (ii) an interest rate based on LIBOR plus 350 bps, with a 200 bps LIBOR floor (under the prior arrangement, the interest rate was based on LIBOR plus a bps spread depending upon the Company’s leverage ratio, as defined, which had been 135 bps prior to the new facility), (iii) a leverage ratio limited to 67.5%, (iv) an unused portion fee of 50 bps (previously 25 bps), and (v) a maturity date of January 31, 2012, subject to a one-year extension option. In connection was the new facility, the Company paid participating lender fees and closing and transaction costs of approximately $9.0 million.
     Borrowings outstanding under the facility aggregated $188.0 million at December 31, 2009, such borrowings bore interest at an average rate of 5.5% per annum, and the Company had pledged 34 of its shopping center properties as collateral for such borrowings.
     The secured revolving stabilized property credit facility has been and will be used to fund acquisitions, certain development and redevelopment activities, capital expenditures, mortgage repayments, dividend distributions, working capital and other general corporate purposes. The facility is subject to customary financial covenants, including limits on leverage as discussed above and distributions (limited to 95% of funds from operations, as defined), and other financial statement ratios. Based on covenant measurements and collateral in place as of December 31, 2009, the Company was permitted to draw up to approximately $204.3 million, of which approximately $16.3 million remained available as of that date. As a result of the application of the net proceeds from, among other things, the transfers of two of the remaining properties to the RioCan joint venture (more fully described above) and the sales of shares of the Company’s common stock in February and March 2010 (more fully described below), such availability has increased to approximately $104 million as of March 3, 2010.. As of December 31, 2009, the Company was in compliance with the financial covenants and financial statement ratios required by the terms of the secured revolving stabilized property credit facility.
     The Company has a $150 million secured revolving development property credit facility with KeyBank, National Association (as agent) and several other banks, pursuant to which the Company has pledged certain of its development projects and redevelopment properties as collateral for borrowings thereunder. The facility, as amended, is expandable to $250 million, subject to certain conditions, including acceptable collateral, and will expire in June 2011, subject to a one-year extension option. Borrowings under the facility bear interest at the Company’s option at either LIBOR or the agent bank’s prime rate, plus a spread of 225 bps or 75 bps, respectively. Advances under the facility are calculated at the least of 70% of aggregate project costs, 70% of “as stabilized” appraised values, or costs incurred in excess of a 30% equity requirement on the part of the Company. The facility also requires an unused

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portion fee of 15 bps. This facility has been and will be used to fund in part the Company’s and certain joint ventures’ development activities. In order to draw funds under this construction facility, the Company must meet certain pre-leasing and other conditions. Borrowings outstanding under the facility aggregated $69.7 million at December 31, 2009, and such borrowings bore interest at a rate of 2.5% per annum. As of December 31, 2009, the Company was in compliance with the financial covenants and financial statement ratios required by the terms of the secured revolving development property credit facility.
     The Company has a $77.7 million construction facility with Manufacturers and Traders Trust Company (as agent) and several other banks, pursuant to which the Company has guaranteed and pledged its joint venture development project in Pottsgrove, Pennsylvania as collateral for borrowings to be made thereunder. This facility will expire in September 2011, subject to a one-year extension option. Borrowings outstanding under the facility aggregated $61.2 million at December 31, 2009, and such borrowings bore interest at an average rate of 2.5% per annum. Borrowings under the facility bear interest at the Company’s option at either LIBOR plus a spread of 225 bps, or the agent bank’s prime rate. As of December 31, 2009, the Company was in compliance with the financial covenants and financial statement ratios required by the terms of the construction facility.
     Mortgage loans payable at December 31, 2009 consisted of fixed-rate notes totaling $606.1 million, with a weighted average interest rate of 5.8%, and variable-rate debt totaling $82.2 million, with a weighted average interest rate of 3.4%. Total mortgage loans payable and secured revolving credit facilities have an overall weighted average interest rate of 5.3% and mature at various dates through 2029. For 2010, the Company has approximately $8.0 million of scheduled debt principal amortization payments and $12.3 million of balloon payments.
     The terms of several of the Company’s mortgage loans payable require the Company to deposit certain replacement and other reserves with its lenders. Such “restricted cash” is generally available only for property-level requirements for which the reserves have been established, and is not available to fund other property-level or Company-level obligations.
     On October 26, 2009, the Company entered into definitive agreements with RioCan Real Estate Investment Trust of Toronto, Canada, a publicly-traded Canadian real estate investment trust listed on the Toronto Stock Exchange (“RioCan”), pursuant to which the Company (1) sold to RioCan approximately 6,667,000 shares of the Company’s common stock at $6.00 per share in a private placement (RioCan agreeing that it would not sell any of such shares for a period of one year), (2) issued to RioCan warrants to purchase approximately 1,429,000 shares of the Company’s common stock at an exercise price of $7.00 per share, exercisable over a two-year period (valued at $1,643,000), (3) entered into an 80% (RioCan) and 20% (Cedar) joint venture (i) initially for the purchase of seven supermarket-anchored properties presently owned by the Company, and (ii) then to acquire additional primarily supermarket-anchored properties in the Company’s primary market areas during the next two years, in the same joint venture format, and (4) entered into a “standstill” agreement with respect to increases in RioCan’s ownership of the Company’s common stock for a three-year period. In addition, subject to certain exceptions, the Company has agreed that it will not issue any new shares of common stock unless RioCan is offered the right to purchase that additional number of shares that will maintain its pro rata percentage ownership, on a fully diluted basis. In connection with the formation of the joint venture,

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the Company recorded an impairment charge of $23.6 million relating to the seven properties transferred or to be transferred to the joint venture.
     The private placement investment by RioCan and the issuance of the warrants by the Company were concluded on October 30, 2009. Two of the properties (Blue Mountain Commons located in Harrisburg, Pennsylvania and Sunset Crossing located in Dickson City, Pennsylvania) were transferred to the joint venture on December 10, 2009, resulting in proceeds to the Company of approximately $33 million (in connection with the closing, a repayment of $25.9 million was required under the Company’s secured revolving development property credit facility). The remaining five properties are subject to mortgage loans payable aggregating approximately $94 million. Two of the properties (Columbus Crossing Shopping Center located in Philadelphia, Pennsylvania and Franklin Village Plaza located in Franklin, Massachusetts) were transferred to the joint venture in January and February 2010, resulting in net proceeds to the Company of approximately $16 million. The remaining three properties (Loyal Plaza Shopping Center located in Williamsport, Pennsylvania, Shaw’s Plaza located in Raynham, Massachusetts, and Stop & Shop Plaza located in Bridgeport, Connecticut) are to be transferred during the first half of 2010, resulting in net proceeds to the Company of an additional approximately $16 million. In connection with the transfers of the seven properties to the joint venture and the private placement transactions, the Company will have received aggregate net proceeds of approximately $105 million, after estimated closing and transaction costs, which have been or will be used to repay/reduce the outstanding balances under the Company’s secured revolving credit facilities. In connection with these transactions, the Company incurred costs and fees of approximately $6.0 million, including fees to the Company’s investment advisor ($3.5 million), the value assigned to the warrants (approximately $1.6 million), and other costs and expenses aggregating $0.9 million. In addition, the Company agreed to pay to its investment advisor a fee of 1% of the gross cost of future acquisitions made by the joint venture for a two-year period, up to a maximum of $3.0 million.
     On February 5, 2010, the Company concluded a public offering of 7,500,000 shares of its common stock at $6.60 per share, and realized net proceeds after offering expenses of approximately $47.0 million. On March 3, 2010, the underwriters exercised their over-allotment option to the extent of 697,800 shares, and the Company realized additional net proceeds of $4.4 million. In connection with the offering, RioCan acquired 1,350,000 shares of the Company’s common stock, including 100,000 shares acquired in connection with the exercise of the over-allotment option, and the Company realized net proceeds of $8.9 million.
     In September 2009, the Company entered into a Standby Equity Purchase Agreement (the “SEPA Agreement”) with an investment company for sales of its shares of common stock aggregating up to $30 million over a two-year commitment period; the commitment is expandable at the Company’s option to $45 million. Through December 31, 2009, 422,000 shares had been sold pursuant to the SEPA Agreement, at an average price of $5.93 per share, and the Company realized net proceeds, after allocation of other issuance expenses, of approximately $2.3 million. In January and February 2010, an additional 718,000 shares of the Company’s common stock had been sold pursuant to the SEPA Agreement at an average selling price of $6.97 per share, and the Company had realized net proceeds of approximately $5.0 million.

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     The Company expects to have sufficient liquidity to effectively manage its business. Such liquidity sources include, amongst others (i) cash on hand, (ii) operating cash flows, (iii) availability under its secured revolving credit facilities, (iv) property-specific financings, (v) sales of properties and (vi) proceeds from contributions of properties to joint ventures, and/or issuances of shares of common or preferred stock.
Contractual obligations and commercial commitments
     The following table sets forth the Company’s significant debt repayment, interest and operating lease obligations at December 31, 2009 (in thousands):
                                                         
    Maturity Date  
    2010     2011     2012     2013     2014     Thereafter     Total  
Debt:
                                                       
Mortgage loans payable
(i) (ii)
  $ 20,335,000     $ 90,962,000     $ 39,533,000     $ 64,091,000     $ 119,458,000     $ 353,910,000     $ 688,289,000  
Stabilized property credit facility (iii)
                187,985,000                         187,985,000  
Development property credit facility (iii)
          69,700,000                               69,700,000  
Interest payments (iv)
    48,498,000       47,193,000       44,142,000       28,709,000       22,908,000       23,016,000       214,466,000  
Operating lease obligations
    1,150,000       1,213,000       1,219,000       1,234,000       1,250,000       21,519,000       27,585,000  
 
                                         
Total
  $ 69,983,000     $ 209,068,000     $ 272,879,000     $ 94,034,000     $ 143,616,000     $ 398,445,000     $ 1,188,025,000  
 
                                         
 
(i)   Does not include: (a) the $15.3 million mortgage loan payable by the Company’s 76.3% owned unconsolidated joint venture, which is due in May 2011, (b) mortgage loans payable applicable to the seven properties transferred or to be transferred to the RioCan joint venture, or (c) mortgage loans payable applicable to discontinued operations.
 
(ii)   Mortgage loans payable for 2011 includes $61.2 million applicable to property-specific structured financing which is subject to a one-year extension option.
 
(iii)   Subject to a one-year extension option.
 
(iv)   Represents interest payments expected to be incurred on the Company’s consolidated debt obligation as of December 31, 2009 inclusive of capitalized interest. For variable rate debt, the rate in effect at December 31, 2009 is assumed to remain in effect until the maturities of the respective obligations. Does not include interest payments to be incurred on debt obligations applicable to unconsolidated joint ventures or discontinued operations.
     In addition, the Company plans to spend between $30 million and $35 million during 2010 in connection with development and redevelopment activities in process as of December 31, 2009.
Net Cash Flows
Operating Activities
     Net cash flows provided by operating activities amounted to $51.9 million during 2009, compared to $60.8 million during 2008 and $53.5 million during 2007. The changes in operating cash flows during 2009, 2008 and 2007 were primarily the result of the Company’s development and redevelopment activities, and property acquisitions or dispositions.

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Investing Activities
     Net cash flows used in investing activities were $70.0 million in 2009, $151.4 million in 2008 and $192.4 million in 2007, and were primarily the result of the Company’s acquisition/disposition activities. During 2009, the Company acquired two shopping and convenience centers and incurred expenditures for property improvements, an aggregate of $108.3 million. The Company realized proceeds from the transfers of two properties to the RioCan joint venture ($32.1 million) and from the sales of properties treated as discontinued operations ($6.8 million). During 2008, the Company acquired four shopping and convenience centers, acquired land for development, expansion and/or future development and incurred expenditures for property improvements, an aggregate of $131.9 million. The Company also purchased the joint venture minority interests in four properties for $17.5 million. During 2007, the Company acquired 20 shopping and convenience centers and land for development, expansion and/or future development, and incurred expenditures for property improvements, an aggregate of $187.5 million.
Financing Activities
     Net cash flows provided by financing activities were $27.0 million in 2009, $75.5 million in 2008 and $143.7 million in 2007. During 2009, the Company received proceeds of mortgage financings of $60.9 million, proceeds from sales of common stock of $40.9 million, $12.2 million in contributions from noncontrolling interests (minority interest partners) $5.0 million in proceeds from a standby equity advance (not settled as of December 31, 2009), offset by net repayments to its revolving credit facilities of $46.8 million, repayment of mortgage obligations of $18.2 million (including $8.9 million of mortgage balloon payments), preferred and common stock distributions of $12.9 million, the payment of financing costs of $10.0 million, and distributions paid to noncontrolling interests (minority and limited partner interests) of $4.1 million. During 2008, the Company received net advance proceeds of $114.1 million from its revolving credit facilities, $106.7 million in net proceeds from mortgage financings, and $6.3 million in contributions from noncontrolling interests (minority interest partners), offset by the repayment of mortgage obligations of $93.3 million (including $84.8 million of mortgage balloon payments), preferred and common stock distributions of $47.9 million, distributions paid to noncontrolling interests (minority and limited partner interests) of $5.2 million, the payment of financing costs of $5.1 million, and the redemption of noncontrolling interests (a limited partner’s OP Units) of $0.1 million. During 2007, the Company received net advance proceeds of $122.0 million from its stabilized property credit facility, $53.2 million in contributions from noncontrolling interests (minority interest partners), $34.5 million in net proceeds from mortgage financings, and $3.9 million in net proceeds from public offerings, offset by preferred and common stock distributions of $47.6 million, the repayment of mortgage obligations of $16.2 million (including $7.6 million of mortgage balloon payments), the payment of financing costs of $3.2 million, and distributions paid to noncontrolling interests (minority and limited partner interests) of $2.9 million.
Funds From Operations
     Funds From Operations (“FFO”) is a widely-recognized non-GAAP financial measure for REITs that the Company believes, when considered with financial statements determined in accordance with GAAP, is useful to investors in understanding financial performance and providing a relevant basis for comparison among REITs. In addition, FFO is useful to investors as it captures features particular to real

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estate performance by recognizing that real estate generally appreciates over time or maintains residual value to a much greater extent than do other depreciable assets. Investors should review FFO, along with GAAP net income, when trying to understand an equity REIT’s operating performance. The Company presents FFO because the Company considers it an important supplemental measure of its operating performance and believes that it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs. Among other things, the Company uses FFO or an adjusted FFO-based measure (i) as a criterion to determine performance-based bonuses for members of senior management, (ii) in performance comparisons with other shopping center REITs, and (iii) to measure compliance with certain financial covenants under the terms of the Loan Agreements relating to the Company’s credit facilities.
     The Company computes FFO in accordance with the “White Paper” on FFO published by the National Association of Real Estate Investment Trusts (“NAREIT”), which defines FFO as net income applicable to common shareholders (determined in accordance with GAAP), excluding gains or losses from debt restructurings and sales of properties, plus real estate-related depreciation and amortization, and after adjustments for partnerships and joint ventures (which are computed to reflect FFO on the same basis).
     FFO does not represent cash generated from operating activities and should not be considered as an alternative to net income applicable to common shareholders or to cash flow from operating activities. FFO is not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions. Although FFO is a measure used for comparability in assessing the performance of REITs, as the NAREIT White Paper only provides guidelines for computing FFO, the computation of FFO may vary from one company to another. The following table sets forth the Company’s calculations of FFO for 2009, 2008 and 2007:

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    2009     2008     2007  
Net (loss) income attributable to common shareholders
  $ (24,747,000 )   $ 10,296,000     $ 13,948,000  
Add (deduct):
                       
Real estate depreciation and amortization
    55,391,000       49,732,000       42,068,000  
Noncontrolling interests:
                       
Limited partners’ interest
    (912,000 )     468,000       627,000  
Minority interests in consolidated joint ventures
    772,000       2,157,000       1,415,000  
Minority interests’ share of FFO applicable to consolidated joint ventures
    (5,787,000 )     (6,134,000 )     (2,139,000 )
Equity in income of unconsolidated joint ventures
    (1,098,000 )     (956,000 )     (634,000 )
FFO from unconsolidated joint ventures
    1,519,000       1,296,000       905,000  
Gain on sales of discontinued operations
    (557,000 )            
 
                       
 
                 
Funds From Operations
  $ 24,581,000     $ 56,859,000     $ 56,190,000  
 
                 
 
                       
FFO per common share (assuming conversion of OP Units) 
                       
Basic and diluted
  $ 0.51     $ 1.22     $ 1.22  
 
                       
Weighted average number of common shares:
                       
Shares used in determination of basic earnings per share
    46,234,000       44,475,000       44,193,000  
Additional shares assuming conversion of OP Units (basic)
    2,014,000       2,024,000       1,985,000  
 
                 
Shares used in determination of basic FFO per share
    48,248,000       46,499,000       46,178,000  
 
                 
 
                       
Shares used in determination of diluted earnings per share
    46,234,000       44,475,000       44,197,000  
Additional shares assuming conversion of OP Units (diluted)
    2,014,000       2,024,000       1,990,000  
 
                 
Shares used in determination of diluted FFO per share
    48,248,000       46,499,000       46,187,000  
 
                 
Inflation
     Low to moderate levels of inflation during the past several years have favorably impacted the Company’s operations by stabilizing operating expenses. However, the Company’s properties have tenants whose leases include expense reimbursements and other provisions to minimize the effect of inflation. At the same time, low inflation has had the indirect effect of reducing the Company’s ability to increase tenant rents upon the signing of new leases and/or lease renewals.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
     One of the principal market risks facing the Company is interest rate risk on its credit facilities. The Company may, when advantageous, hedge its interest rate risk using derivative financial instruments. The Company is not subject to foreign currency risk.
     The Company is exposed to interest rate changes primarily through (i) the variable-rate credit facilities used to maintain liquidity, fund capital expenditures, development/redevelopment activities, and expand its real estate investment portfolio, (ii) property-specific variable-rate construction financing, and (iii) other property-specific variable-rate mortgages. The Company’s objectives with respect to interest rate risk are to limit the impact of interest rate changes on operations and cash flows,

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and to lower its overall borrowing costs. To achieve these objectives, the Company may borrow at fixed rates and may enter into derivative financial instruments such as interest rate swaps, caps, etc., in order to mitigate its interest rate risk on a related variable-rate financial instrument. The Company does not enter into derivative or interest rate transactions for speculative purposes. At December 31, 2009, the Company had approximately $28.9 million of mortgage loans payable and $23.9 million of secured revolving stabilized property credit facility subject to interest rate swaps which converted LIBOR-based variable rates to fixed annual rates ranging from 5.2% to 6.8% per annum. In addition, the Company had an interest rate swap applicable to anticipated permanent financing of $28.0 million for its development joint venture project in Stroudsburg, Pennsylvania. On January 20, 2010, the Company paid approximately $5.5 million to terminate interest rate swaps applicable to approximately $23.9 million of secured revolving stabilized property credit facility as well as the interest rate swap applicable to anticipated permanent financing for its development joint venture project in Stroudsburg, Pennsylvania.
     At December 31, 2009, long-term debt consisted of fixed-rate mortgage loans payable and variable-rate debt (principally the Company’s variable-rate credit facilities). The average interest rate on the $606.1 million of fixed-rate indebtedness outstanding was 5.8%, with maturities at various dates through 2029. The average interest rate on the $339.9 million of variable-rate debt (including $257.7 million in advances under the Company’s revolving credit facilities) was 4.4%. The secured revolving stabilized property credit facility matures in January 2012, subject to a one-year extension option. The secured revolving development property credit facility matures in June 2011, subject to a one-year extension option. With respect to $151.9 million of variable-rate debt outstanding at December 31, 2009, if interest rates either increase or decrease by 1%, the Company’s interest cost would increase or decrease respectively by approximately $1.5 million per annum. With respect to the remaining $188.0 million of variable-rate debt outstanding at December 31, 2009, represented by the Company’s secured revolving stabilized property credit facility, interest is based on LIBOR with a 200 bps LIBOR floor. Accordingly, if interest rates either increase or decrease by 1%, the Company’s interest cost applicable on this line would increase by approximately $1.9 million per annum only if LIBOR was in excess of 2.0% per annum.

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Item 8. Financial Statements and Supplementary Data
     
  35
 
   
  36
 
   
  37
 
   
  38
 
   
  40
 
   
  41 - 79
 
   
  80 - 86
All other schedules have been omitted because the required information is not present, is not present in amounts sufficient to require submission of the schedule, or is included in the consolidated financial statements or notes thereto.

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Report of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders
Cedar Shopping Centers, Inc.
We have audited the accompanying consolidated balance sheets of Cedar Shopping Centers, Inc. (the “Company”) as of December 31, 2009 and 2008, and the related consolidated statements of operations, equity, and cash flows for each of the three years in the period ended December 31, 2009. Our audits also included the financial statement schedule listed in the Index at Item 8. These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Cedar Shopping Centers, Inc. at December 31, 2009 and 2008, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2009, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
As discussed in Note 2 to the consolidated financial statements, the 2009, 2008 and 2007 financial statements and related financial statement schedule have been restated to correct for the accounting of certain lease intangibles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Cedar Shopping Centers, Inc.’s internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 15, 2010 expressed an unqualified opinion thereon.
/s/ ERNST & YOUNG LLP                     
New York, New York
March 15, 2010
except for Notes 2 and 3,
as to which the date is August 12, 2010

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CEDAR SHOPPING CENTERS, INC.
Consolidated Balance Sheets
                 
    December 31,  
    2009     2008  
Assets
               
Real estate:
               
Land
  $ 356,366,000     $ 326,623,000  
Buildings and improvements
    1,316,315,000       1,209,967,000  
 
           
 
    1,672,681,000       1,536,590,000  
Less accumulated depreciation
    (163,879,000 )     (123,807,000 )
 
           
Real estate, net
    1,508,802,000       1,412,783,000  
 
               
Real estate to be transferred to a joint venture
    139,743,000       194,952,000  
Real estate held for sale — discontinued operations
    21,380,000       42,267,000  
Investment in unconsolidated joint ventures
    14,113,000       4,976,000  
 
               
Cash and cash equivalents
    17,164,000       8,231,000  
Restricted cash
    14,075,000       14,004,000  
Rents and other receivables, net
    9,745,000       5,818,000  
Straight-line rents
    14,545,000       12,255,000  
Other assets
    8,809,000       9,403,000  
Deferred charges, net
    36,742,000       30,339,000  
 
           
Total assets
  $ 1,785,118,000     $ 1,735,028,000  
 
           
 
               
Liabilities and equity
               
Mortgage loans payable
  $ 688,289,000     $ 608,940,000  
Mortgage loans payable — real estate to be transferred to a joint venture
    94,018,000       77,307,000  
Mortgage loans payable — real estate held for sale — discontinued operations
    12,455,000       22,736,000  
Secured revolving credit facilities
    257,685,000       304,490,000  
Accounts payable and accrued liabilities
    46,902,000       46,548,000  
Unamortized intangible lease liabilities
    53,733,000       63,048,000  
Liabilities — real estate held for sale and real estate to be transferred to a joint venture
    5,634,000       6,765,000  
 
           
Total liabilities
    1,158,716,000       1,129,834,000  
 
           
 
               
Limited partners’ interest in Operating Partnership
    12,638,000       14,257,000  
 
               
Commitments and contingencies
           
 
               
Equity:
               
Cedar Shopping Centers, Inc. shareholders’ equity:
               
Preferred stock ($.01 par value, $25.00 per share liquidation value, 12,500,000 shares authorized, 3,550,000 shares issued and outstanding)
    88,750,000       88,750,000  
Common stock ($.06 par value, 150,000,000 shares authorized 52,139,000 and 44,468,000 shares, respectively, issued and outstanding)
    3,128,000       2,668,000  
Treasury stock (981,000 and 713,000 shares, respectively, at cost)
    (9,688,000 )     (9,175,000 )
Additional paid-in capital
    621,299,000       576,086,000  
Cumulative distributions in excess of net income
    (162,041,000 )     (127,552,000 )
Accumulated other comprehensive loss
    (2,992,000 )     (7,256,000 )
 
           
Total Cedar Shopping Centers, Inc. shareholders’ equity
    538,456,000       523,521,000  
 
           
Noncontrolling interests:
               
Minority interests in consolidated joint ventures
    67,229,000       58,150,000  
Limited partners’ interest in Operating Partnership
    8,079,000       9,266,000  
 
           
Total noncontrolling interests
    75,308,000       67,416,000  
 
           
Total equity
    613,764,000       590,937,000  
 
           
Total liabilities and equity
  $ 1,785,118,000     $ 1,735,028,000  
 
           
See accompanying notes to consolidated financial statements.

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CEDAR SHOPPING CENTERS, INC.
Consolidated Statements of Operations
                         
    Years ended December 31,  
    2009     2008     2007  
Revenues:
                       
Rents
  $ 144,231,000     $ 136,217,000     $ 119,321,000  
Expense recoveries
    34,469,000       31,543,000       27,864,000  
Other
    1,415,000       1,183,000       1,767,000  
 
                 
Total revenues
    180,115,000       168,943,000       148,952,000  
 
                 
Expenses:
                       
Operating, maintenance and management
    33,955,000       28,989,000       24,000,000  
Real estate and other property-related taxes
    20,860,000       18,879,000       15,269,000  
General and administrative
    10,166,000       8,586,000       9,041,000  
Impairments
    23,636,000              
Terminated projects and acquisition transaction costs
    4,367,000       855,000        
Depreciation and amortization
    54,044,000       48,488,000       40,637,000  
 
                 
Total expenses
    147,028,000       105,797,000       88,947,000  
 
                 
 
                       
Operating income
    33,087,000       63,146,000       60,005,000  
Non-operating income and expense:
                       
Interest expense, including amortization of deferred financing costs
    (49,504,000 )     (44,646,000 )     (38,203,000 )
Interest income
    63,000       284,000       788,000  
Equity in income of unconsolidated joint ventures
    1,098,000       956,000       634,000  
Gain on sales of land parcels
    521,000              
 
                       
 
                 
Total non-operating income and expense
    (47,822,000 )     (43,406,000 )     (36,781,000 )
 
                 
 
                       
(Loss) income before discontinued operations
    (14,735,000 )     19,740,000       23,224,000  
 
                       
(Loss) income from discontinued operations
    (2,833,000 )     1,058,000       643,000  
Gain on sales of discontinued operations
    557,000              
 
                 
Total discontinued operations
    (2,276,000 )     1,058,000       643,000  
 
                 
 
                       
Net (loss) income
    (17,011,000 )     20,798,000       23,867,000  
 
                       
Less, net (income) loss attributable to noncontrolling interests:
                       
Minority interests in consolidated joint ventures
    (772,000 )     (2,157,000 )     (1,415,000 )
Limited partners’ interest in Operating Partnership
    912,000       (468,000 )     (627,000 )
 
                 
Total net (income) loss attributable to noncontrolling interests
    140,000       (2,625,000 )     (2,042,000 )
 
                 
 
                       
Net (loss) income attributable to Cedar Shopping Centers, Inc.
    (16,871,000 )     18,173,000       21,825,000  
 
                       
Preferred distribution requirements
    (7,876,000 )     (7,877,000 )     (7,877,000 )
 
                       
 
                 
Net (loss) income attributable to common shareholders
  $ (24,747,000 )   $ 10,296,000     $ 13,948,000  
 
                 
 
                       
Per common share attributable to common shareholders (basic and diluted):
                       
Continuing operations
  $ (0.49 )   $ 0.21     $ 0.30  
Discontinued operations
    (0.05 )     0.02       0.02  
 
                 
 
  $ (0.54 )   $ 0.23     $ 0.32  
 
                 
 
                       
Amounts attributable to Cedar Shopping Centers, Inc. common shareholders, net of limited partners’ interest:
                       
(Loss) income from continuing operations
  $ (22,552,000 )   $ 9,284,000     $ 13,333,000  
(Loss) income from discontinued operations
    (2,732,000 )     1,012,000       615,000  
Gain on sales of discontinued operations
    537,000              
 
                 
Net (loss) income
  $ (24,747,000 )   $ 10,296,000     $ 13,948,000  
 
                 
 
                       
Weighted average number of common shares outstanding
    46,234,000       44,475,000       44,193,000  
 
                 
See accompanying notes to consolidated financial statements.

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CEDAR SHOPPING CENTERS, INC.
Consolidated Statements of Equity
Years ended December 31, 2009, 2008 and 2007
                                                                         
    Cedar Shopping Centers, Inc. Shareholders  
    Preferred stock     Common stock                     Cumulative     Accumulated        
            $25.00                     Treasury     Additional     distributions     other        
            Liquidation             $0.06     stock,     paid-in     in excess of     comprehensive        
    Shares     value     Shares     Par value     at cost     capital     net income     (loss) income     Total  
Balance, December 31, 2006
    3,550,000     $ 88,750,000       43,773,000     $ 2,626,000     $ (6,378,000 )   $ 564,639,000     $ (75,472,000 )   $ 146,000     $ 574,311,000  
 
                                                                       
Net income
                                                    21,825,000               21,825,000  
Unrealized loss on change in fair value of cash flow hedges
                                                            (82,000 )     (82,000 )
 
                                                                     
Total other comprehensive income
                                                                    21,743,000  
 
                                                                     
 
                                                                       
Deferred compensation activity, net
                    186,000       11,000       (1,814,000 )     3,949,000                       2,146,000  
Net proceeds from sale of common stock
                    275,000       17,000               4,115,000                       4,132,000  
Conversion of OP units into common stock
                    4,000                     45,000                       45,000  
Preferred distribution requirements
                                                    (7,877,000 )             (7,877,000 )
Distributions to common shareholders/ noncontrolling interests
                                                    (39,775,000 )             (39,775,000 )
Additional noncontrolling interests’ shares
                                                                     
Reallocation adjustment of limited partners’ interest
                                            (354,000 )                     (354,000 )
Adjustment of Mezz OP Units to redemption value
                                                    3,478,000               3,478,000  
 
                                                                       
 
                                                     
Balance, December 31, 2007
    3,550,000       88,750,000       44,238,000       2,654,000       (8,192,000 )     572,394,000       (97,821,000 )     64,000       557,849,000  
 
                                                                       
Net income
                                                    18,173,000               18,173,000  
Unrealized loss on change in fair value of cash flow hedges
                                                            (7,320,000 )     (7,320,000 )
 
                                                                     
Total other comprehensive income
                                                                    10,853,000  
 
                                                                     
 
                                                                       
Deferred compensation activity, net
                    225,000       13,000       (983,000 )     3,342,000                       2,372,000  
Conversion of OP units into common stock
                    5,000       1,000               67,000                       68,000  
Preferred distribution requirements
                                                    (7,877,000 )             (7,877,000 )
Distributions to common shareholders/ noncontrolling interests
                                                    (40,027,000 )             (40,027,000 )
Additional noncontrolling interests’ shares
                                                                     
Purchase/redemption of noncontrolling interests’ shares
                                                                     
Reallocation adjustment of limited partners’ interest
                                            283,000                       283,000  
 
                                                                       
 
                                                     
Balance, December 31, 2008
    3,550,000       88,750,000       44,468,000       2,668,000       (9,175,000 )     576,086,000       (127,552,000 )     (7,256,000 )     523,521,000  
 
                                                                       
Net loss
                                                    (16,871,000 )             (16,871,000 )
Unrealized gain on change in fair value of cash flow hedges
                                                            4,264,000       4,264,000  
 
                                                                     
Total other comprehensive loss
                                                                    (12,607,000 )
 
                                                                     
 
                                                                       
Deferred compensation activity, net
                    570,000       34,000       (513,000 )     3,070,000                       2,591,000  
Net proceeds from the sales of common stock and issuance of warrants
                    7,089,000       425,000               40,465,000                       40,890,000  
Conversion of OP units into common stock
                    12,000       1,000               130,000                       131,000  
Preferred distribution requirements
                                                    (7,876,000 )             (7,876,000 )
Distributions to common shareholders/ noncontrolling interests
                                                    (9,742,000 )             (9,742,000 )
Reallocation adjustment of limited partners’ interest
                                            1,548,000                       1,548,000  
Additional noncontrolling interests’ shares
                                                                       
 
                                                                       
 
                                                     
Balance, December 31, 2009
    3,550,000     $ 88,750,000       52,139,000     $ 3,128,000     $ (9,688,000 )   $ 621,299,000     $ (162,041,000 )   $ (2,992,000 )   $ 538,456,000  
 
                                                     
See accompanying notes to consolidated financial statements.

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Table of Contents

                                 
    Noncontrolling Interests        
            Limited                
    Minority     partners’                
    interests in     interest in                
    consolidated     Operating             Total  
    joint ventures     Partnership     Total     equity  
Balance, December 31, 2006
  $ 9,132,000     $ 9,832,000     $ 18,964,000     $ 593,275,000  
 
                               
Net income
    1,415,000       238,000       1,653,000       23,478,000  
Unrealized loss on change in fair value of cash flow hedges
    (200,000 )     (2,000 )     (202,000 )     (284,000 )
 
                       
Total other comprehensive income
    1,215,000       236,000       1,451,000       23,194,000  
 
                       
 
                               
Deferred compensation activity, net
                      2,146,000  
Net proceeds from sale of common stock
                      4,132,000  
Conversion of OP units into common stock
            (45,000 )     (45,000 )      
Preferred distribution requirements
                      (7,877,000 )
Distributions to common shareholders/ noncontrolling interests
    (1,063,000 )     (681,000 )     (1,744,000 )     (41,519,000 )
Additional noncontrolling interests’ shares
    53,118,000       570,000       53,688,000       53,688,000  
Reallocation adjustment of limited partners’ interest
          194,000       194,000       (160,000 )
Adjustment of Mezz OP Units to redemption value
                      3,478,000  
 
                               
 
                       
Balance, December 31, 2007
    62,402,000       10,106,000       72,508,000       630,357,000  
 
                               
Net income
    2,157,000       183,000       2,340,000       20,513,000  
Unrealized loss on change in fair value of cash flow hedges
    (336,000 )     (129,000 )     (465,000 )     (7,785,000 )
 
                       
Total other comprehensive income
    1,821,000       54,000       1,875,000       12,728,000  
 
                       
 
                               
Deferred compensation activity, net
                      2,372,000  
Conversion of OP units into common stock
          (68,000 )     (68,000 )      
Preferred distribution requirements
                      (7,877,000 )
Distributions to common shareholders/ noncontrolling interests
    (3,427,000 )     (717,000 )     (4,144,000 )     (44,171,000 )
Additional noncontrolling interests’ shares
    6,364,000               6,364,000       6,364,000  
Purchase/redemption of noncontrolling interests’ shares
    (9,010,000 )             (9,010,000 )     (9,010,000 )
Reallocation adjustment of limited partners’ interest
          (109,000 )     (109,000 )     174,000  
 
                               
 
                       
Balance, December 31, 2008
    58,150,000       9,266,000       67,416,000       590,937,000  
 
                               
Net loss
    772,000       (361,000 )     411,000       (16,460,000 )
Unrealized gain on change in fair value of cash flow hedges
          79,000       79,000       4,343,000  
 
                       
Total other comprehensive loss
    772,000       (282,000 )     490,000       (12,117,000 )
 
                       
 
                               
Deferred compensation activity, net
                      2,591,000  
Net proceeds from the sales of common stock and issuance of warrants
                      40,890,000  
Conversion of OP units into common stock
          (131,000 )     (131,000 )      
Preferred distribution requirements
                      (7,876,000 )
Distributions to common shareholders/ noncontrolling interests
    (3,905,000 )     (167,000 )     (4,072,000 )     (13,814,000 )
Reallocation adjustment of limited partners’ interest
          (607,000 )     (607,000 )     941,000  
Additional noncontrolling interests’ shares
    12,212,000             12,212,000       12,212,000  
 
                               
 
                       
Balance, December 31, 2009
  $ 67,229,000     $ 8,079,000     $ 75,308,000     $ 613,764,000  
 
                       
See accompanying notes to consolidated financial statements.

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Table of Contents

CEDAR SHOPPING CENTERS, INC.
Consolidated Statements of Cash Flows
                         
    Years ended December 31,  
    2009     2008     2007  
Cash flow from operating activities:
                       
Net (loss) income
  $ (17,011,000 )   $ 20,798,000     $ 23,867,000  
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
                       
Non-cash provisions:
                       
Equity in income of unconsolidated joint ventures
    (1,098,000 )     (956,000 )     (634,000 )
Distributions from unconsolidated joint ventures
    921,000       834,000       529,000  
Impairments
    23,636,000              
Terminated projects
    3,094,000       463,000        
Impairment — discontinued operations
    3,559,000              
Gain on sales of real estate
    (1,078,000 )            
Straight-line rents
    (2,874,000 )     (2,876,000 )     (3,451,000 )
Depreciation and amortization
    55,391,000       50,013,000       42,310,000  
Amortization of intangible lease liabilities
    (13,522,000 )     (14,409,000 )     (10,892,000 )
Amortization/market price adjustments relating to stock-based compensation
    2,433,000       1,099,000       1,306,000  
Amortization of deferred financing costs
    3,648,000       1,790,000       1,233,000  
Increases/decreases in operating assets and liabilities:
                       
Rents and other receivables, net
    (2,555,000 )     1,822,000       (2,548,000 )
Prepaid expenses and other
    (5,168,000 )     153,000       (4,265,000 )
Accounts payable and accrued liabilities
    2,566,000       2,084,000       6,048,000  
 
                 
Net cash provided by operating activities
    51,942,000       60,815,000       53,503,000  
 
                 
 
                       
Cash flow from investing activities:
                       
Expenditures for real estate and improvements
    (108,300,000 )     (131,874,000 )     (187,497,000 )
Proceeds from transfers to unconsolidated joint venture
    32,089,000              
Net proceeds from sales of real estate
    6,752,000              
Purchase of consolidated joint venture minority interests
          (17,454,000 )      
Investment in unconsolidated joint venture
    (350,000 )     (1,097,000 )     (8,000 )
Construction escrows and other
    (217,000 )     (965,000 )     (4,927,000 )
 
                 
Net cash used in investing activities
    (70,026,000 )     (151,390,000 )     (192,432,000 )
 
                 
 
                       
Cash flow from financing activities:
                       
Net (repayments)/advances (to)/from revolving credit facilities
    (46,805,000 )     114,050,000       121,970,000  
Proceeds from mortgage financings
    60,950,000       106,738,000       34,493,000  
Mortgage repayments
    (18,203,000 )     (93,317,000 )     (16,177,000 )
Payments of debt financing costs
    (9,973,000 )     (5,062,000 )     (3,187,000 )
Noncontrolling interests:
                       
Contributions from consolidated joint venture minority interests, net
    12,212,000       6,383,000       53,229,000  
Distributions to consolidated joint venture minority interests
    (3,905,000 )     (3,427,000 )     (1,063,000 )
Redemption of Operating Partnership Units
          (122,000 )      
Distributions to limited partners
    (227,000 )     (1,822,000 )     (1,788,000 )
Proceeds from the sales of common stock
    40,890,000             3,910,000  
Proceeds from standby equity advance not settled
    5,000,000              
Preferred stock distributions
    (7,876,000 )     (7,877,000 )     (7,877,000 )
Distributions to common shareholders
    (5,046,000 )     (40,027,000 )     (39,775,000 )
 
                 
Net cash provided by financing activities
    27,017,000       75,517,000       143,735,000  
 
                 
 
                       
Net increase (decrease) in cash and cash equivalents
    8,933,000       (15,058,000 )     4,806,000  
Cash and cash equivalents at beginning of period
    8,231,000       23,289,000       18,483,000  
 
                 
Cash and cash equivalents at end of period
  $ 17,164,000     $ 8,231,000     $ 23,289,000  
 
                 
See accompanying notes to consolidated financial statements.

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
Note 1. Organization and Basis of Preparation
     Cedar Shopping Centers, Inc. (the “Company”) was organized in 1984 and elected to be taxed as a real estate investment trust (“REIT”) in 1986. The Company focuses primarily on ownership, operation, development and redevelopment of supermarket-anchored shopping centers predominately in coastal mid-Atlantic and New England states. At December 31, 2009, the Company owned and managed 117 operating properties.
     Cedar Shopping Centers Partnership, L.P. (the “Operating Partnership”) is the entity through which the Company conducts substantially all of its business and owns (either directly or through subsidiaries) substantially all of its assets. At December 31, 2009, the Company owned a 96.3% economic interest in, and was the sole general partner of, the Operating Partnership. The limited partners’ interest in the Operating Partnership (3.7% at December 31, 2009) is represented by Operating Partnership Units (“OP Units”). The carrying amount of such interest is adjusted at the end of each reporting period to an amount equal to the limited partners’ ownership percentage of the Operating Partnership’s net equity. The approximately 2,006,000 OP Units outstanding at December 31, 2009 are economically equivalent to the Company’s common stock and are convertible into the Company’s common stock at the option of the respective holders on a one-to-one basis.
     As used herein, the “Company” refers to Cedar Shopping Centers, Inc. and its subsidiaries on a consolidated basis, including the Operating Partnership or, where the context so requires, Cedar Shopping Centers, Inc. only.
     In July 2009, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard No. 168, “The FASB Accounting Standards Codification and Hierarchy of Generally Accepted Accounting Principles”, also known as the FASB Accounting Standards Codification (the “Codification”), which establishes the exclusive authoritative reference for accounting principles generally accepted in the United States (“GAAP”) for use in financial statements. The Codification supersedes all existing non-Securities and Exchange Commission (“SEC”) accounting and reporting standards, although SEC rules and interpretive releases remain as additional authoritative GAAP for U.S. registrants. The Codification does not change GAAP, but is intended to simplify user access by providing all the authoritative literature related to a particular topic in one place. The Codification, which became effective for financial statements issued after September 15, 2009, did not have an effect on the Company’s financial statements. Although the Company has continued to provide a general description of the relevant accounting literature applicable to its significant accounting policies, it has ceased including the specific FASB pronouncement references in its financial statement footnotes.

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
     The consolidated financial statements include the accounts and operations of the Company, the Operating Partnership, its subsidiaries, and certain joint venture partnerships in which it participates. The Company consolidates all variable interest entities (“VIEs”) for which it is the primary beneficiary. Generally, a VIE is an entity with one or more of the following characteristics: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support, (b) as a group, the holders of the equity investment at risk (i) lack the ability to make decisions about an entity’s activities through voting or similar rights, (ii) have no obligation to absorb the expected losses of the entity, or (iii) have the right to receive the expected residual returns of the entity, or (c) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. The current accounting guidance requires a VIE to be consolidated in the financial statements of the entity that is determined to be the primary beneficiary of the VIE, i.e., the entity that will receive a majority of the VIE’s expected losses, expected residual returns, or both. In determining whether the Company is the primary beneficiary of a VIE, it considers qualitative and quantitative factors including, but not limited to: (i) the amount and characteristics of the Company’s investment, (ii) the obligation or likelihood for the Company or other investors to provide financial support, (iii) the Company’s and the other investors’ ability to control or significantly influence key decisions for the VIE, and (iv) the similarity with, and significance to, the business activities of the Company and the other investors. Significant judgments related to these determinations include estimates about the current and future fair values and performance of real estate held by these VIEs and general market conditions.
     With respect to its 13 consolidated operating joint ventures, the Company has general partnership interests of 20% in nine properties, 40% in two properties, 50% in one property and 75% in one property. As (i) such entities are not VIEs, and (ii) the Company is the sole general partner and exercises substantial operating control over these entities, the Company has determined that such entities should be consolidated for financial statement purposes. Current accounting guidance provides a framework for determining whether a general partner controls, and should consolidate, a limited partnership or similar entity in which it owns a minority interest.
     The Company’s three 60%-owned joint ventures for development projects in Limerick, Pottsgrove and Stroudsburg, Pennsylvania, are consolidated as they are deemed to be VIEs and the Company is the primary income or loss beneficiary in each case. At December 31, 2009, these VIEs owned real estate with a carrying value of $134.9 million. At that date, two of the VIEs had property-specific mortgage loans payable aggregating $62.5 million, and the real estate owned by one of the VIEs collateralized the secured revolving development property credit facility in the amount of $7.7 million.

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
     With respect to its unconsolidated joint ventures, the Company has a 20% interest in a joint venture with RioCan (more fully described below) formed initially for the acquisition of seven shopping center properties owned by the Company. Two of the properties were transferred to the joint venture prior to December 31, 2009, two of the properties were transferred in January and February 2010 and the three remaining properties are expected to be transferred during the first half of 2010. In addition, the Company has a 76.3% interest in a joint venture which owns a single-tenant office property in Philadelphia, Pennsylvania. Although the Company exercises influence over these joint ventures, it does not have operating control. In the case of the RioCan joint venture, although the Company provides management and other services, RioCan has significant management participation rights. The Company has determined that these joint ventures are not VIEs. The Company accounts for its investment in these joint ventures under the equity method.
     At December 31, 2009, the Company had deposits of $0.9 million on three land parcels to be purchased for future development. Although each of the deposits is considered a VIE, the Company has not consolidated any of them as the Company is not the primary income or loss beneficiary in each case.
Note 2. Intangible Lease Asset/Liability
     The Company determined that at the time it acquired certain properties during 2003 through 2009, it had underprovided for certain identifiable intangible lease liabilities relating to fixed-price renewal options that were at below-market rates. At the time such properties were acquired, the Company determined the fair value of such renewal options to be immaterial, based upon the Company’s assessment of a very low probability that any of such renewal options would be exercised. Accordingly, at the time of acquisition, the Company assigned a zero value to such renewal options. The Company has reconsidered these determinations, and concluded that option renewal periods should have been valued with respect to certain of the leases. Using the updated assumptions, the Company determined the December 31, 2009 carrying amounts of unamortized intangible lease liabilities and real estate, net, to be understated by $8,429,000 and $7,688,000, respectively (the latter amount net of $741,000, representing the cumulative understated depreciation expense for the period 2003 through, 2009). In addition, total equity and limited partners’ interest in the Operating Partnership were overstated by $723,000 and $18,000, respectively, as of December 31, 2009, reflecting the aforementioned cumulative depreciation adjustment. At the time the adjustment was identified, the Company determined that the aforementioned adjustments were immaterial to any full year’s consolidated financial statements; however, the Company did determine that recording the adjustments entirely in any quarterly period subsequent to December 31, 2009 would be material to the consolidated statement of operations for that period. Accordingly, as provided by the SEC’s Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements”, such adjustments have been retroactively reflected in the

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
consolidated balance sheets at December 31, 2009 and 2008 and the consolidated statements of operations for each of the three years in the period ended December 31, 2009.
     The following tables summarize the impact of these adjustments on the Company’s consolidated financial statements:

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
                                 
    December 31, 2009  
            Inangible lease     Discontinued        
            liability     operations        
    As reported     adjustment     adjustment (a)     As revised  
Real estate
  $ 1,675,322,000     $ 8,429,000     $ (11,070,000 )   $ 1,672,681,000  
Less accumulated depreciation
    (164,615,000 )     (741,000 )     1,477,000       (163,879,000 )
 
                       
Real estate, net
  $ 1,510,707,000     $ 7,688,000     $ (9,593,000 )   $ 1,508,802,000  
 
                       
 
                               
Real estate held for sale — discontinued operations
  $ 11,599,000     $     $ 9,781,000     $ 21,380,000  
 
                       
 
                               
Unamortized intangible lease liabilities
  $ 46,643,000     $ 8,429,000     $ (1,339,000 )   $ 53,733,000  
 
                       
 
                               
Liabilities — real estate held for sale
  $ 4,295,000     $     $ 1,339,000     $ 5,634,000  
 
                       
 
                               
Limited partners’ interest in Operating Partnership
  $ 12,656,000     $ (18,000 )   $     $ 12,638,000  
 
                       
 
                               
Total equity
  $ 614,487,000     $ (723,000 )   $     $ 613,764,000  
 
                       
                                 
    December 31, 2008  
            Inangible lease     Discontinued        
            liability     operations        
    As reported     adjustment     adjustment (a)     As revised  
Real estate
  $ 1,539,213,000     $ 8,429,000     $ (11,052,000 )   $ 1,536,590,000  
Less accumulated depreciation
    (124,387,000 )     (529,000 )     1,109,000       (123,807,000 )
 
                       
Real estate, net
  $ 1,414,826,000     $ 7,900,000     $ (9,943,000 )   $ 1,412,783,000  
 
                       
 
                               
Real estate held for sale — discontinued operations
  $ 32,063,000     $     $ 10,204,000     $ 42,267,000  
 
                       
 
                               
Unamortized intangible lease liabilities
  $ 56,122,000     $ 8,429,000     $ (1,503,000 )   $ 63,048,000  
 
                       
 
                               
Liabilities — real estate held for sale
  $ 5,262,000     $     $ 1,503,000     $ 6,765,000  
 
                       
 
                               
Limited partners’ interest in Operating Partnership
  $ 14,271,000     $ (14,000 )   $     $ 14,257,000  
 
                       
 
                               
Total equity
  $ 591,452,000     $ (515,000 )   $     $ 590,937,000  
 
                       
                                 
    Year ended December 31, 2009  
            Inangible lease     Discontinued        
            liability     operations        
    As reported     adjustment     adjustment (a)     As revised  
Depreciation and amortization expense (a)
  $ 54,257,000     $ 212,000     $ (425,000 )   $ 54,044,000  
 
                       
 
                               
Net (loss) attributable to common shareholders
  $ (24,543,000 )   $ (204,000 )   $  (b)   $ (24,747,000 )
 
                       
Per common share (basic and diluted)
  $ (0.53 )   $ (0.01 )   $     $ (0.54 )
 
                       
                                 
    Year ended December 31, 2008  
            Inangible lease     Discontinued        
            liability     operations        
    As reported     adjustment     adjustment (a)     As revised  
Depreciation and amortization expense (a)
  $ 48,741,000     $ 211,000     $ (464,000 )   $ 48,488,000  
 
                       
 
                               
Net income attributable to common shareholders
  $ 10,498,000     $ (202,000 )   $  (b)   $ 10,296,000  
 
                       
Per common share (basic and diluted)
  $ 0.24     $ (0.01 )   $     $ 0.23  
 
                       
                                 
    Year ended December 31, 2007  
            Inangible lease     Discontinued        
            liability     operations        
    As reported     adjustment     adjustment (a)     As revised  
Depreciation and amortization expense (a)
  $ 41,004,000     $ 150,000     $ (517,000 )   $ 40,637,000  
 
                       
 
                               
Net income attributable to common shareholders
  $ 14,092,000     $ (144,000 )   $  (b)   $ 13,948,000  
 
                       
Per common share (basic and diluted)
  $ 0.32     $     $     $ 0.32  
 
                       
 
(a)   Includes other retroactive adjustments for the sales of properties, where the applicable net assets and results of operations have been treated as “held for sale” and “income (loss) from discontinued operations”, respectively.
 
(b)   Net of noncontrolling interests (limited partners’ interest).

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
     The Company allocates the fair value of real estate acquired to land, buildings and improvements. In addition, the fair value of in-place leases is allocated to intangible lease assets and liabilities.
     The fair value of the tangible assets of an acquired property is determined by valuing the property as if it were vacant, which value is then allocated to land, buildings and improvements based on management’s determination of the relative fair values of these assets. In valuing an acquired property’s intangibles, factors considered by management include an estimate of carrying costs during the expected lease-up periods, such as real estate taxes, insurance, other operating expenses, and estimates of lost rental revenue during the expected lease-up periods based on its evaluation of current market demand. Management also estimates costs to execute similar leases, including leasing commissions, tenant improvements, legal and other related costs.
     The values of acquired above-market and below-market leases are recorded based on the present values (using discount rates which reflect the risks associated with the leases acquired) of the differences between the contractual amounts to be received and management’s estimate of market lease rates, measured over the terms of the respective leases that management deemed appropriate at the time of the acquisitions. Such valuations include a consideration of the non-cancellable terms of the respective leases as well as any applicable renewal period(s). The fair values associated with below-market rental renewal options are determined based on the Company’s experience and the relevant facts and circumstances that existed at the time of the acquisitions. The values of above-market leases are amortized to rental income over the terms of the respective non-cancelable lease periods. The portion of the values of below-market leases associated with the original non-cancelable lease terms are amortized to rental income over the terms of the respective non-cancelable lease periods. The portion of the values of the leases associated with below-market renewal options that are likely of exercise are amortized to rental income over the respective renewal periods. The value of other intangible assets (including leasing commissions, tenant improvements, etc.) is amortized to expense over the applicable terms of the respective leases. If a lease were to be terminated prior to its stated expiration or not renewed, all unamortized amounts relating to that lease would be recognized in operations at that time.
     With respect to the Company’s 2009 acquisitions, the fair values of in-place leases and other intangibles have been allocated to the intangible asset and liability accounts. Such allocations are preliminary and are based on information and estimates available as of the respective dates of acquisition. As final information becomes available and is refined, appropriate adjustments are made to the purchase price allocations, which are finalized within twelve months of the respective dates of acquisition. Unamortized intangible lease liabilities relate primarily to below-market leases, and amounted to $53.7 million and $63.0 million at December 31, 2009 and 2008, respectively.

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
     As a result of recording the intangible lease assets and liabilities, (i) revenues were increased by $13.2 million, $14.1 million and $10.6 million for 2009, 2008 and 2007, respectively, relating to the amortization of intangible lease liabilities, and (ii) depreciation and amortization expense was increased correspondingly by $13.7 million, $14.2 million and $12.6 million for 2009, 2008 and 2007, respectively.
     The unamortized balance of intangible lease liabilities of $53.7 million at December 31, 2009 is net of accumulated amortization of $51.9 million, and will be credited to future operations through 2043 as follows:
         
2010
  $ 8,544,000  
2011
    7,044,000  
2012
    6,363,000  
2013
    5,956,000  
2014
    5,335,000  
Thereafter
    20,491,000  
 
     
 
  $ 53,733,000  
 
     
Note 3. Discontinued operations
     During 2009 and subsequent to December 31, 2009, the Company sold, or has treated as “held for sale”, 11 of its properties (primarily drug store/convenience centers), located in Ohio, Maryland and New York, including the McDonalds/Waffle House property, located in Medina, Ohio, the CVS property located in Westfield, New York, the Staples property located in Oswego, New York, the Hudson Ohio Discount Drug Mart Plaza, the Dover Ohio Discount Drug Mart Plaza, the Gabriel Brothers property located in Kent, Ohio, the Carrollton Ohio Discount Drug Mart Plaza, the Pondside Plaza located in Geneseo, New York, the Powell Ohio Discount Drug Mart Plaza, the 7,000 square foot Family Dollar convenience center located in Zanesville, Ohio, and the 105,000 square foot Long Reach Village property located in Columbia, Maryland. The aggregate sales prices for the 11 properties is approximately $33.3 million, including property-specific mortgage loans payable of approximately $22.4 million. In connection with these transactions, the Company recorded impairment charges aggregating $6.5 million (including $3.0 million subsequent to December 31, 2009), and has realized gain on sales of $727,000 (including $170,000 subsequent to December 31, 2009). The carrying values of the assets and liabilities of these properties, principally the net book values of the real estate and the related mortgage loans payable to be assumed, have been reclassified as “held for sale” on the Company’s consolidated balance sheets at December 31, 2009 and 2008. In addition, the properties’ results of operations have been classified as “discontinued operations” for all periods presented.

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
     The following is a summary of the results of operations from discontinued operations for 2009, 2008 and 2007:
                         
    Years ended December 31,  
    2009     2008     2007  
Revenues:
                       
Rents
  $ 3,754,000     $ 4,203,000     $ 4,134,000  
Expense recoveries
    1,223,000       1,334,000       1,361,000  
 
                 
Total revenues
    4,977,000       5,537,000       5,495,000  
 
                 
Expenses:
                       
Operating, maintenance and management
    950,000       848,000       1,053,000  
Real estate and other property-related taxes
    753,000       795,000       800,000  
Depreciation and amortization
    1,368,000       1,525,000       1,673,000  
Interest expense
    1,180,000       1,311,000       1,326,000  
 
                 
 
    4,251,000       4,479,000       4,852,000  
 
                 
Income from discontinued operations before impairment charges
    726,000       1,058,000       643,000  
Impairment charges
    (3,559,000 )            
 
                 
(Loss) income from discontinued operations
  $ (2,833,000 )   $ 1,058,000     $ 643,000  
 
                 
 
                       
Gain on sales of discontinued operations
  $ 557,000     $     $  
 
                 
Note 4. Summary of Significant Accounting Policies
     The accompanying financial statements are prepared on the accrual basis in accordance with GAAP, which requires management to make estimates and assumptions that affect the disclosure of contingent assets and liabilities, the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the periods covered by the financial statements. Actual results could differ from these estimates.
     The consolidated financial statements reflect certain reclassifications of prior period amounts to conform to the 2009 presentation, principally (i) the retrospective reclassification, for all periods presented, of the balances related to minority interests in consolidated joint ventures and limited partners’ interest in the Operating Partnership into the consolidated equity accounts, as appropriate (certain non-controlling interests of the Company will continue to be classified in the mezzanine section of the balance sheet as these redeemable OP Units (“Mezz OP Units”) do not meet the requirements for equity classification), (ii) to reflect the reclassifications of the assets and liabilities of the properties transferred and to be transferred to the RioCan joint venture as “real estate to be transferred to a joint venture”, (iii) to reflect the retroactive valuation adjustments relating to lease renewal options, and (iv) to reflect the sale and/or treatment as

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
“held for sale” of certain operating properties and the treatment thereof as “discontinued operations”. The reclassifications had no material impact on previously-reported net income attributable to common shareholders or earnings per share.
Real Estate Investments and Discontinued Operations
     Real estate investments are carried at cost less accumulated depreciation. The provision for depreciation is calculated using the straight-line method based upon the estimated useful lives of the respective assets of between 3 and 40 years. Depreciation expense amounted to $50.2 million, $44.5 million and $37.4 million for 2009, 2008 and 2007, respectively. Expenditures for betterments that substantially extend the useful lives of the assets are capitalized. Expenditures for maintenance, repairs, and betterments that do not substantially prolong the normal useful life of an asset are charged to operations as incurred, and amounted to $2.2 million, $2.2 million and $1.7 million for 2009, 2008 and 2007, respectively.
     Upon the sale (or classification as “held for sale”) or other disposition of assets, the cost and related accumulated depreciation and amortization are removed from the accounts and the resulting gain or impairment loss, if any, is reflected as discontinued operations. In addition, prior periods’ financial statements would be reclassified to reflect the sold properties’ operations as discontinued.
     Real estate investments include costs of development and redevelopment activities, and construction in progress. Capitalized costs, including interest and other carrying costs during the construction and/or renovation periods, are included in the cost of the related asset and charged to operations through depreciation over the asset’s estimated useful life. Interest and financing costs capitalized amounted to $6.3 million, $6.7 million and $4.1 million for 2009, 2008 and 2007, respectively. A variety of costs are incurred in the acquisition, development and leasing of a property, such as pre-construction costs essential to the development of the property, development costs, construction costs, interest costs, real estate taxes, salaries and related costs, and other costs incurred during the period of development. After a determination is made to capitalize a cost, it is allocated to the specific component of a project that is benefited. The Company ceases capitalization on the portions substantially completed and occupied, or held available for occupancy, and capitalizes only those costs associated with the portions under development. The Company considers a construction project to be substantially completed and held available for occupancy upon the completion of tenant improvements, but not later than one year from cessation of major construction activity.
     Management reviews each real estate investment for impairment whenever events or circumstances indicate that the carrying value of a real estate investment may not be recoverable. The review of recoverability is based on an estimate of the future cash flows that are expected to result from the real estate investment’s use and eventual disposition. These cash flows consider factors such as expected future operating income, trends and prospects, as well as the effects of

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
leasing demand, competition and other factors. If an impairment event exists due to the projected inability to recover the carrying value of a real estate investment, an impairment loss is recorded to the extent that the carrying value exceeds estimated fair value. Real estate investments held for sale are carried at the lower of their respective carrying amounts or estimated fair values, less costs to sell. Depreciation and amortization are suspended during the periods held for sale.
     In October 2009, the Company entered into the RioCan transactions (more fully described below), and recorded a net impairment charge aggregating $23.6 million based on the indicated values and costs of the contract of sale of an 80% interest in seven properties transferred or to be transferred to the RioCan joint venture. Insofar as the Company has and will have a continued involvement with these properties (it exercises significant influence through 20% interest retained and provides property management and other services), the accounting treatment presentation on the accompanying consolidated balance sheet is to reflect the Company’s applicable carrying values as “real estate to be transferred to a joint venture” retroactively for all periods presented, whereas the accounting treatment presentation on the accompanying consolidated statements of operations is to reflect the results of the properties’ operations prospectively following their transfer to the joint venture as “equity in income of unconsolidated joint ventures” with no reclassification adjustments for discontinued operations. Revenues included in the accompanying statement of operations for the seven properties transferred or to be transferred to the RioCan joint venture aggregated $18.6 million, $17.7 million and $16.6 million, respectively, for 2009, 2008 and 2007.
     During 2009, the Company wrote-off costs incurred in prior years for (i) potential development opportunities in Milford, Delaware and Ephrata, Pennsylvania that the Company determined would not go forward (an aggregate of $2.8 million) and (ii) costs incurred related to the acquisitions of San Souci Plaza and New London Mall (net of minority interest share) and the costs primarily associated with a cancelled acquisition (an aggregate of $1.5 million).
     During 2009 and subsequent to December 31, 2009, the Company sold, or has treated as “held for sale”, 11 of its properties (primarily drug store/convenience centers), located in Ohio, Maryland and New York. In connection with these transactions, the Company recorded impairment charges aggregating $6.5 million (including $3.0 million subsequent to December 31, 2009).
Conditional asset retirement obligation
     A conditional asset retirement obligation is a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement is conditional on a future event that may or may not be within the control of the Company. The Company would record a liability for a conditional asset retirement obligation if the fair value of the obligation can be reasonably estimated. Environmental studies conducted at the time of acquisition with respect to all of the Company’s properties did not reveal any material environmental liabilities, and the

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
Company is unaware of any subsequent environmental matters that would have created a material liability. The Company believes that its properties are currently in material compliance with applicable environmental, as well as non-environmental, statutory and regulatory requirements. There were no conditional asset retirement obligation liabilities recorded by the Company during the three years ended December 31, 2009.
Cash and Cash Equivalents
     Cash and cash equivalents consist of cash in banks and short-term investments with original maturities of less than ninety days, and include cash at consolidated joint ventures of $7.4 million and $1.9 million at December 31, 2009 and 2008, respectively.
Restricted Cash
     The terms of several of the Company’s mortgage loans payable require the Company to deposit certain replacement and other reserves with its lenders. Such “restricted cash” is generally available only for property-level requirements for which the reserves have been established, is not available to fund other property-level or Company-level obligations, and amounted to $14.1 million and $14.0 million at December 31, 2009 and 2008, respectively.
Rents and Other Receivables
     Management has determined that all of the Company’s leases with its various tenants are operating leases. Rental income with scheduled rent increases is recognized using the straight-line method over the respective terms of the leases. The aggregate excess of rental revenue recognized on a straight-line basis over the contractual base rents is included in straight-line rents on the consolidated balance sheet. Leases also generally contain provisions under which the tenants reimburse the Company for a portion of property operating expenses and real estate taxes incurred; such income is recognized in the periods earned. In addition, certain operating leases contain contingent rent provisions under which tenants are required to pay, as additional rent, a percentage of their sales in excess of a specified amount. The Company defers recognition of contingent rental income until those specified sales targets are met.
     The Company must make estimates as to the collectibility of its accounts receivable related to base rent, straight-line rent, percentage rent, expense reimbursements and other revenues. When management analyzes accounts receivable and evaluates the adequacy of the allowance for doubtful accounts, it considers such things as historical bad debts, tenant creditworthiness, current economic trends, and changes in tenants’ payment patterns. The allowance for doubtful accounts was $5.3 million and $3.0 million at December 31, 2009 and 2008, respectively. The provision for doubtful accounts (included in operating, maintenance and

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
management expenses) was $3.9 million, $1.9 million and $0.7 million in 2009, 2008 and 2007, respectively.
Concentration of Credit Risk
     Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents in excess of insured amounts and tenant receivables. The Company places its cash and cash equivalents with high quality financial institutions. Management performs ongoing credit evaluations of its tenants and requires certain tenants to provide security deposits.
     Giant Food Stores, LLC (“Giant Foods”), which is owned by Ahold N.V., a Netherlands corporation, accounted for approximately 12%, 12% and 13% of the Company’s total revenues in 2009, 2008 and 2007, respectively. Giant Foods, in combination with Stop & Shop, Inc., which is also owned by Ahold N.V., accounted for approximately 15%, 15% and 15% of the Company’s total revenues in 2009, 2008 and 2007, respectively. Of these amounts, 3%, respectively, were attributable to Giant Foods revenues at the seven properties transferred or to be transferred to the RioCan joint venture, for each of the periods presented.
     Total revenues from properties located in Pennsylvania, Massachusetts and Connecticut amounted to 47.0%, 13.3%, 11.6%, 49.0%, 14.0%, 8.7%, and 55.2%, 11.3%, 8.2%, of consolidated total revenues in 2009, 2008 and 2007, respectively.
Other Assets
     Other assets at December 31, 2009 and 2008 are comprised of the following:
                 
    December 31,  
    2009     2008  
Cumulative mark-to-market adjustments related to stock-based compensation
  $ 2,100,000     $ 1,965,000  
Prepaid expenses
    5,279,000       4,643,000  
Deposits
    1,430,000       2,795,000  
 
           
 
  $ 8,809,000     $ 9,403,000  
 
           
Deferred Charges, Net
     Deferred charges at December 31, 2009 and 2008 are net of accumulated amortization and are comprised of the following:

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
                 
    December 31,  
    2009     2008  
Lease origination costs (i)
  $ 17,696,000     $ 16,945,000  
Financing costs (ii)
    16,833,000       10,772,000  
Other
    2,213,000       2,622,000  
 
           
 
  $ 36,742,000     $ 30,339,000  
 
           
 
(i)   Lease origination costs include the amortized balance of intangible lease assets resulting from purchase accounting allocations of $9,992,000 and $11,397,000, respectively.
 
(ii)   Financing costs are incurred in connection with the Company’s credit facilities and other long-term debt.
     Deferred charges are amortized over the terms of the related agreements. Amortization expense related to deferred charges (including amortization of deferred financing costs included in non-operating income and expense) amounted to $7.3 million, $5.4 million and $4.2 million for 2009, 2008 and 2007, respectively. The unamortized balances of deferred lease origination costs and deferred financing costs are net of accumulated amortization of $13.8 million and $12.3 million, respectively, and will be charged to future operations as follows (lease origination costs through 2033, and financing costs through 2029):
                 
    Lease        
    origination     Financing  
    costs     costs  
Non-amortizing (i)
  $ 397,000     $ 174,000  
2010
    2,590,000       5,265,000  
2011
    2,257,000       5,044,000  
2012
    1,987,000       4,155,000  
2013
    1,747,000       917,000  
2014
    1,431,000       497,000  
Thereafter
    7,287,000       781,000  
 
           
 
  $ 17,696,000     $ 16,833,000  
 
           
 
(i)   Represents (a) lease origination costs applicable to leases with commencement dates beginning after December 31, 2009 and (b) financing costs applicable to commitment fees/deposits to mortgage loans after December 31, 2009.
Income Taxes
     The Company has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). A REIT will generally not be subject to federal income taxation on that portion of its income that qualifies as REIT taxable income, to the extent that it distributes at least 90% of such REIT taxable income to its shareholders and complies with

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
certain other requirements. As of December 31, 2009, the Company was in compliance with all REIT requirements.
     The Company follows a two-step approach for evaluating uncertain tax positions. Recognition (step one) occurs when an enterprise concludes that a tax position, based solely on its technical merits, is more-likely-than-not to be sustained upon examination. Measurement (step two) determines the amount of benefit that more-likely-than-not will be realized upon settlement. Derecognition of a tax position that was previously recognized would occur when a company subsequently determines that a tax position no longer meets the more-likely-than-not threshold of being sustained. The use of a valuation allowance as a substitute for derecognition of tax positions is prohibited. The Company has not identified any uncertain tax positions requiring accrual.
Derivative Financial Instruments
     The Company occasionally utilizes derivative financial instruments, principally interest rate swaps, to manage its exposure to fluctuations in interest rates. The Company has established policies and procedures for risk assessment, and the approval, reporting and monitoring of derivative financial instrument activities. Derivative financial instruments must be effective in reducing the Company’s interest rate risk exposure in order to qualify for hedge accounting. When the terms of an underlying transaction are modified, or when the underlying hedged item ceases to exist, all changes in the fair value of the instrument are marked-to-market with changes in value included in net income for each period until the derivative instrument matures or is settled. Any derivative instrument used for risk management that does not meet the hedging criteria is marked-to-market with the changes in value included in net income. The Company has not entered into, and does not plan to enter into, derivative financial instruments for trading or speculative purposes. Additionally, the Company has a policy of entering into derivative contracts only with major financial institutions. As of December 31, 2009, the Company believes it has no significant risk associated with non-performance of the financial institutions which are the counterparties to its derivative contracts. Additionally, based on the rates in effect as of December 31, 2009, if a counterparty were to default, the Company would receive a net interest benefit. At December 31, 2009, the Company had approximately $28.9 million of mortgage loans payable and $23.9 million of secured revolving stabilized property credit facility subject to interest rate swaps which converted LIBOR-based variable rates to fixed annual rates ranging from 5.2% to 6.8% per annum. At that date, the Company had accrued liabilities (included in accounts payable and accrued expenses on the consolidated balance sheet) for (i) $2.8 million relating to the fair value of interest rate swaps applicable to existing mortgage loans payable of $28.9 million and secured revolving stabilized property credit facility of $23.9 million, and (ii) $3.1 million relating to an interest rate swap applicable to anticipated permanent financing of $28.0 million for its development joint venture project in Stroudsburg, Pennsylvania, bearing an effective date of June 1, 2010, a termination date of June 1, 2020, and a fixed rate of 5.56%. Charges and/or credits relating to the changes in fair values of such interest

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
rate swaps are made to accumulated other comprehensive (loss) income, noncontrolling interests (minority interests in consolidated joint ventures and limited partners’ interest), or operations (included in interest expense), as appropriate. Currently, all but one of the Company’s derivative instruments are designated as effective hedging instruments.
     The following is a summary of the derivative financial instruments held by the Company at December 31, 2009 and 2008:
                                                     
                Notional values         Balance   Fair value  
Designation/               December 31,     Expiration   sheet   December 31,  
Cash flow   Derivative   Count     2009     2008     dates   location   2009     2008  
Non-qualifying (1)
  Interest     1     $ 23,891,000     $     2011   Accounts payable and   $ 1,297,000     $  
 
                                           
Qualifying (1)
  rate swaps     8     $ 56,925,000     $ 61,796,000     2010 - 2020   accrued expenses   $ 4,655,000     $ 10,590,000  
 
                                           
 
(1)   The notional values and fair values for December 31, 2008 includes all nine of the Company’s interest rate swaps as qualifying.
     These interest rate swaps are used to hedge the variable cash flows associated with existing variable-rate debt. Amounts reported in accumulated other comprehensive loss related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt and totaled approximately $1.6 million and $0.4 million for the years ended December 31, 2009 and 2008, respectively.
     The following presents the effect of the Company’s derivative financial instruments on the consolidated statements of operations and the consolidated statements of equity for 2009, 2008 and 2007, respectively:
                             
        Amount of gain (loss) recognized in other  
        comprehensive (loss) income (effective portion)  
Designation/       Years ended December 31,  
Cash flow   Derivative   2009     2008     2007  
Non-qualifying
  Interest rate   $ 106,000     $     $  
 
                     
Qualifying
  swaps   $ 4,237,000     $ (7,785,000 )   $ (284,000 )
 
                     
                             
        Amount of gain (loss) recognized in interest expense  
        (ineffectve portion)  
Non-qualifying
  Interest rate   $ 107,000     $     $  
 
                     
Qualifying
  swaps   $ 67,000     $ (223,000 )   $  
 
                     

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
Earnings/Dividends Per Share
     Basic earnings per share (“EPS”) is computed by dividing net income attributable to the Company’s common shareholders by the weighted average number of common shares outstanding for the period (including restricted shares and shares held by Rabbi Trusts). Fully-diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into shares of common stock. The calculation of the number of such additional shares was anti-dilutive for 2009 and 2008; such additional shares amounted to 4,000 for 2007. Accordingly, fully-dilutive EPS was the same as basic EPS for those years.
     Dividends to common shareholders in 2009, 2008 and 2007 were $9,742,000 ($0.2025 per share), $40,027,000 ($0.90 per share), and $39,775,000 ($0.90 per share), respectively.
Stock-Based Compensation
     The Company’s 2004 Stock Incentive Plan (the “Incentive Plan”) establishes the procedures for the granting of incentive stock options, stock appreciation rights, restricted shares, performance units and performance shares. The maximum number of shares of the Company’s common stock that may be issued pursuant to the Incentive Plan is 2,750,000, and the maximum number of shares that may be granted to a participant in any calendar year may not exceed 250,000. Substantially all grants issued pursuant to the Incentive Plan are “restricted stock grants” which specify vesting (i) upon the third anniversary of the date of grant for time-based grants, or (ii) upon the completion of a designated period of performance for performance-based grants. Time-based grants are valued according to the market price for the Company’s common stock at the date of grant. For performance-based grants, the Company generally engages an independent appraisal company to determine the value of the shares at the date of grant, taking into account the underlying contingency risks associated with the performance criteria.
     In October 2006, the Company issued 35,000 shares of common stock as performance-based grants, which were to vest if the total annual return on an investment in the Company’s common stock (“TSR”) over the three-year period ending December 31, 2008 was equal to, or greater than, an average of 8% per year. The independent appraisal determined the value of the performance-based shares to be $12.07 per share, compared to a market price at the date of grant of $16.49 per share. With respect to the awards granted in 2006, the Company did not attain an average 8% TSR for such three-year period as provided by the Incentive Plan for vesting. However, the Compensation Committee of the Company’s Board of Directors took into account (1) that factors outside of the Company’s control resulted in the failure to achieve the requisite return, and (2) that the Company had outperformed its peer group during such three-year period. Accordingly, the Committee believed that it was appropriate to vest some of the awards and allowed 40% of the awards, or an aggregate of 14,000 shares, to vest. The decision had no impact on the Company’s results of operations.
     In February 2007, the Company issued 37,000 shares of common stock as performance-based grants, which were to vest if the total annual return on an investment in the Company’s

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
common stock over the three-year period ending December 31, 2009 was equal to, or greater than, an average of 8% per year. The independent appraisal determined the value of the performance-based shares to be $10.09 per share, compared to a market price at the date of grant of $16.45 per share. With respect to the awards granted in 2007, the Company did not attain an average 8% TSR for such three-year period as provided by the Incentive Plan for vesting and, accordingly, none of these shares vested.
     In January 2008 and June 2008, the Company issued 53,000 shares and 7,000 shares of common stock, respectively, as performance-based grants, which will vest if the total annual return on an investment in the Company’s common stock over the three-year period ending December 31, 2010 is equal to, or greater than, an average of 8% per year. The independent appraisal determined the value of the January 2008 performance-based shares to be $6.05 per share, compared to a market price at the date of grant of $10.07 per share; similar methodology determined the value of the June 2008 performance-based shares to be $10.31 per share, compared to a market price at the date of grant of $12.13 per share.
     In January 2009, the Company issued 218,000 shares of common stock as performance-based grants, which will vest if the total annual return on an investment in the Company’s common stock over the three-year period ending December 31, 2011 is equal to, or greater than, a blended measure of (i) an average of 6% TSR per year on the Company’s common stock, and (ii) the median TSR per year of the Company’s peer group. The independent appraisal determined the value of the performance-based shares to be $5.96 per share, compared to a market price at the date of grant of $7.02 per share.
     The additional restricted shares issued during 2009, 2008 and 2007 were time-based grants, and amounted to 397,000 shares, 187,000 shares and 149,000 shares, respectively. The value of all grants is being amortized on a straight-line basis over the respective vesting periods (irrespective of achievement of the performance grants) adjusted, as applicable, for fluctuations in the market value of the Company’s common stock. Those grants of restricted shares that are transferred to Rabbi Trusts are classified as treasury stock on the Company’s consolidated balance sheet. The following table sets forth certain stock-based compensation information for 2009, 2008 and 2007, respectively:

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
                         
    Years ended December 31,  
    2009     2008     2007  
Restricted share grants
    615,000       247,000       186,000  
Average per-share grant price
  $ 4.95     $ 9.39     $ 14.44  
Recorded as deferred compensation, net
  $ 3,032,000     $ 2,306,000     $ 2,694,000  
 
                       
Charged to operations:
                       
Amortization relating to stock-based compensation
  $ 2,921,000     $ 2,389,000     $ 2,154,000  
Adjustments to reflect changes in market price of Company’s common stock
    (488,000 )     (1,290,000 )     (848,000 )
 
                 
Total charged to operations
  $ 2,433,000     $ 1,099,000     $ 1,306,000  
 
                 
 
                       
Non-vested shares:
                       
Non-vested, beginning of period
    508,000       380,000       203,000  
Grants
    615,000       247,000       186,000  
Vested during period
    (104,000 )     (97,000 )     (9,000 )
Forfeitures/cancellations
    (39,000 )     (22,000 )      
 
                 
Non-vested, end of period
    980,000       508,000       380,000  
 
                 
Average value of non-vested shares (based on grant price)
  $ 7.54     $ 12.27     $ 14.59  
 
                 
 
                       
Value of shares vested during the period (based on grant price)
  $ 1,496,000     $ 1,365,000     $ 120,000  
 
                 
     At December 31, 2009, 1,547,000 shares remained available for grants pursuant to the Incentive Plan, and $2,876,000 remained as deferred compensation, to be amortized over various periods ending in October 2012.
     During 2001, pursuant to the 1998 Stock Option Plan (the “Option Plan”), the Company granted to the then directors options to purchase an aggregate of approximately 13,000 shares of common stock at $10.50 per share, the market value of the Company’s common stock on the date of the grant. The options are fully exercisable and expire in 2011. In connection with the adoption of the Incentive Plan, the Company agreed that it would not grant any more options under the Option Plan.
     In connection with an acquisition of a shopping center in 2002, the Operating Partnership issued warrants to purchase approximately 83,000 OP Units to a then minority interest partner in the property. Such warrants have an exercise price of $13.50 per unit, subject to certain anti-dilution adjustments, are fully vested, and expire in 2012.
     In connection with the RioCan transactions (more fully described below), the Company issued to RioCan warrants to purchase 1,428,570 shares of the Company’s common stock, at an exercise price of $7.00 per share, exercisable over a two-year period.

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
401(k) Retirement Plan
     The Company has a 401(k) retirement plan (the “Plan”), which permits all eligible employees to defer a portion of their compensation under the Code. Pursuant to the provisions of the Plan, the Company may make discretionary contributions on behalf of eligible employees. The Company made contributions to the Plan of $248,000, $243,000 and $219,000 in 2009, 2008 and 2007, respectively.

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
Supplemental consolidated statement of cash flows information
                         
    Years ended December 31,
    2009   2008   2007
Supplemental disclosure of cash activities:
                       
Interest paid
  $ 50,413,000     $ 49,006,000     $ 41,023,000  
 
                       
Supplemental disclosure of non-cash activities:
                       
Additions to deferred compensation plans
    3,032,000       2,306,000       2,694,000  
Issuance of non-interest-bearing purchase money mortgage (a)
          (13,851,000 )      
Assumption of mortgage loans payable — acquisitions
    (54,565,000 )     (34,631,000 )     (143,346,000 )
Assumption of mortgage loans payable — disposition
    9,932,000              
Assumption of interest rate swap liabilities
          (2,288,000 )      
Issuance of warrants
    1,643,000              
Issuance of OP Units
                (570,000 )
Conversion of OP Units into common stock
    131,000       68,000       45,000  
Adjustment of Mezz OP Units into common stock
                3,478,000  
Purchase accounting allocations:
                       
Intangible lease assets
    7,057,000       10,301,000       34,781,000  
Intangible lease liabilities
    (3,215,000 )     (4,636,000 )     (33,707,000 )
Net valuation decrease in assumed mortgage loan payable (b)
    1,649,000       143,000       191,000  
Other non-cash investing and financing activities:
                       
Accrued interest rate swap liabilities
    4,638,000       (8,206,000 )     (286,000 )
Accrued real estate improvement costs
    (7,868,000 )     8,407,000       1,806,000  
Accrued construction escrows
    (1,006,000 )     (479,000 )     1,024,000  
Accrued financing costs and other
    (22,000 )     (26,000 )      
Capitalization of deferred financing costs
    1,486,000       988,000       393,000  
 
                       
Deconsolidation of properties transferred to joint venture:
                       
Real estate, net
    42,829,000              
Other assets/liabilties, net
    1,277,000              
Investment in and advances to unconsolidated joint venture
    8,610,000              
 
(a)   A $14,575,000 non-interest-bearing mortgage was issued in connection with a purchase of land, and was valued at a net amount of $13,851,000. This reflected a valuation decrease of $724,000 to a market rate of 9.25% per annum
 
(b)   The net valuation decrease in an assumed mortgage loan payable resulted from adjusting the contract rate of interest (4.9% per annum) to a market rate of interest (6.1% per annum).
Fair Value Measurements
     In September 2006, the accounting guidance relating to fair value measurements and disclosures was updated. The updated guidance defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements. The updated guidance was effective on January 1, 2008 for financial assets, financial liabilities, and all nonfinancial assets and liabilities that are recognized or disclosed at fair value in financial statements on a recurring basis at least annually. The updated guidance was effective for all other nonfinancial assets and liabilities on January 1, 2009, and its adoption did not have a material effect on the Company’s consolidated financial statements. These

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
standards did not materially affect how the Company determines fair value, but resulted in certain additional disclosures.
     The guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels:
    Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
 
    Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
 
    Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
     The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible while also considering counterparty credit risk in the assessment of fair value. Financial assets and liabilities measured at fair value in the consolidated financial statements consist of interest rate swaps. The fair values of interest rate swaps are determined using widely accepted valuation techniques, including discounted cash flow analysis, on the expected cash flows of each derivative. The analysis reflects the contractual terms of the swaps, including the period to maturity, and uses observable market-based inputs, including interest rate curves (“significant other observable inputs”). The fair value calculation also includes an amount for risk of non-performance using “significant unobservable inputs” such as estimates of current credit spreads to evaluate the likelihood of default. The Company has concluded, as of December 31, 2009, that the fair value associated with the “significant unobservable inputs” relating to the Company’s risk of non-performance was insignificant to the overall fair value of the interest rate swap agreements and, as a result, the Company has determined that the relevant inputs for purposes of calculating the fair value of the interest rate swap agreements, in their entirety, were based upon “significant other observable inputs”. Nonfinancial assets and liabilities measured at fair value in the consolidated financial statements consist of real estate to be transferred to a joint venture and real estate held for sale- discontinued operations.
     The carrying amounts of cash and cash equivalents, restricted cash, rents and other receivables, other assets, accounts payable and accrued expenses approximate fair value. The valuation of the liability for the Company’s interest rate swaps ($5.9 million at December 31, 2009), which is measured on a recurring basis, was determined to be a Level 2 within the valuation hierarchy, and was based on independent values provided by financial institutions. The valuation of the assets for the Company’s real estate to be transferred to a joint venture and real estate held for sale – discontinued operations ($139.7 million and $21.4 million, respectively, at December 31, 2009), which is measured on a nonrecurring basis, have been determined to be a

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
Level 2 within the valuation hierarchy, and were based on the respective contracts of transfer and/or sale.
     The fair value of the Company’s fixed rate mortgage loans was estimated using “significant other observable inputs” such as available market information and discounted cash flows analyses based on borrowing rates the Company believes it could obtain with similar terms and maturities. As of December 31, 2009 and 2008, the aggregate fair values of the Company’s fixed rate mortgage loans were approximately $579.2 million and $513.3 million, respectively; the carrying values of such loans were $606.1 million and $555.6 million, respectively, at those dates.
Recently-Issued Accounting Pronouncements
     In January 2009, the Company adopted the updated accounting guidance related to business combinations, which (i) establishes the acquisition-date fair value as the measurement objective for all assets acquired, liabilities assumed, and any contingent consideration, (ii) requires expensing of most transaction costs that were previously capitalized, and (iii) requires the acquiror to disclose the information needed to evaluate and understand the nature and financial effect of the business combination to investors and other users. The principal impact of the adoption of this guidance on the Company’s financial statements, which is being applied prospectively, is that the Company has expensed most transaction costs relating to its acquisition activities ($1,273,000 for the year ended December 31, 2009 of which the noncontrolling interests’ share was $764,000).
     In January 2009, the Company adopted the updated accounting guidance related to noncontrolling interests in consolidated financial statements, which clarifies that a noncontrolling interest in a subsidiary (minority interests or certain limited partners’ interest, in the case of the Company), subject to the classification and measurement of redeemable securities, is an ownership interest in a consolidated entity which should be reported as equity in the parent company’s consolidated financial statements. The updated guidance requires a reconciliation of the beginning and ending balances of equity attributable to noncontrolling interests and disclosure, on the face of the consolidated income statement, of those amounts of consolidated net income attributable to the noncontrolling interests, eliminating the past practice of reporting these amounts as an adjustment in arriving at consolidated net income. The updated guidance is to be applied prospectively as of January 1, 2009, but requires retroactive application of the presentation and disclosure requirements for all periods presented, and early adoption was not permitted. The Company has reclassified, for all periods presented, the balances related to minority interests in consolidated joint ventures and limited partners’ interest in the Operating Partnership into the consolidated equity accounts, as appropriate (certain non-controlling interests of the Company will continue to be classified in the mezzanine section of the balance sheet as such Mezz OP Units do not meet the requirements for equity classification, since certain of the holders of OP Units have registration rights that provide such holders with the right to

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
demand registration under the federal securities law of the common stock of the Company issuable upon conversion of such OP Units). The Company will adjust the carrying value of the Mezz OP Units each period to equal the greater of its historical carrying value or its redemption value. Through December 31, 2009, there have been no cumulative net adjustments recorded to the carrying amounts of the Mezz OP Units.
     In January 2009, the Company adopted the updated accounting guidance related to disclosures about derivative instruments and hedging activities, which is intended to improve financial standards for derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. Among other requirements, entities are required to provide enhanced disclosures about (1) how and why an entity uses derivative instruments, (2) the accounting treatment for derivative instruments and related hedged items, and (3) how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. Other than the enhanced disclosure requirements, the adoption of this guidance did not have a material effect on the Company’s consolidated financial statements.
     In January 2009, the Company adopted the updated accounting guidance related to determining whether instruments granted in share-based payment transactions are participating securities, which states that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share. The adoption of this guidance had no impact on the Company’s consolidated financial statements as unvested restricted stock awards are included in the computations of both basic and diluted earnings per share.
     In January 2009, the Company adopted the updated guidance on initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in a business combination. The adoption of this guidance did not have a material effect on the Company’s consolidated financial statements.
     In April 2009, the Company adopted the updated accounting guidance related to interim disclosures about fair value of financial instruments (the prior guidance had required annual disclosures of the fair value of all instruments, recognized or unrecognized, except for those specifically excluded, when practical to do so). The updated guidance requires a publicly-traded company to include disclosures about the fair value of its financial instruments whenever it issues summarized financial information for interim reporting periods. The updated guidance must be applied prospectively and does not require disclosures for earlier periods presented for comparative periods at initial adoption. Other than the enhanced disclosure requirements, the adoption of this guidance did not have a material effect on the Company’s consolidated financial statements.

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
     In April 2009, the Company adopted additional updated accounting guidance relating to fair value measurements and disclosures, which clarifies the guidance for fair value measurements when the volume and level of activity for the asset or liability have significantly decreased, and includes guidance on identifying circumstances that indicate a transaction is not orderly. The adoption of this guidance did not have a material effect on the Company’s consolidated financial statements.
     In June 2009, the FASB issued updated accounting guidance for determining whether an entity is a VIE, and requires the performance of a qualitative rather than a quantitative analysis to determine the primary beneficiary of a VIE. The updated guidance requires an entity to consolidate a VIE if it has (i) the power to direct the activities that most significantly impact the entity’s economic performance, and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE. This guidance is effective for fiscal years beginning after November 15, 2009 and early adoption is not permitted. The Company will adopt the updated guidance as of January 1, 2010 and does not believe the adoption of this guidance will have a material effect on the consolidated financial statements.
     In January 2010, the FASB issued updated guidance on fair value measurements and disclosures, which requires disclosure of details of significant asset or liability transfers in and out of Level 1 and Level 2 measurements within the fair value hierarchy and inclusion of gross purchases, sales, issuances, and settlements in the rollforward of assets and liabilities valued using Level 3 inputs within the fair value hierarchy. The guidance also clarifies and expands existing disclosure requirements related to the disaggregation of fair value disclosures and inputs used in arriving at fair values for assets and liabilities using Level 2 and Level 3 inputs within the fair value hierarchy. This guidance is effective for interim and annual reporting periods beginning after December 15, 2009, except for the gross presentation of the Level 3 rollforward, which is required for annual reporting periods beginning after December 15, 2010, and for the respective interim periods within those years. The Company does not expect the adoption of this guidance will have a material effect on the consolidated financial statements.
     In January 2010, the FASB issued updated guidance on accounting for distributions to shareholders with components of stock and cash, which clarifies the treatment of the stock portion of a distribution to shareholders that allows the election to receive cash or stock. This guidance is effective for interim and annual reporting periods beginning after December 15, 2009. The Company does not expect the adoption of this guidance will have a material effect on the consolidated financial statements.

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
Note 5. Real Estate
     Real estate at December 31, 2009 and 2008 is comprised of the following:
                 
    Years ended December 31,  
    2009     2008  
Cost
               
Balance, beginning of year (a)
  $ 1,536,590,000     $ 1,384,187,000  
Properties acquired
    73,152,000       98,337,000  
Improvements and betterments
    69,086,000       56,373,000  
Write-off of fully-depreciated assets
    (6,147,000 )     (2,307,000 )
 
           
Balance, end of the year
  $ 1,672,681,000     $ 1,536,590,000  
 
           
 
               
Accumulated depreciation
               
Balance, beginning of the year (a)
    (123,807,000 )   $ (86,326,000 )
Depreciation expense
    (46,219,000 )     (39,788,000 )
Write-off of fully-depreciated assets
    6,147,000       2,307,000  
 
           
Balance, end of the year
  $ (163,879,000 )   $ (123,807,000 )
 
           
 
               
Net book value
  $ 1,508,802,000     $ 1,412,783,000  
 
           
 
(a)   Restated to reflect (i) the reclassifications of properties transferred or to be transferred to the RioCan joint venture and properties treated as discontinued operations, and (ii) the retroactive valuation adjustments relating to lease renewal options.
     Real estate net book value at December 31, 2009 and 2008 included projects under development and land held for expansion and/or future development of $128.6 million and $132.8 million, respectively.
Wholly-owned properties
     During 2008, the Company acquired four shopping and convenience centers (including the remaining portion of a shopping center in addition to the supermarket anchor store it had acquired in 2005), purchased the joint venture minority interests in four properties, and acquired land for development, expansion and/or future development.
     In April 2008, Value City, the only tenant at the Value City Shopping center, vacated its premises at the end of the lease term. In keeping with the Company’s redevelopment plans for the property, the vacant building was subsequently razed and the Company took a one-time depreciation charge of $1.9 million. The property is no longer included as one of the Company’s operating properties. During the fourth quarter of 2008, the Company determined not to proceed with the development of a land parcel in Ephrata, Pennsylvania, and the land was reclassified to “real estate held for sale” in all periods presented.

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
     The 2008 property acquisitions are summarized as follows:
                 
    Number of     Acquisition  
Property   properties     cost  
Operating properties (i)
    3     $ 43,215,000  
 
             
 
               
Land for projects under development, expansion and/or future development
    6       55,122,000  
 
           
 
               
Total
          $ 98,337,000  
 
             
 
(i)   The three operating properties acquired in 2008 were acquired individually and not as part of a portfolio and had acquisition costs of less than $20.0 million each.
Joint Venture Activities
2009 Transactions
     PCP. On January 30, 2009, a newly-formed 40% Company-owned joint venture acquired the New London Mall in New London, Connecticut, a supermarket-anchored shopping center, for a purchase price of approximately $40.7 million. The purchase price included the assumption of an existing $27.4 million first mortgage bearing interest at 4.9% per annum and maturing in 2015. The total joint venture partnership contribution was approximately $14.0 million, of which the Company’s 40% share ($5.6 million) was funded from its secured revolving stabilized property credit facility. The Company is the managing partner of the venture and receives certain acquisition, property management, construction management and leasing fees. In addition, the Company will be entitled to a “promote” fee structure, pursuant to which its profits participation would be increased to 44% if the venture reaches certain income targets. The Company’s joint venture partners are affiliates of Prime Commercial Properties PLC (“PCP”), a London-based real estate/development company.
     On February 10, 2009, a second newly-formed (also with affiliates of PCP) 40% Company-owned joint venture acquired San Souci Plaza in California, Maryland, a supermarket-anchored shopping center, for a purchase price of approximately $31.8 million. The purchase price included the assumption of an existing $27.2 million first mortgage bearing interest at 6.2% per annum and maturing in 2016. The total joint venture partnership contribution was approximately $5.8 million, of which the Company’s 40% share ($2.3 million) was funded from its secured revolving stabilized property credit facility. The Company is the managing partner of the venture and receives certain acquisition, property management, construction management and leasing fees. In addition, the Company will be entitled to a “promote” fee structure, pursuant to which its profits participation would be increased to 44% if the venture reaches certain income targets.

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
     RioCan. On October 26, 2009, the Company entered into definitive agreements with RioCan Real Estate Investment Trust of Toronto, Canada, a publicly-traded Canadian real estate investment trust listed on the Toronto Stock Exchange (“RioCan”), pursuant to which the Company (1) sold to RioCan approximately 6,667,000 shares of the Company’s common stock at $6.00 per share in a private placement (RioCan agreeing that it would not sell any of such shares for a period of one year), (2) issued to RioCan warrants to purchase approximately 1,429,000 shares of the Company’s common stock at an exercise price of $7.00 per share, exercisable over a two-year period (valued at $1,643,000), (3) entered into an 80% (RioCan) and 20% (Cedar) joint venture (i) initially for the purchase of seven supermarket-anchored properties presently owned by the Company, and (ii) then to acquire additional primarily supermarket-anchored properties in the Company’s primary market areas during the next two years, in the same joint venture format, and (4) entered into a “standstill” agreement with respect to increases in RioCan’s ownership of the Company’s common stock for a three-year period. In addition, subject to certain exceptions, the Company has agreed that it will not issue any new shares of common stock unless RioCan is offered the right to purchase that additional number of shares that will maintain its pro rata percentage ownership, on a fully diluted basis. In connection with the formation of the joint venture, the Company recorded an impairment charge of $23.6 million relating to the seven properties transferred or to be transferred to the joint venture.
     The private placement investment by RioCan and the issuance of the warrants by the Company were concluded on October 30, 2009. Two of the properties (Blue Mountain Commons located in Harrisburg, Pennsylvania and Sunset Crossing located in Dickson City, Pennsylvania) were transferred to the joint venture on December 10, 2009, resulting in proceeds to the Company of approximately $33 million (in connection with the closing, a repayment of $25.9 million was required under the Company’s secured revolving development property credit facility). The remaining five properties are subject to mortgage loans payable aggregating approximately $94 million. Two of the properties (Columbus Crossing Shopping Center located in Philadelphia, Pennsylvania and Franklin Village Plaza located in Franklin, Massachusetts) were transferred to the joint venture in January and February 2010, resulting in net proceeds to the Company of approximately $16 million. The remaining three properties (Loyal Plaza Shopping Center located in Williamsport, Pennsylvania, Shaw’s Plaza located in Raynham, Massachusetts, and Stop & Shop Plaza located in Bridgeport, Connecticut) are to be transferred during the first half of 2010, resulting in net proceeds to the Company of an additional approximately $16 million. In connection with the transfers of the seven properties to the joint venture and the private placement transactions, the Company will have received aggregate net proceeds of approximately $105 million, after estimated closing and transaction costs, which have been or will be used to repay/reduce the outstanding balances under the Company’s secured revolving credit facilities. In connection with these transactions, the Company incurred costs and fees of approximately $6.0 million, including fees to the Company’s investment advisor ($3.5 million), the value assigned to the warrants (approximately $1.6 million), and other costs and expenses aggregating $0.9 million. In addition, the Company agreed to pay to its investment advisor a fee of 1% of the gross cost of future acquisitions made by the joint venture for a two-

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
year period, up to a maximum of $3.0 million. At December 31, 2009, the Company was owed approximately $2.3 million ($1.6 million related to contingent consideration) relating to post-closing adjustments applicable to the two properties transferred to the joint venture prior to that date, which is included in rents and other receivables, net on the consolidated balance sheet.
2008 Transactions
     On January 3, 2008, the Company entered into a joint venture agreement for the redevelopment/retenanting of its existing shopping center located in Bloomsburg, Pennsylvania, including adjacent land parcels comprising an additional 46 acres. The required equity contribution from the Company’s joint venture partner was $4.0 million for a 25% interest in the property. The Company used the funds to reduce the outstanding balance on its secured revolving stabilized property credit facility.
     On March 7, 2008, a 60%-owned development joint venture of the Company acquired land in Pottsgrove, Pennsylvania, for a shopping center development project. The $28.4 million purchase price, including closing costs, was funded by the issuance of a non-interest-bearing purchase money mortgage of $14.6 million, which was repaid when property-specific construction financing was concluded in September 2008. The balance of the purchase price was funded by the Company’s capital contribution to the joint venture which was funded from its secured revolving stabilized property credit facility. As of December 31, 2008, the Company’s equity capital requirement of $28.7 million had been met, funded from its secured revolving stabilized property credit facility. The remaining costs of development and construction of this project are being funded by the property-specific construction financing.
     On March 18, 2008, the Company acquired the remaining 70% interests in Fairview Plaza, Halifax Plaza and Newport Plaza, and the remaining 75% interest in Loyal Plaza, previously owned in joint venture with the same partner, and consolidated for financial reporting purposes, for a purchase price of approximately $17.5 million, which was funded from its secured revolving stabilized property credit facility. The total outstanding mortgage loans payable on the properties were approximately $27.3 million at the time. The excess of the purchase price and closing costs over the carrying value of the minority interest partner’s accounts (approximately $8.4 million) was allocated to the Company’s intangible asset and liability accounts.
     On April 23, 2008 the Company entered into a joint venture for the construction and development of a shopping center located in Hamilton Township (Stroudsburg), Pennsylvania. The Company is committed to paying a development fee of $500,000 to the joint venture partner, and has provided approximately $40.5 million to date of equity capital, with a preferred rate of return of 9.25% per annum on its investment, and has a 60% profits interest in the joint venture. The required equity contribution from the Company’s joint venture partner was $400,000. As of December 31, 2008, the Company’s joint venture equity requirement had been funded from its

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
secured revolving stabilized property credit facility. Prior to the formation of the venture, the partner had previously acquired the land parcels at a cost of approximately $15.4 million, incurring mortgage indebtedness of approximately $10.8 million (including purchase money mortgages payable to the seller of $3.9 million). In addition, the partner had entered into an interest rate swap agreement with respect to its existing construction/development loan facility, as well as a future swap agreement applicable to anticipated permanent financing of $28.0 million. The joint venture is deemed to be a variable interest entity with the Company as the primary income or loss beneficiary; accordingly, the Company has consolidated the property. The minority interest partners in the Pottsgrove and Stroudsburg joint ventures are principally the same individuals.
     On September 12, 2008, the Company entered into a joint venture for the construction and development of a shopping center located in Limerick, Pennsylvania. The Company is committed to paying a development fee of $333,000 to the joint venture partner, and has provided approximately $3.3 million to date of equity capital, with a preferred rate of return of 9.5% per annum on its investment, and has a 60% profits interest in the joint venture. The required equity contribution from the Company’s joint venture partner is $217,000. Financing for the balance of the project costs is being funded from the Company’s secured revolving development property credit facility. The joint venture purchased the land parcels on October 27, 2008 and, in addition, reimbursed the seller for certain construction-in-progress costs incurred to date, for a total acquisition cost of approximately $8.4 million. The joint venture is deemed to be a variable interest entity with the Company as the primary income or loss beneficiary; accordingly, the Company will consolidate the property.
     In February 2008, the Company and Homburg Invest Inc., a publicly-traded Canadian corporation listed on the Toronto and Euronext Amsterdam Stock Exchanges (”Homburg”), entered into an agreement in principle to form a group of joint ventures into which the Company would contribute 32 of its properties (mostly drug store-anchored convenience centers and including all 27 of the Company’s Ohio properties). Richard Homburg, a director of the Company, is Chairman and CEO of Homburg. On November 3, 2008, the Company announced that it had been advised by Homburg that Homburg would not proceed with a proposed joint venture for 32 properties, as previously contemplated and disclosed by the Company and the Company expensed all costs it had incurred of approximately $203,000. While Homburg had substantially completed physical, financial and legal due diligence with respect to the properties, it cited the unprecedented current events that have taken place in the U.S. capital markets and the virtual collapse of the world capital markets as the basis for its decision. Homburg noted that it and its affiliates rely on Canadian, U.S. and European capital and retail markets for equity as well as short-term and long-term funding sources. The Company had previously entered into a nine property 20% owned joint venture with Homburg during 2007.

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
Real Estate Pledged
     At December 31, 2009 a substantial portion of the Company’s real estate was pledged as collateral for mortgage loans payable and the revolving credit facilities, as follows:
         
    Net book  
Description   value  
Collateral for mortgage loans payable
  $ 1,015,739,000  
Collateral for revolving credit facilities
    467,347,000  
Unencumbered properties
    25,716,000  
 
     
Total
  $ 1,508,802,000  
 
     
Pro Forma Financial Information (unaudited)
     During the period January 1, 2008 through December 31, 2009, the Company acquired six shopping and convenience centers aggregating approximately 790,000 square foot of GLA, purchased the joint venture minority interests in four properties, and acquired approximately 181.7 acres of land for development, expansion and/or future development, for a total cost of approximately $189.0 million. In addition, the Company placed into service six ground-up developments having an aggregate cost of approximately $194.3 million. The Company sold or held for sale 11 primarily drug store/convenience centers aggregating approximately 416,000 square foot of GLA for an aggregate sales price of approximately $33.3 million. The following table summarizes, on an unaudited pro forma basis, the combined results of operations of the Company for 2009 and 2008, respectively, as if all of these property acquisitions and sales were completed as of January 1, 2008. This unaudited pro forma information does not purport to represent what the actual results of operations of the Company would have been had all the above occurred as of January 1, 2008, nor does it purport to predict the results of operations for future periods.
                 
    Years ended December 31,
    2009   2008
Revenues
  $ 180,886,000     $ 179,493,000  
Net (loss) income attributable to common shareholders
  $ (22,399,000 )   $ 9,328,000  
 
               
Per common share
  $ (0.48 )   $ 0.21  
 
               
Weighted average number of common shares outstanding
    46,234,000       44,475,000  
Note 6. Rentals Under Operating Leases
     Annual future base rents due to be received under non-cancelable operating leases in effect at December 31, 2009 are approximately as follows (excluding those base rents applicable

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
to properties transferred or to be transferred to the RioCan joint venture and properties treated as discontinued operations):
         
2010
  $ 114,566,000  
2011
    107,227,000  
2012
    99,100,000  
2013
    92,248,000  
2014
    81,943,000  
Thereafter
    503,237,000  
 
     
 
  $ 998,321,000  
 
     
     Total future minimum rents do not include expense recoveries for real estate taxes and operating costs, or percentage rents based upon tenants’ sales volume. Such other rental amounted to approximately $35.9 million, $33.4 million and $30.0 million for 2009, 2008 and 2007, respectively. In addition, such amounts do not include amortization of intangible lease liabilities.

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
Note 7. Mortgage Loans Payable and Secured Revolving Credit Facilities
     Secured debt is comprised of the following at December 31, 2009 and 2008:
                                                 
    December 31, 2009     December 31, 2008  
            Interest rates             Interest rates  
    Balance     Weighted             Balance     Weighted        
Description   outstanding     average     Range     outstanding     average     Range  
Fixed-rate mortgages (a)
  $ 606,108,000       5.8 %     5.0% - 8.5 %   $ 555,638,000       5.8 %     5.0% - 8.5 %
Variable-rate mortgages
    82,181,000       3.4 %     2.5% - 5.9 %     53,302,000       4.4 %     2.5% - 5.9 %
 
                                       
Total property-specific mortgages
    688,289,000       5.6 %             608,940,000       5.7 %        
Stabilized property credit facility
    187,985,000       5.5 %             250,190,000       2.7 %        
Development property credit facility
    69,700,000       2.5 %             54,300,000       3.4 %        
 
                                       
 
  $ 945,974,000       5.3 %           $ 913,430,000       4.8 %        
 
                                       
 
                                               
Fixed-rate mortgages related to:
                                               
Real estate transferred or to be transferred to a joint venture
  $ 94,018,000       5.8 %     4.8% - 7.2 %   $ 77,307,000       5.6 %     4.8% - 7.2 %
 
                                       
Real estate held for sale — discontinued operations
  $ 12,455,000       5.5 %     5.2% - 5.7 %   $ 22,736,000       5.5 %     5.2% - 5.7 %
 
                                       
 
(a)   Restated to reflect the reclassifications of properties transferred or to be transferred to the RioCan joint venture and properties treated as discontinued operations.
Mortgage loans payable
     Mortgage loan activity for 2009 and 2008 is summarized as follows:
                 
    Years ended December 31,  
    2009     2008  
Balance, beginning of year (a)
  $ 608,940,000     $ 567,472,000  
New mortgage borrowings
    43,950,000       106,738,000  
Acquisition debt assumed (b)
    52,963,000       27,488,000  
Repayments
    (17,564,000 )     (92,758,000 )
 
           
Balance, end of the year
  $ 688,289,000     $ 608,940,000  
 
           
 
(a)   Restated to reflect the reclassifications of properties transferred or to be transferred to the RioCan joint venture and properties treated as discontinued operations.
 
(b)   Includes net reductions of $1.6 million and $0.1 million, respectively, relating to purchase acounting allocations.
     During 2009, the Company assumed $53.0 million of fixed-rate mortgage loans payable in connection with acquisitions, with interest rates of 6.1% and 6.2% per annum, with an average of 6.2% per annum. These principal amounts and rates of interest represent the fair values at the respective dates of acquisition. The stated contract amounts were $27.4 million and $27.2 million at the respective dates of acquisition, bearing interest at rates of 4.9% and 6.2% per annum, with an average of 5.5% per annum.

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
     During 2009, the Company refinanced one property that had collateralized the secured revolving stabilized property credit facility. The new fixed-rate mortgage, aggregating $17.0 million, bears interest at 6.8% per annum. The Company used the mortgage proceeds to reduce the balance outstanding under the secured revolving stabilized property credit facility.
     In addition, the Company has a $77.7 million construction facility with Manufacturers and Traders Trust Company (as agent) and several other banks, pursuant to which the Company has guaranteed and pledged its joint venture development project in Pottsgrove, Pennsylvania as collateral for borrowings to be made thereunder. This facility will expire in September 2011, subject to a one-year extension option. Borrowings outstanding under the facility aggregated $61.2 million at December 31, 2009, and such borrowings bore interest at an average rate of 2.5% per annum. Borrowings under the facility bear interest at the Company’s option at either LIBOR plus a spread of 225 bps, or the agent bank’s prime rate. As of December 31, 2009, the Company was in compliance with the financial covenants and financial statement ratios required by the terms of the construction facility.
     During 2008, the Company (i) borrowed an aggregate of $56,351,000 of new fixed-rate mortgage loans, bearing interest at rates ranging from 5.4% to 9.25% per annum, with an average of 6.8% per annum (these amounts include a $14,575,000 non-interest-bearing purchase money mortgage issued in connection with the purchase of land, and recorded as $13,851,000 reflecting an imputed interest rate of 9.25% per annum), and (ii) borrowed $50,387,000 in variable-rate mortgage loans bearing interest at LIBOR plus spreads of 225 bps and 275 bps (the latter with a floor of 5.9%). In addition, the Company assumed $24,488,000 of fixed-rate mortgage loans payable in connection with acquisitions, with interest rates ranging from 5.0% to 8.5% per annum, with an average of 7.0% per annum. These principal amounts and rates of interest represent the fair values at the respective dates of acquisition. The stated contract amounts were $24,631,000 at the respective dates of acquisition, bearing interest at rates ranging from 5.0% to 8.5% per annum, with an average of 6.9% per annum. The Company also assumed $2,915,000 in variable-rate mortgage loans bearing interest at LIBOR plus a spread of 190 bps.
     Scheduled principal payments on mortgage loans payable and secured revolving credit facilities at December 31, 2009, due on various dates from 2010 to 2029, are as follows:
         
2010
    20,335,000  
2011
    160,662,000  
2012
    227,518,000  
2013
    64,091,000  
2014
    119,458,000  
Thereafter
    353,910,000  
 
     
 
  $ 945,974,000  
 
     

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
Secured Revolving Stabilized Property Credit Facility
     In November 2009, the Company closed an amended and restated secured revolving stabilized property credit facility with Bank of America, N.A., continuing as administrative agent, together with three other lead lenders and other participating banks, with commitments from participants of $265.0 million (increased to $285.0 million in January 2010). The facility, as amended, is expandable to $400 million, subject to certain conditions, including acceptable collateral. The principal terms of the new facility include (i) an availability based primarily on appraisals, with a 67.5% advance rate, (ii) an interest rate based on LIBOR plus 350 bps, with a 200 bps LIBOR floor (under the prior arrangement, the interest rate was based on LIBOR plus a bps spread depending upon the Company’s leverage ratio, as defined, which had been 135 bps prior to the new facility), (iii) a leverage ratio limited to 67.5%, (iv) an unused portion fee of 50 bps (previously 25 bps), and (v) a maturity date of January 31, 2012, subject to a one-year extension option. In connection with the new facility, the Company paid participating lender fees and closing and transaction costs of approximately $9.0 million.
     Borrowings outstanding under the facility aggregated $188.0 million at December 31, 2009, such borrowings bore interest at an average rate of 5.5% per annum, and the Company had pledged 34 of its shopping center properties as collateral for such borrowings.
     The secured revolving stabilized property credit facility has been and will be used to fund acquisitions, certain development and redevelopment activities, capital expenditures, mortgage repayments, dividend distributions, working capital and other general corporate purposes. The facility is subject to customary financial covenants, including limits on leverage as discussed above and distributions (limited to 95% of funds from operations, as defined), and other financial statement ratios. Based on covenant measurements and collateral in place as of December 31, 2009, the Company was permitted to draw up to approximately $204.3 million, of which approximately $16.3 million remained available as of that date. As a result of the application of the net proceeds from, among other things, the transfers of two of the remaining properties to the RioCan joint venture (more fully described above) and the sales of shares of the Company’s common stock in February 2010 (more fully described below), such availability will have increased to approximately $104 million as of March 3, 2010. As of December 31, 2009, the Company was in compliance with the financial covenants and financial statement ratios required by the terms of the secured revolving stabilized property credit facility.
Secured Revolving Development Property Credit Facility
     The Company has a $150 million secured revolving development property credit facility with KeyBank, National Association (as agent) and several other banks, pursuant to which the Company has pledged certain of its development projects and redevelopment properties as collateral for borrowings thereunder. The facility, as amended, is expandable to $250 million, subject to certain conditions, including acceptable collateral, and will expire in June 2011,

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
subject to a one-year extension option. Borrowings under the facility bear interest at the Company’s option at either LIBOR or the agent bank’s prime rate, plus a spread of 225 bps or 75 bps, respectively. Advances under the facility are calculated at the least of 70% of aggregate project costs, 70% of “as stabilized” appraised values, or costs incurred in excess of a 30% equity requirement on the part of the Company. The facility also requires an unused portion fee of 15 bps. This facility has been and will be used to fund in part the Company’s and certain joint ventures’ development activities. In order to draw funds under this construction facility, the Company must meet certain pre-leasing and other conditions. Borrowings outstanding under the facility aggregated $69.7 million at December 31, 2009, and such borrowings bore interest at a rate of 2.5% per annum. As of December 31, 2009, the Company was in compliance with the financial covenants and financial statement ratios required by the terms of the secured revolving development property credit facility.
Note 8. Preferred and Common Stock
     The Company’s 8-7/8% Series A Cumulative Redeemable Preferred Stock has no stated maturity, is not convertible into any other security of the Company, and is redeemable at the Company’s option at a price of $25.00 per share, plus accrued and unpaid distributions.
     In connection with the RioCan transactions (more fully described above), the Company (1) sold approximately 6,667,000 shares of its common stock to RioCan at $6.00 per share in a private placement, and realized net proceeds of $38.6 million, and (2) issued to RioCan warrants to purchase approximately 1,429,000 shares of its common stock at an exercise price of $7.00 per share, exercisable over a two-year period.
     In September 2009, the Company entered into a Standby Equity Purchase Agreement (the “SEPA Agreement”) with an investment company for sales of its shares of common stock aggregating up to $30 million over a two-year commitment period; the commitment is expandable at the Company’s option to $45 million. Under the terms of the SEPA Agreement, the Company may sell, from time to time, shares of its common stock at a discount to market of 1.75%. The amount of these daily sales is generally limited to the lesser of 20% of the average daily trading volume or $1.0 million. In connection with these sales transactions, the Company agreed to pay an investment advisor a 0.75% placement agent fee.
     In addition, the Company may require the investment company to advance from time to time up to $5.0 million provided, however, that the Company may only request these larger advances approximately once a month. With respect to such advances, the common stock sales are at a discount to market of 2.75% and the placement agent fee is 1.25%. As the Company has a conditional obligation to issue a variable number of shares of its common stock, advances are initially recorded as a liability, and as shares are sold on a daily basis and the advance is settled, such liability is reflected in equity.

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
     Through December 31, 2009, 422,000 shares had been sold pursuant to the SEPA Agreement, at an average price of $5.93 per share, and the Company realized net proceeds, after allocation of other issuance expenses, of approximately $2.3 million. At December 31, 2009, there was an unsettled advance liability of $5.0 million, which is included in accounts payable and accrued liabilities on the consolidated balance sheet. Such advance was settled in January and February 2010 by the sale of 718,000 shares of the Company’s common stock at an average selling price of $6.97 per share.
     In January 2007, in connection with 7,500,000 shares of the Company’s common stock that it sold in December 2006, the underwriters exercised their over-allotment option to the extent of 275,000 shares, and the Company realized additional net proceeds of $4.1 million.
     On September 12, 2007, stockholders approved amendments to the Company’s Articles of Incorporation increasing the number of authorized shares of common stock to 150,000,000 and the number of authorized shares of preferred stock to 12,500,000.
Note 9. Commitments and Contingencies
     With respect to the Company’s 20% joint-venture interest in nine properties in partnership with affiliates of Homburg Invest Inc., the terms of the partnership agreements include buy/sell provisions with respect to equity ownership interests which can be exercised by either party. The buy/sell provisions allow either party to provide notice that it intends to purchase the non-initiating party’s interest at a specific price premised on a value for the entire venture. The non-initiating party may either accept that offer or instead may reject that offer and become the purchaser of the initiating party’s interest at the initially offered price.
     With respect to the Company’s 20% joint-venture interest in the properties transferred or to be transferred to the RioCan joint venture, the terms of the partnership agreements include buy/sell provisions with respect to equity ownership interests which can be exercised by either party during the period ending in December 2012 or upon certain change-of-control circumstances. The buy/sell provisions allow either party to provide notice that it intends to purchase the non-initiating party’s interest at a specific price premised on a value for the entire venture. The non-initiating party may either accept that offer or instead may reject that offer and become the purchaser of the initiating party’s interest at the initially offered price.
     The Company is a party to certain legal actions arising in the normal course of business. Management does not expect there to be adverse consequences from these actions that would be material to the Company’s consolidated financial statements.
     Under various federal, state, and local laws, ordinances, and regulations, an owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances, or petroleum product releases, at its properties. The owner may be liable to governmental entities

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
or to third parties for property damage, and for investigation and cleanup costs incurred by such parties in connection with any contamination. Management is unaware of any environmental matters that would have a material impact on the Company’s consolidated financial statements.
     The Company’s executive offices are located at 44 South Bayles Avenue, Port Washington, New York, in which it presently occupies approximately 8,600 square feet leased from a partnership owned 43.6% by the Company’s Chairman. Under the terms of the lease, as amended, which will expire in February 2020, the Company will add an additional 6,400 square feet by the end of 2010. Future minimum rents payable under the terms of the lease, as amended, amount to $484,000, $545,000, $560,000, $575,000, $591,000 and $3.3 million during the years 2010 through 2014, and thereafter, respectively. In addition, several of the Company’s properties and portions of several others are owned subject to ground leases which provide for annual payments subject, in certain cases, to cost-of-living or fair market value adjustments, through 2014, as follows: 2010 — $660,000 2011 — $668,000, 2012 — $659,000, 2013 — $659,000, 2014 — $659,000 and thereafter — $18.2 million.

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
Note 10. Selected Quarterly Financial Data (unaudited)
                                 
    Quarter ended  
Year   March 31     June 30     September 30     December 31  
2009
                               
Revenues as previously reported
  $ 46,895,000     $ 44,776,000     $ 45,850,000     $ 46,791,000  
Revenues from discontinued operations (a)
    (1,434,000 )     (1,225,000 )     (1,138,000 )     (400,000 )
 
                       
Revenues
  $ 45,461,000     $ 43,551,000     $ 44,712,000     $ 46,391,000  
 
                               
Net income (loss) as previously reported
  $ 5,779,000     $ 1,964,000     $ 3,814,000     $ (28,356,000 )
Net income (loss) from lease liability adjustment
    (53,000 )     (53,000 )     (53,000 )     (53,000 )
 
                       
Net income (loss)
  $ 5,726,000     $ 1,911,000     $ 3,761,000     $ (28,409,000 )
 
                               
Net income (loss) attributable to common shareholders as previously reported
  $ 3,999,000     $ (316,000 )   $ 1,447,000     $ (29,673,000 )
Net income (loss) from lease liability adjustment
    (51,000 )     (51,000 )     (51,000 )     (51,000 )
 
                       
Net income (loss) attributable to common shareholders
  $ 3,948,000     $ (367,000 )   $ 1,396,000     $ (29,724,000 )
 
                               
Per common share (basic and diluted) (b)
  $ 0.09     $ (0.01 )   $ 0.03     $ (0.60 )
 
                               
2008
                               
Revenues as previously reported
  $ 43,635,000     $ 42,915,000     $ 43,322,000     $ 44,608,000  
Revenues from discontinued operations (a)
    (1,417,000 )     (1,411,000 )     (1,381,000 )     (1,328,000 )
 
                       
Revenues
  $ 42,218,000     $ 41,504,000     $ 41,941,000     $ 43,280,000  
 
                               
Net income (loss) as previously reported
  $ 5,928,000     $ 3,733,000     $ 5,806,000     $ 5,542,000  
Net income (loss) from lease liability adjustment
    (53,000 )     (52,000 )     (53,000 )     (53,000 )
 
                       
Net income (loss)
  $ 5,875,000     $ 3,681,000     $ 5,753,000     $ 5,489,000  
 
                               
Net income (loss) attributable to common shareholders as previously reported
  $ 3,112,000     $ 1,224,000     $ 3,277,000     $ 2,885,000  
Net income (loss) from lease liability adjustment
    (51,000 )     (49,000 )     (51,000 )     (51,000 )
 
                       
Net income (loss) attributable to common shareholders
  $ 3,061,000     $ 1,175,000     $ 3,226,000     $ 2,834,000  
 
                               
Per common share (basic and diluted) (b)
  $ 0.07     $ 0.03     $ 0.07     $ 0.06  
 
(a)   Represents revenues from discontinued operations which were previously included in revenues as previously reported.
 
(b)   Difference between the sum of the four quraterly per share amounts and the annual per share amount are attributable to the effect of the weighted average outstanding share calculations for the respective periods.
Note 11. Subsequent Events
     On January 20, 2010, the Company paid approximately $5.5 million to terminate interest rate swaps applicable to approximately $23.9 million of mortgage loans payable as well as the interest rate swap applicable to anticipated permanent financing of $28.0 million, both for its development joint venture project in Stroudsburg, Pennsylvania.
     On January 26, 2010, the Cedar/RioCan joint venture acquired the Town Square Plaza shopping center in Temple, Pennsylvania, an approximately 128,000 square foot supermarket-anchored shopping center which was completed in 2008, and which is anchored by a 73,000 square foot Giant Foods supermarket. The purchase price for the property, which is presently unencumbered, was approximately $19 million, excluding closing costs.
     On February 5, 2010, the Company concluded a public offering of 7,500,000 shares of its common stock at $6.60 per share, and realized net proceeds after offering expenses of approximately $47.0 million. On March 3, 2010, the underwriters exercised their over-allotment

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Cedar Shopping Centers, Inc.
Notes to Consolidated Financial Statements
December 31, 2009
option to the extent of 698,000 shares, and the Company realized additional net proceeds of $4.4 million. In connection with the offering, RioCan acquired 1,350,000 shares of the Company’s common stock, including 100,000 shares acquired in connection with the exercise of the over-allotment option, and the Company realized net proceeds of $8.9 million.
     On March 10, 2010, the Company exercised its option to expand the SEPA Agreement to $45.0 million.

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Cedar Shopping Centers, Inc.
Schedule III
Real Estate and Accumulated Depreciation
Year ended December 31, 2009
                                                         
                            Year built/     Gross     Initial cost to the Company  
            Year     Percent     Year last     leasable             Building and  
Property   State     acquired     owned     renovated     area     Land     Improvements  
Wholly-Owned Stabilized Properties (1):
                                                       
Academy Plaza
  PA     2001       100 %     1965/1998       152,727       2,406,000       9,623,000  
Annie Land Plaza
  VA     2006       100 %     1999       42,500       809,000       4,015,000  
Camp Hill
  PA     2002       100 %     1958/2005       472,458       4,460,000       17,857,000  
Carbondale Plaza
  PA     2004       100 %     1972/2005       129,915       1,586,000       7,289,000  
Carmans Plaza
  NY     2007       100 %     1954/2007       194,481       8,539,000       35,804,000  
Carll’s Corner
  NJ     2007       100 %     1960’s-1999/       129,582       3,034,000       15,293,000  
Circle Plaza
  PA     2007       100 %     1979/1991       92,171       561,000       2,884,000  
Clyde Discount Drug Mart Plaza
  OH     2005       100 %     2002       34,592       451,000       2,326,000  
Coliseum Marketplace
  VA     2005       100 %     1987/2005       98,359       2,924,000       14,416,000  
CVS at Bradford
  PA     2005       100 %     1996       10,722       291,000       1,466,000  
CVS at Celina
  OH     2005       100 %     1998       10,195       418,000       1,967,000  
CVS at Erie
  PA     2005       100 %     1997       10,125       399,000       1,783,000  
CVS at Kinderhook
  NY     2007       100 %     2007       13,225       1,678,000        
CVS at Portage Trail
  OH     2005       100 %     1996       10,722       341,000       1,603,000  
East Chestnut
  PA     2005       100 %     1996       21,180       800,000       3,699,000  
Elmhurst Square
  VA     2006       100 %     1961-1983       66,250       1,371,000       5,994,000  
Enon Discount Drug Mart Plaza
  OH     2007       100 %     2005-2006       42,876       904,000       3,426,000  
Fairfield Plaza
  CT     2005       100 %     2001/2005       72,279       1,816,000       7,891,000  
Fairview Plaza
  PA     2003       100 %     1992       69,579       2,128,000       8,483,000  
FirstMerit Bank at Akron
  OH     2005       100 %     1996       3,200       169,000       734,000  
FirstMerit Bank at Cuyahoga Falls
  OH     2006       100 %     1973/2003       18,300       264,000       1,304,000  
Gahanna Discount Drug Mart Plaza
  OH     2006       100 %     2003       48,992       1,379,000       5,385,000  
General Booth Plaza
  VA     2005       100 %     1985       73,320       1,935,000       9,493,000  
Gold Star Plaza
  PA     2006       100 %     1988       71,720       1,644,000       6,519,000  
Golden Triangle
  PA     2003       100 %     1960/2005       202,943       2,320,000       9,713,000  
Groton Shopping Center
  CT     2007       100 %     1969       117,986       3,070,000       12,320,000  
Grove City Discount Drug Mart Plaza
  OH     2007       100 %     2005       40,848       874,000       3,394,000  
Halifax Plaza
  PA     2003       100 %     1994       51,510       1,412,000       5,799,000  
Hamburg Commons
  PA     2004       100 %     1988-1993       99,580       1,153,000       4,678,000  
Hannaford Plaza
  MA     2006       100 %     1965/2006       102,459       1,874,000       8,453,000  
Hilliard Discount Drug Mart Plaza
  OH     2007       100 %     2003       40,988       1,200,000       3,977,000  
Hills & Dales Discount Drug Mart Plaza
  OH     2007       100 %     1992-2007       33,553       786,000       2,967,000  
Jordan Lane
  CT     2005       100 %     1969/1991       181,730       4,291,000       21,176,000  
Kempsville Crossing
  VA     2005       100 %     1985       94,477       2,207,000       11,000,000  
Kenley Village
  MD     2005       100 %     1988       51,894       726,000       3,512,000  
Kings Plaza
  MA     2007       100 %     1970/1994       168,243       2,413,000       12,604,000  
Kingston Plaza
  NY     2006       100 %     2006       18,337       2,891,000        
LA Fitness Facility
  PA     2002       100 %     2003       41,000       2,462,000        
Liberty Marketplace
  PA     2005       100 %     2003       68,200       2,665,000       12,639,000  
Lodi Discount Drug Mart Plaza
  OH     2005       100 %     2003       38,576       704,000       3,393,000  
Mason Discount Drug Mart Plaza
  OH     2008       100 %     2005/2007       52,896       1,298,000       5,022,000  
McCormick Place
  OH     2005       100 %     1995       46,000       847,000       4,022,000  
Mechanicsburg Giant
  PA     2005       100 %     2003       51,500       2,709,000       12,159,000  
Metro Square
  MD     2008       100 %     1999       71,896       3,121,000       12,341,000  
Newport Plaza
  PA     2003       100 %     1996       66,789       1,721,000       7,758,000  
Oak Ridge
  VA     2006       100 %     2000       38,700       960,000       4,254,000  
Oakland Commons
  CT     2007       100 %     1962/1995       89,850       2,504,000       15,662,000  
Oakland Mills
  MD     2005       100 %     1960’s/2004       58,224       1,611,000       6,292,000  
Palmyra Shopping Center
  PA     2005       100 %     1960/1995       112,108       1,488,000       6,566,000  
Pickerington Discount Drug Mart Plaza
  OH     2005       100 %     2002       47,810       1,186,000       5,396,000  
Pine Grove Plaza
  NJ     2003       100 %     2001/2002       79,306       1,622,000       6,489,000  

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Cedar Shopping Centers, Inc.
Schedule III
Real Estate and Accumulated Depreciation
Year ended December 31, 2009
                                                 
            Gross amount at which carried at              
(continued)   Subsequent     December 31, 2009              
    cost             Building and             Accumulated     Amount of  
Property   capitalized     Land     improvements     Total     depreciation (4)     Encumbrance  
Wholly-Owned Stabilized Properties (1):
                                               
Academy Plaza
  $ 1,561,000     $ 2,406,000     $ 11,184,000     $ 13,590,000     $ 2,319,000     $ 9,365,000  
Annie Land Plaza
    12,000       809,000       4,027,000       4,836,000       506,000       (2 )
Camp Hill
    42,879,000       4,424,000       60,772,000       65,196,000       7,948,000       65,000,000  
Carbondale Plaza
    4,858,000       1,586,000       12,147,000       13,733,000       1,891,000       (3 )
Carmans Plaza
    (961,000 )     8,416,000       34,966,000       43,382,000       2,942,000       33,345,000  
Carll’s Corner
    31,000       2,964,000       15,394,000       18,358,000       1,231,000       5,908,000  
Circle Plaza
    32,000       561,000       2,916,000       3,477,000       194,000       (2 )
Clyde Discount Drug Mart Plaza
    1,128,000       673,000       3,232,000       3,905,000       513,000       1,939,000  
Coliseum Marketplace
    3,410,000       3,586,000       17,164,000       20,750,000       2,713,000       12,228,000  
CVS at Bradford
    16,000       291,000       1,482,000       1,773,000       257,000       775,000  
CVS at Celina
          418,000       1,967,000       2,385,000       288,000       1,429,000  
CVS at Erie
          399,000       1,783,000       2,182,000       249,000       1,114,000  
CVS at Kinderhook
    1,930,000       2,502,000       1,106,000       3,608,000       69,000       2,480,000  
CVS at Portage Trail
    8,000       341,000       1,611,000       1,952,000       245,000       843,000  
East Chestnut
    3,000       800,000       3,702,000       4,502,000       713,000       1,988,000  
Elmhurst Square
    235,000       1,371,000       6,229,000       7,600,000       815,000       4,045,000  
Enon Discount Drug Mart Plaza
    1,161,000       1,135,000       4,356,000       5,491,000       386,000       (2 )
Fairfield Plaza
    1,889,000       2,202,000       9,394,000       11,596,000       1,355,000       5,106,000  
Fairview Plaza
    234,000       2,129,000       8,716,000       10,845,000       1,516,000       5,479,000  
FirstMerit Bank at Akron
    1,000       168,000       736,000       904,000       121,000       (2 )
FirstMerit Bank at Cuyahoga Falls
    8,000       264,000       1,312,000       1,576,000       176,000       (2 )
Gahanna Discount Drug Mart Plaza
    1,739,000       1,738,000       6,765,000       8,503,000       868,000       4,998,000  
General Booth Plaza
    73,000       1,935,000       9,566,000       11,501,000       1,773,000       5,409,000  
Gold Star Plaza
    83,000       1,644,000       6,602,000       8,246,000       942,000       2,417,000  
Golden Triangle
    9,526,000       2,320,000       19,239,000       21,559,000       3,561,000       20,999,000  
Groton Shopping Center
    58,000       3,073,000       12,375,000       15,448,000       1,341,000       11,622,000  
Grove City Discount Drug Mart Plaza
    2,014,000       1,241,000       5,041,000       6,282,000       496,000       (2 )
Halifax Plaza
    162,000       1,347,000       6,026,000       7,373,000       960,000       3,324,000  
Hamburg Commons
    5,210,000       1,153,000       9,888,000       11,041,000       1,277,000       5,180,000  
Hannaford Plaza
    353,000       1,874,000       8,806,000       10,680,000       1,076,000       (2 )
Hilliard Discount Drug Mart Plaza
    1,110,000       1,307,000       4,980,000       6,287,000       429,000       (2 )
Hills & Dales Discount Drug Mart Plaza
    105,000       786,000       3,072,000       3,858,000       301,000       (2 )
Jordan Lane
    545,000       4,291,000       21,721,000       26,012,000       3,345,000       13,080,000  
Kempsville Crossing
    129,000       2,207,000       11,129,000       13,336,000       2,123,000       6,122,000  
Kenley Village
    45,000       726,000       3,557,000       4,283,000       953,000       (2 )
Kings Plaza
    72,000       2,408,000       12,681,000       15,089,000       1,219,000       7,811,000  
Kingston Plaza
    2,344,000       2,891,000       2,344,000       5,235,000       186,000       3,727,000  
LA Fitness Facility
    5,176,000       2,462,000       5,176,000       7,638,000       849,000       5,790,000  
Liberty Marketplace
    238,000       2,695,000       12,847,000       15,542,000       1,746,000       9,373,000  
Lodi Discount Drug Mart Plaza
    68,000       704,000       3,461,000       4,165,000       633,000       2,363,000  
Mason Discount Drug Mart Plaza
    2,978,000       1,849,000       7,449,000       9,298,000       668,000       (2 )
McCormick Place
    44,000       849,000       4,064,000       4,913,000       858,000       2,621,000  
Mechanicsburg Giant
          2,709,000       12,159,000       14,868,000       1,471,000       9,667,000  
Metro Square
    10,000       3,121,000       12,351,000       15,472,000       520,000       9,162,000  
Newport Plaza
    346,000       1,672,000       8,153,000       9,825,000       1,165,000       4,338,000  
Oak Ridge
    27,000       960,000       4,281,000       5,241,000       437,000       3,459,000  
Oakland Commons
    15,000       2,504,000       15,677,000       18,181,000       1,375,000       (2 )
Oakland Mills
    29,000       1,611,000       6,321,000       7,932,000       1,159,000       4,918,000  
Palmyra Shopping Center
    342,000       1,488,000       6,908,000       8,396,000       1,240,000       (2 )
Pickerington Discount Drug Mart Plaza
    675,000       1,305,000       5,952,000       7,257,000       969,000       4,150,000  
Pine Grove Plaza
    18,000       1,622,000       6,507,000       8,129,000       1,107,000       5,797,000  

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Cedar Shopping Centers, Inc.
Schedule III
Real Estate and Accumulated Depreciation
Year ended December 31, 2009
                                                         
(continued)                           Year built/     Gross     Initial cost to the Company  
            Year     Percent     Year last     leasable             Building and  
Property   State     acquired     owned     renovated     area     Land     Improvements  
Wholly-Owned Stabilized Properties (1):
                                                       
Polaris Discount Drug Mart Plaza
  OH     2005       100 %     2001       50,283       1,242,000       5,816,000  
Port Richmond Village
  PA     2001       100 %     1988       154,908       2,942,000       11,769,000  
Price Chopper Plaza
  MA     2007       100 %     1960’s-2004       101,824       3,551,000       18,412,000  
Rite Aid at Massillon
  OH     2005       100 %     1999       10,125       442,000       2,014,000  
River View Plaza I, II and III
  PA     2003       100 %     1991/1998       244,225       9,718,000       40,356,000  
Smithfield Plaza
  VA     2005-2008       100 %     1987/1996       134,664       2,947,000       12,737,000  
South Philadelphia
  PA     2003       100 %     1950/2003       283,415       8,222,000       36,314,000  
St. James Square
  MD     2005       100 %     2000       39,903       688,000       3,838,000  
Stadium Plaza
  MI     2005       100 %     1960’s/2003       77,688       2,341,000       9,175,000  
Suffolk Plaza
  VA     2005       100 %     1984       67,216       1,402,000       7,236,000  
Swede Square
  PA     2003       100 %     1980/2004       98,792       2,268,000       6,232,000  
The Brickyard
  CT     2004       100 %     1990       274,553       6,465,000       29,308,000  
The Commons
  PA     2004       100 %     2003       175,121       3,098,000       14,047,000  
The Point
  PA     2000       100 %     1972/2001       250,697       2,700,000       10,800,000  
The Point at Carlisle Plaza
  PA     2005       100 %     1965/2005       182,859       2,233,000       11,190,000  
Timpany Plaza
  MA     2007       100 %     1970’s-1989       183,775       3,412,000       19,240,000  
Trexler Mall
  PA     2005       100 %     1973/2004       339,363       6,932,000       32,815,000  
Ukrop’s at Fredericksburg
  VA     2005       100 %     1997       63,000       3,213,000       12,758,000  
Ukrop’s at Glen Allen
  VA     2005       100 %     2000       43,000       6,769,000       683,000  
Valley Plaza
  MD     2003       100 %     1975/1994       190,939       1,950,000       7,766,000  
Virginia Center Commons
  VA     2005       100 %     2002       9,763       992,000       3,860,000  
Virginia Little Creek
  VA     2005       100 %     1996/2001       69,620       1,650,000       8,350,000  
Wal-Mart Center
  CT     2003       100 %     1972/2000       155,842             11,834,000  
Washington Center Shoppes
  NJ     2001       100 %     1979/1995       157,290       2,061,000       7,314,000  
West Bridgewater Plaza
  MA     2007       100 %     1970/2007       133,039       2,823,000       14,901,000  
Westlake Discount Drug Mart Plaza
  OH     2005       100 %     2005       55,775       1,004,000       3,905,000  
Yorktowne Plaza
  MD     2007       100 %     1970/2000       158,982       5,940,000       25,505,000  
 
                                                 
Total Wholly-Owned Stabilized Properties
                                    7,663,534       177,427,000       739,015,000  
 
                                                       
Properties Owned in Joint Venture:
                                                       
Homburg Joint Venture:
                                                       
Aston Center
  PA     2007       20 %     2005       55,000       4,319,000       17,070,000  
Ayr Town Center
  PA     2007       20 %     2005       55,600       2,442,000       9,748,000  
Fieldstone Marketplace
  MA     2005       20 %     1988/2003       193,970       5,229,000       21,440,000  
Meadows Marketplace
  PA     2004       20 %     2005       91,538       1,914,000        
Parkway Plaza
  PA     2007       20 %     1998-2002       106,628       4,647,000       19,420,000  
Pennsboro Commons
  PA     2005       20 %     1999       107,384       3,608,000       14,254,000  
Scott Town Center
  PA     2007       20 %     2004       67,933       2,959,000       11,800,000  
Spring Meadow Shopping Center
  PA     2007       20 %     2004       67,950       4,111,000       16,410,000  
Stonehedge Square
  PA     2006       20 %     1990/2006       88,677       2,732,000       11,614,000  
 
                                                 
 
                                    834,680       31,961,000       121,756,000  
PCP Joint Venture:
                                                       
New London Mall
  CT     2009       40 %     1967/1997       257,814       14,891,000       24,967,000  
San Souci Plaza
  MD     2009       40 %     1985 - 1997       264,134       14,849,000       18,445,000  
 
                                                 
 
                                    521,948       29,740,000       43,412,000  
Joint Ventures (other):
                                                       
CVS at Naugatuck
  CT     2008       50 %     2008       13,225              
 
                                                 
 
                                                       
Total Consolidated Joint Ventures
                                    1,369,853       61,701,000       165,168,000  
 
                                                       
Total Stabilized Portfiolio
                                    9,033,387       239,128,000       904,183,000  

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Cedar Shopping Centers, Inc.
Schedule III
Real Estate and Accumulated Depreciation
Year ended December 31, 2009
                                                 
            Gross amount at which carried at              
(continued)   Subsequent     December 31, 2009              
    cost     Building and     Accumulated     Amount of  
Property   capitalized     Land     improvements     Total     depreciation (4)     Encumbrance  
Wholly-Owned Stabilized Properties (1):
                                               
Polaris Discount Drug Mart Plaza
  $ 30,000     $ 1,242,000     $ 5,846,000     $ 7,088,000     $ 1,132,000       4,451,000  
Port Richmond Village
    568,000       2,843,000       12,436,000       15,279,000       2,607,000       14,683,000  
Price Chopper Plaza
    604,000       4,111,000       18,456,000       22,567,000       1,308,000       (3 )
Rite Aid at Massillon
    6,000       442,000       2,020,000       2,462,000       280,000       1,437,000  
River View Plaza I, II and III
    3,714,000       9,718,000       44,070,000       53,788,000       7,600,000       (2 )
Smithfield Plaza
    215,000       2,919,000       12,980,000       15,899,000       1,347,000       10,405,000  
South Philadelphia
    2,532,000       8,222,000       38,846,000       47,068,000       7,862,000       (2 )
St. James Square
    523,000       688,000       4,361,000       5,049,000       815,000       (2 )
Stadium Plaza
    740,000       2,443,000       9,813,000       12,256,000       1,295,000       (2 )
Suffolk Plaza
          1,402,000       7,236,000       8,638,000       1,341,000       4,617,000  
Swede Square
    4,457,000       2,272,000       10,685,000       12,957,000       2,321,000       (2 )
The Brickyard
    488,000       6,465,000       29,796,000       36,261,000       5,908,000       (2 )
The Commons
    1,131,000       3,098,000       15,178,000       18,276,000       2,980,000       (2 )
The Point
    12,355,000       2,996,000       22,859,000       25,855,000       5,355,000       17,298,000  
The Point at Carlisle Plaza
    211,000       2,233,000       11,401,000       13,634,000       2,220,000       (2 )
Timpany Plaza
    328,000       3,379,000       19,601,000       22,980,000       1,796,000       8,377,000  
Trexler Mall
    715,000       6,932,000       33,530,000       40,462,000       4,346,000       21,526,000  
Ukrop’s at Fredericksburg
          3,213,000       12,758,000       15,971,000       1,522,000       (2 )
Ukrop’s at Glen Allen
          6,769,000       683,000       7,452,000       258,000       (2 )
Valley Plaza
    637,000       1,950,000       8,403,000       10,353,000       1,352,000       (2 )
Virginia Center Commons
    3,000       992,000       3,863,000       4,855,000       559,000       (2 )
Virginia Little Creek
    (11,000 )     1,639,000       8,350,000       9,989,000       1,424,000       5,348,000  
Wal-Mart Center
    23,000             11,857,000       11,857,000       1,884,000       5,795,000  
Washington Center Shoppes
    3,692,000       1,999,000       11,068,000       13,067,000       2,286,000       8,575,000  
West Bridgewater Plaza
    (606,000 )     2,712,000       14,406,000       17,118,000       1,100,000       10,885,000  
Westlake Discount Drug Mart Plaza
    70,000       1,004,000       3,975,000       4,979,000       451,000       3,215,000  
Yorktowne Plaza
    (141,000 )     5,898,000       25,406,000       31,304,000       2,432,000       20,418,000  
 
                                   
Total Wholly-Owned Stabilized Properties
    124,253,000       181,518,000       859,177,000       1,040,695,000       125,275,000       434,401,000  
 
                                               
Properties Owned in Joint Venture:
                                               
Homburg Joint Venture:
                                               
Aston Center
          4,319,000       17,070,000       21,389,000       1,303,000       12,802,000  
Ayr Town Center
    2,000       2,442,000       9,750,000       12,192,000       840,000       7,225,000  
Fieldstone Marketplace
    441,000       5,167,000       21,943,000       27,110,000       3,093,000       18,647,000  
Meadows Marketplace
    11,390,000       1,914,000       11,390,000       13,304,000       1,094,000       10,333,000  
Parkway Plaza
    15,000       4,647,000       19,435,000       24,082,000       1,800,000       14,300,000  
Pennsboro Commons
    43,000       3,608,000       14,297,000       17,905,000       2,147,000       10,949,000  
Scott Town Center
    1,000       2,959,000       11,801,000       14,760,000       1,073,000       8,669,000  
Spring Meadow Shopping Center
    20,000       4,112,000       16,429,000       20,541,000       1,318,000       12,698,000  
Stonehedge Square
    57,000       2,698,000       11,705,000       14,403,000       1,464,000       8,700,000  
 
                                   
 
    11,969,000       31,866,000       133,820,000       165,686,000       14,132,000       104,323,000  
PCP Joint Venture:
                                               
New London Mall
    24,000       14,891,000       24,991,000       39,882,000       918,000       26,009,000  
San Souci Plaza
    25,000       14,849,000       18,470,000       33,319,000       918,000       27,200,000  
 
                                   
 
    49,000       29,740,000       43,461,000       73,201,000       1,836,000       53,209,000  
Joint Ventures (other):
                                               
CVS at Naugatuck
    2,825,000             2,825,000       2,825,000       82,000       2,450,000  
 
                                   
 
                                               
Total Consolidated Joint Ventures
    14,843,000       61,606,000       180,106,000       241,712,000       16,050,000       159,982,000  
 
                                               
Total Stabilized Portfiolio
    139,096,000       243,124,000       1,039,283,000       1,282,407,000       141,325,000       594,383,000  

83


Table of Contents

Cedar Shopping Centers, Inc.
Schedule III
Real Estate and Accumulated Depreciation
Year ended December 31, 2009
                                                         
(continued)                           Year built/     Gross     Initial cost to the Company  
            Year     Percent     Year last     leasable             Building and  
Property   State     acquired     owned     renovated     area     Land     Improvements  
Redevelopment Properties: (1)
                                                       
Dunmore Shopping Center
  PA     2005       100 %     1962/1997       101,000       565,000       2,203,000  
Lake Raystown Plaza
  PA     2004       100 %     1995       145,727       2,231,000       6,735,000  
Shore Mall
  NJ     2006       100 %     1960/1980       459,098       7,179,000       37,868,000  
The Shops at Suffolk Downs
  MA     2005       100 %     2005       121,829       7,580,000       11,089,000  
Townfair Center
  PA     2004       100 %     2002       138,041       3,022,000       13,786,000  
Trexlertown Plaza
  PA     2006       100 %     1990/2005       241,381       5,262,000       23,867,000  
 
                                                 
Total Redevelopment Properties
                                    1,207,076       25,839,000       95,548,000  
 
                                                       
Retenanting Properties: (1)
                                                       
Columbia Mall
  PA     2005       75 %     1988       348,574       2,855,000       15,600,000  
Centerville Discount Drug Mart Plaza
  OH     2005       100 %     2000       49,494       780,000       3,607,000  
Fairview Commons
  PA     2007       100 %     1976/2003       59,578       858,000       3,568,000  
Huntingdon Plaza
  PA     2004       100 %     1972 - 2003       147,355       933,000       4,129,000  
Oakhurst Plaza
  VA     2006       100 %     1980/2001       107,869       4,539,000       18,177,000  
Ontario Discount Drug Mart Plaza
  OH     2005       100 %     2002       38,623       809,000       3,643,000  
Shelby Discount Drug Mart Plaza
  OH     2005       100 %     2002       36,596       671,000       3,264,000  
Shoppes at Salem Run
  VA     2005       100 %     2005       15,100       1,076,000       4,253,000  
 
                                                 
Total Retenanting Properties
                                    803,189       12,521,000       56,241,000  
 
                                                 
Total Non-Stabilized Properties
                                    2,010,265       38,360,000       151,789,000  
 
                                                 
Total Operating Portfolio
                                    11,043,652       277,488,000       1,055,972,000  
 
                                                 
 
                                                       
Ground-Up Developments: (1)
                                                       
Crossroads II
  PA     2008       60 %     2009       133,618       15,383,000        
Heritage Crossing
  PA     2008       60 %     2009       59,396       5,080,000        
Northside Commons
  PA     2008       100 %     2009       85,300       3,332,000        
Upland Square
  PA     2007       60 %     2009       352,456       28,187,000        
 
                                                 
Total Ground-Up Developments
                                    630,770       51,982,000        
Total Portfolio
                                    11,674,422       329,470,000       1,055,972,000  
 
                                                       
Projects Under Development and Land Held For Future Expansion and Development:
                                                       
Columbia Mall
  PA             75 %             46.21       1,466,000        
Halifax Commons
  PA             100 %             4.37       858,000        
Halifax Plaza
  PA             100 %             12.83       1,107,000        
Liberty Marketplace
  PA             100 %             15.51       1,564,000        
Oregon Pike
  PA             100 %             11.20       2,283,000        
Pine Grove Plaza
  NJ             100 %             2.66       388,000        
Shore Mall
  NJ             100 %             50.00       2,018,000        
The Brickyard
  CT             100 %             1.95       1,167,000        
Trexlertown Plaza
  PA             100 %             37.28       8,087,000        
Trindle Spring
  NY             100 %             2.10       1,028,000        
Wyoming
  MI             100 %             12.32       360,000        
Various projects in progress
  N/A             100 %             0.00              
 
                                                 
Total Projects Under Development and Land Held For Future Expansion and Development:
                                    196.41       20,326,000        
 
                                                       
Total Carrying Value
                                            349,796,000       1,055,972,000  
 
                                                   

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Table of Contents

Cedar Shopping Centers, Inc.
Schedule III
Real Estate and Accumulated Depreciation
Year ended December 31, 2009
                                                 
            Gross amount at which carried at              
(continued)   Subsequent     December 31, 2009              
    cost             Building and             Accumulated     Amount of  
Property   capitalized     Land     improvements     Total     depreciation (4)     Encumbrance  
Redevelopment Properties: (1)
                                               
Dunmore Shopping Center
  $ 42,000     $ 565,000     $ 2,245,000     $ 2,810,000     $ 424,000       (3 )
Lake Raystown Plaza
    6,115,000       2,231,000       12,850,000       15,081,000       2,016,000       (3 )
Shore Mall
    4,028,000       7,179,000       41,896,000       49,075,000       4,991,000       21,243,000  
The Shops at Suffolk Downs
    8,180,000       7,580,000       19,269,000       26,849,000       1,503,000       (2 ) (3)
Townfair Center
    (1,574,000 )     3,022,000       12,212,000       15,234,000       2,325,000       (3 )
Trexlertown Plaza
    2,808,000       5,262,000 &