CDR 10-Q Quarter ended March 31, 2014

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2014

OR

COMMISSION FILE NUMBER: 001-31817

CEDAR REALTY TRUST, INC.

(Exact name of registrant as specified in its charter)

44 South Bayles Avenue, Port Washington, New York 11050-3765

(Address of principal executive offices) (Zip Code)

(516) 767-6492

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x No ¨

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 x No ¨

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.

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: At April 30, 2014, there were 79,225,705 shares of Common Stock, $0.06 par value, outstanding.

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CEDAR REALTY TRUST, INC.

INDEX

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Forward-Looking Statements

The information contained in this Form 10-Q is unaudited and does not purport to disclose all items required by accounting principles generally accepted in the United States. In addition, statements made or incorporated by reference herein may include certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and, as such, may involve known and unknown risks, uncertainties and other factors which may cause the Company’s actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements, which are based on certain assumptions and describe the Company’s future plans, strategies and expectations, are generally identifiable by use of the words “may”, “will”, “should”, “estimates”, “projects”, “anticipates”, “believes”, “expects”, “intends”, “future”, and words of similar import, or the negative thereof. Factors which could have a material adverse effect on the operations and future prospects of the Company are as set forth under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

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CEDAR REALTY TRUST, INC.

See accompanying notes to consolidated financial statements.

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CEDAR REALTY TRUST, INC.

(unaudited)

See accompanying notes to consolidated financial statements.

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CEDAR REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

See accompanying notes to consolidated financial statements.

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CEDAR REALTY TRUST, INC.

Consolidated Statement of Equity

Three months ended March 31, 2014

(unaudited)

See accompanying notes to consolidated financial statements.

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CEDAR REALTY TRUST, INC.

(unaudited)

See accompanying notes to consolidated financial statements.

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Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

March 31, 2014

(unaudited)

Cedar Realty Trust, Inc. (the “Company”) is a real estate investment trust (“REIT”) that focuses primarily on ownership and operation of grocery-anchored shopping centers straddling the Washington, DC to Boston corridor. At March 31, 2014, the Company owned and managed a portfolio of 62 operating properties (excluding properties “held for sale/conveyance”).

Cedar Realty Trust 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 March 31, 2014, the Company owned a 99.4% economic interest in, and was the sole general partner of, the Operating Partnership. The limited partners’ interest in the Operating Partnership (0.6% at March 31, 2014) 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 465,000 OP Units outstanding at March 31, 2014 are economically equivalent to the Company’s common stock. The holders of OP Units have the right to exchange their OP Units for the same number of shares of the Company’s common stock or, at the Company’s option, for cash.

As used herein, the “Company” refers to Cedar Realty Trust, Inc. and its subsidiaries on a consolidated basis, including the Operating Partnership or, where the context so requires, Cedar Realty Trust, Inc. only.

Principles of Consolidation/Basis of Preparation

The accompanying consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and include all of the information and disclosures required by U.S. Generally Accepted Accounting Principles (“GAAP”) for interim reporting. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statement disclosures. In the opinion of management, all adjustments necessary for fair presentation (including normal recurring accruals) have been included. The 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 prior period financial statements reflect certain reclassifications which had no impact on previously-reported net income attributable to common shareholders or earnings per share. The consolidated financial statements in this Form 10-Q should be read in conjunction with the audited consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

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Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

March 31, 2014

(unaudited)

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 for which it is the primary beneficiary.

Supplemental Consolidated Statements of Cash Flows Information

Recently-Issued Accounting Pronouncement

In April 2014, the Financial Accounting Standards Board issued guidance which amends the requirements for reporting discontinued operations. Under the amended guidance, a disposal of an individual property or group of properties (i.e., when a property or properties are sold or meet the criteria to be classified as “held for sale”) is required to be reported in “discontinued operations” only if the disposal represents a strategic shift that has, or will have, a major effect on the Company’s operations and financial results. The amended guidance also requires additional disclosures about both discontinued operations and the disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements.

The Company has adopted the provisions of this guidance as of January 1, 2014, and has applied the provisions prospectively. The results of operations for properties classified as “held for sale/conveyance” prior to the adoption of this guidance will continue to be reported as “discontinued operations” in the consolidated statements of operations.

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Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

March 31, 2014

(unaudited)

On March 21, 2014, the Company acquired Quartermaster Plaza located in Philadelphia, Pennsylvania. The purchase price for the property was approximately $92.3 million, of which approximately $53.4 million was funded from the assumptions of (1) a $42.1 million mortgage loan payable, bearing interest at the rate of 5.3% per annum and maturing in October 2015, and (2) an $11.3 million mortgage loan payable, bearing interest at the rate of 5.5% per annum and maturing in October 2014, with the remainder being funded from the Company’s unsecured revolving credit facility. The Company incurred costs of $2.9 million in connection with this acquisition. In addition, the purchase price has been preliminarily allocated to real estate assets acquired and liabilities assumed, as applicable, in accordance with accounting policies for business combinations, such valuations to be finalized when valuation studies are completed.

During the quarter, the Company determined to sell the following properties: (1) Annie Land Plaza, located in Lovingston, Virginia, (2) Carbondale Plaza, located in Carbondale, Pennsylvania, (3) Fairview Plaza, located in New Cumberland, Pennsylvania, and (4) Virginia Little Creek, located in Norfolk, Virginia. As such, these properties have been classified as “real estate held for sale/conveyance” as of March 31, 2014 and December 31, 2013 on the accompanying consolidated balance sheets. As the potential sales of these properties do not meet the criteria for the newly-adopted guidance for reporting discontinued operations (See Note 2—Summary of Significant Accounting Policies), the results of operations for these properties have remained in continuing operations. At March 31, 2014, the carrying value of the assets and liabilities of these properties totaled $30.6 million and $1.2 million, respectively, and are included in real estate held for sale/conveyance and unamortized intangible lease liabilities – real estate held for sale/conveyance, respectively, on the consolidated balance sheets.

The Company conducts a continuing review of the values for all properties “held for sale/conveyance” based on final sales prices and sales contracts entered into. Impairment charges/reversals, if applicable, are based on a comparison of the carrying values of the properties with either (1) actual sales prices less costs to sell for properties sold, or contract amounts for properties in the process of being sold, (2) estimated sales prices based on discounted cash flow analyses, if no contract amounts were as yet being negotiated, as discussed in more detail in Note 5—Fair Value Measurements, or (3) with respect to land parcels, estimated sales prices, less cost to sell, based on comparable sales completed in the selected market areas.

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Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

March 31, 2014

(unaudited)

The following is a summary of the components of income (loss) from discontinued operations applicable to properties classified as such prior to the newly-adopted guidance for reporting discontinued operations (See Note 2—Summary of Significant Accounting Policies):

On February 25, 2014, the Company sold Harbor Square (f/k/a Shore Mall), located in Egg Harbor, New Jersey, for a sales price of $25.0 million, which approximated its carrying value as of that date.

As of March 31, 2014, the Company was in the process of negotiating with the respective lenders to two of its properties (Gahanna Discount Drug Mart Plaza and McCormick Place) to convey the properties either through short sale, foreclosure, or deed-in-lieu of foreclosure processes (mortgage loans payable and accrued interest and real estate taxes aggregated $7.9 million at that date). In connection with these conveyances, each applicable subsidiary borrower has stopped paying monthly mortgage payments and is currently in default on these non-recourse mortgages. At the time of such conveyances, the Company would recognize gains (an aggregate of approximately $1.7 million as of March 31, 2014) based on the excess of the carrying amounts of the liabilities (mortgage principal and any accrued property-related expenses) over the carrying amounts of the properties.

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Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

March 31, 2014

(unaudited)

The carrying amounts of cash and cash equivalents, restricted cash, rents and other receivables, certain other assets, and accounts payable and accrued liabilities approximate fair value. The fair value of the Company’s investments and liabilities related to share-based compensation were determined to be a Level 1 within the valuation hierarchy, and were based on independent values provided by financial institutions.

The valuation of the asset and liability for the Company’s interest rate swaps, which are measured on a recurring basis, were determined to be Level 2 within the valuation hierarchy, and were based on independent values provided by financial institutions. Such valuations were determined using widely accepted valuation techniques, including discounted cash flow analyses, on the expected cash flows of each derivative. The analyses reflect the contractual terms of the swaps, including the period to maturity, and user-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 that, as of March 31, 2014, 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, 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 held for sale/conveyance, which are measured on a nonrecurring basis, have been determined to be (1) a Level 2 within the valuation hierarchy, where applicable, based on the respective contracts of sale, adjusted for closing costs and expenses, or (2) a Level 3 within the valuation hierarchy, where applicable, based on estimated sales prices, adjusted for closing costs and expenses, determined by discounted cash flow analyses, direct capitalization analyses or a sales comparison approach if no contracts had been concluded. The discounted cash flow and direct capitalization analyses include all estimated cash inflows and outflows over a specific holding period and, where applicable, any estimated debt premiums. These cash flows were comprised of unobservable inputs which included forecasted rental revenues and expenses based upon existing in-place leases, market conditions and expectations for growth. Capitalization rates and discount rates utilized in these analyses were based upon observable rates that the Company believed to be within a reasonable range of current market rates for the respective properties. The sales comparison approach was utilized for certain land values and include comparable sales that were completed in the selected market areas. The comparable sales utilized in these analyses were based upon observable per acre rates that the Company believed to be within a reasonable range of current market rates for the respective properties.

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Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

March 31, 2014

(unaudited)

The Company engaged third party valuation experts to assist with the preparation of certain of its valuations. Other valuations were prepared using internally-developed valuation models. In addition, these valuations are reviewed and approved, during each reporting period, by a diverse group of management, as deemed necessary, including personnel from acquisitions, accounting, finance, operations, development and leasing departments, and the valuations are updated as appropriate.

The following tables show the hierarchy for those assets measured at fair value on a recurring basis as of March 31, 2014 and December 31, 2013, respectively:

The fair value of the Company’s fixed rate mortgage loans was estimated using 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 March 31, 2014 and December

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Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

March 31, 2014

(unaudited)

31, 2013, the aggregate fair values of the Company’s fixed rate mortgage loans payable, which were determined to be a Level 3 within the valuation hierarchy, were approximately $525.8 million and $471.4 million, respectively; the carrying values of such loans were $509.7 million and $457.9 million, respectively.

The following tables show the hierarchy for those assets measured at fair value on a non-recurring basis as of March 31, 2014 and December 31, 2013, respectively:

The following table details the quantitative information regarding Level 3 assets measured at fair value on a non-recurring basis as of March 31, 2014:

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Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

March 31, 2014

(unaudited)

Mortgage Loans Payable

During the three months ended March 31, 2014, the Company prepaid $58.1 million of mortgage loans payable (including $0.3 million included in mortgage loans payable – real estate held for sale/conveyance).

Unsecured Revolving Credit Facility and Term Loans

The Company has a $260 million revolving credit facility, expiring on August 1, 2016. The revolving credit facility may be extended, at the Company’s option, for two additional one-year periods, subject to customary conditions. Under an accordion feature, the facility can be increased to $500 million, subject to customary conditions, and lending commitments from participating banks. The facility contains financial covenants including, but not limited to, maximum debt leverage, maximum secured debt, minimum interest coverage, minimum fixed charge coverage, and minimum net worth. In addition, the facility contains restrictions including, but not limited to, limits on indebtedness, certain investments and distributions. Although the facility is unsecured, borrowing availability is based on unencumbered property adjusted net operating income, as defined in the agreement. The Company’s failure to comply with the covenants or the occurrence of an event of default under the facility could result in the acceleration of the related debt.

Borrowings under the revolving credit facility are priced at LIBOR plus 195 basis points (“bps”) (a weighted average rate of 2.2% per annum at March 31, 2014), and can range from LIBOR plus 165 bps to 225 bps based on the Company’s leverage ratio. As of March 31, 2014, the Company had $119.0 million outstanding under the revolving credit facility, and had $133.2 million available for additional borrowings.

On February 11, 2014, the Company closed $150 million of unsecured term loans consisting of a five-year $75 million term loan, maturing on February 11, 2019, and a seven-year $75 million term loan, maturing on February 11, 2021. Under an accordion feature, the term loans can be increased to an aggregate of $300 million, subject to customary conditions and lending commitments from participating banks. The financial covenants and other terms contained in the loan agreement are substantially the same as those contained in the Company’s revolving credit facility (see above). In connection with the transaction, the Company paid fees and legal expenses of approximately $1.1 million.

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Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

March 31, 2014

(unaudited)

The five-year term loan, all of which was borrowed at closing, is priced at LIBOR plus 175 bps (a weighted average rate of 1.9% per annum at March 31, 2014), and can range from LIBOR plus 145 bps to 205 bps based on the Company’s leverage ratio. The seven-year term loan, none of which has been borrowed at March 31, 2014, will be initially priced at LIBOR plus 200 bps, and can range from LIBOR plus 170 bps to 230 bps, also based on the Company’s leverage ratio. The Company has until July 1, 2014 to borrow the $75.0 million under the seven-year term loan. The Company also entered into forward interest rate swap agreements which convert the LIBOR rates to fixed rates for the new term loans beginning July 1, 2014 through their maturities. As a result, the effective fixed interest rates will be 3.37% for the five-year term loan and 4.27% for the seven-year term loan beginning July 1, 2014, based on the Company’s current leverage ratio.

Derivative Financial Instruments

As discussed above, on February 11, 2014, the Company closed $150 million of unsecured term loans for which it entered into forward interest rate swap agreements, effective July 1, 2014.

At March 31, 2014, the Company had a mortgage loan payable of approximately $11.8 million (included in mortgage loans payable – real estate held for sale/conveyance on the consolidated balance sheet) subject to an interest rate swap. The interest rate swap converted the LIBOR-based variable rate to a fixed rate of 5.2% per annum.

At March 31, 2014, the Company had on the consolidated balance sheet (1) $589,000 included in other assets and deferred charges, net, relating to the fair value of the interest rate swaps applicable to the $150 million unsecured term loans which closed on February 11, 2014, and (2) $625,000 included in accounts payable and accrued liabilities relating to the fair value of the interest rate swap applicable to the mortgage loan payable. Charges and/or credits relating to the changes in the fair value of the interest rate swaps are made to accumulated other comprehensive income (loss), noncontrolling interests (minority interests in consolidated joint ventures and limited partners’ interest), or operations (included in interest expense), as appropriate.

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Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

March 31, 2014

(unaudited)

The following is a summary of the derivative financial instruments held by the Company at March 31, 2014 and December 31, 2013:

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 the three months ended March 31, 2014 and 2013, respectively:

As of March 31, 2014, the Company believes it has no significant risk associated with non-performance of the financial institutions which are the counterparties to its derivative contracts.

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Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

March 31, 2014

(unaudited)

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.

Common Stock

On January 13, 2014, the Company concluded a public offering of 6,900,000 shares of its common stock (including 900,000 shares relating to the exercise of an over-allotment option by the underwriters), and realized net proceeds, after offering expenses, of approximately $41.3 million.

The Company has an at-the-market offering program under which it may offer and sell, from time-to-time, up to 10 million shares of its common stock. Through March 31, 2014, no shares had been sold under this program.

Dividends

The following table provides a summary of dividends declared and paid per share:

On April 24, 2014, the Company’s Board of Directors declared a dividend of $0.05 per share with respect to its common stock. At the same time, the Board declared a dividend of $0.453125 per share with respect to the Company’s Series B Preferred Stock. The distributions are payable on May 20, 2014 to shareholders of record on May 9, 2014.

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Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

March 31, 2014

(unaudited)

Rental revenues for the three months ended March 31, 2014 and 2013, respectively, are comprised of the following:

The following tables set forth certain share-based compensation information for the three months ended March 31, 2014 and 2013, respectively:

The Company’s 2012 Stock Incentive Plan (the “2012 Plan”) establishes the procedures for the granting of, among other things, restricted stock awards. During the three months ended March 31, 2014, there were 133,000 time-based restricted shares issued, with a weighted average grant date fair value of $6.32 per share. At March 31, 2014, approximately 1.6 million shares remained available for grants pursuant to the 2012 Plan.

Basic earnings per share (“EPS”) is calculated by dividing net income (loss) attributable to the Company’s common shareholders by the weighted average number of common shares outstanding for the period including participating securities (restricted shares issued pursuant to the Company’s share-based compensation program are considered participating securities, as

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Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

March 31, 2014

(unaudited)

such shares have non-forfeitable rights to receive dividends). Unvested restricted shares are not allocated net losses and/or any excess of dividends declared over net income, as such amounts are allocated entirely to the common shareholders. For the three months ended March 31, 2014 and 2013, the Company had 3.7 million and 3.6 million, respectively, of weighted average unvested restricted shares outstanding. The following table provides a reconciliation of the numerator and denominator of the EPS calculations for the three months ended March 31, 2014 and 2013, respectively:

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 net loss attributable to noncontrolling interests of the Operating Partnership has been excluded from the numerator and the related OP Units have been excluded from the denominator for the purpose of calculating diluted EPS as there would have been no effect had such amounts been included. The weighted average number of OP Units outstanding was 480,000 and 281,000 for the three months ended March 31, 2014 and 2013, respectively.

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Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

March 31, 2014

(unaudited)

In determining subsequent events, management reviewed all activity from April 1, 2014 through the date of filing this Quarterly Report on Form 10-Q.

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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 that focuses primarily on ownership and operation of grocery-anchored shopping centers straddling the Washington DC to Boston corridor. At March 31, 2014, the Company owned and managed a portfolio of 62 operating properties (excluding properties “held for sale/conveyance”) totaling approximately 9.5 million square feet of gross leasable area (“GLA”). The portfolio was 93.5% leased and 92.6% occupied at March 31, 2014.

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 grocery-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.

2014 Significant Transactions

Acquisition

On March 21, 2014, the Company acquired Quartermaster Plaza located in Philadelphia, Pennsylvania. The purchase price for the property was approximately $92.3 million, of which approximately $53.4 million was funded from the assumptions of (1) a $42.1 million mortgage loan payable, bearing interest at the rate of 5.3% per annum and maturing in October 2015, and (2) an $11.3 million mortgage loan payable, bearing interest at the rate of 5.5% per annum and maturing in October 2014, with the remainder being funded from the Company’s unsecured reolving credit facility. The Company incurred costs of $2.9 million in connection with this acquisition.

Disposition

On February 25, 2014, the Company sold Harbor Square (f/k/a Shore Mall), located in Egg Harbor, New Jersey, for a sales price of $25.0 million, which approximated its carrying value as of that date.

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On February 11, 2014, the Company closed $150 million of unsecured term loans consisting of a five-year $75 million term loan, all of which was borrowed at closing, maturing on February 11, 2019, and a seven-year $75 million term loan, none of which was borrowed at closing, maturing on February 11, 2021. The Company has until July 1, 2014 to borrow the $75.0 million under the seven-year term loan. See “Liquidity” below for additional details.

During the three months ended March 31, 2014, the Company prepaid $58.1 million of mortgage loans payable (including $0.3 million included in mortgage loans payable – real estate held for sale/conveyance) from the proceeds of the five-year $75 million term loan which closed on February 11, 2014.

Equity

In January 2014, the Company concluded a public offering of 6,900,000 shares of its common stock (including 900,000 shares relating to the exercise of an over-allotment option by the underwriters), and realized net proceeds, after offering expenses, of approximately $41.3 million.

The Company has an at-the-market offering program, under which it may offer and sell, from time-to-time, up to 10 million shares of its common stock. Through March 31, 2014, no shares had been sold under this program.

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Results of Operations

Comparison of three months ended March 31, 2014 to 2013

Revenues were higher primarily as a result of (1) an increase of $1.0 million in rental revenues and expense recoveries for properties acquired in the first quarter of 2014 and the fourth quarter of 2013, (2) an increase of $0.7 million in rental revenues and expense recoveries at the Company’s same-property portfolio, (3) an increase of $0.2 million in rental revenues and expense recoveries at the Company’s redevelopment properties, and (4) an increase of $0.1 million in rental revenues and expense recoveries at properties classified in 2014 as real estate held for sale/conveyance on the balance sheet, partially offset by a decrease of $0.2 million in management fee income related to the Cedar/RioCan joint venture; the management agreement was terminated effective January 31, 2013.

Property operating expenses were higher primarily as a result of (1) an increase of $0.7 million in snow removal costs, (2) an increase of $0.3 million in other operating expenses, (3) an increase of $0.2 million in property operating expenses at properties acquired in the first quarter of 2014 and the fourth quarter of 2013, and (4) an increase of $0.2 million in bad debt expense.

General and administrative expenses were higher primarily as a result of increase in payroll and related benefits including share-based compensation.

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Impairment (charges)/reversal in 2014 relates to the impairment of a property classified in 2014 as real estate held for sale/conveyance on the balance sheet. The impairment reversal in 2013 relates to the partial cash recovery on a loan receivable previously written off.

Acquisition costs in 2014 relates to the costs associated with the purchase of Quartermaster Plaza, located in Philadelphia, Pennsylvania.

Depreciation and amortization expenses were consistent, reflecting the completion of scheduled depreciation and amortization, offset by the depreciation and amortization of properties acquired in the first quarter of 2014 and the fourth quarter of 2013.

Interest expense decreased $0.9 million as a result of a lower overall weighted average interest rate, partially offset by $0.2 million due to an increase in the overall outstanding principal balance of debt.

Gain on sales in 2013 relates to the sale of a land parcel treated as “held for sale/conveyance”.

Discontinued operations for 2014 and 2013 include the results of operations and impairment charges for properties sold or treated as “discontinued operations” prior to December 31, 2013, as more fully discussed elsewhere in this report.

Same-Property Net Operating Income

Same-property net operating income (“same-property NOI”) is a widely-used non-GAAP financial measure for REITs that the Company believes, when considered with financial statements prepared in accordance with GAAP, is useful to investors as it provides an indication of the recurring cash generated by the Company’s properties by excluding certain non-cash revenues and expenses, as well as other infrequent items such as lease termination income which tends to fluctuate more than rents from year to year. Properties are included in same-property NOI if they are owned and operated for the entirety of both periods being compared, except for properties undergoing significant redevelopment and expansion until such properties have stabilized, and properties classified as “held for sale/conveyance”. Consistent with the capital treatment of such costs under GAAP, tenant improvements, leasing commissions and other direct leasing costs are excluded from same-property NOI.

Same-property NOI should not be considered as an alternative to net income prepared in accordance with GAAP or as a measure of liquidity. Further, same-property NOI is a measure for which there is no standard industry definition and, as such, it is not consistently defined or reported on among the Company’s peers, and thus may not provide an adequate basis for comparison between REITs. The following table reconciles same-property NOI to the Company’s consolidated operating income.

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Same-property NOI for the comparative three month period increased by 2.7% The results reflect an increase in average base rent of $0.18 per square foot and the increase in occupancy of 70 bps. Same-property NOI for the comparative three month period increased by 1.6% excluding the favorable re-tenanting impact from replacing the dark anchor at Oakland Commons with a Walmart Neighborhood Market.

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Leasing Activity

The following is a summary of the Company’s leasing activity during the three months ended March 31, 2014: