agreement with us that our ownership of the short-term Treasury Bill reverse repurchase agreements will not adversely affect our status as a REIT. The IRS deferred any action relating to this issue pending the further examination of our taxable years ended December 31, 1991, through 1994. As discussed below, the field examination has since been completed and the IRS has proposed to disqualify us as a REIT for our taxable year ended December 31, 1994, based on our ownership of the short-term Treasury Bill reverse repurchase agreements. Our former tax counsel, Battle Fowler LLP, had rendered an opinion on March 6, 1996, that our

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     In connection with the incorporation and distribution of all of the shares of Atlantic Realty Trust in May 1996, we entered into a tax agreement with Atlantic under which Atlantic assumed all our tax liability arising out of the IRS’ then ongoing examination, excluding any tax liability relating to any actions or events occurring, or any tax return position taken after May 10, 1996, but including liabilities for additions to tax, interest, penalties and costs relating to covered taxes. Under the tax agreement, a group of our Trustees consisting of Stephen R. Blank, Arthur Goldberg and Joel Pashcow has the right to control, conduct and effect the settlement of any claims for taxes for which Atlantic assumed liability. Accordingly, Atlantic does not have any control as to the timing of the resolution or disposition of any such claims. In addition, the tax agreement provides that, to the extent any tax which Atlantic is obligated to pay under the tax agreement can be avoided through the declaration of a “deficiency dividend” (that is, our declaration and payment of a distribution that is permitted to relate back to the year for which the IRS determines a deficiency in order to satisfy the requirement for REIT qualification that we distribute a certain minimum amount of our “REIT taxable income” for such year), we will make, and Atlantic will reimburse us for the amount of, such deficiency dividend.

     In addition to examining our taxable years ended December 31, 1991, through 1994, the IRS examined our taxable year ended December 31, 1995. The IRS revenue agent issued an examination report on March 1, 1999 (which is hereinafter referred to as the “First Report”). As previously noted, the First Report proposes to disqualify us as a REIT for our taxable year ended December 31, 1994, based on our ownership of the short-term Treasury Bill reverse repurchase agreements. In addition, the First Report proposes to adjust our “REIT taxable income” for our taxable years ended December 31, 1991, 1992, 1993, and 1995. In this regard, we and Atlantic received an opinion from special tax counsel, Wolf, Block, Schorr and Solis-Cohen, on March 25, 1996, that, to the extent there is a deficiency in our “REIT taxable income” for our taxable years ended December 31, 1991, through 1994, and provided we timely make a deficiency dividend, our status as a REIT for those taxable years would not be affected. The First Report acknowledges that we may avoid disqualification for failure to meet the distribution requirement with respect to a year for which our income is increased can be avoided by payment of a deficiency dividend. However, the First Report notes that the payment of a deficiency dividend cannot cure our disqualification as a REIT for the taxable year ended December 31, 1994, based on our ownership of the short-term Treasury Bill reverse repurchase agreements.

     We believe that most of the positions set forth in the First Report are unsupported by the facts and applicable law. Accordingly, on April 30, 1999, we filed a protest with the Appeals Office of the IRS to contest most of the positions set forth in the First Report. The Appeals Officer returned the case file to the revenue agent for further development. On October 29, 2001, the revenue agent issued a new examination report (which is hereinafter referred to as the “Second Report”) that arrived at very much the same conclusions as the First Report. We filed a protest of the Second Report with the IRS on November 29, 2001, and expect to have a meeting with the appellate conferee in the near future. If a satisfactory result cannot be obtained through the administrative appeals process, judicial review of the determination is available to us. In addition, the IRS is currently conducting an examination of us for the taxable years ended December 31, 1996, and 1997, and of one of our subsidiary partnerships for the taxable years ended December 31, 1997, and 1998, and may shortly begin examination of us and/or the subsidiary partnership for subsequent taxable years.

     Based on the Second Report, we could be liable for up to $54.9$56 million in combined taxes, penalties and interest through March 31,June 30, 2002. However, the Second Report acknowledges (as does the First Report as noted above) that we can avoid disqualification as a REIT for certain of our examined tax years if we distribute a deficiency dividend to our shareholders. The distribution of a deficiency dividend would be

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     If, notwithstanding the above-described opinions of legal counsel, the IRS successfully challenges our status as a REIT for any taxable year, we will be able to re-elect REIT status commencing with the fifth succeeding taxable year (or possibly an earlier taxable year if we meet certain relief provisions under the Internal Revenue Code).

     �� In the notes to the consolidated financial statements made part of Atlantic’s most recent annual report on Form 10-K10-Q filed with the Securities and Exchange Commission for its fiscal yearquarterly period ended DecemberMarch 31, 2001,2002, Atlantic has disclosed its liability for the tax deficiencies (and interest and penalties on the tax deficiencies) proposed to be assessed against us by the IRS for the taxable years ended December 31, 1991, through 1995, as reflected in each of the First Report and Second Report. We believe, but can provide no assurance, that Atlantic currently has sufficient assets to pay such tax deficiencies, interest and penalties. According to the annual report on Form 10-K10-Q filed by Atlantic for its fiscal yearquarter ended DecemberMarch 31, 2001,2002, Atlantic had net assets on DecemberMarch 31, 2001,2002, of approximately $57.9$59.0 million (as determined pursuant to the liquidation basis of accounting). If the amount of tax, interest and penalties assessed against us ultimately exceeds the amounts proposed in each of the First Report and Second Report, however, because interest continues to accrue on the proposed tax deficiencies, or if additional tax deficiencies are proposed or for any other reason, then Atlantic may not have sufficient assets to reimburse us for all amounts we must pay to the IRS, and we would be required to pay the difference out of our own funds. Accordingly, the ultimate resolution of any controversy over tax liabilities covered by the above-described tax agreement may have a material adverse effect on our financial position, results of operations or cash flows, including if we are required to distribute deficiency dividends to our shareholders and/or pay additional taxes, interest and penalties to the IRS in amounts that exceed the value of Atlantic’s net assets. Moreover, the IRS may assess us with taxes that Atlantic is not required under the above-described tax agreement to pay, such as taxes arising from the recently-commenced examination of us for the taxable years ended December 31, 1996, and 1997, and of our subsidiary partnership for the taxable years ended December 31, 1997, and 1998. There can be no assurance, therefore, that the IRS will not assess us with substantial taxes, interest and penalties which Atlantic cannot, is not required to, or otherwise does not pay.

     In connection with the development and expansion of various shopping centers as of March 31,June 30, 2002, we have entered into agreements for the construction of shopping centers of approximately $7,590.

10.$3,338. 12.     Mortgage Note Receivable	Subsequent Event

     On April 29,July 11, 2002, we issued 4,200,000 common shares of beneficialpurchased a note receivable, which bears interest at 16.75% (18.75% during any period of default), from Metropolitan Life Insurance Company for $2,401. The note is due December 31, 2002. At the time we acquired the note, the unpaid principal and interest amounted to approximately $4,600. This note is secured by a pricemortgage on property located adjacent to our Naples Towne Center in Naples, Florida. The property was previously leased to Kmart Corporation, but the publiclease was rejected by Kmart in January 2002. Certain defaults have occurred with respect to this note, including the failure of $17.50 per share,the borrower to make monthly payments of principal and we received net proceeds of approximately $67,800. We intend to use the net proceeds from the offering to redeem 1,200,000 of our Series A Preferred Shares at a cost of $26,571, purchase the equity interest of our joint venture partner in RPT/ INVEST, LLC, an unconsolidated entity, for approximately $9,100 and reduce our outstanding debt.interest.

     In connection withWe have commenced action, including the offering, we grantedinitiation of legal proceedings to receive the underwriters an option, exercisablecollateralized assets in partial satisfaction of the amount due us under terms of the mortgage note. We will not later than May 23, 2002, to purchase up to 630,000 additional common shares at $17.50 per share, less underwriting discounts and commissions.

     As a result ofaccrue interest income on this offering of our common shares,note receivable during the remaining 200,000 of our Series A Preferred Shares automatically converted into 286,537 common shares on April 29, 2002.

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period the borrower is in default.

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations

     The following discussion and analysis of the financial condition and results of operations should be read in conjunction with the Consolidated Financial Statements of the Company, including the respective notes thereto which are included in this Form 10-Q.

     Capital Resources and Liquidity

     We generated $8,074 in cashCash flows from operating activities, and $2,919 from financing activitiesas reported in the Statement of Consolidated Cash Flows, increased to $12,928 for the threesix months ended March 31, 2002. RedevelopmentJune 30, 2002 from $9,768 for the six months ended June 30, 2001. Cash

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     Investing activities included the acquisition of three shopping centers at an aggregate cost of $45,500. We also purchased an additional interest in RPT/ INVEST, LLC, a previously unconsolidated entity consisting of two shopping centers, at a net cost of $7,887 plus the assumption of $22,000 of debt, and we also invested in the redevelopment of four shopping centers and improvements to existing properties used $11,633amounting to approximately $18,926 during the quarter. Borrowingssix months ended June 30, 2002.

     On April 29, 2002, we issued 4.2 million common shares of beneficial interest in a public offering. On May 29, 2002, we issued an additional 630,000 common shares upon the exercise by the underwriters of their over-allotment option. We received total net proceeds of $77,698, based on an offering price of $17.50 per share. The net proceeds from the offering were used to redeem 1.2 million of our Series A preferred shares, purchase the equity interest of our joint venture partner in RPT/ INVEST, LLC and pay down amounts outstanding under our Credit Facility.

     Repayment under our Credit Facility provided $5,220,used $17,750, net of repaymentsborrowings of $1,200, and borrowings under$6,400. During the six months ended June 30, 2002, we repaid $2,260 of mortgage obligations, repaid $2,125 of our unsecured term loan, provided $4,125. During the three months ended March 31, 2002, we repaid $1,132net of mortgage obligationsborrowings of $5,000, and paid $5,062 for$10,104 in cash distributions to common shareholders, holders of operating partnership units and preferred shareholders.

     Our mortgage and notes payable amounted to $355,488$377,253 at March 31,June 30, 2002, with a weighted average interest rate of 7.03%7.0%. The debt consists of twelveseventeen loans secured by various properties, one unsecured term loan and the Credit Facility, as described below. TenThirteen of the mortgage loans, amounting to $194,248$223,303, have maturities ranging from 20062003 to 2011,2012, monthly payments that include regularly scheduled amortization, and fixed interest rates ranging between 6.83%6.8% to 8.81%8.8%. Three of the mortgage loans, amounting to $43,000, have maturities ranging from 2002 to 2004 and monthly payments that include variable interest rates ranging between 3.8% to 4.1% at June 30, 2002. One of the mortgage loans, evidenced by tax free bonds, amounting to $6,490$6,400 and secured by Oak Brook Square Shopping Center, matures in 2010 and carries a floating interest rate equal to 75% of the new issue long term Capital A rated utility bonds, plus interest to the lender sufficient to cause the lender’s overall yield on its investment in the bonds to be equal to 200 basis points over their applicable LIBOR rate, (6.43%if applicable (5.3% at March 31,June 30, 2002).

     The Credit Facility bears interest between 162.5 and 225 basis points over LIBOR depending on certain debt ratios (effective(and had an effective interest rate of 6.5%7.2% at March 31,June 30, 2002), including interest rate swap agreements, and matures in September 2003. The Credit Facility is secured by mortgages on various properties and contains financial covenants relating to liabilities-to-assets ratios, minimum operating coverage ratios and a minimum equity value. As of March 31,June 30, 2002, we were in compliance with the covenant terms.

     Outstanding letters of credit issued under the Credit Facility amounted to $818 at March 31, 2002.

     Under terms of the Credit Facility, we are required to maintain interest rate swap agreements to reduce the impact of changes in interest rate on our floating rate debt. We havehad interest rate swap agreements with an aggregate notional amount of $75,000 at March 31,June 30, 2002. Based on rates in effect at March 31,June 30, 2002, the agreements provide for fixed rates ranging from 7.0% to 8.3% and expire at various dates through March 2004. We are exposed to credit loss in the event of non-performance by the counter party to the interest rate swap agreements,agreements; however we do not anticipate non-performance by the counter party.

     After taking into account the impact of converting our variable rate debt into fixed rate debt by use of the interest rate swap agreements, at March 31,June 30, 2002, our variable rate debt accounted for approximately $86,240$78,950 of outstanding debt with a weighted average interest rate of 4.81%4.6%. Variable rate debt accounted for approximately 24.3%20.9% of our total debt and 15.2%11.6% of our total capitalization.

     Our debt to total market capitalization (our debt plus the market value of our equity) ratio was 62.5%decreased from 64.3% at MarchDecember 31, 2001 to 55.2% at June 30, 2002.

     The properties in which Ramco-Gershenson Properties, L.P. (the “Operating Partnership”), owns an interest and which are accounted for on the equity method of accounting are subject to non-recourse mortgage

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     The mortgage loans (other than our Credit Facility) encumbering our properties, including properties held by our unconsolidated joint ventures, are generally non-recourse, subject to certain exceptions for which we would be liable for any resulting losses incurred by the lender. These exceptions vary from loan to loan but generally include fraud or a material misrepresentation, misstatement or omission by the borrower, intentional

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     With respect to the Crossroads Centre shopping center, which is owned by a joint venture in which we have a 10% interest, we have guaranteed to the joint venture the completion of the center by October 17, 2002, and we have entered into a master lease with the joint venture under which we are obligated to provide net operating income sufficient to provide a 1.2 to 1.0 debt service coverage ratio. In the event that the center is not completed by the scheduled completion date, we would be obligated to the joint venture for any damages it incurs due to such failure. We believe that the construction of the center has been substantially completed in accordance with the terms of our agreement. We have the option to purchase the Crossroads Centre shopping center from the joint venture, exercisable by notice on or before July 16,October 15, 2002, and if we do not exercise this option, we will be obligated to make an option payment of $3.3 million to the 90% owner of this joint venture on July 17,October 15, 2002.

     Our capital structure at March 31,June 30, 2002, includes property specific mortgages, an unsecured term loan, the Credit Facility, our Series A Preferred Shares, our Common Shares and the minority interest in the Operating Partnership. At March 31,June 30, 2002, the minority interest in the Operating Partnership represented a 29.3%19.4% ownership in the Operating Partnership which may, under certain conditions, be exchanged for an aggregate of 2,938,062 Common Shares.

     As of March 31,June 30, 2002, the units in the Operating Partnership Units (“OP Units”) were exchangeable for Common Shares of the Company on a one-for-one basis. We, as sole general partner of the Operating Partnership, have the option, but not the obligation, to settle exchanged OP Units in cash based on the current trading price of our Common Shares. Assuming the exchange of all limited partnership interests in the Operating Partnership, there would have been 10,034,00015,179,278 of our common shares outstanding at March 31,June 30, 2002, with a market value of approximately $178,202$305,856 (based on the closing price of $17.76$20.15 per share on March 31,June 30, 2002).

     The principal uses of our liquidity and capital resources are for acquisitions, development, redevelopment, including expansion and renovation programs, and debt repayment. To maintain our qualification as a real estate investment trust (a “REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”), we are required to distribute to our shareholders at least 90% of our “Real Estate Investment Trust Taxable Income” as defined in the Code.

     As part of our business plan to improve our capital structure and reduce debt, we will continue to pursue the strategy of selling fully-valued properties and to dispose of shopping centers that no longer meet the criteria established for our portfolio. Our ability to obtain acceptable selling prices and satisfactory terms will impact the timing of future sales. Net proceeds from the sale of properties are expected to reduce outstanding debt.

     On April 29, 2002 we issued 4,200,000 common shares of beneficial interest at a price to the public of $17.50 per share, and we received net proceeds of approximately $67,800. We intend to use the net proceeds from the offering to redeem 1,200,000 of our Series A Preferred Shares at a cost of $26,571, purchase the equity interest of our joint venture partner in RPT/ INVEST, LLC, an unconsolidated entity for approximately $9,100, and to reduce our outstanding debt.

     In connection with the offering, we granted the underwriters an option, exercisable not later than May 23, 2002, to purchase up to 630,000 additional common shares at $17.50 per share, less underwriting discounts and commissions.

     As a result of this offering of our common shares, the remaining 200,000 of our Series A Preferred Shares automatically converted into 286,537 common shares on April 29, 2002.

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     The conversion of our Tel-Twelve shopping center from an enclosed regional mall to an open-air center is currently in process along with the proposed redevelopment at our Shoppes of Lakeland. These redevelopments will include demolition and rebuilding of a portion of Tel-Twelve, as well as retenanting of the Shoppes of Lakeland. As a result of reduced rental income during the redevelopment period, it is our estimate that net income will decrease by approximately $3,400 for these two centers for the year ended December 31, 2002, as compared to the year ended December 31, 2001.

     As part of our business plan to improve our capital structure and reduce debt, we will continue to pursue the strategy of selling fully-valued properties and to dispose of shopping centers that no longer meet the criteria established for our portfolio. Our ability to obtain acceptable selling prices and satisfactory terms will impact the timing of future sales. Net proceeds from the sale of properties are expected to reduce outstanding debt.

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We anticipate that the combination of the availability under the Credit Facility, the offering of our common shares,possible equity offerings, the sale of existing properties, and potential new debt will satisfy our expected working capital requirements through at least the next 12 months. We anticipate adequate liquidity for the foreseeable future to fund future developments, expansions, repositionings, and to continue currently planned capital programs, and to make distributions to our shareholders in accordance with the Code’s requirements applicable to REITs. Although we believe that the combination of factors discussed above will provide sufficient liquidity, no such assurance can be given.

     Comparison of ThreeSix Months Ended March 31,June 30, 2002 to ThreeSix Months Ended March 31, 2001.June 30, 2001

     Total revenues for the threesix months ended March 31,June 30, 2002 were $21,739,$43,169, a $1,445$1,116 decrease over the comparable period in 2001. Of the $1,445$1,116 decrease, $1,164$891 was the result of decreased minimum rents. TheAcquisitions of five shopping centers during the second quarter of 2002 resulted in an increase of $802 in minimum rents. Redevelopment projects, including the conversion of our Tel-Twelve shopping center from an enclosed regional mall to an open-air center, reduced minimum rents during the redevelopment period by approximately $592$954 when compared to the threesix months ended March 2001June 2001. The sale of White Lake MarketPlace and Athens Town Center during the first quarter of 2001 resulted in a reduction of $292 in minimum rents.

     Recoveries from tenants increased $309, or 5.5%, to $5,948 as compared to $5,639 forFor the same three months in 2001. The increase is primarily due to a higher level of recoverable operating expenses and real estate taxes associated with the Auburn Mile development. The overall recovery ratio was 99.9% for the threesix months ended March 31, 2002, compared to 96.9% for the three months ended March 31, 2001.

     For the three months ended March 31,June 30, 2002, percentage rents decreased $399$378 to $522,$716, as compared to $921$1,094 for the threesix months ended March 31,June 30, 2001. The decrease is the result of tenant changes associated with redevelopment projects and our efforts to convert percentage rent to higher minimum rent when renewing leases.

     Recoveries from tenants increased $681, or 6.2%, to $11,710 as compared to $11,029 for the same six months in 2001. The increase is primarily due to a higher level of recoverable operating expenses and real estate taxes associated with the Auburn Mile development and the acquisition of five properties during the six months ended June 30, 2002. The overall recovery ratio was 98.2% for the six months ended June 30, 2002, compared to 96.2% for the six months ended June 30, 2001.

     Fees and management income decreased $216 to $880 as compared to $1,096 for the six months ended June 30, 2001. The decrease is primarily attributed to a decrease in development fees when compared to six months ended June 30, 2001. Interest and other income decreased $184$312 to $750$973 for the threesix months ended March 31,June 30, 2002, and the decrease was primarily attributable to a decrease in lease termination fees and temporary tenant income when compared to the same quarterperiod in 2001.

     Total expenses for the threesix months ended March 31,June 30, 2002 decreased $888,$330, or 4.5%0.9%, to $18,639$37,494 as compared to $19,527$37,824 for the threesix months ended March 31,June 30, 2001. The decrease was due to a $444an $87 decrease in general and administrative expenses, a $57 decrease in other operating expenses and a $647$1,027 decrease in interest expense, offset by a $139$385 increase in depreciation and amortization and a $456 increase in total recoverable expenses, including recoverable operating expenses and real estate taxes.

     Total recoverable expenses, including recoverable operating expenses and real estate taxes, increased by $139,$456, to $5,956$11,926 as compared to $5,817$11,470 for the threesix months ended March 31,June 30, 2001. Real estate taxes increased $479$1,022 for the threesix months ended March 31,June 30, 2002 when compared to the same period in 2001. The increase in real estate taxes was primarily due to the completion of the development of the Auburn Mile shopping center in 2001, resulting in higher assessed valuation.valuation and the acquisitions made during the second quarter 2002.

     GeneralDepreciation and administrative expenses decreased $444amortization expense increased $385, or 4.8%, to $2,051,$8,349 as compared to $2,495$7,964 for the threesix months ended March 31,June 30, 2001. This decrease is principally attributableAcquisitions during the second quarter contributed $203 to a $271 decrease in salaries, bonusesthe increase and other fringe benefits and a $125 decrease in consulting and other professional feesredevelopment of various properties accounted for the three months ended March 31, 2002.balance of the increase.

     Interest expense decreased $647,$1,027, from $6,957$13,393 to $6,310$12,366 during the first quarterhalf of 2002. The 9.3%7.7% decrease is the result of a reduction of our averagelower interest rate to 7.2% for the three months ended March 31, 2002 from 8.1% for the same period in 2001. The net decrease wasrates, offset by an increase in borrowings during the three months ended March 31, 2002 when compared to the quarter ended March 31, 2001.

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$761 from new mortgages secured by six properties.

     We sold White Lake MarketPlace and Athens Town Center during the first quarter of 2001 for cash of $28,600, resulting in a gain on sale of real estate of approximately $5,300. The proceeds from the sales of the properties were used to reduce debt.

     The decrease in minority interest is the result of lower income before minority interest for the three months ended March 31, 2002 when compared to 2001.15

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     Minority interest representsdecreased to a 29.3%19.4% share of income before minority interest of the operating partnership for the threesix months ended March 31,June 30, 2002 from a 29.3% share for the six months ended June 30, 2001. The decrease is the result of the issuance of 4,830,000 common shares during the second quarter of 2002 and the threelower income before minority interest for the six months ended March 31,June 30, 2002 when compared to June 30, 2001.

     Income from discontinued operations, which consists of operating income for the Hickory Corners shopping center, which was sold on April 10, 2002, decreased $41,$213 or 16.1%59.2%. Minimum rents decreased $22$308 and operating expenses at the Hickory Corners shopping center increased $33decreased $67 offset by a $14$72 increase in lease termination income and other revenue when compared to the six months ended June 30, 2001. The sale of Hickory Corners resulted in a gain on sale of property of approximately $2,164, net of minority interest.

	Comparison of Three Months Ended June 30, 2002 to Three Months Ended June 30, 2001

     Total revenues for the three months ended March 31,June 30, 2002 were $21,430, a $329 increase over the comparable period in 2001. Minimum rents increased 1.9%, or $273, to $15,022 for the quarter, as compared to $14,749 for the same period in 2001. Acquisitions during the second quarter of 2002 resulted in an increase of $802 in minimum rents, offset by a reduction of $529 related to our redevelopment properties.

     Recoveries from tenants increased $372, or 6.9%, to $5,762 as compared to $5,390 for the same three months in 2001. The increase is primarily due to a higher level of recoverable operating expenses and real estate taxes associated with the Auburn Mile development and the acquisition of five properties during the three months ended June 30, 2002. The overall recovery ratio was 96.5% for the three months ended June 30, 2002, compared to 95.3% for the three months ended June 30, 2001.

     Fees and management income decreased $209 to $229, for the three months ended June 30, 2002 and was attributable to a decrease in leasing and development fees when compared to the same quarter of 2001.

     For the three months ended June 30, 2002, interest and other income decreased $128 to $223, as compared to $351 for the three months ended June 30, 2001. The decrease was primarily due to a reduction in temporary tenant income.

     Total expenses for the three months ended June 30, 2002 increased $558, or 3.0%, to $18,855 as compared to $18,297 for the three months ended June 30, 2001. The increase was due to a $357 increase in general and administrative expenses, a $301 increase in depreciation and amortization expense and a $317 increase in total recoverable expenses, including recoverable operating expenses and real estate taxes, offset by a $380 decrease in interest expense and a $37 decrease in other operating expenses.

     Total recoverable expenses, including recoverable operating expenses and real estate taxes, increased by $317, to $5,970 as compared to $5,653 for the three months ended June 30, 2001. Real estate taxes increased $543 for the three months ended June 30, 2002 when compared to the same period in 2001. The increase in real estate taxes was primarily due to the completion of the development of the Auburn Mile shopping center in 2001, resulting in higher assessed valuation and acquisitions made during the second quarter 2002.

     General and administrative expenses increased $357 to $2,108, as compared to $1,751 for the three months ended June 30, 2001. This increase is principally attributable to a $399 increase in salaries, bonuses and other fringe benefits for the three months ended June 30, 2002.

     Interest expense decreased $380, from $6,436 to $6,056 during the second quarter of 2002. The 5.9% decrease is the result of lower interest rates, offset by an increase of $571 from new mortgages relating to acquisitions and refinancing during the three months ended June 30, 2002.

     Minority interest decreased to a 19.4% share of income before minority interest of the operating partnership for the six months ended June 30, 2002 from a 29.3% share for the six months ended June 30, 2001. The decrease is the result of the issuance of 4,830,000 common shares during the second quarter of 2002 and the lower income before minority interest for the three months ended June 30, 2002 when compared to June 30, 2001.

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Income from discontinued operations, which consists of operating income for the Hickory Corners shopping center which was sold on April 10, 2002, decreased $184. Minimum rents and recoveries from tenants decreased $362 and operating expenses at the Hickory Corners shopping center decreased $100 when compared to the three months ended June 30, 2001. The sale of Hickory Corners resulted in a gain on sale of property of $2,164, net of minority interest.

	Economic Conditions

     Substantially all of the leases at our properties provide for tenants to pay their pro rata share of operating expenses, including common area maintenance and real estate taxes, thereby reducing our exposure to increases in operating expenses resulting from inflation. Many of the tenants’ leases contain provisions designed to lessen the impact of inflation. Such provisions include the ability to receive percentage rentals based on a tenant’s gross sales, which generally increase as prices rise, and/or escalation clauses, which generally increase rental rates during the terms of the leases. In addition, many of the leases are for terms of less than ten years, which may enable us to replace existing leases with new leases at a higher base and/or percentage rentals if rents of the existing leases are below the then existing market rate.

     The retail industry has experienced some financial difficulties during the past few years and certain local, regional and national retailers have filed for protection under bankruptcy laws. If this trend should continue, our future earnings performance could be negatively impacted.

Sensitivity Analysis

     We are exposed to interest rate risk on our variable rate debt obligations. Based on our debt and interest rates and the interest rate swap agreements in effect at March 31,June 30, 2002, a 100 basis point change in interest rates would affect our earnings and cash flows by approximately $862.$790.

Funds from Operations

     We generally consider funds from operations, also known as “FFO,” an appropriate supplemental measure of our financial performance because it is predicated on cash flow analyses. We have adopted the most recent National Association of Real Estate Investment Trusts (“NAREIT”) definition of FFO, which was amended onin April 4, 2002. Under the NAREIT definition, FFO represents income before minority interest, excluding extraordinary items, as defined under accounting principles generally accepted in the United States of America, gains on sales of depreciable property, plus real estate related depreciation and amortization (excluding amortization of financing costs), and after adjustments for unconsolidated partnerships and joint ventures. Our computation of FFO may, however, differ from the methodology for calculating FFO utilized by other real estate companies, and therefore, may not be comparable to these other real estate companies. FFO should not be considered an alternative to net income as an indication of our performance or to cash flows as a measure of liquidity or our ability to pay distributions.

     FFO does not represent cash generated from operating activities in accordance with accounting principles generally accepted in the United States of America and should not be considered an alternative to net income as an indication of our performance or to cash flows from operating activities as a measure of liquidity or our ability to pay distributions. Furthermore, while net income and cash generated from operating, investing and financing activities, determined in accordance with accounting principles generally accepted in the United

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     The following table illustrates the calculation of FFO for the three months and six months ended March 31,June 30, 2002 and 2001:

				Three Months Ended										Three Months Ended								Six Months Ended
				March 31,										June 30,								June 30,
				2002				2001						2002				2001				2002				2001
Net Income	Net Income			$	2,437			$	6,336		Net Income			$	4,322			$	2,634			$	6,759			$	8,970
Add:	Add:										Add:
	Depreciation and amortization expense				3,971				3,982		Depreciation and amortization expense				4,597				4,101				8,569				8,083
	Minority interest in partnership				1,046				2,657		Minority interest in partnership:
												Continuing operations			590				1,032				1,573				3,614
												Discontinued operations			(2	)			74				61				149
Less:	Less:										Less:
											Discontinued operations, gain on sale of property				(2,164	)			—				(2,164	)			—
	Gain on sale of property				—				(5,017	)	Gain on sale of real estate				—				(195	)			—				(5,212	)
Funds from operations — diluted	Funds from operations — diluted				7,454				7,958		Funds from operations — diluted				7,343				7,646				14,798				15,604
Less:	Less:										Less:
	Preferred share dividends				(828	)			(828	)	Preferred share dividends				—				(838	)			(828	)			(1,666	)
Funds from operations — basic	Funds from operations — basic			$	6,626			$	7,130		Funds from operations — basic			$	7,343			$	6,808			$	13,970			$	13,938
Weighted average equivalent shares outstanding (1)
Weighted average equivalent shares outstanding: (1)											Weighted average equivalent shares outstanding: (1)
		Basic			10,034				10,066			Basic			13,373				10,047				11,713				10,056
		Diluted			12,091				12,069			Diluted			14,674				12,065				13,392				12,067
Supplemental disclosure:	Supplemental disclosure:										Supplemental disclosure:
		Straight-line rental income		$	357			$	627			Straight-line rental income		$	1,090			$	606			$	1,447			$	1,233
		Amortization of management contracts		$	56			$	56

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(1)

For basic FFO, represents the weighted average total shares outstanding, assuming the redemption of all Operating Partnership Units for Common Shares. For diluted FFO, represents the weighted average total shares outstanding, assuming the redemption of all Operating Partnership Units for Common Shares, the Series A Preferred Shares converted to Common Shares, and the Common Sharescommon shares issuable under the treasury stock method upon exercise of stock options.

	Capital Expenditures

     During the threesix months ended March 31,June 30, 2002, we spent approximately $1,497$1,599 on revenue-generatingrevenue generating capital expenditures including tenant allowances, leasing commissions paid to third-party brokers, legal costs relative to lease documents, and capitalized leasing and construction costs. These types of costs generate a return through rents from tenants over the term of their leases. Revenue-enhancingRevenue enhancing capital expenditures, including expansions, renovations or repositionings, were approximately $10,828.

     Forward Looking Statements$18,135. Revenue neutral capital expenditures, such as roof and parking lot repairs which are anticipated to be recovered from tenants, amounted to approximately $80.

     In addition, during the first six months of 2002, we acquired three shopping centers at an aggregate cost of $45,500, and we assumed debt in the amount of $6,840. We also purchased an additional interest in RPT/INVEST, LLC, an unconsolidated joint venture, at a net cost of $7,887 plus the assumption of $22,000 of debt. As a result of this purchase, we became the 100% owner of two community centers owned by the joint venture.

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	Forward Looking Statements

This Form 10-Q contains forward-looking statements with respect to the operation of certain of our properties. We believe the expectations reflected in the forward-looking statements made in this document are based on reasonable assumptions. Certain factors could occur that might cause actual results to vary. These include general economic conditions, the strength of key industries in the cities in which our properties are located, the performance of tenants at our properties and elsewhere, and other factors discussed in this report and other reports we have filed with the Securities and Exchange Commission.

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