Strategic Realty Trust (SGIC) 10-K/A 2009 FY Annual report (amended)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K/A

(Amendment No. 1)

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
	For the Transition Period from          to          .

Commission file number333-154975

TNP STRATEGIC RETAIL TRUST, INC.

(Exact name of registrant as specified in its charter)

Maryland (State or other jurisdiction of incorporation or organization)	90-0413866 (I.R.S. Employer Identification No.)
1900 Maine Street, Suite 700 Irvine, California (Address of principal executive offices)	92614 (Zip Code)

(949) 833-8252

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

None

Securities registered pursuant to Section 12(g) of the Securities Exchange Act of 1934:

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 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 if disclosure of delinquent filers pursuant to Item 405 ofRegulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of thisForm 10-K or any amendment to thisForm 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 definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” inRule 12b-2 of the Exchange Act (check one):

Large accelerated filer o Accelerated filer o Non-accelerated filer þ
(Do not check if a smaller reporting company) Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined inRule 12b-2 of the Act).  Yes o     No þ

There is no established trading market for the registrant’s common stock, and therefore the aggregate market value of the registrant’s common stock held by non-affiliates cannot be determined.

As of March 26, 2010, there were 908,318 outstanding shares of common stock of TNP Strategic Retail Trust, Inc.

Explanatory Note

TNP Strategic Retail Trust, Inc. (the “Company,” “we,” “us” and “our”) is filing this Amendment No. 1 to its Annual Report onForm 10-K (the “Amended10-K”) to amend its Annual Report onForm 10-K for the year ended December 31, 2009, filed with the Securities and Exchange Commission on March 31, 2010 (the “Original10-K”). This Amended 10-K corrects the omission of the conformed signature of KPMG LLP on the Report of Independent Registered Public Accounting Firm in Item 8. At the time of filing of the Original 10-K, we had on-hand a manually signed and dated Report of Independent Registered Public Accounting Firm from KPMG LLP. This Amended10-K also corrects an immaterial error in our consolidated financial statements relating to the inclusion in other liabilities and other expense of the fair value of the derivative related to an exit fee of $130,000 payable under our convertible note issued to Moreno Retail Partners, LLC. The executed convertible note did not include an exit fee. As a result, we have revised our Consolidated Financial Statements, Selected Financial Data and Management’s Discussion and Analysis of Financial Condition to remove references to the derivative and adjust the related liability and expense. As a result of amending the Original 10-K for the omission of the signature of KPMG LLP, we have elected to reflect this immaterial correction in the Amended 10-K. This Amended10-K does not reflect events occurring after the filing of the Original10-K and does not otherwise modify or update the disclosure in the Original10-K.

Pursuant toRule 12b-15 promulgated under the Securities Exchange Act of 1934, as amended, this Amended10-K consists solely of the preceding cover page, this explanatory note, Item 6 (Selected Financial Data), Item 7 (Management’s Discussion and Analysis of Financial Condition and Results of Operations), Item 8 (Financial Statements and Supplementary Data), Item 9A(T) (Controls and Procedures), Item 15 (Exhibits and Financial Statement Schedules), the signature page, and the certifications required to be filed as exhibits under Item 15 to this Amended10-K.

TNP STRATEGIC RETAIL TRUST, INC.

TABLE OF CONTENTS

PART II
Item 6.	Selected Financial Data	1
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1
Item 8.	Financial Statements and Supplementary Data	12
Item 9A(T).	Controls and Procedures	12
PART IV
Item 15.	Exhibits and Financial Statement Schedules	13
EX-31.1
EX-31.2
EX-32.1
EX-32.2

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PART II

Item 6.   Selected Financial Data

The following selected financial data as of and for the year ended December 31, 2009 should be read in conjunction with the accompanying consolidated financial statements and related notes thereto and “Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The selected financial data has been derived from our audited consolidated financial statements.

	December 31,		December 31,
Selected Financial Data	2009		2008
BALANCE SHEET DATA:
Total assets	$	15,605,000	$	202,000
Total liabilities	$	12,317,000	$	—
Total equity	$	3,288,000	$	202,000

				(Date of Inception)
	Year Ended			through
	December 31,			December 31,
	2009			2008
STATEMENT OF OPERATIONS DATA:
Total revenues	$	145,000			—
Total expenses	$	(1,228,000	)		—
Other income and expense	$	(117,000	)
Net loss	$	(1,200,000	)		—
STATEMENT OF CASH FLOWS DATA:
Net cash used in operating activities	$	(1,047,000	)	$	(1,000	)
Net cash used in investing activities	$	(12,500,000	)	$	—
Net cash provided by financing activities	$	14,452,000		$	202,000

Item 7.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the “Selected Financial Data” above and our accompanying consolidated financial statements and the notes thereto. Also see “Forward Looking Statements” preceding Part I.

Overview

We were formed as a Maryland corporation on September 18, 2008 to invest in and manage a portfolio of income-producing retail properties, located primarily in the Western United States, and real estate-related assets, including the investment in or origination of mortgage, mezzanine, bridge and other loans related to commercial real estate.

On August 7, 2009, our Registration Statement onForm S-11 (FileNo. 333-154975), registering a public offering of up to $1,100,000,000 in shares of our common stock, was declared effective under the Securities Act, and we commenced our initial public offering. We are offering up to 100,000,000 shares of our common stock to the public in our primary offering at $10.00 per share and up to 10,526,316 shares of our common stock pursuant to our distribution reinvestment plan at $9.50 per share.

Pursuant to the terms of our initial public offering, all subscription proceeds were placed in an account held by our escrow agent in trust for subscribers’ benefit until we had achieved gross offering proceeds of $2,000,000 from persons who are not affiliated with us. On November 12, 2009, we achieved the minimum offering amount of $2,000,000 and offering proceeds were released to us from the escrow account. We acquired our first property on November 19, 2009.

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We are dependent upon proceeds received from the sale of shares of our common stock in our initial public offering and any indebtedness that we may incur in order to conduct our proposed real estate investment activities. We were capitalized with $200,000 which was contributed in cash on October 16, 2008, from the sale of 22,222 shares in the aggregate. Our sponsor, Thompson National Properties, LLC, or any affiliate of our sponsor, must maintain this investment while it remains our sponsor.

As of December 31, 2009, we had accepted investors’ subscriptions for, and issued, 509,752 shares of our common stock, including shares issued pursuant to our distribution reinvestment plan, resulting in gross offering proceeds of $5,009,000. As of March 26, 2010, we had accepted investors’ subscriptions for, and issued, 893,318 shares of our common stock, including shares issued pursuant to our distribution reinvestment plan, resulting in gross offering proceeds of $8,806,000.

We will experience a relative increase in liquidity as additional subscriptions for shares of our common stock are received and a relative decrease in liquidity as offering proceeds are used to acquire and operate our assets.

We are externally managed by our advisor, TNP Strategic Retail Advisor, LLC. Our advisor may, but is not required to, establish working capital reserves from offering proceeds out of cash flow generated by our investments or out of proceeds from the sale of our investments. We do not anticipate establishing a general working capital reserve during the initial stages of our initial public offering; however, we may establish capital reserves with respect to particular investments. We also may, but are not required to, establish reserves out of cash flow generated by investments or out of net sale proceeds in non-liquidating sale transactions. Working capital reserves are typically utilized to fund tenant improvements, leasing commissions and major capital expenditures. Our lenders also may require working capital reserves.

To the extent that the working capital reserve is insufficient to satisfy our cash requirements, additional funds may be provided from cash generated from operations, through short-term borrowing or borrowings under our revolving credit agreement. In addition, subject to certain limitations, we may incur indebtedness in connection with the acquisition of any real estate asset, refinance the debt thereon, arrange for the leveraging of any previously unfinanced property or reinvest the proceeds of financing or refinancing in additional properties.

We intend to qualify as a REIT for federal income tax purposes, therefore we generally will not be subject to federal income tax on income that we distribute to our stockholders. If we fail to qualify as a REIT in any taxable year, including and after the taxable year in which we initially elect to be taxed as a REIT, we will be subject to federal income tax on our taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year in which qualification is denied. Failing to qualify as a REIT could materially and adversely affect our net income.

Review of our Policies

Our board of directors, including our independent directors, has reviewed our policies described in this Annual Report and determined that they are in the best interest of our stockholders because: (1) they increase the likelihood that the Company will be able to acquire a diversified portfolio of income producing properties, thereby reducing risk in its portfolio; (2) the Company’s executive officers, directors and affiliates of the advisor have expertise with the type of real estate investments the Company seeks; and (3) borrowings should enable the Company to purchase assets and earn rental income more quickly, thereby increasing the likelihood of generating income for the Company’s stockholders and preserving stockholder capital.

Critical Accounting Policies

General

Our accounting policies have been established to conform to GAAP. The preparation of financial statements in conformity with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affect the reported amounts of assets

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and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. If management’s judgment or interpretation of the facts and circumstances relating to various transactions is different, it is possible that different accounting policies will be applied or different amounts of assets, liabilities, revenues and expenses will be recorded, resulting in a different presentation of the financial statements or different amounts reported in the financial statements. Additionally, other companies may utilize different estimates that may impact comparability of our results of operations to those of companies in similar businesses. Below is a discussion of the accounting policies that management considers to be most critical. These policies require complex judgment in their application or estimates about matters that are inherently uncertain.

Principles of Consolidation

Our consolidated financial statements include our accounts and the accounts of our subsidiaries, TNP Strategic Retail Operating Partnership, LP, TNP SRT Moreno Marketplace, LLC, and TNP SRT Waianae Mall, LLC. All intercompany profits, balances and transactions are eliminated in consolidation.

Our consolidated financial statements will also include the accounts of our consolidated subsidiaries and joint ventures in which we are the primary beneficiary or in which we have a controlling interest. In determining whether we have a controlling interest in a joint venture and the requirement to consolidate the accounts of that entity, our management considers factors such as an entity’s purpose and design and our ability to direct the activities of the entity that most significantly impacts the entity’s economic performance, ownership interest, board representation, management representation, authority to make decisions, and contractual and substantive participating rights of the partners/members as well as whether the entity is a variable interest entity in which we will absorb the majority of the entity’s expected losses, if they occur, or receive the majority of the expected residual returns, if they occur, or both.

Allocation of Real Property Purchase Price

We account for all acquisitions in accordance with GAAP. We first determine the value of the land and buildings utilizing an “as if vacant” methodology. We then assign a fair value to any debt assumed at acquisition. The balance of the purchase price is allocated to tenant improvements and identifiable intangible assets or liabilities. Tenant improvements represent the tangible assets associated with the existing leases valued on a fair value basis at the acquisition date prorated over the remaining lease terms. The tenant improvements are classified as an asset under investments in real estate and are depreciated over the remaining lease terms. Identifiable intangible assets and liabilities relate to the value of in-place operating leases which come in three forms: (1) leasing commissions and legal costs, which represent the value associated with “cost avoidance” of acquiring in-place leases, such as lease commissions paid under terms generally experienced in our markets; (2) value of in-place leases, which represents the estimated loss of revenue and of costs incurred for the period required to lease the “assumed vacant” property to the occupancy level when purchased; and (3) above or below market value of in-place leases, which represents the difference between the contractual rents and market rents at the time of the acquisition, discounted for tenant credit risks. The value of in-place leases are recorded in acquired lease intangibles, net and amortized over the remaining lease term. Above or below market leases are classified in acquired lease intangibles, net or in other liabilities, depending on whether the contractual terms are above or below market. Above market leases are amortized as a decrease to rental revenue over the remaining non-cancelable terms of the respective leases and below market leases are amortized as an increase to rental revenue over the remaining initial lease term and any fixed rate renewal periods, if applicable.

When we acquire real estate properties, we will allocate the purchase price to the components of these acquisitions using relative fair values computed using estimates and assumptions. These estimates and assumptions impact the amount of costs allocated between various components as well as the amount of costs assigned to individual properties in multiple property acquisitions. These allocations also impact depreciation expense and gains or losses recorded on future sales of properties.

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Real Property

Costs related to the development, redevelopment, construction and improvement of properties are capitalized. Interest incurred on development, redevelopment and construction projects is capitalized until construction is substantially complete.

Maintenance and repair expenses are charged to operations as incurred. Costs for major replacements and betterments, which include heating, ventilating, and air conditioning equipment, roofs and parking lots, are capitalized and depreciated over their estimated useful lives. Gains and losses are recognized upon disposal or retirement of the related assets and are reflected in earnings.

Property is recorded at cost and is depreciated using a straight-line method over the estimated useful lives of the assets as follows:

	Years
Buildings and improvements	5-45 years
Exterior improvements	10-20 years
Equipment and fixtures	5-10 years

Revenue Recognition

We recognize rental income on a straight-line basis over the term of each lease. The difference between rental income earned on a straight-line basis and the cash rent due under the provisions of the lease agreements is recorded as deferred rent receivable and is included as a component of accounts receivable in the accompanying consolidated balance sheets. We anticipate collecting these amounts over the terms of the leases as scheduled rent payments are made. Reimbursements from tenants for recoverable real estate taxes and operating expenses are accrued as revenue in the period the applicable expenditures are incurred. Lease payments that depend on a factor that does not exist or is not measurable at the inception of the lease, such as future sales volume, would be contingent rentals in their entirety and, accordingly, would be excluded from minimum lease payments and included in the determination of income as they are earned.

Valuation of Accounts Receivable

We have taken into consideration certain factors that require judgments to be made as to the collectability of receivables. Collectability factors taken into consideration are the amounts outstanding, payment history and financial strength of the tenant, which taken as a whole determines the valuation.

Organization and Offering Costs

Our organization and offering costs (other than selling commissions and the dealer manager fee) are paid by our advisor and its affiliates on our behalf. Such costs shall include legal, accounting, printing and other offering expenses, including marketing, salaries and direct expenses of our advisor’s employees and employees of our advisor’s affiliates and others. Pursuant to our advisory agreement, we are obligated to reimburse our advisor or its affiliates, as applicable, for organization and offering costs associated with our initial public offering, provided that our advisor is obligated to reimburse us to the extent organization and offering costs, other than selling commissions and dealer manager fees, incurred by us exceed 3.0% of our gross offering proceeds. Any such reimbursement will not exceed actual expenses incurred by our advisor. Prior to raising the minimum offering amount of $2,000,000, we had no obligation to reimburse our advisor or its affiliates for any organization and offering costs. As of December 31, 2009, organization and offering costs incurred by our Advisor on our behalf were $1,579,000. These costs are payable by us to the extent organization and offering costs, other than selling commissions and dealer manager fees, do not exceed 3.0% of the gross proceeds of our initial public offering. As of December 31, 2009, organization and offering costs did exceed 3.0% of the gross proceeds of our initial public offering, thus the amount in excess of 3.0%, or $1,425,000 is deferred.

All offering costs, including sales commissions and dealer manager fees are recorded as an offset to additionalpaid-in-capital, and all organization costs are recorded as an expense when we have an obligation to reimburse our advisor.

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We will reimburse our advisor for all expenses paid or incurred by our advisor in connection with the services provided to us, subject to the limitation that we will not reimburse our advisor for any amount by which our operating expenses (including the asset management fee) at the end of the four preceding fiscal quarters exceeds the greater of: (1) 2% of our average invested assets, or (2) 25% of our net income determined without reduction for any additions to depreciation, bad debts or other similar non-cash expenses and excluding any gain from the sale of our assets for that period. Notwithstanding the above, we may reimburse our advisor for expenses in excess of this limitation if a majority of the independent directors determines that such excess expenses are justified based on unusual and nonrecurring factors. As of December 31, 2009, amounts incurred by our advisor in connection with services provided to us were $1,967,000, of which $1,579,000 were organization and offering costs and $388,000 were other costs incurred on our behalf prior to achieving our minimum offering.

Income Taxes

We intend to elect to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code, commencing with the 2009 fiscal year which is the taxable year in which we satisfied the minimum offering requirements. As we believe we qualify for taxation as a REIT, we generally will not be subject to federal corporate income tax to the extent we distributed our REIT taxable income to our stockholders, so long as we distributed at least 90% of our REIT taxable income (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). REITs are subject to a number of other organizational and operations requirements. Even though we believe we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income and property, and federal income and excise taxes on its undistributed income.

Results of Operations

Our results of operations for the year ended December 31, 2009 are not indicative of those expected in future periods as we commenced real estate operations on November 19, 2009 in connection with our first property acquisition. During the period from our inception (September 18, 2008) to December 31, 2008, we had been formed but had not yet commenced our ongoing initial public offering or real estate operations. As a result, we had no material results of operations for that period.

As of December 31, 2009, we had acquired one property for an aggregate purchase price of $12,500,000, plus closing costs. We funded the acquisition of this property with a combination of debt and proceeds from our ongoing initial public offering. We acquired the Moreno property during the fourth quarter of 2009, and therefore our financial statements do not reflect a full period of operations for this property. We expect that all income and expenses related to our portfolio will increase in future years as a result of owning the property acquired in 2009 for a full year and as a result of anticipated future acquisitions of real estate and real estate-related assets.

Revenue.  Total revenue for the year ended December 31, 2009, was $145,000, which consisted of rental revenue from our sole property of $140,000 and $5,000 from other operating revenue.

General and administrative expenses.  General and administrative expenses were $660,000 for the year ended December 31, 2009. These general and administrative expenses consisted primarily of legal and accounting, restricted stock compensation, directors fees, insurance, and organization fees. We expect general and administrative costs to increase in the future based on a full year of real estate operations and as a result of anticipated future acquisitions, but to decrease as a percentage of total revenue.

Acquisition expenses.  Acquisition expenses for the year ended December 31, 2009 were $408,000, all of which were incurred in connection with the acquisition of the Moreno property.

Operating and maintenance expenses.  For the year ended December 31, 2009, operating and maintenance expenses were $114,000.

Asset management and property management fees incurred and payable to our advisor and its affiliates totaled $9,000 and $5,000, respectively, for the year ended December 31, 2009. We expect asset management

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and property management fees to increase in future years as a result of owning our investments for a full year and as a result of anticipated future acquisitions.

Depreciation and amortization expenses.  Depreciation and amortization expense was $46,000 for the year ended December 31, 2009. We expect these amounts to increase in future years as a result of owning our property for a full year and as a result of anticipated future acquisitions.

Interest expense.  Interest expense was $119,000 for the year ended December 31, 2009, which included the amortization of deferred financing costs of $39,000. Our real estate property acquisition was financed with $11,126,000 in debt. We expect that in future periods our interest expense will vary based on the amount of our borrowings, which will depend on the cost of borrowings, the amount of proceeds we raise in our ongoing initial public offering and our ability to identify and acquire real estate and real estate-related assets that meet our investment objectives.

Interest income.  Interest income for the year ended December 31, 2009 was $2,000 and related primarily to cash received from subscription agreements that are held for future acquisitions.

Net loss.  We had a net loss of $1,200,000 for the year ended December 31, 2009. Our operating loss is due primarily to the fact that we commenced real estate operations on November 19, 2009.

Liquidity and Capital Resources

We commenced real estate operations with the acquisition of our first property on November 19, 2009.

Our principal demand for funds will be for the acquisition of real estate assets, the payment of operating expenses and interest on our outstanding indebtedness and the payment of distributions to our stockholders. Over time, we intend to generally fund our cash needs for items other than asset acquisitions from operations. Our cash needs for acquisitions and investments will be funded primarily from the sale of shares of our common stock, including those offered for sale through our distribution reinvestment plan, and through the assumption of debt.

Net cash provided by financing activities for the year ended December 31, 2009 were $14,452,000, consisting primarily of net offering proceeds of $4,260,000 (after payment of selling commissions, dealer manager fees and other organization and offering expenses of $542,000) and $11,126,000 of borrowings. Between November 19, 2009 (the date we commenced real estate operations) and December 31, 2009, we incurred aggregate borrowings related to the purchase of real estate of $11,126,000. As of December 31, 2009, we had repaid $636,000 of these borrowings. With capital from our financing activities, we invested approximately $12,500,000 in property acquisitions, and paid acquisition fees and closing costs of $408,000. We paid distributions to stockholders (net of reinvested distributions) of $6,000 for the year ended December 31, 2009. Net cash used in operating activities for the year ended December 31, 2009 was $1,047,000. The excess cash generated from financing activities (net of cash used in investing activities and net cash used in operating activities) of $905,000 is expected to be used to pay liabilities or to make additional real estate investments.

As of December 31, 2009, our liabilities totaled $12,317,000. Our financings are described in greater detail below and summarized in tabular form under “— Contractual Commitments and Contingencies.”

KeyBank Revolving Credit Facility

On November 12, 2009, our operating partnership entered into a revolving credit agreement, or the credit agreement, with KeyBank National Association, or KeyBank, as administrative agent for itself and the other lenders named in the credit agreement, or the lenders, to establish a revolving credit facility with a maximum aggregate borrowing capacity of up to $15,000,000. The proceeds of the revolving credit facility may be used by the operating partnership for investments in properties and real estate-related assets, improvement of properties, costs involved in the ordinary course of the operating partnership business and for other general working capital purposes; provided, however, that prior to any funds being advanced to the operating partnership under the revolving credit facility, KeyBank shall have the authority to review and approve, in its

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sole discretion, the investments which the operating partnership proposes to make with such funds, and the operating partnership shall be required to satisfy certain enumerated conditions set forth in the credit agreement, including, but not limited to, limitations on outstanding indebtedness with respect to a proposed property acquisition, a ratio of net operating income to debt service on the prospective property of at least 1.35 to 1.00 and a requirement that the prospective property be 100% owned, directly or indirectly, by the operating partnership.

The credit agreement contains customary covenants including, without limitation, limitations on distributions, the incurrence of debt and the granting of liens. Additionally, the credit agreement contains certain covenants relating to the amount of offering proceeds we receive in our continuous offering of common stock. We received a waiver from KeyBank relating to the covenant in our credit agreement requiring us to raise at least $2,000,000 in shares of our common stock in our public offering during each of January, February and March 2010. In addition, our operating partnership received a waiver relating to the covenant requiring us to maintain a 1.3 to 1 debt service coverage ratio for the quarter ended March 31, 2010. The credit agreement is guaranteed by our sponsor and an affiliate of our sponsor. As part of that guarantee agreement, our sponsor and its affiliate must maintain minimum net worth and liquidity requirements on a combined or individual basis.

The operating partnership may, upon prior written notice to KeyBank, prepay the principal of the borrowings then outstanding under the revolving credit facility, in whole or in part, without premium or penalty.

The entire unpaid principal balance of all borrowings under the revolving credit facility and all accrued and unpaid interest thereon will be due and payable in full on November 12, 2010. Borrowings under the revolving credit facility will bear interest at a variable per annum rate equal to the sum of (a) 425 basis points plus (b) the greater of (1) 300 basis points or(2) 30-day LIBOR as reported by Reuters on the day that is two business days prior to the date of such determination, and accrued and unpaid interest on any past due amounts will bear interest at a variable LIBOR-based rate that in no event shall exceed the highest interest rate permitted by applicable law. The operating partnership paid KeyBank a one time $150,000 commitment fee in connection with entering into the credit agreement and will pay KeyBank an unused commitment fee of 0.50% per annum.

As of December 31, 2009, $15,000,000 was available under the KeyBank credit facility, subject to KeyBank’s review and approval described above, and there were no borrowings outstanding.

Moreno Property Loan

In connection with the acquisition of the Moreno property, on November 19, 2009, which we refer to herein as the “closing date”, TNP SRT Moreno borrowed $9,250,000 from KeyBank pursuant to a promissory note, or the Moreno Property Note, secured by the Moreno property. The entire outstanding principal balance of the Moreno Property Note, plus any accrued and unpaid interest thereon, is due and payable in full on November 19, 2011 (as such date may be extended as described below, the “maturity date”), provided that TNP SRT Moreno has the option to extend the maturity date for up to two successive extension periods of twelve months each. Each exercise by TNP SRT Moreno of its option to extend the maturity date is subject to (1) TNP SRT Moreno providing KeyBank with written notice of the requested extension at least sixty (60) days prior to the then existing maturity date, (2) the payment by TNP SRT Moreno of an extension fee equal to 0.25% of the then outstanding principal balance of the Moreno Property Note and (3) TNP SRT Moreno’s satisfaction of certain covenants, including, but not limited to, specific debt service coverage and debt yield ratios, the absence of any uncured events of default under the Moreno Property Note and the absence of any material adverse changes in the financial condition of TNP SRT Moreno or any guarantors of its obligations under the Moreno Property Note.

A principal payment of $10,000 plus interest, at the applicable interest rate, on the outstanding principal balance of the Moreno Property Note will be due and payable monthly until the maturity date. Interest on the outstanding principal balance of the Moreno Property Note will accrue at a rate of 5.5% per annum through the initial maturity date. During the first extension period, if any, interest on the outstanding principal balance

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of the Moreno Property Note will accrue at a rate of 7.0% per annum. During the second extension period, if any, interest on the outstanding principal balance of the Moreno Property Note will accrue at a rate equal to the greater of (1) 7.50% per annum and (2) a variable per annum rate based upon LIBOR as reported by Reuters. TNP SRT Moreno may prepay the outstanding principal balance of the Moreno Property Note in full without premium or penalty if such prepayment occurs on or before the first anniversary of the closing date. Following the first anniversary of the closing date, any prepayment in full of the Moreno Property Note will be subject to an exit fee ranging from of 0.25% to 0.75% of the then outstanding principal balance of the Moreno Property Note based upon when such prepayment occurs.

As of December 31, 2009, there was $9,240,000 outstanding on the Moreno Property Note.

Convertible Note

In connection with the acquisition of the Moreno property, on November 19, 2009, TNP SRT Moreno borrowed $1,250,000 from Moreno Retail Partners, LLC, or MRP, pursuant to a subordinated convertible promissory note, or the convertible note. The entire outstanding principal balance of the convertible note, plus any accrued and unpaid interest, is due and payable in full on November 18, 2015. Interest on the outstanding principal balance of the convertible note will accrue at a rate of 8% per annum, payable quarterly in arrears. After April 2, 2010, TNP SRT Moreno may, at any time and from time to time, prepay all or any portion of the then outstanding principal balance of the convertible note without premium or penalty. The convertible note provides for customary events of default, including, without limitation, payment defaults and insolvency and bankruptcy related defaults. Upon an uncured event of default, MRP may declare all amounts due under the convertible note immediately due and payable in full.

At any time after January 2, 2010 but before April 2, 2010, MRP may elect to convert the unpaid principal balance due on the convertible note (which we refer to herein as the “conversion amount”) into a capital contribution by MRP to TNP SRT Moreno to be credited to a capital account with TNP SRT Moreno. At any time after February 2, 2010 but before April 2, 2010, TNP SRT Moreno may elect to convert the conversion amount into a capital contribution by MRP to TNP SRT Moreno to be credited to a capital account with TNP SRT Moreno. Any accrued but unpaid interest on the convertible note shall be payable to MRP in cash upon the conversion of the conversion amount. As of this filing, neither party had converted this note. If the note is not converted, TNP SRT Moreno will pay our Advisor an additional acquisition fee of $110,000.

Contractual Commitments and Contingencies

The following is a summary of our contractual obligations as of December 31, 2009:

	Payments Due by Period
Contractual Obligations	Total		2010		2011-2012		2013-2014		Thereafter
Long-term debt obligations(1)	$	10,490,000		120,000		9,120,000		—		1,250,000
Interest payments on outstanding debt obligations(2)		1,508,000		605,000		616,000		200,000		87,000
Total	$	11,998,000		725,000		9,376,000		200,000		1,337,000

(1)	Amounts include principal payments only.
(2)	Projected interest payments are based on the outstanding principal amounts and weighted-average interest rates at December 31, 2009.

Potential Property Acquisition

On December 14, 2009, we assumed the rights to a purchase and sale agreement for the acquisition of Waianae Mall, an approximately 170,275 square foot multi-tenant retail center consisting of 11 buildings located in Honolulu, Hawaii or the Waianae property. An affiliate of our sponsor previously entered into a purchase agreement to purchase the Waianae property for an aggregate purchase price of $25,688,000, including the assumption of debt on the property. In connection with this potential acquisition, we formed TNP SRT Waianae Mall, LLC, a wholly owned subsidiary of our operating partnership, to complete the

8

acquisition and have paid a $250,000 refundable deposit as of December 31, 2009. We intend to purchase the Waianae property using debt financing and funds raised through our public offering of common stock. We anticipate paying an acquisition fee of 2.5%, or $642,000, of the purchase price to our advisor. We expect to close the acquisition in the second quarter of 2010, however, there is no assurance that the closing will occur within this timeframe, or at all. This potential acquisition is subject to substantial conditions to closing including: (1) the sale of a sufficient number of shares of common stock in our public offering to fund a portion of the purchase price for the Waianae property; (2) the approval of the loan servicer for the existing indebtedness on the Waianae property to be assumed by us and the receipt of other applicable third-party consents; and (3) the absence of a material adverse change to the Waianae property prior to the date of the acquisition.

Inflation

The majority of our leases at the Moreno property contain inflation protection provisions applicable to reimbursement billings for common area maintenance charges, real estate tax and insurance reimbursements on a per square foot basis, or in some cases, annual reimbursement of operating expenses above a certain per square foot allowance. We expect to include similar provisions in our future tenant leases designed to protect us from the impact of inflation. Due to the generally long-term nature of these leases, annual rent increases, as well as rents received from acquired leases, may not be sufficient to cover inflation and rent may be below market.

REIT Compliance

To qualify as a REIT for tax purposes, we are required to distribute at least 90% of our REIT taxable income to our stockholders. We must also meet certain asset and income tests, as well as other requirements. We will monitor the business and transactions that may potentially impact our REIT status. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax (including any applicable alternative minimum tax) on our taxable income at regular corporate rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which our REIT qualification is lost unless the Internal Revenue Service grants us relief under certain statutory provisions. Such an event could materially adversely affect our net income and net cash available for distribution to our stockholders.

Distributions

We intend to make regular cash distributions to our stockholders, typically on a monthly basis. The actual amount and timing of distributions will be determined by our board of directors in its discretion and typically will depend on the amount of funds available for distribution, which is impacted by current and projected cash requirements, tax considerations and other factors. As a result, our distribution rate and payment frequency may vary from time to time. However, to qualify as a REIT for tax purposes, we must make distributions equal to at least 90% of our “REIT taxable income” each year.

On August 13, 2009, our board of directors approved a monthly cash distribution of $0.05625 per common share, which represents an annualized distribution of $0.675 per share. The commencement of the distribution, which was expected to take place in the calendar month following the closing of our first asset acquisition, was subject to our having achieved minimum offering proceeds of $2,000,000, the sale of a sufficient number of shares in our public offering to finance an asset acquisition and our identification and completion of an asset acquisition. On November 12, 2009, we achieved the minimum offering amount $2,000,000, and on November 19, 2009 we completed our first asset acquisition. On November 30, 2009, we declared a monthly distribution in the aggregate amount of $7,000, of which $6,000 was paid in cash on December 15, 2009 and $1,000 was paid through our distribution reinvestment plan in the form of additional shares issued on November 30, 2009. On December 31, 2009, we declared a monthly distribution on the aggregate of $24,000, of which $18,000 was paid in cash on January 15, 2010 and $6,000 was paid through our distribution reinvestment plan in the form of additional shares issued on December 31, 2009. We did not have any funds from operation, or FFO, for the year ended December 31, 2009, and the cash amounts

9

distributed to stockholders in December 2009 were funded from proceeds from our offering. FFO is a non-GAAP financial measure that is widely recognized as a measure of REIT operating performance. See the “Funds from Operations and Adjusted Funds from Operations” section below for a reconciliation of FFO and adjusted FFO to our net income.

On January 31, 2010, we declared a monthly distribution in the aggregate of $32,000, of which $25,000 was paid in cash on February 12, 2010 and $7,000 was paid through our distribution reinvestment plan in the form of additional shares issued on January 31, 2010. On February 28, 2010, we declared a monthly distribution in the aggregate of $40,000, of which $29,000 was paid in cash on March 15, 2010 and $11,000 was paid through our distribution reinvestment plan in the form of additional shares issued on February 28, 2010.

Funds from Operations and Adjusted Funds from Operations

One of our objectives is to provide cash distributions to our stockholders from cash generated by our operations. Cash generated from operations is not equivalent to net operating income as determined under GAAP. Due to certain unique operating characteristics of real estate companies, the National Association of Real Estate Investment Trusts, an industry trade group, or NAREIT, has promulgated a standard known as Funds from Operations, or FFO for short, which it believes more accurately reflects the operating performance of a REIT. As defined by NAREIT, FFO means net income computed in accordance with GAAP, excluding gains (or losses) from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures in which the REIT holds an interest. We believe that FFO is helpful to investors and our management as a measure of operating performance because it excludes depreciation and amortization, gains and losses from property dispositions, and extraordinary items, and as a result when compared year over year, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses and interests costs, which is not immediately apparent from net income.

Changes in the accounting and reporting rules under GAAP have prompted a significant increase in the amount of non-operating items included in FFO, as defined. As a result, in addition to FFO, we also calculate Adjusted Funds from Operations, or adjusted FFO, which excludes from FFO (1) any acquisition expenses and acquisition fees expensed by us and that are related to any property, loan or other investment acquired or expected to be acquired by us and (2) any non-operating non-cash charges incurred by us, such as impairments of property or loans, anyother-than-temporary impairments of marketable securities, or other similar charges. We believe that adjusted FFO is helpful to our investors and management as a measure of operating performance because it excludes costs that management considers more reflective of investing activities and other non-operating items included in FFO.

As explained below, management’s evaluation of our operating performance excludes the items considered in the calculation of adjusted FFO based on the following economic considerations:

Acquisition costs:  In evaluating investments in real estate, including both business combinations and investments accounted for under the equity method of accounting, management’s investment models and analysis differentiates costs to acquire the investment from the operations derived from the investment. Prior to 2009, acquisition costs for these types of investments were capitalized; however, beginning in 2009 acquisition costs related to business combinations are expensed. We believe by excluding expensed acquisition costs, adjusted FFO provides useful supplemental information that is comparable for each type of our real estate investments and is consistent with management’s analysis of the investing and operating performance of our properties.

Impairment charge:  An impairment charge represents a downward adjustment to the carrying amount of a long-lived asset to reflect the current valuation of the asset even when the asset is intended to be held long-term. Such adjustment, when properly recognized under GAAP, may lag the underlying consequences related to rental rates, occupancy and other operating performance trends. The valuation is also based, in part, on the impact of current market fluctuations and estimates of future capital requirements and long-term operating performance that may not be directly attributable to current operating performance. Because adjusted FFO

10

excludes impairment charges, management believes adjusted FFO provides useful supplemental information by focusing on the changes in our operating fundamentals rather than changes that may reflect only anticipated losses.

Subject to the following limitations, FFO and adjusted FFO provides a better basis for measuring our operating performance. The calculation of FFO and adjusted FFO may, however, vary from entity to entity because capitalization and expense policies tend to vary from entity to entity. Consequently, the presentation of FFO and adjusted FFO by us may not be comparable to other similarly titled measures presented by other REITs. FFO and adjusted FFO are not intended to be alternatives to net income as an indicator of our performance, liquidity or to “Cash Flows from Operating Activities” as determined by GAAP as a measure of our capacity to pay distributions.

Our calculation of FFO, and adjusted FFO, is presented in the following table for the year ended December 31, 2009:

Net Loss	$	(1,200,000	)
Add:
Depreciation and amortization of real estate assets		46,000
FFO		(1,154,000	)
Add:
Acquisition expenses		408,000
Adjusted FFO	$	(746,000	)

Off-Balance Sheet Arrangements

As of December 31, 2009, we had no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial conditions, changes in financial conditions, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

New Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board, or FASB, issued ASC810-10, Consolidation, which will become effective for us on January 1, 2010. This Statement requires an enterprise to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity. We do not expect such standard will have a significant impact on our financial statements as it relates to existing entities we have an ownership interest in.

In August 2009, the FASB issued Accounting Standards Update (ASU)No. 2009-05, Fair Value Measurements and Disclosures. ASUNo. 2009-05, which became effective for us in 2009, provides clarification to measuring the fair value of a liability. In circumstances in which a quoted market price in an active market for the identical liability is not available, a reporting entity is required to measure fair value by using either (1) a valuation technique that uses quoted prices for identical or similar liabilities or (2) another valuation technique, such as a present value technique or a technique that is based on the amount paid or received by the reporting entity to transfer an identical liability. ASUNo. 2009-05 only applies to our disclosures in note 5 related to the estimated fair value of our notes payable and did not have a significant impact on our footnote disclosures.

In January 2010, the FASB issued ASUNo. 2010-06, Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements. Effective for interim and annual reporting periods beginning after December 15, 2009, this ASU requires new disclosures and clarifies existing disclosure requirements about fair value measurement. ASUNo. 2010-06 only applies to our disclosures in Note 5 of our consolidated financial statements included in this Annual Report related to the estimated fair values of our notes payable and is not expected to have a significant impact on our footnote disclosures.

11

Subsequent Events

Status of Offering

We commenced our initial public offering of up to $1,100,000,000 in shares of our common stock on August 7, 2009. As of March 26, 2010, we had accepted investors’ subscriptions for, and issued, 893,318 shares of our common stock, including shares issued pursuant to our distribution reinvestment plan, resulting in gross offering proceeds of $8,806,000.

Item 8.   Financial Statements and Supplementary Data

The Company’s consolidated financial statements and supplementary data and the report of KPMG LLP, Independent Registered Public Accounting Firm, are included elsewhere herein. Reference is made to the Index to Consolidated Financial Statements and Schedules in Item 15.

Item 9A(T).   Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, management, including the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based upon, and as of the date of, the evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective (as defined inRules 13a-15(e) and13d-15(e) under the Exchange Act).

Management’s Annual Report on Internal Control over Financial Reporting

This Annual Report onForm 10-K/A does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of the Company’s registered public accounting firm, and the Company has not evaluated any change in its internal control over financial reporting that occurred during our last fiscal quarter due to a transition period established by the rules of the Securities and Exchange Commission for newly public companies.

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PART IV

Item 15.   Exhibits and Financial Statement Schedules

(a) The following documents are filed as part of this Annual Report:

1.   Consolidated Financial Statements

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2009 and 2008

Consolidated Statements of Operations for the year ended December 31, 2009 and for the Period from September 18, 2008 (date of inception) through December 31, 2008

Consolidated Statements of Equity for the year ended December 31, 2009 and for the Period from September 18, 2008 (date of inception) through December 31, 2008

Consolidated Statements of Cash Flows for the year ended December 31, 2009 and for the Period from September 18, 2008 (date of inception) through December 31, 2008

Notes to Consolidated Financial Statements

2.   Financial Statement Schedules

Schedule III — Real Estate Assets and Accumulated Depreciation and Amortization

All other schedules have been omitted as the required information is either not material, inapplicable or the information is presented in the financial statements or related notes.

(b)   Exhibits

3	.1	Articles of Amendment and Restatement of TNP Strategic Retail Trust, Inc. (filed as Exhibit 3.1 to Pre-Effective Amendment No. 5 to the Company’s Registration Statement onForm S-11(No. 333-154975) and incorporated herein by reference).
3	.2	Bylaws of TNP Strategic Retail Trust, Inc. (filed as Exhibit 3.2 to the Company’s Registration Statement onForm S-11(No. 333-154975) and incorporated herein by reference).
4	.1	Form of Subscription Agreement (included as Appendix C to prospectus, incorporated by reference to Exhibit 4.1 to Pre-Effective Amendment No. 6 to the Company’s Registration Statement onForm S-11(No. 333-154975)).
4	.2	TNP Strategic Retail Trust, Inc. Distribution Reinvestment Plan (included as Appendix D to prospectus, incorporated by reference to Exhibit 4.2 to Pre-Effective Amendment No. 6 to the Company’s Registration Statement onForm S-11(No. 333-154975)).
10	.1	Escrow Agreement among TNP Strategic Retail Trust, Inc., TNP Securities, LLC and CommerceWest Bank, N.A. (filed as Exhibit 10.1 to Pre-Effective Amendment No. 5 to the Company’s Registration Statement onForm S-11(No. 333-154975) and incorporated herein by reference).
10	.2	Advisory Agreement among TNP Strategic Retail Trust, Inc., TNP Strategic Retail Operating Partnership, LP and TNP Strategic Retail Advisor, LLC (filed as Exhibit 10.2 to Pre-Effective Amendment No. 5 to the Company’s Registration Statement onForm S-11(No. 333-154975) and incorporated herein by reference).
10	.3	Limited Partnership Agreement of TNP Strategic Retail Operating Partnership, LP (filed as Exhibit 10.3 to Pre-Effective Amendment No. 3 to the Company’s Registration Statement onForm S-11(No. 333-154975) and incorporated herein by reference).
10	.4	TNP Strategic Retail Trust, Inc. 2009 Long-Term Incentive Plan (filed as Exhibit 10.4 to Pre-Effective Amendment No. 5 to the Company’s Registration Statement onForm S-11(No. 333-154975) and incorporated herein by reference).

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10	.5	TNP Strategic Retail Trust, Inc. Amended and Restated Independent Directors Compensation Plan (filed as Exhibit 10.5 to Pre-Effective Amendment No. 5 to the Company’s Registration Statement onForm S-11(No. 333-154975) and incorporated herein by reference).
10	.6	Dealer Manager Agreement (filed as Exhibit 1.1 to Pre-Effective Amendment No. 5 to the Company’s Registration Statement onForm S-11(No. 333-154975) and incorporated herein by reference).
10	.7	Purchase and Sale Agreement (relating to the acquisition of the Moreno Marketplace), dated September 22, 2009, by and between Moreno Marketplace, LLC and Bill and John Skeffington (filed as Exhibit 10.1 to the Current Report onForm 8-K filed with the SEC on November 24, 2009).
10	.8	Assignment of Purchase and Sale Agreement (relating to the acquisition of the Moreno Marketplace), dated October 21, 2009 (filed as Exhibit 10.2 to the Current Report onForm 8-K filed with the SEC on November 24, 2009).
10	.9	Assignment of Purchase and Sale Agreement (relating to the acquisition of the Moreno Marketplace), dated November 9, 2009 (filed as Exhibit 10.3 to the Current Report onForm 8-K filed with the SEC on November 24, 2009).
10	.10	Promissory Note between TNP SRT Moreno Marketplace, LLC and KeyBank National Association, dated November 12, 2009 (filed as Exhibit 10.9 to Pre-Effective Amendment No. 1 to Post-Effective Amendment No. 1 to the Company’s Registration Statement onForm S-11(No. 333-154975) and incorporated herein by reference).
10	.11	Subordinated Convertible Promissory Note between TNP SRT Moreno Marketplace, LLC and Moreno Retail Partners, LLC, dated November 18, 2009 (filed as Exhibit 10.10 to Pre-Effective Amendment No. 1 to Post-Effective Amendment No. 1 to the Company’s Registration Statement onForm S-11(No. 333-154975) and incorporated herein by reference).
10	.12	Guaranty, dated November 12, 2009, by and between TNP Strategic Retail Trust, Inc. and Anthony W. Thompson, for the benefit of KeyBank National Association (filed as Exhibit 10.11 to Pre-Effective Amendment No. 1 to Post-Effective Amendment No. 1 to the Company’s Registration Statement onForm S-11(No. 333-154975) and incorporated herein by reference).
10	.13	Environmental Indemnity Agreement, dated November 12, 2009, by and among TNP SRT Moreno Marketplace, LLC, TNP Strategic Retail Trust, Inc., Moreno Retail Partners, LLC, John Skeffington, William Skeffington and KeyBank National Association (filed as Exhibit 10.12 to Pre-Effective Amendment No. 1 to Post-Effective Amendment No. 1 to the Company’s Registration Statement onForm S-11(No. 333-154975) and incorporated herein by reference).
10	.14	Reimbursement and Fee Agreement, dated November 20, 2009, by and among TNP SRT Moreno Marketplace, LLC, TNP Strategic Retail Trust, Inc. and Anthony W. Thompson (filed as Exhibit 10.13 to Pre-Effective Amendment No. 1 to Post-Effective Amendment No. 1 to the Company’s Registration Statement onForm S-11(No. 333-154975) and incorporated herein by reference).
10	.15	Revolving Credit Agreement, dated November 12, 2009, by and among TNP Strategic Retail Operating Partnership, LP, TNP Strategic Retail Trust, Inc. and KeyBank National Association (filed as Exhibit 10.14 to Pre-Effective Amendment No. 1 to Post-Effective Amendment No. 1 to the Company’s Registration Statement onForm S-11(No. 333-154975) and incorporated herein by reference).
10	.16	Revolving Credit Note of TNP Strategic Retail Operating Partnership, LP, dated November 12, 2009, in favor of KeyBank National Association (filed as Exhibit 10.15 to Pre-Effective Amendment No. 1 to Post-Effective Amendment No. 1 to the Company’s Registration Statement onForm S-11(No. 333-154975) and incorporated herein by reference).
10	.17	Guaranty Agreement, dated November 12, 2009, by and among TNP Strategic Retail Trust, Inc., Thompson National Properties, LLC and Anthony W. Thompson, for the benefit of KeyBank National Association (filed as Exhibit 10.16 to Pre-Effective Amendment No. 1 to Post-Effective Amendment No. 1 to the Company’s Registration Statement onForm S-11(No. 333-154975) and incorporated herein by reference).

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10	.18	Pledge and Security Agreement, dated November 12, 2009, by and between TNP Strategic Retail Trust, Inc. and KeyBank National Association (filed as Exhibit 10.17 to Pre-Effective Amendment No. 1 to Post-Effective Amendment No. 1 to the Company’s Registration Statement onForm S-11(No. 333-154975) and incorporated herein by reference).
10	.19	Pledge and Security Agreement, dated November 12, 2009, by and between TNP Strategic Retail Operating Partnership, LP and KeyBank National Association (filed as Exhibit 10.18 to Pre-Effective Amendment No. 1 to Post-Effective Amendment No. 1 to the Company’s Registration Statement onForm S-11(No. 333-154975) and incorporated herein by reference).
10	.20	Reimbursement Agreement, dated November 12, 2009, by and between TNP Strategic Retail Operating Partnership, LP and Anthony W. Thompson (filed as Exhibit 10.19 to Pre-Effective Amendment No. 1 to Post-Effective Amendment No. 1 to the Company’s Registration Statement onForm S-11(No. 333-154975) and incorporated herein by reference).
10	.21	Reimbursement and Fee Agreement, dated November 12, 2009, by and between TNP Strategic Retail Operating Partnership, LP and Thompson National Properties, LLC (filed as Exhibit 10.20 to Pre-Effective Amendment No. 1 to Post-Effective Amendment No. 1 to the Company’s Registration Statement onForm S-11(No. 333-154975) and incorporated herein by reference).
10	.22*	Agreement for Purchase and Sale and Joint Escrow Instructions, dated July 13, 2009, by and between West Oahu Mall Associates, LLC and TNP Acquisitions, LLC.
10	.23*	Assignment and Assumption Agreement, dated December 14, 2009, by and between TNP Acquisitions, LLC and TNP SRT Waianae Mall, LLC.
10	.24*	First Amendment of Agreement of Purchase and Sale and Joint Escrow Instructions, dated July 22, 2009, by and among West Oahu Mall Associates, LLC, TNP Acquisitions, LLC and Title Guaranty Escrow Services, Inc.
10	.25*	Second Amendment of Agreement of Purchase and Sale and Joint Escrow Instructions, dated August 13, 2009, by and among West Oahu Mall Associates, LLC, TNP Acquisitions, LLC and Title Guaranty Escrow Services, Inc.
10	.26*	Third Amendment of Agreement of Purchase and Sale and Joint Escrow Instructions, dated August 31, 2009, by and among West Oahu Mall Associates, LLC, TNP Acquisitions, LLC and Title Guaranty Escrow Services, Inc.
10	.27*	Tenth Amendment of Agreement of Purchase and Sale and Joint Escrow Instructions, dated March 10, 2010, by and among West Oahu Mall Associates, LLC, TNP SRT Waianae Mall, LLC and Title Guaranty Escrow Services, Inc.
21	*	Subsidiaries of the Company
31	.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31	.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32	.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*  Previously filed with the Annual Report onForm 10-K, filed on March 31, 2010

15

Index to Consolidated Financial Statements

	Page
	Number
Index to Consolidated Financial Statements		F-1
Report of Independent Registered Public Accounting Firm		F-2
Consolidated Balance Sheets as of December 31, 2009 and 2008		F-3
Consolidated Statements of Operations for the year ended December 31, 2009 and for the Period from September 18, 2008 (date of inception) through December 31, 2008		F-4
Consolidated Statements of Equity for the year ended December 31, 2009 and for the Period from September 18, 2008 (date of inception) through December 31, 2008		F-5
Consolidated Statements of Cash Flows for the year ended December 31, 2009 and for the Period from September 18, 2008 (date of inception) through December 31, 2008		F-6
Notes to Consolidated Financial Statements		F-7
Schedule III — Real Estate Assets and Accumulated Depreciation and Amortization		F-22

F-1

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

TNP Strategic Retail Trust, Inc.:

We have audited the accompanying consolidated balance sheets of TNP Strategic Retail Trust, Inc. and subsidiaries (the Company) as of December 31, 2009 and 2008, and the related consolidated statements of operations, equity, and cash flows for the year ended December 31, 2009 and for the period from September 18, 2008 (date of inception) through December 31, 2008. In connection with our audits of the consolidated financial statements, we have also audited the financial statement schedule III. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of TNP Strategic Retail Trust, Inc. and subsidiaries as of December 31, 2009 and 2008, and the results of their operations and their cash flows for the year ended December 31, 2009 and for the period from September 18, 2008 (date of inception) through December 31, 2008, in conformity with U.S. generally accepted accounting principles. Additionally, in our opinion, the related financial statement schedule III, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ KPMG LLP

Irvine, California

March 31, 2010, except

  as to Note 1 and Note 7,

  which are as of May 17, 2010

F-2

TNP STRATEGIC RETAIL TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31,			December 31,
	2009			2008
ASSETS
Cash and cash equivalents	$	1,106,000		$	201,000
Prepaid expenses and other assets		360,000			—
Accounts receivable		11,000			1,000
Investments in real estate
Land		3,080,000			—
Building and improvements		6,124,000			—
Tenant improvements		656,000			—
		9,860,000			—
Accumulated depreciation		(28,000	)		—
Total investments in real estate, net		9,832,000			—
Acquired lease intangibles, net		2,617,000			—
Deferred costs
Organization and offering		1,425,000			—
Financing fees, net		254,000			—
Total deferred costs, net		1,679,000			—
Total	$	15,605,000		$	202,000
LIABILITIES AND EQUITY
LIABILITIES
Accounts payable and accrued expenses	$	326,000		$	—
Amounts due to affiliates		1,489,000			—
Other liabilities		12,000			—
Notes payable		10,490,000			—
Total liabilities		12,317,000			—
COMMITMENTS AND CONTINGENCIES
EQUITY
Stockholders’ equity
Preferred stock, $0.01 par value per share; 50,000,000 shares authorized; none issued and outstanding		—			—
Common stock, $0.01 par value per share; 400,000,000 shares authorized; 524,752 issued and outstanding at December 31, 2009, 22,222 issued and outstanding at December 31, 2008		5,000			—
Additional paid-in capital		4,512,000			200,000
Accumulated deficit		(1,231,000	)		—
Total stockholders’ equity		3,286,000			200,000
Noncontrolling interest		2,000			2,000
Total equity		3,288,000			202,000
TOTAL	$	15,605,000		$	202,000

See accompanying notes to consolidated financial statements

F-3

TNP STRATEGIC RETAIL TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

				Period from
				September 18,
				2008
				(date of inception)
	Year Ended			through
	December 31,			December 31,
	2009			2008
Revenue:
Rental	$	140,000		$	—
Other		5,000			—
		145,000			—
Expense:
General and administrative		660,000			—
Acquisition expenses		408,000			—
Operating and maintenance		114,000			—
Depreciation and amortization		46,000			—
		1,228,000			—
Loss before other income (expenses)		(1,083,000	)		—
Other income and expense:
Interest income		2,000			—
Interest expense		(119,000	)		—
Net loss	$	(1,200,000	)	$	—
Net loss per share — basic and diluted	$	(17.14	)	$	—
Weighted average number of common shares outstanding — basic and diluted		71,478			22,222
Distributions declared ($0.11 per share)	$	31,000		$	—

See accompanying notes to consolidated financial statements

F-4

TNP STRATEGIC RETAIL TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

	Number		Par		Additional Paid-In			Accumulated			Stockholders’			Non-controlling
	of Shares		Value		Capital			Deficit			Equity			Interest		Total Equity
BALANCE — September 18, 2008 (date of inception)		—	$	—	$	—		$	—		$	—		$	—	$	—
Issuance of common stock		22,222		—		200,000			—			200,000			—		200,000
Contributions from non-controlling interest		—		—		—			—			—			2,000		2,000
BALANCE — December 31, 2008		22,222		—		200,000			—			200,000			2,000		202,000
Issuance of common stock		486,815		5,000		4,797,000			—			4,802,000			—		4,802,000
Offering costs		—		—		(542,000	)		—			(542,000	)		—		(542,000	)
Issuance of vested and non-vested restricted common stock		15,000		—		135,000			—			135,000			—		135,000
Deferred stock compensation		—		—		(85,000	)		—			(85,000	)		—		(85,000	)
Issuance of common stock under DRIP		715		—		7,000			—			7,000			—		7,000
Distributions		—		—		—			(31,000	)		(31,000	)		—		(31,000	)
Net loss		—		—		—			(1,200,000	)		(1,200,000	)		—		(1,200,000	)
BALANCE — December 31, 2009		524,752	$	5,000	$	4,512,000		$	(1,231,000	)	$	3,286,000		$	2,000	$	3,288,000

See accompanying notes to consolidated financial statements

F-5

TNP STRATEGIC RETAIL TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

				Period from
				September 18,
				2008
				(date of inception)
	Year Ended			through
	December 31,			December 31,
	2009			2008
Cash flows from operating activities:
Net loss	$	(1,200,000	)	$	—
Adjustment to reconcile net loss to net cash used in operating activities:
Amortization of deferred financing costs		39,000			—
Depreciation and amortization		46,000			—
Stock based compensation,		50,000			—
Amortization of above market leases		4,000			—
Changes in assets and liabilities:
Accounts receivable		(10,000	)		(1,000	)
Amounts due to affiliates		64,000			—
Prepaid expenses and other assets		(360,000	)		—
Accounts payable and accrued expenses		308,000			—
Other liabilities		12,000			—
Net cash used in operating activities		(1,047,000	)		(1,000	)
Cash flows from investing activities:
Investments in real estate		(9,861,000	)		—
Acquired lease intangibles		(2,639,000	)		—
Net cash used in investing activities		(12,500,000	)		—
Cash flows from financing activities:
Proceeds from issuance of common stock		4,802,000			200,000
Distributions		(6,000	)		—
Contributions from noncontrolling interests		—			2,000
Payment of offering costs		(542,000	)		—
Proceeds from notes and loan payables		11,126,000			—
Repayment of notes and loan payable		(636,000	)		—
Payment of deferred financing costs		(292,000	)		—
Net cash provided by financing activities		14,452,000			202,000
Net increase in cash		905,000			201,000
Cash and cash equivalents — Beginning of the period		201,000			—
Cash and cash equivalents — End of the period	$	1,106,000		$	201,000
Supplemental disclosure of non-cash financing activities:
Deferred organization and offering costs due to affiliates	$	1,425,000		$	—
Issuance of common stock under the DRIP	$	7,000		$	—
Distributions declared but not paid	$	18,000		$	—
Cash paid for interest	$	22,000		$	—

See accompanying notes to consolidated financial statements

F-6

TNP Strategic Retail Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2009 and 2008

1.   Organization

TNP Strategic Retail Trust, Inc. (the “Company”) was formed on September 18, 2008, as a Maryland corporation and believes it qualifies as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). The Company was organized primarily to acquire income-producing retail properties located in the Western United States, real estate-related assets and other real estate assets. As discussed in Note 4, the Company sold stock to Thompson National Properties, LLC (“Sponsor”) on October 16, 2008. The Company’s fiscal year end is December 31.

On November 4, 2008, the Company filed a registration statement onForm S-11 with the Securities and Exchange Commission (the “SEC”) to offer a maximum of 100,000,000 shares of its common stock to the public in its primary offering and 10,526,316 shares of its common stock pursuant to its distribution reinvestment plan. On August 7, 2009, the SEC declared the offering effective and the Company commenced its initial public offering. The Company is offering shares to the public in its primary offering at a price of $10.00 per share, with discounts available for certain purchasers, and to its stockholders pursuant to its distribution reinvestment plan at a price of $9.50 per share. Pursuant to the terms of the Company’s initial public offering, the Company was required to deposit all subscription proceeds in escrow pursuant to the terms of an escrow agreement with CommerceWest Bank, N.A. until the Company received subscriptions aggregating at least $2,000,000. On November 12, 2009, the Company achieved the minimum offering amount of $2,000,000 and offering proceeds were released to the Company from the escrow account. As of December 31, 2009, the Company had accepted investors’ subscriptions for, and issued, including shares through the distribution reinvestment plan, 509,752 shares of the Company’s common stock, resulting in gross offering proceeds of $5,009,000.

The Company intends to use the net proceeds from its public offering primarily to acquire retail properties. The Company may also make or acquire first mortgages or second mortgages, mezzanine loans, preferred equity investments and investments in common stock of private real estate companies and publicly traded real estate investment trusts, in each case provided that the underlying real estate meets the Company’s criteria for direct investment. The Company may also invest in any real properties or other real estate-related assets that, in the opinion of the Company’s board of directors, meets the Company’s investment objectives. As of December 31, 2009, the Company, through wholly owned subsidiaries, had acquired one multi-tenant retail property encompassing approximately 78,743 rentable square feet (see Note 3, Real Estate).

On August 13, 2009, the Company’s board of directors approved a monthly cash distribution of $0.05625 per common share, which represents an annualized distribution of $0.675 per share. The commencement of the distribution was subject to the Company having achieved minimum offering proceeds of $2,000,000, the sale of a sufficient number of shares in the Company’s public offering to finance an asset acquisition and the Company’s identification and completion of an asset acquisition. On November 12, 2009, the Company achieved the minimum offering amount $2,000,000, and on November 19, 2009 the Company completed its first asset acquisition. As of December 31, 2009, the Company had paid an aggregate of $7,000 in distributions to the Company’s stockholders.

The Company’s advisor is TNP Strategic Retail Advisor, LLC (“Advisor”), a Delaware limited liability company. Subject to certain restrictions and limitations, Advisor is responsible for managing the Company’s affairs on aday-to-day basis and for identifying and making acquisitions and investments on behalf of the Company.

The Company is the sole general partner of its operating partnership, TNP Strategic Retail Operating Partnership, LP, a Delaware limited partnership (the “OP”), and as of December 31, 2009 and 2008, the Company owned 99.8% and 95.7%, respectively, of the limited partnership interest in the OP. As of December 31, 2009 and 2008, Advisor owned a 0.2% and 4.3%, respectively, limited partnership interest in

F-7

TNP Strategic Retail Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

the OP and TNP Strategic Retail OP Holdings, LLC, a Delaware limited liability company (“TNP OP”), is a special limited partner in the OP.

Substantially all of the Company’s business will be conducted through the OP. The initial limited partners of the OP are Advisor and TNP OP. Advisor has invested $1,000 in the OP in exchange for common units and TNP OP has invested $1,000 in the OP and has been issued a separate class of limited partnership units (the “Special Units”). As the Company accepts subscriptions for shares, it will transfer substantially all of the net proceeds of the offering to the OP as a capital contribution. The partnership agreement provides that the OP will be operated in a manner that will enable the Company to (1) satisfy the requirements for being classified as a REIT for tax purposes, (2) avoid any federal income or excise tax liability, and (3) ensure that the OP will not be classified as a “publicly traded partnership” for purposes of Section 7704 of the Internal Revenue Code, which classification could result in the OP being taxed as a corporation, rather than as a partnership. In addition to the administrative and operating costs and expenses incurred by the OP in acquiring and operating real properties, the OP will pay all of the Company’s administrative costs and expenses, and such expenses will be treated as expenses of the OP.

Correction of an Immaterial Error

For the year ended December 31, 2009, the Company included in other liabilities and other expense the fair value of a derivative related to an exit fee of $130,000 payable under the Convertible Note (as defined in Note 7) issued to MRP (as defined in Note 7). However, the executed Convertible Note did not include an exit fee. The error resulted in the overstatement of other liabilities by $130,000 and overstatement of other expense by $130,000 as of and for the year ended December 31, 2009, respectively. The Company assessed the materiality of the error in accordance with Staff Accounting Bulletin No. 99, Materiality, and determined that the error was immaterial to previously reported amounts.

The following is a summary of the effects of the correction on the Company’s consolidated balance sheet as of December 31, 2009 and the statements of operations, equity and cash flows for the previously reported year ended December 31, 2009:

	As
	previously			As
Consolidated Balance Sheet	reported			corrected
Total liabilities	$	12,447,000		$	12,317,000
Total equity	$	3,158,000		$	3,288,000
Consolidated Statement of Operations
Other expense	$	(130,000	)	$	—
Net loss	$	(1,330,000	)	$	(1,200,000	)
Loss per share — basic and diluted	$	(19.17	)	$	(17.14	)
Consolidated Statement of Equity
Net loss	$	(1,330,000	)	$	(1,200,000	)
Accumulated Deficit	$	(1,361,000	)	$	(1,231,000	)
Consolidated Statement of Cash Flows
Cash flows from operating activities:
Net loss	$	(1,330,000	)	$	(1,200,000	)
Change in other liabilities	$	142,000		$	12,000

F-8

TNP Strategic Retail Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

2.   Summary of Significant Accounting Policies

Consolidation

The Company’s consolidated financial statements include its accounts and the accounts of its subsidiaries, the OP, TNP Moreno Marketplace, LLC, and TNP Waianae Mall, LLC. All intercompany profits, balances and transactions are eliminated in consolidation.

Under accounting principles generally accepted in the United States of America (“GAAP”), the Company’s consolidated financial statements will also include the accounts of its consolidated subsidiaries and joint ventures in which the Company is the primary beneficiary, or in which the Company has a controlling interest. In determining whether the Company has a controlling interest in a joint venture and the requirement to consolidate the accounts of that entity, the Company’s management considers factors such as an entity’s purpose and design and the Company’s ability to direct the activities of the entity that most significantly impacts the entity’s economic performance, ownership interest, board representation, management representation, authority to make decisions, and contractual and substantive participating rights of the partners/members as well as whether the entity is a variable interest entity in which it will absorb the majority of the entity’s expected losses, if they occur, or receive the majority of the expected residual returns, if they occur, or both.

Allocation of Real Property Purchase Price

The Company accounts for all acquisitions in accordance with GAAP. The Company first determines the value of the land and buildings utilizing an “as if vacant” methodology. The Company then assigns a fair value to any debt assumed at acquisition. The balance of the purchase price is allocated to tenant improvements and identifiable intangible assets or liabilities. Tenant improvements represent the tangible assets associated with the existing leases valued on a fair value basis at the acquisition date prorated over the remaining lease terms. The tenant improvements are classified as an asset under real estate investments and are depreciated over the remaining lease terms. Identifiable intangible assets and liabilities relate to the value of in-place operating leases which come in three forms: (1) leasing commissions and legal costs, which represent the value associated with “cost avoidance” of acquiring in-place leases, such as lease commissions paid under terms generally experienced in the Company’s markets; (2) value of in-place leases, which represents the estimated loss of revenue and of costs incurred for the period required to lease the “assumed vacant” property to the occupancy level when purchased; and (3) above or below market value of in-place leases, which represents the difference between the contractual rents and market rents at the time of the acquisition, discounted for tenant credit risks. The value of in-place leases are recorded in acquired lease intangibles and amortized over the remaining lease term. Above or below market leases are classified in acquired lease intangibles, net or in other liabilities, depending on whether the contractual terms are above or below market. Above market leases are amortized as a decrease to rental revenue over the remaining non-cancelable terms of the respective leases and below market leases are amortized as an increase to rental revenue over the remaining initial lease term and any fixed rate renewal periods, if applicable.

When the Company acquires real estate properties, the Company will allocate the purchase price to the components of these acquisitions using relative fair values computed using its estimates and assumptions. Acquisition costs will be expensed as incurred. These estimates and assumptions impact the amount of costs allocated between various components as well as the amount of costs assigned to individual properties in multiple property acquisitions. These allocations also impact depreciation expense and gains or losses recorded on future sales of properties.

Noncontrolling Interest

In December 2007, the Financial Accounting Standards Board (the “FASB”) issued a standard that establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest,

F-9

TNP Strategic Retail Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

changes in a parent’s ownership interest, and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. The standard, which is effective for fiscal years beginning after December 15, 2008, also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. In accordance with the guidance, the presentation provisions were presented retrospectively on the Company’s consolidated balance sheets, which resulted in a reclassification of $2,000 in noncontrolling interests to permanent equity as of December 31, 2008. The adoption of this standard had no impact on the Company’s consolidated statements of operations or cash flows.

Real Property

Costs related to the development, redevelopment, construction and improvement of properties are capitalized. Interest incurred on development, redevelopment and construction projects is capitalized until construction is substantially complete.

Maintenance and repair expenses are charged to operations as incurred. Costs for major replacements and betterments, which include heating, ventilating, and air conditioning equipment, roofs, and parking lots, are capitalized and depreciated over their estimated useful lives. Gains and losses are recognized upon disposal or retirement of the related assets and are reflected in earnings.

Property is recorded at cost and is depreciated using a straight-line method over the estimated useful lives of the assets as follows:

	Years
Buildings and improvements		5-45 years
Exterior improvements		10-20 years
Equipment and fixtures		5-10 years

Revenue Recognition

The Company recognizes rental income on a straight-line basis over the term of each lease. Rental income recognition commences when the tenant takes possession or controls the physical use of the leased space. The difference between rental income earned on a straight-line basis and the cash rent due under the provisions of the lease agreements will be recorded as deferred rent receivable and will be included as a component of accounts receivable in the accompanying consolidated balance sheets. The Company anticipates collecting these amounts over the terms of the leases as scheduled rent payments are made. Reimbursements from tenants for recoverable real estate taxes and operating expenses are accrued as revenue in the period the applicable expenditures are incurred. Lease payments that depend on a factor that does not exist or is not measurable at the inception of the lease, such as future sales volume, would be contingent rentals in their entirety and, accordingly, would be excluded from minimum lease payments and included in the determination of income as they are earned.

Valuation of Accounts Receivable

The Company has taken into consideration certain factors that require judgments to be made as to the collectability of receivables. Collectability factors taken into consideration are the amounts outstanding, payment history and financial strength of the tenant, which taken as a whole determines the valuation.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the

F-10

TNP Strategic Retail Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Organization and Offering Costs

Organization and offering costs of the Company (other than selling commissions and the dealer manager fee) are initially being paid by the Advisor and its affiliates on the Company’s behalf. Such costs shall include legal, accounting, printing and other offering expenses, including marketing, salaries and direct expenses of Advisor’s employees and employees of Advisor’s affiliates and others. Pursuant to the advisory agreement, the Company is obligated to reimburse Advisor or its affiliates, as applicable, for organization and offering costs associated with the Company’s initial public offering, provided that Advisor is obligated to reimburse the Company to the extent organization and offering costs, other than selling commissions and dealer manager fees, incurred by the Company exceed 3.0% of the gross offering proceeds from the Company’s initial public offering. Any such reimbursement will not exceed actual expenses incurred by Advisor. Prior to raising the minimum offering amount of $2,000,000 on November 12, 2009, the Company had no obligation to reimburse Advisor or its affiliates for any organization and offering costs.

All offering costs, including sales commissions and dealer manager fees are recorded as an offset to additionalpaid-in-capital, and all organization costs are recorded as an expense when the Company has an obligation to reimburse the Advisor.

As of December 31, 2009, organization and offering costs incurred by the Advisor on the Company’s behalf were $1,579,000. Such costs are payable by the Company to the extent that organization and offering costs, other than selling commissions and dealer manager fees, do not exceed 3% of the gross proceeds of the Company’s initial public offering. As of December 31, 2009, the Company’s organization and other offering costs did exceed 3% of the gross proceeds of our initial public offering, thus the amount in excess of 3% is deferred.

Income Taxes

The Company intends to elect to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code, commencing in the taxable year ended December 31, 2009. The Company believes that it qualifies for taxation as a REIT, thus the Company generally will not be subject to federal corporate income tax to the extent it distributes its REIT taxable income to its stockholders, so long as it distributes at least 90% of its REIT taxable income (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with accounting principles generally accepted in the United States of America). REITs are subject to a number of other organizational and operations requirements. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income.

Cash and Cash Equivalents

Cash and cash equivalents represents current bank accounts and other bank deposits free of encumbrances and having maturity dates of three months or less from the respective dates of deposit. As of December 31, 2009, the Company had $513,000 in excess of federally insured limits in a money market account. The Company limits cash investments to financial institutions with high credit standing; therefore, the Company believes it is not exposed to any significant credit risk in cash.

Provisions for Impairment

We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Generally, a provision for impairment is recorded if

F-11

TNP Strategic Retail Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

estimated future operating cash flows (undiscounted and without interest charges) plus estimated disposition proceeds (undiscounted) are less than the current book value of the property. Key inputs that we estimate in this analysis include projected rental rates, capital expenditures and property sales capitalization rates. Additionally, a property classified as held for sale is carried at the lower of carrying cost or estimated fair value, less estimated cost to sell.

No provisions for impairment were recorded by the Company in 2009 or 2008.

Recent Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board, or FASB, issued ASC810-10, Consolidation, which will become effective for us on January 1, 2010. This Statement requires an enterprise to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity. We do not expect such standard will have a significant impact on our financial statements as it relates to existing entities we have an ownership interest in.

In August 2009, the FASB issued Accounting Standards Update (“ASU”)No. 2009-05, Fair Value Measurements and Disclosures. ASUNo. 2009-05, which became effective for us in 2009, provides clarification to measuring the fair value of a liability. In circumstances in which a quoted market price in an active market for the identical liability is not available, a reporting entity is required to measure fair value by using either (1) a valuation technique that uses quoted prices for identical or similar liabilities or (2) another valuation technique, such as a present value technique or a technique that is based on the amount paid or received by the reporting entity to transfer an identical liability. ASUNo. 2009-05 only applies to our disclosures in note 5 related to the estimated fair value of our notes payable and did not have a significant impact on our footnote disclosures.

In January 2010, the FASB issued ASUNo. 2010-06, Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements. Effective for interim and annual reporting periods beginning after December 15, 2009, this ASU requires new disclosures and clarifies existing disclosure requirements about fair value measurement. ASUNo. 2010-06 only applies to our disclosures in note 5 related to the estimated fair values of our notes payable and is not expected to have a significant impact on our footnote disclosures.

3.   Investments in Real Estate

2009 Property Acquisition

As of December 31, 2009, the Company had acquired, through a wholly-owned subsidiary, one property, which was acquired in the fourth quarter of 2009.

Moreno Property

On November 19, 2009, the Company acquired a fee simple interest in the Moreno Marketplace, a multi-tenant retail center located in Moreno Valley, California (the “Moreno Property”), through TNP SRT Moreno Marketplace, LLC (“TNP SRT Moreno”), a wholly owned subsidiary of the OP. TNP SRT Moreno acquired the Moreno Property from an unaffiliated third party for an aggregate purchase price of $12,500,000, exclusive of closing costs.

The Moreno Property is an approximately 94,574 square foot multi-tenant retail center located in Moreno Valley, California that was constructed in 2008 and is comprised of six buildings and two vacant pad sites. The Moreno Property is comprised of approximately 78,743 square feet of building improvements and approximately 15,831 square feet of finished but unimproved pad sites. As of December 31, 2009, the Moreno Property is approximately 70.1% leased excluding the 15,831 square feet of unimproved pad sites. The Moreno Property is anchored by Stater Bros. Stater Bros. occupies 55.9% of the rentable square footage of the Moreno Property and

F-12

TNP Strategic Retail Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

pays an annual rent of $730,000 pursuant to a lease that expires in November 2028. Stater Bros. has the option to renew the term of its lease for up to six successive five-year renewal terms after the expiration of the initial term. No other tenants occupy 10% or more of the rentable square feet at the Moreno Property.

The purchase price of the Moreno Property was allocated as follows:

Land	$	3,080,000
Building & improvements		6,124,000
Tenant improvements		656,000
	$	9,860,000
Acquired lease intangibles	$	2,640,000
	$	12,500,000

Minimum Future Rents

Minimum future rents to be received on noncancelable operating leases as of December 31, 2009 for each of the next five years ending December 31 and thereafter is as follows:

2010	$	1,062,000
2011		1,064,000
2012		1,067,000
2013		1,073,000
2014		1,055,000
Thereafter		14,077,000
	$	19,398,000

Potential Property Acquisition

On December 14, 2009, the Company assumed the rights to a purchase and sale agreement for the acquisition of Waianae Mall, an approximately 170,275 square foot multi-tenant retail center consisting of 11 buildings located in Honolulu, Hawaii (the “Waianae property”). An affiliate of the Sponsor entered into a purchase agreement to purchase the Waianae property for an aggregate purchase price of $25,688,000, including the assumption of debt on the property. In connection with this potential acquisition, the Company formed TNP SRT Waianae Mall, LLC, a wholly owned subsidiary of the OP, to complete the acquisition and has paid a $250,000 refundable deposit which is included in prepaid expenses and other assets. The $250,000 deposit along with $72,000 in acquisition related expenses were paid to the affiliate of the Sponsor upon assumption of the rights to the purchase and sale agreement. The Company intends to purchase the Waianae property using debt financing and funds raised through its public offering of common stock. The Company anticipates paying an acquisition fee of 2.5%, or $642,000, of the purchase price to its Advisor. The Company expects to close the acquisition in the second quarter of 2010, however, there is no assurance that the closing will occur within this timeframe, or at all. This potential acquisition is subject to substantial conditions to closing including: (1) the sale of a sufficient number of shares of the Company’s common stock in its public offering to fund a portion of the purchase price for the Waianae property; (2) the approval of the loan servicer for the existing indebtedness on the Waianae property to be assumed by the Company and the receipt of other applicable third-party consents; and (3) the absence of a material adverse change to the Waianae property prior to the date of the acquisition.

F-13

TNP Strategic Retail Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

4.   Acquired Lease Intangibles, Net

Acquired lease intangibles, net consisted of the following at December 31, 2009:

Lease commissions	$	1,169,000
Above market leases		247,000
Leases in place		1,167,000
Marketing costs		57,000
	$	2,640,000
Accumulated amortization		(23,000	)
Acquired lease intangibles, net	$	2,617,000

The acquired lease intangibles have a weighted average remaining life of 214 months as of December 31, 2009.

Estimated amortization expense on acquired lease intangibles as of December 31, 2009 for each of the next five years ending December 31 and thereafter is as follows:

2010	$	181,000
2011		181,000
2012		181,000
2013		181,000
2014		164,000
Thereafter		1,729,000
	$	2,617,000

5.   Deferred Costs, Net

Deferred costs, net consisted of the following at December 31, 2009:

Financing fees	$	293,000
Accumulated amortization		(39,000	)
		254,000
Organization and offering		1,425,000
Deferred costs, net	$	1,679,000

Deferred financing fees have a weighted average remaining life of 14 months as of December 31, 2009.

Estimated amortization to interest expense of the deferred financing fees as of December 31, 2009 for each of the next five years ending December 31 and thereafter is as follows:

2010	$	214,000
2011		40,000
2012		—
2013		—
2014		—
Thereafter		—
	$	254,000

F-14

TNP Strategic Retail Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

6.   Equity

Common Stock

Under the Company’s charter, the Company has the authority to issue 400,000,000 shares of common stock. All shares of such stock have a par value of $0.01 per share. On October 16, 2008, the Company sold 22,222 shares of common stock to the Sponsor for an aggregate purchase price of $200,000. As of December 31, 2009, the Company had accepted investors’ subscriptions for, and issued, including shares through the distribution reinvestment plan (DRIP), 509,752 shares of the Company’s common stock in the Company’s ongoing public offering.

The Company’s board of directors is authorized to amend its charter, without the approval of the stockholders, to increase the aggregate number of authorized shares of capital stock or the number of shares of any class or series that the Company has authority to issue.

Preferred Stock

The Company’s charter authorizes it to issue 50,000,000 shares of $0.01 par value preferred stock. As of December 31, 2009 and 2008, no shares of preferred stock were issued and outstanding.

Share Redemption Plan

The share redemption plan allows for share repurchases by the Company when certain criteria are met by requesting stockholders. Share repurchases will be made at the sole discretion of the Company’s board of directors. The Company presently intends to limit the number of shares to be redeemed during any calendar year to no more than (1) 5.0% of the weighted average of the number of shares of its common stock outstanding during the prior calendar year and (2) those that could be funded from the net proceeds from the sale of shares under the distribution reinvestment plan in the prior calendar year plus such additional funds as may be borrowed or reserved for that purpose by the Company’s board of directors. In addition, the Company’s board of directors reserves the right to reject any redemption request for any reason or no reason or to amend or terminate the share redemption program at any time.

For the year ended December 31, 2009 and for the period from September 18, 2008 (date of inception) to December 31, 2008, the Company’s did not repurchase any shares of its common stock pursuant to the share redemption program.

Distribution Reinvestment Plan

The Company adopted a distribution reinvestment plan (the “DRIP”), which that allows stockholders to purchase additional shares of common stock through the reinvestment of distributions, subject to certain conditions. The Company registered and reserved 10,526,316 shares of its common stock for sale pursuant to the DRIP in its public offering. As of December 31, 2009 $7,000 in distributions were reinvested and 715 shares of common stock were issued under the DRIP.

Distributions

On August 13, 2009, our board of directors approved a monthly cash distribution of $0.05625 per common share, which represents an annualized distribution of $0.675 per share. The commencement of the distribution was subject to our having achieved minimum offering proceeds of $2,000,000, the sale of a sufficient number of shares in our public offering to finance an asset acquisition and our identification and completion of an asset acquisition. On November 12, 2009, we achieved the minimum offering amount $2,000,000, and on November 19, 2009 we completed our first asset acquisition, thus satisfying all of the conditions for the commencement of the monthly distribution. On November 30, 2009, we declared a monthly distribution in the aggregate amount of $7,000 of which $6,000 was paid in cash on December 15, 2009 and $1,000 was paid through our distribution reinvestment plan in the form of additional shares issued on November 30, 2009.

F-15

TNP Strategic Retail Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

On December 31, 2009, we declared a monthly distribution in the aggregate of $24,000, of which $18,000 was paid in cash on January 15, 2010 and $6,000 was paid through our distribution reinvestment plan in the form of additional shares issued on December 31, 2009. On January 31, 2010, we declared a monthly distribution in the aggregate of $32,000, of which $25,000 was paid in cash on February 12, 2010 and $7,000 was paid through our distribution reinvestment plan in the form of additional shares issued on January 31, 2010. On February 28, 2010, we declared a monthly distribution in the aggregate of $40,000, of which $29,000 was paid in cash on March 15, 2010 and $11,000 was paid through our distribution reinvestment plan in the form of additional shares issued on February 28, 2010.

7.   Debt

During the year ended December 31, 2009, the Company incurred $119,000 of interest expense, of which $57,000 was payable at December 31, 2009.

The following is a schedule of maturities for all notes payable as of December 31, 2009 for each of the next five years ending December 31 and thereafter:

2010	$	120,000
2011		9,120,000
2012		—
2013		—
2014		—
Thereafter		1,250,000
	$	10,490,000

During the year ended December 31, 2009, the Company entered into the following financings:

KeyBank Revolving Credit Facility

On November 12, 2009, the OP entered into a revolving credit agreement, or the credit agreement, with KeyBank National Association, or KeyBank, as administrative agent for itself and the other lenders named in the credit agreement, or the lenders, to establish a revolving credit facility with a maximum aggregate borrowing capacity of up to $15,000,000. The proceeds of the revolving credit facility may be used by the OP for investments in properties and real estate-related assets, improvement of properties, costs involved in the ordinary course of the OP business and for other general working capital purposes; provided, however, that prior to any funds being advanced to the OP under the revolving credit facility, KeyBank shall have the authority to review and approve, in its sole discretion, the investments which the OP proposes to make with such funds, and the OP shall be required to satisfy certain enumerated conditions set forth in the credit agreement, including, but not limited to, limitations on outstanding indebtedness with respect to a proposed property acquisition, a ratio of net operating income to debt service on the prospective property of at least 1.35 to 1.00 and a requirement that the prospective property be 100% owned, directly or indirectly, by the OP.

The credit agreement contains customary covenants including, without limitation, limitations on distributions, the incurrence of debt and the granting of liens. Additionally, the credit agreement contains certain covenants relating to the amount of offering proceeds the Company receives in its continuous offering of common stock. The OP received a waiver from KeyBank relating to the covenant in the credit agreement requiring the Company to raise at least $2,000,000 in shares of common stock in its public offering during each of January, February and March 2010. In addition, the OP received a waiver relating to the covenant requiring the Company to maintain a 1.3 to 1 debt service coverage ratio for the quarter ended March 31, 2010. The credit agreement is guaranteed by the Sponsor and an affiliate of the Sponsor. As part of the

F-16

TNP Strategic Retail Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

guarantee agreement, the Sponsor and its affiliate must maintain minimum net worth and liquidity requirements on a combined or individual basis.

The OP may, upon prior written notice to KeyBank, prepay the principal of the borrowings then outstanding under the revolving credit facility, in whole or in part, without premium or penalty.

The entire unpaid principal balance of all borrowings under the revolving credit facility and all accrued and unpaid interest thereon will be due and payable in full on November 12, 2010. Borrowings under the revolving credit facility will bear interest at a variable per annum rate equal to the sum of (a) 425 basis points plus (b) the greater of (1) 300 basis points or(2) 30-day LIBOR as reported by Reuters on the day that is two business days prior to the date of such determination, and accrued and unpaid interest on any past due amounts will bear interest at a variable LIBOR-based rate that in no event shall exceed the highest interest rate permitted by applicable law. The OP paid KeyBank a one time $150,000 commitment fee in connection with entering into the credit agreement and will pay KeyBank an unused commitment fee of 0.50% per annum.

As of December 31, 2009, $15,000,000 was available under the KeyBank credit facility subject to KeyBank’s review and approval described above. The OP borrowed $626,000 under the revolving credit facility on November 12, 2009 in connection with the acquisition of the Moreno property. As of December 31, 2009, the OP had repaid such borrowings.

Moreno Property Loan

In connection with the acquisition of the Moreno Property, on November 19, 2009, TNP SRT Moreno borrowed $9,250,000 from KeyBank pursuant to a promissory note (the “Moreno Property Note”), secured by the Moreno property. The entire outstanding principal balance of the Moreno Property Note, plus any accrued and unpaid interest thereon, is due and payable in full on November 19, 2011, provided that TNP SRT Moreno has the option, subject to the satisfaction of certain conditions, to extend the maturity date for up to two successive periods of twelve months each (each an “Extension Period”). A principal payment of $10,000 plus interest, at the applicable interest rate, on the outstanding principal balance of the Moreno Property Note will be due and payable monthly. Interest on the outstanding principal balance of the Moreno Property Note will accrue at a rate of 5.5% per annum through the initial maturity date. During the first Extension Period, if any, interest on the outstanding principal balance will accrue at a rate of 7.0% per annum. During the second Extension Period, if any, interest on the outstanding principal balance will accrue at a rate equal to the greater of (i) 7.50% per annum and (ii) a variable per annum rate based upon LIBOR as reported by Reuters. The Moreno Property Note is secured by a first deed of trust on the Moreno Property and an assignment of all leases and rents of and from the Moreno Property in favor of KeyBank.

Convertible Note

In connection with the acquisition of the Moreno Property, on November 19, 2009, TNP SRT Moreno borrowed $1,250,000 from Moreno Retail Partners, LLC (“MRP”) pursuant to a subordinated convertible promissory note (the “Convertible Note”). The entire outstanding principal balance of the Convertible Note, plus any accrued and unpaid interest, is due and payable in full on November 18, 2015. Interest on the outstanding principal balance of the Convertible Note will accrue at a rate of 8% per annum, payable monthly in arrears. At any time after January 2, 2010 but before April 2, 2010, MRP may elect to convert the unpaid principal balance due on the Convertible Note (the “Conversion Amount”) into a capital contribution by MRP to TNP SRT Moreno to be credited to a capital account with TNP SRT Moreno. At any time after February 2, 2010 but before April 2, 2010, TNP SRT Moreno may elect to convert the Conversion Amount into a capital contribution by MRP to TNP SRT Moreno to be credited to a capital account with TNP SRT Moreno. If the note is not converted, TNP SRT Moreno will pay our Advisor an additional acquisition fee of $110,000.

F-17

TNP Strategic Retail Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

As of December 31, 2009, all of our outstanding indebtedness accrued interest at a fixed rate and therefore an increase or decrease in interest rates would have no effect on our interest expense. The carrying value of our debt approximates fair value as of December 31, 2009, as all of our debt has a fixed interest rate and the rate approximates market interest rates.

8.   Related Party Arrangements

Advisor and certain affiliates of Advisor receive fees and compensation in connection with the Company’s public offering, and the acquisition, management and sale of the Company’s real estate investments.

TNP Securities, LLC (“Dealer Manager”), the dealer manager of the offering and a related party, will receive a commission of up to 7.0% of gross offering proceeds. Dealer Manager may reallow all or a portion of such sales commissions earned to participating broker-dealers. In addition, the Company will pay Dealer Manager a dealer manager fee of up to 3.0% of gross offering proceeds, a portion of which may be reallowed to participating broker-dealers. No selling commissions or dealer manager fee will be paid for sales under the Company’s distribution reinvestment plan. As of December 31, 2009, the Company had paid the Dealer Manager $262,000 in sales commissions and $114,000 in dealer manager fees. The company has $31,000 and $13,000 recorded in amounts due to affiliates for sales commissions and dealer manager fees, respectively, as of December 31, 2009.

Advisor will receive up to 3.0% of the gross offering proceeds for reimbursement of organization and offering expenses. Advisor will be responsible for the payment of organization and offering expenses, other than selling commissions and dealer manager fees and to the extent they exceed 3.0% of gross offering proceeds, without recourse against or reimbursement by the Company. As of December 31, 2009, the Advisor and its affiliates had incurred organizational and offering expenses of $1,579,000 (of which $122,000 are offering expenses that are recorded as a reduction to equity, $32,000 are organizational expenses that are recorded in general and administrative expense, and $1,425,000 recorded as deferred organization and offering costs and in amounts due to affiliates as the amount of organization and offering costs has exceeded 3% of gross offering proceeds).

Advisor, or its affiliates, will also receive an acquisition fee equal to 2.5% of (1) the cost of investments the Company acquires or (2) the Company’s allocable cost of investments acquired in a joint venture. As of December 31, 2009, the Company had paid the Advisor $202,000 in acquisition fees.

The Company expects to pay TNP Property Manager, LLC (“TNP Manager”), its property manager and a related party, a market-based property management fee of up to 5.0% of the gross revenues generated by the properties in connection with the operation and management of properties. TNP Manager may subcontract with third party property managers and will be responsible for supervising and compensating those property managers. For the year ended December 31, 2009, we incurred a property management fee payable to TNP Manager of $5,000 which is included in amounts due to affiliates.

The Company will pay Advisor a monthly asset management fee of one-twelfth of 0.6% on all real estate investments the Company acquires; provided, however, that Advisor will not be paid the asset management fee until the Company’s funds from operations exceed the lesser of (1) the cumulative amount of any distributions declared and payable to the Company’s stockholders or (2) an amount that is equal to a 10.0% cumulative, non-compounded, annual return on invested capital for the Company’s stockholders. If Advisor or its affiliates provides a substantial amount of services, as determined by the Company’s independent directors, in connection with the sale of a real property, Advisor or its affiliates also will be paid disposition fees up to 50.0% of a customary and competitive real estate commission, but not to exceed 3.0% of the contract sales price of each property sold. For the year ended December 31, 2009, we incurred an asset management fee payable to our advisor of $9,000 which is included in amounts due to affiliates.

F-18

TNP Strategic Retail Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

The Company reimburses Advisor for the cost of administrative services, including personnel costs and our allocable share of other overhead of the advisor such as rent and utilities; provided, however, that no reimbursement shall be made for costs of such personnel to the extent that personnel are used in transactions for which our advisor receives a separate fee or an officer of Advisor. As of December 31, 2009, the Company had paid Advisor $17,500 for administrative services.

During the year ended December 31, 2009, the Advisor incurred $388,000 in costs on behalf of the Company prior to achieving the minimum offering amount. Of such costs, $348,000 were reimbursed to the Advisor during the year ended December 31, 2009 and $40,000 is included in amounts due to affiliates.

The Company will reimburse Advisor for all expenses paid or incurred by Advisor in connection with the services provided to the Company, subject to the limitation that the Company will not reimburse Advisor for any amount by which its operating expenses (including the asset management fee) at the end of the four preceding fiscal quarters exceeds the greater of: (1) 2% of its average invested assets, or (2) 25% of its net income determined without reduction for any additions to depreciation, bad debts or other similar non-cash expenses and excluding any gain from the sale of the Company’s assets for that period (the “2%/25% guidelines”). Notwithstanding the above, the Company may reimburse Advisor for expenses in excess of this limitation if a majority of the independent directors determines that such excess expenses are justified based on unusual and nonrecurring factors. In accordance with the advisory agreement, the Company will recognize on a quarterly basis amounts not exceeding the 2%/25% guidelines; however, we cannot yet evaluate whether our operating expenses have exceeded the 2%/25% guidelines because we have only been conducting our operations since November 2009.

9.   Incentive Award Plan

The Company adopted an incentive plan (the “Incentive Award Plan”) that provides for the grant of equity awards to its employees, directors and consultants and those of the Company’s affiliates on July 7, 2009. The Incentive Award Plan authorized the grant of non-qualified and incentive stock options, restricted stock awards, restricted stock units, stock appreciation rights, dividend equivalents and other stock-based awards or cash-based awards. The Company has reserved 2,000,000 shares of common stock for stock grants pursuant to the Incentive Award Plan. The Company granted each of its current independent directors an initial grant of 5,000 shares of restricted stock (the “initial restricted stock grant”) following the Company’s raising of the $2,000,000 minimum offering amount on November 12, 2009. Each new independent director that subsequently joins the board of directors will receive the initial restricted stock grant on the date he or she joins the board of directors. In addition, on the date of each of the Company’s annual stockholders meetings at which an independent director is re-elected to the board of directors, he or she will receive 2,500 shares of restricted stock. The restricted stock will vest as to one-third of the shares on the grant date and as to one-third of the shares on each of the first two anniversaries of the grant date. The restricted stock will become fully vested in the event of an independent directors’ termination of service due to his or her death or disability, or upon the occurrence of a change in control of the Company.

For the year ended December 31, 2009 and for the period from September 18, 2008 (date of inception) through December 31, 2008, we recognized compensation expense of $50,000 and $0, respectively, related to the restricted common stock grants, which is included in general and administrative in our accompanying consolidated statements of operations. Shares of restricted common stock have full voting rights and rights to dividends.

As of December 31, 2009 and 2008, there was $85,000 and $0, respectively, of total unrecognized compensation expense, related to nonvested shares of restricted common stock. As of December 31, 2009, this expense is expected to be realized over a remaining period of 2.87 years.

F-19

TNP Strategic Retail Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

As of December 31, 2009 and 2008, the fair value of the nonvested shares of restricted common stock was $90,000 and $0, respectively. A summary of the status of the nonvested shares of restricted common stock as of December 31, 2009 and 2008, and the changes for the year ended December 31, 2009 and for the period from September 18, 2008 (date of inception) through December 31, 2008, is presented below:

				Weighted
	Restricted			Average
	Common			Grant Date
	Stock			Fair Value
Balance — September 18, 2008 (date of inception)		—		$	—
Granted		—			—
Vested		—			—
Balance — December 31, 2008		—			—
Granted		15,000			9.00
Vested		(5,000	)		9.00
Balance — December 31, 2009		10,000		$	9.00

10.   Subordinated Participation Interest

Pursuant to the Limited Partnership Agreement for the OP, the holders of the Special Units will be entitled to distributions from the OP in an amount equal to 15.0% of net sales proceeds received by the OP on dispositions of its assets and dispositions of real properties by joint ventures or partnerships in which the OP owns a partnership interest, after the other holders of common units, including the Company, have received, in the aggregate, cumulative distributions from operating income, sales proceeds or other sources, equal to their capital contributions plus a 10.0% cumulative non-compounded annual pre-tax return thereon. The Special Units will be redeemed for the above amount upon the earliest of: (1) the occurrence of certain events that result in the termination or non-renewal of the advisory agreement or (2) a listing liquidity event.

11.   Tax Treatment of Distributions

Our distributions in excess of our taxable income, including distributions reinvested, have resulted in a return of capital to our stockholders for federal income tax purposes. The tax treatment for distributions reportable for the year ended December 31, 2009 was 100% return of capital.

12.   Selected Quarterly Financial Data (Unaudited)

Set forth below is the unaudited selected quarterly financial data. We believe that all necessary adjustments, consisting only of normal recurring adjustments, have been included in the amounts stated below to present fairly, and in accordance with GAAP, the unaudited selected quarterly financial data when read in conjunction with our consolidated financial statements.

	Quarters Ended:
	December 31,		September 30,		June 30,		March 31,
	2009		2009		2009		2009
Revenues	$	145,000	$	—	$	—	$	—
Expenses		1,139,000		89,000		—		—
Loss before other expense		994,000		89,000		—		—
Other expense, net		117,000		—		—		—
Net loss	$	1,111,000	$	89,000	$	—	$	—
Loss per share	$	5.24	$	4.01	$	—	$	—
Weighted average number of shares
outstanding		217,640		22,222		22,222		22,222

F-20

TNP Strategic Retail Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements — (Continued)

13.   Subsequent Events

Status of Offering

The Company commenced its initial public offering of up to $1,100,000,000 in shares of its common stock on August 7, 2009. As of March 26, 2010, the Company had accepted investors’ subscriptions for, and issued, 893,318 shares of the Company’s common stock, including shares issued pursuant to our distribution reinvestment plan, resulting in gross offering proceeds of $8,806,000.

Distributions Declared

On December 31, 2009, we declared a monthly distribution in the aggregate of $24,000, of which $18,000 was paid in cash on January 15, 2010 and $6,000 was paid through our distribution reinvestment plan in the form of additional shares issued on December 31, 2009. On January 31, 2010, we declared a monthly distribution in the aggregate of $32,000, of which $25,000 was paid in cash on February 12, 2010 and $7,000 was paid through our distribution reinvestment plan in the form of additional shares issued on January 31, 2010. On February 28, 2010, we declared a monthly distribution in the aggregate of $40,000, of which $29,000 was paid in cash on March 15, 2010 and $11,000 was paid through our distribution reinvestment plan in the form of additional shares issued on February 28, 2010.

F-21

SCHEDULE III — REAL ESTATE OPERATING PROPERTIES
AND ACCUMULATED DEPRECIATION
December 31, 2009

				Initial Cost to Company
						Building,		Cost		Gross Amount at Which Carried at Close of Period
						Improvements		Capitalized				Building,
						and		Subsequent to				Improvements				Accumulated		Date of		Date
		Encumbrances		Land		Fixtures		Acquisition		Land		and Fixtures		Total		Depreciation		Construction		Acquired
Moreno Marketplace	Moreno Valley, CA	$	10,490,000	$	3,080,000	$	6,780,000	$	—	$	3,080,000	$	6,780,000	$	9,860,000	$	28,000		2008		11/19/2009
Total		$	10,490,000	$	3,080,000	$	6,780,000	$	—	$	3,080,000	$	6,780,000	$	9,860,000	$	28,000

The aggregate cost of our real estate for federal income tax purposes is $12,936,000.

F-22

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

TNP STRATEGIC RETAIL TRUST, INC.

By:  /s/  Wendy J. Worcester

Wendy J. Worcester

Chief Financial Officer, Treasurer and Secretary

Date: May 17, 2010