Glimcher Realty Trust (GRT) 10-Q 2012 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

x    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2012

OR

¨    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For The Transition Period From _____ To ______

Commission file number 001-12482

GLIMCHER REALTY TRUST

(Exact Name of Registrant as Specified in Its Charter)

Maryland (State or Other Jurisdiction of Incorporation or Organization)	31-1390518 (I.R.S. Employer Identification No.)
180 East Broad Street Columbus, Ohio (Address of Principal Executive Offices)	43215 (Zip Code)

Registrant's telephone number, including area code: (614) 621-9000

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x  No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

(Check One):  Large accelerated filer x    Accelerated filer ¨   Non-accelerated filer ¨   (Do not check if a smaller reporting company)   Smaller reporting company ¨

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

As of April 25, 2012, there were 139,454,681 Common Shares of Beneficial Interest outstanding, par value $0.01 per share.

1

GLIMCHER REALTY TRUST

FORM 10-Q

INDEX

PART I:	FINANCIAL INFORMATION	PAGE
Item 1.	Financial Statements
	Consolidated Balance Sheets as of March 31, 2012 and December 31, 2011.	3
	Consolidated Statements of Operations and Comprehensive (Loss) Income for the three months ended March 31, 2012 and 2011.	4
	Consolidated Statement of Equity for the three months ended March 31, 2012.	5
	Consolidated Statements of Cash Flows for the three months ended March 31, 2012 and 2011.	6
	Notes to Consolidated Financial Statements.	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	39
Item 4.	Controls and Procedures.	39
PART II:	OTHER INFORMATION
Item 1.	Legal Proceedings.	40
Item 1A.	Risk Factors.	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	40
Item 3.	Defaults Upon Senior Securities.	40
Item 4.	Mine Safety Disclosures.	40
Item 5.	Other Information.	40
Item 6.	Exhibits.	40
SIGNATURES		41

2

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements

GLIMCHER REALTY TRUST

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except share and par value amounts)

	March 31, 2012
ASSETS	(unaudited)			December 31, 2011
Investment in real estate:
Land	$	308,476		$	312,496
Buildings, improvements and equipment	1,890,367			1,876,048
Developments in progress	51,534			46,530
	2,250,377			2,235,074
Less accumulated depreciation	645,372			634,279
Property and equipment, net	1,605,005			1,600,795
Deferred costs, net	23,812			24,505
Real estate assets held-for-sale	9,379			4,056
Investment in and advances to unconsolidated real estate entities	120,007			124,793
Investment in real estate, net	1,758,203			1,754,149
Cash and cash equivalents	134,793			8,876
Non-real estate assets associated with property held-for-sale	131			—
Restricted cash	15,406			18,820
Tenant accounts receivable, net	22,611			26,873
Deferred expenses, net	14,527			15,780
Prepaid and other assets	34,961			36,601
Total assets	$	1,980,632		$	1,861,099
LIABILITIES AND EQUITY
Mortgage notes payable	$	1,177,949		$	1,175,053
Notes payable	—			78,000
Other liabilities associated with property held-for-sale	143			127
Accounts payable and accrued expenses	41,970			45,977
Distributions payable	20,354			18,013
Total liabilities	1,240,416			1,317,170
Glimcher Realty Trust shareholders’ equity:
Series F Cumulative Preferred Shares of Beneficial Interest, $0.01 par      value, 2,400,000 shares issued and outstanding	60,000			60,000
Series G Cumulative Preferred Shares of Beneficial Interest, $0.01 par      value, 9,500,000 shares issued and outstanding	222,074			222,074
Common Shares of Beneficial Interest, $0.01 par value, 139,439,471 and      115,975,420 shares issued and outstanding as of March 31, 2012 and      December 31, 2011, respectively	1,395			1,160
Additional paid-in capital	1,234,953			1,016,188
Distributions in excess of accumulated earnings	(791,871		)	(766,571		)
Accumulated other comprehensive loss	(515		)	(483		)
Total Glimcher Realty Trust shareholders’ equity	726,036			532,368
Noncontrolling interest	14,180			11,561
Total equity	740,216			543,929
Total liabilities and equity	$	1,980,632		$	1,861,099

The accompanying notes are an integral part of these consolidated financial statements.

3

GLIMCHER REALTY TRUST

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

(unaudited)

(dollars and shares in thousands, except per share and unit amounts)

	For the Three Months Ended March 31,
	2012			2011
Revenues:
Minimum rents	$	42,750		$	38,598
Percentage rents	1,382			1,333
Tenant reimbursements	20,445			18,923
Other	5,251			5,133
Total revenues	69,828			63,987
Expenses:
Property operating expenses	14,461			14,446
Real estate taxes	8,842			7,343
Provision for doubtful accounts	4,142			964
Other operating expenses	2,665			2,709
Depreciation and amortization	19,556			16,226
General and administrative	5,497			4,954
Total expenses	55,163			46,642
Operating income	14,665			17,345
Interest income	2			330
Interest expense	16,688			18,104
Equity in (loss) income of unconsolidated real estate entities, net	(3,474		)	265
Loss from continuing operations	(5,495		)	(164		)
Discontinued operations:
Income from operations	13			142
Net loss	(5,482		)	(22		)
Add: allocation to noncontrolling interest	263			182
Net (loss) income attributable to Glimcher Realty Trust	(5,219		)	160
Less:  Preferred share dividends	6,137			6,137
Net loss to common shareholders	$	(11,356	)	$	(5,977	)
Earnings Per Common Share (“EPS”):
EPS (basic):
Continuing operations	$	(0.10	)	$	(0.06	)
Discontinued operations	$	0.00		$	0.00
Net loss to common shareholders	$	(0.10	)	$	(0.06	)
EPS (diluted):
Continuing operations	$	(0.10	)	$	(0.06	)
Discontinued operations	$	0.00		$	0.00
Net loss to common shareholders	$	(0.10	)	$	(0.06	)
Weighted average common shares outstanding	117,517			98,234
Weighted average common shares and common share equivalents outstanding	120,271			101,220
Cash distributions declared per common share of beneficial interest	$	0.10		$	0.10
Net loss	$	(5,482	)	$	(22	)
Other comprehensive (loss) income on derivative instruments, net	(33		)	2,374
Comprehensive (loss) income	(5,515		)	2,352
Comprehensive loss (income) attributable to noncontrolling interest	1			(30		)
Comprehensive (loss) income attributable to Glimcher Realty Trust	$	(5,514	)	$	2,322

The accompanying notes are an integral part of these consolidated financial statements.

4

GLIMCHER REALTY TRUST

CONSOLIDATED STATEMENT OF EQUITY

For the Three Months Ended March 31, 2012

(unaudited)

(dollars in thousands, except share, par value and unit amounts)

	Series F Cumulative Preferred Shares		Series G Cumulative Preferred Shares		Common Shares of Beneficial Interest				Additional Paid-In Capital			Distributions In Excess of Accumulated Earnings			Accumulated Other Comprehensive Loss
					Shares		Amount											Noncontrolling Interest			Total
Balance, December 31, 2011	$	60,000	$	222,074	115,975,420		$	1,160	$	1,016,188		$	(766,571	)	$	(483	)	$	11,561		$	543,929
Distributions declared, $0.10 per share												(13,944		)				(273		)	(14,217		)
Distribution reinvestment and share purchase plan					3,220		—		27												27
Exercise of stock options					12,500		—		39												39
Cancellation of restricted stock grant					(35,174	)	—		—												—
OP unit conversion					61,305		1		—												1
Amortization of performance stock									79												79
Amortization of restricted stock									264												264
Preferred stock dividends												(6,137		)							(6,137		)
Net loss												(5,219		)				(263		)	(5,482		)
Other comprehensive loss on derivative instruments															(32		)	(1		)	(33		)
Stock option expense									133												133
Issuances of common stock					23,422,200		234		231,498												231,732
Stock issuance costs									(10,119		)										(10,119		)
Transfer to noncontrolling interest in partnership									(3,156		)							3,156			—
Balance, March 31, 2012	$	60,000	$	222,074	139,439,471		$	1,395	$	1,234,953		$	(791,871	)	$	(515	)	$	14,180		$	740,216

 The accompanying notes are an integral part of these consolidated financial statements.

5

GLIMCHER REALTY TRUST

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(dollars in thousands)

	For the Three Months Ended March 31,
	2012			2011
Cash flows from operating activities:
Net loss	$	(5,482	)	$	(22	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Provision for doubtful accounts	4,172			1,074
Depreciation and amortization	19,576			16,667
Amortization of financing costs	985			2,159
Equity in loss (income) of unconsolidated real estate entities, net	3,474			(265		)
Distributions from unconsolidated real estate entities	1,312			1,720
Capitalized development costs charged to expense	126			—
Gain on sale of outparcel	(146		)	—
Stock compensation expense	476			276
Net changes in operating assets and liabilities:
Tenant accounts receivable, net	3,282			2,073
Prepaid and other assets	(1,735		)	(2,144		)
Accounts payable and accrued expenses	(3,109		)	(6,004		)
Net cash provided by operating activities	22,931			15,534
Cash flows from investing activities:
Additions to investment in real estate	(28,106		)	(16,691		)
Additions to investment in unconsolidated real estate entities	—			(24		)
Proceeds from sale of outparcel	210			—
Withdrawals from restricted cash	3,414			2,150
Additions to deferred costs and other	(1,240		)	(1,495		)
Net cash used in investing activities	(25,722		)	(16,060		)
Cash flows from financing activities:
(Payments to) proceeds from revolving line of credit, net	(78,000		)	2,499
Payments of deferred financing costs	(755		)	(2,642		)
Refund of previously paid financing costs	963			—
Proceeds from issuance of mortgages and other notes payable	77,000			—
Principal payments on mortgages and other notes payable	(74,169		)	(103,180		)
Net proceeds from issuances of common shares	221,613			116,657
Proceeds received from dividend reinvestment and exercise of stock options	66			88
Cash distributions	(18,010		)	(14,941		)
Net cash provided by (used in) financing activities	128,708			(1,519		)
Net change in cash and cash equivalents	125,917			(2,045		)
Cash and cash equivalents, at beginning of year	8,876			9,245
Cash and cash equivalents, at end of period	$	134,793		$	7,200

The accompanying notes are an integral part of these consolidated financial statements.

6

GLIMCHER REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except share and unit amounts)

1. Organization and Basis of Presentation

Organization

Glimcher Realty Trust (“GRT”) is a fully-integrated, self-administered and self-managed Maryland real estate investment trust (“REIT”), which owns, leases, manages and develops a portfolio of retail properties (the “Property” or “Properties”) consisting of enclosed and open-air regional malls, super regional malls (“Malls”), and community shopping centers (“Community Centers”).  At March 31, 2012, GRT both owned interests in and managed 27 Properties, consisting of 24 Malls (19 wholly-owned and five partially owned through joint ventures) and three Community Centers (two wholly-owned and one partially owned through a joint venture). The "Company" refers to GRT and Glimcher Properties Limited Partnership (the "Operating Partnership," "OP" or "GPLP"), a Delaware limited partnership, as well as entities in which the Company has an interest, collectively.

Basis of Presentation

The consolidated financial statements include the accounts of GRT, GPLP and Glimcher Development Corporation (“GDC”).  As of March 31, 2012, GRT was a limited partner in GPLP with a 97.9% ownership interest and GRT’s wholly-owned subsidiary, Glimcher Properties Corporation, was GPLP’s sole general partner, with a 0.1% interest in GPLP.  GDC, a wholly-owned subsidiary of GPLP, provides development, construction, leasing and legal services to the Company’s affiliates and is a taxable REIT subsidiary.  The Company consolidates entities in which it owns more than 50% of the voting equity, and control does not rest with other parties, as well as variable interest entities (“VIE”) in which it is deemed to be the primary beneficiary in accordance with Accounting Standards Codification (“ASC”) Topic 810 – “Consolidation.”  The equity method of accounting is applied to entities in which the Company does not have a controlling direct or indirect voting interest, but can exercise influence over the entity with respect to its operations and major decisions.  These entities are reflected on the Company’s consolidated financial statements as “Investment in and advances to unconsolidated real estate entities.”  All significant intercompany accounts and transactions have been eliminated in the consolidated financial statements.

The consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.  The information furnished in the accompanying Consolidated Balance Sheets, Statements of Operations and Comprehensive (Loss) Income, Statement of Equity, and Statements of Cash Flows reflect all adjustments which are, in the opinion of management, recurring and necessary for a fair statement of the aforementioned financial statements for the interim period.  Operating results for the three months ended March 31, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.

The December 31, 2011 balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S.”).  The consolidated financial statements should be read in conjunction with the notes to the consolidated financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Form 10-K for the year ended December 31, 2011.

No material subsequent events have occurred since March 31, 2012 that required recognition or disclosure in these financial statements.

7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except share and unit amounts)

2. Summary of Significant Accounting Policies

Revenue Recognition

Minimum rents are recognized on an accrual basis over the terms of the related leases on a straight-line basis.  Percentage rents, which are based on tenants’ sales as reported to the Company, are recognized once the sales reported by such tenants exceed any applicable breakpoints as specified in the tenants’ leases.  The percentage rents are recognized based upon the measurement dates specified in the leases which indicate when the percentage rent is due.

Recoveries from tenants for real estate taxes, insurance and other shopping center operating expenses are recognized as revenues in the period that the applicable costs are incurred.  The Company recognizes differences between estimated recoveries and the final billed amounts in the subsequent year.  Other revenues primarily consist of fee income which relates to property management services and other related services and is recognized in the period in which the service is performed, licensing agreement revenues which are recognized as earned, and the proceeds from sales of development land which are generally recognized at the closing date.

Tenant Accounts Receivable

The allowance for doubtful accounts reflects the Company’s estimate of the amount of the recorded accounts receivable at the balance sheet date that will not be recovered from cash receipts in subsequent periods.  The Company’s policy is to record a periodic provision for doubtful accounts based on total revenues.  The Company also periodically reviews specific tenant and other receivable balances and determines whether an additional allowance is necessary.  In recording such a provision, the Company considers a tenant’s or other party's creditworthiness, ability to pay, probability of collections and consideration of the retail sector in which the tenant operates.  The allowance for doubtful accounts is reviewed and adjusted periodically based upon the Company’s historical experience.

Investment in Real Estate – Carrying Value of Assets

The Company maintains a diverse portfolio of real estate assets.  The portfolio holdings have increased as a result of both acquisitions and the development of Properties and have been reduced by selected sales of assets.  The amounts to be capitalized as a result of acquisitions and developments and the periods over which the assets are depreciated or amortized are determined based on the application of accounting standards that may require estimates as to fair value and the allocation of various costs to the individual assets.  The Company allocates the cost of the acquisition based upon the estimated fair value of the net assets acquired.  The Company also estimates the fair value of intangibles related to its acquisitions.  The valuation of the fair value of the intangibles involves estimates related to market conditions, probability of lease renewals, and the current market value of in-place leases.  This market value is determined by considering factors such as the tenant’s industry, location within the Property, and competition in the specific market in which the Property operates.  Differences in the amount attributed to the fair value estimate for intangible assets can be significant based upon the assumptions made in calculating these estimates.

Depreciation and Amortization

Depreciation expense for real estate assets is computed using a straight-line method and estimated useful lives for buildings and improvements using a weighted average composite life of forty years and three to ten years for equipment and fixtures.  Expenditures for leasehold improvements and construction allowances paid to tenants are capitalized and amortized over the initial term of each lease.  Cash allowances paid to tenants that are used for purposes other than improvements to the real estate are amortized as a reduction to minimum rents over the initial lease term.  Maintenance and repairs are charged to expense as incurred.  Cash allowances paid in return for operating covenants from retailers who own their real estate are capitalized as contract intangibles.  These intangibles are amortized over the period the retailer is required to operate their store.

Investment in Real Estate – Impairment Evaluation

Management evaluates the recoverability of its investments in real estate assets.  Long-lived assets are tested on a quarterly basis for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.  An impairment loss is recognized only if the carrying amount of a long-lived asset is not recoverable and exceeds its fair value.

8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except share and unit amounts)

The Company evaluates the recoverability of its investments in real estate assets to be held and used each quarter and records an impairment charge when there is an indicator of impairment and the undiscounted projected cash flows are less than the carrying amount for a particular property.  The estimated cash flows used for the impairment analysis and the determination of estimated fair value are based on the Company’s plans for the respective asset(s) and the Company’s views of market and economic conditions.  The Company evaluates each property that has material reductions in occupancy levels and/or net operating income and conducts a detailed evaluation of the respective property.  The evaluation considers factors such as current and historical rental rates, occupancies for the respective properties and comparable properties, sales contracts for certain land parcels and recent sales data for comparable properties.  Changes in estimated future cash flows due to changes in the Company’s plans or its views of market and economic conditions could result in recognition of impairment losses, which, under the applicable accounting guidance, could be substantial.

Sale of Real Estate Assets

The Company records sales of operating properties and outparcels using the full accrual method at closing when both of the following conditions are met: a) the profit is determinable, meaning that, the collectability of the sales price is reasonably assured or the amount that will not be collectible can be estimated; and b) the earnings process is virtually complete, meaning that the seller is not obligated to perform significant activities after the sale to earn the profit.  Sales not qualifying for full recognition at the time of sale are accounted for under other appropriate deferral methods.

Investment in Real Estate – Held-for-Sale

The Company evaluates the held-for-sale classification of its consolidated real estate assets each quarter.  Assets that are classified as held-for-sale are recorded at the lower of their carrying amount or fair value less cost to sell.  Management evaluates the fair value less cost to sell each quarter and records impairment charges as required.  An asset is generally classified as held-for-sale once management commits to a plan to sell its entire interest in a particular Property which results in no continuing involvement in the asset as well as initiates an active program to market the asset for sale.  In instances where the Company may sell either a partial or entire interest in a Property and has commenced marketing of the Property, the Company evaluates the facts and circumstances of the potential sale to determine the appropriate classification for the reporting period.  Based upon management’s evaluation, if it is expected that the sale will be for a partial interest, the asset is classified as held for investment.  If during the marketing process it is determined the asset will be sold in its entirety, the period of that determination is the period the asset would be reclassified as held-for-sale.  The results of operations for these real estate Properties that are classified as held-for-sale are reflected as discontinued operations in all periods reported.

On occasion, the Company will receive unsolicited offers from third parties to buy individual Properties.  Under these circumstances, the Company will classify the particular Property as held-for-sale when a sales contract is executed with no contingencies and the prospective buyer has funds at risk to ensure performance.

Accounting for Acquisitions

The fair value of the real estate acquired is allocated to acquired tangible assets, consisting of land, buildings and tenant improvements, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, acquired in-place leases and the value of tenant relationships, based in each case on their fair values.  Purchase accounting is applied to assets and liabilities related to real estate entities acquired based upon the percentage of interest acquired.

The fair value of the tangible assets of an acquired property (which includes land, buildings and tenant improvements) is determined by valuing the property as if it were vacant, based on management’s determination of the relative fair values of these assets.  Management determines the as-if-vacant fair value of an acquired property using methods to determine the replacement cost of the tangible assets.

In determining the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market lease values are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between a) the contractual amounts to be paid pursuant to the in-place leases and b) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease.  The capitalized above-market lease values and the capitalized below-market lease values are amortized as an adjustment to rental income over the initial lease term.

9

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except share and unit amounts)

The aggregate value of in-place leases is determined by evaluating various factors, including an estimate of carrying costs during the expected lease-up periods, current market conditions, and similar leases.  In estimating carrying costs, management includes real estate taxes, insurance and other operating expenses, and estimates of lost rental revenue during the expected lease-up periods based on current market demand.  Management also estimates costs to execute similar leases including leasing commissions, legal and other related costs.  The value assigned to this intangible asset is amortized over the remaining lease term plus an assumed renewal period that is reasonably assured.

The aggregate value of other acquired intangible assets includes tenant relationships.  Factors considered by management in assigning a value to these relationships include: assumptions of probability of lease renewals, investment in tenant improvements, leasing commissions, and an approximate time lapse in rental income while a new tenant is located.  The value assigned to this intangible asset is amortized over the average life of the relationship.

Deferred Costs

The Company capitalizes initial direct costs of leases and amortizes these costs over the initial lease term.  The initial direct costs include primarily salaries, commissions and travel of the Company’s leasing and legal personnel.  The costs are capitalized upon the execution of the lease and the amortization period begins the earlier of the store opening date or the date the tenant’s lease obligation begins.

Stock-Based Compensation

The Company expenses the fair value of share awards in accordance with the fair value recognition requirements of ASC Topic 718 - “Compensation-Stock Compensation.”  ASC 718 requires companies to measure the cost of the recipient services received in exchange for an award of an equity instrument based on the grant-date fair value of the award.  The cost of the share award is expensed over the requisite service period (usually the vesting period).

Cash and Cash Equivalents

For purposes of the statements of cash flows, all highly liquid investments purchased with original maturities of three months or less are considered to be cash equivalents.  Cash and cash equivalents primarily consisted of short term securities and overnight purchases of debt securities.  The carrying amounts approximate fair value.

Restricted Cash

Restricted cash consists primarily of cash held for real estate taxes, insurance, property reserves for maintenance, and expansion or leasehold improvements as required by certain of our loan agreements.

Deferred Expenses

Deferred expenses consist principally of financing fees.  These costs are amortized as interest expense over the terms of the respective agreements.  Deferred expenses in the accompanying consolidated balance sheets are shown net of accumulated amortization.

Derivative Instruments and Hedging Activities

The Company accounts for derivative instruments and hedging activities in accordance with ASC Topic 815 - “Derivative and Hedging.”  The objective is to provide users of financial statements with an enhanced understanding of: a) how and why an entity uses derivative instruments; b) how derivative instruments and related hedged items are accounted for under this guidance; and c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows.  It also requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about the fair value of gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments.

10

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except share and unit amounts)

The Company records all derivatives on the balance sheet at fair value.  The accounting for changes in the fair value of derivatives depends on whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting.  Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges.  Also, derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges.  Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge.  The change in fair value of derivative instruments that do not qualify for hedge accounting is recognized in earnings.

Investment in and Advances to Unconsolidated Real Estate Entities

The Company evaluates all joint venture arrangements for consolidation. The percentage interest in the joint venture, evaluation of control and whether the joint venture is a VIE are all considered in determining if the arrangement qualifies for consolidation. The Company evaluates our investments in joint ventures to determine whether such entities may be a VIE, and, if a VIE, whether the Company is the primary beneficiary. Generally, an entity is determined to be a VIE when either (1) the equity investors (if any) lack one or more of the essential characteristics of a controlling financial interest, (2) the equity investment at risk is insufficient to finance that entity's activities without additional subordinated financial support or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The primary beneficiary is the entity that has both (1) the power to direct matters that most significantly impact the VIE's economic performance and (2) the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The Company considers a variety of factors in identifying the entity that holds the power to direct matters that most significantly impact the VIE's economic performance including, but not limited to; the ability to direct financing, leasing, construction and other operating decisions and activities. In addition, the Company considers the rights of other investors to participate in policy making decisions, to replace or remove the manager of the entity and to liquidate or sell the entity. The obligation to absorb losses and the right to receive benefits when a reporting entity is affiliated with a VIE must be based on ownership, contractual, and/or other pecuniary interests in that VIE.

The Company has determined that it is the primary beneficiary in one VIE, and has consolidated it as disclosed in Note  4 - “Investment in Joint Ventures - Consolidated.”

The Company accounts for its investments in unconsolidated real estate entities using the equity method of accounting whereby the cost of an investment is adjusted for the Company’s share of equity in net income or loss beginning on the date of acquisition and reduced by distributions received.  The income or loss of each joint venture investor is allocated in accordance with the provisions of the applicable operating agreements.  The allocation provisions in these agreements may differ from the ownership interest held by each investor.  Any differences between the carrying amount of the Company’s investment in the respective joint venture and the Company’s share of the underlying equity of such unconsolidated entities are amortized over the respective lives of the underlying assets as applicable.

The Company classifies distributions from joint ventures as operating activities if they satisfy all three of the following conditions: the amount represents the cash effect of transactions or events; the amounts result from the joint ventures’ normal operations; and the amounts are derived from activities that enter into the determination of net income.  The Company treats distributions from joint ventures as investing activities if they relate to the following activities: lending money and collecting on loans; acquiring and selling or disposing of available-for-sale or held-to-maturity securities (trading securities are classified based on the nature and purpose for which the securities were acquired); and acquiring and selling or disposing of productive assets that are expected to generate revenue over a long period of time.

11

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except share and unit amounts)

In the instance where the Company receives a distribution made from a joint venture that has the characteristics of both operating and investing activity, management identifies where the predominant source of cash was derived in order to determine its classification in the Consolidated Statements of Cash Flows.  When a distribution is made from operations, it is compared to the available retained earnings within the Property.  Cash distributed that does not exceed the retained earnings of the Property is classified in the Company’s Consolidated Statements of Cash Flows as cash received from operating activities.  Cash distributed in excess of the retained earnings of the Property is classified in the Company’s Consolidated Statements of Cash Flows as cash received from investing activities.

The Company periodically reviews its investment in unconsolidated real estate entities for other than temporary declines in market value.  Any decline that is not considered temporary will result in the recording of an impairment charge to the investment.

Noncontrolling Interest

Noncontrolling interest at March 31, 2012 and December 31, 2011, represents the aggregate partnership interest in the Operating Partnership held by the Operating Partnership limited partner unit holders (the “Unit Holders”).

Income or loss allocated to noncontrolling interest related to the Unit Holders ownership percentage of the Operating Partnership is determined by dividing the number of Operating Partnership Units (“OP Units”) held by the Unit Holders by the total number of OP Units outstanding at the time of the determination.  The issuance of additional common shares of beneficial interest of GRT (the “Common Shares,” “Shares,” “Share,” or “Stock”) or OP Units changes the percentage ownership in the OP Units of both the Unit Holders and the Company.  Because an OP Unit is generally redeemable for cash or Shares at the option of the Company, it is deemed to be equivalent to a Share.  Therefore, such transactions are treated as capital transactions and result in an allocation between shareholders’ equity and noncontrolling interest in the accompanying Consolidated Balance Sheets to account for the change in the ownership of the underlying equity in the Operating Partnership.

Supplemental Disclosure of Non-Cash Operating, Investing, and Financing Activities

The Company's other non-cash activities accounted for changes in the following areas:  a) investment in real estate - $(916), b) mortgage notes payable $(65), c) accounts payable and accrued liabilities - $885, and d) accumulated other comprehensive loss - $32.

Share distributions of $13,944 and $11,597 were declared, but not paid as of March 31, 2012 and December 31, 2011, respectively.  Operating Partnership distributions of $273 and $279 were declared, but not paid as of March 31, 2012 and December 31, 2011, respectively.  Distributions for GRT's 8.75% Series F Cumulative Redeemable Preferred Shares of Beneficial Interest (“Series F Preferred Shares”) of $1,313 were declared, but not paid as of March 31, 2012 and December 31, 2011.  Distributions for GRT's 8.125% Series G Cumulative Redeemable Preferred Shares of Beneficial Interest (“Series G Preferred Shares”) of $4,824 were declared, but not paid as of March 31, 2012 and December 31, 2011.

Comprehensive Income

ASC Topic 220 – “Comprehensive Income” establishes guidelines for the reporting and display of comprehensive income and its components in financial statements.  Comprehensive income includes net income and unrealized gains and losses from fair value adjustments on certain derivative instruments, net of allocations to noncontrolling interest.

Use of Estimates

The preparation of financial statements in conformity with GAAP in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods.  Actual results could differ from those estimates.

Reclassifications

Certain reclassifications of prior period amounts, including the presentation of the Statements of Operations and Comprehensive (Loss) Income required by ASC Topic 205 - “Presentation of Financial Statements” have been made in the financial statements, in order to conform to the 2012 presentation.

12

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except share and unit amounts)

3. Real Estate Assets Held-for-Sale

As required by ASC Topic 360 - “Property, Plant and Equipment,” long-lived assets to be disposed of by sale are measured at the lower of the carrying amount for such assets or fair value less cost to sell.  During the fourth quarter of 2011, the Company entered into a contract to sell a sixty-nine acre parcel of vacant land located near Cincinnati, Ohio. Accordingly, this land is classified as held-for-sale as of March 31, 2012 and December 31, 2011. During the first quarter of 2012, the Company entered into a contract to sell an outparcel located at Northtown Mall. Accordingly, this outparcel is classified as held-for-sale as of March 31, 2012.  The financial results for these assets are reported as discontinued operations in the Consolidated Statements of Operations and Comprehensive (Loss) Income.  The net book value of the assets and liabilities associated with these assets are reflected as held-for-sale in the Consolidated Balance Sheets.  The table below provides information on the held-for-sale assets:

	March 31, 2012		December 31, 2011
Real estate assets held-for-sale	$	9,379	$	4,056
Non-real estate assets associated with Property held-for-sale	$	131	$	—

4. Investment in Joint Ventures – Consolidated

As of March 31, 2012, the Company has an interest in a consolidated joint venture; the VBF Venture (defined below), which qualifies as a VIE under ASC Topic 810. The Company is the primary beneficiary of the joint venture as it has the power to direct activities of the VIE that most significantly impact the VIE’s economic performance, and it has the obligation to absorb losses of the VIE or rights to receive benefits from the VIE that could potentially be significant.

• VBF Venture

On October 5, 2007, an affiliate of the Company entered into an agreement with Vero Venture I, LLC to form Vero Beach Fountains, LLC (the “VBF Venture”).  The VBF Venture is evaluating a potential retail development in Vero Beach, Florida.  The Company contributed $5,000 in cash for a 50% interest in the VBF Venture.  The economics of the VBF Venture require the Company to receive a preferred return and 75% of the distributions from the VBF Venture until such time as the capital contributed by the Company is returned.

The Company did not provide any additional financial support to the VBF Venture during the three months ended March 31, 2012.  Furthermore, the Company does not have any contractual commitments or obligations to provide additional financial support to the VBF Venture.

The carrying amounts and classification of the VBF Venture’s total assets and liabilities at March 31, 2012 and December 31, 2011 are as follows:

	March 31, 2012		December 31, 2011
Investment in real estate, net	$	3,658	$	3,658
Total Assets	$	3,658	$	3,658
Total Liabilities	$	2	$	—

The VBF Venture is a separate legal entity, and is not liable for the debts of the Company.  All of the assets in the table above are restricted for settlement of the joint venture obligations.  Accordingly, creditors of the Company may not satisfy their debts from the assets of the VBF Venture except as permitted by applicable law or regulation, or by agreement.  Also, creditors of the VBF Venture may not satisfy their debts from the assets of the Company except as permitted by applicable law or regulation, or by agreement.

13

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except share and unit amounts)

5. Investment in and Advances to Unconsolidated Real Estate Entities

Investment in unconsolidated real estate entities as of March 31, 2012 consisted of investments in four separate joint venture arrangements (the “Ventures”).  A description of each of the Ventures is provided below:

• Blackstone Joint Venture

This investment consists of a 40% interest held by a GPLP subsidiary in a joint venture with Blackstone ("Blackstone") the (“Blackstone Joint Venture”) that owns and operates both Lloyd Center located in Portland, Oregon and WestShore Plaza located in Tampa, Florida. The Blackstone Joint Venture was formed in March 2010.

• Pearlridge Venture

This investment consists of a 20% interest held by a GPLP subsidiary in a joint venture (the “Pearlridge Venture”) formed in November 2010 with Blackstone.  The Pearlridge Venture owns and operates Pearlridge Center which is located in Aiea, Hawaii.

In March of 2012, the Company executed a contract to purchase the 80% indirect ownership interest in Pearlridge Venture from affiliates of Blackstone. The purchase price for this ownership interest will be approximately $289,400, which includes Blackstone's pro-rata share of the $175,000 mortgage debt currently encumbering the Property, which will remain in place after the closing, resulting in a cash purchase price for Blackstone's interest of $149,400. The transaction is expected to close during the second quarter of 2012.

• ORC Venture

This investment consists of a 52% economic interest held by GPLP in a joint venture (the “ORC Venture”) with an affiliate of Oxford Properties Group (“Oxford”), which is the global real estate platform for the Ontario (Canada) Municipal Employees Retirement System, a Canadian pension plan.  The ORC Venture, formed in December 2005, owns and operates two Mall Properties - Puente Hills Mall in City of Industry, California and Tulsa Promenade ("Tulsa") in Tulsa, Oklahoma.

During the fourth quarter of 2011, the ORC Venture entered into a contingent contract to sell Tulsa. In connection with entering into this contract, the ORC Venture reduced Tulsa's carrying value at December 31, 2011 to an amount consistent with the sales price per the contract. In February of 2012, the contract was terminated during the contingency period. In connection with the first quarter of 2012 quarterly impairment evaluation, as described above in Note 2 - “Summary of Significant Accounting Policies,” the ORC Venture determined a further reduction in the value of Tulsa was warranted due to the uncertainty associated with the terminated sales contract. The Company's proportionate share of this additional impairment loss amounts to $3,932 for the quarter ended March 31, 2012, and is reflected in the 2012 Consolidated Statements of Operations and Comprehensive (Loss) Income within "Equity in (loss) income of unconsolidated real estate entities, net." The Company also reduced the carrying value of a note receivable it made to an affiliate of the ORC Venture. The recorded value of this note was reduced by $3,322 to its estimated net recoverable amount, which is reflected in the Consolidated Statement of Operations and Comprehensive (Loss) Income within "Provision for doubtful accounts."

• Surprise Venture

This investment consists of a 50% interest held by a GPLP subsidiary in a joint venture (the “Surprise Venture”) with the former landowner of the real property. The Surprise Venture, formed in 2006, owns and operates Town Square at Surprise, a 25,000 square foot community shopping center located in Surprise, Arizona.

Individual agreements specify which services the Company is to provide to each Venture. The Company, through its affiliates GDC and GPLP, provides management, development, construction, leasing, legal, housekeeping, and security services for a fee to the Ventures described above.  The Company recognized fee and service income of $2,177 and $2,065 for the three months ended March 31, 2012 and 2011, respectively.

The following Balance Sheets and Statements of Operations, for each period reported, include the Blackstone Joint Venture, Pearlridge Venture, ORC Venture, and the Surprise Venture.

14

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except share and unit amounts)

The net income or loss generated by the Ventures is allocated in accordance with the provisions of the applicable operating agreements.  The summary financial information for the Ventures accounted for using the equity method is presented below:

Balance Sheets	March 31, 2012		December 31, 2011
Assets:
Investment properties at cost, net	$	715,672	$	726,390
Construction in progress	11,309		10,485
Intangible assets (1)	27,740		29,919
Other assets	43,905		46,802
Total assets	$	798,626	$	813,596
Liabilities and members’ equity:
Mortgage notes payable	$	457,125	$	458,937
Notes payable (2)	5,000		5,000
Intangibles (3)	25,466		26,496
Other liabilities	17,159		17,615
	504,750		508,048
Members’ equity	293,876		305,548
Total liabilities and members’ equity	$	798,626	$	813,596
GPLP’s share of members’ equity	$	119,366	$	124,229

(1) Includes value of acquired in-place leases.

(2) Amount represents a note payable to GPLP.

(3) Includes the net value of $4,096 and $4,432 for above-market acquired leases as of March 31, 2012 and December 31, 2011, respectively, and $29,562 and $30,928 for below-market acquired leases as of March 31, 2012 and December 31, 2011, respectively.

	March 31, 2012		December 31, 2011
Members’ equity	$	119,366	$	124,229
Advances and additional costs	641		564
Investment in and advances to unconsolidated real estate entities	$	120,007	$	124,793

	For the Three Months Ended March 31,
Statements of Operations	2012			2011
Total revenues	$	30,570		$	30,900
Operating expenses	15,160			14,975
Depreciation and amortization	9,259			9,447
Impairment loss	7,562			—
Operating (loss) income	(1,411		)	6,478
Other expenses, net	159			99
Interest expense, net	5,694			6,148
Net (loss) income	(7,264		)	231
Preferred dividend	8			8
Net (loss) income from the Company’s unconsolidated real estate entities	$	(7,272	)	$	223
GPLP’s share of (loss) income from unconsolidated real estate entities	$	(3,474	)	$	265

15

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except share and unit amounts)

6. Tenant Accounts Receivable, net

The Company’s accounts receivable is comprised of the following components:

Accounts Receivable, net – Assets Held-for-Investment:	March 31, 2012			December 31, 2011
Billed receivables	$	4,499		$	6,071
Straight-line receivables	17,762			17,287
Unbilled receivables	4,500			7,249
Less:  allowance for doubtful accounts	(4,150		)	(3,734		)
Tenant accounts receivable, net	$	22,611		$	26,873

Accounts Receivable, net – Assets Held-for-Sale (1):	March 31, 2012		December 31, 2011
Billed receivables	$	—	$	—
Straight-line receivables	131		—
Unbilled receivables	—		—
Less:  allowance for doubtful accounts	—		—
Tenant accounts receivable, net	$	131	$	—

(1)Included in non-real estate assets associated with Property held-for-sale.

16

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except share and unit amounts)

7. Mortgage Notes Payable

Mortgage notes payable as of March 31, 2012 and December 31, 2011 consist of the following:

Description/Borrower	Carrying Amount of Mortgage Notes Payable						Interest Rate				Interest Terms	Payment Terms	Payment at Maturity		Maturity Date
	2012			2011			2012		2011
Fixed Rate:
Dayton Mall Venture, LLC	$	50,194		$	50,529		8.27	%	8.27	%	(i)	(a)	$	49,864	(e)
PFP Columbus, LLC	127,787			128,570			5.24	%	5.24	%		(a)	$	124,572	April 11, 2013
JG Elizabeth, LLC	142,993			143,846			4.83	%	4.83	%		(a)	$	135,194	June 8, 2014
MFC Beavercreek, LLC	98,989			99,551			5.45	%	5.45	%		(a)	$	92,762	November 1, 2014
Glimcher Supermall Venture, LLC	53,990			54,309			7.54	%	7.54	%	(i)	(a)	$	49,969	(f)
Glimcher Merritt Square, LLC	55,800			55,999			5.35	%	5.35	%		(a)	$	52,914	September 1, 2015
SDQ Fee, LLC	68,566			68,829			4.91	%	4.91	%		(a)	$	64,577	October 1, 2015
RVM Glimcher, LLC	47,917			48,097			5.65	%	5.65	%		(a)	$	44,931	January 11, 2016
WTM Glimcher, LLC	60,000			60,000			5.90	%	5.90	%		(b)	$	60,000	June 8, 2016
EM Columbus II, LLC	41,239			41,388			5.87	%	5.87	%		(a)	$	38,057	December 11, 2016
Glimcher MJC, LLC	54,007			54,153			6.76	%	6.76	%		(a)	$	47,768	May 6, 2020
Grand Central Parkersburg, LLC	44,140			44,277			6.05	%	6.05	%		(a)	$	38,307	July 6, 2020
ATC Glimcher, LLC	41,681			41,833			4.90	%	4.90	%		(a)	$	34,569	July 6, 2021
Leawood TCP, LLC	76,908			—			5.00	%	—			(a)	$	52,465	(o)
Tax Exempt Bonds (k)	19,000			19,000			6.00	%	6.00	%		(c)	$	19,000	November 1, 2028
	983,211			910,381
Variable Rate:
Catalina Partners, LP	40,000			40,000			3.40	%	3.41	%	(j)	(n)	$	40,000	(g)
Kierland Crossing, LLC	140,633			140,633			2.85	%	2.86	%	(h)	(b)	$	140,633	(d)
SDQ III Fee, LLC	15,000			15,000			3.14	%	3.20	%	(l)	(b)	$	15,000	(m)
	195,633			195,633
Other:
Fair value adjustments	(895		)	(961		)
Extinguished debt	—			70,000					3.30	%
Mortgage Notes Payable	$	1,177,949		$	1,175,053

(a) The loan requires monthly payments of principal and interest.

(b) The loan requires monthly payments of interest only.

(c) The loan requires semi-annual payments of interest.

(d) The loan matures on May 29, 2012; however, the Company has a one-year extension option that would extend the maturity date of the loan to May 29, 2013.

(e) The loan matures in July 2027, with an optional prepayment (without penalty) date on July 11, 2012.

(f) The loan matures in September 2029, with an optional prepayment (without penalty) date on February 11, 2015.

(g) The loan matured on April 23, 2012; however, the Company exercised its option to extend the maturity date of the loan to April 23, 2013. In April 2012, the Company reduced the loan amount by $6,200 to a balance of $33,800.

(h) Interest rate of LIBOR plus 2.50%.  $125,000 was fixed through a swap agreement at a rate of 2.86% at March 31, 2012 and December 31, 2011.

(i) Interest rate escalates after optional prepayment date.

(j) Interest rate of LIBOR plus 3.0% and increasing to LIBOR plus 3.5% during the extension period.  $30,000 has been fixed through a swap agreement at a rate of 3.45% at March 31, 2012 and December 31, 2011.

(k) The bonds were issued by the New Jersey Economic Development Authority as part of the financing for the development of the Jersey Gardens Mall site.  Although not secured by the Property, the loan is fully guaranteed by GRT.

(l) Interest rate of LIBOR plus 2.9%.

(m) The loan matures on June 1, 2012; however, the Company has a six-month extension option that would extend the maturity date of the loan to December 1, 2012.

(n) The loan requires monthly payments of interest only through the maturity date. During the extension period, monthly payments of principal and interest are required.

(o) The loan has a 15-year term based on a call date of February 1, 2027.

All mortgage notes payable are collateralized by the respective Properties having net book values of $1,395,230 and $1,384,982 at March 31, 2012 and December 31, 2011, respectively. Certain loans listed above contain financial covenants regarding minimum net operating income and coverage ratios. Management believes the Company's affiliate borrowers are in compliance with all covenants at March 31, 2012. Additionally, $123,000 of mortgage notes payable relating to certain Properties, including $19,000 of tax exempt bonds issued as part of the financing for the development of Jersey Gardens remain guaranteed by GRT as of March 31, 2012.

17

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except share and unit amounts)

8. Note Payable

GPLP's secured credit facility (the “Credit Facility”) has a total borrowing availability of $250,000. GPLP may increase the total borrowing availability to $400,000 by providing additional collateral and adding new financial institutions as facility lenders or obtaining the agreement from the existing lenders to increase their lending commitment.  The Credit Facility matures on October 12, 2014 and contains an option to extend the maturity date an additional year to October 12, 2015. The interest rate ranges from LIBOR plus 2.00% to LIBOR plus 2.75% based upon the quarterly measurement of our consolidated debt outstanding as a percentage of total asset value. The applicable interest rate as of March 31, 2012 is LIBOR plus 2.25%. The Credit Facility is secured by perfected first mortgage liens with respect to four of the Company's Mall Properties, two Community Center Properties, and certain other assets. The Credit Facility contains customary covenants, representations, warranties and events of default, including maintenance of a specified net worth requirement; a consolidated debt outstanding as a percentage of total asset value ratio; an interest coverage ratio; a fixed charge ratio; and a total recourse debt outstanding as a percentage of total asset value ratio.  Management believes GPLP is in compliance with all covenants of the Credit Facility as of March 31, 2012.

At March 31, 2012, the commitment level on the Credit Facility was $250,000 and the outstanding balance was $0.  Additionally, $327 represented a holdback on the available balance for letters of credit issued under the Credit Facility.  As of March 31, 2012, and accounting for the aforementioned holdback, the unused balance of the Credit Facility available to the Company was $249,673.

At December 31, 2011, the commitment level on the Credit Facility was $250,000 and the outstanding balance was $78,000.  Additionally, $327 represented a holdback on the available balance for letters of credit issued under the Credit Facility.  As of December 31, 2011, the unused balance of the Credit Facility available to the Company was $171,673 and the average interest rate on the outstanding balance was 2.71% per annum.

9. Equity Offerings

On March 27, 2012, GRT completed a secondary public offering of 23,000,000 Common Shares at a price of $9.90 per share, which included 3,000,000 Common Shares issued and sold upon the full exercise of the underwriters' option to purchase additional Common Shares. The net proceeds to GRT from the offering, after deducting underwriting commissions, discounts, and offering expenses, were $217,726.

During the three months ended March 31, 2012, GRT issued 422,200 Common Shares under an at-the-market equity offering program (the "GRT ATM Program") at a weighted average issue price of $9.55 per Common Share, generating net proceeds of $3,887 after deducting $145 of offering related costs and commissions. GRT used the proceeds from the GRT ATM Program to reduce the outstanding balance under the Credit Facility. As of March 31, 2012, GRT had $53,238 available for issuance under the GRT ATM Program.

10. Derivative Financial Instruments

Risk Management Objective of Using Derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its debt funding and through the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future uncertain cash amounts, the value of which are determined by interest rates. The Company's derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company's known or expected cash payments related to the Company's borrowings.

Cash Flow Hedges of Interest Rate Risk

The Company's objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The Company has elected to designate all interest rate swaps as cash flow hedging relationships.

18

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except share and unit amounts)

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in “Accumulated other comprehensive loss” (“OCL”) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the three months ended March 31, 2012 and 2011, such derivatives were used to hedge the variable cash flows associated with our existing variable-rate debt. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. The Company recognized $0 and $32 of hedge ineffectiveness in earnings during the three months ended March 31, 2012 and 2011, respectively.

Amounts reported in OCL related to derivatives that will be reclassified to interest expense as interest payments are made on the Company's variable-rate debt. During the next twelve months, the Company estimates that an additional $31 will be reclassified as an increase to interest expense.

As of March 31, 2012, the Company had two outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk with a notional value of $155,000. Both derivative instruments were interest rate swaps.

The table below presents the fair value of the Company's derivative financial instruments as well as their classification on the Consolidated Balance Sheets as of March 31, 2012 and December 31, 2011.

	Liability Derivatives
	As of March 31, 2012			As of December 31, 2011
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments:
Interest Rate Products	Accounts Payable & Accrued Expenses	$	31	Accounts Payable & Accrued Expenses	$	(2	)

The derivative instruments were reported at their fair value of $31 and $(2) in accounts payable and accrued expenses at March 31, 2012 and December 31, 2011, respectively, with a corresponding adjustment to OCL for the unrealized gains and losses (net of noncontrolling interest allocation). Over time, the unrealized gains and losses held in OCL will be reclassified to earnings. This reclassification will correlate with the recognition of the hedged interest payments in earnings.

The table below presents the effect of the Company's derivative financial instruments on the Consolidated Statements of Operations and Comprehensive (Loss) Income for the three months ended March 31, 2012 and 2011:

Derivatives in Cash Flow Hedging Relationships	Amount of Gain or (Loss) Recognized in OCL on Derivative (Effective Portion)					Location of Gain or (Loss) Reclassified from Accumulated OCL into Income (Effective Portion)	Amount of Gain or (Loss) Reclassified from Accumulated OCL into Income (Effective Portion)						Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
	March 31,						March 31,							March 31,
	2012			2011			2012			2011				2012		2011
Interest Rate Products	$	(76	)	$	376	Interest expense	$	(43	)	$	(1,998	)	Interest expense	$	—	$	32

During the three months ended March 31, 2012, the Company recognized additional other comprehensive income of $(33), to adjust the carrying amount of the interest rate swaps to their fair values at March 31, 2012, net of $43 in reclassifications to earnings for interest rate swap settlements during the period. The Company allocated $(1) of OCL to the noncontrolling interest during the three months ended March 31, 2012.

19

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except share and unit amounts)

During the three months ended March 31, 2011, the Company recognized additional other comprehensive income of $2,374, to adjust the carrying amount of the interest rate swaps to their fair values at March 31, 2011, net of $1,998 in reclassifications to earnings for interest rate swap settlements during the period. The Company allocated $30 of OCL to the noncontrolling interest during the three months ended March 31, 2011. The interest rate swap settlements were offset by a corresponding adjustment in interest expense related to the interest payments being hedged.

Non-designated Hedges

The Company does not use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated as hedges.

Credit risk-related Contingent Features

The Company has agreements with each of its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its consolidated indebtedness, then the Company could also be declared in default on its derivative obligations.

The Company has agreements with its derivative counterparties that incorporate the loan covenant provisions of the Company's indebtedness with a lender affiliate of the derivative counterparty. Failure to comply with the loan covenant provisions would result in the Company being in default on any derivative instrument obligations covered by the agreement.

The Company has agreements with its derivative counterparties that incorporate provisions from its indebtedness with a lender affiliate of the derivative counterparty requiring it to maintain certain minimum financial covenant ratios on its indebtedness. Failure to comply with the covenant provisions would result in the Company being in default on any derivative instrument obligations covered by the agreement.

As of March 31, 2012, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $49. As of March 31, 2012, the Company has not posted any collateral related to these agreements. The Company is not in default with any of these provisions. If the Company had breached any of these provisions at March 31, 2012, it would have been required to settle its obligations under the agreements at their termination value of $49.

11. Fair Value Measurements

The Company measures and discloses its fair value measurements in accordance with ASC Topic 820 – “Fair Value Measurements and Disclosure” (“Topic 820”).Topic 820 guidance emphasizes that fair value is a market-based measurement, not an entity-specific measurement.  Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability.  As a basis for considering market participant assumptions in fair value measurements, Topic 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).  The fair value hierarchy, as defined by Topic 820, contains three levels of inputs that may be used to measure fair value as follows:

• Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access.

• Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly such as interest rates, foreign exchange rates, and yield curves, that are observable at commonly quoted intervals.

• Level 3 inputs are unobservable inputs for the asset or liability which are typically based on an entity’s own assumptions, as there is little, if any, related market activity.

20

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except share and unit amounts)

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety.  The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

The Company has derivatives that must be measured under the fair value standard.  The Company currently does not have any non-financial assets and non-financial liabilities that are required to be measured at fair value on a recurring basis.

Derivative financial instruments

The Company uses interest rate swaps to manage its interest rate risk.  The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative.  This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, foreign exchange rates, and implied volatilities.  Based on these inputs the Company has determined that its interest rate swap valuations are classified within Level 2 of the fair value hierarchy.

To comply with the provisions of Topic 820, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements.  In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties.  However, as of March 31, 2012, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives.  As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

Recurring Valuations

The Company values its derivative instruments, net using significant other observable inputs (Level 2).

Nonrecurring Valuations

In connection with the quarterly impairment evaluation described in Note 2 – “Summary of Significant Accounting Policies,” management determined that it was more likely than not that a planned retail project on a sixty-nine acre parcel located near Cincinnati, Ohio would not be developed as previously planned.  In accordance with ASC 360 – “Property Plant and Equipment” the Company reduced the carrying value of the asset to its estimated net realizable value and recorded an $8,995 impairment loss during the year ended December 31, 2011. The Company valued the parcel based upon an independent review of comparable land sales.

The table below presents the Company’s assets and liabilities measured at fair value as of March 31, 2012 and December 31, 2011, aggregated by the level in the fair value hierarchy within which those measurements fall:

	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level3)		Balance at March 31, 2012
Liabilities:
Derivative instruments, net	$	—	$	31	$	—	$	31

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except share and unit amounts)

	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level3)		Balance at December 31, 2011
Assets:
Developments in progress	$	—	$	—		$	4,056	$	4,056
Liabilities:
Derivative instruments, net	$	—	$	(2	)	$	—	$	(2	)

12. Stock-Based Compensation

Restricted Common Shares

Shares of restricted Common Stock are granted pursuant to GRT’s 2004 Amended and Restated Incentive Compensation Plan (the “2004 Plan”). Restricted Common Shares issued to GRT's senior executive officers for the years ended December 31, 2011, 2010, and 2009 vest in one-third installments over a period of five (5) years beginning on the third anniversary of the grant date. Restricted Common Shares issued for the year ended December 31, 2011 to non-employee members of GRT's Board of Trustees vest in one-third installments over a period of three (3) years beginning on the one year anniversary of the grant date. The restricted Common Stock value is determined by the Company’s closing market share price on the grant date. As restricted Common Stock represents an incentive for future periods, the Company recognizes the related compensation expense ratably over the applicable vesting periods.

The compensation expense for all restricted Common Shares for the three months ended March 31, 2012 and 2011 was $264 and $231, respectively.  The amount of compensation expense related to unvested restricted shares that the Company expects to expense in future periods, over a weighted average period of 3.3 years, is $2,533 as of March 31, 2012.

Share Option Plans

Options granted under the Company’s share option plans generally vest over a three-year period, with options exercisable at a rate of 33.3% per annum beginning with the first anniversary of the grant date.  The options generally expire on the tenth anniversary of the grant date.  The fair value of each option grant is estimated on the date of the grant using the Black-Scholes options pricing model and is amortized over the requisite vesting period.  Compensation expense recorded for the Company’s share option plans was $133 and $45 for the three months ended March 31, 2012 and 2011, respectively.

Performance Shares

During the year ended December 31, 2011, GRT allocated 103,318 performance shares to certain of its executive officers under the 2011 Glimcher Long-Term Incentive Compensation Plan (the “Incentive Plan”).  Under the terms of the Incentive Plan, an Incentive Plan participant’s allocation of performance shares are convertible into Common Shares as determined by the outcome of GRT’s relative total shareholder return (“TSR”) for its Common Shares during the period of January 1, 2011 to December 31, 2013 (the “Performance Period”), as compared to the TSR for the common shares of a selected group of twenty-four retail oriented real estate investment trusts.

The compensation expense recorded for the Incentive Plan was calculated in accordance with ASC Topic 718 - “Compensation-Stock Compensation.”   The fair value of the unearned portion of the performance share awards was determined utilizing the Monte Carlo simulation technique and will be amortized to compensation expense over the Performance Period.  The fair value of the performance shares allocated under the Incentive Plan was determined to be $8.64 per share for a total compensation amount of $893 to be recognized over the Performance Period.  The amount of compensation expense related to the Incentive Plan for the three months ended March 31, 2012 was $79.  As the performance shares were issued after March 31, 2011, the Company did not record any compensation expense during the three months ended March 31, 2011 relating to the Incentive Plan.

22

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except share and unit amounts)

13. Commitments and Contingencies

At March 31, 2012, there were 2.7 million OP Units outstanding.  These OP Units are redeemable, at the option of the holders, beginning on the first anniversary of their issuance.  The redemption price for an OP Unit shall be, at the option of GPLP, payable in the following form and amount: a) cash at a price equal to the fair market value of one Common Share of GRT or b) one Common Share for each OP Unit.  The fair value of the OP Units outstanding at March 31, 2012 is $27,716 based upon a per unit value of $10.16 at March 31, 2012 (based upon a five-day average closing price of the Common Stock from March 23, 2012 to March 29, 2012).

14. Earnings Per Common Share (shares in thousands)

The presentation of basic EPS and diluted EPS is summarized in the table below:

	For the Three Months Ended March 31,
	2012							2011
Basic EPS:	Income			Shares	Per Share			Income			Shares	Per Share
Loss from continuing operations	$	(5,495	)					$	(164	)
Less:  preferred stock dividends	(6,137		)					(6,137		)
Noncontrolling interest adjustments (1)	263							186
Loss from continuing operations	$	(11,369	)	117,517	$	(0.10	)	$	(6,115	)	98,234	$	(0.06	)
Income from discontinued operations	$	13						$	142
Noncontrolling interest adjustments (1)	—							(4		)
Income from discontinued operations	$	13		117,517	$	0.00		$	138		98,234	$	0.00
Net loss to common shareholders	$	(11,356	)	117,517	$	(0.10	)	$	(5,977	)	98,234	$	(0.06	)
Diluted EPS:
Loss from continuing operations	$	(5,495	)	117,517				$	(164	)	98,234
Less:  preferred stock dividends	(6,137		)					(6,137		)
Operating partnership units				2,754							2,986
Loss from continuing operations	$	(11,632	)	120,271	$	(0.10	)	$	(6,301	)	101,220	$	(0.06	)
Income from discontinued operations	$	13		120,271	$	0.00		$	142		101,220	$	0.00
Net loss to common shareholders before noncontrolling interest	$	(11,619	)	120,271	$	(0.10	)	$	(6,159	)	101,220	$	(0.06	)

(1) The noncontrolling interest adjustment reflects the allocation of noncontrolling interest expense to continuing and discontinued operations for appropriate allocation in the calculation of the earnings per share.

All Common Share equivalents have been excluded as of March 31, 2012 and 2011.  GRT has issued restricted Common Shares which have non-forfeitable rights to dividends immediately after issuance.  These shares are considered participating securities and are included in the weighted average outstanding share amounts.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except share and unit amounts)

15. Discontinued Operations

Financial results of Properties sold or classified as held-for-sale by the Company are reflected in discontinued operations for all periods reported in the Consolidated Statements of Operations and Comprehensive (Loss) Income.  The table below summarizes key financial results for these discontinued operations:

	For the Three Months Ended March 31,
	2012			2011
Revenues	$	107		$	2,034
Operating expenses	(95		)	(1,101		)
Operating income	12			933
Interest income (expense), net	1			(791		)
Net income from discontinued operations	$	13		$	142

The reduction in revenues, operating expenses and interest expense for the three months ended March 31, 2012 as compared to March 31, 2011 relate primarily to Polaris Towne Center, which was sold during the fourth quarter of 2011.

16.  Intangible Assets Associated with Acquisitions

Intangibles assets as of March 31, 2012, which were recorded at the respective acquisition dates, are associated with acquisitions of Eastland Mall in Columbus, Ohio, Polaris Fashion Place in Columbus, Ohio, Merritt Square Mall in Merritt Island, Florida, and Town Center Plaza located in Leawood, Kansas.

Gross intangibles are comprised of an asset for acquired above-market leases of $7,514, a liability for acquired below-market leases of $15,242, an asset for tenant relationships of $2,689, and an asset for in-place leases for $11,875.  Intangibles related to above and below-market leases are primarily amortized as a net increase to minimum rents on a straight-line basis over the lives of the leases with a remaining weighted average amortization period of 8.9 years.  Amortization of the tenant relationships is recorded as amortization expense on a straight-line basis over an estimated remaining life of 4.8 years.  Amortization of the in-place leases is being recorded as amortization expense over the life of the leases to which they pertain with a remaining weighted amortization period of 6.7 years.

Net amortization for all of the acquired intangibles is a decrease to net income in the amount of $492 and $24 for the three months ended March 31, 2012 and 2011, respectively. The amortization for the three months ended March 31, 2011 also includes activity from Polaris Towne Center which was sold during December 2011. The table below identifies the account balances of the intangible assets as well as their location on the Consolidated Balance Sheets as of March 31, 2012 and December 31, 2011.

		Balance as of
Intangible Asset/Liability	Location on the Consolidated Balance Sheets	March 31, 2012			December 31, 2011
Above-Market Leases	Accounts payable and accrued expenses	$	4,184		$	4,327
Below-Market Leases	Accounts payable and accrued expenses	$	(5,261	)	$	(5,548	)
Tenant Relationships	Prepaid and other assets	$	983		$	1,034
In-Place Leases	Building, improvements, and equipment	$	6,687		$	7,272

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except share and unit amounts)

17. Fair Value of Financial Instruments

The carrying values of cash and cash equivalents, restricted cash, tenant accounts receivable, accounts payable and accrued expenses are reasonable estimates of their fair values because of the short maturity of these financial instruments.  The carrying value of the Credit Facility is also a reasonable estimate of its fair value because it bears variable rate interest at current market rates.  Based on the discounted amount of future cash flows using rates currently available to GRT for similar liabilities (ranging from 2.85% to 6.00% per annum at March 31, 2012 and from 2.89% to 6.25% at December 31, 2011), the fair value of GRT's mortgage notes payable is estimated at $1,212,854 and $1,205,046 at March 31, 2012 and December 31, 2011, respectively, compared to its carrying amounts of $1,177,949 and $1,175,053, respectively.  The fair value of the debt instruments considers in part the credit of GRT as an entity and not just the individual entities and Properties owned by GRT.

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

The following should be read in conjunction with the unaudited consolidated financial statements of Glimcher Realty Trust (“GRT” or the “Company”) including the respective notes thereto, all of which are included in this Form 10-Q.

This Form 10-Q, together with other statements and information publicly disseminated by GRT, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  Such statements are based on assumptions and expectations which may not be realized and are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated.  Future events and actual results, financial and otherwise, may differ from the results discussed in the forward-looking statements.  Risks and other factors that might cause differences, some of which could be material, include, but are not limited to, changes in political, economic or market conditions generally and the real estate and capital markets specifically; impact of increased competition; availability of capital and financing; tenant or joint venture partner(s) bankruptcies; failure to increase mall store occupancy and same-mall operating income; rejection of leases by tenants in bankruptcy; financing and development risks; construction and lease-up delays; cost overruns; the level and volatility of interest rates; the rate of revenue increases as compared to expense increases; the financial stability of tenants within the retail industry; the failure of the Company to make additional investments in regional mall properties and to redevelop properties; failure of the Company to comply or remain in compliance with the covenants in our debt instruments, including, but not limited to, the covenants under our corporate credit facility; defaults by the Company under its debt instruments; failure to complete proposed or anticipated acquisitions; the failure to sell properties as anticipated and to obtain estimated sale prices; the failure to upgrade our tenant mix; restrictions in current financing arrangements; the failure to fully recover tenant obligations for common area maintenance, insurance, taxes and other property expense; the impact of changes to tax legislation and, generally, our tax position; the failure of GRT to qualify as a real estate investment trust (“REIT”); the failure to refinance debt at favorable terms and conditions; inability to exercise available extension options on debt instruments; impairment charges with respect to Properties (defined herein) as well as additional impairment charges with respect to Properties for which there has been a prior impairment charge; loss of key personnel; material changes in GRT’s dividend rates on its securities or the ability to pay its dividend on its common shares or other securities; possible restrictions on our ability to operate or dispose of any partially-owned Properties; failure to achieve earnings/funds from operations targets or estimates; conflicts of interest with existing joint venture partners; failure to achieve projected returns on development or investment properties; changes in generally accepted accounting principles or interpretations thereof; terrorist activities and international hostilities, which may adversely affect the general economy, domestic and global financial and capital markets, specific industries and us; the unfavorable resolution of legal proceedings; the impact of future acquisitions and divestitures; significant costs related to environmental issues; bankruptcies of lending institutions participating in the Company’s construction loans and corporate credit facility; as well as other risks listed from time to time in the Company’s Form 10-K and in the Company’s other reports and statements filed with the Securities and Exchange Commission (“SEC”).

Overview

GRT is a fully-integrated, self-administered and self-managed REIT which commenced business operations in January 1994 at the time of its initial public offering.  The “Company,” “we,” “us” and “our” are references to GRT, Glimcher Properties Limited Partnership (“GPLP” or “Operating Partnership”), as well as entities in which the Company has an interest.  We own, lease, manage and develop a portfolio of retail properties (“Properties”) consisting of enclosed and open-air regional malls, super regional malls (“Malls”), and community shopping centers (“Community Centers”).  As of March 31, 2012, we owned interests in and managed 27 Properties located in 15 states, consisting of 24 Malls (five of which are partially owned through joint ventures) and three Community Centers (one of which is partially owned through a joint venture).  The Properties contain an aggregate of approximately 21.5 million square feet of gross leasable area (“GLA”) of which approximately 93.8% was occupied at March 31, 2012.

Our primary business objective is to achieve growth in net income and Funds From Operations (“FFO”) by developing and acquiring retail properties, by improving the operating performance and value of our existing portfolio through selective expansion and renovation of our Properties, and by maintaining high occupancy rates, increasing minimum rents per square-foot of GLA, and aggressively controlling costs.

26

Key elements of our growth strategies and operating policies are to:

• Increase Property values by aggressively marketing available GLA and renewing existing leases;

• Negotiate and sign leases which provide for regular or fixed contractual increases to minimum rents;

• Capitalize on management’s long-standing relationships with national and regional retailers and extensive experience in marketing to local retailers, as well as exploit the leverage inherent in a larger portfolio of properties in order to lease available space;

• Establish and capitalize on strategic joint venture relationships to maximize capital resource availability;

• Utilize our team-oriented management approach to increase productivity and efficiency;

• Hold Properties for long-term investment and emphasize regular maintenance, periodic renovation and capital improvements to preserve and maximize value;

• Selectively dispose of assets we believe have achieved long-term investment potential and redeploy the proceeds;

• Strategic acquisitions of high quality retail properties subject to market conditions and availability of capital;

• Capitalize on opportunities to raise additional capital on terms consistent with the Company’s long term objectives as market conditions may warrant;

• Control operating costs by utilizing our employees to perform management, leasing, marketing, finance, accounting, construction supervision, legal and information technology services;

• Renovate, reconfigure or expand Properties and utilize existing land available for expansion and development of outparcels to meet the needs of existing or new tenants; and

• Utilize our development capabilities to develop quality properties at low cost.

Our strategy is to be a leading REIT focusing on enclosed malls and other anchored retail properties located primarily in the top 100 metropolitan statistical areas by population.  We expect to continue investing in select development opportunities and in strategic acquisitions of mall and other anchored retail properties that provide growth potential while disposing of non-strategic assets.

Critical Accounting Policies and Estimates

General

Management’s Discussion and Analysis of Financial Condition and Results of Operations are based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles (“GAAP”).  The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.  Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.  Senior management has discussed the development, selection and disclosure of these estimates with the Audit Committee of the Board of Trustees.  Actual results may differ from these estimates under different assumptions or conditions.

An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that are reasonably likely to occur could materially impact the financial statements.  No material changes to our critical accounting policies have occurred since the fiscal year ended December 31, 2011.

27

Funds From Operations

Our consolidated financial statements have been prepared in accordance with GAAP.  We have indicated that FFO is a key measure of financial performance.  FFO is an important and widely used financial measure of operating performance in our industry, which we believe provides important information to investors and a relevant basis for comparison among REITs.

We believe that FFO is an appropriate and valuable non-GAAP measure of our operating performance because real estate generally appreciates over time or maintains a residual value to a much greater extent than personal property and, accordingly, reductions for real estate depreciation and amortization charges are not meaningful in evaluating the operating results of the Properties.

FFO is defined by the National Association of Real Estate Investment Trusts, or “NAREIT,” as net income (or loss) available to common shareholders computed in accordance with GAAP, excluding gains or losses from sales of depreciable property, impairment adjustments associated with depreciable real estate, plus real estate related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures. The Company's FFO may not be directly comparable to similarly titled measures reported by other real estate investment trusts. FFO does not represent cash flow from operating activities in accordance with GAAP and should not be considered as an alternative to net income (determined in accordance with GAAP), as an indication of our financial performance or to cash flow from operating activities (determined in accordance with GAAP), as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make cash distributions.

The following tables illustrate the calculation of FFO and the reconciliation of FFO to net loss to common shareholders for the three months ended March 31, 2012 and 2011 (in thousands):

	For the Three Months Ended March 31,
	2012			2011
Net loss to common shareholders	$	(11,356	)	$	(5,977	)
Add back (less):
Real estate depreciation and amortization	19,054			16,145
Equity in loss (income) of unconsolidated entities, net	3,474			(265		)
Pro-rata share of unconsolidated entities funds from operations	3,564			3,484
Noncontrolling interest in operating partnership	(263		)	(182		)
Funds From Operations	$	14,473		$	13,205

FFO increased by $1.3 million, or 9.6%, for the three months ended March 31, 2012, as compared to the three months ended March 31, 2011.  During the three months ended March 31, 2012, we experienced a $4.2 million increase in minimum rents when compared to the three months ended March 31, 2011. This increase in minimum rents was primarily driven by our December 2011 acquisition of Town Center Plaza ("Town Center") located in Leawood, Kansas and by new tenant openings during the period at Scottsdale Quarter. Also, we experienced a $1.4 million decrease in interest expense. This decrease was driven by lower outstanding borrowings. Also contributing to the decrease in interest were charges related to the termination of interest rate protection agreements during the three months ended March 31, 2011, which we did not incur during the three months ended March 31, 2012.

Offsetting these increases to FFO, we reduced the carrying amount of a note receivable from Tulsa Promenade REIT, LLC (“Tulsa REIT”), an affiliate of the venture (the "ORC Venture") that owns Tulsa Promenade (“Tulsa”), by $3.3 million that was recorded as a provision for doubtful accounts. During the three months ended March 31, 2012, the sales contract for Tulsa was terminated during the contingency period. Based upon the current marketing efforts ongoing to sell Tulsa, the ORC Venture reduced the estimated sales value of the property and determined that the estimated proceeds from the sale would not be sufficient to pay the note receivable that the Company held from Tulsa REIT. Accordingly, we reduced the value of the note receivable from Tulsa REIT to its estimated net recoverable amount.

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Results of Operations – Three Months Ended March 31, 2012 Compared to Three Months Ended March 31, 2011

Revenues

Total revenues increased 9.1%, or $5.8 million, for the three months ended March 31, 2012 compared to the three months ended March 31, 2011.  Of this amount, minimum rents increased $4.2 million, percentage rents increased $49,000, tenant reimbursements increased $1.5 million, and other income increased $118,000.

Minimum Rents

Minimum rents increased 10.8%, or $4.2 million, for the three months ended March 31, 2012 compared to the three months ended March 31, 2011.  During the three months ended March 31, 2012, we experienced a $2.3 million increase in minimum rents associated with our acquisition of Town Center. We also experienced a $1.7 million increase from Scottsdale Quarter located in Scottsdale, Arizona. This increase can be attributed to new tenant openings.

Percentage Rents

Percentage rents increased by 3.7% or $49,000, for the three months ended March 31, 2012 compared to the three months ended March 31, 2011.  This increase is primarily the result of increased sales productivity from certain tenants whose sales exceeded their respective lease breakpoints.

Tenant Reimbursements

Tenant reimbursements increased 8.0%, or $1.5 million, for the three months ended March 31, 2012 compared to the three months ended March 31, 2011.  Of the increase, $1.1 million is a result of our acquisition of Town Center. The remaining increase can be primarily attributed to an overall increase in property operating expenses for the remaining properties of $467,000.

Other Revenues

Other revenues increased 2.3%, or $118,000, for the three months ended March 31, 2012 compared to the three months ended March 31, 2011.  The components of other revenues are shown below (in thousands):

	For the Three Months Ended March 31,
	2012		2011		Inc. (Dec.)
Licensing agreement income	$	1,567	$	1,682	$	(115	)
Outparcel sale	215		—		215
Sponsorship income	379		345		34
Fee and service income	2,177		2,065		112
Other	913		1,041		(128		)
Total	$	5,251	$	5,133	$	118

Licensing agreement income relates to our tenants with rental agreement terms of less than thirteen months.  During the three months ended March 31, 2012, we sold an outparcel at Grand Central Mall, located in City of Vienna, West Virginia for $215,000.  We had no outparcel sales during the three months ended March 31, 2011.  Fee and service income primarily relates to fee and service income earned from our joint ventures. These fees are calculated in accordance with each specific joint venture arrangement.

Expenses

Total expenses increased 18.3%, or $8.5 million, for the three months ended March 31, 2012 compared to the three months ended March 31, 2011.  Property operating expenses increased $15,000, real estate taxes increased $1.5 million, the provision for doubtful accounts increased $3.2 million, other operating expenses decreased $44,000, depreciation and amortization increased $3.3 million, and general and administrative costs increased $543,000.

29

Property Operating Expenses

Property operating expenses increased $15,000, or 0.1%, for the three months ended March 31, 2012 compared to the three months ended March 31, 2011.  We experienced an increase of $385,000 in costs related to our acquisition of Town Center. Also, we experienced a $291,000 increase in salaries and benefits. Furthermore, we experienced a $125,000 increase in insurance costs related to property liability insurance. Offsetting these increases was an $838,000 decrease in snow removal expenses.

Real Estate Taxes

Real estate taxes increased $1.5 million, or 20.4%, for the three months ended March 31, 2012 compared to the three months ended March 31, 2011.  Of this increase, $674,000 can be attributed to various Properties located in Ohio. We also experienced an additional $662,000 in real estate taxes associated with the purchase of Town Center. The remaining portion of the increase can be attributed to various Properties throughout our portfolio.

Provision for Doubtful Accounts

The provision for doubtful accounts was $4.1 million for the three months ended March 31, 2012, compared to $964,000 for the three months ended March 31, 2011.  The provision for the three months ended March 31, 2012 includes a $3.3 million charge to reduce the value of a note receivable from Tulsa REIT. During the three months ended March 31, 2012, the sales contract for Tulsa was terminated during the contingency period. Based upon the current marketing efforts ongoing to sell Tulsa, the ORC Venture reduced the estimated sales value of the property. Accordingly, the value of the note receivable from Tulsa REIT was reduced by $3.3 million to its estimated net recoverable amount.

Other Operating Expenses

Other operating expenses decreased 1.6%, or $44,000, for the three months ended March 31, 2012, as compared to the three months ended March 31, 2011.  We incurred $434,000 less in professional fees associated with tenant related collection matters.  Offsetting this decrease, we expensed $126,000 in costs related to a project that we no longer continue to pursue. Also, we experienced $69,000 in costs associated with the sale of an outparcel at Grand Central Mall. During the three months ended March 31, 2011, we did not have any outparcel sales. Lastly, we incurred $70,000 in additional costs for services we provide to our joint ventures.

Depreciation and Amortization

Depreciation and amortization expense increased by $3.3 million, or 20.5%, for the three months ended March 31, 2012 as compared to the three months ended March 31, 2011.  We experienced a $1.8 million increase in depreciation expense associated with Scottsdale Quarter.  This change can be primarily attributed to an increase in the level of assets placed in service at this development.  We also experienced a $1.7 million increase due to our acquisition of Town Center.

General and Administrative

General and administrative expenses were $5.5 million and $5.0 million for the three months ended March 31, 2012 and 2011, respectively.  The increase in general and administrative expenses can be attributed to increased costs relating to compensation and legal fees.  Offsetting these increases, we experienced a decrease in expenses related to business travel.

Interest Income

Interest income was $2,000 for the three months ended March 31, 2012 compared with interest income of $330,000 for the three months ended March 31, 2011. This decrease is primarily attributed to interest that is no longer being accrued on a note receivable due from Tulsa REIT.

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Interest expense/capitalized interest

Interest expense decreased7.8%, or $1.4 million, for the three months ended March 31, 2012 as compared to the three months ended March 31, 2011. The summary below identifies the decrease by its various components (dollars in thousands).

	For the Three Months Ended March 31,
	2012			2011			Inc. (Dec.)
Average loan balance	$	1,254,175		$	1,258,869		$	(4,694	)
Average rate	5.09		%	5.68		%	(0.59		)%
Total interest	$	15,959		$	17,876		$	(1,917	)
Amortization of loan fees	985			2,138			(1,153		)
Capitalized interest	(489		)	(2,962		)	2,473
Swap termination fees	—			819			(819		)
Other	233			233			—
Interest expense	$	16,688		$	18,104		$	(1,416	)

The decrease in interest expense was due to decreases in the average loan balance, average rate, termination fees for interest rate protection agreements, and loan fee amortization.  The average loan balance decreased due primarily to our use of proceeds from the at-the-market equity offering program ("GRT ATM Program") instituted in May 2011 to reduce the outstanding borrowings under our corporate credit facility. The average rate has decreased due to the refinancing of mortgages and the removal of the LIBOR floor in our corporate credit facility as part of the modification completed in March 2011. Amortization of loan fees decreased due to the Scottsdale Quarter construction loan fees being fully amortized in May 2011 and to the write-off of loan fees associated with the payoff of the loan agreements in connection with the March 2011 modification of the credit facility. The termination fees for interest rate protection agreements incurred during the first quarter of 2011 were also related to the payoff of debt in connection with the modification of the credit facility that was completed in March 2011. These cost savings were partially offset by a decrease in capitalized interest due to placing the completed phases of Scottsdale Quarter into service.

Equity in (Loss) Income of Unconsolidated Real Estate Entities, Net

Equity in (loss) income of unconsolidated real estate entities, net in both periods contain results from our investments in the ORC Venture that owns both Puente Hills Mall (“Puente”) and Tulsa, the joint venture that owns the Town Square at Surprise (“Surprise”), the joint venture (the "Blackstone Venture") that owns Lloyd Center ("Lloyd") and WestShore Plaza ("Westshore"), and the joint venture ("Pearlridge Venture") that owns Pearlridge Center ("Pearlridge").  Net (loss) income of the unconsolidated entities was $(7.3) million and $223,000 for the three months ended March 31, 2012 and 2011, respectively.  Our proportionate share of this activity was a (loss) income of $(3.5) million and $265,000 for the three months ended March 31, 2012 and 2011, respectively.

In February 2012, the contract to sell Tulsa was terminated during the contingency period. The ORC Venture determined a further reduction in the carrying value of Tulsa was warranted due to the uncertainty associated with the terminated sales contract and planned sale of Tulsa. Accordingly, the ORC Venture recorded a $7.6 million impairment loss, of which our proportionate share amounts to $3.9 million.

Discontinued Operations

Total revenues from discontinued operations were $107,000 and $2.0 million for the three months ended March 31, 2012 and 2011, respectively.  The net income from discontinued operations during the three months ended March 31, 2012 and 2011 was $13,000 and $142,000, respectively.  The activity in discontinued operations primarily relates to the operating results of Polaris Towne Center, which was sold during the fourth quarter of 2011.

Allocation to Noncontrolling Interest

The allocation of loss to noncontrolling interest was $(263,000) and $(182,000) for the three months ended March 31, 2012 and 2011, respectively.  Noncontrolling interest represents the aggregate partnership interest within the Operating Partnership that is held by certain limited partners.

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Liquidity and Capital Resources

Liquidity

Our short-term (less than one year) liquidity requirements include recurring operating costs, capital expenditures, debt service requirements, and dividend requirements for our preferred shares, Common Shares of Beneficial Interest (“Common Shares”) and units of partnership interest in the Operating Partnership (“OP Units”). We anticipate that these needs will be met primarily with cash flows provided by operations.

Our long-term (greater than one year) liquidity requirements include scheduled debt maturities, capital expenditures to maintain, renovate and expand existing assets, property acquisitions, dispositions and development projects. Management anticipates that net cash provided by operating activities, the funds available under our credit facility, construction financing, long-term mortgage debt, contributions from strategic joint ventures, issuances of preferred and common shares of beneficial interest, and proceeds from the sale of assets will provide sufficient capital resources to carry out our business strategy. Our business strategy includes focusing on possible growth opportunities such as pursuing strategic investments and acquisitions (including joint venture opportunities), property acquisitions and development projects. Also, as part of our business strategy, we regularly assess the debt and equity markets for opportunities to raise additional capital on favorable terms as market conditions may warrant.

In light of the improving debt and equity markets, we have remained focused on addressing our near-term debt maturities.  On January 17, 2012, we completed a $77.0 million mortgage loan secured by Town Center.  We used $70.0 million of the loan proceeds to repay the existing bridge loan with the remainder of the proceeds being used to reduce the outstanding principal amount under the credit facility.

On March 21, 2012 we executed a contract to purchase the 80% indirect ownership interest in Pearlridge ("Pearlridge Acquisition") from an affiliate of The Blackstone Group (“Blackstone”). The purchase price for this ownership interest will be approximately $289.4 million, including Blackstone's pro-rata share of the $175.0 million mortgage debt currently encumbering the Property, which will remain in place after the closing and will be included with our other long term indebtedness for consolidated real estate properties, resulting in a cash purchase price for Blackstone's interest of approximately $149.4 million. The Company anticipates that the acquisition will be funded through the net proceeds from the March Offering ( as defined below) and available funds from our credit facility.

On March 27, 2012, we completed an underwritten secondary public offering of 23,000,000 Common Shares, at a price of $9.90 per share (the “March Offering”). The net proceeds to GRT from the offering, after deducting underwriting commissions, discounts and offering expenses were $217.7 million. GRT used a portion of the proceeds from this secondary public offering to reduce the outstanding principal amount under the credit facility and expects to use a portion of the remaining proceeds to fund the Company's acquisition of the aforementioned interest in Pearlridge.

During the three months ended March 31, 2012, GRT issued 422,200 Common Shares under the GRT ATM Program at a weighted average issue price of $9.55 per Common Share, generating net proceeds of $3.9 million after deducting $145,000 of offering related costs and commissions. Of this total, 225,000 Common Shares were sold at an average price of $9.14 per share at the end of the fourth quarter of 2011, but settled in the first quarter of 2012.  The remaining 197,200 Common Shares were sold and issued during the first quarter at an average price of $10.02 per share, generating net proceeds of $1.9 million.  GRT used the proceeds from the GRT ATM Program to reduce the outstanding balance under the credit facility. As of March 31, 2012, GRT had $53.2 million available for issuance under the GRT ATM Program.

At March 31, 2012, the Company's total-debt-to-total-market capitalization, including our pro-rata share of joint venture debt, was 43.5%, compared to 50.6% at December 31, 2011.  We also look at the Company's debt-to-EBITDA ratio and other metrics to assess overall leverage levels.EBITDA represents our share of the earnings before interest, income taxes, and depreciation and amortization of our consolidated and unconsolidated operations.

We continue to evaluate joint venture opportunities, property acquisitions and development projects in the ordinary course of business and, to the extent debt levels remain in an acceptable range, we also may use the proceeds from any future asset sales or equity offerings to fund expansion, renovation and redevelopment of existing Properties, fund joint venture opportunities, and property acquisitions.

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Capital Resource Availability

On February 25, 2011, we filed an automatically effective universal shelf registration statement on Form S-3, registering debt securities, preferred shares, Common Shares, warrants, units, rights to purchase our Common Shares, purchase contracts, and any combination of the foregoing. This new universal shelf registration statement is not limited in the amount of equity that can be raised for subsequent registered debt or equity offerings.

At the annual meeting of our shareholders held in May 2011, holders of our Common Shares approved an amendment to GRT's Amended and Restated Declaration of Trust to increase the number of authorized shares of beneficial interest that GRT may issue from 150,000,000 to 250,000,000. At the annual meeting of our shareholders to be held in May 2012, the holders of our Common Shares will be asked to consider and vote upon certain amendments to the Declaration of Trust, including an amendment to increase the number of authorized shares of beneficial interest from 250,000,000 to 350,000,000. This proposal will enhance our flexibility to issue additional equity in the form of common or preferred shares as market conditions may warrant.

At March 31, 2012, the aggregate borrowing availability on the credit facility was $250.0 million, and the outstanding balance was $0. However, $0.3 million represents a holdback on the available balance for letters of credit issued under the credit facility. As of March 31, 2012, the unused balance of the credit facility available to the Company was $249.7 million.

At March 31, 2012, our credit facility was collateralized by first mortgage liens on six Properties having a net book value of $134.7 million and other assets with a net book value of $76.5 million. Our mortgage notes payable were collateralized by first mortgage liens on fifteen of our Properties having a net book value of $1,395.2 million. We have other corporate assets that have a net book value of $7.5 million.

Cash Activity

For the three months ended March 31, 2012

Net cash provided by operating activities was $22.9 million for the three months ended March 31, 2012.  (See also “Results of Operations - Three Months Ended March 31, 2012 Compared to Three Months Ended March 31, 2011” for descriptions of 2012 and 2011 transactions affecting operating cash flow.)

Net cash used in investing activities was $25.7 million for the three months ended March 31, 2012.  We spent $28.1 million on our investments in real estate.  Of this amount, $14.9 million represents a non-refundable deposit for the Pearlridge Acquisition and $3.7 million related to the development of Scottsdale Quarter.  We also spent $4.0 million to re-tenant existing spaces, with the most significant expenditures occurring at Dayton Mall, Polaris Fashion Place and River Valley Mall.  The remaining amount was spent on operational capital expenditures.

Net cash provided by financing activities was $128.7 million for the three months ended March 31, 2012. We issued additional Common Shares as part of the March Offering, raising net proceeds of $217.7 million.  Additionally, we raised net proceeds of $3.9 million as part of the GRT ATM Program.  We received $77.0 million in proceeds from the issuance of a mortgage note payable secured by Town Center. Offsetting the increases to cash, we made $74.2 million in principal payments on existing mortgage debt.  Of this amount, $70.0 million was used to repay the existing bridge loan associated with the 2011 purchase of Town Center.  Additionally, regularly scheduled principal payments of $4.2 million were made on various loan obligations.  Also, $18.0 million in dividend payments were made to holders of our Common Shares, OP Units, and preferred shares.  Lastly, we reduced our outstanding indebtedness under the credit facility by $78.0 million.

For the three months ended March 31, 2011

Net cash provided by operating activities was $15.5 million for the three months ended March 31, 2011. (See also “Results of Operations – Three Months Ended March 31, 2012 Compared to Three Months Ended March 31, 2011” for descriptions of 2012 and 2011 transactions affecting operating cash flow.)

Net cash used in investing activities was $16.1 million for the three months ended March 31, 2011. We spent $16.7 million on our investments in real estate. Of this amount, $7.4 million related to the development of Scottsdale Quarter. We also spent $3.6 million to re-tenant existing spaces, with the most significant expenditures occurring at Jersey Garden Center and The Mall at Johnson City. Finally, $1.0 million was spent on operational capital expenditures.

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Net cash used in financing activities was $1.5 million for the three months ended March 31, 2011. We issued additional Common Shares as part of a secondary stock offering in January of 2011, raising net proceeds of $116.7 million. Additionally, we borrowed a net $2.5 million under our credit facility. Offsetting the increases to cash was $103.2 million in principal payments on existing mortgage debt. Of this amount, $23.4 million, $38.5 million, and $37.0 million was used to repay the existing mortgages on Polaris Lifestyle Center, Morgantown Mall and Northtown Mall, respectively. Additionally, regularly scheduled principal payments of $4.3 million were made on various loan obligations. Also, $14.9 million in dividend payments were made to holders of our Common Shares, OP units, and preferred shares. Lastly, the Company paid $2.6 million in costs related to the re-financing of the credit facility in March 2011.

Financing Activity - Consolidated

Total debt decreased by $75.1 million during the first three months of 2012. The change in outstanding borrowings is summarized as follows (in thousands):

	Mortgage Notes			Notes Payable			Total Debt
Balance at December 31, 2011	$	1,175,053		$	78,000		$	1,253,053
New mortgage debt	77,000			—			77,000
Repayment of debt	(70,000		)	—			(70,000		)
Debt amortization payments	(4,169		)	—			(4,169		)
Amortization of fair value adjustment	65			—			65
Net payments, facilities	—			(78,000		)	(78,000		)
Balance at March 31, 2012	$	1,177,949		$	—		$	1,177,949

On January 17, 2012, a GRT affiliate borrowed $77.0 million (the “Leawood TCP Loan”). The Leawood TCP Loan is evidenced by a promissory note and secured by a mortgage, assignment of rents and leases, collateral assignment of property agreements, security agreement and fixture filing on Town Center. The Leawood TCP Loan is non-recourse and has an interest rate of 5.00% per annum and a maturity date of February 1, 2027. The Leawood TCP Loan requires the borrower to make periodic payments of principal and interest with all outstanding principal and accrued interest being due and payable at the maturity date. The proceeds of the Leawood TCP Loan were used to payoff the existing short term loan that was due on March 5, 2012.

During April 2012, we reduced the balance of the mortgage loan on Colonial Park Mall (the “Colonial Loan”) by $6.2 million to a balance of $33.8 million. We also exercised our option to extend the maturity date of the loan to April 23, 2013. During the extension period, the Colonial Loan requires the borrower to make periodic payments of principal and interest with all outstanding principal and accrued interest being due and payable at the maturity date. The interest rate on the Colonial Loan will increase from LIBOR plus 3.0% to LIBOR plus 3.5% per annum during the extension period.

Financing Activity – Unconsolidated Real Estate Entities

Total debt related to our unconsolidated real estate entities decreased by $1.8 million during the first three months of 2012. The change in outstanding borrowings is summarized as follows (in thousands):

	Mortgage Notes			GRT Share
Balance at December 31, 2011	$	458,937		$	157,684
Repayment of debt	(153		)	(79		)
Debt amortization payments	(1,659		)	(715		)
Balance at March 31, 2012	$	457,125		$	156,890

During December 2011, an agreement was reached that extended the maturity date to January 1, 2012 for the loan on Surprise (the "Surprise Loan"). During January 2012, the venture closed on an additional loan modification that extended the maturity date to June 1, 2012, with two extension options that would move the final maturity date to December 31, 2013, subject to certain conditions. The Surprise Loan requires the borrower to make periodic payments of principal and interest and has an interest rate of LIBOR plus 4.0% or 5.5%, whichever is greater. As of March 31, 2012, $4.6 million (of which $2.3 million represents GRT's 50% share) was drawn under the loan.

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During March 2011, an affiliate of the ORC Venture executed a modification agreement for the loan for Tulsa (the “Tulsa Loan”) that extended the maturity date to April 14, 2011. The loan modification decreased the interest rate to the greater of 5.25% or LIBOR plus 4.25%. During April 2011, an affiliate of the ORC Venture executed an additional modification agreement for the Tulsa Loan that extended the maturity date to September 14, 2011. During September 2011, an affiliate of the ORC Venture executed a modification agreement for the Tulsa Loan modification that further extended the maturity date to March 14, 2012. However, as required by the Tulsa loan, the ORC Venture was required to market the Property for sale in order to extend the maturity date beyond March 2012. In 2011, the ORC Venture entered into a contingent contract to sell Tulsa and the carrying value of Tulsa was reduced to reflect the sales price of that contract. The contract was terminated on February 21, 2012 during the contingency period. The Tulsa Loan matured on March 14, 2012 and is currently in default. The lender has not initiated any adverse legal action against the Property or Property owner. The ORC Venture is engaged in active discussions with the lender regarding an extension of the Tulsa Loan for six months while continuing to market Tulsa for sale.

At March 31, 2012, the mortgage notes payable associated with Properties held in the ORC Venture were collateralized with first mortgage liens on two Properties having a net book value of $205.4 million. At March 31, 2012, the Surprise Loan was collateralized with a first mortgage lien on one Property having a net book value of $7.6 million. At March 31, 2012, the mortgage notes payable associated with Properties held in the Blackstone Venture were collateralized with first mortgage liens on two Properties having a net book value of $294.7 million. At March 31, 2012, the mortgage notes payable associated with the Property held by the Pearlridge Venture is collateralized with first mortgage liens on one Property having a net book value of $247.0 million.

Consolidated Obligations and Commitments

Long-term debt obligations, including both scheduled interest and principal payments, are disclosed in Note 7 - “Mortgage Notes Payable” and Note 8 - "Note Payable" to the consolidated financial statements.

At March 31, 2012, we had the following obligations relating to dividend distributions.  In the first quarter of 2012 the Company declared distributions of $0.10 per Common Share and OP Units, which totaled $14.2 million, to be paid during the second quarter of 2012.  Our 8.75% Series F Cumulative Redeemable Preferred Shares of Beneficial Interest (the “Series F Preferred Shares”) and our 8.125% Series G Cumulative Redeemable Preferred Shares (the "Series G Preferred Shares") pay cumulative dividends and therefore the Company is obligated to pay the dividends for these shares in each fiscal period in which the shares remain outstanding.  This obligation is $24.5 million per year.  The distribution obligation at March 31, 2012 for Series F Preferred Shares and Series G Preferred Shares is $1.3 million and $4.8 million, which represent the dividends declared but not paid as of March 31, 2012, respectively.

At March 31, 2012, there were approximately 2.7 million OP Units outstanding.  These OP Units are redeemable, at the option of the holders, beginning on the first anniversary of their issuance.  The redemption price for an OP Unit shall be, at the option of GPLP, payable in the following form and amount: (i) cash at a price equal to the fair market value of one Common Share of the Company or (ii) Common Shares at the exchange ratio of one share for each OP Unit.  The fair value of the OP Units outstanding at March 31, 2012 is $27.7 million based upon a per unit value of $10.16 at March 31, 2012 (based upon a five-day average of the Common Stock price from March 23, 2012 to March 29, 2012).

Our lease obligations are for office space, office equipment, computer equipment and other miscellaneous items.  The obligation for these leases at March 31, 2012 was $3.8 million.

At March 31, 2012, we had executed leases committing to $8.7 million in tenant allowances.  The leases will generate gross rents of approximately $72.1 million over the original lease term.

Other purchase obligations relate to commitments to vendors for various items such as development contractors and other miscellaneous commitments.  These obligations totaled $11.4 million at March 31, 2012.

Commercial Commitments

The terms of our corporate credit facility as of March 31, 2012, are discussed in Note 8 - “Note Payable” to the consolidated financial statements.

Pro-rata share of Joint Venture Obligations and Commitments

Our pro-rata share of the long-term debt obligation for scheduled payments of both principal and interest related to loans at Properties owned through unconsolidated joint ventures are as follows:

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We have a pro-rata obligation for tenant allowances in the amount of $712,000 for tenants who have signed leases at the joint venture Properties.  The leases will generate pro-rata gross rents of approximately $1.6 million over the original lease term.

Other pro-rata share of purchase obligations relate to commitments to vendors for various items such as development contractors and other miscellaneous commitments.  These obligations totaled $354,000 at March 31, 2012.

The Company currently has two ground lease obligations relating to its Pearlridge and Puente joint ventures.  The ground lease at Pearlridge provides for scheduled rent increases every five years.  The ground lease at Pearlridge expires in 2058, with two ten-year extension options that are exercisable at the option of the Pearlridge Venture.  The ground lease at Puente is set to fair market value every ten years as determined by independent appraisal.  The ground lease at Puente expires in 2059. Our current annual pro-rata share of these obligations, in which we hold a 20% common interest in Pearlridge, and a 52% common interest in Puente, are as follows:  2012 - $714,000, 2013-2014 - $1.9 million, 2015-2016 - $1.5 million, and $51.7 million thereafter.

Off Balance Sheet Arrangements

We have no off-balance sheet arrangements (as defined in Item 303 of Regulation S-K).

Developments in Progress

The table below summarizes the classification of “Developments in Progress” as it relates to our Consolidated Balance Sheet as of March 31, 2012:

	Developments in Progress (dollars in thousands) As of March 31, 2012
	Consolidated Properties		Unconsolidated Proportionate Share		Total
Land for future development	$	7,297	$	—	$	7,297
Scottsdale Quarter land and improvements	31,195		—		31,195
Redevelopment and development	6,006		3,867		9,873
Tenant improvements and tenant allowances	5,369		473		5,842
Other	1,667		155		1,822
Total	$	51,534	$	4,495	$	56,029

Capital expenditures are generally accumulated within a project and classified as “Developments in Progress” on the Consolidated Balance Sheets until such time as the project is completed and placed in service.  At the time the project is completed, the dollars are transferred to the appropriate category on the Consolidated Balance Sheets and are depreciated on a straight-line basis over the useful life of the assets.  The $31.2 million associated with Scottsdale Quarter includes $2.6 million of internal costs.  These costs include items such as interest and wages.

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The table below summarizes the amounts spent on capital expenditures for the first quarter of 2012 (dollars in thousands):

	Capital Expenditures for the Three Months Ended March 31, 2012
	Consolidated Properties		Unconsolidated Joint Venture Proportionate Share		Total
Development Capital Expenditures:
Development projects	$	4,429	$	—	$	4,429
Redevelopment and renovation projects	$	1,453	$	17	$	1,470
Property Capital Expenditures:
Tenant improvements and tenant allowances:
Anchor stores	$	1,323	$	1,313	$	2,636
Non-anchor stores	2,716		453		3,169
Operational capital expenditures	1,304		294		1,598
Total Property Capital Expenditures	$	5,343	$	2,060	$	7,403

Property Capital Expenditures

We plan capital expenditures by considering various factors such as return on investment, our five-year capital plan for major facility expenditures such as roof and parking lot improvements and tenant construction allowances, based upon the economics of the lease terms and cash available for making such expenditures.  Our redevelopment expenditures in the first quarter of 2012 relate primarily to new Dick's Sporting Goods stores at Indian Mound Mall in Heath, Ohio and the Dayton Mall in Dayton, Ohio. Our anchor store tenant improvements include improvements for a new Restoration Hardware at Scottsdale Quarter, a new DSW at Dayton Mall, a new Toys 'R' Us store and Burlington Coat renewal at Puente and two new H&M stores at Polaris Fashion Place in Columbus, Ohio and Lloyd.

The tenant improvements for non-anchor stores include stores such as Ulta Cosmetics at River Valley Mall in Lancaster, Ohio, rue21 store at Dayton Mall in Dayton, Ohio and Madewell at Town Center. Tenant improvements for non-anchor stores at the joint venture properties relate primarily to a new Buffalo Wild Wings at Puente.

Expansion, Renovation and Development Activity

We continue to be active in expansion, renovation and development activities.  Our business strategy is to enhance the quality of the Company’s assets in order to improve cash flow and increase shareholder value.

Expansions and Renovations

We maintain a strategy of selective expansions and renovations in order to improve the operating performance and the competitive position of our existing portfolio.  We also engage in an active redevelopment program, with the objective of attracting innovative retailers, which we believe will enhance the operating performance of the Properties. We anticipate funding our expansion and renovation projects with the net cash provided by operating activities, the funds available under the credit facility, proceeds from the GRT ATM Program, construction financing, long-term mortgage debt, and proceeds from the sale of assets or other equity offerings.

We have started redevelopment projects to update our two outlet Properties, Jersey Gardens in Elizabeth, New Jersey and SuperMall of the Great Northwest in Auburn, Washington ("SuperMall"). We anticipate investing approximately $55 - $65 million during the next 12 - 18 months to renovate, re-brand, and enhance the tenant mix at these outlet Properties. Plans include remodeled corridors, entrances, food courts, restrooms and the introduction of premier outlet retail brands to compliment the existing retailers at the Properties.

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Our redevelopment and renovation expenditures in 2012 relate primarily to our interior and food court renovation project at River Valley Mall in Lancaster, Ohio and the outlet redevelopment project at Jersey Gardens.

Developments

One of our objectives is to enhance portfolio quality by developing new retail properties. Our management team has developed numerous retail properties nationwide and has significant experience in all phases of the development process including site selection, zoning, design, pre-development leasing, construction financing, and construction management.

Our development spending for the quarter ended March 31, 2012 primarily relates to our investment in Scottsdale Quarter. The first two phases of Scottsdale Quarter are completed with approximately 519,000 square feet of GLA consisting of approximately 346,000 square feet of retail space with approximately 173,000 square feet of office space above the retail units. Over 80% of the retailers in the first two phases are now open and Scottsdale Quarter has become a dynamic, outdoor urban environment featuring sophisticated architectural design, comfortable pedestrian plazas, an open park space, and a variety of upscale shopping, dining and entertainment options. Scottsdale Quarter's improvements have been funded by the proceeds from the mortgage loan on Scottsdale Quarter as well as proceeds from our credit facility. We are pleased with the tenant mix and overall leasing progress made to date on Scottsdale Quarter.  Between signed leases and letters of intent, we have approximately 94% of Phase I and II space addressed. Apple, Armani Exchange, Brio, Dominick's Steakhouse, Express, Free People, Gap, Gap Kids, Grimaldi's Pizzeria, H&M, iPic Theater, Industrie Denim, lululemon athletica, Nike, Pottery Barn, Republic of Couture, Sephora, Stingray Sushi, True Food, and West Elm have opened their stores.  Also, more than 90% of the office tenants have now moved in.  The first two phases of Scottsdale Quarter required a net investment in hard costs of approximately $325 million with an expected stabilized return ranging between approximately 6.0% and 6.5%. The hard costs include land, construction and design costs, tenant improvements, third party leasing commissions, and ground lease payments. In addition to the hard costs, we capitalize certain internal leasing costs, development fees, interest and real estate taxes. As of March 31, 2012, we have invested approximately $325 million in hard costs in the first two phases of the project.

With respect to Phase III of Scottsdale Quarter, our goal in 2012 is to finalize our plans for this phase and we anticipate that the retail component of Phase III will be the cornerstone of that portion of the project. In addition to retail, a portion of Phase III of Scottsdale Quarter could be for various uses including residential, lodging or office. A portion of the Phase III real estate has been formally listed by a broker and negotiations with several interested parties continue, but at this point no contract has been executed.

We also continue to actively pursue a variety of other prospective development opportunities.  With the continued improvement in overall economic market conditions, management believes the possibility of moving forward with such opportunities is increasing.

Portfolio Data

Tenant Sales

Average sales for tenants in stores less than 10,000 square feet, including our joint venture Malls (“Mall Store Sales”), for the twelve month period ended March 31, 2012 were $414 compared to $376 for the twelve month period ended March 31, 2011.  Mall Store Sales include only those stores open for the twelve months ended March 31, 2012 and 2011.

Property Occupancy

Occupied space at our Properties is defined as any space where a store is open or a tenant is paying rent at the date indicated, excluding all tenants with leases having an initial term of less than one year.  The occupancy percentage is calculated by dividing the occupied space into the total available space to be leased.  Anchor occupancy is for stores of 20,000 square feet or more and non-anchor occupancy is for stores of less than 20,000 square feet and outparcels.

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Portfolio occupancy statistics, by property type, are summarized below:

	Occupancy (1)
	3/31/2012	12/31/2011	9/30/2011	6/30/2011	3/31/2011
Total Occupancy
Core Malls (2) (3)	93.8%	94.8%	94.3%	93.6%	94.1%
Mall Portfolio – Excluding Joint Ventures	92.9%	93.9%	93.3%	92.4%	93.2%
Total Community Center Portfolio	90.7%	90.2%	95.0%	93.0%	96.1%

(1) Occupied space is defined as any space where a tenant is occupying the space or paying rent at the date indicated, excluding all tenants with leases having an initial term of less than one year.

(2) The Company placed the square footage for the completed phases of Scottsdale Quarter in service during the second quarter of 2011.

(3) Includes the Company’s joint venture Malls.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our primary market risk exposure is interest rate risk.  We use interest rate protection agreements or swap agreements to manage interest rate risks associated with long-term, floating rate debt.  At March 31, 2012, approximately 96.6% of our debt, after giving effect to interest rate protection agreements, bore interest at fixed rates with a weighted-average maturity of 3.8 years and a weighted-average interest rate of approximately 5.4%.  At December 31, 2011, approximately 85.0% of our debt, after giving effect to interest rate protection agreements, bore interest at fixed rates with a weighted-average maturity of 3.4 years, and a weighted-average interest rate of approximately 5.4%.  The remainder of our debt at March 31, 2012 and December 31, 2011, bears interest at variable rates with weighted-average interest rates of approximately 3.1% and 3.0%, respectively.

At March 31, 2012, the fair value of our debt (excluding borrowings under our credit facility) was $1,212.9 million, compared to its carrying amount of $1,177.9 million.  Fair value was estimated using cash flows discounted at current market rates, as estimated by management. When determining current market rates for purposes of estimating the fair value of debt, we employed adjustments to the original credit spreads used when the debt was originally issued to account for current market conditions. Our combined future earnings, cash flows and fair values relating to financial instruments are dependent upon prevalent market rates of interest, primarily LIBOR.  Based upon consolidated indebtedness and interest rates at March 31, 2012, a 100 basis point increase in the market rates of interest would decrease both future earnings and cash flows by $0.4 million per year.  Also, the fair value of our debt would decrease by approximately $33.3 million.  A 100 basis point decrease in the market rates of interest would increase future earnings and cash flows by $0.1 million per year and increase the fair value of our debt by approximately $35.4 million.  We have entered into certain swap agreements which impact this analysis at certain LIBOR rate levels (see Note 10 - "Derivative Financial Instruments" to the consolidated financial statements).

Item 4. Controls and Procedures

(a) Disclosure Controls and Procedures.  The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report.  The Company’s disclosure controls and procedures are designed to provide reasonable assurance that information is recorded, processed, summarized and reported accurately and on a timely basis in the Company’s periodic reports filed with the SEC and are effective to ensure that information that we are required to disclose in our Exchange Act reports is accumulated, communicated to management, and disclosed in a timely manner.  Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective to provide reasonable assurance.  Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in the Company’s periodic reports.

(b) Changes in Internal Controls Over Financial Reporting.  There were no changes in our internal controls over financial reporting during the first quarter of 2012 that have materially affected, or reasonably likely to materially affect, our internal controls over financial reporting.

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PART II

OTHER INFORMATION

Item 1. Legal Proceedings

The Company is involved in lawsuits, claims and proceedings, which arise in the ordinary course of business.  The Company is not presently involved in any material litigation.  In accordance with ASC Topic 450 - “Contingencies,” the Company makes a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

Item 1A. Risk Factors

There are no material changes to any of the risk factors as previously disclosed in Item 1A to Part I of the Company’s Form 10-K for the fiscal year ended December 31, 2011.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

None

Item 5. Other Information

None

Item 6. Exhibits

10.143	Purchase and Sale Agreement, dated as of March 20, 2012, by and between BRE/Pearlridge Member LLC and GRT Pearlridge, LLC.
31.1	Certification of the Company’s CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Company’s CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of the Company’s CEO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of the Company’s CFO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document*
101.SCH	XBRL Taxonomy Extension Schema Document*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*

* Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

40

SIGNATURES

Pursuant to the requirements 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.

GLIMCHER REALTY TRUST
By:	/s/ Michael P. Glimcher
	Michael P. Glimcher Chairman of the Board and Chief Executive Officer (Principal Executive Officer)

By:	/s/ Mark E. Yale
	Mark E. Yale Executive Vice President, Chief Financial Officer and Treasurer (Principal Accounting and Financial Officer)

Dated:          April 26, 2012

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