FILE NO. 33-53311 RULE 424(b)(5) SUBJECT TO COMPLETION PRELIMINARY PROSPECTUS SUPPLEMENT DATED JUNE 10, 1994 PROSPECTUS SUPPLEMENT (TO PROSPECTUS DATED MAY 23, 1994) 3,000,000 SHARES NEW PLAN REALTY TRUST LOGO NEW PLAN REALTY TRUST COMMON SHARES ---------------- New Plan Realty Trust ("New Plan" or the "Trust"), originally organized in 1962, is an equity real estate investment trust which makes equity investments in income-producing real estate, principally consisting of shopping centers. The Trust is one of the largest publicly traded real estate investment trusts in the United States based on the aggregate market value of its outstanding common shares of beneficial interest (the "Common Shares"), and is self- administered and self-managed. All of the Common Shares offered hereby are being sold by the Trust. The Common Shares are listed on the New York Stock Exchange (symbol: NPR). On June 9, 1994, the last reported sales price of the Common Shares on the New York Stock Exchange was $22.75. ---------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PRICE TO UNDERWRITING PROCEEDS TO PUBLIC DISCOUNT(1) TRUST(2) - -------------------------------------------------------------------------------- Per Common Share.............................. $ $ $ - -------------------------------------------------------------------------------- Total(3)...................................... $ $ $ - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (1) The Trust has agreed to indemnify the several Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. See "Underwriting." (2) Before deducting estimated expenses of $325,000 payable by the Trust. (3) The Trust has granted the several Underwriters an option to purchase up to an additional 450,000 Common Shares to cover over-allotments. If all such Common Shares are purchased, the total Price to Public, Underwriting Discount and Proceeds to Trust will be $ , $ and $ , respectively. See "Underwriting." THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. ---------------- The Common Shares are offered by the several Underwriters, subject to prior sale, when, as and if delivered to and accepted by them, subject to approval of certain legal matters by counsel for the Underwriters. The Underwriters reserve the right to withdraw, cancel or modify such offer and to reject orders in whole or in part. It is expected that delivery of the Common Shares offered hereby will be made in New York, New York on or about June , 1994. ---------------- MERRILL LYNCH & CO. KIDDER, PEABODY & CO. INCORPORATED PAINEWEBBER INCORPORATED PRUDENTIAL SECURITIES INCORPORATED ---------------- The date of this Prospectus Supplement is June , 1994. [CHARTS TO BE INSERTED BY THE TRUST] IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON SHARES AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE OVER-THE- COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. Unless otherwise indicated, the information contained in this Prospectus Supplement assumes that the Underwriters' over-allotment option is not exercised. THE TRUST New Plan, one of the largest publicly traded real estate investment trusts in the United States based on the aggregate market value of its outstanding Common Shares, is a self-administered and self-managed equity real estate investment trust which primarily owns shopping centers. The Trust's present equity investments consist principally of 92 shopping centers, with approximately 11,813,000 gross rentable square feet, five factory outlet centers with approximately 1,529,000 gross rentable square feet (including expansions under construction of approximately 310,000 gross rentable square feet) and 15 garden apartment complexes containing 2,862 apartment units. These properties are located in 18 states. See "Business." The Trust has also recently entered into contracts to purchase one shopping center with approximately 84,200 gross rentable square feet and four garden apartment complexes containing 914 apartment units for an aggregate purchase price of approximately $24.7 million. See "Recent Developments." Since the organization of the corporate predecessor of the Trust in 1962, the Trust and its predecessor have been directed by members of the Newman family, who own and control 3,085,901 Common Shares, or approximately 6.2% of the currently outstanding Common Shares, and are the Trust's largest group of non-institutional shareholders. See "Controlling Shareholders." The Newman family has been active in real estate ownership and management since 1926. The Trust has paid regular and uninterrupted cash distributions on its Common Shares since it commenced operations as a real estate investment trust in 1972. These distributions, which are paid quarterly, have increased from $0.19 per Common Share in fiscal 1973 to $1.275 per Common Share in fiscal 1993. Since inception, each distribution has either been equal to or greater than the distribution preceding it, and the distributions have been increased in each of the last 60 consecutive quarters. The Trust intends to continue to declare quarterly distributions on its Common Shares. The Trust's primary investment strategy is to identify and purchase well- located income-producing shopping centers and garden apartment complexes at a discount to replacement cost. The Trust also purchases selected factory outlet centers. The Trust seeks to achieve income growth through a program of expansion, renovation, leasing, re-leasing and improving the tenant mix. The Trust minimizes development risks by generally purchasing existing income- producing properties. The Trust generally has acquired properties for cash. It is management's belief that its ability to purchase available properties for cash enhances its negotiating position in obtaining attractive purchase prices. During the fiscal year ended July 31, 1993, New Plan acquired six shopping centers and one factory outlet center aggregating approximately 1,198,000 gross rentable square feet and one garden apartment complex containing 220 apartment units for an aggregate purchase price of approximately $78.2 million. Since August 1, 1993, the Trust has acquired 15 shopping centers and three factory outlet centers aggregating approximately 3,023,000 gross rentable square feet and three garden apartment complexes containing 834 apartment units for an aggregate purchase price of approximately $185 million. In a few instances properties have been acquired subject to existing non-recourse long-term mortgages. Long-term debt of the Trust at April 30, 1994 consisted of approximately $28.1 million of mortgage loans. As of May 31, 1994, the Trust had also used approximately $40 million of its $65 million line of credit with The Bank of New York and Fleet Bank, N.A. (the "Line of Credit") to purchase properties. The Trust intends to repay the outstanding borrowings under the Line of Credit with the net proceeds of this offering. See "Use of Proceeds." The Trust has a highly diversified shopping center tenant base. Kmart, the Trust's largest tenant, currently accounts for approximately 6% of revenues. No other single tenant or chain of tenants currently accounts for more than 2% of the Trust's revenues. Many of the shopping centers include supermarket and drug store tenants which historically have been less susceptible to economic downturns. See "Business." S-3 The Trust, a Massachusetts business trust, maintains its executive offices at 1120 Avenue of the Americas, New York, New York 10036, and its telephone number is (212) 869-3000. The Trust employs approximately 260 individuals, including executive, administrative and field personnel. Trust personnel lease, manage and maintain or supervise the maintenance of all of the Trust's properties. RECENT DEVELOPMENTS The Trust has recently entered into contracts to purchase one shopping center with approximately 84,200 gross rentable square feet and four garden apartment complexes containing 914 apartment units for an aggregate purchase price of approximately $24.7 million. The purchase of the four garden apartment complexes will increase the number of apartment units in the Trust's portfolio to 3,776. The Trust is presently conducting its due diligence review with respect to these properties and there can be no assurance that these properties will be purchased. The shopping center that New Plan has contracted to acquire is Brandywine Plaza located in DeLand, Florida. Brandywine Plaza consists of approximately 84,000 gross rentable square feet on approximately 12 acres, has space for 21 tenants and is currently 86% occupied. Brandywine Plaza's major tenants include Winn-Dixie and Eckerd Drugs. The four garden apartment complexes that New Plan has contracted to acquire are Sedgefield Apartments, in Florence, South Carolina, the Trust's first property in that state, and Paddock Place, The Pines and Cedar Village, all of which are located in Clarksville, Tennessee. Sedgefield Apartments contains 280 apartment units and was built in 1972 and was expanded in 1974 and 1979. Paddock Place contains 240 apartment units and was built in 1989. The Pines contains 224 apartment units and was built in 1986. Cedar Village contains 170 apartment units and was built in 1982. All of the garden apartment complexes under contract have landscaped grounds and a swimming pool and Sedgefield Apartments also has three tennis courts. In May, 1994, the Trust acquired four shopping centers containing an aggregate of approximately 639,000 gross rentable square feet for an aggregate purchase price of approximately $25.8 million. The four shopping centers are Western Village and Brentwood Plaza, located in Cincinnati, Ohio; Hamilton Plaza, located in Hamilton, New Jersey; and Albany Plaza, located in Albany, Georgia. Western Village consists of approximately 139,000 gross rentable square feet on approximately 13 acres, has space for 15 tenants and is currently 100% occupied. Western Village's major tenants include Furrows Hardware and T.J. Maxx. Brentwood Plaza consists of approximately 237,000 gross rentable square feet on approximately 20 acres, has space for 34 tenants and is currently 93% occupied. Brentwood Plaza's major tenants include TJX, IGA Supermarket and Hader Home Improvement Center. Hamilton Plaza consists of approximately 149,000 gross rentable square feet on approximately 18 acres, has space for eight tenants and is currently 97% occupied. Hamilton Plaza's major tenants include Kmart and Acme Supermarket. Albany Plaza consists of approximately 114,000 gross rentable square feet on approximately seven acres, has space for 11 tenants and is currently 99% occupied. Albany Plaza's major tenants include Food Lion Supermarket, Big Lots and Eckerd Drugs. The Trust is presently discussing with The Bank of New York and Fleet Bank, N.A. an increase in the Line of Credit from $65 million to $100 million on the same terms and conditions as the existing Line of Credit. In the nine-month period ended April 30, 1994, net income totaled $38,143,000 (or $.78 per Common Share) on revenues of $73,053,000. Set forth below is certain selected financial data of the Trust which should S-4 be read in conjunction with the financial statements of the Trust and related notes thereto incorporated herein by reference. NINE MONTHS ENDED APRIL 30, --------------------------- 1993 1994 ------------- ------------- (UNAUDITED) (IN THOUSANDS EXCEPT PER SHARE DATA) Income Statement Data: Revenues......................................... $ 56,196 $ 73,053 Net income....................................... 32,295 38,143 Net income per Common Share...................... .67 .78 Other Data: Funds from operations(1)......................... $ 36,844 $ 45,393 Balance Sheet Data: Total assets..................................... $ 533,113 $ 565,184 Shareholders' equity............................. 501,522 501,303 - -------- (1) Net income plus depreciation and amortization of properties, adjusted for gains and losses from the sale of assets. Industry analysts generally consider funds from operations to be an appropriate measure of the performance of an equity REIT. Funds from operations does not represent cash generated from operating activities in accordance with generally accepted accounting principles and should not be considered as an alternative to net income as an indicator of the Trust's operating performance or as an alternative to cash flow as a measure of liquidity. USE OF PROCEEDS The net proceeds to the Trust from the sale of the Common Shares offered hereby are estimated at approximately $64.4 million (approximately $74.2 million if the Underwriters' over-allotment option is exercised in full), assuming an offering price of $22.75 per share (the closing price of the Common Shares on the New York Stock Exchange on June 9, 1994). Approximately $40 million of the net proceeds will be used to repay borrowings outstanding under the Line of Credit. The borrowings outstanding under the Line of Credit presently bear interest at a weighted average rate of 4.83% and are due and payable on December 29, 1994. The balance of the net proceeds will be used to make future property acquisitions, to finance property expansions and renovations underway and planned, and for general trust purposes. Pending such uses, the net proceeds may be invested in short-term income producing investments such as investments in commercial paper, government securities or money market funds that invest in government securities. S-5 CAPITALIZATION The following table sets forth the capitalization of the Trust as of April 30, 1994 and as adjusted to give effect to this offering and the anticipated use of the proceeds thereof as described under "Use of Proceeds." HISTORICAL AS ADJUSTED ---------- ----------- (IN THOUSANDS) Short-term debt: Notes payable(1)..................................... $ 25,000 -- ======== ======== Long-term debt: Mortgage notes payable(2)............................. 28,140 $ 28,140 -------- -------- Shareholders' equity: Common Shares of Beneficial Interest, without par value, unlimited Common Shares authorized; 49,422,890 Common Shares outstanding; 52,422,890 Common Shares outstanding, as adjusted(3). 541,464 605,908 -------- -------- Total shareholders' equity.............................. 501,303 565,747 -------- -------- Total capitalization.................................... $529,443 $593,887 ======== ======== - -------- (1) As of May 31, 1994, short-term notes payable under the Line of Credit were approximately $40,000,000. The "As Adjusted" column above reflects repayment of these notes from the proceeds of this offering. (2) Includes current portion of long-term debt. The rates of interest on outstanding mortgage indebtedness range from 6.53% to 10.75%; the weighted average interest rate of the mortgages was 8.9% at April 30, 1994. (3) Does not include 356,000 Common Shares reserved for issuance under the Trust's 1985 Incentive Stock Option Plan, 1,000,000 Common Shares reserved for issuance under the Trust's 1991 Stock Option Plan, 1,300,000 Common Shares reserved for issuance under the Trust's March 1991 Stock Option Plan, and 6,300 Common Shares reserved for issuance under the Trust's Non- Incentive Stock Option Plan. S-6 SELECTED FINANCIAL DATA The following table sets forth selected financial data for the Trust and should be read in conjunction with the financial statements of the Trust and related notes thereto incorporated herein by reference. YEAR ENDED JULY 31, ----------------------------------------------------------------------------------------- 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- (IN THOUSANDS EXCEPT PER SHARE AMOUNTS) OPERATING DATA: Revenues Rental income.......... $ 17,289 $ 19,662 $ 21,879 $ 26,164 $ 28,463 $ 33,763 $ 38,041 $ 41,395 $ 47,595 $ 65,308 Interest and dividends. 4,815 6,564 9,523 9,235 8,857 9,778 16,082 15,988 17,097 11,001 Other revenues......... 108 75 881 460 -- -- -- -- -- -- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- 22,212 26,301 32,283 35,859 37,320 43,541 54,123 57,383 64,692 76,309 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Operating expenses Property operating costs................. 6,868 7,538 8,411 9,772 9,871 11,547 14,916 14,133 16,163 22,440 Interest on mortgages & notes(1).............. 4,281 4,104 5,673 5,713 2,035 1,933 1,901 1,935 1,527 1,386 Depreciation and amortization.......... 1,511 1,725 2,057 2,406 2,569 3,164 3,563 4,205 5,051 7,574 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- 12,660 13,367 16,141 17,891 14,475 16,644 20,380 20,273 22,741 31,400 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Operating income........ 9,552 12,934 16,142 17,968 22,845 26,897 33,743 37,110 41,951 44,909 Other income............ 263 -- 701 1,454 2,223 2,153 3,262 4,789 10,064 940 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- 9,815 12,934 16,843 19,422 25,068 29,050 37,005 41,899 52,015 45,849 Other deductions(1)..... 1,054 1,153 1,225 1,456 1,618 1,939 1,958 2,021 2,569 2,620 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Net income.............. $ 8,761 $ 11,781 $ 15,618 $ 17,966 $ 23,450 $ 27,111 $ 35,047 $ 39,878 $ 49,446 $ 43,229 ======== ======== ======== ======== ======== ======== ======== ======== ======== ======== Net income per Common Share(2)............... .62 .70 .78 .80 .88 .95 1.01 1.05 1.08 .89 OTHER DATA: Funds from operations(1)(3)....... $ 10,010 $ 13,506 $ 16,974 $ 20,413 $ 23,796 $ 28,123 $ 35,347 $ 39,294 $ 44,433 $ 49,863 Distributions paid...... 8,111 11,003 14,747 18,257 23,780 28,148 36,557 43,640 55,173 61,963 Distributions paid per Common Share(2)........ .57 .65 .73 .81 .89 .97 1.05 1.13 1.21 1.275 Weighted average number of Common Shares outstanding(2)......... 14,170 16,890 20,033 22,585 26,734 28,620 34,844 38,138 45,971 48,838 JULY 31, ----------------------------------------------------------------------------------------- 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- (IN THOUSANDS) BALANCE SHEET DATA: Real estate (at cost)... $ 52,331 $ 58,208 $ 82,042 $ 92,867 $107,310 $137,081 $168,601 $180,361 $301,136 $388,228 Total assets............ 108,149 111,153 190,740 189,280 187,319 301,282 307,678 461,913 530,827 534,248 Long-term debt(4)....... 46,988 44,317 96,273 26,714 22,748 22,971 22,938 18,868 17,831 23,321 Shareholders' equity.... 57,163 63,103 90,884 159,368 161,866 274,199 279,490 437,206 506,339 500,571 - -------- (1) Certain amounts prior to 1993 have been reclassified to conform to the 1993 presentation. (2) Adjusted to give effect to the 3-for-2 share split on April 1, 1986. (3) Net income plus depreciation and amortization of properties, adjusted for gains and losses from the sale of assets and a non-cash accounting charge of $1,495,000 in 1987. Industry analysts generally consider funds from operations to be an appropriate measure of the performance of an equity REIT. Funds from operations does not represent cash generated from operating activities in accordance with generally accepted accounting principles and should not be considered as an alternative to net income as an indicator of the Trust's operating performance or as an alternative to cash flow as a measure of liquidity. (4) Includes current installments on mortgage notes and bonds payable. S-7 PRICE RANGE OF THE COMMON SHARES AND DISTRIBUTIONS The Common Shares are listed on the New York Stock Exchange under the symbol NPR. The following table sets forth for the periods indicated, the high and low sale prices of the Common Shares as reported by the New York Stock Exchange and, prior to June 12, 1986, by the American Stock Exchange, and the cash distributions paid in such periods (the Common Share prices and distributions have been adjusted to give effect to a 2-for-1 split on February 1, 1983, and a 3-for-2 split on April 1, 1986). CASH DISTRIBUTIONS PAID FISCAL YEAR ENDED JULY 31, HIGH LOW PER COMMON SHARE -------------------------- ------ ------ ------------------------ 1980...................... $ 3.85 $ 2.51 $ .30 1981...................... 4.14 3.65 .34 1982...................... 5.33 3.46 .39 1983...................... 9.50 4.96 .51 1984...................... 8.50 7.25 .57 1985...................... 11.92 7.50 .65 1986...................... 14.50 10.00 .73 1987...................... 18.38 13.00 .81 1988...................... 17.63 10.75 .89 1989...................... 17.88 14.38 .97 1990...................... 19.13 14.88 1.05 1991...................... 21.25 13.75 1.13 1992...................... 25.00 19.63 1.21 1993...................... 26.38 21.50 1.275 1994 1st Quarter............. 26.38 21.50 .325 2nd Quarter............. 25.75 21.25 .3275 3rd Quarter............. 24.25 20.88 .33 4th Quarter (through June 9, 1994).......... 23.50 21.50 .3325 The last reported sale price of the Common Shares on the New York Stock Exchange on June 9, 1994 was $22.75. The number of shareholders of record at June 8, 1994 was 11,511. The First National Bank of Boston is registrar and transfer agent for the Common Shares. Since its organization in 1972, the Trust has made regular and uninterrupted distributions and such distributions have never been omitted or reduced. Distributions have been increased in each of the last 60 consecutive quarters. The Trust intends to continue to declare quarterly distributions on its Common Shares. However, no assurances can be made as to the amounts of future distributions since such distributions are subject to the Trust's cash flow from operations, earnings, financial condition, capital requirements and such other factors as the Board of Trustees deems relevant. A principal factor in the determination of the amounts of distributions is the requirement of the Internal Revenue Code of 1986, as amended, that a real estate investment trust must distribute at least 95% of its taxable income. S-8 HISTORICAL TOTAL RETURNS Set forth below are the cumulative and average annual rates of pre-tax total return (increase or decrease in market value of the Common Shares over the previous year plus distributions paid) which would have been realized by an investor who purchased Common Shares on the open market at the beginning of the periods indicated and sold such Common Shares on the open market at the end of the periods indicated. Past performance is not necessarily indicative of the results that can be expected in the future from an investment in the Trust's Common Shares. AVERAGE CUMULATIVE ANNUAL RATE TOTAL OF TOTAL PERIOD RETURN RETURN ------ ---------- ----------- Eighteen years ended July 31, 1993(1)................. 4,732% 25% Ten years ended July 31, 1993(1)...................... 407% 18% Five years ended July 31, 1993(1)..................... 108% 16% One year ended July 31, 1993.......................... 11% 11% From August 1, 1993 through June 9, 1994(2)........... 3% -- - -------- (1) Includes the annual reinvestment of distributions. (2) Assumes the payment of the $.3325 distribution per share declared on May 26, 1994, which is payable on July 6, 1994 to shareholders of record on June 15, 1994. DISTRIBUTION REINVESTMENT AND SHARE PURCHASE PLAN The Trust has a Distribution Reinvestment and Share Purchase Plan which allows shareholders to acquire additional Common Shares by automatically reinvesting distributions. Common Shares are acquired pursuant to the Plan at a price equal to 95% of the market price of such Common Shares on the dividend payment date, without payment of any brokerage commission or service charge. The Plan also allows shareholders to purchase additional Common Shares at 100% of the average of the high and low sales price of such Common Shares on the dividend payment date in January, April, July and October of each year, by making optional cash payments, without payment of any brokerage commission or service charge. Shareholders who do not participate in the Plan continue to receive cash distributions, as declared. At present, approximately 62% of the Trust's eligible shareholders participate in the Plan. William Newman, the Chairman of the Board and Chief Executive Officer of the Trust, is the largest individual participant in the Plan. BUSINESS The Trust presently owns or has leasehold interests in 92 shopping centers containing an aggregate of approximately 11,813,000 gross rentable square feet. Substantially all of the shopping centers are community and neighborhood centers. The centers frequently include supermarket chains and drug stores as major tenants and in some instances the centers include discount department stores. Twenty-one of the shopping centers are located in New York, 15 in Ohio, 13 in Georgia, eight in Pennsylvania, six each in Kentucky and Virginia, five in North Carolina, four each in Indiana and Tennessee, three each in New Jersey and West Virginia, two in Delaware and one each in Maryland and Michigan. The Trust also owns five factory outlet centers aggregating approximately 1,529,000 gross rentable square feet (including expansions under construction of approximately 310,000 gross rentable square feet). Two of the centers are located in Missouri and one center is located in each of California, Florida and Virginia. The Trust also owns 15 garden apartment complexes with an aggregate of 2,862 apartment units. Four of the apartment complexes are located in Kentucky, three in Alabama, two each in Delaware, New York and Tennessee, and one each in Florida and Ohio. Approximately 70% of the apartment units have two or more bedrooms. The Trust believes that all of its properties are adequately covered by insurance. Kmart, the Trust's largest tenant, currently accounts for approximately 6% of revenues. No other single tenant or chain of tenants currently accounts for more than 2% of the Trust's revenues. For a complete listing of the Trust's properties, see the "Schedule of Properties" below. S-9 The Trust intends to continue to invest in well-located income-producing real estate, with a primary emphasis on shopping centers and garden apartment complexes. The Trust may also continue to invest in selected factory outlet centers. An important part of the Trust's investment strategy is to enhance the cash flow potential of its properties through a program of expansion, renovation, leasing, re-leasing and improving the tenant mix. The recent economic recession and tight real estate credit conditions have led to financial difficulties for leveraged property owners and their lenders creating an additional source of acquisitions for the Trust. Management expects the number of properties available for purchase from these sources to continue. The Trust often seeks properties located in small cities. Currently, none of the Trust's shopping centers are enclosed malls. Many of the centers feature supermarket and drug store tenants and some of the centers include discount department stores. Supermarkets and drug stores historically have been less susceptible to economic downturns. The Trust attempts to acquire each shopping center and apartment complex at a discount to replacement cost. Properties purchased substantially below replacement cost generally have low rent which may allow for significant increases. By primarily purchasing completed income- producing properties rather than building them, the Trust has avoided development risks. Recently, the Trust has purchased newer and more modern shopping centers at below replacement cost. The average size of the supermarkets in these centers exceeds 40,000 square feet, representing current food store designs. The Trust believes that such newer, high-quality centers will continue to be available below replacement cost. The Trust generally seeks to acquire properties in those states in which it already owns property or in an adjacent state to allow for efficient management. The Trust also attempts to acquire shopping centers which provide opportunities for expansion or would benefit from renovation. See "Renovations and Expansions." A substantial portion of the Trust's shopping center income consists of rents received under long-term leases. Most of these shopping center leases provide for payment by tenants of an annual minimum rent and additional rent calculated generally as a percentage of gross sales in excess of a specified amount ("percentage rent"), and many leases also have cost of living escalation clauses. Upon renewal of a shopping center lease, the annual minimum rent of a tenant is generally increased to an amount which approaches or exceeds the sum of the former annual minimum rent plus the most recent annual percentage rent received from the tenant. The Trust's apartments are generally rented on a one-year basis. The Trust's shopping center leases usually provide that the Trust, as landlord, must repair and maintain building exteriors (including roofs and canopies and external utilities) and common areas, including parking lots. Most of the shopping center leases also contain provisions for pro rata contribution by tenants to the cost of maintaining common areas and payment of real estate taxes. New leases generally provide for full pro rata recovery of these costs from tenants. In order to protect and enhance its investments, the Trust incurs unreimbursed costs for renovation of its properties. The Trust also seeks to commit tenants to make improvements to their premises, including sign installation and store modernization. The management of the Trust believes that because such renovations and improvements enhance the appearance of the shopping centers, customer traffic may increase. To the extent that additional customer traffic results in higher sales, percentage rents received by the Trust with respect to that shopping center may increase. As a result, the Trust is in a better position to receive higher minimum rents upon the expiration of leases from existing tenants or new leases. In addition to the real estate properties described above, the Trust holds three purchase money first mortgages at per annum interest rates of 9.375%, 9.875% and 10%, a second mortgage at a per annum S-10 interest rate of 10.5%, a leasehold mortgage at a per annum interest rate of 12% and a note receivable at a per annum interest rate of 11.5%. The mortgages and note receivable, all of which are presently current, totalled $22,918,000 at April 30, 1994. The mortgages are collateralized by shopping centers located in New York and Pennsylvania. These shopping centers contain an aggregate of approximately 536,000 gross rentable square feet. The Trust also owns 55 acres of vacant land in Jackson Township, New Jersey, an approximately 51,000 square foot office building in Princeton, New Jersey and minor interests in several publicly traded real estate entities, consisting of convertible debentures and shares of beneficial interest. Under various Federal, state and local laws, ordinances and regulations, an owner of real estate or interests therein may be liable for the costs of removal or remediation of certain hazardous substances on or in such property. Such enactments often impose such liability without regard to whether the owner knew of, or was responsible for, the presence of such hazardous substances. The cost of any required remediation and the owner's liability therefor as to any property is generally not limited under such enactments and could exceed the value of the property and/or the aggregate assets of the owner. The presence of such substances, or the failure to properly remediate such substances, may also adversely affect the owner's ability to sell or rent such property or to borrow using such property as collateral. The Trust's management is not aware of any environmental liability that it believes could have a material adverse effect on the Trust's financial condition or results of operations. In addition, since 1989, the Trust has typically conducted Phase I environmental audits (which generally involve inspection without soil sampling or ground water analysis) in connection with property acquisitions and none of these audits has revealed the existence of any environmental conditions that the Trust's management believes could have a material adverse effect on the Trust's financial condition or results of operations. No assurance, however, can be given that these audits reveal all environmental liabilities, that environmental liabilities may not have developed since such audits were conducted or that no material adverse environmental condition exists that is not known to the Trust. The success of the Trust depends, among other factors, upon the trends of the economy, including interest rates, construction costs, income tax laws and increases or decreases in operating expenses, governmental regulations and legislation, including environmental requirements, real estate fluctuations, retailing trends, population trends, zoning laws, the financial condition and stability of tenants, the availability of financing and capital on satisfactory terms and the ability of the Trust to compete with others for tenants and keep its properties leased at profitable levels. The Trust competes for properties with an indeterminate number of investors, including domestic and foreign corporations and financial institutions, and an increasing number of real estate investment trusts, life insurance companies, pension funds and trust funds. The Trust regularly reviews its portfolio and from time to time considers the sale of certain of its properties. RENOVATIONS AND EXPANSIONS The Trust is continuously engaged in a major program of renovation or expansion of its existing properties. Renovations and expansions are currently underway or are planned at several of the Trust's properties, the estimated short term aggregate cost of which is approximately $28,100,000. These renovations and expansions consist primarily of a $8.9 million expansion underway at the Branson, Missouri factory outlet center, a $7.3 million expansion underway at the Barstow, California factory outlet center, a $4.9 million expansion underway at the Osage Beach, Missouri factory outlet center, a $3.6 million renovation and expansion underway at the Moundsville Plaza Shopping Center in Moundsville, West Virginia, a $1.1 million expansion planned at the St. Augustine, Florida factory outlet center and a $750,000 renovation planned at the Northland Plaza Shopping Center in Watertown, New York. S-11 SCHEDULE OF PROPERTIES The Trust owns or has a leasehold interest in 92 shopping centers and five factory outlet centers containing an aggregate of approximately 13,342,000 gross rentable square feet (including expansions under construction of approximately 310,000 gross rentable square feet), at an average cost of approximately $37.13 per rentable square foot (excluding expansions) against which the average debt was approximately $1.95 per rentable square foot at April 30, 1994. Average annual rental per square foot was approximately $6.51 at July 31, 1993. The Trust owns 15 garden apartment complexes consisting of 2,862 rental apartment units at an average cost of approximately $21,725 per apartment unit against which the average debt was approximately $961 per apartment unit at April 30, 1994. Average monthly rental per apartment unit was approximately $478 at April 30, 1994. The following schedule sets forth certain information concerning the Trust's properties, properties under contract and mortgages held. AVERAGE OUTSTANDING NUMBER OF PERCENT RENTAL MORTGAGES PRINCIPAL TYPE TENANTS RENTED PER SQ. FT. PAYABLE TENANTS PROPERTY DESCRIPTION INTEREST 5/31/94 5/31/94 7/31/93 5/31/94 5/31/94 - -------- ----------- -------- --------- ------- ----------- ----------- --------- SHOPPING AND FACTORY OUTLET CENTERS: Rockland Plaza 256,000 sq. ft. Shopping Fee 37 94 $14.53 None Marshall's Nanuet, NY Center on 28 acres Barnes & Noble Tower Records Rock Bottom Modell's Northland Shopping Plaza 123,000 sq. ft. Shopping Fee 11 91 5.23 None Ames Watertown, NY Center on 23 acres Kinney Drugs Oswego Plaza 131,000 sq. ft. Shopping Fee 15 86 4.24 None J.C. Penney Oswego, NY Center on 20 acres P&C Foods Radio Shack University Mall 78,000 sq. ft. Shopping Fee 7 89 5.66 None Ames Canton, NY Center on 25 acres Montgomery Ward 84,000 sq. ft. Department Fee 1 100 1.79 None Montgomery Ward Rome, NY Store on 7 acres Mohawk Acres 108,000 sq. ft. Shopping Fee 22 92 8.96 None McCrory Rome, NY Center on 13 acres Rite Aid SoFro Fabrics Westgate Plaza 72,000 sq. ft. Shopping Fee 4 100 5.53 None Ames Oneonta, NY Center on 11 acres Grand Union Rite Aid Westgate Manor Plaza 66,000 sq. ft. Shopping Fee 11 82 7.13 None Victory Markets Rome, NY Center on 15 acres McCrory Rite Aid D&F Plaza 192,000 sq. ft. Shopping Fee 22 69 5.61 None J.C. Penney Dunkirk, NY Center on 30 acres Quality Markets South Plaza 144,000 sq. ft. Shopping Fee 15 98 4.55 None Ames Norwich, NY Center on 36 acres Victory Markets Fay's Drug River Road and 123,000 sq. ft. Shopping Fee 2 100 .87 None U.S. Post Office Cavanaugh Road Center on 21 acres R. Alexander Marcy, NY Cortlandville 100,000 sq. ft. Shopping Fee 3 100 3.51 None Ames Cortland, NY Center on 13 acres Victory Market Kinney Drugs Church Street 45,000 sq. ft. Shopping Fee 2 100 3.35 None Victory Markets Gloversville, NY Center on 4 acres S-12 AVERAGE OUTSTANDING NUMBER OF PERCENT RENTAL MORTGAGES PRINCIPAL TYPE TENANTS RENTED PER SQ. FT. PAYABLE TENANTS PROPERTY DESCRIPTION INTEREST 5/31/94 5/31/94 7/31/93 5/31/94 5/31/94 - -------- ----------- -------- --------- ------- ----------- ----------- --------- East Washington & 54,000 sq. ft. Shopping Fee 1 100 $ 2.20 None Tops Markets Grand Central Aves. Center on 5 acres Elmira, NY Cayuga Mall 207,000 sq. ft. Shopping Fee 14 88 5.08 None TJX Ithaca, NY Center on 22 acres P&C Market Fay's Drug McKinley Plaza 93,000 sq. ft. Shopping Fee 12 100 10.36 None T.J. Maxx Hamburg, NY Center on 20 acres Kids-R-Us Linens N Things JoAnn Fabrics Kmart Plaza 116,000 sq. ft. Shopping Fee 4 100 (1) None Kmart Dewitt, NY Center on 11 acres Office Max Pyramid Mall 233,000 sq. ft. Shopping Fee 9 88 (1) None Kmart Geneva, NY Center on 37 acres Tops Shoppes at 238,000 sq. ft. Shopping Fee 12 78 (1) None Kmart Seneca Mall Center on 30 acres Price Chopper Liverpool, NY Fay's Drug JoAnn Fabrics Transit Road Plaza 138,000 sq. ft. Shopping Fee 4 100 (1) None Kmart Lockport, NY Center on 15 acres Quality Markets Price Chopper Plaza 78,000 sq. ft. Shopping Fee 4 100 (1) None Price Chopper Rome, NY Center on 6 acres Fay's Drug St. Augustine 307,000 sq. ft. Shopping Fee 94 100 14.96 $113,946 WestPoint Pepperell Outlet Center Center on 32 acres Levis St. Augustine, FL Mikasa Brandywine Plaza 84,000 sq. ft. Shopping Fee(2) (2) (2) (1) None Winn-Dixie DeLand, FL Center on 12 acres Eckerd Drugs Columbus Center 270,000 sq. ft. Shopping Fee 15 78 3.28 None Hills Columbus, IN Center on 24 acres Big Blue Big Lots Jasper Manor 194,000 sq. ft. Shopping Fee 9 89 5.73 None Kmart Jasper, IN Center on 26 acres J.C. Penney Goody's Holiday Foods Town Fair Shopping 114,000 sq. ft. Shopping Fee 6 100 5.11 None Kmart Center Center on 15 acres Goody's Princeton, IN Wabash Crossing 167,000 sq. ft. Shopping Fee 10 100 (1) None Kmart Wabash, IN Center on 18 acres Clark's Food Walgreen's U.S. Route 13 and 110,000 sq. ft. Shopping Fee 1 99 .30 None Wicomico Clyde Avenue Center on 16 acres Shoppers Bazaar Salisbury, MD Washtenau Fountain Plaza 136,000 sq. ft. Shopping Fee 8 93 10.20 None Builder's Square Ypsilanti, MI Center on 12 acres Dunham's S-13 AVERAGE OUTSTANDING NUMBER OF PERCENT RENTAL MORTGAGES PRINCIPAL TYPE TENANTS RENTED PER SQ. FT. PAYABLE TENANTS PROPERTY DESCRIPTION INTEREST 5/31/94 5/31/94 7/31/93 5/31/94 5/31/94 - -------- ----------- -------- --------- ------- ----------- ----------- --------- Osage Factory Outlet 399,000 sq. ft. Shopping Fee 95 99 $14.76 None Polo Village Center on 147 acres(3) Lenox China Osage Beach, MO Ann Klein Nike Van Heusen Branson Factory Outlet 315,000 sq. ft. Shopping Fee 51 100 (1) None Van Heusen Branson, MO Center on 39 acres(4) London Fog Bass Middletown Plaza 123,000 sq. ft. Shopping Fee 20 63 11.20 None ShopRite Middletown, NJ Center on 19 acres Thrift Drug Laurel Square 243,000 sq. ft. Shopping Fee 27 99 8.49 None Kmart Bricktown, NJ Center on 35 acres Pathmark Hamilton Plaza 149,000 sq. ft. Shopping Fee 7 97 (1) None Kmart Hamilton, NJ Center on 18 acres Acme Supermarket Fayetteville Road 107,000 sq. ft. Shopping Fee 1 4 1.16 None Hardee's Lumberton, NC Center on 17 acres U.S. 301 South 105,000 sq. ft. Shopping Fee 1 100 1.22 None Goodwin-Tew, Inc. Wilson, NC Center on 17 acres Route 7 and 4,000 sq. ft. Shopping Fee 1 100 8.90 None Pizza Hut Greenville Road Center on 1 acre Greenville, NC U.S. Route 70 80,000 sq. ft. Shopping Fee 1 100 1.55 None Goldsboro Goldsboro, NC Center on 10 acres Flea Market Neuse Boulevard 99,000 sq. ft. Shopping Fee 1 100 .61 None Flea City New Bern, NC Center on 19 acres Superstores Silver Bridge Plaza 146,000 sq. ft. Shopping Fee 14 77 4.54 None Quality Stores Gallipolis, OH Center on 20 acres Kroger Rite Aid Belpre Plaza 89,000 sq. ft. Shopping Leasehold 9 50 3.40 None Kroger Belpre, OH Center on 8 acres Nelson's Drugs Parkway Plaza 141,000 sq. ft. Shopping Fee 17 74 3.19 None The Pharm Maumee, OH Center on 12 acres Value City Southwood Plaza 83,000 sq. ft. Shopping Fee 9 65 2.91 None Big Lots Bowling Green, OH Center on 44 acres Rite Aid Fairfield Mall 74,000 sq. ft. Shopping Fee 8 96 6.09 None Kroger Fairfield, OH Center on 9 acres Don-A-Lee Central Avenue 157,000 sq. ft. Shopping Fee 5 100 3.26 None Woolworth Market Place Center on 18 acres Kroger Toledo, OH Jo-Ann Fabrics Harbor Plaza 52,000 sq. ft. Shopping Fee 8 83 6.79 None Super Duper Ashtabula, OH Center on 7 acres Rite Aid Millersburg 17,000 sq. ft. Shopping Fee 3 86 8.02 None Rite Aid Millersburg, OH Center on 3 acres Genoa 17,000 sq. ft. Shopping Fee 5 100 7.84 $600,375 Rite Aid Genoa, OH Center on 2 acres The Marketplace 170,000 sq. ft. Shopping Fee 13 91 4.28 None Quality Stores Piqua, OH Center on 18 acres Pic n' Save Revco Drugs S-14 AVERAGE OUTSTANDING NUMBER OF PERCENT RENTAL MORTGAGES PRINCIPAL TYPE TENANTS RENTED PER SQ. FT. PAYABLE TENANTS PROPERTY DESCRIPTION INTEREST 5/31/94 5/31/94 7/31/93 5/31/94 5/31/94 - -------- ----------- -------- --------- ------- ----------- ----------- --------- South Towne 309,000 sq. ft. Shopping Fee 33 96 $ 6.46 None Kmart Center Center on 29 acres Burlington Coat Dayton, OH Factory New Boston SC 234,000 sq. ft. Shopping Fee 16 99 6.51 $9,309,000 Wal-mart New Boston, OH Center on 22 acres Festival Food Goody's Sears Brentwood Plaza 237,000 sq. ft. Shopping Fee 29 93 (1) None TJX Cincinnati, OH Center on 20 acres IGA Supermarkets Western Village 139,000 sq. ft. Shopping Fee 15 100 (1) None Furrows Cincinnati, OH Center on 13 acres T.J. Maxx Heritage Square 232,000 sq. ft. Shopping Fee 20 100 (1) None Bag 'N Save Dover, OH Center on 29 acres Stambaugh Odd Lots Revco Drugs Roosevelt Mall 250,000 sq. ft. Shopping Part Fee and 57 86 21.77 None Hermans Philadelphia, PA Center on 36 acres Part Leasehold Rite Aid Sizes Unlimited Sam Goody John Wanamaker Dept. 313,000 sq. ft. Fee 1 100 1.29 None John Wanamaker's Store Department Store Philadelphia, PA with parking on Roosevelt Mall site Roosevelt Mall Annex 36,000 sq. ft. Shopping Fee 8 58 25.07 None Roy Rogers Philadelphia, PA Center on Roosevelt Fayva Shoes Mall site Lenscrafters Route 94 South 87,000 sq. ft. Shopping Fee 2 99 2.59 None Hardee's and Clover Lane Center on 12 acres Hanover, PA Route 422 83,000 sq. ft. Shopping Fee 1 100 1.11 None Pharmhouse Annville, PA Center on 15 acres Cross Roads Plaza 105,000 sq. ft. Shopping Fee 12 95 3.76 None Quality Stores Mt. Pleasant, PA Center on 14 acres Revco Drugs Big Lots Northland Center 94,000 sq. ft. Shopping Part Fee and 17 96 10.38 None Giant Food State College, PA Center on 15 acres Part Leasehold CVS Drugs Stone Mill Plaza 95,000 sq. ft. Shopping Fee 21 97 (1) None Giant Food Lancaster, PA Center on 21 acres Rite Aid Kings Giant 159,000 sq. ft. Shopping Leasehold 16 96 3.34 None Food Lion Shopping Center Center on 18 acres Furniture City Kingsport, TN Georgetown Square 104,000 sq. ft. Shopping Fee 21 83 (1) None Kroger Murfreesboro, TN Center on 12 acres Super X Drugs Congress Crossing 172,000 sq. ft. Shopping Fee 15 95 6.44 None Kmart Athens, TN Center on 39 acres Red Foods Greeneville Commons 223,000 sq. ft. Shopping Fee 20 96 6.30 None Kmart Greeneville, TN Center on 26 acres Belk's Goody's J.C. Penney S-15 AVERAGE OUTSTANDING NUMBER OF PERCENT RENTAL MORTGAGES PRINCIPAL TYPE TENANTS RENTED PER SQ. FT. PAYABLE TENANTS PROPERTY DESCRIPTION INTEREST 5/31/94 5/31/94 7/31/93 5/31/94 5/31/94 - -------- ----------- -------- --------- ------- ----------- ----------- --------- Main Street 119,000 sq. ft. Shopping Fee 2 69 $ 1.76 None Pizza Hut and Moseby Road Center on 10 acres Harrisonburg, VA Jefferson Davis 87,000 sq. ft. Shopping Fee 1 100 3.14 None Pharmhouse Boulevard Center on 8 acres Spotslvania, VA U.S. Routes 1 and 301 82,000 sq. ft. Shopping Fee 0 0 N/A None N/A Colonial Heights, VA Center on 10 acres Hanover Square 130,000 sq. ft. Shopping Fee 23 95 8.94 None UKrop's Mechanicsville, VA Center on 14 acres Toy Works Ridgeview Centre 177,000 sq. ft. Shopping Fee 16 97 6.21 $4,613,386 Kmart Wise, VA Center on 30 acres Piggly Wiggly Victorian Square 271,000 sq. ft. Shopping Fee 30 98 (1) None Kmart Midlothian, VA Center on 34 acres Lowes Farm Fresh Fort Chiswell Factory 176,000 sq. ft. Shopping Fee 29 58 (1) None Polo Outlet Center on 55 acres London Fog Max Meadows, VA Grand Central Plaza 75,000 sq. ft. Shopping Leasehold 7 100 5.09 None Sun T.V. Parkersburg, WV Center on 7 acres Watsons Moundsville Plaza 143,000 sq. ft. Shopping Fee 15 84 3.81 None Kroger Moundsville, WV Center on 29 acres Dollar Bargain Hook-Super X Kmart Plaza 102,000 sq. ft. Shopping Fee 11 99 3.95 None Kmart Vienna, WV Center on 14 acres New Louisa Plaza 111,000 sq. ft. Shopping Fee 12 92 3.05 None Wetterau Louisa, KY Center on 20 acres Rite Aid Family Dollar J* Town Center 188,000 sq. ft. Shopping Fee 24 96 4.98 None Target Stores Jeffersontown, KY Center on 17 acres Wetterau Jackson Village 145,000 sq. ft. Shopping Fee 8 62 3.23 None Wal-mart Jackson, KY Center on 48 acres Winn-Dixie Rite Aid Chinoe Village 100,000 sq. ft. Shopping Fee 19 55 4.76 None Winn-Dixie Lexington, KY Center with office space on 10 acres Piccadilly Square 96,000 sq. ft. Shopping Fee 13 96 3.60 None Big Lots Louisville, KY Center on 13 acres Winn-Dixie Taylor Drug Eastgate Shopping 145,000 sq. ft. Shopping Fee 25 95 (1) None Kroger Center Center on 18 acres Middletown, KY Rodney Village 216,000 sq. ft. Shopping Fee 20 66 4.66 None Foodliner Shopping Center Center on 15 acres Thrift Drug Dover, DE McCrory Doverama at Rodney 30,000 sq. ft. Shopping 75% Owned 1 100 1.22 None Brunswick Village Center on 1 acre Dover, DE Southgate Plaza 60,000 sq. ft. Shopping Fee 6 85 2.98 None Eckerd Drugs Albany, GA Center on 5 acres Eastgate Plaza 44,000 sq. ft. Shopping Fee 7 100 4.20 None Winn-Dixie Americus, GA Center on 4 acres Eckerd Drugs Family Dollar S-16 AVERAGE OUTSTANDING NUMBER OF PERCENT RENTAL MORTGAGES PRINCIPAL TYPE TENANTS RENTED PER SQ. FT. PAYABLE TENANTS PROPERTY DESCRIPTION INTEREST 5/31/94 5/31/94 7/31/93 5/31/94 5/31/94 - -------- ----------- -------- --------- ------- ----------- ----------- --------- Perlis Plaza 166,000 sq. ft. Shopping Fee 26 88 $ 4.76 None Belk's Americus, GA Center on 20 acres Piggly Wiggly Rite Aid Rogers Plaza 50,000 sq. ft. Shopping Fee 4 59 2.87 None Piggly Wiggly Ashburn, GA Center on 5 acres Rite Aid Cordele Square 131,000 sq. ft. Shopping Fee 12 87 3.43 None Belk's Cordele, GA Center on 11 acres Piggly Wiggly Goody's Mr. B's 14,000 sq. ft. Shopping Fee 7 74 3.14 None Southern Sunrise Cordele, GA Center on 1 acre Southgate Plaza 39,000 sq. ft. Shopping Fee 3 54 2.91 None B.C. Moore Cordele, GA Center on 3 acres Westgate 191,000 sq. ft. Shopping Fee 21 80 3.93 None Piggly Wiggly Dublin, GA Center on 35 acres Sears Tift-Town 61,000 sq. ft. Shopping Fee 10 58 2.99 None Family Dollar Tifton, GA Center on 4 acres Revco Drugs Westgate 16,000 sq. ft. Shopping Fee 5 100 5.68 None Nationwise Auto Tifton, GA Center on 2 acres Volume Shoe Habersham Village 147,000 sq. ft. Shopping Fee 13 94 5.42 None Kmart Cornelia, GA Center on 18 acres Winn Dixie Victory Square 165,000 sq. ft Shopping Fee 20 97 6.28 None Scotty's Savannah, GA Center on 35 acres Food Lion Albany Plaza 114,000 sq. ft. Shopping Fee 11 99 (1) None Food Lion Albany, GA Center on 7 acres Big Lot Turners Eckerd Drugs Barstow Factory Outlet 332,000 sq. ft. Shopping Fee 56 100 (1) $10,718,855 Polo Barstow, CA Center on 49 acres (5) Coach Brooks Brothers GARDEN APARTMENTS: Devonshire Place 284 Unit Garden Apartments Fee 281 99 N/A None N/A Birmingham, AL on 16 acres Breckenridge 120 Unit Garden Apartments Fee 119 99 N/A None N/A Birmingham, AL on 7 acres Courts at Wildwood 220 Unit Garden Apartments Fee 218 99 N/A 2,750,000 N/A Birmingham, AL on 7 acres Rodney 207 Unit Garden Apartments Fee 204 99 N/A None N/A Dover, DE on 11 acres Mayfair 96 Unit Garden Apartments Fee 93 97 N/A None N/A Dover, DE on 7 acres Lake Park 227 Unit Garden Apartments Fee 222 98 N/A None N/A Lake Park, FL on 10 acres Poplar Level Terrace 88 Unit Garden Apartments Fee 86 98 N/A None N/A Louisville, KY on 3 acres Jamestown 125 Unit Garden Apartments Fee 122 98 N/A None N/A Lexington, KY on 8 acres S-17 AVERAGE OUTSTANDING NUMBER OF PERCENT RENTAL MORTGAGES PRINCIPAL TYPE TENANTS RENTED PER SQ. FT. PAYABLE TENANTS PROPERTY DESCRIPTION INTEREST 5/31/94 5/31/94 7/31/93 5/31/94 5/31/94 - -------- ----------- -------- --------- ------- ----------- ----------- --------- LaFontenay 248 Unit Garden Apartments Fee 239 96 N/A None N/A Louisville, KY on 17 acres Charlestown at 244 Unit Garden Apartments Fee 227 93 N/A None N/A Douglas Hill on 17 acres Louisville, KY Meadow East 100 Unit Garden Apartments Fee 97 97 N/A None N/A Potsdam, NY on 15 acres Mohawk Garden 209 Unit Garden Apartments Fee 202 97 N/A None N/A Rome, NY on 12 acres Chesterfield 104 Unit Garden Apartments Fee 103 99 N/A None N/A Maumee, OH on 9 acres Sedgefield 280 Unit Garden Apartments Fee(2) (2) (2) N/A None N/A Florence, SC on 19 acres Ashford Place 268 Unit Garden Apartments Fee 265 99 N/A None N/A Clarksville, TN on 16 acres Paddock Place 240 Unit Garden Apartments Fee(2) (2) (2) N/A None N/A Clarskville, TN on 11 acres The Pines 224 Unit Garden Apartments Fee(2) (2) (2) N/A None N/A Clarksville, TN on 11 acres Cedar Village 170 Unit Garden Apartments Fee(2) (2) (2) N/A None N/A Clarksville, TN on 11 acres Hickory Lake 322 Unit Garden Apartments Fee 313 97 N/A None N/A Nashville, TN 26 acres MISCELLANEOUS: Institute for Defense 51,000 sq. ft. Leasehold Subject to 1 100 $ 6.95 None Institute for Analyses Building Office Building and Operating Sublease Defense Analyses Princeton, NJ Computer Complex on 8 acres Jackson 55 acres of Land Fee N/A N/A N/A None N/A Township, NJ MORTGAGE RECEIVABLES: 1 North Central 15,000 sq. ft. $500,000 Avenue Shopping Center Second Mortgage Hartsdale, NY on 1 acre Newdon Plaza 105,000 sq. ft. $10,350,000 New City, NY Shopping Center First Mortgage on 10 acres Whitestown Plaza 83,000 sq. ft. $4,610,000 Whitesboro, NY Shopping Center First Mortgage on 11 acres Laurel Mall 333,000 sq. ft. $6,200,000 Connellsville, PA Shopping Center First Mortgage on 57 acres - -------- (1)Property purchased after July 31, 1993 or presently under contract to purchase. (2)Under contract to purchase. Certain information has not yet been verified by the Trust and is therefore not provided. (3)Includes 54,000 sq. ft. of expansion under construction. (4)Includes 126,000 sq. ft. of expansion under construction. (5)Includes 130,000 sq. ft. of expansion under construction. S-18 MANAGEMENT THE TRUST The Trustees and executive officers of the Trust and their principal occupations are as follows: NAME AGE PRINCIPAL OCCUPATIONS AND AFFILIATIONS ---- --- -------------------------------------- William Newman ......... 67 Chairman of the Board and Chief Executive Officer Chairman of the Board of the Trust since its organization in 1972, of Trustees and Chief President of the Trust from 1972 to 1988 and Executive Officer President of the Trust's corporate predecessor from 1962 to 1972; formerly Chairman of National Association of Real Estate Investment Trusts; ac- tive in real estate for more than 40 years. Arnold Laubich.......... 64 President and Chief Operating Officer and Trustee President, Chief of the Trust since August 1, 1988; President of Operating Officer and Dover Management Corp. (which managed the Trust's Trustee properties) from 1972 to 1988; Senior Vice Presi- dent of the Trust's predecessor from 1962 to 1972. Norman Gold............. 63 Partner in the law firm of Altheimer & Gray; ac- Trustee tive in the practice of law for 39 years; Trustee of the Trust since its organization in 1972; Trustee of Banyan Short Term Income Trust, Banyan Hotel Investment Fund and Banyan Strategic Land Trust. Melvin Newman........... 52 Private Investor; Vice President and General Coun- Trustee sel of the Trust from 1972 to 1982; Trustee of the Trust since 1983. Raymond H. Bottorf...... 51 President of U.S. Alpha, Inc., a wholly-owned sub- Trustee sidiary of Algemeen Burgerlijk Pensionefonds ("ABP"); Trustee of the Trust since 1991. James M. Steuterman..... 37 Property acquisition officer for the Trust since Senior Vice President-- 1984; elected Vice President in 1988, and Senior Acquisitions and Vice President and Trustee in 1990. Trustee Dean Bernstein.......... 36 Vice President and Trustee since 1992; Assistant Vice President and Vice President from 1991 to 1992; previously a Trustee Vice President in the Real Estate Group at Chemi- cal Bank for three years. William Kirshenbaum..... 58 Vice President of the Trust since 1981; Treasurer Vice President, since 1983. Treasurer Leonard N. Cancell...... 61 Senior Vice President of the Trust since August 1, Senior Vice President-- 1988; Senior Vice President of Dover Management Operations from 1972 to 1988; employee of the Trust's prede- cessor from 1964 to 1972. Irwin E. Kwartler....... 67 Vice President of the Trust since 1982; previous- Vice President ly, National Sales Manager, Kimball Division of Litton Industries. Michael I. Brown........ 51 Chief Financial Officer since 1991; Controller of Chief Financial Officer the Trust since 1987. and Controller Steven F. Siegel........ 34 General Counsel and Secretary of the Trust since General Counsel and October 1991; formerly an associate in the law Secretary firm of Miro, Miro & Weiner for six years. Joseph Bosco............ 45 Vice President of the Trust since 1993; employee Vice President-- of the Trust since 1983. Apartment Operations S-19 CONTROLLING SHAREHOLDERS Upon the consummation of this offering, ABP will own 5,000,000 Common Shares, or approximately 9.5% of the outstanding Common Shares, MNOPF Trustees Limited (formerly Merchant Navy Officers Pension Fund Trustees Limited) ("MNOPF") will own 4,509,954 Common Shares, or 8.6% of the outstanding Common Shares, and the Newman family as a group, including William Newman, Chairman of the Board of Trustees and Chief Executive Officer of the Trust, Melvin Newman, a Trustee of the Trust, and the estate of Joseph Newman, a former Trustee of the Trust, will own and control an aggregate of 3,085,901 Common Shares, or approximately 5.9% of the outstanding Common Shares. William Newman and Melvin Newman may be deemed to be controlling persons of the Trust by virtue of their ownership of Common Shares. Under a shareholders' agreement among William Newman, Melvin Newman and the estate of Joseph Newman (the successor in interest to Joseph Newman), each party to the agreement holds a first refusal right to purchase Common Shares in the event of a proposed transfer of Common Shares by any party to someone other than an immediate family member. In addition, William Newman and Melvin Newman each have the right to vote 50% of the Common Shares owned by the estate of Joseph Newman. They have also agreed to vote such Common Shares and their own respective Common Shares for the re-election of each other as Trustees. Common Shares transferred among immediate family members will remain subject to the agreement. In connection with their purchase of Common Shares, MNOPF and ABP (collectively sometimes called the "Funds") have each entered into separate agreements with the Trust. ABP has agreed that for the period ending December 24, 2001, it will vote its Common Shares in favor of management's nominees to the Board of Trustees. The ABP agreement also requires that a specified degree of continuity exist in the Trust's management. The Trust has agreed to include among management's nominees to the Board of Trustees up to two persons designated by MNOPF in the event that MNOPF owns at least 20% of the Common Shares, and one person designed by ABP so long as ABP owns at least 9.9% of the Common Shares. Mr. Bottorf has been so designated by ABP. The agreements between the Trust and the Funds additionally provide that for the periods ending December 24, 2001 in the case of MNOPF and ending January 10, 2006 in the case of ABP, the Funds will not acquire Common Shares or other voting securities or convertible securities of the Trust which would bring their respective holdings in excess of 25% of the outstanding Common Shares for MNOPF and in excess of 15% of such Common Shares for ABP, provided that a degree of continuity exists in the Trust's management. MNOPF's agreement for continuity requires that at least one of William Newman, Melvin Newman and Arnold Laubich is a Trustee and key executive officer of the Trust. ABP's agreement for continuity requires that a majority of the Trust's Board of Trustees consist of "Continuing Trustees" (who are defined as Trustees who either were Trustees on January 10, 1991 or whose nomination at any time thereafter is approved by a majority of Continuing Trustees) and that a majority of the Trust's executive officers consist of officers who have been executive officers for at least two years or who are elected to their office by a majority of Continuing Trustees. ABP has also agreed that except under certain specified circumstances it will not sell or transfer any of its Common Shares without the Trust's consent for the period ending January 10, 2001. In the event the Trust issues additional Common Shares for cash at a time when MNOPF owns at least 20% of the Common Shares and ABP owns at least 9.9% of the Common Shares, each Fund has the right to maintain its respective percentage of ownership in the Trust by purchasing from the Trust additional Common Shares of the Trust at the same price as was paid by such purchaser, less an amount equal to underwriter's commissions, if any. In addition to the issued Common Shares owned by the Newman family, William Newman, Chief Executive Officer, and Arnold Laubich, President, each hold options to acquire 650,000 and 655,000 Common Shares, respectively. Such options represent or include the grant of options for 650,000 Common S-20 Shares each on March 12, 1991 at an exercise price of $18 7/8 per Common Share, which was the closing sale price of the Common Shares on the New York Stock Exchange on that date. The options vest and are exercisable 30% during the third year and 10% in each succeeding year. Accordingly, management is in the position of controlling the affairs of the Trust for an indefinite period by virtue of the combined shareholdings of the Funds and the Newman family, and the agreements among the Trust, the Funds and the Newmans. TAXATION The Trust believes that it has operated, and the Trust intends to continue to operate, in such manner as to qualify as a real estate investment trust under the Internal Revenue Code of 1986, as amended (the "Code"), but no assurance can be given that it will at all times so qualify. In the opinion of Altheimer & Gray, tax counsel to the Trust, the Trust was organized in conformity with the requirements for qualification as a "real estate investment trust" under the Code, and the Trust since its organization has met and continues to meet all requirements of the Code requisite to such qualification. In rendering its opinion, Altheimer & Gray has relied, as to factual determinations and conclusions necessary to its opinion, on representations of the Trust. The provisions of the Code pertaining to real estate investment trusts are highly technical and complex. The following is a brief and very general summary of certain provisions which currently govern the federal income tax treatment of the Trust and its shareholders. For the particular provisions which govern the federal income tax treatment of the Trust and its shareholders, reference is made to Sections 856 through 860 of the Code and the Income Tax Regulations promulgated thereunder. The following summary is qualified in its entirety by such reference. Under the Code, if certain requirements are met in a taxable year, a real estate investment trust will generally not be subject to federal income tax with respect to income which it distributes to its shareholders. If the Trust fails to qualify during any taxable year as a real estate investment trust, unless certain relief provisions are available, it will be subject to tax (including any applicable alternative minimum tax) on its taxable income at regular corporate rates, which could have a material adverse effect upon its shareholders. In any year in which the Trust qualifies to be taxed as a real estate investment trust, distributions made to its shareholders out of current or accumulated earnings or profits will be treated as dividends except that distributions of net capital gains designated by the Trust as capital gain dividends will be taxed as long-term capital gains to the shareholders. To the extent that distributions exceed current or accumulated earnings and profits, they will constitute a return of capital, rather than dividend or capital gain income, and will be applied in reducing the basis for the shareholders' Common Shares, or if in excess of such basis, will be taxed in the same manner as gain from the sale of those Common Shares. Investors are urged to consult their own tax advisors with respect to the tax consequences arising under federal law and the laws of any state, municipality or other taxing jurisdiction. Foreign investors should consult their own tax advisors concerning the tax consequences of an investment in the Trust including the possibility of United States income tax withholding on Trust distributions. UNDERWRITING Subject to the terms and conditions contained in the terms agreement and related underwriting agreement (collectively, the "Underwriting Agreement"), the Trust has agreed to sell to each of the Underwriters named below, and each of the Underwriters for whom Merrill Lynch, Pierce, Fenner & Smith Incorporated, Kidder Peabody & Co. Incorporated, PaineWebber Incorporated and Prudential Securities S-21 Incorporated are acting as representatives (the "Representatives") has severally agreed to purchase, the respective number of Common Shares set forth below opposite their respective names. The Underwriting Agreement provides that the obligations of the Underwriters are subject to certain conditions precedent, and that the Underwriters will be obligated to purchase all of the Common Shares if any are purchased. NUMBER OF UNDERWRITER COMMON SHARES ----------- ------------- Merrill Lynch, Pierce, Fenner & Smith Incorporated............................................ Kidder, Peabody & Co. Incorporated........................... PaineWebber Incorporated..................................... Prudential Securities Incorporated........................... --------- Total.................................................. 3,000,000 ========= The Representatives have advised the Trust that the Underwriters propose initially to offer the Common Shares to the public at the public offering price set forth on the cover page of this Prospectus Supplement, and to certain dealers at such price less a concession not in excess of $ per share. The Underwriters may allow, and such dealers may reallow, a discount not in excess of $ per share on sales to certain other dealers. After the initial public offering, the public offering price, concession and discounts may be changed. The Trust has granted an option to the Underwriters, exercisable during the 30-day period after the date of this Prospectus Supplement, to purchase up to an aggregate of 450,000 additional Common Shares at the price to the public set forth on the cover page of this Prospectus Supplement, less the underwriting discount. The Underwriters may exercise this option only to cover over- allotments, if any. To the extent that the Underwriters exercise this option, each Underwriter will be obligated, subject to certain conditions, to purchase the number of additional Common Shares proportionate to such Underwriter's initial amount reflected in the foregoing table. The Trust has agreed to indemnify the Underwriters against certain civil liabilities, including certain liabilities under the Securities Act of 1933, as amended, or to contribute to payments the Underwriters may be required to make in respect thereof. S-22 [MAP TO BE INSERTED BY TRUST] - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- NO DEALER, SALESMAN OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY IN- FORMATION OR MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED OR INCORPO- RATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS IN CONNEC- TION WITH THE OFFERING MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUST OR THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCE, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS SUPPLEMENT OR IN THE PROSPECTUS OR IN THE AFFAIRS OF THE TRUST SINCE THE DATE HEREOF. THIS PROSPEC- TUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. --------------- TABLE OF CONTENTS PAGE ---- PROSPECTUS SUPPLEMENT The Trust................................................................. S-3 Recent Developments....................................................... S-4 Use of Proceeds........................................................... S-5 Capitalization............................................................ S-6 Selected Financial Data................................................... S-7 Price Range of the Common Shares and Distributions........................ S-8 Business.................................................................. S-9 Management................................................................ S-19 Taxation.................................................................. S-21 Underwriting.............................................................. S-21 PROSPECTUS Available Information..................................................... 2 Incorporation of Certain Documents by Reference........................... 2 The Trust................................................................. 3 Ratios of Earnings to Fixed Charges....................................... 4 Use of Proceeds........................................................... 4 Description of Debt Securities............................................ 4 Description of Preferred Shares........................................... 19 Description of Depositary Shares.......................................... 24 Description of Common Shares.............................................. 28 Description of Warrants................................................... 29 Certain Federal Income Tax Considerations to the Trust of its REIT Election................................................................. 30 Plan of Distribution...................................................... 34 ERISA Matters............................................................. 35 Legal Opinions............................................................ 35 Experts................................................................... 35 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- 3,000,000 SHARES NEW PLAN REALTY TRUST COMMON SHARES --------------- PROSPECTUS SUPPLEMENT --------------- MERRILL LYNCH & CO. KIDDER, PEABODY & CO. INCORPORATED PAINEWEBBER INCORPORATED PRUDENTIAL SECURITIES INCORPORATED JUNE , 1994 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- GRAPHICS APPENDIX LIST PAGE WHERE GRAPHIC APPEARS DESCRIPTION OF GRAPHIC OR CROSS REFERENCE - -------------------------------------------------------------------------------- IFC-1 Four separate color charts showing: (i) Distributions Per Share (adjusted to give effect to the 3-for-2 share split on April 1, 1986) for fiscal years 1984-93, ranging from $0.57 per share in fiscal 1984 to $1.275 per share in fiscal 1993, and showing expected Distributions Per Share in fiscal 1994 of $1.33 based upon the current rate; (ii) Funds From Operations (net income plus depreciation and amortization, excluding gains from the sales of properties and sale of investment securities) ("FFO") and FFO Per Share for fiscal years 1984-93 and for the nine-month periods ended April 30, 1993 and 1994, ranging from $10,272,000 FFO and $0.73 FFO Per Share in fiscal 1984 to $49,863,000 FFO and $1.02 FFO Per Share in fiscal 1993, and from $36,844,000 FFO and $.76 FFO Per Share for the nine-months ended April 30, 1993 to $45,393,000 and $0.92 FFO Per Share for the nine-months ended April 30, 1994; (iii) New Plan Distributions vs. Consumer Price Index for fiscal years 1976-93; ranging from 0.00% in fiscal 1976 to 571.05% in fiscal 1993; and (iv) Shopping Center Square Footage (including square footage of factory outlet centers, shopping centers securing mortgages and properties under contract) from fiscal years 1983-94, ranging from $2,067 in fiscal 1983 to 14,014 in fiscal 1994 (year-to-date). - -------------------------------------------------------------------------------- IBC-1 Six-color map of the Eastern half of the United States plus California displaying New Plan Realty Trust's Portfolio of Properties as of 5/31/94, indicating Headquarters, Regional Offices, Shopping Centers, Apartment Complexes and Miscellaneous. Three-color pie chart showing that the Trust's portfolio is comprised of 83% Shopping Centers, 13% Apartments and 4% Mortgages and Other. - --------------------------------------------------------------------------------