Good morning and welcome to the Cedar Shopping Centers Incorporated first quarter 2011 earnings conference call. At this time, all participants have been placed in a listen-only mode and the floor will be open to your questions following the presentation. As a reminder, today’s call is being recorded. It is now my pleasure to turn the call over to your host, Brad Cohen of ICR. Please go ahead sir. Brad Cohen – IR, ICR: Thank you very much, operator. Good morning. At this time, management would like me to inform you that certain statements made during this call, which are not historical facts may be deemed forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1933, and Section 21E of the Securities and Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Although the company believes that expectations reflecting any forward-looking statements are based upon reasonable assumptions, they are subject to various risks and uncertainties. The company can provide no assurance that expectations will be achieved and actual results may differ. Many of the factors and risks that could cause actual results to differ materially from expectations are detailed in the company’s press release, which was put out yesterday and from time-to-time in the company’s filings with the Securities and Exchange Commission. In the end, the company undertakes no obligation to revise or update any forward-looking statements reflected in our circumstances after the date of the company’s release. It is now my pleasure to turn the call over to Mr. Leo Ullman, Chairman, Chief Executive Officer and President. Leo? Leo Ullman – Chairman, CEO and President: Thank you very much Brad. Good morning and thank you all very much for joining us today on the first quarter 2011 earnings…

Thank you Leo. As disclosed in previous communications, the present development and redevelopment pipeline at Cedar is much reduced from its size in past years. Today, Cedar's pipeline has a total of eight projects. Of these, three are ground-up developments while the remaining five are redevelopments of existing operating properties. These projects represent a total of new net investment approximating $50 million. Significant progress is being made in obtaining the final necessary entitlements for two of the ground-up developments. Each of these projects Kutztown Commons in Kutztown Pennsylvania, and Halifax Commons in Halifax Pennsylvania, should be delivered in late 2011 or early 2012. The final ground-up development Addisville Commons in Bucks County, Pennsylvania, is slated for delivery in 2013. The Kutztown and Bucks County projects are grocery-anchored developments, while Halifax Commons is pharmacy-anchored. Of the five redevelopment projects, two, Townfair Shopping Center in Indiana, Pennsylvania and The Point Shopping Center in Harrisburg, have already been delivered earlier this year with a third, Trexlertown Plaza, in Allentown, Pennsylvania, to be delivered later this calendar year. The Point Shopping Center project consisted of the expansion of an existing operating grocer, while the Townfair project involved the replacement of a dark grocery anchor with a new, much larger grocery store. The Trexlertown Plaza project consists of the relocation of an existing grocery anchor into a new facility. The final two redevelopment projects in the Cedar pipeline, the Brickyard shopping center in Berlin, Connecticut, and the Shore mall in Egg Harbor Township, are scheduled for completion in 2012 and 2014 respectively. We continue to consider future project opportunities at Cedar with a previously stated strict and conservative criteria centered on our aversion to risk. We are also continuing to look at projects that have a significant amount of preleasing and entitlements in place, as…

Thank you sir. [Operator instructions.] We'll take our first question from Todd Thomas at KeyBanc Capital Markets. Todd Thomas – KeyBanc Capital Markets: Hi, good morning. I'm on with Jordan Sadler as well. With regard to your guidance can you discuss some of the underlying assumptions related to the core portfolio that you're assuming in terms of occupancy and maybe same-store NOI? Leo Ullman – Chairman, CEO and President: Well, Todd, as I said in my remarks, we expect a pretty constant same-store NOI through this year and constant occupancy. Todd Thomas – KeyBanc Capital Markets: Okay. And I was wondering, Leo, you mentioned with regard to the additional asset sales, the two properties in Michigan and the five in the Chesapeake area, I was just wondering if you could discuss the strong interest that you're seeing and maybe discuss what kind of pricing we should expect, and also who are the buyers for these assets. Leo Ullman – Chairman, CEO and President: The strong interest has been mostly from private owners who are active in the area. We have generally contemplated based on initial reactions that the sales prices would be generally equal to our cost basis for the properties. In Michigan, we have not seen a great deal of activity and partly it's a problem of not yet having fixed the Hobby Lobby lease, which replaces the A&P tenancy, although A&P never opened, and Hobby Lobby is the sublessee, that contract is either extendable or terminable by us and we haven't reached an agreement because that may very much affect the desirability of the property to an acquirer. The other property in Michigan is a small development site near Grand Rapids. We have had some activity for the Columbia Mall property and we continue to market that. Other…

And moving on, we'll next go to Paul Adornato with BMO Capital Markets. Paul Adornato – BMO Capital Markets: First, with respect to the East Lansing property with the A&P, that obviously is in same-store, but is it also included in held-for-sale? Leo Ullman – Chairman, CEO and President: No. Paul Adornato – BMO Capital Markets: What do you think you'll do with the property? Will you try to lease up the A&P before you market it? Leo Ullman – Chairman, CEO and President: No, in fact we first have to figure out exactly what we will be doing with Hobby Lobby and that in turn will be dependent on, as I indicated, whether potential purchasers would rather have the vacant store versus a continuing lease. That lease is at about $6.25, whereas the A&P lease, I believe, Nancy, was in the $17 area? Nancy Mozzachio – VP, Leasing: $17.03, something along those lines, yes. Leo Ullman – Chairman, CEO and President: That property is a couple of hundred feet from the entrance to Michigan State University, so we do expect to have strong interest in that property once we determine what to do with the Hobby Lobby lease, which now is a direct lease rather than a sublease, and that tenant has been paying rent to date. The other thing that's relevant to that property is that we do contemplate having substantial claims under the A&P bankruptcy for leases up to three years, and that's a valuation in the millions of dollars, where we are actively talking to companies who purchase these claims in bankruptcies at a 20-27% valuation of the ultimate claim. And we contemplate that that may be a transaction that we would enter into, which would generate probably on the order of $400,000 or more. Paul…

And next we'll go to Nathan Isby at Stifel Nicolaus.

Can you just disclose what the physical occupancy of the portfolio is, not on a leased basis but actual physical occupancy? Leo Ullman – Chairman, CEO and President: I'm going to leave the discussion on occupancy to Gus for a moment. Gus, would you explain also, if you would, what we have done with occupancy statistics during the course of the past year in our sup.

To start off, if you look back at our sup from March of 2010, you would see that the occupancy for the total operating portfolio was more around 94.5%. In June of last year, on the advice of our analysts, we decided to put back in the retenanting properties into our total operating portfolio. And over the course of December and March, as we held properties for sale, we removed them from the total operating portfolio in accordance with the accounting rules. It reduced that occupancy from 94.5% to approximately 93.5%. Our occupancy right now in March of '11 is approximately 93.6%. We had about seven tenants that were erroneously marked as terminated as of March 31, who did not terminate at March 31. Our actual occupancy for the March quarter should be about 93.8%, which shows about a 20 basis point decrease from December. In our new leases that we list here on page 13 of our supplemental, there are about 34,000 square feet of new leases that relate to our ground-up developments, which are not in the total operating portfolio. Also, in the new leases executed but not yet commenced, which are not in our occupancy numbers, there are about 24,000 square feet of leases related to our total operating portfolio. What it does is our occupancy is pretty stable from December to March and has shown an increase from March of last year.

What I was actually referring to was the physical occupancy just in terms of the fixed grosses that have closed and how, if you were to include those into your occupancy numbers, how that would -

Understood. Yes, the six grocers that have closed represent a total of approximately 360,000 square feet out of the 14.9 million square feet we are reporting. And that represents approximately, let's say, 2.5%.

Okay, very good. Thank you. And then can you just address, just looking at your portfolio as a whole and then maybe breaking it down a bit, what your sales productivity of the grocers in your portfolio are? Leo Ullman – Chairman, CEO and President: Well, we have a pretty good idea of certainly the Stop N Shop and Giant component, which represents nearly 20% of our total revenues and of our GLA. Their average sales for the stores in our portfolio are between $630 and $650 per square feet according to our estimates. The grocers are not required to report, so much of this is based on our assumptions and our analysis and conversations with people at the tenants. With respect to our other stores, it's varied, but I would guess generally that it's in the $400 to $450 per square foot range, with the exception of course, again, of the very strong Stop N Shop and Giant tenancies.

If you were to look at your portfolio between what's in the RioCan portfolio and what's in your consolidated portfolio, how much of a difference would you say there is in terms of the gross and productivity? Leo Ullman – Chairman, CEO and President: I think it's probably fairly reflective. In the RioCan portfolio we have, let's say, between 22 and 24 properties. Most have a supermarket component and most are the Ahold affiliates, with limited exceptions, such as Raynham, mentioned by Brenda, and there may be others. But basically, I would say that most would reflect the grocery component with the Ahold concept. So again, at the probably $625-650 per square feet kind of sales results.

And then just looking at it one other way, can you talk about what the productivity in your SUPERVALU concepts are? And maybe specifically both what's still open and maybe the six grocers that have closed already. Leo Ullman – Chairman, CEO and President: Well, the six grocers that have closed aren't producing a lot of -

I know, but where were they before they closed? Leo Ullman – Chairman, CEO and President: I think in general our properties that we have offered for sale in the Chesapeake area are operating well. I would say in the $400-425 kind of area. And the reason we put them for sale at this time is that they are operating well and they do look good. But strategically for us, we have decided it's a market that we do not want to play in going forward. I think with respect to the other SUPERVALU concepts, Acme in Philly is, I would say, would be in the $500 area. Those are good stores. Washington Center, probably a little down from that, in South New Jersey. That's probably in the $400 area. I think those are the ones that are relevant.

And the ones that are closed, do you have any figures on those? Leo Ullman – Chairman, CEO and President: Before closing? They don't report, Nate. None of them report. It's hard to speculate at this point.

And then just focusing on the Philly property. I remember when you bought it you clearly knew it was not a long-term deal for the IRS there. Can you just talk about what you're looking at, what you've been working on in terms of replacing and IRS, what it's going to cost in terms of time and yield? Leo Ullman – Chairman, CEO and President: Well, there again it's not predictable. I wish it were in terms of timing and cost. The property was just vacated literally a couple of weeks ago at this point. And we have carefully reviewed the properties in terms of our potential claims for restoration. It represents 40 acres in northeast Philly, just south of the Pennsylvania turnpike, where we have a signalized entrance that's just north of [Red Line] Boulevard. 100,000 cars or so pass this property per day. It's 12-lane traffic, believe it or not, and of course it's Route 1 Roosevelt Boulevard, so it's a very, very impressive site. It is presently zoned industrial. We have been in the process of obtaining potential retail use and dealing with the various entitlement aspects of it. We have also been talking to a couple of very strong Philadelphia developers on the concept of potential joint development activities, which could be multiuse. We have also been approached by schools and industrial users as possibilities. So it's very, very hard, at this early stage, to predict when, and how, and how much.

Okay, thank you. And then just one final question. Your net recoveries were down this quarter. The expenses were up, recoveries were down. Was that due to snow issues? Leo Ullman – Chairman, CEO and President: On a cash basis, certainly. On an accrual basis, we're still showing 73% collections, which are, in fact, slightly up.

Yeah, I was looking in your same-store NOI on page 12 there. Leo Ullman – Chairman, CEO and President: We think by the end of this month, we will have billed and largely collected on a cash basis much of the year-end billings, which of course were immensely affected by snow removal.

Next we'll go to Craig Schmidt of Bank of America Merrill Lynch

You may have been in the process of answering this, but when I look at the occupancy for the operating properties, from December to March you went from 96.4% to 97.4% and then for the smaller properties you went from 81.9% to an increase of 82.7%. But when I get to the total for opening properties, it went from 94% to 93.6%. I'm just trying to understand why the two different areas could increase yet the total would decrease. Leo Ullman – Chairman, CEO and President: Gus?

Craig, you're looking at the table that's in the footnote H? In the sup on page 13?

Yes, on page 13, on March and -

That also includes our ground-up developments and our development properties. That's why there's the difference between the 92.1% and the 93.6%. In the prior quarter at December, it didn't include all the properties. We had to correct the mix.

Okay, so it's a mix issue.

Yes.

Great. Okay, then I guess for Nancy, if she could just describe the leasing spreads between the large and the small tenants. How would you characterize them? Nancy Mozzachio – VP, Leasing: You're talking about new lease spreads, or renewal?

Renewal I guess is more important, but both if I can get it. Nancy Mozzachio – VP, Leasing: Okay. Well, just generally I can tell you that the overall renewal spreads large versus small, of course if it's a lease that comes due with an option that's in place with a larger tenant, you're typically seeing a smaller increase, sometimes no increase at all. The grocer sometimes will give you a small percentage. When we've had the opportunity to negotiate new terms, we have generally had the ability to get a positive free lease spread on a renewal basis. With the smaller tenants, I would say we've been seeing pretty consistently pretty high numbers in terms of our spreads. I'd say anywhere between the 7-11% range, and we're certainly seeing that well into 2011 and any new deals that we're working on for 2012. In terms of new lease spreads, I think that we are showing, and as I mentioned in my remarks, the overall numbers are still positive. Our newer leases with larger-sized tenants, we're still eking out percentages and with the smaller tenants I think pretty consistently I would say maybe 5-7% for new leases for smaller tenants, say under 10,000 square feet.

[Operator instructions.] We'll take our next question from Sri Nagarajan at FBR. Evan Smith – FBR Capital Markets: Hi, this is Evan Smith on with Sri. I was just hoping you guys could talk a little bit about specific goals you have in terms of net debt to EBITDA and fixed charge, and also the timing of those goals. Leo Ullman – Chairman, CEO and President: Well, we can give you sort of a range. Basically, in terms of our business plan, over a two-year period, we would like to move the fixed charge coverage from 1.6 toward 2.0, and with respect to debt to EBITDA, again looking at a two-year period, we'd like to move that 8.3, at which we are now, to, say, the 7.5 kind of range. Evan Smith – FBR Capital Markets: And with the planned dispositions that you've been talking about, are there any additional impairment charges that you expect to incur this year? And then also, is this going to have any effect on the dividend level going forward? Leo Ullman – Chairman, CEO and President: We don't expect any effect on the dividend. Our AFFO is substantially in excess of our dividend amount. Our AFFO is in the 43-44% range, and our dividend's $0.36. So we do not expect a challenge in that area. We do contemplate possible additional impairments, which we can't quantify yet. For example, with respect to the Michigan property, if we have a sale there, and possibly Columbia, depending on where we ultimately sell that. But we don't expect large amounts anymore. We took a real hit with respect to our Ohio properties and that's where we think we were most vulnerable. But strategically, we strongly believe it was the right move. And other than that, we do not expect serious impairments. Larry Kreider – CFO: Just one addendum, we do expect an, in the range of $5 million increase once we dispose of our 20% interest in the Homburg properties. A gain. Evan Smith – FBR Capital Markets: And then lastly, you talked in the press release about substantially completing all renewal leases for 2011 expirations. Just curious what exactly you mean by substantially, and also what the retention rate was. Leo Ullman – Chairman, CEO and President: Nancy, would you address that? Nancy Mozzachio – VP, Leasing: I think last quarter we were talking about that we're more than 50%. We've definitely upped that number. I would say that we are probably two-thirds of the way at this point, with probably another, I would say, 10-15% in contracts, so not yet signed. The retention rate for us is quite high. You're probably in the high 80s for smaller tenants and probably in the low 90s if not higher for the larger tenants.

And now we'll take our last question from Arthur Friedman at Friedman Asset Management. Arthur Friedman – Friedman Asset Management: Actually, all my detailed occupancy questions have been very nicely answered, so I won't ask those. I was wondering could you do what you did last quarter, which was give us just an overall macro assessment of the overall economy and how you think it's impacting your strategy and the properties going forward? Leo Ullman – Chairman, CEO and President: I think it's fair to say that we may be a little bit more pessimistic than some of the reports that have been in papers, and we think our product, which is essentially a defensive product with the grocery anchors, continues to be probably the best answer to the increases in commodities pricing, to the increases in fuel charges and energy costs, all of which we think will impact again on sales for retail properties going forward. Continued unemployment, no meaningful increase in housing starts, all of those things. And no meaningful new construction. We think all of that will continue to benefit our defensive product going forward. And as you heard from Nancy, in terms of the trips to the supermarket-anchored properties, they are more than double the nearest other category, which I believe is the power centers. So we think we're in a relative sweet spot still, with the challenges that are out there. The other kind of concerns that we have, which are not impacting us very much, are sales through the web, and we think that will impact electronic stores. Among our tenants, it could impact people like Staples. We don't have that much exposure to, say, Best Buys, but it could impact Staples and Staples has been featuring smaller stores. It could impact somebody like Radio Shack. Again, not a meaningful percentage of our overall tenancy at all, but we think with respect to grocers, they will continue to operate well. The challenge for the grocers has been, and will continue to be, the amount of food that's being sold in drugstores, convenience stores, and dollar stores. And that will impact on our general leasing parameters in that the grocers, in terms of their exclusivity, would clearly prefer not to have challenges with dollar stores, which to date have comfortably been in the same supermarket-anchored properties as the grocers. And I think going forward that huge component of our total tenancy that's measured by the dollar stores will be challenged. But the dollar stores we think will continue to do well unless pricing from China increases greatly as a result of transportation costs for example. Arthur Friedman – Friedman Asset Management: That's right, because actually we noticed Targets are starting to sell a lot of food too. Thank you very much.

And that's all the time we have for questions today. At this time I'd like to turn the call back over to our speakers for any additional or closing remarks. Leo Ullman – Chairman, CEO and President: Thank you very much, operator. Thank you again all for listening in to our call. For closing remarks, I would only say that the company will continue its capital recycling strategy, which we started last year, to upgrade the quality of our assets through selected asset sales as we've been talking about and through dispositions generally. We expect that our efforts will further reduce our debt and improve long-term growth in our opening results in order to build and enhance shareholder value, which of course is what we have to be about. So thank you very much, and that's the end of this call.