1)

You requested that we again review our analysis submitted in our prior correspondence of March 5, 2010, January 19, 2010 and December 14, 2009, to determine whether the lease liabilities, as reported, were in fact appropriate based on our assumptions at the time of acquisition of the respective properties and that the assumptions we used were reasonable and supportable.

2)

With respect to the materiality of the adjustments relating to the additional intangible lease liabilities and related property carrying amounts noted above, we believe that such adjustments are not material to any of our prior year financial statements. We submit that it is not likely that the judgment of a reasonable person relying upon our financial statements would have been changed or influenced by the inclusion or correction of such adjustments.

 

	•	Adjustment as percent of Total Assets: 0.17% - 0.44%
	•	Adjustment as percent of Total Liabilities: 0.34% - 0.75%
	•	Adjustment as percent of Intangible Lease Liability: 4.33% - 16.90%
	•	Adjustment as percent of Net Income (Loss): 0.06% - 1.43% (rollover method)
	•	Adjustment as percent of Net Income (Loss) before discontinued operations and limited partners' interest: 0.06% - 5.14% 2003 – 2009 and 117.4% first quarter 2010 and 11.2% full year 2010 (iron curtain method)
	*	Support for the foregoing quantitative metrics is included in the exhibits attached hereto.

	•	The initial assigned intangible lease liabilities are based on valuations which are not capable of precise measurement and are  thus subject to a considerable degree of estimation. Factors affecting such valuations include market rent assumptions, sales projections, competitive considerations for the center and the tenants, financial strength and staying power of tenants, renewal rate assumptions, discount rates, and other factors.
	•	The adjustments would not mask a change in earnings or other trends. They would have no effect to-date on "Funds from Operations" or FFO, a primary non-GAAP measure of performance for real estate operating companies and real estate investment trusts, widely used by the investment and banking community, or derivative "adjusted" FFO concepts, all of which exclude real estate related depreciation altogether. The adjustments to the years from 2003 through 2009 would have consisted entirely of such real-estate based depreciation.
	•	The adjustments would have had no effect on meeting analysts' consensus expectations of FFO results for the Company.
	•	The adjustment had no impact on reported revenue in any year.
	•	The adjustment would not change a loss into income or vice versa for any of the relevant years.
	•	Because we operate a single segment, the adjustment has no effect on segment reporting.
	•	The adjustments have no effect on qualification of the Company as a real estate investment trust under applicable provisions of the Internal Revenue Code or the Company's compliance with other regulatory requirements. Specifically, the adjustments have no impact on an income tax basis, and, accordingly, result in no impact on taxable income or required minimum distributions for continued qualification as a Real Estate Investment Trust nor any impact on the other assets or income tests for REIT qualification.
	•	The adjustments will or would have no impact on our compliance with loan covenants or other contractual requirements.
	•	Neither the original valuations nor the adjustments will or would have had any effect on management's compensation or the determination thereof.
	•	The adjustments will or would have no effect on operations of the Company or any of its properties.

 

3)

In a subsequent telephone call, also on April 7 with Ms. Crittendon, you requested a further analysis of the additional income which would result if we reported these lease liabilities (for the 15 leases identified with lease renewal value) at the time of acquisition, notwithstanding the fact that none of the leases have yet to reach their renewal period. We confirm that through December 31, 2009, because none of the leases identified with intangible lease renewal value (of $8.6 million) have come up for renewal, there is no additional amortization of lease liability (income recognition) to recognize prior to December 31, 2009. Through 2009, all of the 15 leases are still within their non-cancellable lease period and all of their lease renewals periods will commence starting in 2010 and beyond. As a result, none of the renewal period value of $8.6 million would have been recognized into income prior to 2010. Our policy is that the estimated fair value of below market lease renewals that are likely to be exercised is deferred until such renewal options are exercised and subsequently amortized over the corresponding renewal period. If any such lease is not renewed, any value allocated to it will be charged to rental income at that time. Looking to the future, however, we would expect to record the following approximate annual amounts of revenue related to amortization of intangible lease liabilities over the next 11 years and beyond:

4)

In response to your request that we enhance the disclosure in our financial statements as to the initial accounting for below market renewal options included in determining intangible lease liabilities and the related amortization, the following reflects both the actual relevant wording used in our Form 10-K for the fiscal year ended December 31, 2009 (Note 2 to Consolidated Financial Statements, page 63 as filed with the SEC on March 15, 2010) and our proposed additional language (inserted in bold type):

 

              /s/ Leo S. Ullman

cc:

Lawrence E. Kreider, Jr. — Chief Financial Officer at Cedar Gaspare Saitta, II — Chief Accounting Officer at Cedar Jeffrey L. Goldberg — Former Corporate Controller of the Company and Current Consultant to the Company David Farhi — CPA, Engagement Partner at Ernst & Young on the Company's account as of 2009 Barry Moss — CPA, Independent Review Partner (Engagement Quality Reviewer) at Ernst & Young in its New York Office