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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 12, 2002

NEW PLAN EXCEL REALTY TRUST, INC.
(Exact name of Company as specified in its charter)

Maryland
(State or other jurisdiction
of incorporation)		   1-12244
(Commission
File Number)		   33-0160389
(IRS Employer
Identification Number)

1120 Avenue of the Americas, 12th Floor
New York, New York
(Address of principal executive offices)
 
10036
(Zip Code)

Company's telephone number, including area code:
 (212) 869-3000

Not applicable
(Former name or former address, if changed since last report)


Item 2.    Acquisition or Disposition of Assets

        On December 12, 2002, New Plan Excel Realty Trust, Inc. (the "Company") closed on 57 community and neighborhood shopping centers from Equity Investment Group ("EIG"), a private retail focused REIT. The acquisition of one additional shopping center from EIG is expected to close in January 2003.

        The aggregate purchase price for the acquisition was approximately $437 million, consisting of the assumption of approximately $149 million of outstanding indebtedness, the issuance of approximately $25 million of units in a partnership controlled by the Company and approximately $263 million in cash. The cash component of the acquisition was financed with proceeds from the sale of four factory outlet centers to Chelsea Property Group, which closed on December 19, 2002 and generated gross proceeds of approximately $193 million, and through borrowings under the Company's existing credit facility with Fleet National Bank as lead agent.


Item 7.    Financial Statements and Exhibits

(a)
Financial Statements of Properties Acquired
(b)
Pro forma financial information
(c)
Exhibits
  2.1   Purchase Agreement, dated as of October 17, 2002, by and between the Company and EIG Realty, Inc.

 
2.2
 
First Amendment to Purchase Agreement, dated as of November 6, 2002, by and between the Company and EIG Realty, Inc.

 
2.3
 
Closing Day Amendment to Purchase Agreement, dated as of December 12, 2002, by and between the Company and EIG Realty, Inc.

 
2.4
 
Purchase Agreement, dated as of October 17, 2002, by and among the Company, RIG Hunt River Commons, LLC, RIG Paradise Pavilion, LLC and RIG Hilltop Plaza, LLC.

 
2.5
 
First Amendment to Purchase Agreement, dated as of November 6, 2002, by and among the Company, RIG Hunt River Commons, LLC, RIG Paradise Pavilion, LLC, RIG Hilltop Plaza, LLC and RIG Normandy Square, LLC.

 
2.6
 
Closing Day Amendment to Purchase Agreement, dated as of December 12, 2002, by and among the Company, RIG Hunt River Commons, LLC, RIG Paradise Pavilion, LLC, RIG Hilltop Plaza, LLC and RIG Normandy Square, LLC.

 
2.7
 
Purchase Agreement, dated as of October 17, 2002, by and between the Company and EIG Operating Partnership, L.P.

 
2.8
 
First Amendment to Purchase Agreement, dated as of November 6, 2002, by and between the Company and EIG Operating Partnership, L.P.

 
 
 
 

2


 
2.9
 
Closing Day Amendment to Purchase Agreement, dated as of December 12, 2002, by and between the Company and EIG Operating Partnership, L.P.

 
2.10
 
Contribution Agreement, dated as of October 17, 2002, by and between Excel Realty Partners, L.P. and EIG Operating Partnership, L.P.

 
2.11
 
First Amendment to Contribution Agreement, dated as of November 6, 2002, by and between Excel Realty Partners, L.P. and EIG Operating Partnership, L.P.

 
2.12
 
Second Amendment to Contribution Agreement, dated as of December 9, 2002, by and between Excel Realty Partners, L.P. and EIG Operating Partnership, L.P.

 
2.13
 
Closing Day Amendment to Contribution Agreement, dated as of December 12, 2002, by and between Excel Realty Partners, L.P. and EIG Operating Partnership, L.P.

 
4.1
 
Registration Rights Agreement, dated as of December 12, 2002, by and between the Company and EIG Operating Partnership, L.P.

 
4.2
 
Registration Rights Agreement, dated as of December 12, 2002, by and between the Company and EIG Operating Partnership, L.P.

3


SIGNATURE

        Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

  NEW PLAN EXCEL REALTY TRUST, INC.

 
 
 
Date: December 27, 2002 By: /s/  STEVEN F. SIEGEL      
Steven F. Siegel
 Executive Vice President, General Counsel and Secretary

4


NEW PLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES

Pro Forma Consolidated Balance Sheet
September 30, 2002
(unaudited, in thousands)

 
   Historical(a)
   EIG
Acquisition(b)
   Factory Outlet
Disposition(c)
   Pro Forma
  
ASSETS                          
Real estate:                          
  Land   $ 731,480   $ 136,416 (b1) $ (11,137 )(c1) $ 856,759  
  Building and improvements     2,599,462     318,304 (b1)   (127,776 )(c1)   2,789,990  
  Accumulated depreciation and amortization     (310,113 )   —     28,249 (c1)   (281,864 )
   
 
 
 
 
    Net real estate     3,020,829     454,720     (110,664 )   3,364,885  
Real estate held for sale     44,743     —     —     44,743  
Cash and cash equivalents     6,384     1,030 (b2)   —     7,414  
Restricted cash     13,126     —     —     13,126  
Marketable securities     2,098     —     —     2,098  
Receivables:                          
  Trade, less allowance for doubtful accounts of $14,874     46,408     —     —     46,408  
  Other, net     18,965     —     —     18,965  
Mortgages and notes receivable     2,939     —     —     2,939  
Prepaid expenses and deferred charges     24,480     —     —     24,480  
Investment in/advances to unconsolidated ventures     53,518     —     —     53,518  
Other assets     21,663     —     —     21,663  
   
 
 
 
 
    Total assets   $ 3,255,153   $ 455,750   $ (110,664 ) $ 3,600,239  
   
 
 
 
 
LIABILITES AND STOCKHOLDERS' EQUITY                          
Liabilities:                          
Mortgages payable, including unamortized premium of $5,059   $ 504,743   $ 163,372 (b3) $ —   $ 668,115  
Notes payable, net of unamortized discount of $2,325     783,873     —     —     783,873  
Credit facilities     185,000     265,788 (b1)   (193,000 )(c2)   257,788  
Capital leases     28,961     —     —     28,961  
Other liabilities     152,786     —     —     152,786  
Tenant security deposits     8,213     1,030 (b2)   —     9,243  
   
 
 
 
 
    Total liabilities     1,663,576     430,190     (193,000 )   1,900,766  
   
 
 
 
 
Minority interest in consolidated partnership     13,966     25,560 (b1)   —     39,526  
   
 
 
 
 
Commitments and contingencies     —     —     —     —  

Stockholders' equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
  Preferred stock     8     —     —     8  
  Common stock     968     —     —     968  
Additional paid-in capital     1,825,654     —     —     1,825,654  
Accumulated other comprehensive loss     (979 )   —     —     (979 )
Accumulated distribution in excess of net income     (248,040 )   —     82,336 (c3)   (165,704 )
   
 
 
 
 
    Total stockholders' equity   $ 1,577,611     —     82,336   $ 1,659,947  
   
 
 
 
 
      Total liabilities and stockholders' equity   $ 3,255,153   $ 455,750   $ (110,664 ) $ 3,600,239  
   
 
 
 
 

F-1


NEW PLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES

Notes to Pro Forma Consolidated Balance Sheet
September 30, 2002
(unaudited, in thousands, except per share amounts)

Presentation

        The preceding pro forma consolidated balance sheet as of September 30, 2002 presents the historical amounts for New Plan Excel Realty Trust, Inc. and its subsidiaries (collectively the "Company"), adjusted for the effects of (i) the acquisition by the Company of 58 community and neighborhood shopping centers from Equity Investment Group (the "EIG Acquisition"), and (ii) the disposition by the Company of four of its factory outlet properties (the "Factory Outlet Disposition"), as if such transactions had occurred on September 30, 2002.

        The pro forma consolidated balance sheet should be read in conjunction with the pro forma consolidated statement of operations of the Company and the historical financial statements and notes thereto of the Company presented in the Company's Form 10-Q for the quarter ended September 30, 2002.

        The pro forma consolidated balance sheet is unaudited and is not necessarily indicative of what the actual financial position of the Company would have been had the transactions described above actually occurred on September 30, 2002, nor does it purport to represent the future financial position of the Company.

Notes and Management Assumptions

(a)
Reflects the consolidated historical balance sheet of the Company as of September 30, 2002, as contained in the historical consolidated financial statements and notes thereto presented in the Company's Form 10-Q for the quarter ended September 30, 2002.

(b)
Represents adjustments to reflect the EIG Acquisition as follows:

(b1)
Represents the approximate, aggregate acquisition costs incurred by the Company (allocated among land and building) to effect the EIG Acquisition, based on the terms of the contract. Includes the following:

Cash   $ 261,788  
Assumed debt     163,372  
Partnership units issued     25,560 (1)
Estimated transaction-related costs     4,000  
   
 
  Total   $ 454,720  
   
 

F-2

(c)
Represents adjustments to reflect the Factory Outlet Disposition as follows:

(c1)
Represents the sale of all real estate assets and the related accumulated depreciation.

(c2)
Represents the application of net proceeds to pay down amounts outstanding under the Company's existing credit facilities.

(c3)
Represents estimated gain on the sale of the Factory Outlet Disposition.

F-3


NEW PLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES

Pro Forma Consolidated Statement of Operations
For the Nine Months Ended September 30, 2002
(unaudited, in thousands, except per share amounts)

 
    
    
    
    
   Pro Forma Adjustments
    
  
 
   Historical(a)
   Factory
Outlet
Historical(b)
   EIG
Acquisition
Historical(c)
   Center
America
Historical(d)
   EIG
Acquisition(e)
   Center
America
Acquisition(f)
   Other(g)
   Pro
Forma
  
Rental revenues:                                                  
  Rental income   $ 247,209   $ (17,601 ) $ 37,521   $ 12,212   $ —   $ 124 (f1) $ —   $ 279,465  
  Percentage rents     6,212     (1,166 )   —     144     —     —     —     5,190  
  Expense reimbursements     57,553     (3,269 )   7,846     2,887     —     —     —     65,017  
   
 
 
 
 
 
 
 
 
    Total rental revenues     310,974     (22,036 )   45,367     15,243     —     124     —     349,672  
   
 
 
 
 
 
 
 
 
Expenses:                                                  
  Operating costs     53,426     (5,202 )   7,582     1,442     —     —     —     57,248  
  Real estate and other taxes     34,984     (1,103 )   5,115     2,028     —     —     —     41,024  
  Interest     68,371     —     —     824     7,658 (e1)   2,640 (f2)   5,488 (g1)   84,981  
  Depreciation and amortization     52,143     (2,805 )   —     —     5,788 (e2)   2,177 (f3)   —     57,303  
  Provision for doubtful accounts     7,093     (255 )   —     789     —     —     —     7,627  
  General and administrative     13,329     (9 )   788     582     —     —     —     14,690  
   
 
 
 
 
 
 
 
 
    Total expenses     229,346     (9,374 )   13,485     5,665     13,446     4,817     5,488     262,873  
   
 
 
 
 
 
 
 
 
Income before real estate sales, impairment of real estate, minority interest and other income and expenses     81,628     (12,662 )   31,882     9,578     (13,446 )   (4,693 )   (5,488 )   86,799  
Other income and expenses:                                                  
  Interest, dividend and other income     8,792     (3 )   —     —     —     —     —     8,789  
  Equity participation in ERT     —     —     —     —     —     —     —     —  
  Equity in income of unconsolidated ventures     3,733     —     —     —     —     (28 )(f3)   —     3,705  
  Foreign currency loss     (13 )   —     —     —     —     —     —     (13 )
  Gain on sale of real estate     371     —     —     —     —     —     —     371  
  Impairment of real estate     (1,750 )   —     —     —     —     —     —     (1,750 )
  Minority interest in income of consolidated partnership     (418 )   —     —     —     (776 )(e3)   —     —     (1,194 )
   
 
 
 
 
 
 
 
 
Income from continuing operations   $ 92,343   $ (12,665 ) $ 31,882   $ 9,578   $ (14,222 ) $ (4,721 ) $ (5,488 ) $ 96,707  
   
 
 
 
 
 
 
 
 
Income from continuing operations per common share                                                  
  Basic   $ 0.88                                       $ 0.92  
   
                                     
 
  Diluted   $ 0.87                                       $ 0.90  
   
                                     
 

Average shares outstanding—basic
 
 
94,519
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
95,227
(g3)
   
                                     
 
Average shares outstanding—diluted     96,123                                         98,213 (g3)
   
                                     
 

F-4


NEW PLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES

Pro Forma Consolidated Statement of Operations
For the Year Ended December 31, 2001
(unaudited, in thousands, except per share amounts)

 
    
    
    
    
   Pro Forma Adjustments
    
  
 
   Historical(a)
   Factory
Outlet
Historical(b)
   EIG
Acquisition
Historical(c)
   Center
America
Historical(d)
   EIG
Acquisition (e)
   Center
America
Acquisition(f)
   Other (g)
   Pro
Forma
  
Rental revenues:                                                  
  Rental income   $ 270,244   $ (22,992 )   46,693   $ 68,956   $ —   $ 163 (f1) $ —   $ 363,064  
  Percentage rents     7,139     (1,763 )   —     1,150     —     —     —     6,526  
  Expense reimbursements     61,026     (4,457 )   10,388     18,233     —     —     —     85,190  
   
 
 
 
 
 
 
 
 
    Total rental revenues     338,409     (29,212 )   57,081     88,339     —     163     —     454,780  
   
 
 
 
 
 
 
 
 
Expenses:                                                  
  Operating costs     56,698     (6,324 )   8,598     12,631     —     —     —     71,603  
  Real estate and other taxes     35,424     (1,430 )   6,322     12,319     —     —     —     52,635  
  Interest     78,779     —     —     —     10,211 (e1)   15,838 (f2)   9,244 (g1)   114,072  
  Depreciation and amortization     57,615     (3,870 )   —     —     7,718 (e2)   13,064 (f3)   —     74,527  
  Provision for doubtful accounts     6,453     (671 )   —     1,527     —     —     —     7,309  
  Severance costs     896     —     —     —     —     —     —     896  
  General and administrative     10,318     (13 )   1,424     5,213     —     —     —     16,942  
   
 
 
 
 
 
 
 
 
    Total expenses     246,183     (12,308 )   16,344     31,690     17,929     28,902     9,244     337,984  
   
 
 
 
 
 
 
 
 
Income before real estate sales, impairment of real estate, minority interest and other income and expenses     92,226     (16,904 )   40,737     56,649     (17,929 )   (28,739 )   (9,244 )   116,796  
Other income and expenses:                                                  
  Interest, dividend and other income     13,990     (14 )   —     3,309     —     —     —     17,285  
  Equity participation in ERT     (4,313 )   —     —     —     —     —     2,501 (g2)   (1,812 )
  Equity in income of unconsolidated ventures     985     —     —     62     —     (166 )(f3)   —     881  
  Foreign currency loss     (560 )   —     —     —     —     —     —     (560 )
  Gain on sale of real estate     1,610     (245 )   —     —     —     —     —     1,365  
  Impairment of real estate     (13,107 )   —     —     —     —     —     —     (13,107 )
  Minority interest in income of consolidated partnership     (848 )   —     —     (273 )   (1,015 )(e3)   —     —     (2,136 )
   
 
 
 
 
 
 
 
 
Income from continuing operations   $ 89,983   $ (17,163 ) $ 40,737   $ 59,747   $ (18,944 ) $ (28,905 ) $ (6,743 ) $ 118,712  
   
 
 
 
 
 
 
 
 
Income from continuing operations per common share                                                  
  Basic   $ 0.77                                       $ 1.02  
   
                                     
 
  Diluted   $ 0.77                                       $ 0.99  
   
                                     
 
Average shares outstanding—basic     87,241                                         94,141 (g3)
   
                                     
 
Average shares outstanding—diluted     88,799                                         97,081 (g3)
   
                                     
 

F-5


NEW PLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES

Notes to Pro Forma Consolidated Statements of Operations
Nine Months Ended September 30, 2002 and Year Ended December 31, 2001
(unaudited, in thousands, except per share amounts)

Presentation

        The preceding pro forma consolidated statements of operations for the nine months ended September 30, 2002 and for the year ended December 31, 2001 present the historical amounts for New Plan Excel Realty Trust, Inc. and its subsidiaries (collectively the "Company"), adjusted for the effects of (i) the acquisition by the Company of 58 community and neighborhood shopping centers from Equity Investment Group ("EIG Acquisition"), (ii) the disposition by the Company of four of its factory outlet properties ("Factory Outlet Disposition"), (iii) the acquisition of 92 community and neighborhood shopping centers and equity investment from CenterAmerica Property Trust, L.P. on March 1, 2002 (the "CenterAmerica Acquisition"), and (iv) other adjustments, including the public offering of 6,900,000 shares of common stock of the Company (the "Stock Offering") completed on January 29, 2002, the offering of $250 million of 5.875% senior unsecured notes (the "Bond Offering") completed on June 11, 2002, and the disposition by the Company of its garden apartment portfolio (the "Apartment Disposition") completed on September 21, 2001, as if such transactions had occurred on January 1, 2001.

Notes and Management Assumptions

(a)
Reflects the consolidated results of operations of the Company for the nine months ended September 30, 2002 and the year ended December 31, 2001, respectively, as contained in the historical consolidated financial statements and notes thereto presented in the Company's Form 10-Q for the quarter ended September 30, 2002 and the Company's Form 10-K for the year ended December 31, 2001, respectively.

(b)
Reflects the revenues and expenses of the four factory outlet properties disposed of by the Company for the nine months ended September 30, 2002 and the year ended December 31, 2001, respectively.

(c)
Reflects the revenues and expenses for the 58 properties acquired by the Company in connection with the EIG Acquisition for the nine months ended September 30, 2002 and the year ended December 31, 2001, respectively.

(d)
Reflects the revenues and expenses for the 92 properties acquired by the Company in connection with the CenterAmerica Acquisition, for the two months ended March 1, 2002 and the year ended December 31, 2001, respectively.

(e)
Represents adjustments to reflect the EIG Acquisition as follows:

(e1)
Reflects interest expense on mortgage debt assumed in connection with the EIG Acquisition as follows:

 
   Nine months ended
September 30, 2002
   Year ended
December 31, 2001
Interest expense—mortgage debt assumed (interest rate of 6.25%)   $ 7,658   $ 10,211

F-6

Description
   Principal Amount
   Interest Rate
   Due Date
27 Properties   $ 163,372   6.25 % 3/1/06 - 2/1/28
(f)
Represents adjustments to reflect the CenterAmerica Acquisition as follows:

(f1)
Pro forma base rents are presented on a straight-line basis calculated from January 1, 2001 forward.

(f2)
Reflects interest expense on mortgage debt assumed in connection with the CenterAmerica Acquisition as follows:

 
   Nine months ended
September 30, 2002
   Year ended
December 31, 2001
Interest expense—mortgage debt assumed   $ 2,640   $ 15,838
Description
   Principal
Amount
   Interest Rate
   Due Date
REMIC—Floating   $ 110,500   LIBOR + 150 bp   07/02/03
Merchants Park/The Crossing at Fry Road     21,414   7.81 % 07/01/04
41 Properties (REMIC)     156,616   6.67 % 06/01/08
(g)
Represents certain pro forma adjustments made in connection with the Factory Outlet Disposition, the Apartment Disposition, the Stock Offering and the Bond Offering as follows (in thousands):

(g1)
Reflects the application of a portion of the cash proceeds from the Factory Outlet Disposition, the Apartment Disposition, the Stock Offering and the Bond Offering to repay outstanding debt under the Company's existing revolving credit facilities and term loan facilities, including the $78 million term loan (the "Pointe Orlando Loan") incurred by Pointe Orlando Development Company, a wholly owned subsidiary of ERT. This results in an increase in pro forma interest expense of $5,488 and $9,244 for the nine months ended September 30, 2002 and the year ended December 31, 2001, respectively.

(g2)
Reflects the application of a portion of the cash proceeds from the Factory Outlet Disposition, the Apartment Disposition, the Stock Offering and the Bond Offering to repay the Pointe

F-7


 
   Nine months ended
September 30, 2002
   Year ended
December 31, 2001
Basic:        
Historical basic weighted average common shares outstanding   94,519   87,241
Effect of pro forma adjustment for shares issued in Stock Offering   708   6,900
   
 
Pro forma basic weighted average common shares outstanding   95,227   94,141
   
 
Diluted:        
Historical diluted weighted average common shares outstanding   96,123   88,799
Effect of pro forma adjustment for shares issued in Stock Offering   708   6,900
Effect of pro forma adjustment for units issued in EIG Acquisition   1,382   1,382
   
 
Pro forma diluted weighted average common shares outstanding   98,213   97,081
   
 

F-8


NEW PLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES

Estimated Twelve-Month Pro Forma Statement of
Taxable Income and Operating Funds Available (unaudited)

        The following unaudited statement is a pro forma estimate for the twelve month period ended September 30, 2002 of taxable income and funds available from operations of the Company. The pro forma statement is based on the Company's historical operating results for the twelve-months ended September 30, 2002, adjusted for the acquisition by the Company of 58 community and neighborhood shopping centers from Equity Investment Group, (ii) the disposition by the Company of four of its factory outlet properties, (iii) the acquisition of 92 community and neighborhood shopping centers and equity investment from CenterAmerica Property Trust, L.P. on March 1, 2002, and (iv) other adjustments, including the public offering of 6,900,000 shares of common stock of the Company completed on January 29, 2002, the offering of $250 million of 5.875% senior unsecured notes completed on June 11, 2002, and the disposition by the Company of its garden apartment portfolio completed on September 21, 2001. This statement does not purport to forecast actual operating results for any period in the future.

        This statement should be read in conjunction with the historical financial statements and notes thereto of the Company presented in the Company's Form 10-Q for the quarter ended September 30, 2002 and the pro forma financial statements and notes thereto of the Company presented elsewhere in this filing.

Estimate of Taxable Income (in thousands):        
Company pro forma income before minority interest for the twelve-month period ended September 30, 2002   $ 110,740  
Net adjustment for tax basis revenue and expense recognition, exclusive of depreciation and amortization(1)     (112 )
Estimated tax deprecation and amortization adjustment(2)     (713 )
   
 
Pro forma taxable income before allocation to minority interest and dividends deduction     109,915  
Estimated allocation to minority interest     (1,640 )
Estimated dividends deduction(3)     (179,465 )
   
 
Pro forma taxable income   $ (71,190 )
   
 
Estimated operating funds available (in thousands):        
Pro forma taxable income before allocation to minority interest and dividends deduction   $ 109,915  
Add: pro forma depreciation and amortization     73,304  
   
 
Estimated operating funds available(4)   $ 183,219  
   
 
(1)
Represents the net adjustment to reverse the effects of (i) rental revenue recognition on a straight-line basis, (ii) impairment charges and (iii) debt premium and discount.

(2)
Represents the net adjustment for tax depreciation based upon the original cost or purchase price allocated to the buildings, depreciated on a straight-line method over their respective tax lives.

F-9

(3)
Estimated dividends deduction includes the following:

Dividends
   Div per share
   Pro forma o/s
   Total div
Common   $ 1.65   95,081   $ 156,884
Preferred A   $ 2.125   1,481     3,147
Preferred B   $ 2.15625   6,300     13,584
Preferred D   $ 3.90   1,500     5,850
             
              $ 179,465
             
(4)
Operating funds available does not represent cash generated from operating activities in accordance with generally accepted accounting principles and is not necessarily indicative of cash available to fund cash needs.

F-10


Certain Properties of the EIG Realty Portfolio

Combined Statements of Revenue and Expenses

Year ended December 31, 2001 and Nine Months Ended September 30, 2002 (Unaudited)

Contents

Report of Independent Auditors   F-12

Financial Statements:
 
 
Combined Statements of Revenue and Certain Expenses   F-13
Notes to Combined Statements of Revenue and Certain Expenses   F-14

F-11


Report of Independent Auditors

Board of Directors
EIG Realty, Inc.

        We have audited the accompanying combined statement of revenue and certain expenses of Certain Properties of the EIG Realty Portfolio for the year ended December 31, 2001. This combined statement is the responsibility of EIG Realty, Inc.'s management. Our responsibility is to express an opinion on this statement based on our audit.

        We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined statement of revenue and certain expenses is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the combined statement of revenue and certain expenses. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the combined statement of revenue and certain expenses. We believe that our audit provides a reasonable basis for our opinion.

        The accompanying statement of revenue and certain expenses was prepared for the purpose of complying with the requirements with the rules and regulations of the Securities and Exchange Commission for inclusion in the Current Report on Form 8-K of New Plan Excel Realty Trust, Inc. as described in Note 1 and is not intended to be a complete presentation of the EIG Realty Portfolio's revenue and expenses.

        In our opinion, the combined statement of revenue and certain expenses referred to above presents fairly, in all material respects, the revenue and certain expenses described in Note 2 of Certain Properties of the EIG Realty Portfolio for the year ended December 31, 2001 in conformity with accounting principles generally accepted in the United States.

December 2, 2002
Indianapolis, Indiana

F-12


Portfolio of Certain Properties of EIG Realty, Inc. and Affiliate

Combined Statements of Revenue and Certain Expenses

 
   Year Ending
December 31, 2001
   Nine Months Ending
September 30, 2002
 
    
   (Unaudited)
Revenue            
Rental income   $ 46,536,934   $ 37,432,025
Recoveries     10,387,743     7,846,272
Miscellaneous income     155,724     88,847
   
 
Total revenue     57,080,401     45,367,144

Operating expenses
 
 
 
 
 
 
Property taxes     6,321,820     5,115,366
Insurance     622,597     1,025,821
Repairs and maintenance     4,474,415     3,707,777
Utilities     1,295,165     937,401
Management fees     2,206,195     1,911,424
Other general and administrative     1,423,979     787,705
   
 
Total expenses     16,344,171     13,485,494
   
 
Revenue in excess of certain expenses   $ 40,736,230   $ 31,881,650
   
 

See accompanying notes.

F-13


Certain Properties of the EIG Realty Portfolio

Notes to Combined Statements of Revenue and Certain Expenses

Year Ended December 31, 2001 and
Nine Months Ended September 30, 2002 (Unaudited)

1.    Business and Basis of Presentation

Business

        The accompanying combined statements of revenue and certain expenses relate to operations of fifty-four commercial retail shopping centers held by EIG Realty Inc. and four properties owned by an Affiliate of EIG Realty Inc. ("the EIG Realty Portfolio"). The EIG Realty Portfolio is expected to be acquired by New Plan Excel Realty Trust, Inc. ("New Plan Excel").

Basis of Presentation

        Three EIG Realty Portfolio properties were acquired by the EIG Realty Portfolio during 2001 and one property was acquired in 2002; accordingly, the combined statements of revenue and certain expenses include the revenue and certain expenses commencing with their acquisition date.

        The accompanying statements of revenue and certain expenses for the year ended December 31, 2001 and the nine months ending September 30, 2002 (unaudited) were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission. The statements of revenue and certain expenses are not representative of the actual operations of the properties for the period presented nor are they indicative of future operations as certain expenses, consisting of interest expense, depreciation, and amortization, which may not be comparable to expenses expected to be incurred by New Plan Excel in future operations of the properties, have been excluded.

        The accompanying unaudited combined statement of revenues and certain expenses for the nine months ended September 30, 2002 has been prepared in accordance with accounting principles generally accepted in the United States for interim financial information. In the opinion of management, all adjustments, consisting only of recurring accruals, considered necessary for a fair presentation have been included. Operating results for the interim period are not necessarily indicative of the results that may be expected for a full fiscal year.

        The EIG Realty Portfolio consists of the following properties:

 
   Property
   Location
1   Conway Towne Center   Conway, Arkansas
2   Arvada Plaza   Arvarda, Colorado
3   Aurora Plaza   Aurora, Colorado
4   Sun Plaza   Fort Walton Beach, Florida
5   Holly Hill Shopping Center   Holly Hill, Florida
6   Normandy Square   Jacksonville, Florida (Acquired May, 2002)
7   Plaza 66   Kenneth City, Florida
8   New Port Richey Center   New Port Richey, Florida
9   Pensacola Square   Pensacola, Florida
10   Skyway Plaza   St. Petersburg, Florida

F-14

11   Tarpon Mall   Tarpon Springs, Florida
12   Northeast Plaza   Atlanta, Georgia
13   North Leg Plaza   Augusta, Georgia
14   Covered Bridge   Clayton, Georgia
15   Merchants Crossing   Newnan, Georgia
16   Village Mart   Aurora, Illinois
17   Festival Center   Bradley, Illinois
18   Pershing Plaza   Decatur, Illinois
19   Freeport Plaza   Freeport, Illinois
20   Olympia Corners   Olympia Fields, Illinois
21   Elkhart Plaza West   Elkhart, Indiana
22   Elkhart Market Centre   Goshen, Indiana
23   Marwood Plaza   Indianapolis, Indiana
24   Westlane Shopping Center   Indianapolis, Indiana
25   Knox Plaza   Vincennes, Indiana
26   Florence Plaza   Florence, Kentucky
27   Towne Square North   Owensboro, Kentucky
28   Karam Shopping Center   Lafayette, Louisiana
29   Desiard Plaza   Monroe, Louisiana
30   Points West   Brockton, Massachusetts
31   Holyoke Shopping Center   Holyoke, Massachusetts
32   Green Acres   Saginaw, Michigan
33   University IV   Spring Lake Park, Minnesota
34   Macon Plaza   Franklin, North Carolina
35   Parkway Plaza   Winston-Salem, North Carolina
36   Sunshine Square   Medford, New York
37   Springbrook Plaza   Canton, Ohio
38   Hillcrest Square   Cincinnati, Ohio
39   Karl Plaza   Columbus, Ohio
40   The Vineyards   Eastlake, Ohio
41   Napoleon Center   Napoleon, Ohio
42   Alexis Park   Toledo, Ohio
43   Glengary Shopping Center   Westerville, Ohio
44   Bristol Plaza   Bristol, Pennsylvania
45   Hunt River Commons   North Kinstown, Rhode Island (Acquired October, 2001)
46   South Park   Aiken, South Carolina
47   Lexington Town Square   Lexington, South Carolina
48   Festival Centre   North Charleston, South Carolina
49   Chapman Square   Knoxville, Tennessee
50   Northshore Plaza   Portland, Texas

F-15

51   Jefferson Green   Newport News, Virginia
52   Cross Pointe Marketplace   Richmond, Virginia
53   Tuckernuck Square   Richmond, Virginia
54   Hilltop Plaza   Virginia Beach, Virginia (Acquired January, 2001)
55   Packard Plaza   Cudahy, Wisconsin
56   Northridge Plaza   Milwaukee, Wisconsin
57   Paradise Pavilion   West Bend, Wisconsin (Acquired December 2001)
58   Cheyenne Plaza   Cheyenne, Wyoming

2.    Significant Accounting Policies

Revenue Recognition

        Rental income is recognized on a straight-line basis over the terms of the respective lease agreements. Certain tenants are also required to pay overage rents based on sales above a stated base amount during the lease year. Overage rents are recognized as revenues based on actual reported sales for each tenant less the applicable stated base amount.

Recoveries

        Certain operating expenses, including real estate taxes and utilities, incurred in the operation of the investment properties are reimbursable by the tenants. The reimbursable amounts (expense recoveries) not fixed by the lease are either adjusted periodically on a prospective basis or adjusted annually based on actual expenses incurred. Reimbursements are recognized as revenue in the period in which the applicable costs are incurred. Miscellaneous income consists primarily of short-term rentals in the retail properties.

        Tenant credit losses are provided when they become known.

Use of Estimates

        The preparation of the combined statements of revenue and certain expenses in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

3.    Tenant Leases

        The EIG Realty Portfolio leases retail space to tenants under noncancelable lease agreements with terms ranging from 1 to 25 years. The leases generally provide for fixed annual minimum rents, contingent rents based on sales volume and reimbursement of certain operating expenses. Contingent rents based on sales volume, approximated $763,000 for the year ended December 31, 2001 and $548,000 (unaudited) for the nine months ended September 30, 2002 for the Properties. Approximate

F-16


annual future minimum rental commitments to be received from executed operating leases as of December 31, 2001, exclusive of tenant reimbursements and contingent rentals, are as follows:

Year ending December 31,      
  2002   $ 46,703,759
  2003     44,147,297
  2004     39,436,802
  2005     34,393,591
  2006     29,117,332
  Thereafter     143,213,243
   
    $ 337,012,024
   

4.    Related Party Transactions

        The EIG Realty Portfolio is charged a management fee of 4% of gross revenues by a wholly owned subsidiary of EIG Realty, Inc., related to the leasing, billing, collection of rent, and preparation of financial data.

F-17



EXHIBIT INDEX

Exhibit
   Document
2.1   Purchase Agreement, dated as of October 17, 2002, by and between the Company and EIG Realty, Inc.

2.2
 
First Amendment to Purchase Agreement, dated as of November 6, 2002, by and between the Company and EIG Realty, Inc.

2.3
 
Closing Day Amendment to Purchase Agreement, dated as of December 12, 2002, by and between the Company and EIG Realty, Inc.

2.4
 
Purchase Agreement, dated as of October 17, 2002, by and among the Company, RIG Hunt River Commons, LLC, RIG Paradise Pavilion, LLC and RIG Hilltop Plaza, LLC.

2.5
 
First Amendment to Purchase Agreement, dated as of November 6, 2002, by and among the Company, RIG Hunt River Commons, LLC, RIG Paradise Pavilion, LLC, RIG Hilltop Plaza, LLC and RIG Normandy Square, LLC.

2.6
 
Closing Day Amendment to Purchase Agreement, dated as of December 12, 2002, by and among the Company, RIG Hunt River Commons, LLC, RIG Paradise Pavilion, LLC, RIG Hilltop Plaza, LLC and RIG Normandy Square, LLC.

2.7
 
Purchase Agreement, dated as of October 17, 2002, by and between the Company and EIG Operating Partnership, L.P.

2.8
 
First Amendment to Purchase Agreement, dated as of November 6, 2002, by and between the Company and EIG Operating Partnership, L.P.

2.9
 
Closing Day Amendment to Purchase Agreement, dated as of December 12, 2002, by and between the Company and EIG Operating Partnership, L.P.

2.10
 
Contribution Agreement, dated as of October 17, 2002, by and between Excel Realty Partners, L.P. and EIG Operating Partnership, L.P.

2.11
 
First Amendment to Contribution Agreement, dated as of November 6, 2002, by and between Excel Realty Partners, L.P. and EIG Operating Partnership, L.P.

2.12
 
Second Amendment to Contribution Agreement, dated as of December 9, 2002, by and between Excel Realty Partners, L.P. and EIG Operating Partnership, L.P.

2.13
 
Closing Day Amendment to Contribution Agreement, dated as of December 12, 2002, by and between Excel Realty Partners, L.P. and EIG Operating Partnership, L.P.

4.1
 
Registration Rights Agreement, dated as of December 12, 2002, by and between the Company and EIG Operating Partnership, L.P.

4.2
 
Registration Rights Agreement, dated as of December 12, 2002, by and between the Company and EIG Operating Partnership, L.P.


QuickLinks

SIGNATURE
NEW PLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES Pro Forma Consolidated Balance Sheet September 30, 2002 (unaudited, in thousands)
NEW PLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES Notes to Pro Forma Consolidated Balance Sheet September 30, 2002 (unaudited, in thousands, except per share amounts)
NEW PLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES Pro Forma Consolidated Statement of Operations For the Nine Months Ended September 30, 2002 (unaudited, in thousands, except per share amounts)
NEW PLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES Pro Forma Consolidated Statement of Operations For the Year Ended December 31, 2001 (unaudited, in thousands, except per share amounts)
NEW PLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES Notes to Pro Forma Consolidated Statements of Operations Nine Months Ended September 30, 2002 and Year Ended December 31, 2001 (unaudited, in thousands, except per share amounts)
NEW PLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES Estimated Twelve-Month Pro Forma Statement of Taxable Income and Operating Funds Available (unaudited)
Certain Properties of the EIG Realty Portfolio Combined Statements of Revenue and Expenses
Report of Independent Auditors
Portfolio of Certain Properties of EIG Realty, Inc. and Affiliate Combined Statements of Revenue and Certain Expenses
Certain Properties of the EIG Realty Portfolio Notes to Combined Statements of Revenue and Certain Expenses Year Ended December 31, 2001 and Nine Months Ended September 30, 2002 (Unaudited)
EXHIBIT INDEX