Realty Income - Press Release

REALTY INCOME REPORTS STRONG THIRD QUARTER OPERATING RESULTS

ESCONDIDO, CALIFORNIA, October 30, 2002—Realty Income Corporation (Realty Income), The Monthly Dividend Company®, (NYSE: O) announces operating results for the third quarter and nine months ended September 30, 2002.

COMPANY HIGHLIGHTS:
(For the three months ended September 30, 2002)

Revenue increased 18.8% to $36.1 million compared to the same period in 2001
Funds from Operations (FFO) increased 23.9% to $24.4 million
FFO per diluted common share increased 7.6% to $0.71 per share
Same store rents increased 0.5% to $27.77 million
Portfolio occupancy was 98.2%
Invested $28.7 million in 9 additional properties at a 10.3% lease rate
Increased the monthly dividend amount for the 20th consecutive quarter to an annual rate of $2.325 per share
Paid its 386th consecutive monthly dividend through September 2002
Issued 1.55 million shares of common stock raising net proceeds of $49 million
Arranged new $250 million bank credit facility in October
Provided year-to-date total return to shareholders of 22.0% through September 30th

Financial Results

Revenue Increases
Realty Income's revenue for the quarter ended September 30, 2002 increased 18.8% to $36.1 million as compared to $30.4 million for the same quarter ended September 30, 2001.

Revenue for the nine months ended September 30, 2002 increased 14.3% to $103.8 million from $90.8 million for the same period in 2001.

Funds from Operations
FFO for the quarter ended September 30, 2002 increased 23.9% to $24.4 million as compared to $19.7 million for the same quarter in 2001. FFO per diluted common share increased 7.6% to $0.71 per share compared to $0.66 per share for the same period in 2001.

FFO for the nine months ended September 30, 2002 increased 25.8% to $69.8 million as compared to $55.5 million for the same period one year ago. FFO per diluted common share increased 5.6% to $2.07 per share from $1.96 per share for the same period in 2001.

FFO is a widely used measure of REIT performance that excludes non-cash charges, primarily for the depreciation of real estate and gains on sales of investment properties. FFO is one measure of a company's cash flow and of its ability to pay dividends.

Net Income Available to Common Stockholders
Net income available to common stockholders for the quarter ended September 30, 2002 was $19.4 million as compared to $14.8 million for the same period in 2001. On a diluted per common share basis, net income was $0.56 per share as compared to $0.50 per share for the quarter ended September 30, 2001.

The calculation to determine net income for a real estate company includes gains and losses from the sale of investment properties. The amount of gains and losses varies from quarter to quarter according to the timing of property sales. This variance can significantly impact net income.

Excluding the gain on sales of investment properties and income from discontinued operations during the third quarter of each year, income from continuing operations available to common stockholders increased by $0.08 to $0.47 per share in 2002 as compared to $0.39 per share for the same quarter in 2001, on a diluted per common share basis.

Net income available to common stockholders for the nine months ended September 30, 2002 was $51.3 million as compared to $41.9 million for the same period in 2001. On a diluted per common share basis, net income was $1.52 per share as compared to $1.48 per share for the same period one year ago.

Excluding the gain on sales of investment properties and income from discontinued operations during the first nine months of each year, income from continuing operations available to common stockholders increased by $0.25 to $1.37 per share in 2002 as compared to $1.12 per share for the same period in 2001, on a diluted per common share basis.

Dividend Information
In September 2002, Realty Income announced the 20th consecutive quarterly increase in the amount of the monthly dividend on its common stock. This marked the 22nd increase in the amount of the dividend since 1995. The monthly dividend amount was increased to $0.19375 per share for an annualized dividend amount of $2.325 per share. The Company continues its 33-year policy of declaring and paying common stock dividends every month.

Real Estate Portfolio Update

As of September 30, 2002, Realty Income's portfolio of freestanding, single-tenant, retail properties consisted of 1,199 properties located in 48 states, leased to 80 retail chains doing business in 24 retail industries. The properties are leased under long-term, triple-net leases with a weighted average remaining lease term of approximately 10.2 years.

Portfolio Management Activities
The Company's portfolio of retail real estate, owned primarily under 15- to 20-year net leases, continues to perform well and provide dependable lease revenue supporting the payment of monthly dividends. As of September 30, 2002, Realty Income's portfolio occupancy was 98.2% with only 21 properties available for lease out of 1,199 properties in the portfolio.

Same store rents on 963 properties under lease during the three months ended September 30, 2002 and 2001 increased 0.5% to $27.77 million from $27.62 million. Same store rents on 963 properties under lease during the nine months ended September 30, 2002 and 2001 increased 1.4% to $82.98 million compared to $81.84 million in 2001.

Property Acquisitions
During the quarter ended September 30, 2002, the Company invested $28.7 million in nine new properties and properties under development with an initial contractual lease yield of 10.3%. The new properties are located in nine different states and are 100% leased with an initial average lease length of 22.2 years. They are leased to five different retail chains in three industries (automotive service, convenience store and entertainment).

During the nine months ended September 30, 2002, the Company invested $115.5 million in 100 new properties and properties under development with an initial contractual lease yield of 10.4%. The new properties are located in 24 different states and are 100% leased with an initial average lease length of 20.1 years. They are leased to ten different retail chains in six industries (automotive service, convenience store, entertainment, office supplies, restaurants, and shoe stores).

Property Dispositions
During the third quarter of 2002, Realty Income continued to execute its asset disposition program. The objective of the program is to sell assets when the Company believes the reinvestment of the sales proceeds will generate higher returns, enhance the credit quality of the Company's real estate portfolio or increase the average lease length. During the third quarter, Realty Income sold nine properties for $8.7 million and reported a gain on sales of $3.1 million. The properties sold consisted of: one automotive parts store; one automotive service location; three child care facilities; one home furnishings store; one home improvement store; and two restaurants. The proceeds were, or will be, used to pay down the Company's acquisition credit facility and invest in new properties.

During the nine months ended September 30, 2002, Realty Income sold 25 properties for $15.9 million and recorded a gain on sales of $5.5 million. The properties consisted of: one automotive parts store; one automotive service location; ten child care locations; one health and fitness facility; one home furnishing store; one home improvement store; and ten restaurants. In accordance with Generally Accepted Accounting Principles (GAAP), these gains are primarily included in Income from Discontinued Operations on the Consolidated Statements of Income.

Other Activities

Issuance of Common Stock
In July 2002, Realty Income issued 1.55 million shares of common stock priced at $33.40 per share. The net proceeds of approximately $49 million from the offering were used to repay a portion of the amount outstanding on the Company's $200 million unsecured acquisition credit facility. The number of common shares outstanding at the end of the third quarter was 34,871,217.

New Bank Credit Facility
On October 28, 2002, Realty Income entered into a new credit facility to replace its existing $225 million credit facilities that were scheduled to expire in 2003. Funds available under the new credit facility were increased by $25 million, to $250 million, and the borrowing rate was reduced. The term of the new facility extends through October 2005 and is priced at LIBOR (London Interbank Offered Rate) plus 100 basis points with a facility fee of 20 basis points, for all-in drawn pricing of 120 basis points over LIBOR. The co-lead Arranger and sole Administrative Agent for the credit facility is Wells Fargo Bank, N.A. with The Bank of New York acting as co-lead Arranger and sole Documentation Agent. They are joined by the Bank of America, N.A. and Wachovia Bank National Association as co-Syndication Agents. Five other banks are also participants in providing the credit line: AmSouth Bank, Bank of Montreal, U.S. Bank National Association, BANK ONE, NA and Chevy Chase Bank, FSB.

Crest Net Lease
Crest Net Lease Inc., a subsidiary of Realty Income, is focused on acquiring and subsequently marketing net-leased properties for sale. During the quarter ended September 30, 2002, Crest sold six properties for $8.4 million and reported a gain on sales of $969,000. During the quarter Crest also invested $1.4 million in new properties.

During the first nine months of the year, Crest sold 17 properties for $20.2 million and reported a gain on sales of $2.5 million. During this period Crest also invested $5.3 million in three new properties and properties under development. As of the end of the third quarter, Crest carried an inventory of $9.9 million in properties held for sale.

Management believes that Crest will carry an average inventory of between $20 to $25 million in properties. The subsidiary generates earnings on the difference between the lease payments it receives on the properties held in inventory and the cost of the capital used to acquire properties. It is management's belief that at this level of inventory these earnings will more than cover the ongoing operating expenses of Crest. The contribution to Realty Income's FFO by Crest depends on the timing and the number of property sales achieved, if any, in a given quarter. During the third quarter and first nine months of 2002, Crest generated $0.02 and $0.06, respectively, per diluted common share in FFO for Realty Income.

CEO Comments on Year-to-Date Operating Results

Commenting on Realty Income's financial results and real estate operations, Tom A. Lewis, Chief Executive Officer stated, "We are delighted with our operating results for the first nine months of the year. Our portfolio of 1,199 properties remains extremely healthy with occupancy at 98.2% and a weighted average remaining lease length of 10.2 years. Both revenue and FFO per share were higher as a result of continued increases in our same store rents and recent property acquisitions. The market for acquisitions in our freestanding, net-lease retail niche, while competitive, remains strong as demonstrated by the purchase of just over $115 million in new properties so far this year. By acquiring additional properties and increasing the size of our real estate portfolio, the lease revenue supporting the payment of dividends has continued to increase. This has allowed us to increase the amount of the dividend three times this year and for 20 consecutive quarters since 1994. Throughout our operating history, we have paid 386 consecutive monthly dividends to our shareholders.

"Dividend safety is critical to our shareholders. Our commitment to maintaining a conservative balance sheet, stable real estate performance and a high occupancy rate is fundamental to achieving this important shareholder objective. We are pleased with the continued positive performance of our real estate portfolio during challenging economic times, and attribute this to the fact that the majority of our retailers provide goods and services, at low prices, that satisfy basic consumer needs. Another aspect of dividend safety are the earnings supporting the payment of dividends. We continue to grow FFO faster than dividends, providing solid dividend coverage and a reduced FFO payout ratio, which adds to dividend safety.

"We are fortunate that, as The Monthly Dividend Company®, we have continued to offer a dependable source of monthly income to our shareholders throughout market swings and economic uncertainties. We are also fortunate, in today's reporting environment, to run a straightforward business with fairly simple and easy to understand financial statements."

Earnings Commentary

Realty Income's funds from operations tend to be stable and fairly predictable because of the long-term leases that are the primary source of the Company's revenue. There are, however, several factors that can impact changes in FFO per common share from levels that have been anticipated by the Company. These factors include, but are not limited to, changes in interest rates, occupancy rates, periodically accessing the capital markets, the level of property acquisitions and dispositions, lease rollovers, the general real estate market, the economy, and the operations of Crest Net Lease.

2002 Estimates
Management continues to estimate that FFO per common share for 2002 will be approximately $2.80 per share, which would equate to an increase of approximately 5.3% over the Company's 2001 FFO per share of $2.66.

Management estimates that Crest Net Lease, Inc. will generate between $0.06 and $0.08 per share of FFO during 2002. Crest's primary business is the purchase and sale of properties at a profit. These sales may occur at various times during the course of the year, which could cause FFO, in certain quarters, to fluctuate from normal levels.

2003 Estimates
Management estimates that FFO per common share for 2003 should range from $2.93 to $2.95, which would equate to an increase of approximately 4.6% to 5.4% over the Company's 2002 projected FFO per share of approximately $2.80.

The Company does not intend to provide quarterly estimates of FFO. Absent changes in annual FFO guidance at the end of each quarter, it may be presumed that the Company's overall estimate for the year has not changed.

Forward-Looking Statements

Statements in this press release, which are not strictly historical, are "forward-looking" statements. Forward-looking statements involve known and unknown risks, which may cause the Company's actual future results to differ materially from expected results. These risks include, among others, general economic conditions, local real estate conditions, the availability of capital to finance planned growth, and the profitability of the Company's subsidiary, Crest Net Lease, as described in the Company's filings with the Securities and Exchange Commission. Consequently, such forward-looking statements should be regarded solely as reflections of the Company's current operating plans and estimates. Actual operating results may differ materially from what is expressed or forecast in this press release. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date these statements were made.

Realty Income is The Monthly Dividend Company®, a New York Stock Exchange real estate company dedicated to providing shareholders with dependable monthly income. As of September 30, 2002, the Company had paid 386 consecutive monthly dividends throughout its 33-year operating history. The monthly income is supported by the cash flow from approximately 1,200 retail properties owned under long-term lease agreements with leading regional and national retail chains. The Company is an active buyer of net-leased retail properties nationwide.

Note to Editors:

Realty Income press releases are available at no charge by calling our toll-free investor hotline number: 888-811-2001, or through the internet at http://www.realtyincome.com/Investing/News.html

CONSOLIDATED STATEMENTS OF INCOME

For the three and nine months ended September 30, 2002 and 2001
(dollars in thousands, except per share amounts)

	Three Months Ended 9/30/02	Three Months Ended 9/30/01	Nine Months Ended 9/30/02	Nine Months Ended 9/30/01

REVENUE
Rental	$ 34,863	$ 29,747	$101,062	$ 87,734
Gain on sales of real estate aquired for resale	969	284	2,460	2,373
Interest and other	223	409	306	715

	36,055	30,440	103,828	90,822

EXPENSES
Interest	5,919	6,080	17,327	20,726
Depreciation and amortization	7,920	7,087	22,808	21,159
General and administrative	2,313	1,913	7,050	5,820
Property	754	559	1,991	1,722
Other	503	294	1,389	1,313
Provision for impairment loss	--	520	--	1,050

	17,409	16,453	50,565	51,790

Income from continuing operations	18,646	13,987	53,263	39,032
Income from discontinued operations	3,174	393	4,956	1,182
Gain on sales of investment properties	--	2,806	340	8,921

Net Income	21,820	17,186	58,559	49,135
Preferred stock dividends	(2,428)	(2,428)	(7,284)	(7,284)

Net income available to common stockholders	$19,392	$14,758	$ 51,275	$ 41,851

Funds from operations (FFO)	$ 24,403	$ 19,677	$ 69,774	$ 55,497
Per share information for common stockholders:
FFO
Basic	$ 0.71	$ 0.66	$ 2.08	$ 1.96
Diluted	0.71	0.66	2.07	1.96
Income from continuing operations
Basic	0.47	0.39	1.37	1.12
Diluted	0.47	0.39	1.37	1.12
Net Income
Basic	0.56	0.50	1.53	1.48
Diluted	0.56	0.50	1.52	1.48
Cash dividends paid	0.578	0.563	1.721	1.676

Segmentation by Category

FUNDS FROM OPERATIONS
For the three and nine months ended September 30, 2002 and 2001
(dollars in thousands, except per share amounts)

Three Months Ended
9/30/02

Three Months Ended
9/30/01

Nine
Months Ended
9/30/02

Nine
Months Ended
9/30/01

Net income available to common stockholders $ 19,392 $ 14,758 $ 51,275 $ 41,851

Depreciation and amortization:
   Continuing operations 7,920 7,087 22,808 21,159

   Discontinued operations 44 147 299 443

Depreciation of furniture, fixtures and equipment (37) (29) (104) (85)

Provision for impairment loss:
   Continuing operations -- 520 -- 1,050

   Discontinued operations 150 -- 980 --

Gain on sale of
   investment properties:
   Continuing operations -- (2,806) (340) (8,921)

   Discontinued operations (3,066) -- (5,144) --

Funds from operations $ 24,403 $ 19,677 $ 69,774 $ 55,497

Divideneds paid to
   common stockholders $ 19,839 $ 16,716 $ 57,773 $ 46,905

FFO in excess of dividends $ 4,564 $ 2,961 $ 12,001 $ 8,592

FFO per common share:
   Basic $ 0.71 $ 0.66 $ 2.08 $ 1.96

   Diluted $ 0.71 $ 0.66 $ 2.07 $ 1.96

Weighted average number of common shares used for:

Computation per share
   Basic 34,482,522 29,752,807 33,617,736 28,264,186

   Diluted 34,538,007 29,804,308 33,671,335 28,303,628

FUNDS FROM OPERATIONS GENERATED BY CREST NET LEASE
For the three and nine months ended September 30, 2002 and 2001
(dollars in thousands, except per share amounts)

Gains from the sales of real
   estate acquired for resale $ 969 $ 284 $ 2,460 $ 2,373

Rent and other revenue 305 506 1,261 1,292

Interest expense (99) (219) (319) (673)

General and administrative exp. (56) (83) (340) (361)

Property expenses (63) -- (104) --

Income taxes (379) (185) (1,017) (969)

Minority interest -- -- -- (56)

Funds from operations
   contributed by Crest Net $ 677 $ 303 $ 1,941 $ 1,606

Basic and diluted
   FFO per common share $ 0.02 $ 0.01 $ 0.06 $ 0.06

CONSOLIDATED BALANCE SHEETS
As of September 30, 2002 and December 31, 2001
(dollars in thousands, except per share amounts)

2002
2001

ASSETS

Real estate, at cost:

    Land $ 460,050 $ 412,455

    Buildings and improvements 811,235 765,707

1,271,285 1,178,162

    Less accumulated depreciation and
       amortization (247,234) (233,848)

    Net real estate held for investment 1,024,051 944,314

    Real estate held for sale, net 13,156 23,356

    Net real estate 1,037,207 967,670

Cash and cash equivalents 8,391 2,467

Accounts receivable 3,116 4,857

Goodwill, net 17,206 17,206

Other assets 9,734 11,508

     Total assets $ 1,075,654 $ 1,003,708

LIABILITIES AND STOCKHOLDERS' EQUITY

Distributions payable $    6,756 $    6,238

Accounts payable and accrued expenses 6,903 5,834

Other liabilities 4,888 4,543

Lines of credit payable 102,200 85,300

Notes payable 230,000 230,000

    Total liabilities 350,747 331,915

Stockholders’ equity:
Preferred stock and paid in capital, par
    value $1.00 per share, 20,000,000
    shares authorized, 4,125,700 shares
    issued and outstanding 99,368 99,368

Common stock and paid in capital, par
    value $1.00 per share, 100,000,000
    shares authorized, 34,871,217 and
    32,829,111 shares issued and
    outstanding in 2002 and 2001,
    respectively 855,635 795,505

Distributions in excess of net income (230,096) (223,080)

    Total stockholders’ equity 724,907 671,793

    Total liabilities and stockholders’ equity $ 1,075,654 $ 1,003,708

Industry Diversifcation

The following table sets forth certain information regarding our properties classified according to the business of the respective tenants, expressed as a percentage of our total rental revenue:

Annualized⁽²⁾ Rent as of Sept 30, 2002 Percentage of Rental Revenue⁽¹⁾
For the Years Ended

Industry
Dec 31, 2001

Dec 31, 2000

Dec 31, 1999

Dec 31, 1998

Dec 31, 1997

Dec 31, 1996

Dec 31, 1995

Apparel Stores 2.2% 2.4% 2.4% 3.8% 4.1% 0.7% --% --%

Automotive Parts 7.3 8.3 8.3 8.6 7.8 9.1 10.5 11.4

Automotive Service 8.5 5.7 5.8 6.6 7.5 6.4 4.8 3.7

Book Stores 0.4 0.4 0.5 0.5 0.6 0.5 -- --

Business Services 0.1 0.1 0.1 0.1 * -- -- --

Child Care 20.0 23.9 24.7 25.3 29.2 35.9 42.0 45.6

Consumer Electronics 3.3 4.0 4.9 4.4 5.4 6.5 0.9 --

Convenience Stores 10.4 8.4 8.4 7.2 6.1 5.5 4.6 2.4

Crafts and Novelties 0.4 0.4 0.4 0.4 * -- -- --

Drug Stores 0.2 0.2 0.2 0.2 0.1 -- -- --

Entertainment 2.7 1.8 2.0 1.2 -- -- -- --

General Merchandise 0.5 0.6 0.6 0.6 * -- -- --

Grocery Stores 0.5 0.6 0.6 0.5 * -- -- --

Health and Fitness 3.7 3.6 2.4 0.6 0.1 -- -- --

Home Furnishings 5.2 6.0 5.8 6.5 7.8 5.6 4.4 2.9

Home Improvement 1.1 1.3 2.0 3.6 * -- -- --

Office Supplies 2.0 2.2 2.3 2.6 3.0 1.7 -- --

Pet Supplies and Services 1.6 1.6 1.5 1.1 0.6 0.2 -- --

Private Education 1.2 1.5 1.4 1.2 0.9 -- -- --

Restaurants 12.9 12.2 12.3 13.3 16.2 19.8 24.4 24.7

Shoe Stores 0.9 0.7 0.8 1.1 0.8 0.2 -- --

Sporting Goods 3.9 0.9 -- -- -- -- -- --

Theaters 3.6 4.3 2.7 0.6 -- -- -- --

Video Rental 3.2 3.7 3.9 4.3 3.8 0.6 -- --

Other 4.2 5.2 6.0 5.7 6.0 7.3 8.4 9.3

Totals 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

* Less than 0.1%
(1) The table does not include properties owned by our subsidiary, Crest Net Lease.
(2) Annualized Rent is calculated by multiplying the monthly contractual base rent as of September 30, 2002 for each of the properties by 12, and adding the previous 12 month's historic percentage rent on properties owned at September 30, 2002, which totaled $1.7 million (i.e., percentage rent is calculated as a percentage of the tenants' gross sales above a specified level). For the properties under construction, an estimated contractual base rent is used based upon the estimated total costs of each property.

Segmentation by Category

The following table sets forth certain information regarding properties owned by Realty Income at September 30, 2002, classified according to the retail business types and the level of services they provide (dollars in thousands):

Industry
Number of Properties (1) Annualized
Rent (1)(2) Percentage of Annualized Rent

TENANTS PROVIDING SERVICES

Automotive Service 179 $ 12,181 8.5 %

Child Care 317 28,624 20.0

Entertainment 10 3,862 2.7

Health and Fitness 8 5,335 3.8

Private Education 5 1,738 1.2

Theaters 10 5,209 3.7

Other 8 6,030 4.2

537 62,979 44.1

TENANTS SELLING GOODS AND SERVICES

Automotive Parts (with
installation) 65 6,066 4.3

Business Services 1 124 0.1

Convenience Stores 117 14,888 10.4

Home Improvement 2 187 0.1

Pet Supplies and Services 6 1,561 1.1

Restaurants 221 18,393 12.9

Video Rental 34 4,625 3.2

446 45,844 32.1

TENANTS SELLING GOODS

Apparel Stores 5 3,103 2.2

Automotive Parts 74 4,302 3.0

Book Stores 2 606 0.4

Consumer Electronics 36 4,660 3.3

Crafts and Novelties 2 517 0.3

Drug Stores 1 235 0.2

General Merchandise 11 687 0.5

Grocery Stores 2 727 0.5

Home Furnishings 38 7,372 5.1

Home Improvement 16 1,377 1.0

Office Supplies 9 2,846 2.0

Pet Supplies 4 761 0.5

Shoe Stores 5 1,254 0.9

Sporting Goods 11 5,584 3.9

216 34,031 23.8

Totals 1,199 $ 142,854 100.0 %

(1) The table does not include properties owned by our subsidiary, Crest Net Lease.
(2) Annualized Rent is calculated by multiplying the monthly contractual base rent as of September 30, 2002 for each of the properties by 12, and adding the previous 12 month's historic percentage rent on properties owned at September 30, 2002, which totaled $1.7 million (i.e., percentage rent is calculated as a percentage of the tenants' gross sales above a specified level). For the properties under construction, an estimated contractual base rent is used based upon the estimated total costs of each property.

The following table sets forth certain information regarding the timing of the initial lease term expirations (excluding extension options) on our 1,173 net leased, single-tenant retail properties as of September 30, 2002 (dollars in thousands):

Year
Number of
Leases
Expiring(1) Annualized
Rent(1)(2) Percentage
of Annualized
Rent

2002 28 $ 3,316 2.4 %

2003 81 6,909 5.0

2004 122 10,422 7.6

2005 87 6,802 4.9

2006 75 6,696 4.9

2007 115 8,364 6.1

2008 64 5,793 4.2

2009 28 2,555 1.9

2010 42 3,742 2.7

2011 35 5,324 3.9

2012 52 6,237 4.5

2013 70 12,348 9.0

2014 36 6,546 4.8

2015 32 3,417 2.5

2016 14 1,498 1.1

2017 17 5,297 3.9

2018 16 1,988 1.4

2019 49 8,246 6.0

2020 11 4,166 3.0

2021 95 14,367 10.5

2022 92 9,098 6.6

2023 2 341 0.2

2024 1 216 0.2

2026 2 372 0.3

2033 2 1,118 0.8

2034 2 834 0.6

2037 3 1,343 1.0

Totals 1,173 $137,355 100.0 %

(1) This table does not include five multi-tenant properties and 21 vacant, unleased single-tenant properties owned by the Company and properties owned by our subsidiary, Crest Net Lease. The lease expirations for properties under construction are based on the estimated date of completion of such properties.
(2) Annualized rent is calculated by multiplying the monthly contractual base rent as of September 30, 2002 for each of the properties by 12 and adding the previous 12 month's historic percentage rent on properties owned at September 30, 2002, which totaled $1.7 million (i.e., percentage rent is calculated as a percentage of the tenants' gross sales above a specified level). For the properties under construction, an estimated contractual base rent is used based upon the estimated total costs of each property.

Geographic Diversifcation

As of September 30, 2002
(dollars in thousands)

State
Number of Properties (1)

Percent Leased

Approximate Leasable Square Feet

Annualized Rent (1)(2)

Percent of Annualized Rent

Alabama 15 93% 142,600 $1,393 1.0%

Alaska 2 100 128,500 1,003 0.7%

Arizona 35 97 248,800 3,980 2.8%

Arkansas 8 100 48,800 916 0.6%

California 61 98 1,015,000 14,768 10.3%

Colorado 43 100 266,300 4,195 2.9%

Connecticut 16 100 245,600 3,709 2.6%

Delaware 1 100 5,400 72 *

Florida 90 97 1,148,400 15,140 10.6%

Georgia 68 100 504,100 7,100 5.0%

Idaho 11 100 52,000 775 0.5%

Illinois 41 100 322,200 4,558 3.2%

Indiana 29 97 165,500 2,139 1.5%

Iowa 10 100 67,600 702 0.5%