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Prepared and filed by St Ives Burrups
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<p align="center"><b><font face="serif" size="4">UNITED
      STATES<br>
  SECURITIES AND EXCHANGE COMMISSION<br>
</font></b><font size="2" face="serif"><b>WASHINGTON,
  DC&nbsp; 20549</b></font></p>
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<p align="center"><b><font size="2" face="serif"></font></b><b><font face="serif" size="4">FORM 8-K</font></b></p>
<p align="center"><font size="2" face="serif"><b>CURRENT REPORT<br>
</b></font><font size="2" face="serif"><b>Pursuant
      to Section&nbsp;13 OR 15(d) of the<br>
Securities Exchange Act of 1934</b></font></p>
<p align="center"><font size="2" face="serif"><b>Date of report (Date of earliest event reported):&nbsp; October 7, 2005</b></font></p>
<p align="center"><b><font face="serif" size="3">Cedar Shopping Centers, Inc.<br>
</font></b><font size="2" face="serif">(Exact Name of Registrant as Specified in Charter)</font></p>
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<td width="30%" align="center"><font size="2" face="serif"><b>Maryland</b></font></td>
<td width="30%" align="center"><font size="2" face="serif"><b>0-14510</b></font></td>
<td width="30%" align="center"><font size="2" face="serif"><b>42-1241468</b></font></td>
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<td align="center" bgcolor="#FFFFFF"><font size="2" face="serif">(State or Other Jurisdiction of<br>Incorporation)</font></td>
<td align="center" bgcolor="#FFFFFF"><font size="2" face="serif">(Commission File Number)</font></td>
<td align="center" bgcolor="#FFFFFF"><font size="2" face="serif">(IRS Employer Identification<br>No.)</font></td>
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<td align="center" bgcolor="#FFFFFF"><font size="2" face="serif"><b>44 South Bayles Avenue<br>Port Washington, NY</b></font></td>
<td align="center" bgcolor="#FFFFFF"></td>
<td align="center" bgcolor="#FFFFFF"><font size="2" face="serif"><b>11050-3765</b></font></td>
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<td align="center" bgcolor="#FFFFFF"><font size="2" face="serif">(Address of Principal Executive<br>Offices)</font></td>
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<td align="center" bgcolor="#FFFFFF"><font size="2" face="serif">(Zip Code)</font></td>
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<p align="center"><font size="2" face="serif"><b>(516) 767-6492<br>
</b></font><font size="2" face="serif">(Registrant&#8217;s
    telephone number,<br>
including area code)</font></p>
<p align="left"><font size="2" face="serif">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):</font></p>
<p align="left"><font size="2" face="serif"><img src="emptybox.gif" width="12" height="12">&nbsp;&nbsp;&nbsp;Written communications pursuant
    to Rule 425 under the Securities Act (17 CFR 230.425)</font></p>
<p align="left"><font size="2" face="serif"><img src="emptybox.gif" width="12" height="12">&nbsp;&nbsp;&nbsp;Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</font></p>
<p align="left"><font size="2" face="serif"><img src="emptybox.gif" width="12" height="12">&nbsp;&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</font></p>
<p align="left"><font size="2" face="serif"><img src="emptybox.gif" width="12" height="12">&nbsp;&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</font></p>
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<p align="left">&nbsp;</p>
<p align="left"><font size="2" face="serif"><b>Item 8.01.</b> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Other Events.</b></font></p>
<p align="left"><font size="2" face="serif">With the completion of an acquisition on October 7, 2005, the total of the Company&#8217;s 2005 non-material acquisitions had reached an amount requiring that a majority of such acquisitions be audited pursuant to Rule 3-14 of Regulation S-X of the Securities and Exchange Commission.</font></p>
<p align="left"><font size="2" face="serif"><b>Item 9.01.</b> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b>Financial Statements and Exhibits.</b></font></p>
<p align="left"><font size="2" face="serif"><b>(a) Financial Statements of Businesses Acquired:</b></font></p>  <table width="100%" cellspacing="0" cellpadding="0" border="0">
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<td colspan="3" align="left"><font size="2" face="serif"><b>Trexler Mall Shopping Center Venture:</b></font><font size="1" face="serif">&nbsp;</font><font size="1" face="serif">&nbsp;</font></td>
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<td align="left" width="15%"><font size="2" face="serif">&nbsp;</font></td>
<td colspan="2" align="left"><font size="2" face="serif">Report of Independent Registered Public Accounting Firm</font><font size="2" face="serif">&nbsp;</font></td>
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<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td colspan="2" align="left"><font size="2" face="serif">Statements of Revenues and Certain Expenses:</font><font size="2" face="serif">&nbsp;</font></td>
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<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="9%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="72%" align="left"><font size="2" face="serif">For the year ended December 31, 2004</font></td>
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<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">For the nine months ended September 30, 2005 (unaudited)</font></td>
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<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td colspan="2" align="left"><font size="2" face="serif">Notes to Statements of Revenues and Certain Expenses</font><font size="2" face="serif">&nbsp;</font></td>
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<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td> </tr>
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<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td colspan="3" align="left"><font size="2" face="serif"><b>Certain Properties of the Silver Companies:</b></font><font size="2" face="serif">&nbsp;</font><font size="2" face="serif">&nbsp;</font></td>
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<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td colspan="2" align="left"><font size="2" face="serif">Report of Independent Registered Public Accounting Firm</font><font size="2" face="serif">&nbsp;</font></td>
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<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td colspan="2" align="left"><font size="2" face="serif">Combined Statements of Revenues and Certain Expenses:</font><font size="2" face="serif">&nbsp;</font></td>
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<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">For the year ended December 31, 2004</font></td>
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<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">For the nine months ended September 30, 2005 (unaudited)</font></td>
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<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td colspan="2" align="left"><font size="2" face="serif">Notes to Combined Statements of Revenues and Certain Expenses</font><font size="2" face="serif">&nbsp;</font></td>
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<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td> </tr>
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<td colspan="3" align="left"><font size="2" face="serif"><b>Shore Mall Associates, L.P.:</b></font><font size="2" face="serif">&nbsp;</font><font size="2" face="serif">&nbsp;</font></td>
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<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td colspan="2" align="left"><font size="2" face="serif">Report of Independent Registered Public Accounting Firm</font><font size="2" face="serif">&nbsp;</font></td>
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<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td colspan="2" align="left"><font size="2" face="serif">Statements of Revenues and Certain Expenses:</font><font size="2" face="serif">&nbsp;</font></td>
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<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">For the years ended December 31, 2004, 2003 and 2002</font></td>
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<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">For the nine months ended September 30, 2005 (unaudited)</font></td>
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<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td colspan="2" align="left"><font size="2" face="serif">Notes to Statements of Revenues and Certain Expenses</font><font size="2" face="serif">&nbsp;</font></td>
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<p align="left"><font size="2" face="serif"><b>(b) Pro Forma Financial Information:</b></font></p>
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    <td align="left" width="4%"><font size="2" face="serif">&nbsp;</font></td>
    <td colspan="2" align="left"><font size="2" face="serif">Pro Forma Condensed
        Consolidated Balance Sheet as of September 30, 2005 (unaudited)</font><font size="2" face="serif">&nbsp;</font></td>
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    <td>&nbsp;</td>
    <td width="24%">&nbsp;</td>
    <td width="72%">&nbsp;</td>
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    <td colspan="2" align="left"><font size="2" face="serif">Pro Forma Condensed
        Consolidated Statements of Income (unaudited):</font><font size="2" face="serif">&nbsp;</font></td>
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    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left"><font size="2" face="serif">For the year ended December
        31, 2004</font></td>
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    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left"><font size="2" face="serif">&nbsp;</font></td>
    <td align="left"><font size="2" face="serif">For the nine months ended September
        30, 2005</font></td>
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    <td colspan="2" align="left"><font size="2" face="serif">Notes to Pro Forma
        Condensed Consolidated Financial Statements (unaudited)</font><font size="2" face="serif">&nbsp;</font></td>
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<p align="left"><font size="2" face="serif"><b>(d) Exhibits:</b></font></p>

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<td width="96%" align="left"><font size="2" face="serif">23.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consent of Independent Registered Public Accounting Firm dated December 21, 2005</font><font size="2" face="serif">&nbsp;</font></td>
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<p align="left"><font size="2" face="serif"><b>Signatures</b></font></p>
<p align="center">&nbsp;</p>
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<p>&nbsp;</p>
<p align="center"><font size="2" face="serif"><b>  Report of Independent Registered Public Accounting Firm </b></font></p>
<p align="left"><font size="2" face="serif">Board of Directors and Stockholders<br>
</font><font size="2" face="serif">Cedar Shopping Centers, Inc. </font></p>
<p align="left"><font size="2" face="serif">&nbsp;<br>
We have audited the statement of revenues and certain expenses of Trexler Mall Shopping Center Venture (the &#8220;Property&#8221;) for the year ended December 31, 2004. The financial statement is the responsibility of the Property&#8217;s management. Our responsibility is to express an opinion on this financial statement based on our audit.</font></p>
<p align="left"><font size="2" face="serif"><br>
  We conducted our audit in accordance with the standards of the Public Company
  Accounting Oversight Board (United States). Those standards require that we plan
  and perform the audit to obtain reasonable assurance about whether the financial
  statement is free of material misstatement. We were not engaged to perform an
  audit of the Property&#8217;s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Property&#8217;s
  internal control over financial reporting. Accordingly, we express no such opinion.
  An audit also includes examining, on a test basis, evidence supporting the amounts
  and disclosures in the financial statement, assessing the accounting principles
  used and significant estimates made by management, and evaluating the overall
  financial statement presentation. We believe that our audit provides a reasonable
  basis for our opinion.</font></p>
<p align="left"><font size="2" face="serif"><br>
  The accompanying statement of revenues and certain expenses was prepared for
    the purpose of complying with Rule 3-14 of Regulation S-X of the Securities
    and Exchange Commission for inclusion in the Current Report on Form 8-K of
    Cedar Shopping Centers, Inc. dated October 7, 2005 and is not intended to be
a complete presentation of the Property&#8217;s revenues and certain expenses.</font></p>
<p align="left"><font size="2" face="serif"><br>
  In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of the Property as described in Note 1 for the year ended December 31, 2004, in conformity with U.S. generally accepted accounting principles.</font></p>
<p align="right"><font size="2" face="serif"><br><br>/s/ Ernst &amp; Young LLP </font></p>
<p align="left"><font size="2" face="serif"><br>
<br>New York, New York<br>
</font><font size="2" face="serif">December 21, 2005</font></p>
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<page><p align="center"><font size="2" face="serif"><b>Trexler Mall Shopping Center Venture<br>
</b></font><font size="2" face="serif"><b>Statements of Revenues and Certain Expenses</b></font></p>
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<tr valign="top">
<td width="69%" align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="center" valign="bottom"><font size="1" face="serif"><b>Nine months<br>
  ended<br>
  September 30, 2005</b></font></td>
<td align="right" valign="bottom">&nbsp;</td>
<td align="center" valign="bottom"><font size="1" face="serif"><b>Year ended<br>
  December 31, 2004</b></font></td>
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  <td align="left">&nbsp;</td>
  <td colspan="4" align="right"><hr size="1" noshade>
  </td>
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<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="center"><font size="1" face="serif"><b>(Unaudited)</b></font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
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<td align="left"><font size="2" face="serif">Revenues:</font></td>
<td width="3%" align="right">&nbsp;</td>
<td width="12%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="4%" align="right">&nbsp;</td>
<td width="12%" align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
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<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Base rents</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">                     1,931,000 </font></td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">                    2,454,000 </font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tenant reimbursements</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">                           542,000 </font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">                          717,000 </font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other income</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">                              1,000 </font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td colspan="4" align="right"><hr size="1" noshade>
  </td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Total revenues</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">                        2,473,000 </font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">                       3,172,000 </font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td colspan="4" align="right"><hr size="1" noshade>
  </td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Certain expenses:</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Real estate taxes</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">                           272,000 </font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">                          363,000 </font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property operating expenses</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">                           454,000 </font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">                          598,000 </font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management fees</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">                             80,000 </font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">                            99,000 </font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td colspan="4" align="right"><hr size="1" noshade>
  </td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Total certain expenses</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">                           806,000 </font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">                       1,060,000 </font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td colspan="4" align="right"><hr size="1" noshade>
  </td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Revenues in excess of certain expenses</font></td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">                     1,667,000 </font></td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">                    2,112,000 </font></td>
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<tr valign="top">
  <td align="left">&nbsp;</td>
  <td colspan="4" align="right"><hr size="2" noshade>
  </td>
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<p align="center"><font size="2" face="serif">See accompanying notes to statements of revenues and certain expenses.</font></p>
<p align="center">&nbsp;</p>
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<p align="center"><font size="2" face="serif"><b>Trexler Mall Shopping Center Venture<br>
</b></font><font size="2" face="serif"><b>Notes to the Statements of Revenues and Certain Expenses<br>
</b></font><font size="2" face="serif"><b>For the year ended December 31, 2004<br>
</b></font><font size="2" face="serif"><b>For the nine months ended September 30, 2005 (unaudited)</b></font></p>
<p align="left"><font size="2" face="serif"><b>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basis of Presentation </b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Presented
    herein are the statements of revenues and certain expenses related to a multi-anchored
    shopping center, located in Trexlertown, Pennsylvania (the &#8220;Property&#8221;).
    The Property contains approximately 339,000 square feet of gross leasable
    area. Cedar Shopping Centers, Inc. acquired the Property on December 19,
    2005.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The accompanying financial statements have been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission for the acquisition of real estate properties. Accordingly, the financial statements exclude certain expenses because they may not be comparable to those expected to be incurred in the proposed future operations of the Property. Items excluded consist of interest expense and depreciation and amortization expense, which are not directly related to future operations. </font></p>
<p align="left"><font size="2" face="serif"><b>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Use of Estimates </b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The preparation of the statements of revenues and certain expenses in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the statements of revenues and certain expenses and accompanying notes. Actual results could differ from those estimates. </font></p>
<p align="left"><font size="2" face="serif"><b>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue Recognition </b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Property is being leased to tenants under operating leases. Minimum rental income is recognized on a straight-line basis over the terms of the leases. The excess of amounts contractually due pursuant to the underlying leases over rents recognized was approximately $19,000 and $44,000, respectively, for the year ended December 31, 2004 and for the nine months ended September 30, 2005 (unaudited). </font></p>
<p align="left"><font size="2" face="serif">Certain of the Property&#8217;s tenants received lease incentives related to tenant improvements performed by them, resulting in base rent reductions of approximately $0 and $11,000, respectively, for the year ended December 31, 2004 and for the nine months ended September 30, 2005 (unaudited).</font></p>
<p align="left"><font size="2" face="serif"><b>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property Operating Expenses </b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property operating expenses for the year ended December 31, 2004 include approximately $207,000 for utilities, $146,000 for repair and maintenance costs, $101,000 for payroll, $93,000 for insurance, $39,000 for snow removal, and $12,000&nbsp;for other costs.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property operating expenses for the nine months ended September 30, 2005 (unaudited) include approximately $148,000 for utilities, $107,000 for insurance, $68,000 for payroll, $64,000 for repair and maintenance costs, $56,000 for snow removal, and $11,000&nbsp;for other costs.</font></p>
<p align="left"><font size="2" face="serif"><b>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management Fees</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Property was managed by RD Management Corp., TKO Real Estate Advisory Group, Inc., and RD Management LLC pursuant to agreements which provide for monthly management fees equal to 4% of cash receipts, as defined. Management fees of approximately $99,000 and $80,000, respectively, were incurred for the year ended December 31, 2004 and for the nine months ended September 30, 2005 (unaudited).</font></p>
<p align="left"><font size="2" face="serif"><b>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Significant Tenants </b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Significant tenants include Kohl&#8217;s Dept. Stores and Lehigh Wellness Center, which constituted approximately 28% and 20%, respectively, of base rents for the year ended December 31, 2004, and 27% and 19%, respectively, for the nine months ended September 30, 2005 (unaudited).</font></p>
<p align="center">&nbsp;</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<p align="center"><font size="2" face="serif"><b>Trexler Mall Shopping Center Venture</b></font></p>
<p align="center"><font size="2" face="serif"><b>Notes to Statements of Revenues
      and Certain Expenses<br>
</b></font><font size="2" face="serif"><b>For the year ended December 31, 2004<br>
</b></font><font size="2" face="serif"><b>For the nine months ended September 30, 2005 (unaudited)</b></font><br>
<font size="2" face="serif"><b>(Continued)</b></font></p>
<p align="left"><b><font size="2" face="serif">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Future
Minimum Lease Payments </font></b></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Future minimum lease payments to be received under non-cancelable operating leases for the years ending December 31 are as follows: </font></p>
<table width="60%" cellspacing="0" cellpadding="0" align="center" border="0">
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">2005</font></td>
<td width="2%" align="right"><div align="left"><font size="2" face="serif">$</font></div></td>
<td width="8%" align="right"><font size="2" face="serif">        2,621,000 </font></td>
<td width="2%" align="left">&nbsp;</td> </tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">2006</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">2,635,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">2007</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">2,386,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">2008</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">2,198,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">2009</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,607,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Thereafter</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">13,736,000 </font></td>
<td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td colspan="2" align="right"><hr size="1" noshade>  </td>
<td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Total</font></td>
<td align="right"><div align="left"><font size="2" face="serif">$</font></div></td>
<td align="right"><font size="2" face="serif">      25,183,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td colspan="2" align="right"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
</tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of lease incentives, future minimum lease payments will be offset by base rent reductions for the years ending December 31, as follows:</font></p>



<table width="60%" cellspacing="0" cellpadding="0" align="center" border="0">
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">2005</font></td>
<td width="2%" align="right"><div align="left"><font size="2" face="serif">$</font></div></td>
<td width="8%" align="right"><font size="2" face="serif">        15,000 </font></td>
<td width="2%" align="left">&nbsp;</td> </tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">2006</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif"> 15,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">2007</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">15,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">2008</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">15,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">2009</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">15,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Thereafter</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">73,000 </font></td>
<td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td colspan="2" align="right"><hr size="1" noshade>  </td>
<td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Total</font></td>
<td align="right"><div align="left"><font size="2" face="serif">$</font></div></td>
<td align="right"><font size="2" face="serif">      148,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td colspan="2" align="right"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
</tr>
</table>












<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The lease agreements generally contain provisions for reimbursement of real estate taxes and operating expenses, on a pro rata basis, as well as for fixed increases in rent. </font></p>
<p align="left"><font size="2" face="serif"><b>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interim Unaudited Financial Information </b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The statement of revenues and certain expenses for the nine months ended September 30, 2005 is unaudited; however, in the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary for a fair presentation of the statement of revenues and certain expenses for this interim period have been included. The results of the interim period are not necessarily indicative of the results to be obtained for a full fiscal year.</font></p>
<p align="center">&nbsp;</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<p>&nbsp;</p>
<p align="center"><font size="2" face="serif"><b>  Report of Independent Registered Public Accounting Firm </b></font></p>
<p align="left"><font size="2" face="serif">Board of Directors and Stockholders<br>
</font><font size="2" face="serif">Cedar Shopping Centers, Inc. </font></p>
<p align="left"><font size="2" face="serif">&nbsp;<br>
We have audited the combined statement of revenues and certain expenses of those
    certain properties of the Silver Companies (the &#8220;Properties&#8221;)
    for the year ended December 31, 2004. The combined financial statement is
    the responsibility of the Properties&#8217; management. Our responsibility
    is to express an opinion on this combined financial statement based on our
    audit.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;<br>We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined financial statement is free of material misstatement. We were not engaged to perform an audit of the Properties&#8217; internal control over financial reporting. &nbsp;Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Properties&#8217; internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the combined financial statement, assessing the accounting principles used and significant estimates made by management, and evaluating the overall combined financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;<br>The accompanying combined statement of revenues and certain expenses was prepared for the purpose of complying with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission for inclusion in the Current Report on Form 8-K of Cedar Shopping Centers, Inc. dated October 7, 2005 and is not intended to be a complete presentation of the Properties&#8217; combined revenues and certain expenses.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;<br>In our opinion, the combined financial statement referred to above presents fairly, in all material respects, the combined revenues and certain expenses of the Properties as described in Note 1 for the year ended December 31, 2004, in conformity with U.S. generally accepted accounting principles.</font></p>
<p align="right"><font size="2" face="serif"><br><br>/s/ Ernst &amp; Young LLP</font></p>
<p align="left"><font size="2" face="serif">
  <br>
  New York, New York<br>
  December 21, 2005</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<p align="center"><font size="2" face="serif"><b>Certain Properties of the Silver Companies<br>
</b></font><font size="2" face="serif"><b>Combined Statements of Revenues and Certain Expenses</b></font></p>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
<tr valign="top">
<td width="67%" align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="center" valign="bottom"><font size="1" face="serif"><b>Nine months<br>
  ended<br>
  September 30, 2005</b></font></td>

<td align="right" valign="bottom">&nbsp;</td>

<td align="center" valign="bottom"><font size="1" face="serif"><b>Year ended<br>
  December 31, 2004</b></font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td colspan="4" align="right"><hr size="1" noshade>
  </td>
  </tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="center"><font size="1" face="serif"><b>(Unaudited)</b></font></td>
<td align="right">&nbsp;</td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Revenues:</font></td>
<td width="2%" align="right">&nbsp;</td>
<td width="14%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="5%" align="right">&nbsp;</td>
<td width="12%" align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Base rents</font></td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">                     1,149,000 </font></td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">                    1,449,000 </font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tenant reimbursements</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">                             38,000 </font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">                            42,000 </font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td colspan="4" align="right"><hr size="1" noshade>
  </td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Total revenues</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">                        1,187,000 </font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">                       1,491,000 </font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td colspan="4" align="right"><hr size="1" noshade>
  </td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Certain expenses:</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Real estate taxes</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">                             26,000 </font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">                            22,000 </font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property operating expenses</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">                             18,000 </font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">                            22,000 </font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management fees &#150; related party</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">                             40,000 </font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">                            50,000 </font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td colspan="4" align="right"><hr size="1" noshade>
  </td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Total certain expenses</font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">                             84,000 </font></td>
<td align="right">&nbsp;</td>
<td align="right"><font size="2" face="serif">                            94,000 </font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td colspan="4" align="right"><hr size="1" noshade>
  </td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Revenues in excess of certain expenses</font></td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">                     1,103,000 </font></td>
<td align="right"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">                    1,397,000 </font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td colspan="4" align="right"><hr size="2" noshade>
  </td>
</tr>
</table>
<p align="center"><font size="2" face="serif">See accompanying notes to combined statements of revenues and certain expenses.</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<p align="center"><font size="2" face="serif"><b>Certain Properties of the Silver Companies<br>
</b></font><font size="2" face="serif"><b>Notes to the Combined Statements of Revenues and Certain Expenses<br>
</b></font><font size="2" face="serif"><b>For the year ended December 31, 2004<br>
</b></font><font size="2" face="serif"><b>For the nine months ended September 30, 2005 (unaudited)</b></font></p>
<p align="left"><font size="2" face="serif"><b>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basis of Presentation </b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Presented herein are the combined statements of revenues and certain expenses related to the operations of two supermarkets and two ancillary retail strip shopping center properties, located in Virginia (the &#8220;Properties&#8221;). The Properties contain an aggregate of approximately 131,000 square feet of gross leasable area. Cedar Shopping Centers, Inc. acquired the Properties on November 18, 2005.&nbsp;</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The accompanying combined financial statements have been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission for the acquisition of real estate properties. Accordingly, the combined financial statements exclude certain expenses because they may not be comparable to those expected to be incurred in the proposed future operations of the Properties. Items excluded consist of interest expense and depreciation and amortization expense, which are not directly related to future operations. </font></p>
<p align="left"><font size="2" face="serif"><b>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Use of Estimates </b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The preparation of the combined statements of revenues and certain expenses in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the combined statements of revenues and certain expenses and accompanying notes. Actual results could differ from those estimates. </font></p>
<p align="left"><font size="2" face="serif"><b>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue Recognition </b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Properties are being leased to tenants under operating leases. Minimum rental income is recognized on a straight-line basis over the terms of the leases. The excess of rents recognized over amounts contractually due pursuant to the underlying leases was approximately $62,000 and $54,000, respectively, for the year ended December 31, 2004 and for the nine months ended September 30, 2005 (unaudited).</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain of the Properties&#8217; tenants received lease incentives related to tenant improvements performed by them, resulting in base rent reductions of approximately $256,000 and $190,000, respectively, for the year ended December 31, 2004 and for the nine months ended September 30, 2005 (unaudited).</font></p>
<p align="left"><font size="2" face="serif"><b>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property Operating Expenses </b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property operating expenses for the year ended December 31, 2004 include approximately $13,000 for parking and landscaping, $4,000 for insurance, $4,000 for utilities, and $1,000 for repair and maintenance costs.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property operating expenses for the nine months ended September 30, 2005 (unaudited) include approximately $11,000 for parking and landscaping, $3,000 for insurance and $4,000 for utilities.</font></p>
<p align="left"><font size="2" face="serif"><b>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management Fees</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Properties were managed by Silver Properties, Inc., a related party, pursuant to an agreement which provides for monthly management fees equal to 3% of cash receipts, as defined. Management fees of approximately $50,000 and $40,000, respectively, were incurred for the year ended December 31, 2004 and for the nine months ended September 30, 2005 (unaudited).</font></p>
<p align="left"><font size="2" face="serif"><b>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Significant Tenants </b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Significant tenants include two Ukrop Supermarkets, under triple-net leases, which constituted approximately 82% and 79%, respectively, of base rents for the year ended December 31, 2004 and for the nine months ended September 30, 2005 (unaudited).</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<p align="center"><font size="2" face="serif"><b>Certain Properties of the Silver
      Companies<br>
</b></font><font size="2" face="serif"><b>Notes to Combined Statements of Revenues and Certain Expenses<br>
</b></font><font size="2" face="serif"><b>For the year ended December 31, 2004<br>
</b></font><font size="2" face="serif"><b>For the nine months ended September 30, 2005 (unaudited)</b></font><br>
<font size="2" face="serif"><b>(Continued)</b></font></p>
<p align="left"><b><font size="2" face="serif">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Future
Minimum Lease Payments </font></b></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Future minimum lease payments to be received under non-cancelable operating leases for the years ending December 31 are as follows: </font></p>
<table width="60%" cellspacing="0" cellpadding="0" align="center" border="0">
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">2005</font></td>
<td width="2%" align="left"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">         1,754,000</font></td>
<td width="2%" align="left">&nbsp;</td> </tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">2006</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">2,013,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">2007</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">2,045,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">2008</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">2,065,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">2009</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">2,056,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Thereafter</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">12,214,000 </font></td>
<td align="left">&nbsp;</td>
</tr>


<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td colspan="2" align="right"><hr size="1" noshade>  </td>
<td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Total</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">       22,147,000</font></td>
<td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td colspan="2" align="right"><hr size="2" noshade>  </td>
<td align="left">&nbsp;</td>
</tr>

</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of lease incentives, future minimum lease payments will be offset by base rent reductions for the years ending December 31, as follows:</font></p>
<table width="60%" cellspacing="0" cellpadding="0" align="center" border="0">
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">2005</font></td>
<td width="2%" align="left"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">256,000</font></td>
<td width="2%" align="left">&nbsp;</td> </tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">2006</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">256,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">2007</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">252,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">2008</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">251,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">2009</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">250,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Thereafter</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,912,000 </font></td>
<td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td colspan="2" align="right"><hr size="1" noshade>  </td>
<td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Total</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">3,177,000</font></td>
<td align="left">&nbsp;</td>
</tr>

<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td colspan="2" align="right"><hr size="2" noshade>  </td>
<td align="left">&nbsp;</td>
</tr>

</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The lease agreements, other than the triple-net leases, generally contain provisions for reimbursement of real estate taxes and operating expenses, on a pro rata basis, as well as for fixed increases in rent. </font></p>
<p align="left"><font size="2" face="serif"><b>8<font size="2" face="serif">.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>Interim Unaudited Financial Information </b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The combined statement of revenues and certain expenses for the nine months ended September 30, 2005 is unaudited; however, in the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary for a fair presentation of the combined statement of revenues and certain expenses for this interim period have been included. The results of the interim period are not necessarily indicative of the results to be obtained for a full fiscal year.</font></p>
<p align="center">&nbsp;</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<p>&nbsp;</p>
<p align="center"><font size="2" face="serif"><b>  Report of Independent Registered Public Accounting Firm </b></font></p>
<p align="left"><font size="2" face="serif">Board of Directors and Stockholders<br>
</font><font size="2" face="serif">Cedar Shopping Centers, Inc. </font></p>
<p align="left"><font size="2" face="serif">&nbsp;<br>
We have audited the statements of revenues and certain expenses of Shore Mall
    Associates, L.P. (the &#8220;Property&#8221;) for the years ended December
    31, 2004, 2003 and 2002. The financial statements are the responsibility
    of the Property&#8217;s management. Our responsibility is to express an opinion
    on these financial statements based on our audits.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;<br>We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Property&#8217;s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Property&#8217;s internal control over financial reporting. Accordingly, we express no such opinion. An audit
also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;<br>The accompanying statements of revenues and certain expenses were prepared for the purpose of complying with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission for inclusion in the Current Report on Form 8-K of Cedar Shopping Centers, Inc. dated October 7, 2005 and are not intended to be a complete presentation of the Property&#8217;s revenues and certain expenses.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;<br>In our opinion, the financial statements referred to above present fairly, in all material respects, the revenues and certain expenses of the Property as described in Note 1 for the years ended December 31, 2004, 2003 and 2002, in conformity with U.S. generally accepted accounting principles.</font></p>
<p align="right"><font size="2" face="serif"><br><br>/s/ Ernst &amp; Young LLP</font></p>
<p align="left"><font size="2" face="serif"><br>
<br>New York, New York<br>
</font><font size="2" face="serif">December  21, 2005</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<p align="center"><font size="2" face="serif"><b>Shore Mall Associates, L.P.<br>
</b></font><font size="2" face="serif"><b>Statements of Revenues and Certain Expenses</b></font></p>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
<tr align="center" valign="bottom">
<td><font size="1" face="serif">&nbsp;</font></td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td colspan="8"><font size="1" face="serif"><b>Years ended December 31,</b></font></td>
</tr>
<tr align="center" valign="bottom">
  <td>&nbsp;</td>
  <td colspan="2">&nbsp;</td>
  <td>&nbsp;</td>
  <td colspan="8"><hr size="1" noshade></td>
  </tr>
<tr align="center" valign="bottom">
<td><font size="1" face="serif">&nbsp;</font></td>
<td colspan="2"><font size="1" face="serif"><b>Nine months <br>
  ended<br>
  September 30, 2005</b></font></td>
<td>&nbsp;</td>
<td colspan="2"><font size="1" face="serif"><b>2004</b></font></td>
<td>&nbsp;</td>
<td colspan="2"><font size="1" face="serif"><b>2003</b></font></td>
<td>&nbsp;</td>
<td colspan="2"><font size="1" face="serif"><b>2002</b></font></td>
</tr>
<tr valign="top">
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
  <td colspan="11" align="left"><hr size="1" noshade>
  </td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td colspan="2" align="center" valign="middle"><font size="1" face="serif"><b>(Unaudited)</b></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Revenues:</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="9%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="2%" align="left">&nbsp;</td>
<td width="9%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="2%" align="left">&nbsp;</td>
<td width="9%" align="left"><font size="2" face="serif">&nbsp;</font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="2%" align="left">&nbsp;</td>
<td width="9%" align="left"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Base rents</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">                        3,326,000</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">        4,849,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">        4,698,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">        4,792,000 </font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tenant reimbursements</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">                           1,636,000</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">           2,062,000</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">           1,910,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">           2,136,000 </font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lease termination and other income</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">                  1,030,000</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">                32,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">                212,000 </font></td>
</tr>
<tr valign="top">
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
  <td colspan="11" align="left"><hr size="1" noshade>
  </td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Total revenues</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">                           4,962,000</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">           7,941,000</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">           6,640,000</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">           7,140,000</font></td>
</tr>
<tr valign="top">
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
  <td colspan="11" align="left"><hr size="1" noshade>
  </td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Certain expenses:</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Real estate taxes</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">                              868,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">           1,140,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">           1,060,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">              969,000 </font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property operating expenses</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">                           1,329,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">           1,845,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">           2,191,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">           1,985,000 </font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management fees &#150; related parties</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">                              215,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">              316,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">              294,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">              287,000 </font></td>
</tr>
<tr valign="top">
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
  <td colspan="11" align="left"><hr size="1" noshade>
  </td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Total certain expenses</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">                           2,412,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">           3,301,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">           3,545,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">           3,241,000 </font></td>
</tr>
<tr valign="top">
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
  <td colspan="11" align="left"><hr size="1" noshade>
  </td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Revenues in excess of certain expenses</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">                        2,550,000</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">        4,640,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">        3,095,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">        3,899,000 </font></td>
</tr>
<tr valign="top">
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
  <td colspan="11" align="left"><hr size="2" noshade>
  </td>
</tr>
</table>
<p align="center"><font size="2" face="serif">See accompanying notes to statements of revenues and certain expenses.</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<p align="center"><font size="2" face="serif"><b>Shore Mall Associates, L.P.<br>
</b></font><font size="2" face="serif"><b>Notes to the Statements of Revenues and Certain Expenses<br>
</b></font><font size="2" face="serif"><b>For the years ended December 31, 2004, 2003 and 2002<br>
</b></font><font size="2" face="serif"><b>For the nine months ended September 30, 2005 (unaudited)</b></font></p>
<p align="left"><font size="2" face="serif"><b>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basis of Presentation </b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Presented herein are the statements of revenues and certain expenses related to the operations of a multi-anchored mall, located in Egg Harbor, New Jersey (the &#8220;Property&#8221;). The Property, which is owned in part by a related party, contains approximately 620,000 square feet of gross leasable area. Although the due-diligence review has not yet been completed, it is anticipated that Cedar Shopping Centers, Inc. will acquire the Property in January 2006.&nbsp;</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The accompanying financial statements have been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission for the acquisition of real estate properties. Accordingly, the financial statements exclude certain expenses because they may not be comparable to those expected to be incurred in the proposed future operations of the Property. Items excluded consist of interest expense and depreciation and amortization expense, which are not directly related to future operations. </font></p>
<p align="left"><font size="2" face="serif"><b>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Use of Estimates </b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The preparation of the statements of revenues and certain expenses in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the statements of revenues and certain expenses and accompanying notes. Actual results could differ from those estimates. </font></p>
<p align="left"><font size="2" face="serif"><b>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue Recognition </b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Property is being leased to tenants under operating leases. Minimum rental income is recognized on a straight-line basis over the terms of the leases. The excess of amounts contractually due pursuant to the underlying lease over the rents recognized was approximately $46,000, $150,000, and $139,000, respectively, for the years ended December 31, 2004, 2003 and 2002, and $62,000 for the nine months ended September 30, 2005 (unaudited). </font></p>
<p align="left"><font size="2" face="serif"><b>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property Operating Expenses </b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property
    operating expenses for the year ended December 31, 2004 include approximately
    $715,000&nbsp;for
    payroll costs, $428,000 for utilities, $269,000 for insurance, $212,000 for
    repair and maintenance costs, $62,000 for professional fees, $64,000 for
    snow
removal, and $95,000 for other costs.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property
    operating expenses for the year ended December 31, 2003 include approximately
    $711,000&nbsp;for
    payroll costs, $395,000 for utilities, $373,000 for insurance, $293,000 for
    repair and maintenance costs, $212,000 for snow removal, $69,000 for professional
fees, and $138,000 for other costs.</font></p>
<p align="left"><font size="2" face="serif">&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property
    operating expenses for the year ended December 31, 2002 include approximately
    $687,000&nbsp;for payroll costs, $359,000 for utilities, $324,000 for insurance,
    $188,000 for snow removal, $160,000 for professional fees, $144,000 for
    repair and maintenance costs, and $123,000 for other costs.</font></p>
<p align="left"><font size="2" face="serif">&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property
    operating expenses for the nine months ended September 30, 2005 (unaudited)
    include approximately $492,000 for payroll costs, $302,000 for utilities,
    $207,000 for repair and maintenance costs, $197,000 for insurance, $48,000
    for snow removal, $32,000 for professional fees, and $51,000&nbsp;for
    other costs.</font></p>
<p align="left"><font size="2" face="serif"><b>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management
Fees and Related Party Transactions</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Property was managed by Cedar Shopping Centers, Inc. and its predecessor management company, related parties, pursuant to an agreement which provided for monthly management fees equal to 4% of cash receipts, as defined. Management fees of approximately $316,000, $294,000, and $287,000, respectively, for the years ended December 31, 2004, 2003 and 2002, and $215,000 for the nine months ended September 30, 2005 (unaudited) were incurred. Leo S. Ullman, chief executive officer of Cedar Shopping Centers, Inc., owns 8% of Shore Mall Associates, L.P.</font></p>
<p align="center">&nbsp;</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<p align="center"><font size="2" face="serif"><b>Shore Mall Associates, L.P.<br>
</b></font><font size="2" face="serif"><b>Notes to the Statements of Revenues
and Certain Expenses<br>
</b></font><font size="2" face="serif"><b>For the years ended December 31, 2004,
2003 and 2002<br>
</b></font><font size="2" face="serif"><b>For the nine months ended September
30, 2005 (unaudited)</b></font><br>
<font size="2" face="serif"><b>(Continued)</b></font></p>
<p align="left"><font size="2" face="serif"><b>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Significant Tenants </b></font></p>
<p align="left"><font size="2" face="serif">&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Significant
    tenants include Burlington Coat Factory and Boscov&#8217;s
    Dept. Stores, which constituted approximately 17% and 15%, 16% and 14%, and
    16% and 13%, respectively, of base rents for the years ended December 31,
    2004, 2003 and 2002, and 22% and 15%, respectively, for the nine months ended
September 30, 2005 (unaudited). </font></p>
<p align="left"><b><font size="2" face="serif">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Future
Minimum Lease Payments </font></b></p>
<p align="left"><font size="2" face="serif">&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Future minimum lease payments to be received under non-cancelable operating leases for the years ending December 31 are as follows: </font></p>
<table width="60%" cellspacing="0" cellpadding="0" align="center" border="0">
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">2005</font></td>
<td width="2%" align="left"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">4,245,000 </font></td>
<td width="2%" align="left">&nbsp;</td> </tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">2006</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">3,241,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">2007</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">3,032,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">2008</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">2,656,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">2009</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,787,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Thereafter</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">1,498,000</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="1" noshade></td>
  <td align="right"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Total</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">16,459,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="left"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
</tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The lease agreements generally contain provisions for reimbursement of real estate taxes and operating expenses, on a pro rata basis, as well as for fixed increases in rent. </font></p>
<p align="left"><font size="2" face="serif"><b>8<font size="2" face="serif">.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>Interim Unaudited Financial Information </b></font></p>
<p align="left"><font size="2" face="serif">&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The statement of revenues and certain expenses for the nine months ended September 30, 2005 is unaudited; however, in the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary for a fair presentation of the statement of revenues and certain expenses for this interim period have been included. The results of the interim period are not necessarily indicative of the results to be obtained for a full fiscal year.</font></p>
<p align="center">&nbsp;</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<p align="center"><font size="2" face="serif"><b>Cedar Shopping Centers, Inc.<br>
</b></font><font size="2" face="serif"><b>Pro Forma Condensed Consolidated Balance Sheet<br>
</b></font><font size="2" face="serif"><b>As of September 30, 2005<br>
</b></font><font size="2" face="serif"><b>(Unaudited)                             </b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following unaudited pro forma condensed consolidated balance sheet is presented as if Cedar Shopping Centers, Inc. (the &#8220;Company&#8221;) had acquired (1) Trexler Mall Shopping Center Venture, those certain properties of the Silver Companies, and Shore Mall Associates, L.P., and (2) the other properties it purchased subsequent to September 30, 2005 and through November 30, 2005, as if all these transactions were completed as of September 30, 2005. This financial statement should be read in conjunction with the unaudited pro forma condensed consolidated statements of income, and the Company&#8217;s historical financial statements and notes thereto as filed on Form 10-K for the year ended December 31, 2004 and on Form 10-Q for the nine
months ended September 30, 2005. The pro forma condensed consolidated balance sheet is unaudited and is not necessarily indicative of what the actual financial position would have been had the Company acquired (1) Trexler Mall Shopping Center Venture, those certain properties of the Silver Companies, and Shore Mall Associates, L.P., and (2) the other properties it purchased subsequent to September 30, 2005 and through November 30, 2005, all as of September 30, 2005, nor does it purport to represent the future financial position of the Company.</font></p>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>Cedar Shopping<br>
  Centers, Inc.<br>
  Historical (a)</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>Completed<br>
  transactions<br>
  (b)</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>Acquired<br>
  properties<br>
  (c)(d)</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>Pro forma</b></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><b>Assets</b></font></td>
<td width="2%" align="left"><hr size="1" noshade></td>
<td width="9%" align="left"><hr size="1" noshade></td>
<td width="2%" align="left"><hr size="1" noshade></td>
<td width="2%" align="left"><hr size="1" noshade></td>
<td width="9%" align="left"><hr size="1" noshade></td>
<td width="2%" align="left"><hr size="1" noshade></td>
<td width="2%" align="left"><hr size="1" noshade></td>
<td width="9%" align="left"><hr size="1" noshade></td>
<td width="2%" align="left"><hr size="1" noshade></td>
<td width="2%" align="left"><hr size="1" noshade></td>
<td width="9%" align="left"><hr size="1" noshade></td>
<td width="2%" align="left">&nbsp;</td> </tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Real estate</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Land</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">       146,248,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">         11,589,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">      21,378,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">    179,215,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Buildings and improvements</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">657,544,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">46,356,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">85,512,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">       789,412,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td colspan="11" align="left"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">803,792,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">57,945,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">106,890,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">968,627,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less accumulated depreciation</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">(28,275,000</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">(28,275,000</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td colspan="11" align="left"><hr size="1" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Real estate, net</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">775,517,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">57,945,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">106,890,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">940,352,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">10,690,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">10,690,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash at joint ventures and restricted cash</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">6,364,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">6,364,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rents and other receivables, net</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">7,984,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">7,984,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">6,988,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">                (500,000</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">            (500,000</font></td>
<td align="left"><font size="2" face="serif">)</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">5,988,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred charges, net</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">14,325,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">14,325,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td colspan="11" align="left"><hr size="1" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif"><b>Total Assets</b></font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">       821,868,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">         57,445,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">    106,390,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">    985,703,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td colspan="11" align="left"><hr size="2" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><b>Liabilities and Shareholders' Equity</b></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mortgage loans payable</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">       309,997,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">         13,845,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">      55,941,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">    379,783,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Secured revolving credit facility</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">60,400,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">            43,600,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">         50,449,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">       154,449,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable, accrued expenses, and other</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">11,762,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">         11,762,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred liabilities</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">25,576,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">25,576,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td colspan="11" align="left"><hr size="1" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><b>Total Liabilities</b></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">407,735,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">57,445,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">106,390,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">571,570,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td colspan="11" align="left"><hr size="1" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Minority interests</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">12,403,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">12,403,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Limited partners' interest in consolidated</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">20,488,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">20,488,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating Partnership</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Shareholders' Equity</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">381,242,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&#151;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">381,242,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td colspan="11" align="left"><hr size="1" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><b>Total Liabilities and Shareholders' Equity</b></font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">       821,868,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">         57,445,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">    106,390,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">    985,703,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td colspan="11" align="left"><hr size="2" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
</table>
<p align="center"><font size="2" face="serif">See accompanying notes to pro forma condensed consolidated financial statements.</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<p align="center"><font size="2" face="serif"><b>Cedar Shopping Centers, Inc.<br>
Pro Forma Condensed Consolidated Statements of Income<br>
For the year ended December 31, 2004<br>
</b></font><font size="2" face="serif"><b>For the nine months ended September
30,
2005<br>
</b></font><font size="2" face="serif"><b>(Unaudited)</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following unaudited pro forma condensed consolidated statements of income are presented as if the Company had acquired (1) Trexler Mall Shopping Center Venture, those certain properties of the Silver Companies, and Shore Mall Associates, L.P., and (2) the other properties it purchased throughout 2004 and through November 30, 2005, as if all these transactions were completed as of January 1, 2004. These financial statements should be read in conjunction with the unaudited pro forma condensed consolidated balance sheet, and the Company&#8217;s historical financial statements and notes thereto as filed on Form 10-K for the year ended December 31, 2004 and on Form 10-Q for the nine months ended September, 2005. The pro forma condensed
consolidated statements of income are unaudited and are not necessarily indicative of what the actual results of operations would have been had the Company acquired (1) Trexler Mall Shopping Center Venture, those certain properties of the Silver Companies, and Shore Mall Associates, L.P., and (2) the other properties it purchased throughout 2004 and through November 30, 2005, all as of January 1, 2004, nor does it purport to represent the results of operations of the Company for future periods.</font></p>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td colspan="16" align="center" valign="bottom"><font size="1" face="serif"><b>For the year ended December 31, 2004</b></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td colspan="16" align="center" valign="bottom"><hr size="1" noshade>
</td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td rowspan="2" align="left"><font size="1" face="serif">&nbsp;</font></td>
<td colspan="2" rowspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>Cedar Shopping<br>
  Centers, Inc.<br>
  Historical (a)</b></font></td>
<td rowspan="2" align="center" valign="bottom">&nbsp;</td>
<td colspan="2" rowspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>Completed<br>
  transactions<br>
  (b)</b></font></td>
<td rowspan="2" align="center" valign="bottom">&nbsp;</td>
<td colspan="5" align="center" valign="bottom"><font size="1" face="serif"><b>Acquired properties<br>
</b></font>
  <hr size="1" noshade>
  <font size="1" face="serif"><b>  </b></font></td>
<td rowspan="2" align="center" valign="bottom">&nbsp;</td>
<td rowspan="2" align="center" valign="bottom"></td>
<td rowspan="2" align="center" valign="bottom">&nbsp;</td>
<td colspan="2" rowspan="2" align="center" valign="bottom"><font size="1" face="serif"><b> Pro forma </b></font></td>
<td rowspan="2" align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>Historical
    (c)</b></font></td>
  <td align="center" valign="bottom">&nbsp;</td>
  <td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b> Pro
        forma <br>
adjustments (d)</b></font></td>
</tr>
<tr valign="top">
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
  <td colspan="16" align="center" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">Revenues</font></font></td>
<td width="1%" align="left"><font face="serif" size="1">$</font></td>
<td width="7%" align="right"><font size="2" face="serif"><font face="serif" size="1">         51,078,000 </font></font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="left"><font face="serif" size="1">$</font></td>
<td width="7%" align="right"><font size="2" face="serif"><font face="serif" size="1">        39,030,000 </font></font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="left"><font face="serif" size="1">$</font></td>
<td width="7%" align="right"><font size="2" face="serif"><font face="serif" size="1">           12,604,000 </font></font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="left"><font face="serif" size="1">$</font></td>
<td width="7%" align="right"><font size="2" face="serif"><font face="serif" size="1">              370,000 </font></font></td>
<td width="1%" align="left">&nbsp;</td>
<td width="2%" align="center"><font size="2" face="serif"><font face="serif" size="1">(e)</font></font></td>
<td width="1%" align="left">&nbsp;</td>
<td width="1%" align="left"><font face="serif" size="1">$</font></td>
<td width="7%" align="right"><font size="2" face="serif"><font face="serif" size="1">       103,082,000 </font></font></td>
<td width="2%" align="left">&nbsp;</td> </tr>
<tr valign="top">
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
  <td colspan="16" align="center" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">Expenses:</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating, maintenance and management</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">10,751,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font size="1">7,294</font><font face="serif" size="1">,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">              2,930,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">                 (316,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="center"><font size="2" face="serif"><font face="serif" size="1">(e)</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">            20,659,000 </font></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif"><font size="2" face="serif"><font face="serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></font><font face="serif" size="1">Real estate and other property-related taxes</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">4,872,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">3,381,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">               1,525,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font>&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">             9,778,000 </font></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><font size="2" face="serif"><font face="serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></font><font face="serif" size="1">General and administrative</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">3,575,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font>&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">              3,575,000 </font></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif"><font size="2" face="serif"><font face="serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></font><font face="serif" size="1">Depreciation and amortization</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">11,376,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font size="1">8</font><font face="serif" size="1">,212,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">               2,138,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="center"><font size="2" face="serif"><font face="serif" size="1"> (g) </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">            21,726,000 </font></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
  <td colspan="16" align="center" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">Total expenses</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">            30,574,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">            18,887,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">              4,455,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">               1,822,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">            55,738,000 </font></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
  <td colspan="16" align="center" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">Operating income</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">20,504,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">20,143,000</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font size="1">              8,149,000</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">             (1,452,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">47,344,000 </font></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">Non-operating income and expense:</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><font size="2" face="serif"><font face="serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></font><font face="serif" size="1">Interest expense</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">(10,239,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">(18,774,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">            (4,908,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="center"><font size="2" face="serif"><font face="serif" size="1"> (f) </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">(33,921,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif"><font size="2" face="serif"><font face="serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></font><font face="serif" size="1">Amortization of deferred financing costs</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">(1,025,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">(1,025,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><font size="2" face="serif"><font face="serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></font><font face="serif" size="1">Interest income</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">66,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">                    66,000 </font></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
  <td colspan="16" align="center" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">Total non-operating income and expense</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">(11,198,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">(18,774,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">            (4,908,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">(34,880,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">Income before minority and limited partners' interests</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">              9,306,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">              1,369,000</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">              </font><font size="2" face="serif"><font size="1">8,149,000</font></font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">            (6,360,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">             12,464,000 </font></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">Minority interests</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">(1,229,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">             (1,229,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">Limited partners' interest in Operating Partnership</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">(157,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">                  (36,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">                     (47,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="center"><font size="2" face="serif"><font face="serif" size="1"> (h) </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">                 (240,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
</tr>
<tr valign="top">
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
  <td colspan="16" align="center" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">Net income</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">7,920,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">1,333,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">              </font><font size="2" face="serif"><font size="1">8,149,000</font></font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">              (6,407,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">10,995,000 </font></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">Preferred distribution requirements</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">(2,218,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">             (2,218,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
</tr>
<tr valign="top">
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
  <td colspan="16" align="center" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">Net income applicable to common shareholders</font></font></td>
<td align="left"><font face="serif" size="1">$</font></td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">          5,702,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left"><font face="serif" size="1">$</font></td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">          1,333,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left"><font face="serif" size="1">$</font></td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">          </font><font size="2" face="serif"><font size="1">8,149,000</font></font></font></td>
<td align="left">&nbsp;</td>
<td align="left"><font face="serif" size="1">$</font></td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">          (6,407,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left"></td>
<td align="left">&nbsp;</td>
<td align="left"><font face="serif" size="1">$</font></td>
<td align="right"><font size="2" face="serif"><font size="1">          8,777,000</font></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
  <td colspan="16" align="center" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">Per common share (basic and diluted)</font></font></td>
<td align="left"><font face="serif" size="1">$</font></td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">0.34 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font face="serif" size="1">$</font></td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">0.53</font></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="right">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left">&nbsp;</td>
  <td align="left"><hr size="2" noshade></td>
  <td align="right"><hr size="2" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">Average number of common shares outstanding</font></font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">16,681,000 </font></font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">              16,681,000 </font></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="right"><hr size="2" noshade>
</td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="2" noshade></td>
<td align="right"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
</tr>
</table>
<p align="center"><font face="serif" size="2">See accompanying notes to pro forma condensed consolidated financial statements.</font></p>
<p align="center">&nbsp;</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<p align="center"><font size="2" face="serif"><b>Cedar Shopping Centers, Inc.<br>
</b></font><font size="2" face="serif"><b>Pro Forma Condensed Consolidated Statements of Income<br>
</b></font><font size="2" face="serif"><b>For the year ended December 31, 2004<br>
</b></font><font size="2" face="serif"><b>For the nine months ended September 30, 2005<br>
</b></font><font size="2" face="serif"><b>(Unaudited)<br>
</b></font><font size="2" face="serif"><b>(Continued)</b></font></p>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td colspan="16" align="center" valign="bottom"><font size="1" face="serif"><b>For the nine months ended September 30, 2005</b></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td colspan="16" align="center" valign="bottom"><hr size="1" noshade></td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td align="center" valign="bottom">&nbsp;</td>
<td align="center" valign="bottom">&nbsp;</td>
<td align="center" valign="bottom">&nbsp;</td>
<td align="center" valign="bottom"><font size="1" face="serif">&nbsp;</font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="5" align="center" valign="bottom"><font size="1" face="serif"><b>Acquired properties<br>
</b></font>
  <hr size="1" noshade>
  <font size="1" face="serif"><b>  </b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td align="center" valign="bottom"><font size="1" face="serif">&nbsp;</font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td align="center" valign="bottom">&nbsp;</td>
<td align="center" valign="bottom"><font size="1" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>Cedar Shopping<br>
  Centers, Inc.<br>
  Historical (a)</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>Completed<br>
  transactions<br>
  (b)</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b>Historical (c)</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b> Pro forma <br>
  adjustments (d)</b></font></td>
<td align="center" valign="bottom">&nbsp;</td>
<td align="center" valign="bottom"></td>
<td align="center" valign="bottom">&nbsp;</td>
<td colspan="2" align="center" valign="bottom"><font size="1" face="serif"><b> Pro forma </b></font></td>
<td align="left" valign="bottom">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td colspan="16" align="center" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">Revenues</font></font></td>
<td width="1%" align="left"><font face="serif" size="1">$</font></td>
<td width="7%" align="right"><font size="2" face="serif"><font face="serif" size="1">     54,120,000 </font></font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="left"><font face="serif" size="1">$</font></td>
<td width="7%" align="right"><font size="2" face="serif"><font face="serif" size="1">     18,053,000 </font></font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="left"><font face="serif" size="1">$</font></td>
<td width="7%" align="right"><font size="2" face="serif"><font face="serif" size="1">       8,622,000 </font></font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="1%" align="left"><font face="serif" size="1">$</font></td>
<td width="7%" align="right"><font size="2" face="serif"><font face="serif" size="1">           124,000 </font></font></td>
<td width="2%" align="left">&nbsp;</td>
<td width="2%" align="center"><font size="2" face="serif"><b><font face="serif" size="1">(e)</font></b></font></td>
<td width="1%" align="left">&nbsp;</td>
<td width="1%" align="left"><font face="serif" size="1">$</font></td>
<td width="7%" align="right"><font size="2" face="serif"><font face="serif" size="1">     80,919,000 </font></font></td>
<td width="2%" align="left">&nbsp;</td> </tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td colspan="16" align="center" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">Expenses:</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating, maintenance and management</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">10,233,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">3,674,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">           2,136,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">             (215,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="center"><font size="2" face="serif"><b><font face="serif" size="1">(e)</font></b></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">         15,828,000 </font></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif"><font size="2" face="serif"><font face="serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></font><font face="serif" size="1">Real estate and other property-related taxes</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">5,351,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">1,571,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">             1,166,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font>&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">           8,088,000 </font></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><font size="2" face="serif"><font face="serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></font><font face="serif" size="1">General and administrative</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">3,483,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font>&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">           3,483,000 </font></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif"><font size="2" face="serif"><font face="serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></font><font face="serif" size="1">Depreciation and amortization</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">13,574,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">3,377,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">            1,603,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="center"><font size="2" face="serif"><b><font face="serif" size="1"> (g) </font></b></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">         18,554,000 </font></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td colspan="16" align="center" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">Total expenses</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">         32,641,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">            8,622,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">           3,302,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">            1,388,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">         45,953,000 </font></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td colspan="16" align="center" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">Operating income</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">21,479,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">9,431,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">           5,320,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">          (1,264,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">34,966,000 </font></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">Non-operating income and expense:</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><font size="2" face="serif"><font face="serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></font><font face="serif" size="1">Interest expense</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">(9,798,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">(8,611,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">         (3,823,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="center"><font size="2" face="serif"><b><font face="serif" size="1"> (f) </font></b></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">       (22,232,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif"><font size="2" face="serif"><font face="serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></font><font face="serif" size="1">Amortization of deferred mortgage costs</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">(771,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">             (771,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><font size="2" face="serif"><font face="serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></font><font face="serif" size="1">Interest income</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">51,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="center"></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">                  51,000 </font></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td colspan="16" align="center" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">Total non-operating income and expense</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">        (10,518,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">         </font><font size="2" face="serif"><font face="serif" size="1">(8,611,000</font></font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">         </font><font size="2" face="serif"><font face="serif" size="1">(3,823,000</font></font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">      (22,952,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">Income before minority and limited partners' interests</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">          10,961,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">             820,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">           5,320,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">         (5,087,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">          12,014,000 </font></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">Minority interests</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">(950,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">            (950,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">Limited partners' interest in Operating Partnership</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">(338,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">            (38,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">               (11,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="center"><font size="2" face="serif"><b><font face="serif" size="1"> (h) </font></b></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">            (387,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td colspan="16" align="center" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">Net income</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">9,673,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">782,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">           </font><font size="2" face="serif"><font face="serif" size="1">5,320,000</font></font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">          (5,098,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">10,677,000 </font></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">Preferred distribution requirements</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">(5,217,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">&#151;</font></font></td>
<td align="left">&nbsp;</td>
<td align="left"></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">          (5,217,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td colspan="16" align="center" valign="bottom"><hr size="1" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">Net income applicable to common shareholders</font></font></td>
<td align="left"><font face="serif" size="1">$</font></td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">       4,456,000 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left"><font face="serif" size="1">$</font></td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">         </font><font size="2" face="serif"><font face="serif" size="1">782,000 </font></font></font></td>
<td align="left">&nbsp;</td>
<td align="left"><font face="serif" size="1">$</font></td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">       </font><font size="2" face="serif"><font face="serif" size="1">5,320,000</font></font></font></td>
<td align="left">&nbsp;</td>
<td align="left"><font face="serif" size="1">$</font></td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">      (5,098,000</font></font></td>
<td align="left"><font size="2" face="serif"><font face="serif" size="1">)</font></font></td>
<td align="left"></td>
<td align="left">&nbsp;</td>
<td align="left"><font face="serif" size="1">$</font></td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">        5,460,000 </font></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left">&nbsp;</td>
  <td colspan="16" align="center" valign="bottom"><hr size="2" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif"><font face="serif" size="1">Per common share (basic and diluted)</font></font></td>
<td align="left"><font face="serif" size="1">$</font></td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">0.20 </font></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font face="serif" size="1">$</font></td>
<td align="right"><font size="2" face="serif"><font face="serif" size="1">0.24</font></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left">&nbsp;</td>
<td align="left"><hr size="2" noshade></td>
<td align="right"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="2" noshade></td>
<td align="right"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left" valign="bottom"><font size="2" face="serif"><font size="2" face="serif"><font size="2" face="serif"><font face="serif" size="1">Average
    number of common shares</font></font><br>
    <font face="serif" size="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></font><font face="serif" size="1">outstanding</font></font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">22,305,000 </font></font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom"><font size="2" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="right" valign="bottom"><font size="2" face="serif"><font face="serif" size="1">        22,305,000 </font></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><hr size="2" noshade></td>
<td align="right"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><hr size="2" noshade></td>
<td align="right"><hr size="2" noshade></td>
<td align="left">&nbsp;</td>
</tr>
</table>
<p align="center"><font face="serif" size="2">See accompanying notes to pro forma condensed consolidated financial statements.</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<p align="center"><font size="2" face="serif"><b>Cedar Shopping Centers, Inc.<br>
</b></font><font size="2" face="serif"><b>Notes to Pro Forma Condensed Consolidated Financial Statements (Unaudited)</b></font></p>
<p align="center"><font size="2" face="serif"><b>Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2005</b></font></p>
<table width="100%" border="0">
  <tr align="left" valign="top">
    <td width="4%"><font size="2" face="serif">(a)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="94%"><font size="2" face="serif">Reflects the Company's historical
    balance sheet as of September 30, 2005 (unaudited), as previously filed.</font></td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr align="left" valign="top">
    <td><font size="2" face="serif">(b)</font></td>
    <td>&nbsp;</td>
    <td><font size="2" face="serif">Reflects the acquisitions of Columbia Mall
        (October 2005), Pennsboro Commons (October 2005), Jordan Lane Shopping
        Center (November 2005) and Westlake Discount Drug Mart (November 2005).
        The aggregate consideration was approximately $57.9 million, comprised
        of approximately $13.8 million of new mortgage loans payable and $44.1
    million funded from the Company&#8217;s secured revolving credit facility.</font></td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr align="left" valign="top">
    <td><font size="2" face="serif">(c)</font></td>
    <td>&nbsp;</td>
    <td><font size="2" face="serif">Reflects the acquisitions of the properties
        owned by Trexler Mall Shopping Center Venture, those certain properties
        of the Silver Companies, and Shore Mall Associates, L.P. The aggregate
        consideration is expected to be approximately $104.9 million, comprised
        of approximately $54.0 million of assumed mortgage loans payable and
        $50.9 million funded from the Company&#8217;s secured revolving credit
    facility.</font></td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr align="left" valign="top">
    <td><font size="2" face="serif">(d)</font></td>
    <td>&nbsp;</td>
    <td><font size="2" face="serif">The Company intends to account for the acquisitions
        in accordance with Statements of Financial Accounting Standards No. 141, &#8220;Business
        Combinations&#8221;, and No. 142, &#8220;Goodwill and Other Intangibles&#8221;,
        and is currently in the process of analyzing the fair value of the properties&#8217; in-place
        leases. No value has yet been assigned to the leases and, therefore,
    the purchase price allocation is preliminary and subject to change.</font></td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size="2" face="serif"><b>Pro Forma Condensed Consolidated Statement
    of Income for the year ended December 31, 2004</b></font></td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr align="left" valign="top">
    <td><font size="2" face="serif">(a)</font></td>
    <td>&nbsp;</td>
    <td><font size="2" face="serif">Reflects the Company's historical operations
        for the year ended December 31, 2004,
as previously filed.</font></td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr align="left" valign="top">
    <td><font size="2" face="serif">(b)</font></td>
    <td>&nbsp;</td>
    <td><font size="2" face="serif">Reflects the acquisitions of (1) The Commons
        (March 2004), Townfair Center (March 2004), Carbondale Plaza (April 2004),
        Lake Raystown Plaza (June 2004), Huntingdon Plaza (June 2004), Hamburg
        Commons (June 2004), Franklin Village Plaza (November 2004), The Brickyard
        (December 2004), St. James Square (March 2005), Kenley Village (March
        2005), those certain properties of Giltz &amp; Associates, Inc. (April &#150; June
        2005), those certain properties of RVG Entity Owners (August 2005), Oakland
        Mills (September 2005), Majestic Plaza, Dunmore Shopping Center and Value
        City Shopping Center (September 2005), The Point at Carlisle Plaza (September
        2005), and the Shops at Suffolk Downs (September 2005), as previously
        filed, and (2) Columbia Mall (October 2005), Pennsboro Commons (October
        2005), Jordan Lane Shopping Center (November 2005), and Westlake Discount
        Drug Mart (November 2005), acquired subsequent to September 30, 2005,
    as if all of the transactions were completed as of January 1, 2004.</font></td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr align="left" valign="top">
    <td><font size="2" face="serif">(c)</font></td>
    <td>&nbsp;</td>
    <td><font size="2" face="serif">Reflects the operations of Trexler Mall Shopping
        Center Venture (December 2005), those certain properties of the Silver
        Companies (November 2005), and Shore Mall Associates, L.P. (anticipated
    January 2006) for the year ended December 31, 2004, as follows:</font></td>
  </tr>
</table>
<hr noshade align="center" width="100%" size="2">
<page>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="center" valign="bottom"><font size="1" face="serif"><b>Trexler<br>
  Mall</b></font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="center" valign="bottom"><font size="1" face="serif"><b>Silver<br>
  Properties</b></font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="center" valign="bottom"><font size="1" face="serif"><b> Shore<br>
  Mall </b></font></td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="left" valign="bottom">&nbsp;</td>
<td align="center" valign="bottom"><font size="1" face="serif"><b> Acquired<br>
  properties </b></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td colspan="11" align="left"><hr size="1" noshade>
</td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Revenues</font></td>
<td width="1%" align="left"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">           3,172,000 </font></td>
<td width="2%" align="left"><font size="2">&nbsp;</font></td>
<td width="1%" align="left"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">            1,491,000 </font></td>
<td width="2%" align="left"><font size="2">&nbsp;</font></td>
<td width="1%" align="left"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">          7,941,000 </font></td>
<td width="2%" align="left"><font size="2">&nbsp;</font></td>
<td width="1%" align="left"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">12,604,000</font></td>
<td width="2%" align="left"><font size="2">&nbsp;</font></td> </tr>
<tr valign="top">
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
  <td colspan="11" align="left"><hr size="1" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Expenses:</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating, maintenance and management</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">697,000</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">72,000 </font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">               2,161,000 </font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">2,930,000</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Real estate and other property-related taxes</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">363,000 </font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">22,000 </font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">                1,140,000 </font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">               1,525,000 </font></td>
<td align="left"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top">
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
  <td colspan="11" align="left"><hr size="1" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Total expenses</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">               1,069,000 </font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">                    94,000 </font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">              3,301,000 </font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">              4,455,000</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top">
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
  <td colspan="11" align="left"><hr size="1" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Operating income</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">          2,112,000 </font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">            1,397,000 </font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">          4,640,000 </font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">8,149,000</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
</tr>
<tr valign="top">
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
  <td colspan="11" align="left"><hr size="2" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
</table>
<br>
<table width="100%" border="0">
  <tr align="left" valign="top">
    <td width="4%"><font size="2" face="serif">(d)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="94%"><font size="2" face="serif">The Company intends to account
        for the acquisitions in accordance with Statements of Financial Accounting
        Standards No. 141, &#8220;Business Combinations&#8221;, and No. 142, &#8220;Goodwill
        and Other Intangibles&#8221;, and is currently in the process of analyzing
        the fair value of the properties&#8217; in-place leases. No value has
        yet been assigned to the leases and, therefore, the purchase price allocation
    is preliminary and subject to change.</font></td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr align="left" valign="top">
    <td><font size="2" face="serif">(e)</font></td>
    <td>&nbsp;</td>
    <td><font size="2" face="serif">Reflects (1) $430,000 of increased straight-line
        rents due to lease start dates being on January 1, 2004, (2) the elimination
        of $256,000 in base rent reductions resulting from lease incentives,
        and (3) the elimination of $316,000 in management fee income included
        in the historical results of Cedar Shopping Centers, Inc. applicable
    to the Shore Mall.</font></td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr align="left" valign="top">
    <td><font size="2" face="serif">(f)</font></td>
    <td>&nbsp;</td>
    <td><font size="2" face="serif">Reflects interest expense on (1) $54.0 million
        of assumed mortgage loans payable, and (2) $50.9 million of increased
        borrowings under the Company&#8217;s secured revolving credit facility,
        at weighted average interest rates of 5.43% and 3.7%, respectively. Interest
        expense has been reduced by $422,000 related to the discounting to current
    market of an assumed mortgage loan payable.</font></td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr align="left" valign="top">
    <td><font size="2" face="serif">(g)</font></td>
    <td>&nbsp;</td>
    <td><font size="2" face="serif">Reflects (1) $2,138,000 of straight-line
    real estate depreciation, based on an estimated useful life of 40 years.</font></td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr align="left" valign="top">
    <td><font size="2" face="serif">(h)</font></td>
    <td>&nbsp;</td>
    <td><font size="2" face="serif">Reflects an increase in limited partners&#8217; share
        of net income applicable to common shareholders as a result of the acquired
    properties.</font></td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size="2" face="serif"><b> Pro Forma Condensed Consolidated Statement
    of Income for the nine months ended September 30, 2005</b></font></td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr align="left" valign="top">
    <td><font size="2" face="serif">(a)</font></td>
    <td>&nbsp;</td>
    <td><font size="2" face="serif">Reflects the Company's historical operations
        for the nine months ended September 30, 2005 (unaudited), as previously
    filed.</font></td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr align="left" valign="top">
    <td><font size="2" face="serif">(b)</font></td>
    <td>&nbsp;</td>
    <td><font size="2" face="serif">Reflects the acquisition of (1) St. James
        Square (March 2005), Kenley Village (March 2005), those certain properties
        of Giltz &amp; Associates, Inc. (April &#150; June 2005), those certain
        properties of RVG Entity Owners (August 2005), Oakland Mills (September
        2005), Majestic Plaza, Dunmore Shopping Center and Value City Shopping
        Center (September 2005), The Point at Carlisle Plaza (September 2005),
        and the Shops at Suffolk Downs (September 2005), as previously filed,
        and (2) Columbia Mall (October 2005), Pennsboro Commons (October 2005),
        Jordan Lane Shopping Center (November 2005), and Westlake Discount Drug
        Mart (November 2005), acquired subsequent to September 30, 2005, as if
        all
of the transactions were completed as of January 1, 2004.</font></td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr align="left" valign="top">
    <td><font size="2" face="serif">(c)</font></td>
    <td>&nbsp;</td>
    <td><font size="2" face="serif">Reflects the operations of Trexler
        Mall Shopping Center Venture (December 2005), those certain properties
        of the Silver Companies (November 2005), and Shore Mall Associates, L.P.
    (December 2005) for the nine months ended September 30, 2005, as follows:</font></td>
  </tr>
</table>
<hr noshade align="center" width="100%" size="2">
<page>
<table width="100%" cellspacing="0" cellpadding="0" align="center" border="0">
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="center"><font size="1" face="serif"><b>Trexler<br>
  Mall</b></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="center"><font size="1" face="serif"><b>Silver<br>
  Properties</b></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="center"><font size="1" face="serif"><b>  Shore <br>
  Mall </b></font></td>
<td align="left">&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="center"><font size="1" face="serif"><b> Acquired<br>
  Properties </b></font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
<td align="left"><font size="1" face="serif">&nbsp;</font></td>
<td colspan="11" align="left"><hr size="1" noshade>
</td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Revenues</font></td>
<td width="1%" align="left"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">           2,473,000 </font></td>
<td width="1%" align="left">&nbsp;</td>
<td width="1%" align="left"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">             1,187,000 </font></td>
<td width="1%" align="left">&nbsp;</td>
<td width="1%" align="left"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">          4,962,000 </font></td>
<td width="1%" align="left">&nbsp;</td>
<td width="1%" align="left"><font size="2" face="serif">$</font></td>
<td width="8%" align="right"><font size="2" face="serif">8,622,000</font></td>
<td width="2%" align="left">&nbsp;</td> </tr>
<tr valign="top">
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
  <td colspan="11" align="left"><hr size="1" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Expenses:</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">&nbsp;</font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Operating, maintenance and management</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">534,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">58,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">               1,544,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">              2,136,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Real estate and other property-related taxes</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">272,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">26,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">                  868,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">                1,166,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
  <td colspan="11" align="left"><hr size="1" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#FFFFFF">
<td align="left"><font size="2" face="serif">Total expenses</font></td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">                   806,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">                    84,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">              2,412,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2">&nbsp;</font></td>
<td align="right"><font size="2" face="serif">              3,302,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
  <td colspan="11" align="left"><hr size="1" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top" bgcolor="#eeeeee">
<td align="left"><font size="2" face="serif">Operating income</font></td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">           1,667,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">            1,103,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">          2,550,000 </font></td>
<td align="left">&nbsp;</td>
<td align="left"><font size="2" face="serif">$</font></td>
<td align="right"><font size="2" face="serif">          5,320,000 </font></td>
<td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td align="left"><font size="1" face="serif">&nbsp;</font></td>
  <td colspan="11" align="left"><hr size="2" noshade>
  </td>
  <td align="left">&nbsp;</td>
</tr>
</table>
<p align="center">&nbsp;</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<p>&nbsp;</p>
<p align="center"><font size="2" face="serif"><b>Cedar Shopping Centers, Inc.<br>
</b></font><font size="2" face="serif"><b>Notes to Pro Forma Condensed Consolidated Financial Statements (Unaudited) (continued)</b></font></p>
<p align="center"><font size="2" face="serif"><b>Pro Forma Condensed Consolidated Statement of Income for the nine months ended September 30, 2005<br>
  (continued)</b></font></p>
<table width="100%" border="0">
  <tr align="left" valign="top">
    <td width="4%"><font size="2" face="serif">(d)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="94%"><font size="2" face="serif">The Company intends to account
        for the acquisitions in accordance with Statements of Financial Accounting
        Standards No. 141, &#8220;Business Combinations&#8221;, and No. 142, &#8220;Goodwill
        and Other Intangibles&#8221;, and is currently in the process of analyzing
        the fair value of the properties&#8217; in-place leases. No value has
        yet been assigned to the leases and, therefore, the purchase price allocation
    is preliminary and subject to change.</font></td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr align="left" valign="top">
    <td><font size="2" face="serif">(e)</font></td>
    <td>&nbsp;</td>
    <td><font size="2" face="serif">Reflects (1) $138,000 of increased straight-line
        rents due to lease start dates being on January 1, 2004, (2) the elimination
        of $201,000 in base rent reductions resulting from lease incentives,
        and (3) the elimination of $215,000 in management fee income included
        in the historical results of Cedar Shopping Centers, Inc. applicable
    to the Shore Mall.</font></td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr align="left" valign="top">
    <td><font size="2" face="serif">(f)</font></td>
    <td>&nbsp;</td>
    <td><font size="2" face="serif">Reflects interest expense on (1) $54.0 million
        of assumed mortgage loans payable, and (2) $50.9 million of increased
        borrowings under the Company&#8217;s secured revolving credit facility,
        at weighted average interest rates of 5.43% and 4.13%, respectively.
        . Interest expense has been reduced by $312,000 related to the discounting
    to current market of an assumed mortgage loan payable.</font></td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr align="left" valign="top">
    <td><font size="2" face="serif">(g)</font></td>
    <td>&nbsp;</td>
    <td><font size="2" face="serif">Reflects (1) $1,603,000 of straight-line
    real estate depreciation, based on an estimated useful life of 40 years.</font></td>
  </tr>
  <tr align="left" valign="top">
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr align="left" valign="top">
    <td><font size="2" face="serif">(h)</font></td>
    <td>&nbsp;</td>
    <td><font size="2" face="serif">Reflects an increase in limited partners&#8217; share
        of net income applicable to common shareholders as a result of the acquire
    properties.</font></td>
  </tr>
</table>
<p align="center">&nbsp;</p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<p>&nbsp;</p>
<p align="center"><b><u><font face="serif" size="2">SIGNATURES</font></u></b></p>
<p align="left"><font size="2" face="serif">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.</font></p>
<p align="left"><font size="2" face="serif">CEDAR SHOPPING CENTERS, INC.</font></p>
<p align="left">&nbsp;</p>
<p align="left"><font size="2" face="serif"><u>/s/ THOMAS J. O&#8217;KEEFFE<br>
</u></font><font size="2" face="serif">Thomas
J. O&#8217;Keeffe<br>
</font><font size="2" face="serif">Chief Financial Officer</font></p>
<p align="left"><font size="2" face="serif">Dated: &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 22, 2005</font></p>
<p align="center">&nbsp;</p>
<hr noshade align="center" width="100%" size="2">
</body>
</html>
[{"type": "8-K", "sequence": "1", "filename": "eight_k.htm", "description": "FORM 8-K", "secsgml_size_bytes": 198292}]
{"company-data": {"conformed-name": "CEDAR SHOPPING CENTERS INC", "cik": "0000761648", "assigned-sic": "6798", "irs-number": "421241468", "state-of-incorporation": "MD", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-31817", "film-number": "051284058"}, "business-address": {"street1": "44 SOUTH BAYLES AVENUE", "city": "PORT WASHINGTON", "state": "NY", "zip": "11050", "phone": "5167676492"}, "mail-address": {"street1": "44 SOUTH BAYLES AVENUE", "city": "PORT WASHINGTON", "state": "NY", "zip": "11050"}, "former-company": [{"former-conformed-name": "CEDAR INCOME FUND LTD /MD/", "date-changed": "20001128"}, {"former-conformed-name": "UNI INVEST USA LTD", "date-changed": "20000407"}, {"former-conformed-name": "CEDAR INCOME FUND LTD", "date-changed": "19920703"}]}
Prepared and filed by St Ives Burrups
UNITED
      STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
  DC  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):  October 7, 2005
Cedar Shopping Centers, Inc.
(Exact Name of Registrant as Specified in Charter)
Maryland
0-14510
42-1241468
(State or Other Jurisdiction of
Incorporation)
(Commission File Number)
(IRS Employer Identification
No.)
44 South Bayles Avenue
Port Washington, NY
11050-3765
(Address of Principal Executive
Offices)
(Zip Code)
(516) 767-6492
(Registrant's
    telephone number,
including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant
    to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 8.01.
Other Events.
With the completion of an acquisition on October 7, 2005, the total of the Company's 2005 non-material acquisitions had reached an amount requiring that a majority of such acquisitions be audited pursuant to Rule 3-14 of Regulation S-X of the Securities and Exchange Commission.
Item 9.01.
Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired:
Trexler Mall Shopping Center Venture:
Report of Independent Registered Public Accounting Firm
Statements of Revenues and Certain Expenses:
For the year ended December 31, 2004
For the nine months ended September 30, 2005 (unaudited)
Notes to Statements of Revenues and Certain Expenses
Certain Properties of the Silver Companies:
Report of Independent Registered Public Accounting Firm
Combined Statements of Revenues and Certain Expenses:
For the year ended December 31, 2004
For the nine months ended September 30, 2005 (unaudited)
Notes to Combined Statements of Revenues and Certain Expenses
Shore Mall Associates, L.P.:
Report of Independent Registered Public Accounting Firm
Statements of Revenues and Certain Expenses:
For the years ended December 31, 2004, 2003 and 2002
For the nine months ended September 30, 2005 (unaudited)
Notes to Statements of Revenues and Certain Expenses
(b) Pro Forma Financial Information:
Pro Forma Condensed
        Consolidated Balance Sheet as of September 30, 2005 (unaudited)
Pro Forma Condensed
        Consolidated Statements of Income (unaudited):
For the year ended December
        31, 2004
For the nine months ended September
        30, 2005
Notes to Pro Forma
        Condensed Consolidated Financial Statements (unaudited)
(d) Exhibits:
23.1     Consent of Independent Registered Public Accounting Firm dated December 21, 2005
Signatures
Report of Independent Registered Public Accounting Firm
Board of Directors and Stockholders
Cedar Shopping Centers, Inc.
We have audited the statement of revenues and certain expenses of Trexler Mall Shopping Center Venture (the "Property") for the year ended December 31, 2004. The financial statement is the responsibility of the Property's management. Our responsibility is to express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with the standards of the Public Company
  Accounting Oversight Board (United States). Those standards require that we plan
  and perform the audit to obtain reasonable assurance about whether the financial
  statement is free of material misstatement. We were not engaged to perform an
  audit of the Property's internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Property's
  internal control over financial reporting. Accordingly, we express no such opinion.
  An audit also includes examining, on a test basis, evidence supporting the amounts
  and disclosures in the financial statement, assessing the accounting principles
  used and significant estimates made by management, and evaluating the overall
  financial statement presentation. We believe that our audit provides a reasonable
  basis for our opinion.
The accompanying statement of revenues and certain expenses was prepared for
    the purpose of complying with Rule 3-14 of Regulation S-X of the Securities
    and Exchange Commission for inclusion in the Current Report on Form 8-K of
    Cedar Shopping Centers, Inc. dated October 7, 2005 and is not intended to be
a complete presentation of the Property's revenues and certain expenses.
In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of the Property as described in Note 1 for the year ended December 31, 2004, in conformity with U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP
New York, New York
December 21, 2005
Trexler Mall Shopping Center Venture
Statements of Revenues and Certain Expenses
Nine months
ended
September 30, 2005
Year ended
December 31, 2004
(Unaudited)
Revenues:
Base rents
$
1,931,000
$
2,454,000
Tenant reimbursements
542,000
717,000
Other income
—
1,000
Total revenues
2,473,000
3,172,000
Certain expenses:
Real estate taxes
272,000
363,000
Property operating expenses
454,000
598,000
Management fees
80,000
99,000
Total certain expenses
806,000
1,060,000
Revenues in excess of certain expenses
$
1,667,000
$
2,112,000
See accompanying notes to statements of revenues and certain expenses.
Trexler Mall Shopping Center Venture
Notes to the Statements of Revenues and Certain Expenses
For the year ended December 31, 2004
For the nine months ended September 30, 2005 (unaudited)
1.     Basis of Presentation
Presented
    herein are the statements of revenues and certain expenses related to a multi-anchored
    shopping center, located in Trexlertown, Pennsylvania (the "Property").
    The Property contains approximately 339,000 square feet of gross leasable
    area. Cedar Shopping Centers, Inc. acquired the Property on December 19,
    2005.
The accompanying financial statements have been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission for the acquisition of real estate properties. Accordingly, the financial statements exclude certain expenses because they may not be comparable to those expected to be incurred in the proposed future operations of the Property. Items excluded consist of interest expense and depreciation and amortization expense, which are not directly related to future operations.
2.     Use of Estimates
The preparation of the statements of revenues and certain expenses in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the statements of revenues and certain expenses and accompanying notes. Actual results could differ from those estimates.
3.     Revenue Recognition
The Property is being leased to tenants under operating leases. Minimum rental income is recognized on a straight-line basis over the terms of the leases. The excess of amounts contractually due pursuant to the underlying leases over rents recognized was approximately $19,000 and $44,000, respectively, for the year ended December 31, 2004 and for the nine months ended September 30, 2005 (unaudited).
Certain of the Property's tenants received lease incentives related to tenant improvements performed by them, resulting in base rent reductions of approximately $0 and $11,000, respectively, for the year ended December 31, 2004 and for the nine months ended September 30, 2005 (unaudited).
4.     Property Operating Expenses
Property operating expenses for the year ended December 31, 2004 include approximately $207,000 for utilities, $146,000 for repair and maintenance costs, $101,000 for payroll, $93,000 for insurance, $39,000 for snow removal, and $12,000 for other costs.
Property operating expenses for the nine months ended September 30, 2005 (unaudited) include approximately $148,000 for utilities, $107,000 for insurance, $68,000 for payroll, $64,000 for repair and maintenance costs, $56,000 for snow removal, and $11,000 for other costs.
5.     Management Fees
The Property was managed by RD Management Corp., TKO Real Estate Advisory Group, Inc., and RD Management LLC pursuant to agreements which provide for monthly management fees equal to 4% of cash receipts, as defined. Management fees of approximately $99,000 and $80,000, respectively, were incurred for the year ended December 31, 2004 and for the nine months ended September 30, 2005 (unaudited).
6.     Significant Tenants
Significant tenants include Kohl's Dept. Stores and Lehigh Wellness Center, which constituted approximately 28% and 20%, respectively, of base rents for the year ended December 31, 2004, and 27% and 19%, respectively, for the nine months ended September 30, 2005 (unaudited).
Trexler Mall Shopping Center Venture
Notes to Statements of Revenues
      and Certain Expenses
For the year ended December 31, 2004
For the nine months ended September 30, 2005 (unaudited)
(Continued)
7.     Future
Minimum Lease Payments
Future minimum lease payments to be received under non-cancelable operating leases for the years ending December 31 are as follows:
2005
$
2,621,000
2006
2,635,000
2007
2,386,000
2008
2,198,000
2009
1,607,000
Thereafter
13,736,000
Total
$
25,183,000
As a result of lease incentives, future minimum lease payments will be offset by base rent reductions for the years ending December 31, as follows:
2005
$
15,000
2006
15,000
2007
15,000
2008
15,000
2009
15,000
Thereafter
73,000
Total
$
148,000
The lease agreements generally contain provisions for reimbursement of real estate taxes and operating expenses, on a pro rata basis, as well as for fixed increases in rent.
8.     Interim Unaudited Financial Information
The statement of revenues and certain expenses for the nine months ended September 30, 2005 is unaudited; however, in the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary for a fair presentation of the statement of revenues and certain expenses for this interim period have been included. The results of the interim period are not necessarily indicative of the results to be obtained for a full fiscal year.
Report of Independent Registered Public Accounting Firm
Board of Directors and Stockholders
Cedar Shopping Centers, Inc.
We have audited the combined statement of revenues and certain expenses of those
    certain properties of the Silver Companies (the "Properties")
    for the year ended December 31, 2004. The combined financial statement is
    the responsibility of the Properties' management. Our responsibility
    is to express an opinion on this combined financial statement based on our
    audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined financial statement is free of material misstatement. We were not engaged to perform an audit of the Properties' internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Properties' internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the combined financial statement, assessing the accounting principles used and significant estimates made by management, and evaluating the overall combined financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
The accompanying combined statement of revenues and certain expenses was prepared for the purpose of complying with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission for inclusion in the Current Report on Form 8-K of Cedar Shopping Centers, Inc. dated October 7, 2005 and is not intended to be a complete presentation of the Properties' combined revenues and certain expenses.
In our opinion, the combined financial statement referred to above presents fairly, in all material respects, the combined revenues and certain expenses of the Properties as described in Note 1 for the year ended December 31, 2004, in conformity with U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP
New York, New York
December 21, 2005
Certain Properties of the Silver Companies
Combined Statements of Revenues and Certain Expenses
Nine months
ended
September 30, 2005
Year ended
December 31, 2004
(Unaudited)
Revenues:
Base rents
$
1,149,000
$
1,449,000
Tenant reimbursements
38,000
42,000
Total revenues
1,187,000
1,491,000
Certain expenses:
Real estate taxes
26,000
22,000
Property operating expenses
18,000
22,000
Management fees – related party
40,000
50,000
Total certain expenses
84,000
94,000
Revenues in excess of certain expenses
$
1,103,000
$
1,397,000
See accompanying notes to combined statements of revenues and certain expenses.
Certain Properties of the Silver Companies
Notes to the Combined Statements of Revenues and Certain Expenses
For the year ended December 31, 2004
For the nine months ended September 30, 2005 (unaudited)
1.     Basis of Presentation
Presented herein are the combined statements of revenues and certain expenses related to the operations of two supermarkets and two ancillary retail strip shopping center properties, located in Virginia (the "Properties"). The Properties contain an aggregate of approximately 131,000 square feet of gross leasable area. Cedar Shopping Centers, Inc. acquired the Properties on November 18, 2005.
The accompanying combined financial statements have been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission for the acquisition of real estate properties. Accordingly, the combined financial statements exclude certain expenses because they may not be comparable to those expected to be incurred in the proposed future operations of the Properties. Items excluded consist of interest expense and depreciation and amortization expense, which are not directly related to future operations.
2.     Use of Estimates
The preparation of the combined statements of revenues and certain expenses in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the combined statements of revenues and certain expenses and accompanying notes. Actual results could differ from those estimates.
3.     Revenue Recognition
The Properties are being leased to tenants under operating leases. Minimum rental income is recognized on a straight-line basis over the terms of the leases. The excess of rents recognized over amounts contractually due pursuant to the underlying leases was approximately $62,000 and $54,000, respectively, for the year ended December 31, 2004 and for the nine months ended September 30, 2005 (unaudited).
Certain of the Properties' tenants received lease incentives related to tenant improvements performed by them, resulting in base rent reductions of approximately $256,000 and $190,000, respectively, for the year ended December 31, 2004 and for the nine months ended September 30, 2005 (unaudited).
4.     Property Operating Expenses
Property operating expenses for the year ended December 31, 2004 include approximately $13,000 for parking and landscaping, $4,000 for insurance, $4,000 for utilities, and $1,000 for repair and maintenance costs.
Property operating expenses for the nine months ended September 30, 2005 (unaudited) include approximately $11,000 for parking and landscaping, $3,000 for insurance and $4,000 for utilities.
5.     Management Fees
The Properties were managed by Silver Properties, Inc., a related party, pursuant to an agreement which provides for monthly management fees equal to 3% of cash receipts, as defined. Management fees of approximately $50,000 and $40,000, respectively, were incurred for the year ended December 31, 2004 and for the nine months ended September 30, 2005 (unaudited).
6.     Significant Tenants
Significant tenants include two Ukrop Supermarkets, under triple-net leases, which constituted approximately 82% and 79%, respectively, of base rents for the year ended December 31, 2004 and for the nine months ended September 30, 2005 (unaudited).
Certain Properties of the Silver
      Companies
Notes to Combined Statements of Revenues and Certain Expenses
For the year ended December 31, 2004
For the nine months ended September 30, 2005 (unaudited)
(Continued)
7.     Future
Minimum Lease Payments
Future minimum lease payments to be received under non-cancelable operating leases for the years ending December 31 are as follows:
2005
$
1,754,000
2006
2,013,000
2007
2,045,000
2008
2,065,000
2009
2,056,000
Thereafter
12,214,000
Total
$
22,147,000
As a result of lease incentives, future minimum lease payments will be offset by base rent reductions for the years ending December 31, as follows:
2005
$
256,000
2006
256,000
2007
252,000
2008
251,000
2009
250,000
Thereafter
1,912,000
Total
$
3,177,000
The lease agreements, other than the triple-net leases, generally contain provisions for reimbursement of real estate taxes and operating expenses, on a pro rata basis, as well as for fixed increases in rent.
8
.
Interim Unaudited Financial Information
The combined statement of revenues and certain expenses for the nine months ended September 30, 2005 is unaudited; however, in the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary for a fair presentation of the combined statement of revenues and certain expenses for this interim period have been included. The results of the interim period are not necessarily indicative of the results to be obtained for a full fiscal year.
Report of Independent Registered Public Accounting Firm
Board of Directors and Stockholders
Cedar Shopping Centers, Inc.
We have audited the statements of revenues and certain expenses of Shore Mall
    Associates, L.P. (the "Property") for the years ended December
    31, 2004, 2003 and 2002. The financial statements are the responsibility
    of the Property's management. Our responsibility is to express an opinion
    on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Property's internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Property's internal control over financial reporting. Accordingly, we express no such opinion. An audit
also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
The accompanying statements of revenues and certain expenses were prepared for the purpose of complying with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission for inclusion in the Current Report on Form 8-K of Cedar Shopping Centers, Inc. dated October 7, 2005 and are not intended to be a complete presentation of the Property's revenues and certain expenses.
In our opinion, the financial statements referred to above present fairly, in all material respects, the revenues and certain expenses of the Property as described in Note 1 for the years ended December 31, 2004, 2003 and 2002, in conformity with U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP
New York, New York
December  21, 2005
Shore Mall Associates, L.P.
Statements of Revenues and Certain Expenses
Years ended December 31,
Nine months
ended
September 30, 2005
2004
2003
2002
(Unaudited)
Revenues:
Base rents
$
3,326,000
$
4,849,000
$
4,698,000
$
4,792,000
Tenant reimbursements
1,636,000
2,062,000
1,910,000
2,136,000
Lease termination and other income
—
1,030,000
32,000
212,000
Total revenues
4,962,000
7,941,000
6,640,000
7,140,000
Certain expenses:
Real estate taxes
868,000
1,140,000
1,060,000
969,000
Property operating expenses
1,329,000
1,845,000
2,191,000
1,985,000
Management fees – related parties
215,000
316,000
294,000
287,000
Total certain expenses
2,412,000
3,301,000
3,545,000
3,241,000
Revenues in excess of certain expenses
$
2,550,000
$
4,640,000
$
3,095,000
$
3,899,000
See accompanying notes to statements of revenues and certain expenses.
Shore Mall Associates, L.P.
Notes to the Statements of Revenues and Certain Expenses
For the years ended December 31, 2004, 2003 and 2002
For the nine months ended September 30, 2005 (unaudited)
1.     Basis of Presentation
Presented herein are the statements of revenues and certain expenses related to the operations of a multi-anchored mall, located in Egg Harbor, New Jersey (the "Property"). The Property, which is owned in part by a related party, contains approximately 620,000 square feet of gross leasable area. Although the due-diligence review has not yet been completed, it is anticipated that Cedar Shopping Centers, Inc. will acquire the Property in January 2006.
The accompanying financial statements have been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission for the acquisition of real estate properties. Accordingly, the financial statements exclude certain expenses because they may not be comparable to those expected to be incurred in the proposed future operations of the Property. Items excluded consist of interest expense and depreciation and amortization expense, which are not directly related to future operations.
2.     Use of Estimates
The preparation of the statements of revenues and certain expenses in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the statements of revenues and certain expenses and accompanying notes. Actual results could differ from those estimates.
3.     Revenue Recognition
The Property is being leased to tenants under operating leases. Minimum rental income is recognized on a straight-line basis over the terms of the leases. The excess of amounts contractually due pursuant to the underlying lease over the rents recognized was approximately $46,000, $150,000, and $139,000, respectively, for the years ended December 31, 2004, 2003 and 2002, and $62,000 for the nine months ended September 30, 2005 (unaudited).
4.     Property Operating Expenses
Property
    operating expenses for the year ended December 31, 2004 include approximately
    $715,000 for
    payroll costs, $428,000 for utilities, $269,000 for insurance, $212,000 for
    repair and maintenance costs, $62,000 for professional fees, $64,000 for
    snow
removal, and $95,000 for other costs.
Property
    operating expenses for the year ended December 31, 2003 include approximately
    $711,000 for
    payroll costs, $395,000 for utilities, $373,000 for insurance, $293,000 for
    repair and maintenance costs, $212,000 for snow removal, $69,000 for professional
fees, and $138,000 for other costs.
Property
    operating expenses for the year ended December 31, 2002 include approximately
    $687,000 for payroll costs, $359,000 for utilities, $324,000 for insurance,
    $188,000 for snow removal, $160,000 for professional fees, $144,000 for
    repair and maintenance costs, and $123,000 for other costs.
Property
    operating expenses for the nine months ended September 30, 2005 (unaudited)
    include approximately $492,000 for payroll costs, $302,000 for utilities,
    $207,000 for repair and maintenance costs, $197,000 for insurance, $48,000
    for snow removal, $32,000 for professional fees, and $51,000 for
    other costs.
5.     Management
Fees and Related Party Transactions
The Property was managed by Cedar Shopping Centers, Inc. and its predecessor management company, related parties, pursuant to an agreement which provided for monthly management fees equal to 4% of cash receipts, as defined. Management fees of approximately $316,000, $294,000, and $287,000, respectively, for the years ended December 31, 2004, 2003 and 2002, and $215,000 for the nine months ended September 30, 2005 (unaudited) were incurred. Leo S. Ullman, chief executive officer of Cedar Shopping Centers, Inc., owns 8% of Shore Mall Associates, L.P.
Shore Mall Associates, L.P.
Notes to the Statements of Revenues
and Certain Expenses
For the years ended December 31, 2004,
2003 and 2002
For the nine months ended September
30, 2005 (unaudited)
(Continued)
6.     Significant Tenants
Significant
    tenants include Burlington Coat Factory and Boscov's
    Dept. Stores, which constituted approximately 17% and 15%, 16% and 14%, and
    16% and 13%, respectively, of base rents for the years ended December 31,
    2004, 2003 and 2002, and 22% and 15%, respectively, for the nine months ended
September 30, 2005 (unaudited).
7.     Future
Minimum Lease Payments
Future minimum lease payments to be received under non-cancelable operating leases for the years ending December 31 are as follows:
2005
$
4,245,000
2006
3,241,000
2007
3,032,000
2008
2,656,000
2009
1,787,000
Thereafter
1,498,000
Total
$
16,459,000
The lease agreements generally contain provisions for reimbursement of real estate taxes and operating expenses, on a pro rata basis, as well as for fixed increases in rent.
8
.
Interim Unaudited Financial Information
The statement of revenues and certain expenses for the nine months ended September 30, 2005 is unaudited; however, in the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary for a fair presentation of the statement of revenues and certain expenses for this interim period have been included. The results of the interim period are not necessarily indicative of the results to be obtained for a full fiscal year.
Cedar Shopping Centers, Inc.
Pro Forma Condensed Consolidated Balance Sheet
As of September 30, 2005
(Unaudited)
The following unaudited pro forma condensed consolidated balance sheet is presented as if Cedar Shopping Centers, Inc. (the "Company") had acquired (1) Trexler Mall Shopping Center Venture, those certain properties of the Silver Companies, and Shore Mall Associates, L.P., and (2) the other properties it purchased subsequent to September 30, 2005 and through November 30, 2005, as if all these transactions were completed as of September 30, 2005. This financial statement should be read in conjunction with the unaudited pro forma condensed consolidated statements of income, and the Company's historical financial statements and notes thereto as filed on Form 10-K for the year ended December 31, 2004 and on Form 10-Q for the nine
months ended September 30, 2005. The pro forma condensed consolidated balance sheet is unaudited and is not necessarily indicative of what the actual financial position would have been had the Company acquired (1) Trexler Mall Shopping Center Venture, those certain properties of the Silver Companies, and Shore Mall Associates, L.P., and (2) the other properties it purchased subsequent to September 30, 2005 and through November 30, 2005, all as of September 30, 2005, nor does it purport to represent the future financial position of the Company.
Cedar Shopping
Centers, Inc.
Historical (a)
Completed
transactions
(b)
Acquired
properties
(c)(d)
Pro forma
Assets
Real estate
Land
$
146,248,000
$
11,589,000
$
21,378,000
$
179,215,000
Buildings and improvements
657,544,000
46,356,000
85,512,000
789,412,000
803,792,000
57,945,000
106,890,000
968,627,000
Less accumulated depreciation
(28,275,000
)
—
—
(28,275,000
)
Real estate, net
775,517,000
57,945,000
106,890,000
940,352,000
Cash and cash equivalents
10,690,000
—
—
10,690,000
Cash at joint ventures and restricted cash
6,364,000
—
—
6,364,000
Rents and other receivables, net
7,984,000
—
—
7,984,000
Other assets
6,988,000
(500,000
)
(500,000
)
5,988,000
Deferred charges, net
14,325,000
—
—
14,325,000
Total Assets
$
821,868,000
$
57,445,000
$
106,390,000
$
985,703,000
Liabilities and Shareholders' Equity
Mortgage loans payable
$
309,997,000
$
13,845,000
$
55,941,000
$
379,783,000
Secured revolving credit facility
60,400,000
43,600,000
50,449,000
154,449,000
Accounts payable, accrued expenses, and other
11,762,000
—
—
11,762,000
Deferred liabilities
25,576,000
—
—
25,576,000
Total Liabilities
407,735,000
57,445,000
106,390,000
571,570,000
Minority interests
12,403,000
—
—
12,403,000
Limited partners' interest in consolidated
20,488,000
—
—
20,488,000
Operating Partnership
Shareholders' Equity
381,242,000
—
—
381,242,000
Total Liabilities and Shareholders' Equity
$
821,868,000
$
57,445,000
$
106,390,000
$
985,703,000
See accompanying notes to pro forma condensed consolidated financial statements.
Cedar Shopping Centers, Inc.
Pro Forma Condensed Consolidated Statements of Income
For the year ended December 31, 2004
For the nine months ended September
30,
2005
(Unaudited)
The following unaudited pro forma condensed consolidated statements of income are presented as if the Company had acquired (1) Trexler Mall Shopping Center Venture, those certain properties of the Silver Companies, and Shore Mall Associates, L.P., and (2) the other properties it purchased throughout 2004 and through November 30, 2005, as if all these transactions were completed as of January 1, 2004. These financial statements should be read in conjunction with the unaudited pro forma condensed consolidated balance sheet, and the Company's historical financial statements and notes thereto as filed on Form 10-K for the year ended December 31, 2004 and on Form 10-Q for the nine months ended September, 2005. The pro forma condensed
consolidated statements of income are unaudited and are not necessarily indicative of what the actual results of operations would have been had the Company acquired (1) Trexler Mall Shopping Center Venture, those certain properties of the Silver Companies, and Shore Mall Associates, L.P., and (2) the other properties it purchased throughout 2004 and through November 30, 2005, all as of January 1, 2004, nor does it purport to represent the results of operations of the Company for future periods.
For the year ended December 31, 2004
Cedar Shopping
Centers, Inc.
Historical (a)
Completed
transactions
(b)
Acquired properties
Pro forma
Historical
    (c)
Pro
        forma
adjustments (d)
Revenues
$
51,078,000
$
39,030,000
$
12,604,000
$
370,000
(e)
$
103,082,000
Expenses:
Operating, maintenance and management
10,751,000
7,294
,000
2,930,000
(316,000
)
(e)
20,659,000
Real estate and other property-related taxes
4,872,000
3,381,000
1,525,000
—
9,778,000
General and administrative
3,575,000
—
—
—
3,575,000
Depreciation and amortization
11,376,000
8
,212,000
—
2,138,000
(g)
21,726,000
Total expenses
30,574,000
18,887,000
4,455,000
1,822,000
55,738,000
Operating income
20,504,000
20,143,000
8,149,000
(1,452,000
)
47,344,000
Non-operating income and expense:
Interest expense
(10,239,000
)
(18,774,000
)
—
(4,908,000
)
(f)
(33,921,000
)
Amortization of deferred financing costs
(1,025,000
)
—
—
—
(1,025,000
)
Interest income
66,000
—
—
—
66,000
Total non-operating income and expense
(11,198,000
)
(18,774,000
)
—
(4,908,000
)
(34,880,000
)
Income before minority and limited partners' interests
9,306,000
1,369,000
8,149,000
(6,360,000
)
12,464,000
Minority interests
(1,229,000
)
—
—
—
(1,229,000
)
Limited partners' interest in Operating Partnership
(157,000
)
(36,000
)
—
(47,000
)
(h)
(240,000
)
Net income
7,920,000
1,333,000
8,149,000
(6,407,000
)
10,995,000
Preferred distribution requirements
(2,218,000
)
—
—
—
(2,218,000
)
Net income applicable to common shareholders
$
5,702,000
$
1,333,000
$
8,149,000
$
(6,407,000
)
$
8,777,000
Per common share (basic and diluted)
$
0.34
$
0.53
Average number of common shares outstanding
16,681,000
16,681,000
See accompanying notes to pro forma condensed consolidated financial statements.
Cedar Shopping Centers, Inc.
Pro Forma Condensed Consolidated Statements of Income
For the year ended December 31, 2004
For the nine months ended September 30, 2005
(Unaudited)
(Continued)
For the nine months ended September 30, 2005
Acquired properties
Cedar Shopping
Centers, Inc.
Historical (a)
Completed
transactions
(b)
Historical (c)
Pro forma
adjustments (d)
Pro forma
Revenues
$
54,120,000
$
18,053,000
$
8,622,000
$
124,000
(e)
$
80,919,000
Expenses:
Operating, maintenance and management
10,233,000
3,674,000
2,136,000
(215,000
)
(e)
15,828,000
Real estate and other property-related taxes
5,351,000
1,571,000
1,166,000
—
8,088,000
General and administrative
3,483,000
—
—
—
3,483,000
Depreciation and amortization
13,574,000
3,377,000
—
1,603,000
(g)
18,554,000
Total expenses
32,641,000
8,622,000
3,302,000
1,388,000
45,953,000
Operating income
21,479,000
9,431,000
5,320,000
(1,264,000
)
34,966,000
Non-operating income and expense:
Interest expense
(9,798,000
)
(8,611,000
)
—
(3,823,000
)
(f)
(22,232,000
)
Amortization of deferred mortgage costs
(771,000
)
—
—
—
(771,000
)
Interest income
51,000
—
—
—
51,000
Total non-operating income and expense
(10,518,000
)
(8,611,000
)
—
(3,823,000
)
(22,952,000
)
Income before minority and limited partners' interests
10,961,000
820,000
5,320,000
(5,087,000
)
12,014,000
Minority interests
(950,000
)
—
—
(950,000
)
Limited partners' interest in Operating Partnership
(338,000
)
(38,000
)
—
(11,000
)
(h)
(387,000
)
Net income
9,673,000
782,000
5,320,000
(5,098,000
)
10,677,000
Preferred distribution requirements
(5,217,000
)
—
—
—
(5,217,000
)
Net income applicable to common shareholders
$
4,456,000
$
782,000
$
5,320,000
$
(5,098,000
)
$
5,460,000
Per common share (basic and diluted)
$
0.20
$
0.24
Average
    number of common shares
outstanding
22,305,000
22,305,000
See accompanying notes to pro forma condensed consolidated financial statements.
Cedar Shopping Centers, Inc.
Notes to Pro Forma Condensed Consolidated Financial Statements (Unaudited)
Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2005
(a)
Reflects the Company's historical
    balance sheet as of September 30, 2005 (unaudited), as previously filed.
(b)
Reflects the acquisitions of Columbia Mall
        (October 2005), Pennsboro Commons (October 2005), Jordan Lane Shopping
        Center (November 2005) and Westlake Discount Drug Mart (November 2005).
        The aggregate consideration was approximately $57.9 million, comprised
        of approximately $13.8 million of new mortgage loans payable and $44.1
    million funded from the Company's secured revolving credit facility.
(c)
Reflects the acquisitions of the properties
        owned by Trexler Mall Shopping Center Venture, those certain properties
        of the Silver Companies, and Shore Mall Associates, L.P. The aggregate
        consideration is expected to be approximately $104.9 million, comprised
        of approximately $54.0 million of assumed mortgage loans payable and
        $50.9 million funded from the Company's secured revolving credit
    facility.
(d)
The Company intends to account for the acquisitions
        in accordance with Statements of Financial Accounting Standards No. 141, "Business
        Combinations", and No. 142, "Goodwill and Other Intangibles",
        and is currently in the process of analyzing the fair value of the properties' in-place
        leases. No value has yet been assigned to the leases and, therefore,
    the purchase price allocation is preliminary and subject to change.
Pro Forma Condensed Consolidated Statement
    of Income for the year ended December 31, 2004
(a)
Reflects the Company's historical operations
        for the year ended December 31, 2004,
as previously filed.
(b)
Reflects the acquisitions of (1) The Commons
        (March 2004), Townfair Center (March 2004), Carbondale Plaza (April 2004),
        Lake Raystown Plaza (June 2004), Huntingdon Plaza (June 2004), Hamburg
        Commons (June 2004), Franklin Village Plaza (November 2004), The Brickyard
        (December 2004), St. James Square (March 2005), Kenley Village (March
        2005), those certain properties of Giltz & Associates, Inc. (April – June
        2005), those certain properties of RVG Entity Owners (August 2005), Oakland
        Mills (September 2005), Majestic Plaza, Dunmore Shopping Center and Value
        City Shopping Center (September 2005), The Point at Carlisle Plaza (September
        2005), and the Shops at Suffolk Downs (September 2005), as previously
        filed, and (2) Columbia Mall (October 2005), Pennsboro Commons (October
        2005), Jordan Lane Shopping Center (November 2005), and Westlake Discount
        Drug Mart (November 2005), acquired subsequent to September 30, 2005,
    as if all of the transactions were completed as of January 1, 2004.
(c)
Reflects the operations of Trexler Mall Shopping
        Center Venture (December 2005), those certain properties of the Silver
        Companies (November 2005), and Shore Mall Associates, L.P. (anticipated
    January 2006) for the year ended December 31, 2004, as follows:
Trexler
Mall
Silver
Properties
Shore
Mall
Acquired
properties
Revenues
$
3,172,000
$
1,491,000
$
7,941,000
$
12,604,000
Expenses:
Operating, maintenance and management
697,000
72,000
2,161,000
2,930,000
Real estate and other property-related taxes
363,000
22,000
1,140,000
1,525,000
Total expenses
1,069,000
94,000
3,301,000
4,455,000
Operating income
$
2,112,000
$
1,397,000
$
4,640,000
$
8,149,000
(d)
The Company intends to account
        for the acquisitions in accordance with Statements of Financial Accounting
        Standards No. 141, "Business Combinations", and No. 142, "Goodwill
        and Other Intangibles", and is currently in the process of analyzing
        the fair value of the properties' in-place leases. No value has
        yet been assigned to the leases and, therefore, the purchase price allocation
    is preliminary and subject to change.
(e)
Reflects (1) $430,000 of increased straight-line
        rents due to lease start dates being on January 1, 2004, (2) the elimination
        of $256,000 in base rent reductions resulting from lease incentives,
        and (3) the elimination of $316,000 in management fee income included
        in the historical results of Cedar Shopping Centers, Inc. applicable
    to the Shore Mall.
(f)
Reflects interest expense on (1) $54.0 million
        of assumed mortgage loans payable, and (2) $50.9 million of increased
        borrowings under the Company's secured revolving credit facility,
        at weighted average interest rates of 5.43% and 3.7%, respectively. Interest
        expense has been reduced by $422,000 related to the discounting to current
    market of an assumed mortgage loan payable.
(g)
Reflects (1) $2,138,000 of straight-line
    real estate depreciation, based on an estimated useful life of 40 years.
(h)
Reflects an increase in limited partners' share
        of net income applicable to common shareholders as a result of the acquired
    properties.
Pro Forma Condensed Consolidated Statement
    of Income for the nine months ended September 30, 2005
(a)
Reflects the Company's historical operations
        for the nine months ended September 30, 2005 (unaudited), as previously
    filed.
(b)
Reflects the acquisition of (1) St. James
        Square (March 2005), Kenley Village (March 2005), those certain properties
        of Giltz & Associates, Inc. (April – June 2005), those certain
        properties of RVG Entity Owners (August 2005), Oakland Mills (September
        2005), Majestic Plaza, Dunmore Shopping Center and Value City Shopping
        Center (September 2005), The Point at Carlisle Plaza (September 2005),
        and the Shops at Suffolk Downs (September 2005), as previously filed,
        and (2) Columbia Mall (October 2005), Pennsboro Commons (October 2005),
        Jordan Lane Shopping Center (November 2005), and Westlake Discount Drug
        Mart (November 2005), acquired subsequent to September 30, 2005, as if
        all
of the transactions were completed as of January 1, 2004.
(c)
Reflects the operations of Trexler
        Mall Shopping Center Venture (December 2005), those certain properties
        of the Silver Companies (November 2005), and Shore Mall Associates, L.P.
    (December 2005) for the nine months ended September 30, 2005, as follows:
Trexler
Mall
Silver
Properties
Shore
Mall
Acquired
Properties
Revenues
$
2,473,000
$
1,187,000
$
4,962,000
$
8,622,000
Expenses:
Operating, maintenance and management
534,000
58,000
1,544,000
2,136,000
Real estate and other property-related taxes
272,000
26,000
868,000
1,166,000
Total expenses
806,000
84,000
2,412,000
3,302,000
Operating income
$
1,667,000
$
1,103,000
$
2,550,000
$
5,320,000
Cedar Shopping Centers, Inc.
Notes to Pro Forma Condensed Consolidated Financial Statements (Unaudited) (continued)
Pro Forma Condensed Consolidated Statement of Income for the nine months ended September 30, 2005
(continued)
(d)
The Company intends to account
        for the acquisitions in accordance with Statements of Financial Accounting
        Standards No. 141, "Business Combinations", and No. 142, "Goodwill
        and Other Intangibles", and is currently in the process of analyzing
        the fair value of the properties' in-place leases. No value has
        yet been assigned to the leases and, therefore, the purchase price allocation
    is preliminary and subject to change.
(e)
Reflects (1) $138,000 of increased straight-line
        rents due to lease start dates being on January 1, 2004, (2) the elimination
        of $201,000 in base rent reductions resulting from lease incentives,
        and (3) the elimination of $215,000 in management fee income included
        in the historical results of Cedar Shopping Centers, Inc. applicable
    to the Shore Mall.
(f)
Reflects interest expense on (1) $54.0 million
        of assumed mortgage loans payable, and (2) $50.9 million of increased
        borrowings under the Company's secured revolving credit facility,
        at weighted average interest rates of 5.43% and 4.13%, respectively.
        . Interest expense has been reduced by $312,000 related to the discounting
    to current market of an assumed mortgage loan payable.
(g)
Reflects (1) $1,603,000 of straight-line
    real estate depreciation, based on an estimated useful life of 40 years.
(h)
Reflects an increase in limited partners' share
        of net income applicable to common shareholders as a result of the acquire
    properties.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CEDAR SHOPPING CENTERS, INC.
/s/ THOMAS J. O'KEEFFE
Thomas
J. O'Keeffe
Chief Financial Officer
Dated:      December 22, 2005