1158265--3/15/2006--HERITAGE_PROPERTY_INVESTMENT_TRUST

related topics

{provision, law, control}

{investment, property, distribution}

{debt, indebtedness, cash}

{loan, real, estate}

{tax, income, asset}

{condition, economic, financial}

{regulation, change, law}

{capital, credit, financial}

{loss, insurance, financial}

{stock, price, share}

{cost, regulation, environmental}

Adverse market conditions affect our results of operations. Downturns or changes in the retailing industry will have a direct impact on our performance. A downturn in our tenants businesses, tenant bankruptcies, leasing delays we encounter, particularly with respect to our anchor tenants, will affect our ability to collect balances due from tenants and would seriously harm our operating results. Certain provisions of our leases with our tenants may harm our operating performance. We face considerable competition in the leasing market and may not be able to renew leases or re-let space as leases expire. We face increasing competition in the acquisition of additional real estate properties and other assets. Current and future development of real estate properties may not yield expected returns and may strain management resources. We anticipate that our working capital reserves and cash flow from operations may not be adequate to cover all of our cash needs and we will have to obtain financing from other sources. As of December 31, 2005, we have approximately $1.5 billion of debt, a portion of which is variable rate debt, which may impede our business and operating performance. Our financial covenants may restrict our operating or acquisition activities. We could become too highly leveraged because our organizational documents do not contain any limitation on the amount of debt we may incur. A downgrade in our credit rating could negatively impact us. We do not have exclusive control over our joint venture investments, so we are unable to ensure that our objectives will be pursued. Compliance with changing regulation of corporate governance and public disclosure may result in additional expenses. The costs of compliance with laws and changes in laws may harm our operating results. If we suffer losses that are not covered by insurance or that are in excess of our insurance coverage limits, we could lose invested capital and anticipated profits. Lack of liquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of our properties. Further issuances of equity securities may be dilutive to current security holders. Our largest stockholder owns approximately 41% of our common stock, exercises significant control of our company and may delay, defer or prevent us from taking actions that would be beneficial to our other stockholders. Provisions of the company s charter and bylaws could inhibit changes in control of the company, and could prevent stockholders from obtaining a premium price for our common stock. Our board of directors has adopted the limitations available in Maryland law on changes in control that could prevent transactions in the best interests of stockholders. Our share ownership limit may discourage a takeover of the company and depress our stock price. If we fail to remain qualified as a REIT, our distributions will not be deductible by us, and our income will be subject to taxation, reducing our earnings available for distribution. Even REITs are subject to federal and state income taxes.

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1158265--3/15/2006--HERITAGE_PROPERTY_INVESTMENT_TRUST_INC