areas around these centers (that is, within a three-mile radius) is,  on average, 14 percent higher than for the MSA as a whole. We’re increasing quality by continuously recycling our portfolio,  divesting non-strategic assets and trading up to superior  properties in top-tier locations where growth prospects,  population, and disposable income are highest. High-quality retail real estate in attractive markets will always be  in demand. Such was the case in 2011, when national retailers –  having retrenched and reconfigured their businesses during the  downturn – were once again seeking growth by increasing their  store counts. More than 37,000 stores were opened in 2011,  and one estimate suggests an additional 70,000 will be opened  in the U.S. over the next two years. That growing need for space  came against a backdrop of virtually non-existent commercial  development in our sector. Kimco is a company that has grown through 50-plus years of  acquisitions. Among the larger portfolios we’ve purchased, asset  quality has varied. In some cases, properties that were once  attractive to us no longer fit our long-term, strategic focus. In  our portfolio review 18 months ago, we identified approximately  150 such “non-strategic” properties – shopping centers that  are outside our primary operating markets, do not fit our  desired asset profile, or have limited opportunity for growth or  repositioning. Those properties represented about 10 percent of  our base rental income. The dearth of available space, combined with sustained  population growth and improving GDP numbers, is causing  effective rents to rise, particularly in Long Island, South Florida,  Baltimore/Washington, Puerto Rico and Canada. Together, these  markets make up about a third of our base rent. The list has since expanded, and we have made good progress  on it. On the heels of selling nine non-strategic centers in 2010,  we sold another 31 non-strategic properties in 2011, for $158  million, including $35 million of mortgage debt. These properties  – 25 wholly owned shopping centers and six unconsolidated  joint-venture properties – totaled 2.6 million square feet and  were less than 80 percent occupied. With demand and rents up, Kimco signed nearly 2,500 leases  totaling more than 8 million square feet in 2011. Of those, 487  were new leases for 1.5 million square feet, and 1,169 were lease  renewals and options for 4.5 million square feet. Importantly,  the company signed more than 800 new leases totaling nearly  2 million square feet for spaces vacant for more than a year – a  clear sign that available inventory is being quickly absorbed. In the same period, we bought for our wholly owned portfolio  17 high-quality shopping centers, virtually all of them in our core  markets and with an overall occupancy rate of 97.6 percent. These properties – along with four joint-venture acquisitions –  were purchased for $494 million and added 3.6 million square  feet to our leasable space. Indeed, the number of available anchor spaces in the Kimco  portfolio – 10,000 square feet or greater – has been reduced  to a little more than 100 boxes, or only 2.5 percent of our total  gross leasable area. The strong demand for quality anchor space is clearly evident in  two recent bankruptcies – A&P and Borders. We quickly signed  new leases with supermarket tenants for each of three former  A&P stores in our portfolio. And of the 16 Borders locations,  four have already been re-leased and we expect another eight  to be filled by mid-2012. Unlike previous bankruptcies, the  composite leasing spreads on these properties are slightly  positive, compared with the negative spreads of two years ago. At the end of 2011, Kimco had 122 non-strategic U.S. shopping  centers remaining in its portfolio. These properties total 12  million square feet, with about 85 percent gross occupancy, and  represent about 8 percent of the company’s total base rental  income. In addition to our ongoing efforts to improve portfolio quality,  another way we are enhancing the value of our properties is  through redeveloping, re-tenanting and expanding the strongly  situated shopping centers we already have. Among the major projects currently underway, we’re  redeveloping for Nordstrom Rack an empty box formerly  In this improving environment, we are relentlessly focused on  enhancing the value of our shopping center portfolio. We don’t  want just the largest portfolio, we want the highest-quality  portfolio in our industry. 13 Trading Up to Higher Quality