H&R REIT AND H&R FINANCE TRUST - MD&A - December 31, 2010  PORTFOLIO OVERVIEW  PROPERTIES UNDER DEVELOPMENT (in thousands of dollars) Page 5 of 45  The geographic diversification of the REIT’s portfolio (excluding properties whose tenants have filed for Chapter 11 protection with a  United States bankruptcy court) as at December 31, 2010 is outlined in the charts below:  (1) Relates to seven non-recourse mortgages to the REIT for income properties in which the tenants (Boscov’s Department Stores, Bruno’s Supermarkets LLC  and Great Atlantic & Pacific Tea Company) have filed for protection under Chapter 11 of the United States Bankruptcy Code. The REIT has handed over  control of three of these income properties to the lenders and expects to be released from any further obligations under these non-recourse mortgages upon  the transfer of title to the lenders. (2) Mark-to-market adjustment represents the difference between the actual mortgages assumed on property acquisitions and the fair value of the mortgages at  the date of purchase and is recognized in interest over the life of the applicable mortgage using the effective interest rate method. Deferred financing costs are  deducted from the REIT’s mortgages payable balances and are recognized in interest over the life of the applicable mortgage. NUMBER OF PROPERTIES  Ontario  United States  Alberta  Quebec  Other  Total  Office 22 4 4 1 4 35 Industrial 53 16 19 11 19 118 Retail 32 84 5 5 3 129 Total 107 104 28 17 26 282 Square Feet (in thousands)  Ontario  United States  Alberta  Quebec  Other  Total  Office 5,208 430 1,406 452 884 8,380 Industrial 9,450 6,314 2,810 2,850 1,176 22,600 Retail 1,759 4,794 515 498 524 8,090 Total 16,417 11,538 4,731 3,800 2,584 39,070 Project Address December 31, 2010  December 31, 2009  The Bow  5 th  Ave. at Centre Street, Calgary, AB  $1,150,094  $719,173  Heart Lake  Mayfield West Business Park, Caledon, ON  80,195  39,809  Airport Road  7900 Airport Rd., Brampton, ON  38,042  35,552  $1,268,331  $794,534  MORTGAGES PAYABLE  Periodic  Amortized  Principal ($000’s)  Principal on  Maturity ($000’s)  Total Principal ($000’s)  % of Total Principal  Weighted  Average Interest  Rate on Maturity  2011 $100,355 $70,246 $170,601 6.5% 6.4% 2012 99,911 263,881 363,792 13.8% 6.7% 2013 95,559 107,821 203,380 7.7% 7.5% 2014 96,129 182,632 278,761 10.6% 6.2% 2015 94,678 225,538 320,217 12.2% 5.3% Thereafter 1,296,418 49.2% 2,633,169 100% Mortgages payable due on demand (1) 77,365 Financing cost and mark-to-market adjustment arising on acquisitions (2) (3,827) Total $2,706,707