51 MANAGEMENT’S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION & RESULTS OF OPERATIONS Kentlands Place Cruse MarketPlace Briggs Chaney Plaza Boca Valley Plaza Countryside PORTFOLIO LEASING STATUS In January 2004, the Company purchased 3.4 acres of undeveloped land adjacent to its 109,000 square foot Kentlands Square shopping center in Gaithersburg, Maryland. The Company commenced construction of a 41,300 square foot retail/office property, comprised of 24,400 square feet of in-line retail space and 16,900 square feet of professional office suites, in April 2004. Development costs, including the land acquisition, are projected to total $7.8 million. The building was substantially completed in January 2005. The property was 39% leased at December 31, 2004 and 58% leased as of March 11, 2005. Additional tenant prospects have been identified and lease negotiations are proceeding for nearly all of the remaining space. anchored Countryside shopping center, its fourth neighborhood shopping center investment in Loudoun County, Virginia. The center was 95% leased at December 31, 2004 and was acquired for a purchase price of $29.7 million. The Company added Publix as one of its grocery tenants with the February 2004 acquisition of Boca Valley Plaza in Boca Raton, Florida. Boca Valley Plaza is a 121,000 square foot neighborhood shopping center on U.S. Highway 1 in South Florida. The center, constructed in 1988 was 91% leased at December 31, 2004 and is anchored by a 42,000 square foot Publix supermarket. The property was acquired for a purchase price of $17.5 million, subject to the assumption of a $9.2 million mortgage. In April 2004, the Company acquired Briggs Chaney Plaza in Silver Spring, Maryland. Briggs Chaney Plaza is a 197,000 square foot neighborhood shopping center on Route 29 in Montgomery County, Maryland. The center, constructed in 1983, was 94% leased at December 31, 2004 and is anchored by a 45,000 square foot Safeway supermarket and a 28,000 square foot Ross Dress For Less. The property was acquired for $27.3 million. The Company has substantially completed interior construction on a portion of the vacant space totaling approximately 11,000 square feet of leasable area. The space was reconfigured into six small shops, with five currently leased. The Company is also finalizing plans for a substantial facade renovation of the shopping center, projected to be substantially completed in mid-2005. In mid-February 2004, the Company completed the acquisition of the 142,000 square foot Safeway  The following chart sets forth certain information regarding our properties for the periods indicated Total Properties Total Square Footage Percent Leased As of December 31, Shopping Centers Office Shopping Centers Office Shopping Centers Office 2004 35 5 6,012,000 1,205,000 93.5% 95.9% 2003 31 5 5,328,000 1,204,000 94.1% 95.8% 2002 29 5 5,069,000 1,203,000 93.9% 92.9% The comparative decrease in the year end 2004 leasing percentage is largely attributable to the departure of a 39,000 square foot local grocer at Southside Plaza in suburban Richmond, Virginia. The improvement in the portfolio’s leasing percentage in 2003 compared to 2002 resulted primarily from improved leasing in the Office Properties at 601 Pennsylvania Avenue, Washington Square and Avenel Business Park.  On March 25, 2004, the Company completed the acquisition of the 79,000 square foot Publix anchored, Cruse MarketPlace located in Forsyth County, Georgia. Cruse MarketPlace was constructed in 2002 and was 97% leased at December 31, 2004. The center was purchased for $12.6 million, subject to the assumption of an $8.8 million mortgage.