FRTFederal Realty Investment Trust

In future Exchange Act periodic reports, please supplement your disclosure to separately discuss leasing costs, on a per square foot basis, for both renewals and new leases.

In future filings, we will include disclosure regarding leasing costs, on a per square foot basis, for both renewals and new leases. Read in the reply ↗

We note that your ATM offering program generated $104.46 million in net proceeds. In addition to this information, please also disclose in future Exchange Act periodic reports any additional offering expenses.

In future filings, we will disclose additional offering expenses of our ATM program. Read in the reply ↗

In future Exchange Act periodic reports, please expand your disclosure regarding period to period changes in property revenues to disaggregate the relative impact of occupancy changes and rental rent changes.

In future filings, we will expand our disclosure to disaggregate between relative occupancy and rental rate change impacts. Read in the reply ↗

We note your disclosure relating to your obligation under certain put option agreements. Please tell us where these obligations have been recorded in your consolidated financial statements and the amounts recorded.

At December 31, 2012, the obligations under our put option agreements are recorded in Capital Lease Obligations for $55.8 million and Redeemable Noncontrolling Interests for $94.4 million.

The Company acknowledges that:

— the Company is responsible for the adequacy and accuracy of the disclosure in the filing;

staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the

Rest of the answer

federal securities laws of the United States.

If you have any further questions or require additional information, please do not hesitate to contact me at (301) 998-8232.

Read in the reply ↗

Please clarify to us and disclose in future filings how you calculated average rent per square foot disclosed in the tables. In your response please discuss whether this average rent metric reflects impact of concessions (e.g. free rent) and tenant expense reimbursements.

Average base rent is calculated as the aggregate, annualized in-place contractual (cash basis) minimum rent for all occupied spaces divided by the aggregate gross leasable area of all occupied spaces. The disclosure does not include tenant expense reimbursements but does include concessions.

In future filings, we will disclose the following: “Average base rent is calculated as the aggregate, annualized in-place contractual (defined as cash basis including adjustments for concessions) minimum rent for all occupied spaces divided by the aggregate GLA of all occupied spaces.” Read in the reply ↗

We note your use of same-center property operating income within your earnings release. Please tell us whether you consider this metric to be a key performance indicator. If not, please tell us the basis for your conclusion.

Rest of the question

If so, in future periodic filings, please disclose same-center property operating income and include the following:  A reconciliation between same center property operating income and property operating income on a consolidated basis. To the extent there are differences beyond non-same center property operating income, please discuss the difference and your basis for such difference.  The number of properties designated as same center properties, redevelopment and expansion properties. Please highlight the number of properties removed from or added to the same center designation from the prior year.  Expand upon your existing definition of same-center to discuss at what point in the redevelopment or expansion process do you include and exclude them from your same center designation.  Include in your same center disclosures occupancy and average rent trends, as adjusted for leasing incentives if any.

Management does not rely on same center property operating income (POI) as a primary metric to analyze performance or manage the business. While we believe same-center POI is one indicator of operational performance, we do not believe it is a key performance indicator. Same-center POI growth is one metric utilized by investors to assess trends in our core operations and the growth metric is included in our earnings release, however, our property operating income is impacted by other areas including acquisitions, dispositions, redevelopments and developments.

Rest of the answer

All of these components are critical aspects of our business which must be evaluated in totality to fully understand the Company and our operating portfolio. We do not believe componentizing any one of these POI metrics is imperative for an investor to evaluate our financial results. Additionally, while same-center POI is used in the real estate industry, it is not consistently defined and the calculation can vary significantly amongst our peers, thus, not providing an adequate basis for comparison.

Separately, in our MD&A disclosures, we explain changes in our financial statement line items using same-center terminology, however, this is to provide a user-friendly way for investors to understand changes in our 87 properties but we do not believe a net metric of same-center POI is necessary nor should it be considered a key financial metric.

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Please tell us your basis for recording earnings one quarter in arrears, especially given the $11.8 million gain deferred from the sale of its entire portfolio. In addition, please tell us how you calculated the gain.

Our partner in Taurus Newbury Street JV II Limited Partnership was the managing member of the partnership and kept the books and records. Our partner was not a public company and was not regularly required to account for information under U.S. GAAP. Given this, we were not able to obtain U.S. GAAP financial statements on a quarterly basis in a sufficiently timely manner to apply the equity method of accounting using current information.

Rest of the answer

We utilized the guidance in ASC 323-10-35-6 which provides equity method investees the ability to report earnings in a lag if current information is not available, however, this lag reporting must be consistent from period to period. While ASC 323-10-35 does not contain specific guidance on an allowable timeframe, Regulation S-X Rule 3A-02 (b) permits a 93 day lag for consolidated subsidiaries which we believe to be an appropriate analogy to unconsolidated subsidiaries. Therefore, we made an accounting policy decision for this equity method investment to record our earnings one quarter in arrears due to our inability to receive U.S. GAAP basis financial statements in a timely manner. This fact has been disclosed each quarter in our periodic filings since entering into the venture in May 2010.

When the properties were sold early in the fourth quarter 2011, we evaluated whether it was appropriate to make a preferential accounting policy change to eliminate the lag in reporting. We determined this was not an allowable policy change by using the guidance in ASC 250-10-45-12 as the entity was terminating and we had consistently reported earnings one quarter in arrears. However, given the magnitude of the expected gain, we felt this information was important to provide to our investors to ensure the financial statements were not misleading. In order to calculate an estimate of the gain on sale, we utilized our investment balance at December 31, 2011, net of the cash we received at closing as part of the sale.

The Company acknowledges that:

— the Company is responsible for the adequacy and accuracy of the disclosure in the filings;

Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

If you have any further questions or require additional information, please do not hesitate to contact me at (301) 998-8166.

Read in the reply ↗

We have considered your response to comment two and note your utilization of samecenter terminology to provide a user-friendly way for investors to understand changes in your properties. In the interest of expanding upon your user-friendly use of same-center terminology, please revise future periodic filings to include the following.

Rest of the question

o Disclosure of the number of properties designated as same center properties, redevelopment and expansion properties. o Disclosure of the number of properties removed from and added to the samecenter designation from the prior year. o Expand upon your existing definition of same-center to discuss at what point in the redevelopment or expansion process you include and exclude them from your same-center designation.

We will include the above disclosures in future periodic filings. Read in the reply ↗

We have considered your response to comment three and note that you calculate an estimate of the gain on sale by utilizing the investment balance at December 31, 2011, net of the cash you received at closing as part of the sale. Please provide us your calculation of the estimated gain and clarify how the repayment of the $11.8 million loans you provided to the joint venture factored into your calculation.

At closing of the sale, we received $34.6 million comprised of $11.8 million to repay the outstanding loans we made to the joint venture and $22.8 million as our remaining share of the proceeds. The full $11.8 million principal balance on the loans was repaid and therefore, did not impact the gain calculation.

Rest of the answer

The $11.8 million estimated gain on sale was calculated as follows:

Sale proceeds after repayment of the loans of $22.8 million less our net equity investment in the joint venture (after repayment of the loans) of $11.0 million for an estimated gain on sale of $11.8 million.

The Company acknowledges that:

— the Company is responsible for the adequacy and accuracy of the disclosure in the filings;

Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

If you have any further questions or require additional information, please do not hesitate to contact me at (301) 998-8166.

Read in the reply ↗

We note you disclose funds from operations available for common shareholders excluding insurance recoveries received in 2004 and 2003. This appears to be an additional non-GAAP measure which adjusts for a recurring item.

Rest of the question

Please explain to us how you considered the need to provide the disclosures in Item 10(e) of Regulations S-K and question 8 of the Frequently Asked Questions Regarding the Use of Non-GAAP Financial Measures for this measure.

On behalf of our client, Federal Realty Investment Trust, a Maryland real estate investment trust (the “Company”), this letter responds to your letter dated May 15, 2007, providing comments relating to the Company’s Form 10-K for the fiscal year ended December 31, 2006. In order to facilitate the Staff’s review of this letter, we have restated each of your numbered comments below and have included the Company’s response underneath each comment. Form 10-K for the year ended December 31, 2006 We note you disclose funds from operations available for common shareholders excluding insurance recoveries received in 2004 and 2003.

Rest of the letter

This appears to be an additional non-GAAP measure which adjusts for a recurring item. Please explain to us how you considered the need to provide the disclosures in Item 10(e) of Regulation S-K and question 8 of the Frequently Asked Questions Regarding the Use of Non-GAAP Financial Measures for this measure. The insurance proceeds which are referred to in footnote 4 to the Selected Financial Data relate to a significant fire which occurred in 2002 at Santana Row, one of the Company’s properties located in San Jose, California. Due to the nature and significant dollar amount of the insurance proceeds, the Company determined it was important to the reader to disclose this matter in order for the reader to fully evaluate reported Funds from Operations (FFO). As indicated in question 8 of the Frequently Asked Questions Regarding the Use of Non-GAAP Financial Measures, excluding an item from a non-GAAP measure “would be permissible if management reasonably believes it is probable that the financial impact of the item will disappear or become immaterial within a near term finite period.” While the Company understands that fires may be considered recurring, the fire at Santana Row was of such magnitude and impact to the property and the consolidated company, the Company determined disclosure was merited of FFO excluding the related insurance proceeds. The Company has not experienced another fire of this magnitude in its 45-year history. Furthermore, this fire remains the largest structural fire in the history of San Jose, California. Thus, the Company believed it was probable that the significant financial impact of the insurance proceeds would disappear in a near finite term and this, in fact, has been the case. The Company provided the disclosures required under Item 10 (e) of Regulation S-K for FFO in footnote 3 to the Selected Financial Data. The Company also provided the amount of the insurance recovery proceeds in footnote 4. The Company does not consider the additional mathematical calculation and disclosure of FFO excluding these insurance proceeds to be an additional Non-GAAP measure but rather supplemental information that enables a reader to fully evaluate reported FFO. However, the Company understands that this item could be viewed differently and will remove the following disclosure in future filings: “Excluding these items, fund from operations available for common shareholders in 2004 and 2003 would have been $145.6 million and $123.3 million, respectively.” Consolidated Statements of Operations, page F-6 We note that you omit the line item income before minority interests. Tell us how you considered Rule 5-03 of Regulation S-X in determining it was not necessary to disclose this amount. discloses minority interests on the face of the Consolidated Statements of Operations. In omitting the line item income before minority interests, the Company considered the requirements of Rule 5-03 of Regulation S-X, the materiality of the line item, and the overall additional benefit to the reader of including the line item. Income after minority interests was $95.1 million, $84.4 million, and $64.0 million for the years ended December 31, 2006, 2005, and 2004, respectively, which represents approximately 96%, 94%, and 94%, respectively, of income before minority interests. Thus, the Company concluded including this line item, which is a subtotal, would not provide additional material information to the reader. However, the Company understands this could be viewed differently and will add the line item “income before minority interests” to the Consolidated Statements of Operations in future filings. It appears that you have classified the gain on sale of Greenlawn Plaza as discontinued operations despite that fact that you have 30% interest in the partnership that purchased the property. Explain to us how you considered the guidance in paragraph 42 of SFAS 144 and EITF 03-13 in determining the appropriate classification of the gain. The Company considered the guidance in paragraph 42 of SFAS 144 and EITF 03-13 in considering whether it was appropriate to include the gain on sale of Greenlawn Plaza in discontinued operations. On the face of the Consolidated Statements of Operations, the Company included a line item in discontinued operations titled “Gain on sale of real estate, net of taxes” which includes the gains on all properties sold, including Greenlawn Plaza, during 2006, 2005, and 2004. In Note 2 to the Consolidated Financial Statements, the Company discloses the properties sold and their related gains. Additionally, the Company clearly discloses the fact that Greenlawn Plaza was sold to their 30% owned real estate partnership. The gain on sale of Greenlawn Plaza of $7.4 million represents 6% of net income. While the Company maintained continuing involvement in the property, the Company concluded that adding a second line item outside of discontinued operations solely related to the gain on the sale of Greenlawn Plaza would not provide significant additional information to the reader as the transaction was clearly disclosed in Note 2. The Company evaluated the Consolidated Financial Statements including the related notes taken as a whole and concluded the reader was appropriately informed of the amount of the gain and the continuing involvement in this property without including an additional line item on the face of the Consolidated Statements of Operations. Note 3. Mortgage Notes Receivable, page F-17 We note that you amended a $17.7 million note receivable on August 4, 2006. Explain to us whether this transaction was accounted for as an extinguishment of the existing note and issuance of new debt or as a modification. In your response, tell us how you considered paragraphs 12 and 13 of SFAS 91 and EITF 01-07 in determining the appropriate accounting. Consistent with the guidance in paragraphs 12 and 13 of SFAS 91 and EITF 01-07, the Company accounted for the restructuring as a modification. There were no unamortized net fees or costs or prepayment penalties on the original loan. Note 4. Real Estate Partnership, page F-18 We note you guarantee $36.7 million in mortgage notes of some of your subsidiaries. Please explain to us how you considered paragraph 13 of FIN 45 in determining whether the term of the guarantee should be disclosed. As disclosed in Note 4 of the Consolidated Financial Statements, the guaranties are for the benefit of a subsidiary partnership that indemnifies the Company for any loss. Given the nature of these guaranties, the Company did not believe it was necessary to disclose the term of the guaranties. These guaranties are typical of the types of guaranties generally used in connection with property secured lending and cover loss to the lender arising from certain bad acts by the borrowing entity (such as fraud and misapplication of funds, among other things) as well as potential loss to the lender from environmental liability with respect to the secured property. The guaranties do not have a finite term; however, once the lenders have been repaid in accordance with the loan documents, the only likely source for a claim on the guaranty is for loss to the lender as a result of potential future environmental liability at the properties to which the loans relate. In order to provide further information on the guaranties, the Company will include the following disclosure in future filings: “The guaranties do not have a finite term; however, once the lenders have been repaid in accordance with the loan documents, the only likely source for a claim on the guaranty is for loss to the lender as a result of potential future environmental liability at the properties to which the loans relate.” Note 12. Components of Rental Income and Expense, page F-21 We note that you recorded $1.2 million of additional straight-line rental income during 2005 due to a change in estimate of collectibility of certain long-term receivables. Please explain to use in detail management’s process for recording straight line revenue, and the related the process of determining the collectibility of straight-line rent receivables and recording the allowance. In your response, include an explanation of when the allowance is recorded by the Company and tell us where the related bad debt expense is recorded on the Company’s process for recording straight-line rental income is primarily based on Statement of Financial Accounting Standards No. 13, “Accounting for Leases” (SFAS 13) and Staff Accounting Bulletin No. 104, Topic 13: Revenue Recognition (SAB 104). SFAS 13 requires minimum rents to be recorded on a straight-line basis unless another systematic and rational basis is more representative of the time pattern in which use benefit is derived from the leased property. SAB 104 states that revenue generally is realized or realizable and earned when four criteria are met including that collectibility is reasonably assured. Accordingly, the Company’s process for recording straight-line rental income generally consists of: (1) computing straight-line rental income for minimum rents provided for in each lease and (2) recognizing rental income on a straight-line basis to the extent that the criteria of SAB 104 are met including assessing whether the collectibility of minimum rents is reasonably assured. This process is applied on a lease by lease basis. The following discussion provides additional background and details regarding this process. The Company primarily owns and operates retail properties. Accordingly, the Company’s long-term leases are with tenants that operate in the retail sector which is a very competitive sector that is subject to down-swings in the economy, changes in consumer tastes, changes in technology and has short life cycles for many retail products. Additionally, retail sector developments such as the increase in internet purchasing, the emergence of big-box national retailers (such as Wal-Mart and Target) and the increased number and types of retailers selling various goods (big-box retailers, dollar stores, fast casual dining, etc.) have further increased competition within the retail sector. As the Company has long-term leases with tenants operating in this very competitive retail sector, assessing the collectibility of minimum rents is an important part of the process to ensure the Company appropriately records rental income. Straight-line rental income for long-term leases for which collectibility of all minimum rents is reasonably assured is recognized on a straight-line basis over the non-cancellable term of the lease and includes the effects of rent steps and rent abatements. The Company begins recognizing straight-line rental income when the tenant takes possession of the leased space and the leased space is substantially ready for its intended use. Straight-line rental income for long-term leases for which collectibility of minimum rents is not reasonably assured is recognized only to the extent collectibility is reasonably assured. These instances represent specific leases for which management has concluded the collectibility of all minimum rents is not reasonably assured based on the specific facts and circumstances surrounding the tenant and lease. In assessing collectibility of minimum rents, management’s consideration includes one or more of the following factors: the tenant’s current financial position, trends in the tenant’s sales and operating income, tenant’s long-term debt rating, tenant’s business strategy, length of the tenant’s lease, nature of the tenant’s business, competition facing the tenant, tenant’s ownership structure and media information available (i.e. press releases announcing the closing of stores, substantial changes in operating model or the potential need to file bankruptcy). If collectibility of all minimum rents is not reasonably assured and the Company recognizes rental income that is less than that which would have been computed under the straight-line basis assuming collection of all minimum rents, the Company does not believe the difference represents a reserve or valuation allowance. For these specific leases, the Company only recognizes revenue to the extent that collectibility is reasonably assured. The Company believes it would be inappropriate to initially recognize straight-line rental income for which collectibility is not reasonably assured by recording revenue and immediately recording bad debt expense. The Company believes this would overstate straight-line rental income by recording revenue that did not meet the criterion for recognition under SFAS 13 and SAB 104. On a quarterly basis, the Company updates its evaluation of both the collectibility of unrecognized straight-line rental income related to long-term leases and the collectibility of rental income previously recognized. If a change in a tenant’s financial condition and operating performance indicates that more straight-line revenue is reasonably collectible than previously estimated and realized, the additional straight-line rental income is recognized as revenue. A reserve or valuation allowance and bad debt expense is not recorded until after rental income has been recognized and subsequent factors cause management to conclude that such amount is no longer collectible. Bad debt expense is included in rental expense in the Consolidated Statements of Operations. Note 1 to the Consolidated Financial Statements contains the following disclosure regarding the Company’s collectibility analysis for straight-line rent: “We make estimates of the collectibility of our accounts receivable related to minimum rents, straight-line rents, expense reimbursements and other revenue or income. In some cases, primarily relating to straight-line rents, the collection of these amounts extends beyond one year. Our experience relative to unbilled straight-line rents is that a certain portion of the amounts otherwise recognizable as revenue is never billed to or collected from tenants due to early lease terminations, lease modifications, bankruptcies and other factors. Accordingly, the extended collection period for straight-line rents along with our evaluation of tenant credit risk may result in the non-recognition of a portion of straight-line rental income until the collection of such income is reasonably assured.” Upon further review of the disclosures, the Company believes the policy footnote could be further enhanced to clarify the accounting for changes in collectibility evaluations. The Company will add the following to the accounting policy for Revenue Recognition and Accounts Receivable in future filings as follows: “If our evaluation of tenant credit risk changes indicating more straight-line revenue is reasonably collectible than previously estimated and realized, the additional straight-line rental income is recognized as revenue. If our evaluation of tenant credit risk changes indicating a portion of realized straight-line rental income is no longer collectible, a reserve and bad debt expense is recorded.” We note that you deleted the language “(the registrant’s fourth fiscal quarter in the case of an annual report)” from paragraph 4(d). Please revise your certifications in future filings to include the disclosure. Paragraph 4(d) of the certifications indicates “the most recent fiscal quarter.” Since this was filed in the annual report, the Company felt it was self-explanatory that this referred to the fourth fiscal quarter. The Company will, however, revise the certifications in future filings to include the disclosure. - the Company is responsible for the adequacy and accuracy of the disclosure in the filings; Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filings; and the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. If you have any further questions or require additional information, please do not hesitate to contact me at (202) 663-8326.

One letter for all the questions, without numbered answers. Read the reply ↗

We note that you omit the line item income before minority interests. Tell us how you considered Rule 5-03 of Regulation S-X in determining it was not necessary to disclose this amount.

See the reply above.

It appears that you have classified the gain on sale of Greenlawn Plaza as discontinued operations despite that fact that you have 30% interest in the partnership that purchased the property. Explain to us how you considered the guidance in paragraph 42 of SFAS 144 and EITF 03-13 in determining the appropriate classification of the gain.

See the reply above.

We note that you amended a $17.7 million note receivable on August 4, 2006. Explain to us whether this transaction was accounted for as an extinguishment of the existing note and issuance of new debt or as a modification. In your response, tell us how you considered paragraphs 12 and 13 of SFAS 91 and EITF 01-07 in determining the appropriate accounting.

See the reply above.

We note you guarantee $36.7 million in mortgage notes of some of your subsidiaries. Please explain to us how you considered paragraph 13 of FIN 45 in determining whether the term of the guarantee should be disclosed.

See the reply above.

We note that you recorded $1.2 million of additional straight-line rental income during 2005 due to a change in estimate of collectibility of certain long-term receivables. Please explain to us in detail management’s process for recording straight line revenue, and the related the process of determining the collectibility of straight-line rent receivables and recording the allowance.

Rest of the question

In your response, include an explanation of when the allowance is recorded by the Company, and tell us where the related bad debt expense is recorded on the Consolidated Statements of Income.

See the reply above.

We note that you deleted the language “(the registrant’s fourth fiscal quarter in the case of an annual report)” from paragraph 4(d). Please revise your certifications in future filings to include this disclosure. * * * * Please respond to this comment within 10 business days or tell us when you will provide us with a response. Please file your response letter on EDGAR.

Rest of the question

Please understand that we may have additional comments after reviewing your response to our comments.

See the reply above.

We have considered your response to our prior comment three. In view of the continuing involvement, we believe the gain related to the sale of Greenlawn Plaza as well as its operating results prior to sale should be classified as continuing operations in accordance with paragraph 42 of SFAS 144 and EITF 03-13.

Rest of the question

Please revise accordingly or provide us with support for a conclusion that the effect would be immaterial based on SAB 99. Please respond to this comment within 10 business days or tell us when you will provide us with a response. Please file your response letter on EDGAR. You may contact Robert Telewicz, Senior Staff Accountant at (202) 551-3438, Jennifer Monick, Staff Accountant at (202) 551-3295, or the undersigned at (202) 551-3780 if you have questions. S i n c e r e l y ,

On behalf of our client, Federal Realty Investment Trust, a Maryland real estate investment trust

(the “Company”), this letter responds to your letter dated June 6, 2007, providing comments relating to the Company’s Form 10-K for the fiscal year ended December 31, 2006. In order to facilitate the Staff’s review of this letter, we have restated each of your numbered comments below and have included the Company’s response underneath each comment.

Form 10-K for the year ended December 31, 2006

Note 2. Real Estate, page F-16

We have considered your response to our prior comment three.

Rest of the answer

In view of the continuing involvement, we believe the gain related to Greenlawn Plaza as well as its operating results prior to sale should be classified as continuing operations in accordance with paragraph 42 of SFAS 144 and EITF 03-13. Please revise accordingly or provide us with support for a conclusion that the effect would be immaterial based on SAB 99.

The Company understands your comment that due to the continuing involvement in Greenlawn Plaza, the gain on sale and the resulting operations should be classified as continuing operations. However, the Company believes the effect of this reclassification is immaterial to the consolidated financial statements taken as a whole. SAB 99 states: “the omission or misstatement of an item in a financial report is material if, in the light of surrounding circumstances, the magnitude of the item is such that it is probable that the judgment of a reasonable person relying upon the report would have been changed or influenced by the inclusion or correction of the item”. Thus, the Company has considered both the quantitative and qualitative factors surrounding the materiality of this item.

Quantitative and Qualitative Analysis

The below charts detail the significant line items in our consolidated financial statements and includes the amounts as filed in our 2006 Form 10-K, the amounts assuming the Company reclassified Greenlawn Plaza to continuing operations, and the percentage change in order to evaluate the quantitative materiality.

(In thousands)

2006 Statement of Operations

As Filed

Including Greenlawn

Plaza in Continuing

Operations

Percentage

Change

Total Revenues

451,022

451,849

0.2

%

Total Expenses

251,986

252,543

Operating Income

199,036

199,306

0.1

Income from Continuing Operations

95,076

102,793

8.1

Income from Discontinued Operations

23,636

15,919

-32.6

Net Income

118,712

0.0

2005 Statement of Operations

408,469

410,331

0.5

232,944

234,017

175,525

176,314

0.4

84,433

85,222

0.9

30,179

29,390

-2.6

114,162

2004 Statement of Operations

383,612

385,386

232,052

233,009

151,560

152,377

64,041

64,858

1.3

20,115

19,298

-4.1

84,156

The reclassification is clearly immaterial from a quantitative standpoint for all line items for the years ended

December 31, 2005 and 2004 and for total revenues, total expenses, and operating income for 2006. While the 2006 impact to income from continuing operations and income from discontinued operations is a change of 8.1% and 32.6%, respectively, there is no impact to net income. There is also no impact to the statement of cash flows for 2006, 2005, or 2004. As stated in SAB 99, “magnitude by itself, without regard to the nature of the item and the circumstances in which the judgment has to be made, will not generally be a sufficient basis for a materiality judgment.” Accordingly, the Company further considered the qualitative factors related to the reclassification as follows:

•

The change would be a Statement of Operations reclassification from discontinued operations to continuing operations and net income would not be impacted.

The Company is generally evaluated by analysts based on funds from operations (FFO) which excludes gains on sale of real estate. Thus, the geography of the gain on sale of Greenlawn Plaza on the statement of operations would not impact FFO.

The reclassification would have no effect on net income and thus, would not result in a change from a loss to income or vice versa.

Greenlawn Plaza does not play a significant role in the Company’s operations or profitability. Greenlawn Plaza’s net income excluding gain on sale while it was owned by the Company during 2006, 2005, and 2004 was $0.3 million, $0.8 million, and $0.8 million, respectively. This is not considered a significant part of the operations.

The classification of Greenlawn Plaza in continuing operations would have no effect on compliance with loan covenants, regulatory requirements, or other contractual requirements.

The classification of Greenlawn Plaza would not impact management’s compensation.

The classification of Greenlawn Plaza does not involve concealment of an unlawful transaction.

The classification is clearly not a situation whereby management intentionally misstated the financial statements to manage earnings.

The Company would not expect the market to react positively or negatively based on the classification of Greenlawn Plaza.

The sale of Greenlawn Plaza is a distinct event that is clearly disclosed in Note 2 to the Consolidated Financial Statements. Additionally, the Company clearly discloses the fact that Greenlawn Plaza was sold to their 30% owned real estate partnership.

SAB 99 Conclusion

Based on the above quantitative and qualitative analysis, the Company does not believe that the magnitude of the item is such that it is probable that the judgment of a reasonable person relying upon its Form 10-K would have been changed or influenced by the reclassification of Greenlawn Plaza from discontinued operations to continuing operations. Accordingly, we do not believe a revision is required.

The Company acknowledges that:

- the Company is responsible for the adequacy and accuracy of the disclosure in the filings;

Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filings; and the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

If you have any further questions or require additional information, please do not hesitate to contact me at (202) 663-8326.

Read in the reply ↗

We have considered your response to our prior comment one. After reviewing your SAB 99 analysis, we continue to believe that the operations and gain from sale of Greenlawn Plaza should be classified as continuing operations.

Rest of the question

Please revise your Form 10-K for the year ended December 31, 2006 to reflect the classification of the gain related to the sale of Greenlawn Plaza as well as its operating results prior to sale as continuing operations in accordance with paragraph 42 of SFAS 144 and EITF 03-13. Please respond to this comment within 10 business days or tell us when you will provide us with a response. Please file your response letter on EDGAR. You may contact Robert Telewicz, Senior Staff Accountant at (202) 551-3438, Jennifer Monick, Staff Accountant at (202) 551-3295, or the undersigned at (202) 551-3780 if you have questions. S i n c e r e l y ,

, the Company is expanding its discussion related to Greenlawn Plaza to include a discussion of the special provision relating to real estate investment trusts provided for in Rule 3-15 of Regulation S-X and some additional quantitative and qualitative support for the Company’s conclusion to not include the gain on sale of Greenlawn Plaza and its operating results prior to sale in continuing operations.

Rule

5-03 indicates the various captions which, if applicable, and except as otherwise permitted should appear on the face of the income statement.

Rest of the answer

Rule 3-15, Special Provision as to Real Estate Investment Trusts states the following:

“(a)(1) The income statement prepared pursuant to Rule 5-03 shall include the following additional captions between those required by Rule 5-03.15 and 16: (i) Income or loss before gain or loss on sale of properties, extraordinary items and cumulative effects of accounting changes, and (ii) gain or loss on sale of properties, less applicable income tax.”

Accordingly, Rule 3-15, specifically requires real estate investment trusts such as the Company to include gain on the sale of properties between the captions discontinued operations (Rule 5-03.15) and extraordinary items and cumulative effect of changes in accounting principles (Rule 5-03.16). The classification of gain on sale of properties presented as a separate caption in accordance with Rule 3-15 due to continuing involvement can be seen in the filings of numerous real estate investment trusts. Though their presentation is not consistent with the Staff’s request to include the gain on sale of

Greenlawn Plaza in continuing operations, this presentation is consistent with Rule 3-15 and prevalent reporting of such gains within the real estate investment trust industry and other registrants within the Company’s Standard Industry Code.

Therefore, the Company believes the appropriate quantitative analysis under SAB 99 should not be prepared based on classifying both the gain on sale of

Greenlawn Plaza and its operating results prior to sale in continuing operations. The appropriate quantitative analysis should be prepared based on only classifying the operating results of Greenlawn Plaza prior to sale in continuing operations and classifying the gain on sale of Greenlawn Plaza as a separate caption after discontinued operations as required of real estate investment trusts by Rule 3-15.

The charts below detail the significant captions in the Company’s income statements and includes the amounts as filed in the Company’s 2006 Form 10-K compared to the amounts assuming the operating results of Greenlawn Plaza prior to sale were included in continuing operations and the gain on the sale of Greenlawn Plaza was presented as a separate caption in accordance with Rule 3-15. Additionally, the percentage change between these two presentations is presented in order to assist with the evaluation of materiality.

(In thousands)

2006 Statement of Operations

As Filed

As Required by

Rule 3-15

Percentage

Change

Total Revenues

451,022

451,849

0.2

%

Total Expenses

251,986

252,543

Operating Income

199,036

199,306

0.1

Income from Continuing Operations

95,076

95,346

0.3

Income from Discontinued Operations

23,636

15,925

-32.6

Gain on the Sale of Real Estate

—

7,441

100.0

Net Income

118,712

0.0

2005 Statement of Operations

408,469

410,330

0.5

232,944

234,016

175,525

176,314

0.4

84,433

85,222

0.9

30,179

29,390

-2.6

114,162

2004 Statement of Operations

383,612

385,387

232,052

233,010

151,560

152,377

64,041

64,858

1.3

20,115

19,298

-4.1

84,156

This reclassification is clearly immaterial for all captions except for income from discontinued operations and gain on sale of real estate for 2006. While the impact to income from discontinued operations and gain on sale of real estate for 2006 is 32.6% and 100%, respectively, there is no impact to net income and the impact to continuing operations is between 0.3% and 1.3% for all years presented. Rule 3-15 segregates out gains on the sale of real estate for real estate investment trusts in order to provide transparency in operating results versus sales of real estate. The Company believes it has achieved this transparency with its income statement presentation as income from continuing operations is clearly not significantly misstated and the users of the Company’s financial statements would place little emphasis on a distinction between discontinued operations and a separate caption for gain on sale of real estate.

The Company has also provided transparency about the amount and nature of the gain on sale of Greenlawn Plaza with its footnote disclosures. Accordingly, the Company does not believe separate presentation of the gain on sale of Greenlawn Plaza is required and that it may be combined with the next most appropriate caption. Furthermore, the Company believes the next most appropriate caption is income from discontinued operations for the following qualitative reasons:

•

The gain on sale of real estate can be a significant amount for many real estate investment trusts, but such gain is not typically meaningful to the users of their financial statements (see FFO discussion below). Again, the Company believes that Rule 3-15 specifically responds to this point and as such, requires gain on the sale of real estate to be classified outside of continuing operations.

The company has sold a majority interest in Greenlawn Plaza to an unconsolidated partnership and its continuing interest in Greenlawn Plaza is not expected to play a significant role in the Company’s ongoing operations or profitability.

This is the only gain on sale of real estate resulting from the Company selling a property to its 30% owned real estate partnership since the inception of the partnership in 2004. Property sales to this unconsolidated real estate partnership are not a core part of the Company’s current or planned continuing operations.

Income from continuing operations for the last several years generally provides a trend that is meaningful to a user of financial statements and including the gain on sale of Greenlawn Plaza in continuing operations would misstate this trend. Excluding the gain on sale of Greenlawn Plaza from continued operations assists the users of the Company’s financial statements with assessing its “go forward” performance.

Rule 4-02 provides that is an amount which would otherwise be required to be shown with respect to any item is immaterial, it need not be separately set forth.

If the gain on sale of Greenlawn Plaza is not material enough to be presented as a separate caption in the Company’s income statement, classifying it as discontinued operations supported by adequate and appropriate disclosure (see Note 2 to the Company’s financial statements) provides consistency and clarity in reporting to the users of the Company’s financial statements.

Additionally, SAB 99 states, “magnitude by itself, without regard to the nature of the item and the circumstances in which judgment has to be made, will not generally be sufficient basis for a materiality judgment.” Accordingly, the Company believes the following additional qualitative factors are also relevant to considering if the Company’s income statement as filed in its 2006 Form 10-K should be restated for the classification of the gain on sale of Greenlawn Plaza and its operating results prior to sale:

The Company is generally evaluated by analysts based on funds from operations (FFO) a non-GAAP measure that excludes gains on sale of real estate. Thus, the geography of the gain on sale of Greenlawn Plaza on the statement of operations would not impact FFO.

The reclassification would have no effect on net income and thus, would not result in a change from a loss to income or vice versa.

The reclassification has no effect on cash flows.

The classification of Greenlawn Plaza in continuing operations would have no effect on compliance with loan covenants, regulatory requirements, or other contractual requirements. In fact, gain on the sale of real estate is excluded from all of the Company’s debt covenants.

The classification of Greenlawn Plaza would not impact management’s compensation.

The classification of Greenlawn Plaza does not involve concealment of an unlawful transaction.

The classification is clearly not a situation whereby management intentionally misstated the financial statements to manage earnings as earnings are unaffected by the classification.

The Company would not expect the market to react positively or negatively based on the classification of Greenlawn Plaza.

The sale of Greenlawn Plaza is a distinct event that is clearly disclosed in Note 2 to the Company’s Consolidated Financial Statements. Additionally, the

Company clearly discloses the fact that Greenlawn Plaza was sold to its 30% owned unconsolidated real estate partnership.

Accordingly, based on Rule 3-15 and the above quantitative and qualitative discussion, the Company believes its presentation of the gain on sale of Greenlawn Plaza and its operating results prior to sale is appropriate, and it does not believe that reclassification of these items in its 2006 Form 10-K is warranted.

On August 1, 2007, the Company plans to file its Form 10-Q for the quarter ended

June 30, 2007. Because the sale of Greenlawn Plaza occurred in the quarter ended June 30, 2006, this Form 10-Q will include an income statement for the period during which the sale occurred. The Company’s preference is to continue to classify the gain on sale of Greenlawn and its operating results prior to sale as discontinued operations. The Company believes its current presentation is inline with the interests of the users of its financial statements and their evaluation of the Company’s operating results. The Company also believes the Staff’s requested reclassification is inconsistent with Rule 3-15 and would result in its financial statements being less useful to the readers rather than more useful.

The Company acknowledges that:

- the Company is responsible for the adequacy and accuracy of the disclosure in the filings;

Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filings; and the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

If you have any further questions or require additional information, please do not hesitate to contact me at (202) 663-8326.

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