Equity One, Inc. has no plans of slowing down its rapid growth

Howard Sipzner could feel free to just sit back, relax and enjoy his company’s success. As executive vice president and Chief Financial Officer of Equity One, Inc., Sipzner is running a company that is currently boasting an average leased factor far above the industry standard.

But complacency is not a word that is high up in Sipzner’s vocabulary. “Our company really doesn’t compare itself to other companies,” said Sipzner. “We are not just sitting here applauding ourselves. We’re trying to push it harder all the time.”

Equity One, Inc. strives to be the dominant owner of supermarket-anchored centers in its target markets and, so far, the company is achieving its lofty goals. So far, Equity One owns 198 properties with a total GLA of 20.4 million sq.ft. with a lease rate of 93.6%. “It’s a strong market out there,” said Sipzner. “We’re in really good demographic areas, supply and demand is in check and the company doesn’t suffer from excess supply.”

Equity One is a real estate investment trust that principally acquires, renovates, develops and manages neighborhood and community shopping centers anchored by national and regional supermarket chains and other necessity-oriented retailers such as drug stores or discount retail stores in major metropolitan markets of the southern and northeastern U.S. The company’s portfolio consists of properties encompassing supermarket-anchored shopping centers, drug store-anchored shopping centers, retail-anchored shopping centers, development parcels and other non-retail properties.

The company seeks two types of situations to employ its acquisition strategy, including stabilized market-dominant supermarket anchored properties with supply-side restrictions and strong demographics, and value-added opportunities offering potential near-term revenue enhancements that could result from repositioning the tenant mix, building expansion space for existing or new tenants and building out pads. Of particular interest are community and neighborhood supermarket-anchored shopping centers, which provide daily essential shopping experiences. The first preference is to own the site and all improvements. The company will consider any status of leasing or property conditions, as long as the property is well located. Additionally, Equity One can offer a “down-REIT” which, similar to 1031 exchange, can alleviate the immediate tax gain of sale.

Here is the company’s criteria for acquiring existing centers: supermarket-anchored retail centers with a GLA of at least 65,000 sq.ft. with excellent visibility, good ingress/egress with median cuts, preferably located on a signalized corner with an average household income in the upper percentile of its market. The company also will consider redevelopment and/or re-tenanting opportunities in well-located areas and locations that have short terms remaining on supermarket leases. Equity One prefers all-cash transactions, but will consider debt assumption. When it comes to yield criteria, the tenant’s credit, remaining term, existing debt and other factors contribute greatly in determining yield.

The company prides itself on providing the best locations and customer service for its tenants and shoppers, while maintaining a disciplined approach to acquisitions, dispositions and developments. Equity One also pursues a conservative financial strategy, being responsive to strategic transactions that make sense for its stockholders and maximizing the overall return. Since the second quarter of 2004, Equity One has avoided the roller coaster ride that many companies suffer in keeping its centers occupied. During the second quarter in 2004, Equity One had a 93.4% occupancy rate. Currently, the company has a 94.1% occupancy rate.

Overview of Equity One Inc. Portfolio*
State	Ttl GLA (in millions)	#of Properties	% Leased
FL	9.30	80	96.0
TX	2.97	32	92.3
GA	2.90	25	88.5
LA	1.62	14	91.7
NC	1.13	12	90.2
SC	0.84	8	92.4
MA	0.40	6	99.5
AL	0.13	2	96.9
*Based on 1Q 2006

The company’s top 10 tenants are Publix in 50 centers, Blockbuster Video in 29 locations, CVS Pharmacy in 19 sites, Kroger in 17 centers, Winn-Dixie in 14 projects, Albertsons/Shaw’s with eight stores, T.J. Maxx/Marshalls in eight locations, Bed Bath & Beyond with eight stores, Safeway/Randalls operating five stores and H.E. Butt Grocery with four stores in the company’s portfolio. Although one of its top tenants filed for bankruptcy protection, the company also is coping quite well with the Winn-Dixie filing. “Everything is going fine, but we’ll have to watch them,” said Sipzner.

The company also recently announced the sale of 29 of its TX properties to a joint venture consisting of Equity One and Ivestcorp. The company said that this transaction demonstrates its ability to recycle capital and establish itself as an institutional asset manager. It also allows the company to maintain a significant presence throughout the state. “We’re still running it under the joint venture,” said Sipzner. “It’s just business as usual. We still have management in place, but no opportunities have come up yet.”

The company also is looking at adding more properties to its portfolio during the coming 18 months. “We can’t tell what we intend to buy,” said Sipzner. “But it’s been a very active acquisition process throughout the Southeast. We are willing and interested in adding good quality, market-anchors and at least $100 million this year.” So far this year, the company has acquired Dolphin Village, a 138,129 sq.ft. center located in St. Pete Beach, FL; Brookside Plaza, a 210,787 sq.ft. center located in Enfield, CT; Commonwealth II, a 53,598 sq.ft. center located in Jacksonville, FL; and Piedmont Peachtree Crossing, a 152,239 sq.ft. center located in the Buckhead section of Atlanta, GA.

Equity One also has an aggressive development plan underway for the future. The company is developing the following centers: River Green in Canton, GA; Shops at St. Lucie in Port St. Lucie, FL; Shops at Skylake in North Miami Beach, FL; Sunlake, a 155-acre mixed-use development in Tampa, FL; Westridge in McDonough, GA and Winchester Plaza in Huntsville, AL.

Even with its current success, the company’s management hasn’t gotten self-satisfied and doesn’t plan on forgetting how to keep its level of occupancy stable.

“We’re going to do the little things,” said Sipzner. “We’ll keep them clean and well lit, but really it’s the properties themselves that ensure high levels of occupancy.”

For more information, contact Howard Sipzner, Equity One, Inc., 1600 Northeast Miami Gardens Drive, North Miami Beach, FL 33179; 305-947-1664, Fax 305-947-1734; Email: hsipzner@equityone.net ; Web site: www.equityone.net .