Bradley Real Estate reports 3rd-qtr results; FFO per share for quarter up 19 percent.

NORTHBROOK, Ill.--(BUSINESS WIRE)--Nov. 12, 1996--Bradley Real Estate Inc. (NYSE: BTR) today reported third-quarter funds from operations (FFO) of $8.3 million, or $0.44 per share, compared with $4.1 million, or $0.37 per share, in the prior year's third quarter. Both calculations of FFO are based on the revised definition as modified by the National Association of Real Estate Investment Trusts earlier this year. Third-quarter FFO included a one-time charge of approximately $0.02 per share for expenses incurred in relocating the company's headquarters from Boston to Chicago.

Net income for the period rose to $4.9 million, or $0.26 per share, from $2.4 million, or $0.21 per share, for the comparable period last year. Weighted average shares outstanding increased 68 percent to 18,667,241 from 11,087,721 in the year-ago period. The increase in weighted shares occurred primarily as a result of the acquisition of Tucker Properties Corp., completed in March of this year.

Nine-month Results

For the nine months ended Sept. 30, 1996, FFO totaled $20.7 million, or $1.25 per share, compared with $10.9 million, or $1.15 per share, a year earlier. Net income increased to $21.1 million, or $1.27 per share, from $5.8 million, or $0.62 per share, for the comparable period. Results for 1996 include a gain of $9.4 million on the sale of the company's interest in land under 501-529 Nicollet Avenue in Minneapolis in March 1996.

Weighted average shares outstanding were 16,629,648 for the nine months ended Sept. 30, 1996, compared with 9,404,449 for the prior- year period. Total assets at the end of the quarter were $486.0 million compared with $179.0 million for the prior-year period. The increase in both total assets and weighted shares were brought about primarily as a result of the Tucker acquisition.

Commenting on the results for the quarter, Thomas D'Arcy, president and chief executive officer stated, "The quarterly results were in line with our expectations and the 19 percent increase in FFO per share over the prior-year period reflects the successful integration of personnel and assets from the Tucker acquisition, which has been achieved despite the continued weakness in retail property markets. While the market remains inherently challenging from both a credit quality and a supply and demand perspective, we continue to make progress in enhancing the operating cash flow of our core portfolio and are encouraged by the level of leasing activity."

Operational Review

For the quarter, property occupancy was 89 percent, the same as the previous quarter. This percentage does not include the majority of the new leases signed during the quarter which, as yet, are not contributing to earnings. During the quarter, the company signed 16 new leases totaling approximately 109,000 square feet at an average rate of $12.00 per square foot. Three of the new leases were signed with anchor tenants, including two with Petters Direct for approximately 20,000 square feet each and one new lease for the expansion of Best Buy, which is expanding from 28,000 square feet to 46,000 square feet, at Burning Tree Plaza in Duluth, Minn. In addition, the company renewed 16 leases totaling approximately 28,000 square feet at an average rate of $12.00 per square foot.

Commenting on leasing activity, Richard Heuer, executive vice president, stated, "We have seen a slight increase in activity in the third quarter compared with the previous quarter. We are presently in discussions with a number of potential tenants to occupy some of the larger available bays, and we anticipate that these efforts will strengthen the tenant base at several of the company's centers."

Acquisition Capital Raised

Subsequent to the close of the third quarter, in early November the company raised $45.0 million of new equity capital in an equity issuance managed by PaineWebber. The transaction was executed by selling shares of common stock under the company's shelf registration and was placed on an accelerated basis predominantly to retail investors.

Commenting on the financing, D'Arcy said, "This financing allows Bradley to aggressively pursue our growth agenda. While the additional shares reduce per share FFO in the near term, we believe the long-term benefit of the financing, including enhancing both our earnings and capital structure, more than offset this short-term effect. The capital will be invested in qualified assets that meet our core investment criteria and support our goal of making Bradley the leading REIT in grocery-anchored retail shopping centers in the Midwest. We believe these acquisitions are available at attractive yields and should strengthen the future earnings of the company while further diversifying our income stream. Additionally, this equity capital will allow us to pursue these acquisitions while we continue to reposition the company's capital structure."

In addition to the regular quarterly reports, the company also provides, on a quarterly basis, supplemental information, which includes property and corporate level detail. This information is available upon request from the company.

The preceding information contains forward-looking statements of the company's plans, objectives and expectations, which are dependent upon a number of factors including no further weakness in the Midwestern United States retailing climate and the continuing availability of retail center acquisitions. Reference is made to the discussions under the captions "Risk Factors" in the company's Oct. 29, 1996 Prospectus Supplement relating to its recent Common Stock Offering and in the company's Form 10-K report for 1995 for a discussion of certain other factors which could cause actual results to differ materially from those in the forward-looking statements.

Bradley Real Estate Inc. is the nation's oldest continuously qualified real estate investment trust (REIT) and a leading owner and operator of neighborhood and community shopping centers located in the Midwest region of the United States. The company owns 31 properties (29 shopping centers and 2 office/retail buildings) in 11 states aggregating 7.5 million square feet of rentable space.

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To receive additional information on Bradley Real Estate free of charge via fax, dial 1-800-PRO-INFO and enter "BTR."

                          Bradley Real Estate Inc.
                            Statement of Income
              (Dollars in thousands, except per share data)
                               (unaudited)

                                    Three                 Nine
                                    Months                Months
                                    Ended                 Ended
                                   Sept. 30,             Sept. 30,
                                1996     1995         1996      1995
Income:
 Rental income               $21,442   $9,396      $54,643   $26,697
 Other income                    441       15          996       141
                              21,883    9,411       55,639    26,838
Expenses:
 Operations,
  maintenance and
  management                   3,485    1,573       9,277     4,235
 Real estate taxes             4,375    2,375      12,063     6,380
 Mortgage and other
  interest                     4,106      843       9,660     3,826
 Administrative and
  general                        944      412       2,387     1,154
 Corporate office
  relocation                     409       --         409        --
 Write-off of deferred
  financing and
  acquisition costs               --       --         344        --
Depreciation and
  amortization                 3,597    1,851       9,573     5,413
                              16,916    7,054      43,713    21,008

Income before gain on sale
 of property                   4,967    2,357      11,926     5,830
Gain on sale of property          --       --       9,379        --
Income before allocation to
 minority interest             4,967    2,357      21,305     5,830
Income allocated to minority
 interest                        (82)      --        (193)       --
Net income                    $4,885   $2,357     $21,112    $5,830
Weighted average shares
 outstanding              18,667,241 11,087,721 16,629,648 9,404,449
Net income per share           $0.26    $0.21       $1.27     $0.62

Funds from operations:

Net income                    $4,885   $2,357     $21,112    $5,830
Net gain on sale of property      --       --      (9,379)       --
Depreciation and amortization of
 real estate assets, tenant
 improvements and leasing
 commissions                   3,391    1,724       8,996     5,031
Funds from operations         $8,276   $4,081     $20,729   $10,861
Write off of deferred
 financing costs                  --       --         251        --
Amortization of financing &
 non-real estate related
 costs                           206      127         577       382

Funds from operations, old
 definition                   $8,482   $4,208     $21,557   $11,243

Per share data:
 Funds from operations         $0.44    $0.37       $1.25     $1.15
 Funds from operations, old
  definition                   $0.45    $0.38       $1.30     $1.20


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                     Bradley Real Estate Inc.
                         Balance Sheets
          (Dollars in thousands, except share data)
                          (unaudited)

                                      Sept. 30,   Dec. 31,
                                        1996        1995

     Assets
Real estate investments, at cost      $477,355    $189,405
Accumulated depreciation
 and amortization                      (27,777)    (27,591)
Net real estate investments            449,578     161,814

Real estate investments held for sale,
 net of accumulated depreciation and
 amortization of $7,213                 10,264          --

Cash and cash equivalents                2,031         697
Rents and other receivables, net of
 allowances for doubtful accounts of
 $1,322 and $711, respectively           9,144       8,671
Unamortized buyout of contract, net      3,478       4,372
Deferred charges, net and other assets  11,466       4,991
                                      $485,961    $180,545

     Liabilities and Stockholders' Equity

Mortgage loans                        $125,517     $24,794
Line of credit                          94,500      14,600
Accounts payable, accrued expenses
 and other liabilities                  17,530       6,053
Total liabilities                      237,547      45,447

Minority interest                        4,328          --

Stockholders' equity:
  Shares of common stock, par value
    $.01 per share: authorized
    80,000,000 shares; issued and
    outstanding, 18,673,084 at Sept.
    30, 1996 and 11,230,313
    at Dec. 31, 1995                       187         112
Additional paid-in capital             252,232     148,407
Distributions in excess of
 accumulated earnings                   (8,333)    (13,421)
Total stockholders' equity             244,086     135,098
                                      $485,961    $180,545

CONTACT: Bradley Real Estate

Thomas P. D'Arcy, 847/272-9800

or

The Financial Relations Board

Jenifer Estabrook, 312/640-6787