Kimco Realty merges with West Coast firm.

Kimco Realty Corporation and Pan Pacific Retail Properties, Inc. today announced that the two companies have entered into a definitive merger agreement. Under the terms of the agreement, Kimco will acquire all of the outstanding shares of Pan Pacific for a total merger consideration of $70.00 per share in cash. Kimco may elect to issue up to $10 per share of the total merger consideration in the form of Kimco common stock to be based upon the 10- day average closing price of Kimco shares two trading days prior to the Pan Pacific stockholders' meeting to approve the transaction. The election to issue Kimco common stock may be made up to 15 days prior to the Pan Pacific stockholders' meeting and may be revoked by Kimco at any time if the revocation would not delay the stockholders' meeting for more than 10 business days.

The transaction has a total value of approximately $4.0 billion, including Pan Pacific's outstanding debt totaling approximately $1.1 billion and approximately $2.9 billion in equity value. Kimco has received financing commitments totaling up to $3.0 billion, which it may use to fund all or a portion of the total merger consideration. Pan Pacific's portfolio totals 138 properties, encompassing approximately 22.6 million square feet. Kimco expects to target a substantial number of the properties for its strategic co-investment programs. These programs have produced solid investment returns and growth while further expanding Kimco's investment and property management business.

"We feel very good about the quality and long term prospects for the neighborhood shopping centers in Pan Pacific's portfolio," said Kimco's Chairman and Chief Executive Officer, Milton Cooper. "This merger fits well with our strategy of owning the highest quality shopping center portfolio, growing our management business and generating solid investment returns for our partners and shareholders while conserving our own equity capital," he added.

Stuart Tanz, President and Chief Executive Officer of Pan Pacific stated "We believe that this offer by the nation's largest publicly-traded owner of shopping centers is in the best interest of our stakeholders and represents an attractive price that fairly reflects the value of Pan Pacific." The merger has been unanimously approved by both companies' board of directors. The transaction is expected to close during the fourth quarter of 2006. The merger is subject to customary closing conditions, including approval by the Pan Pacific stockholders.

Latham & Watkins acted as legal counsel for Pan Pacific. Houlihan Lokey Howard & Zukin served as a fairness opinion provider to Pan Pacific. Wachtell, Lipton, Rosen & Katz and Greenburg Traurig acted as legal counsel for Kimco.

Venable LLP acted as Maryland counsel to the transaction. J.P. Morgan and Merrill Lynch have agreed to provide the aforementioned financing commitment.

Kimco, a publicly-traded real estate investment trust, has specialized in shopping center acquisitions, development and management for over 45 years, and owns and operates the nation's largest portfolio of neighborhood and community shopping centers with interests in 1,117 properties comprising approximately 143.2 million s/f of leasable space located throughout 45 states, Canada, Mexico and Puerto Rico.

Pan Pacific Retail Properties, Inc. is an equity real estate investment trust (REIT) traded on the New York Stock Exchange under the symbol PNP.

The Company is the largest neighborhood shopping center REIT focused exclusively on the West Coast. Pan Pacific's portfolio currently totals 138 properties, encompassing approximately 22.6 million square feet. The portfolio is diversified across the Western United States.