Feldman Mall Properties, Inc. Announces Acquisition of Stratford Square Mall, Bloomingdale, Illinois

Company to Host Conference Call to Discuss Acquisition Wednesday, January 5th, at 1pm EST

GREAT NECK, N.Y.--(BUSINESS WIRE)--Jan. 4, 2005--Feldman Mall Properties, Inc. (NYSE: FMP), a real estate investment trust focused on the renovation and repositioning of retail shopping malls, today announced the acquisition of Stratford Square Mall in Bloomingdale, Illinois. The property was purchased on an all-cash basis for $93.1 million.

Located in the rapidly growing and affluent DuPage County, a northwestern suburb of Chicago, the 1.3 million square foot mall has an overall occupancy of 90.4% with a shop tenant occupancy of 68.7% (excluding temporary tenants). The mall boasts 6 anchor tenants including Kohl's, Sears, Carson Pirie Scott (a unit of the Saks Department Store Group), Marshall Fields, JCPenney and Burlington Coat Factory.

Average mall shop sales for 2003 were approximately $275 per square foot, an amount that Feldman intends to increase through capital expenditures focused on improving shopper traffic and tenant sales. Plans to boost shopper traffic and tenant sales include sharply upgrading and expanding the existing 4 screen movie theater into a state of the art, multi-screen Cineplex with stadium seating, adding one or more junior anchor tenants, multiple sit-down restaurants, outdoor cafes and streetscape retail, new property signage and other general capital improvements.

Larry Feldman, Chairman and Chief Executive Officer of Feldman Mall Properties, made the following announcement: "We believe this acquisition is a prime opportunity for our experienced management team to create value for both our shareholders and our tenants. Stratford Square Mall is a regional shopping destination, in close proximity to Chicago, ideally positioned for the area's dense and rapidly growing population. It is a very exciting addition to our growing portfolio."

Scott Jensen, Executive Vice President of Leasing, added "We intend to immediately implement an intensive marketing campaign aimed at obtaining national tenants whose attractiveness and product mix will sharply increase shopper traffic and demand. Additionally we will apply our hands-on management approach to leasing to drive up shop occupancy. The combination of the anticipated physical upgrades and our aggressive leasing and marketing programs will help drive tenant sales throughout the mall, resulting in higher revenues and rental rates."

Financing for the acquisition will be funded with proceeds from the Company's recent IPO and a $75 million, 3-year floating rate mortgage loan, with 2 one-year extensions. The loan will bear interest at LIBOR plus 125 basis points. Following the closing of the loan, the Company intends to enter into debt swap arrangements, which will fix the rate for up to three years. The initial loan to purchase cost will be approximately 80%; however once the intended capital improvements of approximately $20 million are complete, the total leverage is expected to decrease to approximately 65%.

The Company expects an initial yield on its investment of approximately 8%, based upon the anticipated operating income for 2005.
In addition, the Company expects to close shortly on its purchase of Colonie Center, a 1.2 million square foot mall, located in Albany, New York. The terms of such purchase have been more fully described in the Company's prospectus for its initial public offering, which was filed with the SEC on December 15, 2004. Following the closing of Colonie Center, the Company will own 4 regional malls consisting of approximately 4.1 million square feet, including non-owned anchor tenants.

The company will host a conference call Wednesday, January 5, at 1 pm EST to discuss the acquisition of Stratford Square. The conference call can be accessed toll free by dialing 1-800-475-3716 or via the link provided on the Company's homepage (www.feldmanmall.com). A replay of the call will be available through January 14, 2005 by dialing 1-888-203-1112, reference Feldman Mall Properties, pass-code 164157 or via the link provided on the Company's homepage.

About Feldman Mall Properties, Inc.
Feldman Mall Properties, Inc. acquires, renovates and repositions enclosed retail shopping malls. Feldman Mall Properties Inc.'s investment strategy is to opportunistically acquire underperforming malls and transform them into physically attractive and profitable Class A or near Class A malls through comprehensive renovation and re-tenanting efforts aimed at increasing shopper traffic and tenant sales. For more information on Feldman Mall Properties Inc., visit the Company's website at www.feldmanmall.com.

This press release contains various "forward-looking statements" within the meaning of that term in Section 27A of the Securities Act of 1933, as amended, and in Section 21F of the Securities and Exchange Act of 1934, as amended. You can identify forward-looking statements by the use of forward-looking terminology such as "believes," "expects," "may," "will," "would," "could," "should," "seeks," "approximately," "intends," "plans," "projects," "estimates" or "anticipates" or the negative of these words and phrases or similar words or phrases. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Statements regarding the following subjects may be impacted by a number of risks and uncertainties: the success of our business strategy, including our acquisition, renovation and repositioning plans; our ability to close pending acquisitions and the timing of those acquisitions; our ability to obtain required financing; our understanding of our competition; market trends and our ability to implement our repositioning plans on time and within our budgets; projected capital and renovation expenditures; demand for shop space and the success of our lease-up plans; availability and creditworthiness of current and prospective tenants; and lease rates and terms.

The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. These beliefs, assumptions and expectations are subject to risks and uncertainties and can change as a result of many possible events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements. You should carefully consider these risks before you make an investment decision with respect to our common stock.


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