Four of the Kmart stores paid percentage rent in addition totheir minimum rent during 2003, Agree said as part of a recent SECfiling.

In May 2003, Kmart emerged from the bankruptcy proceeding it hadinitiated in January 2002. As part of the reorganization, Kmartclosed approximately 600 of its stores, including one located inAgree's shopping center in Lakeland, FL. Kmart vacated that storein April 2003. Agree says in its annual report that Kmart's annualrent on this property was approximately $480,000 and their annualcontribution under the lease for real estate taxes, insurance andcommon area maintenance was approximately $110,000.

Agree says some of the tenants in the Lakeland shopping centerhave co-tenancy clauses in their leases that provide either formodification of their rent to be based on gross sales or an optionto terminate their lease when the Kmart store closed. However, asof Feb. 29, none of those tenants indicated they will exercisetheir option to terminate their leases.