Winthrop Realty Liquidating Trust - FORM 10-Q

Attached files

file	filename
EXCEL - IDEA: XBRL DOCUMENT - Winthrop Realty Liquidating Trust	Financial_Report.xls
EX-31.1 - EXHIBIT 31.1 - Winthrop Realty Liquidating Trust	c24234exv31w1.htm
EX-31.2 - EXHIBIT 31.2 - Winthrop Realty Liquidating Trust	c24234exv31w2.htm
EX-32.2 - EXHIBIT 32.2 - Winthrop Realty Liquidating Trust	c24234exv32w2.htm
EX-32.1 - EXHIBIT 32.1 - Winthrop Realty Liquidating Trust	c24234exv32w1.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended: September 30, 2011


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-6249

WINTHROP REALTY TRUST

(Exact name of Registrant as specified in its certificate of incorporation)


Ohio		34-6513657

(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)

7 Bulfinch Place, Suite 500, Boston, Massachusetts		02114

(Address of principal executive offices)		(Zip Code)

(617) 570-4614
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer o		Accelerated filer þ		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes o No þ

As of November 1, 2011 there were 33,041,034 Common Shares of Beneficial Interest outstanding.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

INDEX


	Page
Part I. Financial Information

Item 1. Financial Statements (Unaudited):

Consolidated Balance Sheets as of September 30, 2011 and December 31, 2010		3

Consolidated Statements of Operations and Comprehensive Income For the Three and Nine Months Ended September 30, 2011 and September 30, 2010		4

Consolidated Statements of Equity for the Nine Months Ended September 30, 2011 and September 30, 2010		5

Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2011 and September 30, 2010		6

Notes to Consolidated Financial Statements		8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		28

Item 3. Quantitative and Qualitative Disclosure about Market Risk		45

Item 4. Controls and Procedures		45

Part II. Other Information

Item 6. Exhibits		46

Signatures		47

Exhibit Index		48

Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT


Item 1.		Financial Information

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)


	September 30,			December 31,
	2011			2010
	(unaudited)			(unaudited)
ASSETS
Investments in real estate, at cost
Land	$	36,495		$	37,142
Buildings and improvements		273,118			271,357

		309,613			308,499
Less: accumulated depreciation		(42,262	)		(36,232	)

Investments in real estate, net		267,351			272,267

Cash and cash equivalents		66,777			45,257
Restricted cash held in escrows		4,916			8,593
Loans receivable, net		115,889			110,395
Accounts receivable, net of allowances of $594 and $262, respectively		12,380			12,402
Securities carried at fair value		6,652			33,032
Loan securities carried at fair value		5,343			11,981
Preferred equity investments		13,402			4,010
Equity investments		106,156			81,937
Lease intangibles, net		25,394			26,821
Deferred financing costs, net		1,184			1,158
Assets held for sale		1,491			2,275

TOTAL ASSETS	$	626,935		$	610,128


LIABILITIES
Mortgage loans payable	$	185,622		$	230,443
Series B-1 Cumulative Convertible Redeemable Preferred Shares, $25 per share liquidation preference; 852,000 shares authorized and outstanding at September 30, 2011 and December 31, 2010		21,300			21,300
Secured financing		15,150			—
Revolving line of credit		—			25,450
Accounts payable and accrued liabilities		12,287			12,557
Dividends payable		5,395			4,431
Deferred income		1,550			150
Below market lease intangibles, net		2,137			2,696
Liabilites of held for sale assets		597			33

TOTAL LIABILITIES		244,038			297,060


COMMITMENTS AND CONTINGENCIES

NON-CONTROLLING REDEEMABLE PREFERRED INTEREST
Series C Cumulative Convertible Redeemable Preferred Shares, $25 per share liquidation preference, 144,000 shares authorized and outstanding at September 30, 2011 and December 31, 2010		3,221			3,221

Total non-controlling redeemable preferred interest		3,221			3,221


EQUITY
Winthrop Realty Trust Shareholders’ Equity:
Common Shares, $1 par, unlimited shares authorized; 32,958,778 and 27,030,186 issued and outstanding at September 30, 2011 and December 31, 2010, respectively		32,959			27,030
Additional paid-in capital		627,107			569,586
Accumulated distributions in excess of net income		(295,290	)		(300,782	)
Accumulated other comprehensive loss		—			(63	)

Total Winthrop Realty Trust Shareholders’ Equity		364,776			295,771
Non-controlling interests		14,900			14,076

Total Equity		379,676			309,847

TOTAL LIABILITIES AND EQUITY	$	626,935		$	610,128

See Notes to Consolidated Financial Statements.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(in thousands, except per share data)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2011			2010			2011			2010
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenue
Rents and reimbursements	$	10,840		$	9,243		$	33,061		$	27,999
Interest, dividends and discount accretion		5,503			4,948			20,269			11,747

		16,343			14,191			53,330			39,746

Expenses
Property operating		3,536			1,812			11,567			5,579
Real estate taxes		1,107			952			3,450			2,012
Depreciation and amortization		3,185			2,378			9,978			7,050
Interest		3,546			3,809			12,123			11,126
Impairment loss on investment in real estate		3,000			—			3,000			—
General and administrative		2,893			2,300			8,175			6,123
State and local taxes		12			7			88			107

		17,279			11,258			48,381			31,997

Other income (loss)
Earnings from preferred equity investments		257			85			498			253
Equity in income (loss) of equity investments		2,820			(409	)		4,340			(1,328	)
Gain on sale of equity investments		207			—			207			—
Realized gain (loss) on sale of securities carried at fair value		—			(185	)		131			588
Unrealized gain (loss) on securities carried at fair value		(961	)		2,490			(798	)		4,280
Gain on extinguishment of debt		8,514			—			8,514			—
Unrealized gain (loss) on loan securities carried at fair value		(75	)		581			2,772			3,593
Interest and other income		472			17			1,008			94

		11,234			2,579			16,672			7,480


Income from continuing operations		10,298			5,512			21,621			15,229

Discontinued operations
Income (loss) from discontinued operations		(134	)		(1,529	)		2			(2,045	)

Consolidated net income		10,164			3,983			21,623			13,184
Income attributable to non-controlling interest		(318	)		(175	)		(851	)		(595	)

Net income attributable to Winthrop Realty Trust		9,846			3,808			20,772			12,589
Income attributable to non-controlling redeemable preferred interest		(59	)		(59	)		(176	)		(230	)

Net income attributable to Common Shares	$	9,787		$	3,749		$	20,596		$	12,359


Comprehensive income
Consolidated net income	$	10,164		$	3,983		$	21,623		$	13,184
Change in unrealized gain on available for sale securities		—			—			—			2
Change in unrealized gain on interest rate derivative		—			(20	)		63			(8	)

Comprehensive income	$	10,164		$	3,963		$	21,686		$	13,178


Per Common Share data — Basic
Income from continuing operations	$	0.30		$	0.25		$	0.67		$	0.68
Income (loss) from discontinued operations		0.00			(0.07	)		0.00			(0.09	)

Net income attributable to Winthrop Realty Trust	$	0.30		$	0.18		$	0.67		$	0.59


Per Common Share data — Diluted
Income from continuing operations	$	0.30		$	0.25		$	0.67		$	0.68
Income (loss) from discontinued operations		0.00			(0.07	)		0.00			(0.09	)

Net income attributable to Winthrop Realty Trust	$	0.30		$	0.18		$	0.67		$	0.59


Basic Weighted-Average Common Shares		32,949			21,412			30,889			21,064

Diluted Weighted-Average Common Shares		32,949			21,414			30,889			21,499

See Notes to Consolidated Financial Statements

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

CONSOLIDATED STATEMENTS OF EQUITY

(unaudited, in thousands, except per share data)


							Accumulated			Accumulated
	Common Shares of				Additional		Distributions			Other			Non-
	Beneficial Interest				Paid-In		in Excess of			Comprehensive			Controlling
	Shares		Amount		Capital		Net Income			Income			Interests			Total

Balance, December 31, 2010		27,030	$	27,030	$	569,586	$	(300,782	)	$	(63	)	$	14,076		$	309,847

Net income attributable to Winthrop Realty Trust		—		—		—		20,772			—			—			20,772
Net income attributable to non-controlling interests		—		—		—		—			—			851			851
Distributions to non-controlling interests		—		—		—		—			—			(327	)		(327	)
Contributions from non-controlling interests		—		—		—		—			—			300			300
Dividends paid or accrued on Common Shares of Beneficial Interest ($0.4875 per share)		—		—		—		(15,104	)		—			—			(15,104	)
Dividends paid or accrued on Series C Preferred Shares ($1.21875 per share)		—		—		—		(176	)		—			—			(176	)
Change in unrealized gain on interest rate derivatives		—		—		—		—			63			—			63
Net proceeds from Common Shares offering		5,750		5,750		55,636		—			—			—			61,386
Shares issued pursuant to dividend reinvestment plan		179		179		1,885		—			—			—			2,064

Balance, September 30, 2011		32,959	$	32,959	$	627,107	$	(295,290	)	$	—		$	14,900		$	379,676


Balance, December 31, 2009		20,375	$	20,375	$	498,118	$	(301,317	)	$	(87	)	$	12,111		$	229,200

Net income attributable to Winthrop Realty Trust		—		—		—		12,589			—			—			12,589
Net income attributable to non-controlling interests		—		—		—		—			—			595			595
Distributions to non-controlling interests		—		—		—		—			—			(240	)		(240	)
Contributions from non-controlling interests		—		—		—		—			—			1,037			1,037
Dividends paid or accrued on Common Shares of Beneficial Interest ($0.4875 per share)		—		—		—		(11,261	)		—			—			(11,261	)
Dividends paid or accrued on Series C Preferred Shares ($1.21875 per share)		—		—		—		(230	)		—			—			(230	)
Change in unrealized gain on available for sale securities		—		—		—		—			2			—			2
Change in unrealized gain on interest rate derivatives		—		—		—		—			(8	)		—			(8	)
Conversion of Series C Preferred Shares to Common Shares		714		714		8,234		—			—			—			8,948
Shares issued pursuant to dividend reinvestment plan		143		143		1,652		—			—			—			1,795
Net proceeds from Common Share Offering		5,750		5,750		61,117		—			—			—			66,867


Balance, September 30, 2010		26,982	$	26,982	$	569,121	$	(300,219	)	$	(93	)	$	13,503		$	309,294

See Notes to Consolidated Financial Statements

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	Nine Months Ended
	September 30,
	2011			2010
	(unaudited)			(unaudited)
Cash flows from operating activities
Net income	$	21,623		$	13,184
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including amortization of deferred financing costs)		6,891			5,026
Amortization of lease intangibles		3,316			2,064
Straight-lining of rental income		(937	)		378
Loan discount accretion		(11,167	)		(6,087	)
Discount accretion received in cash		13,290			—
Earnings of preferred equity investments		(498	)		(253	)
Distributions of income from preferred equity investments		336			293
(Income) losses of equity investments		(4,340	)		1,328
Distributions of income from equity investments		8,081			3,793
Restricted cash held in escrows		750			1,207
Gain on sale of securities carried at fair value		(131	)		(588	)
Unrealized loss (gain) on securities carried at fair value		798			(4,280	)
Unrealized gain on loan securities carried at fair value		(2,772	)		(3,593	)
Tenant leasing costs		(2,448	)		(2,477	)
Impairment loss on assets held for sale		—			2,720
Impairment loss on investments in real estate		3,000			—
Gain on extinguishment of debt		(8,514	)		—
Loss on sale of real estate held for sale		58			—
Bad debt expense (recovery)		332			(612	)
Net change in interest receivable		19			(236	)
Net change in accounts receivable		688			1,844
Net change in accounts payable and accrued liabilities		1,284			771

Net cash provided by operating activities		29,659			14,482


Cash flows from investing activities
Investments in real estate		(5,788	)		(3,003	)
Proceeds from sale of real estate held for sale		2,151			—
Investment in equity investments		(67,901	)		(24,605	)
Investment in preferred equity investments		(7,208	)		—
Proceeds from sale of equity investments		6,000			—
Return of capital distribution from equity investments		26,432			—
Purchase of securities carried at fair value		(568	)		(3,056	)
Proceeds from sale of securities carried at fair value		26,281			29,565
Proceeds from sale of available for sale securities		—			205
Proceeds from payoff of loan securities		8,748			—
Restricted cash held in escrows		2,828			(2,073	)
Issuance and acquisition of loans receivable		(44,512	)		(83,572	)
Proceeds from sale of loans receivable		—			12,876
Collection of loans receivable		43,410			14,900

Net cash used in investing activities		(10,127	)		(58,763	)

(Continued on next page)

See Notes to Consolidated Financial Statements

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, continued)


	Nine Months Ended
	September 30,
	2011			2010
	(unaudited)			(unaudited)
Cash flows from financing activities
Proceeds from mortgage loans payable		11,000			—
Principal payments of mortgage loans payable		(47,307	)		(4,994	)
Proceeds from revolving line of credit		27,324			25,450
Payment of revolving line of credit		(52,774	)		—
Proceeds from note payable		15,150			—
Restricted cash held in escrows		99			1,482
Deferred financing costs		(611	)		(165	)
Contribution from non-controlling interest		300			1,037
Distribution to non-controlling interest		(327	)		(240	)
Issuance of Common Shares through offering		61,386			66,867
Issuance of Common Shares under Dividend Reinvestment Plan		2,064			1,795
Dividend paid on Common Shares		(14,140	)		(10,187	)
Dividend paid on Series C Preferred Shares		(176	)		(338	)

Net cash provided by financing activities		1,988			80,707


Net increase in cash and cash equivalents		21,520			36,426
Cash and cash equivalents at beginning of period		45,257			66,493

Cash and cash equivalents at end of period	$	66,777		$	102,919


Supplemental Disclosure of Cash Flow Information
Interest paid	$	12,588		$	10,772

Taxes paid	$	52		$	98


Supplemental Disclosure on Non-Cash Investing and Financing Activities
Dividends accrued on Common Shares	$	5,356		$	4,385

Dividends accrued on Series C Preferred Shares	$	39		$	39

Capital expenditures accrued	$	684		$	1,643

Transfer from loan securities	$	662		$	—

Loan receivable	$	(6,534	)	$	(10,220	)

Transfer bridge loan to preferred equity investments	$	(2,022	)	$	—

Transfer Marc Realty equity investments to loans receivable	$	12,544		$	—

Transfer Sealy loan receivable to equity investment	$	4,650		$	—

Transfer of loan assets to investments in real estate	$	—		$	8,188

Transfer of loan assets to invetments in lease intangibles	$	—		$	2,032

See Notes to Consolidated Financial Statements

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

Organization

Winthrop Realty Trust (“Winthrop”), a real estate investment trust (“REIT”) under section 856-860 of the Internal Revenue Code is an unincorporated association in the form of a business trust organized in Ohio under a Declaration of Trust dated August 1, 1961, as amended and restated on May 21, 2009, which has as its stated principal business activity the ownership and management of, and lending to, real estate and related investments.

Winthrop conducts its business through WRT Realty L.P., a Delaware limited partnership (the “Operating Partnership”). Winthrop is the sole general partner of, and owns directly and indirectly, 100% of the limited partnership interest in the Operating Partnership. All references to the “Trust” refer to Winthrop and its consolidated subsidiaries, including the Operating Partnership.

The Trust is engaged in the business of owning real property and real estate related assets which it categorizes into three specific areas: (i) ownership of investment properties (“operating properties”); (ii) origination and acquisition of loans and debt securities collateralized directly or indirectly by commercial and multi-family real property, including collateral mortgage-backed securities (collectively “loan assets”); and (iii) equity and debt interests in other real estate investment trusts (“REIT securities”).

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial statements and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements, although management believes that the disclosures presented herein are adequate to make the accompanying unaudited consolidated interim financial statements not misleading. The accompanying unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated annual financial statements and the notes thereto included in the Trust’s Annual Report on Form 10-K for the year ended December 31, 2010 filed with the SEC. In the opinion of management, all adjustments considered necessary for fair statements have been included, and all such adjustments are of a normal recurring nature. The results of operations for the nine months ended September 30, 2011 are not necessarily indicative of the operating results for the full year.

The accompanying unaudited consolidated financial statements represent the consolidated results of Winthrop, its wholly-owned taxable REIT subsidiary, WRT TRS Management Corp., and the Operating Partnership. All majority-owned subsidiaries and affiliates over which the Trust has financial and operating control and variable interest entities (“VIE’s”) in which the Trust has determined it is the primary beneficiary are included in the consolidated financial statements. All significant intercompany balances and transactions have been eliminated in consolidation. The Trust accounts for all other unconsolidated joint ventures using the equity method of accounting. Accordingly, the Trust’s share of the earnings of these joint ventures and companies is included in consolidated net income.

Reclassifications

Certain prior year balances have been reclassified in order to conform to the current year presentation. Discontinued operations for the three and nine month periods ended September 30, 2011 include the Trust’s properties in Lafayette, Louisiana; Knoxville, Tennessee; and St. Louis, Missouri. Discontinued operations for the three and nine month periods ended September 30, 2010 also include the Trust’s properties in Athens, Georgia and Sherman, Texas which were disposed of in 2010.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

Investments in Real Estate

Real estate assets are stated at historical cost. Expenditures for repairs and maintenance are expensed as incurred. Significant renovations that extend the useful life of the properties are capitalized. Depreciation for financial reporting purposes is computed using the straight-line method.

Upon the acquisition of real estate, the Trust assesses the fair value of acquired assets (including land, buildings and improvements, and identified intangibles) and acquired liabilities. The Trust allocates purchase price based on these assessments.

Real estate investments and purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. When evaluating the carrying amount, the Trust considers the future undiscounted cash flows expected to result from the use and the eventual disposition of the property. Undiscounted cash flows are used to assess recoverability and when warranted, discounted cash flows are used to assess fair value. Cash flow assumptions include market rental rates, lease terms, lease up costs and operating expenses during the hold period as well as proceeds expected to result from the disposition of the property.

Earnings Per Share

The Trust determines basic earnings per share on the weighted average number of Common Shares of Beneficial Interest (“Common Shares”) outstanding during the period and reflects the impact of participating securities. The holders of the Trust’s Series B-1 Cumulative Convertible Redeemable Preferred Shares (“Series B-1 Preferred Shares”) and the Series C Cumulative Convertible Redeemable Preferred Shares (“Series C Preferred Shares”) are entitled to receive cumulative preferential dividends on a quarterly basis equal to the greater of (i) $0.40625 per share quarterly (6.5% of the liquidation preference on an annualized basis) or (ii) cash dividends payable on the number of Common Shares into which the Series B-1 Preferred Shares and Series C Preferred Shares (assuming for this purpose that the conversion price of the Series C Preferred Shares equals the conversion price of the Series B-1 Preferred Shares) are convertible. The Trust computes diluted earnings per share based on the weighted average number of Common Shares outstanding combined with the incremental weighted average effect from all outstanding potentially dilutive instruments.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

The Trust has calculated earnings per share in accordance with relevant accounting guidance for participating securities and the two class method. The reconciliation of earnings attributable to Common Shares outstanding for the basic and diluted earnings per share calculation is as follows (in thousands, except per share data):


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2011			2010			2011			2010
Basic
Income from continuing operations	$	10,298		$	5,512		$	21,621		$	15,229
Income attributable to non-controlling interest		(318	)		(175	)		(851	)		(595	)
Preferred dividend of Series C Preferred Shares		(59	)		(59	)		(176	)		(230	)
Allocations of income to Series C Preferred Shares		(18	)		—			—			—

Income from continuing operations applicable to Common Shares		9,903			5,278			20,594			14,404
Income (loss) from discontinued operations		(134	)		(1,529	)		2			(2,045	)

Net income applicable to Common Shares for earnings per share purposes	$	9,769		$	3,749		$	20,596		$	12,359


Basic weighted-average Common Shares		32,949			21,412			30,889			21,064


Income from continuing operations	$	0.30		$	0.25		$	0.67		$	0.68
Income (loss) from discontinued operations		—			(0.07	)		—			(0.09	)

Net income per Common Share	$	0.30		$	0.18		$	0.67		$	0.59


Diluted
Income from continuing operations	$	10,298		$	5,512		$	21,621		$	15,229
Income attributable to non-controlling interest		(318	)		(175	)		(851	)		(595	)
Preferred dividend of Series C Preferred Shares		(59	)		(59	)		(176	)		—
Allocation of income to Series C Preferred Shares		(18	)		—			—			—

Income from continuing operations applicable to Common Shares		9,903			5,278			20,594			14,634
Income (loss) from discontinued operations		(134	)		(1,529	)		2			(2,045	)

Net income applicable to Common Shares for earnings per share purposes	$	9,769		$	3,749		$	20,596		$	12,589


Basic weighted-average Common Shares		32,949			21,412			30,889			21,064
Series B-1 Preferred Shares (1)		—			—			—			—
Series C Preferred Shares (2)		—			—			—			433
Stock options (3)		—			2			—			2

Diluted weighted-average Common Shares		32,949			21,414			30,889			21,499


Income from continuing operations	$	0.30		$	0.25		$	0.67		$	0.68
Income (loss) from discontinued operations		—			(0.07	)		—			(0.09	)

Net income per Common Share	$	0.30		$	0.18		$	0.67		$	0.59


(1)		The Series B-1 Preferred Shares were anti-dilutive for the three and nine months ended September 30, 2011 and 2010 and are not included in the weighted-average shares outstanding for the calculation of diluted earnings per Common Share.

(2)		The Series C Preferred Shares were anti-dilutive for the three and nine months ended September 30, 2011 and the three months ended September 30, 2010 and are not included in the weighted-average shares outstanding for the calculation of diluted earnings per Common Share. The Series C Preferred Shares were dilutive for the nine months ended September 30, 2010.

(3)		The Trust’s outstanding stock options were anti-dilutive for the three and nine months ended September 30, 2011 and are not included in the weighted average shares outstanding for the calculation of diluted earnings per Common Share. The stock options were dilutive for the three and nine months ended September 30, 2010.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

Fair Value Measurements

Cash and cash equivalents, restricted cash in escrows, derivative financial instruments, and certain securities are reported at fair value. The accounting standards establish a framework for measuring fair value as well as disclosures about fair value measurements. They emphasize that fair value is a market based measurement, not an entity-specific measurement. Therefore a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, the standards establish a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Recurring Measurements

The table below presents the Trust’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2011, according to the level in the fair value hierarchy within which those measurements fall (in thousands):


	Quoted Prices in
	Active Markets		Significant Other		Significant
	for Identical Assets		Observable		Unobservable
	and Liabilities		Inputs		Inputs
Recurring Basis	(Level 1)		(Level 2)		(Level 3)		Total
Assets
Securities carried at fair value	$	6,652	$	—	$	—	$	6,652
Loan securities carried at fair value		—		—		5,343		5,343

	$	6,652	$	—	$	5,343	$	11,995

The table below presents the Trust’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2010, according to the level in the fair value hierarchy within which those measurements fall (in thousands):


	Quoted Prices in
	Active Markets		Significant Other		Significant
	for Identical Assets		Observable		Unobservable
	and Liabilities		Inputs		Inputs
Recurring Basis	(Level 1)		(Level 2)		(Level 3)		Total
Assets
Securities carried at fair value	$	33,032	$	—	$	—	$	33,032
Loan securities carried at fair value		—		—		11,981		11,981

	$	33,032	$	—	$	11,981	$	45,013

Liabilities
Derivative liabilities	$	—	$	63	$	—	$	63

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

The table below includes a roll forward of the balance sheet amounts from January 1, 2011 to September 30, 2011, including the change in fair value, for financial instruments classified by the Trust within Level 3 of the valuation hierarchy. When a determination is made to classify a financial instrument within Level 3 of the valuation hierarchy, the determination is based upon the significance of the unobservable factors to the overall fair value measurement.


	Loan Securities
	Carried at Fair
Nine months Ended September 30, 2011	Value
(in thousands)
Fair value, January 1, 2011	$	11,981
Sales		(662	)
Payoff at par		(8,748	)
Unrealized gain, net		2,772

Fair value, September 30, 2011	$	5,343

Non-Recurring Measurements

Equity Investments

Equity investments are assessed for other-than-temporary impairment. The fair value of equity investments is determined using an income capitalization approach considering prevailing market capitalization rates. The Trust reviews each investment based on the highest and best use of the investment and market participation assumptions. The significant assumptions used in this analysis include the discount rate and terminal capitalization rate used in the income capitalization valuation. The Trust has determined that the significant inputs used to value its Sealy equity investments fall within Level 3. The Trust recognized other—than—temporary impairment losses of $0 and $3,800,000 on these investments during the three and nine months ended September 30, 2011, respectively.

Investments in Real Estate and Assets Held For Sale

The Trust assesses the assets in its portfolio for recoverability based upon its estimate of undiscounted future cash flows expected to result from the use and disposition of the assets. For those assets deemed not to be fully recoverable, the Trust determines the fair value of those assets using an income capitalization approach based on assumptions it believes a market participant would utilize. The Trust records impairment charges equal to the difference between its carrying value and the estimated fair value of the asset. In July 2011 the Trust satisfied its $23,773,000 first mortgage loan on its wholly owned Lisle, Illinois properties for a discounted payoff of $14,500,000. Subsequent to the discounted payoff and as a result of continued declines in occupancy at these properties, the Trust re-evaluated its business plan and holding periods for these properties. The Trust determined that as result of the shorter holding period and higher lease up costs, the carrying value of the 701 Arboretum property was no longer fully recoverable. Significant inputs used to value this investment fall within Level 3. During the three and nine months ended September 30, 2011 the Trust recognized an impairment charge of $3,000,000 on its investments in real estate.

The table below presents as of September 30, 2011 the Trust’s equity method investments and investments in real estate measured at fair value according to the level in the fair value hierarchy within which those measurements fall (in thousands):


	Quoted Prices in
	Active Markets for		Significant Other		Significant
	Identical Assets and		Observable Inputs		Unobservable
Non-Recurring Basis	Liabilities (Level 1)		(Level 2)		Inputs (Level 3)		Total

Equity investments	$	—	$	—	$	12,583	$	12,583
Investments in real estate		—		—		5,049		5,049

	$	—	$	—	$	17,632	$	17,632

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

Fair Value Option

The current accounting guidance for fair value measurement provides a fair value option election that allows companies to irrevocably elect fair value as the measurement for certain financial assets and liabilities. Changes in fair value for assets and liabilities for which the election is made are recognized in earnings on a quarterly basis based on the then market price regardless of whether such assets or liabilities have been disposed of at such time. The fair value option guidance permits the fair value option election to be made on an instrument by instrument basis when it is initially recorded or upon an event that gives rise to a new basis of accounting for that asset or liability. The Trust elected the fair value option for all loan securities and REIT securities.

For the three months ended September 30, 2011, the Trust recognized net unrealized losses of $1,036,000 and for the nine months ended September 30, 2011 net unrealized gains of $1,974,000. For the three and nine months ended September 30, 2010, the Trust recognized net unrealized gains of $3,071,000 and $7,873,000, respectively. The change in fair value of the securities is recorded as an unrealized gain or loss in the Trust’s statement of operations. Income related to securities carried at fair value is recorded as interest and dividend income.

The following table presents as of September 30, 2011 and December 31, 2010 the Trust’s financial assets for which the fair value option was elected (in thousands):


Financial Instruments at Fair Value	September 30, 2011		December 31, 2010

Assets
Securities carried at fair value:
REIT Preferred shares	$	4,222	$	28,547
REIT Common shares		2,430		4,485

Loan securities carried at fair value		5,343		11,981

	$	11,995	$	45,013

The table below presents as of September 30, 2011 the difference between fair values and the aggregate contractual amounts due for which the fair value option has been elected (in thousands):


	Fair Value at		Amount Due
	September 30, 2011		Upon Maturity		Difference

Assets

Loan securities carried at fair value	$	5,343	$	7,494	$	2,151

	$	5,343	$	7,494	$	2,151

Financing, Acquisition and Disposition Activities

Litigation Settlement

The CBS Corporation (“CBS”) lease term with respect to the Trust’s property located in Churchill, Pennsylvania expired on December 31, 2010. CBS elected not to renew the lease and, in anticipation of this lease termination and surrender of the property, a review of the condition of the property was performed by the Trust. In the Trust’s view, the property was in need of substantial repairs and refurbishing in order for the tenant to comply with the surrender conditions. The Trust advised CBS of these issues and no resolution was reached with CBS after numerous discussions. Accordingly, in May 2010 the Trust brought an action in Pennsylvania State Court, Alleghany County against CBS seeking damages for, among other things, CBS’ failure to restore the property to the condition necessary to comply with its surrender obligations.

On September 30, 2011 the Trust entered into a settlement agreement, subject to certain conditions, with respect to the pending lawsuit which provides for the dismissal of the lawsuit, payment to the Trust of $6,500,000, the conveyance to the Trust of approximately 148 acres of land and the waiver of all ground lease payments by the Trust for 2011. As a result of the conditional terms of the agreement being settled subsequent to September 30, 2011, the Trust anticipates recognition of litigation settlement income during the fourth quarter of 2011.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

The Trust also entered into a new net lease with Westinghouse Electric Company LLC (“Westinghouse”) for approximately 57,000 square feet of space at the Churchill property. The lease has a term of 12 years and requires annual rent of $750,000 per year, increasing annually by 3%. Westinghouse is responsible for all costs associated with the leased space and can terminate the lease at any time after the fifth anniversary by making a termination payment of $4,400,000 which decreases each year thereafter. The lease requires the Trust to make certain improvements and utility upgrades with an anticipated cost of approximately $1,000,000.

Under the terms of the settlement agreement, the Trust has agreed to market for sale both the portion of the property leased to Westinghouse and the remaining portion of the property. As such, the operations of the Churchill property are anticipated to be included in discontinued operations in the Trust’s financial statements commencing with the quarter ended December 31, 2011. Upon completion of the marketing, the Trust has agreed to pay CBS 50% of the sales proceeds received from the sale, or if not sold, 50% of the value as determined by the bids for the property received, in excess of $6,500,000.

The Trust conducted an impairment analysis of the Churchill property at September 30, 2011. Due to the Trust not holding title to the land until October 2011, the Trust has determined that this property should continue to be classified in continuing operations at September 30, 2011. Anticipated undiscounted cash flows, inclusive of the expected settlement payment, indicate that the carrying value is fully recoverable at September 30, 2011. The Trust believes that the conditions of the settlement should be satisfied and this property should qualify for held for sale treatment in the fourth quarter of 2011. Accordingly, the Trust expects to record an impairment change in the fourth quarter equal to the difference between the property’s carrying value and the fair value less costs to sell.

Financing Activities

Sealy Northwest Atlanta Loan - On June 23, 2011 the Trust made a $20,641,000 bridge loan to its Sealy Northwest Atlanta joint venture. The Trust’s bridge loan enabled the joint venture to satisfy its $28,750,000 first mortgage loan at a discounted payoff amount of $20,500,000. On September 29, 2011, the joint venture obtained replacement financing in the amount of $14,000,000 bearing interest at Libor + 5.35% and maturing on September 29, 2015. In connection with the financing, the joint venture purchased an interest rate cap which caps Libor at 1% through October 1, 2013. Net proceeds from the new loan plus additional capital contributions of $4,650,000 from the Trust and of $3,100,000 from Sealy were utilized to pay off the bridge loan due to the Trust.

Loan Satisfaction — On July 13, 2011, the Trust satisfied its $23,773,000 first mortgage loan on its wholly owned Lisle, Illinois properties for a discounted payoff of $14,500,000 plus reserves held by the lender of approximately $736,000. The Trust recognized gain on the extinguishment of debt in the amount of $8,514,000. As part of the restructuring, the Trust re-evaluated its business plan and holding periods for these properties which resulted in the recognition of impairment charges totaling $3,000,000 as discussed in Note 3.

Disposition Activity

Marc Realty — On June 1, 2011 the Trust sold to its partner, Marc Realty, for $18,544,000 its equity interest in three properties in its Marc Realty Portfolio (8 South Michigan, 11 East Adams and 29 East Madison). The purchase price was paid $6,000,000 in cash and $12,544,000 in aggregate secured promissory notes which each bear interest at 8% per annum, require payments of interest only and mature on May 31, 2016. Pursuant to the accounting guidance for sales of real estate, the Trust deferred recognition of the gain of $385,000.

During the quarter ended September 30, 2011, Marc Realty made payments in full satisfaction of its $4,910,000 8 South Michigan loan and $2,265,000 11 East Adams loan. In addition, Marc Realty made $1,369,000 in payments on its 29 East Madison loan. As of September 30, 2011, the 29 East Madison loan had a balance of $4,000,000. The Trust recognized $207,000 in gain related to the full repayment of the two loans.

Acquisitions

Vintage Housing — During the quarter ended September 30, 2011, the Trust invested an additional $7,000,000 in its Vintage Housing venture, which holds interests in multifamily and senior housing properties located primarily in California and the Pacific Northwest. Of this contribution, $4,300,000 was invested for the venture’s acquisition of non-controlling general partner interests in seven of the existing investments. The remaining $2,700,000 contributed was used by the venture for investment in three new properties.

Loan Asset Repayments

Beverly Hills Hilton — On September 15, 2011, the Trust’s B-Note receivable was paid off at par. The Trust received repayment of $10,000,000 on the loan which was originally acquired on December 9, 2009 for $5,250,000.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

Loans Receivable

The Trust’s loans receivable at September 30, 2011 and December 31, 2010 are as follows (in thousands):


				Carrying Amount				Contractual
		Stated		September 30,		December 31,		Maturity
Description	Loan Position	Interest Rate		2011		2010		Date

Beverly Hilton	B-Note	Libor + 1.74%		$	—	$	7,899		—
Westwood (1) (4)	Whole Loan	11.00%			3,646		3,500		10/31/11
Metropolitan Tower	B-Note	Libor + 1.51%			—		10,312		—
Moffett Towers (1)	B-Note	Libor + 6.48%			23,187		21,752		01/31/12
Siete Square	B-Note	10.37%			—		2,488		—
160 Spear	B-Note	9.75%	(2)		9,977		6,674		06/09/12
160 Spear	Mezzanine	15.00%			4,844		3,029		06/09/12
Magazine (1)	Mezzanine	Libor + 1.23%			18,249		—		07/09/12
Legacy Orchard (1)	Corporate Loan	15.00%			9,750		9,750		10/31/14
San Marbeya (1)	Whole Loan	5.88%			26,637		26,966		01/01/15
CDH CDO LLC	Unsecured	12.00%			—		3,498		12/30/15
Rockwell	Mezzanine	12.00%			268		255		05/01/16
Marc 29 East Madison (1)	Mezzanine	8.0%			4,019		—		05/31/16
500-512 7th Ave	B-Note	7.19%			9,970		9,954		07/11/16
180 N. Michigan (1)	Mezzanine	8.50%	(3)		2,807		1,862		12/31/16
Wellington Tower	Mezzanine	6.79%			2,535		2,456		07/11/17

				$	115,889	$	110,395


(1)		The Trust determined that certain loans receivable are variable interests in VIEs primarily based on the fact that the underlying entities do not have sufficient equity at risk to permit the entity to finance its activities without additional subordinated financial support. The Trust does not have the power to direct the activities of the entity that most significantly impact the entity’s economic performance and is not required to consolidate the underlying entity.

(2)		The Trust holds a B note in this loan. Interest on the B note equals the difference between (i) interest on the entire outstanding loan principal balance ($73,796 at September 30, 2011) at a rate of 6.48215% per annum less (ii) interest payable on the outstanding principal balance of the A note ($35,000 at September 30, 2011) at a rate of 9.75% per annum. As a result, the effective yield on the Trust’s $3,410 cash investment is 40.8%.

(3)		Represents tenant improvement and capital expenditure loans collateralized by a subordinate mortgage or the ownership interests in the owner of the applicable property.

(4)		Subsequent to September 30, 2011, the borrower has been granted a 30 day forbearance and expects to repay the loan by November 30, 2011.

The carrying amount of loans receivable includes accrued interest of $518,000 and $558,000 at September 30, 2011 and December 31, 2010, respectively, and cumulative accretion of $7,681,000 and $9,803,000 at September 30, 2011 and December 31, 2010, respectively. The fair value of the Trust’s loans receivable, exclusive of interest receivable was approximately $125,859,000 and $114,477,000 at September 30, 2011 and December 31, 2010, respectively.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

At September 30, 2011, the Trust’s loan receivables have accretable discount yet to be recognized as income totaling $10,633,000.

The weighted average coupon on our loans receivable was 6.14% and the weighted average yield to maturity was 12.61%.

With the exception of the San Marbeya loan receivable, none of the loans receivable are directly financed. On January 14, 2011, the Trust restructured the San Marbeya first mortgage loan to create a $15,150,000 senior participation which bears interest at 4.85% and a $15,744,000 junior participation which bears interest at 6.4%. The Trust accounts for the loan participation as a secured financing.

Loan Receivable Activity

Activity related to loans receivable is as follows (in thousands):


	January 1, 2011 to			January 1, 2010 to
	September 30, 2011			December 31, 2010
Balance at beginning of period	$	110,395		$	26,101
Purchase and advances		44,512			122,301
Proceeds from sale		—			(12,876	)
Interest (received) accrued, net		(19	)		361
Repayments		(43,410	)		(15,064	)
Loan accretion		11,167			8,782
Discount accretion received in cash		(13,290	)		—
Transfer from loan securities		662			—
Transfer foreclosed loans to investment in real estate		—			(19,210	)
Transfer Marc Realty seller financing from equity investments		12,544			—
Transfer Sealy loan to equity investments		(4,650	)		—
Transfer 450 W 14th St bridge loan to preferred equity investments		(2,022	)		—

Balance at end of period	$	115,889		$	110,395

In addition to our initial purchase price of certain loans, we have future funding requirements. At September 30, 2011 we had future funding requirements pursuant to two loans receivable totaling approximately $2,654,000.

The following table summarizes the Trust’s interest, dividend and discount accretion income for the three and nine months ended September 30, 2011 and 2010 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Interest, dividends and discount accretion detail:
Interest on loan assets	$	3,043	$	1,840	$	8,440	$	3,397
Accretion of loan discount		2,374		2,345		11,167		6,087
Interest and dividends on REIT securities		86		763		662		2,263

Total interest, dividends, and discount accretion	$	5,503	$	4,948	$	20,269	$	11,747

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

Credit Quality of Loans Receivable and Loan Losses

The Trust evaluates impairment on its loan portfolio on an individual basis and has developed a loan grading system for all of its outstanding loans that are collateralized directly or indirectly by real estate. Grading categories include debt yield, debt service coverage ratio, length of loan, property type, loan type, and other more subjective variables that include property or collateral location, market conditions, industry conditions, and sponsor’s financial stability. Management reviews each category and assigns an overall numeric grade for each loan to determine the loan’s risk of loss and to provide a threshold for the determination of whether a specific allowance analysis is necessary. A loan’s grade of credit quality is determined quarterly.

All loans with a positive score do not require a loan loss allowance. Any loan graded with a neutral score or “zero” is subject to further review of the collectability of the interest and principal based on current conditions and qualitative factors to determine if impairment is warranted. Any loan with a negative score is deemed impaired and management then would measure the specific impairment of each loan separately using the fair value of the collateral less costs to sell.

Management estimates impairment by calculating the estimated fair value of the underlying property collateralizing the loan based on the present value of expected future cash flows and comparing the fair value to the loan’s net carrying value. If the fair value is less than the net carrying value of the loan, an allowance is created with a corresponding charge to the provision for loan losses. The allowance for each loan is maintained at a level the Trust believes is adequate to absorb losses.

The table below summarizes the Trust’s loans receivable by internal credit rating at September 30, 2011 (in thousands, except for number of loans).


			Carrying
			Value of
Internal Credit	# of		Loans		# of		Whole		# of				# of		Mezzanine
Quality	Loans		Receivable		Loans		Loans		Loans		B-Notes		Loans		Loans

Greater than zero		10	$	90,167		3	$	40,033		2	$	19,947		5	$	30,187
Equal to zero		2		25,722		—		—		1		23,187		1		2,535
Less than zero		—		—		—		—		—		—		—		—

Subtotal		12	$	115,889		3	$	40,033		3	$	43,134		6	$	32,722

Non Performing Loans

The Trust considers a loan to be non-performing and places loans on non-accrual status at such time as management determines it is probable that it will be unable to collect all amounts due according to the contractual terms of the loan. While on non-accrual status, based on the Trust’s judgment as to collectability of principal, loans are either accounted for on a cash basis, where interest income is recognized only upon actual receipt of cash, or on a cost-recovery basis, where all cash receipts reduce a loan’s carrying value. If and when a loan is brought back into compliance with its contractual terms, the Trust will resume accrual of interest. As of September 30, 2011 and December 31, 2010, there were no past due payments. There was no provision for loan loss recorded during the three and nine month periods ended September 30, 2011 and 2010.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

Securities Carried at Fair Value

Securities carried at fair value are summarized in the table below (in thousands):


	September 30, 2011				December 31, 2010
	Acquisition Cost		Fair Value		Acquisition Cost		Fair Value

REIT Preferred shares	$	2,067	$	4,222	$	15,757	$	28,547
REIT Common shares		2,935		2,430		3,590		4,485

		5,002		6,652		19,347		33,032

Loan securities		1,661		5,343		7,574		11,981

	$	6,663	$	11,995	$	26,921	$	45,013

During the three and nine months ended September 30, 2011, securities carried at fair value and loan securities carried at fair value were sold or paid off for total proceeds of approximately $0 and $35,029,000 respectively. The gross realized gains on these sales and payoffs totaled approximately $0 and $131,000, in the three and nine months ended September 30, 2011, respectively.

During the three and nine months ended September 30, 2010, available for sale securities, securities carried at fair value and loan securities carried at fair value were sold or paid off for total proceeds of approximately $16,391,000 and $29,565,000 respectively. For the three months ended September 30, 2010, gross realized losses on these sales and payoffs totaled approximately $185,000. For the nine months ended September 30, 2010, gross realized gains on these sales and payoffs totaled approximately $588,000.

For the nine months ended September 30, 2011, the Trust recognized net unrealized gains on securities carried at fair value and loan securities carried at fair value of $1,974,000, as the result of the change in fair value of the financial assets for which the fair value option was elected. For the three months ended September 30, 2011, the Trust recognized net unrealized losses of $1,036,000.

For the three and nine months ended September 30, 2010, the Trust recognized net unrealized gains on available for sale securities, securities carried at fair value and loan securities carried at fair value of $3,071,000, and $7,873,000 respectively, as the result of the change in fair value of the financial assets for which the fair value option was elected.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

Equity Investments

The Trust’s equity investments consist of the following at September 30, 2011 and December 31, 2010 (in thousands):


		Nominal % Ownership			September 30,		December 31,
Venture Partner	Equity Investment	at September 30, 2011			2011		2010

Marc Realty (1)	8 South Michigan LLC		N/A		$	—	$	7,087
Marc Realty (1)	11 East Adams Street LLC		N/A			—		3,223
Marc Realty (1)	29 East Madison Street LLC		N/A			—		7,720
Marc Realty (1)	Michigan 30 LLC		50.0	%		12,045		12,080
Marc Realty (1)	Brooks Building LLC		50.0	%		7,880		7,452
Marc Realty (1)	High Point Plaza LLC		50.0	%		6,198		6,275
Marc Realty (1)	Salt Creek LLC		50.0	%		2,266		2,344
Marc Realty (1)	1701 Woodfield LLC		50.0	%		3,977		4,221
Marc Realty (1)	River Road LLC		50.0	%		4,023		4,123
Marc Realty (1)	3701 Algonquin Road LLC		50.0	%		2,694		2,931
Marc Realty (1)	Enterprise Center LLC		50.0	%		2,730		3,018
Marc Realty (1)	900 Ridgebrook LLC		50.0	%		1,606		1,676
Sealy (1)	Northwest Atlanta Partners LP		60.0	%		8,651		2,479
Sealy (1)	Newmarket GP LLC		68.0	%		3,932		6,647
Sealy	Airpark Nashville GP		50.0	%		1,799		2,778
Inland/Lexington	Concord Debt Holdings LLC		33.3	%		—		—
Inland/Lexington	CDH CDO LLC		33.3	%		—		—
ROIC (1)	WRT-ROIC Riverside LLC		50.0	%		7,883		7,883
ROIC	WRT-ROIC Lakeside Eagle LLC		50.0	%		9		—
Atrium Holding	RE CDO Management LLC		50.0	%		1,273		—
Lexington (1)	LW-SOFI LLC		50.0	%		6,877		—
VHH LLC (1)	Vintage Housing LLC		75.0	%		30,513		—
Broadway Partners	FII Co-Invest LLC		27.9	%		1,800		—

					$	106,156	$	81,937


(1)		The Trust has determined that these equity investments are investments in VIEs. The Trust has determined that it is not the primary beneficiary of these VIEs since the Trust does not have the power to direct the activities that most significantly impact the VIEs economic performance.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

The following table reflects the activity of the Trust’s equity investments for the period ended September 30, 2011 (in thousands):


														Balance at
	Balance at				Equity Income									September 30,
Investment	December 31, 2010		Contributions		(loss)			Distributions			Sales			2011

Marc Realty	$	62,150	$	2,011	$	(319	)	$	(2,264	)	$	(18,159	)	$	43,419
Sealy		11,904		4,650		(1,922	)		(250	)		—			14,382
Concord Debt Holdings		—		—		2,721			(2,721	)		—			—
CDH CDO		—		—		307			(307	)		—			—
WRT-ROIC Riverside		7,883		—		702			(702	)		—			7,883
WRT-ROIC Lakeside Eagle		—		18,093		666			(18,750	)		—			9
WRT-46th Street Gotham		—		8,037		621			(8,658	)		—			—
RE CDO Management		—		1,250		23			—			—			1,273
LW-SOFI		—		5,760		1,117			—			—			6,877
Vintage Housing		—		30,950		424			(861	)		—			30,513
FII Co-invest		—		1,800		—			—			—			1,800


Total	$	81,937	$	72,551	$	4,340		$	(34,513	)	$	(18,159	)	$	106,156

On June 23, 2011 the Trust’s Sealy Northwest Atlanta venture fully satisfied its $28,750,000 first mortgage loan plus accrued interest of approximately $1,083,000 (net of escrowed funds) for a negotiated discounted payoff amount of $20,500,000. As a result of the discounted payoff, the venture recognized approximately $9,203,000 of cancellation of debt income of which $5,522,000 was allocated to the Trust. The allocation of income effectively increases the carrying value of the Trust’s investment in the venture.

At June 30, 2011 the Trust determined that, as a result of current market conditions, including current occupancy levels, current rental rates and an increase in terminal capitalization rates, the fair value of its equity investments in Sealy Northwest Atlanta and Sealy Newmarket were below the carrying values. Accordingly, the Trust assessed whether this decline in value was other-than-temporary. In making this determination, the Trust considered the length of time which the decline has occurred, the length of time before an expected recovery and the lack of any comparables in the market. The Trust determined the fair value of its investments utilizing an unleveraged cash flow methodology with a 10 year hold period and an estimated terminal capitalization rate. The cash flows were then discounted using an estimated market rate. Based on the foregoing, all of which requires significant judgment, the Trust concluded that the declines in value were other-than-temporary, and the Trust recorded other-than-temporary impairment charges of $2,900,000 and $900,000 on its investments in Sealy Northwest Atlanta and Sealy Newmarket, respectively, during the nine months ended September 30, 2011. The Trust has determined that the fair value of its Sealy Northwest Atlanta investment marginally exceeds its carrying value at September 30, 2011.

In relation to its investment in Vintage Housing, the Trust has elected a one-month lag period in which it recognizes its share of the equity earnings of Vintage Housing in arrears. The lag period is allowed under the provisions of ASC 810-10 and is necessary in order for the Trust to consistently meet its regulatory filing deadlines. The Vintage Housing joint venture consolidated balance sheet consists of assets totaling approximately $320,000,000 with mortgage notes payable of approximately $210,000,000 as of August 31, 2011.

The Trust has determined that the fair value of certain of its Marc Realty investments each marginally exceed their carrying values. While the ventures continue to aggressively market available space for lease and work with existing tenants for lease renewal, declines in occupancy could cause impairment of certain of the Trust’s Marc Realty ventures that could be material to the Trust’s results of operations.

During the quarter ended September 30, 2011 the Trust received cash distributions from Concord Debt Holdings LLC of $2,549,000. The Trust recognized equity income for the full amount of the distributions. The Concord Debt Holdings LLC balance sheet consisted of total assets of $28,079,000 and $126,463,000 at September 30, 2011 and December 31, 2010, respectively, and total liabilities of $101,000 and $99,321,000 at September 30, 2011 and December 31, 2010, respectively. Concord Debt Holdings LLC had net income of $4,368,000 and $9,962,000 for the three and nine months ended September 30, 2011 and a net loss of $308,000 for the period from the reorganization date (August 26, 2010) to September 30, 2010.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

Debt

Mortgage Loans Payable

The Trust had outstanding mortgage loans payable of $185,622,000 and $230,443,000 at September 30, 2011 and December 31, 2010, respectively. The mortgage loan payments of principal and interest are generally due monthly, quarterly or semi-annually and are collateralized by the applicable real estate of the Trust.

The Trust’s mortgage loans payable at September 30, 2011 and December 31, 2010 are as follows (in thousands):


Location of		Spread Over		Interest Rate at			September 30,		December 31,
Collateral	Maturity	LIBOR/Prime		September 30, 2011			2011		2010

Andover, MA	—		—		N/A		$	—	$	6,135
S. Burlington, VT	—		—		N/A			—		2,629
Various	—		—		N/A			—		19,002
Lisle, IL	—		—		N/A			—		23,905
Chicago, IL	Apr 2012		—		6.25	%		8,900		9,100
Amherst, NY	Oct 2013		—		5.65	%		15,794		16,116
Meriden, CT	Feb 2014		—		5.83	%		23,875		23,875
Indianapolis, IN	Apr 2015		—		5.82	%		4,188		4,245
Chicago, IL	Mar 2016		—		5.75	%		20,598		20,828
Houston, TX	Apr 2016		—		6.28	%		57,443		60,351
Lisle, IL	Mar 2017		—		5.55	%		5,600		5,600
Orlando, FL	Jul 2017		—		6.40	%		38,268		38,657
Plantation, FL	Apr 2018		—		6.48	%		10,956		—

							$	185,622	$	230,443

Secured Financing

In January 2011 the Trust restructured the San Marbeya first mortgage loan receivable and transferred the senior participation at par. For financial reporting purposes, the transfer of the financial asset is accounted for as a financing rather than a sale. As of September 30, 2011, the secured financing has a carrying value of $15,150,000, bears interest at a rate of 4.85% and matures on January 1, 2015.

The fair value of the Trust’s mortgage loans payable, secured financing and revolving line of credit are less than their current carrying value by $10,870,000 and $22,042,000 at September 30, 2011 and December 31, 2010, respectively.

Revolving Line of Credit

The Trust has a revolving line of credit in the principal amount of $50,000,000 which bears interest at Libor plus 3% and has a maturity date of March 3, 2014 with a one year option to extend the maturity date to March 3, 2015. The Trust must comply with financial covenants on an ongoing basis. The covenants are tested as of the end of each quarter based upon results for the most recently ended quarter. The Trust was in compliance of its financial covenants under its revolving line of credit as of September 30, 2011.

The revolving credit line is recourse and as such is effectively collateralized by all of the Trust’s assets. The Trust has pledged certain unencumbered consolidated operating properties and loans receivable as the borrowing base for the revolving line of credit. The revolving credit line requires monthly payments of interest only. To the extent that the amounts outstanding under the facility are in excess of the borrowing base (as calculated), the Trust is required to make a principal payment to reduce such excess. The Trust may prepay from time to time without premium or penalty and re-borrow amounts prepaid.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

The outstanding balance under the facility was $0 and $25,450,000 at September 30, 2011 and December 31, 2010. The Trust is required to pay a commitment fee on the unused portion of the line, which amounted to approximately $44,000 and $95,000 for the three and nine months ended September 30, 2011, respectively and $8,000 and $52,000 for the three and nine months ended September 30, 2010, respectively.

10.

Common Shares

The following table sets forth information relating to issuance of Common Shares during the nine months ended September 30, 2011:


	Number of
Date of Issuance	Shares Issued		Price per Share		Type of Offering

January 15, 2011		58,161	$	11.70	DRIP (1)
April 6, 2011		5,750,000		11.25	Public Offering
April 15, 2011		59,207		11.63	DRIP
July 15, 2011		61,224		11.35	DRIP


(1)		The Trust’s Dividend Reinvestment and Stock Purchase Plan.

11.

Discontinued Operations

In addition to the Trust’s properties in Athens, Georgia; Lafayette, Louisiana; Knoxville, Tennessee; and Sherman, Texas that were previously classified as discontinued operations, in January 2011 another retail property in St. Louis, Missouri has also been classified as discontinued operations. In February 2011 the Trust entered into an agreement to sell the St. Louis, Missouri property subject to the buyer’s due diligence. In August 2011, the Trust sold its Knoxville, Tennessee property for net proceeds of $2,151,000.

Results for discontinued operations for the three and nine months ended September 30, 2011 and 2010 are as follows (in thousands):


	For the Three Months Ended						For the Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2011			2010			2011			2010

Revenues	$	—		$	255		$	265		$	821
Operating expenses		(76	)		(2	)		(203	)		(22	)
Depreciation and amortization		—			(62	)		(2	)		(124	)
Impairment loss		—			(1,720	)		—			(2,720	)
Loss on sale of assets held for sale		(58	)		—			(58	)		—

Income (loss) from discontinued operations	$	(134	)	$	(1,529	)	$	2		$	(2,045	)

12.

Commitments and Contingencies

The Trust is involved from time to time in litigation on various matters, including disputes with tenants and disputes arising out of agreements to purchase or sell properties. Given the nature of the Trust’s business activities, these lawsuits are considered routine to the conduct of its business. The result of any particular lawsuit cannot be predicted because of the very nature of litigation, the litigation process and its adversarial nature, and the jury system. The Trust does not expect that the liabilities, if any, that may ultimately result from such legal actions will have a material adverse effect on its financial condition or results of operations.

See Note 4 for discussion of the litigation settlement with CBS.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

13.

Related-Party Transactions

FUR Advisors

The activities of the Trust are administered by FUR Advisors LLC (“FUR Advisors”) pursuant to the terms of the Advisory Agreement between the Trust and FUR Advisors. FUR Advisors is controlled by and partially owned by the executive officers of the Trust. Pursuant to the terms of the Advisory Agreement, FUR Advisors is responsible for providing asset management services to the Trust and coordinating with the Trust’s shareholder transfer agent and property managers. FUR Advisors is entitled to receive a base management fee and an incentive fee in accordance with the terms of the Advisory Agreement. In addition, FUR Advisors or its affiliate is also entitled to receive property and construction management fees subject to the approval of the independent Trustees of the Trust.

The following table sets forth the fees and reimbursements paid by the Trust for the three and nine months ended September 30, 2011 and 2010 to FUR Advisors and Winthrop Management (in thousands):


	For the Three Months Ended					For the Nine Months Ended
	September 30,		September 30,			September 30,		September 30,
	2011		2010			2011		2010

Base Asset Management	$	1,997	$	1,324		$	5,682	$	3,517
WRP Sub-Management LLC		—		(34	)		—		(134	)
Credit
Property Management		129		54			400		170
Construction Management		1		—			1		1


	$	2,127	$	1,344		$	6,083	$	3,554

Base Asset Management Fee

Effective January 1, 2010, the Advisory Agreement was amended so that the determination of the issuance price of Common Shares reverted back to the pre 2009 definition such that the quarterly fee is to be calculated as 1.5% of the actual issuance price of Common Shares instead of a fixed price for Common Shares issued prior to January 1, 2009. Additionally, FUR Advisors receives a fee equal to 0.25% of any equity contributions by an unaffiliated third party to a venture managed by the Trust. The management fee paid by the Trust for third party equity contributions amounted to $9,000 and $32,000 for the three and nine months ended September 30, 2011, respectively. There was no fee for third party equity contributions in 2010.

Winthrop Management

Winthrop Management L.P. (“Winthrop Management”), an affiliate of FUR Advisors and the Trust’s executive officers, assumed property management responsibilities for various properties owned by the Trust. Winthrop Management receives a property management fee pursuant to the terms of individual property management agreements.

14.

Reportable Segments

The Financial Accounting Standards Board (“FASB”) guidance on segment reporting establishes standards for the way that public business enterprises report information about operating segments in financial statements and requires that those enterprises report selected financial information about operating segments in interim financial reports issued to shareholders.

Based on the Trust’s method of internal reporting, management determined that it has three operating segments: (i) the ownership of operating properties; (ii) the origination and acquisition of loans and debt securities secured directly or indirectly by commercial and multi-family real property — collectively, loan assets; and (iii) the ownership of equity and debt securities in other REITs — REIT securities.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

The operating properties segment includes all of the Trust’s wholly and partially owned operating properties. The loan assets segment includes all of the Trust’s activities related to real estate loans including loans receivable, loan securities and equity investments in loan related entities. The REIT securities segment includes all of the Trust’s activities related to the ownership of securities in other publicly traded real estate companies. In addition to its three business segments, the Trust reports non-segment specific income and expense under corporate income (expense).

The following table summarizes the Trust’s assets by business segment for the periods ended September 30, 2011 and December 31, 2010 (in thousands):


	September 30,		December 31,
	2011		2010

Operating properties	$	382,859	$	373,142
Loan assets		150,676		134,269
REIT securities		6,652		33,032
Corporate
Cash and cash equivalents		66,777		45,257
Restricted cash		4,916		8,593
Straight line rent receivable		9,666		8,729
Other accounts receivable and prepaids		2,714		3,673
Deferred financing costs		1,184		1,158
Discontinued operations		1,491		2,275

Total Assets	$	626,935	$	610,128

The Trust defines net operating income for each segment presented as all items of income and expense directly derived from or incurred by each business segment before depreciation, amortization and interest expense. Interest on cash reserves, general and administrative expenses and other non-segment specific income and expense items are reported under corporate income (expense).

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

The following table presents a summary of revenues from operating properties, loan assets and REIT securities and expenses incurred by each segment for the three and nine months ended September 30, 2011 and September 30, 2010 (in thousands):


	For the Three Months Ended						For the Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2011			2010			2011			2010
Operating Properties
Rents and reimbursements	$	10,840		$	9,243		$	33,061		$	27,999
Operating expenses		(3,536	)		(1,812	)		(11,567	)		(5,579	)
Real estate taxes		(1,107	)		(952	)		(3,450	)		(2,012	)
Equity in income (loss) of Sealy Northwest Atlanta		(119	)		(192	)		4,422			(541	)
Equity in loss of Sealy Airpark Nashville		(275	)		(248	)		(728	)		(681	)
Equity in loss of Sealy Newmarket		(672	)		(301	)		(1,816	)		(750	)
Impairment loss on Sealy equity investment		—			—			(3,800	)		—
Equity in income of Vintage		424			—			424			—
Equity in income (loss) of Marc Realty investments		(199	)		1,187			(319	)		1,494

Operating income		5,356			6,925			16,227			19,930
Depreciation and amortization expense		(3,185	)		(2,378	)		(9,978	)		(7,050	)
Interest expense		(2,891	)		(3,196	)		(10,006	)		(9,596	)
Impairment loss on investment in real estate		(3,000	)		—			(3,000	)		—
Gain on extinguishment of debt		8,514			—			8,514			—
Gain on sale of equity investments		207			—			207			—

Operating properties net income		5,001			1,351			1,964			3,284


Loan Assets
Interest and discount accretion		5,417			4,185			19,607			9,484
Equity in earnings of preferred equity investment of Marc Realty		85			85			253			253
Equity in earnings of preferred equity investment of 450 West 14th Street		172			—			245			—
Unrealized gain (loss) on loan securities carried at fair value		(75	)		581			2,772			3,593
Equity in income of ROIC Riverside		234			234			702			239
Equity in income of ROIC Lakeside Eagle		—			—			666			—
Equity in income of 46th Street Gotham		—			—			621			—
Equity in loss of PSW NYC		—			(1,089	)		—			(1,089	)
Equity in income of Concord		2,549			—			3,028			—
Equity in income of LW SOFI		855			—			1,117			—
Equity in income of RE CDO Management		23			—			23			—

Operating income		9,260			3,996			29,034			12,480
General and administrative expense		(43	)		(186	)		(58	)		(222	)
Interest expense		(184	)		—			(525	)		—

Loan assets net income		9,033			3,810			28,451			12,258


REIT Securities
Interest and dividends		86			763			662			2,263
Gain (loss) on sale of securities carried at fair value		—			(185	)		131			588
Unrealized gain (loss) on securities carried at fair value		(961	)		2,490			(798	)		4,280

REIT securities net operating income (loss)		(875	)		3,068			(5	)		7,131


Operating Segments Net Income		13,159			8,229			30,410			22,673


Reconciliations to GAAP Net Income:

Corporate Income (Expense)
Interest income		472			17			1,008			94
Interest expense		(471	)		(613	)		(1,592	)		(1,530	)
General and administrative		(2,850	)		(2,114	)		(8,117	)		(5,901	)
State and local taxes		(12	)		(7	)		(88	)		(107	)

Income from continuing operations before non-controlling interest		10,298			5,512			21,621			15,229
Non-controlling interest		(318	)		(175	)		(851	)		(595	)

Income from continuing operations attributable to Winthrop Realty Trust		9,980			5,337			20,770			14,634
Income (loss) from discontinued operations attributable to Winthrop Realty Trust		(134	)		(1,529	)		2			(2,045	)

Net Income Attributable to Winthrop Realty Trust	$	9,846		$	3,808		$	20,772		$	12,589


Capital Expenditures
Operating properties	$	2,141		$	2,929		$	5,856		$	4,646

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

15.

Variable Interest Entities

Consolidated Variable Interest Entities

The Trust has identified two consolidated variable interest entities, Deer Valley, Arizona and the Andover net lease property. Consolidated variable interest entities are those where the Trust has a controlling financial interest in the joint venture or are the primary beneficiary of a variable interest entity. The primary beneficiary is the party that has a controlling financial interest in the VIE, which is defined by the entity having both of the following characteristics: 1) the power to direct the activities that, when taken together, most significantly impact the VIE’s performance, and 2) the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE. The third parties’ interests in these consolidated entities are reflected as non-controlling interest in the accompanying consolidated financial statements.

Variable Interest Entities Not Consolidated

Equity Method and Preferred Equity Investments — The Trust has reviewed its various equity method and preferred equity investments and identified 18 variable interest entities. These unconsolidated joint ventures are those where we do not have a controlling financial interest in the joint venture or are not the primary beneficiary of a VIE.

Loans Receivable and Loan Securities — The Trust has reviewed its loans receivable and loan securities and certain of these assets have been identified as variable interests in a VIE because the equity investment at risk at the borrowing entity level is not considered sufficient for the entity to finance its activities without additional subordinated financial support.

Certain loans receivable and loan securities which have been determined to be VIEs are performing assets, meeting their debt service requirements, and the borrowers hold title to the collateral. In these cases the borrower has the power to direct the activities that most significantly impact the economic performance of the VIE, including management and leasing activities. In the event of default under these loans the Trust only has protective rights and has the risk to absorb losses only to the extent of its loan investment. The borrower has been determined to be the primary beneficiary for these performing assets.

The Trust has determined that it does not currently have the power to direct the activities of the ventures collateralizing any of its loans receivable and loan securities. For this reason, management believes that it does not control, nor is it the primary beneficiary of these ventures. Accordingly, the Trust accounts for these investments under the guidance for loans receivable and real estate debt investments.

16.

Subsequent Events

Loan Origination

Hotel Wales — In October 2011, the Trust originated a $20,000,000 first mortgage loan collateralized by the Hotel Wales located in Manhattan, New York which loan bears interest at LIBOR plus 4%, with a 3% LIBOR floor (i.e. a minimum 7% rate on the loan), and matures in October 2013, with a one-year extension right. Subsequent to originating the loan, the Trust sold a $14,000,000 senior participation which bears interest at LIBOR plus 1.25% with a 3% LIBOR floor, with the Trust retaining a $6,000,000 junior participation which provides for interest payments equal to the interest payable on the loan less the amount payable on the senior participation.

127 West 25th Street — On October 25, 2011, the Trust committed to make a $9,000,000 subordinate mortgage loan collateralized by the commercial property located at 127 West 25th Street, Manhattan, New York. The loan is subject to the satisfaction by the borrower of certain conditions on or prior to January 24, 2012. If funded, the loan will mature on October 1, 2014, bear interest at a rate equal to the greater of 14% per annum or LIBOR plus 10%, and require payment of interest only. In connection with the entering into of the loan agreement, the Trust received an origination fee of $90,000 and a commitment fee of $105,000 per month that the commitment is outstanding prior to funding. The loan is subordinate to a $32,680,000 first mortgage loan. The property is net leased to the Bowery Residents’ Committee, Inc., a New York not-for-profit corporation, which obtains funding from the City of New York.

Southern California Office Portfolio Note — On November 4, 2011, a joint venture in which we own a 73% interest acquired for a purchase price of $96,700,000 a $117,900,000 C note in the $798,000,000 first mortgage encumbering a 4,500,000 square foot, 31 property portfolio of office properties situated throughout southern California. The C Note, which is the controlling holder of the mortgage loan, bears interest at a rate per annum of LIBOR plus 310 basis points, requires payments of interest only and matures on August 9, 2012. We contributed approximately $71,000,000 to the venture and own an approximately 73% interest in the joint venture. Pursuant to the terms of the joint venture agreement, we are permitted to reduce our investment in the C Note by transferring up to 49% of our equity interest in the joint venture to a third party.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

Financing-Newbury/550/650 Corporetum/701 Arboretum

On October 18, 2011, the Trust obtained a $21,000,000 mortgage loan secured by its Newbury Apartments, 550/650 Corporetum and 701 Arboretum properties. The loan bears interest at LIBOR plus 2.5%, matures October 2014, subject to two, one-year extension terms, and requires payments of interest only through the initial term and payments of principal and interest based on a 25 year amortization schedule during the extended terms. In connection with the financing, the Trust purchased an interest rate cap which caps Libor at 1.0% through October 18, 2014. The proceeds from the loan, together with approximately $3,160,000 of reserves, were used to satisfy the existing approximately $23,875,000 loan encumbering Newbury Apartments which bore interest at 5.83%.

450 West 14th

In October 2011, the joint venture that owns the property located at 450 West 14th Street, Manhattan, New York obtained its temporary certificate of occupancy from the New York City Buildings Department. As a result, the Trust exercised its right to become the managing member of the entity. As a result of the change in control, the Trust anticipates that the property and its operations will be consolidated effective with the fourth quarter of 2011.

Moffett Towers

On October 25, 2011, the Trust received payment of $23,034,000 plus accrued interest in full satisfaction of its B-Note collateralized by Moffett Towers. This B-Note was originally purchased by the Trust in October 2010 for a purchase price of $21,558,000 and additional advances of $1,476,000 were made under the terms of the note.

LW-SOFI

On October 31, 2011, the venture received $71,530,000 plus accrued interest in full satisfaction of the mezzanine loan, the proceeds of which were utilized to satisfy the repurchase obligation encumbering the loan receivable resulting in net proceeds of $15,876,000. The Trust received a $7,937,000 distribution from LW-SOFI on November 2, 2011.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011


ITEM 2		— MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain statements contained herein constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “intends,” “plans,” “would,” “may” or similar expressions in this quarterly report on Form 10-Q. These forward-looking statements are subject to numerous assumptions, risks and uncertainties. Many of the factors that will determine these items are beyond our ability to control or predict. Factors that may cause actual results to differ materially from those contemplated by the forward-looking statements include, but are not limited to, those set forth in our annual report on Form 10-K for the year ended December 31, 2010 under “Forward Looking Statements” and “ITEM 1A — Risk Factors,” as well as our other filings with the SEC. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. We expressly disclaim any responsibility to update forward-looking statements, whether as a result of new information, future events or otherwise. Accordingly, investors should use caution in relying on forward-looking statements, which are based on information, judgments and estimates at the time they are made, to anticipate future results or trends.

Management’s Discussion and Analysis of Financial Condition and Results of operations include a discussion of our unaudited consolidated financial statements and footnotes thereto for the three and nine months ended September 30, 2011 as compared with the three and nine months ended September 30, 2010. These unaudited financial statements are prepared in conformity with accounting principles generally accepted in the United States of America which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Overview

As a diversified REIT, we operate in three strategic segments: (i) operating properties; (ii) loan assets; and (iii) REIT securities. As such, we have consistently executed on an investment strategy that focuses on a current yield and long-term appreciation total return approach, pursuing value opportunities in real estate asset classes throughout the capital stack. We have demonstrated our ability to adjust our business plan to capitalize on evolving market conditions, both with respect to asset classes and capital structure and our flexibility to underwrite smaller and/or more complicated opportunities overlooked by larger competitors.

Most recently as a result of executing on our strategy, we have invested in a portfolio transaction, which we refer to as the Vintage portfolio whereby we have access to a large portfolio of assets that have positioned us well for continued growth. We have also sought to invest in loan investments with significant underlying collateral value, future income return potential and in certain cases, non-performing loans with the possibility that our debt position will be converted into equity participation.

Consistent with our original expectations, we have begun to realize income and cash flow on our Vintage portfolio of 25 multifamily and senior housing properties comprising approximately 4,200 units located primarily in the Pacific Northwest and California which we acquired in June 2011. We have already made additional investments using the Vintage platform and during the quarter ended September 30, 2011 made contributions to the venture totaling $7,000,000. The venture’s new investments included a contribution to a planned 231 unit multi-family project in Tacoma, Washington, the acquisition of non-controlling partner interests in seven of the existing Vintage investments and a purchase agreement to acquire 75% member interests in the general partner of two multifamily properties comprising approximately 490 units located in California and Nevada.

In addition to growing our assets, during the quarter ended September 30, 2011 we addressed issues concerning certain of our existing assets by resolving our legal matters related to our Churchill, Pennsylvania property and negotiating a significant discounted payoff on the mortgage encumbering our two Lisle, Illinois properties. Additional debt restructuring discussions continue on the Sealy Newmarket property and we anticipate an outcome in the near term that will help stabilize operations for the joint venture.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

Our Concord investment platform that we previously wrote down to zero has stabilized its operations resulting in cash distributions to us of $2,549,000 for the quarter ended September 30, 2011.

At September 30, 2011, we held $66,777,000 in unrestricted cash and cash equivalents and $6,652,000 in REIT securities. In March 2011 we extended and amended our revolving line of credit, financed our Plantation, Florida property and paid off all of our consolidated debt maturing in 2011. These transactions along with our Common Share offering in April 2011 which raised $61,386,000 through the sale of 5,750,000 Common Shares have considerably strengthened our balance sheet. See “Liquidity and Capital Resources” below.

With respect to our operating results for the third quarter of 2011, net income attributable to Common Shares was $9,787,000 or $0.30 per Common Share as compared to $3,749,000 or $0.18 per Common Share for the third quarter of 2010. The most significant factor in this increase was the gain on the extinguishment of debt on our Lisle, Illinois properties which was partially offset by the impairment charge on one of our Lisle, Illinois properties. See “Results of Operations” below for further information.

Loan Assets

Consistent with our strategy to focus our investing in the segment we believe will generate the greater overall return to us, we continue to focus our acquisition activity on our loan asset segment. Our ability to identify and execute on the acquisition of loan assets has resulted in a considerable growth in the loan portfolio, and during the quarter ended September 30, 2011 we made new investments and additional investments in existing loan assets of approximately $3,617,000.

At September 30, 2011 all of our loan assets were performing in accordance with their terms.

The concentration in this segment was due to our belief that these assets will provide the best means for a current return in the form of interest payments as well as appreciation either through acquiring loan assets at a discount or acquiring loan assets with the expectation of a borrower default that will lead to foreclosure and an equity ownership interest.

Operating Properties

Consolidated Operating Properties —Excluding our Churchill, Pennsylvania property, the average occupancy of our consolidated properties was approximately 89.5% during the nine months ended September 30, 2011. As of September 30, 2011, our consolidated properties were approximately 90.2% leased compared to approximately 92.2% leased at September 30, 2010. The decline in occupancy relates primarily to the Denver, Colorado properties which were acquired in the fourth quarter of 2010. These properties were acquired with significant vacancy.

Increases in our operating income from our new acquisitions have been offset by unfavorable trends in operating income from our existing wholly owned properties.

Occupancy at our Lisle, Illinois property known as 550-560 Corporetum remains down and is 57% occupied as of September 30, 2011. Various smaller tenants have vacated, and one significant tenant representing approximately 13% of the property square footage did not renew its lease at expiration in May 2010. At our other Lisle, Illinois property, referred to as 701 Arboretum, our major tenant which occupied approximately 53% of the building vacated their space at the expiration of their lease term on May 31, 2011. In addition, another tenant who occupied approximately 15% of the building vacated at the expiration of their lease in August 2011. As a result, this property is 17% occupied as of September 30, 2011. As a result of the material negative impact the market conditions have had on these properties, we recently negotiated a discounted payoff of the debt which resulted in a debt extinguishment gain of approximately $8,514,000. Subsequent to the restructuring, we re-evaluated our business plan and shortened our expected holding periods for these properties which resulted in recording an impairment charge of $3,000,000 on 701 Arboretum.

With respect to our recently acquired operating properties, our 82,000 square foot Deer Valley Professional Building, located in Phoenix, Arizona is 89.0% leased at September 30, 2011 compared to 61.0% leased at June 30, 2011 and at our acquisition on August 6, 2010. In the aggregate, our Crossroads I and II buildings, which contain approximately 236,000 square feet, were 72.1% leased at September 30, 2011 as compared to 55.9% leased at the date of our acquisition during the fourth quarter of 2010.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

The Churchill, Pennsylvania property legal settlement ended with a dismissal of a pending lawsuit, a payment to us of $6,500,000, and conveyance to us by our former tenant of approximately 148 acres of land. In addition, we have entered into a long-term net lease with one of our existing Churchill tenants, Westinghouse, for 57,000 square feet of space. The lease has a 12 year term and requires annual rent of $750,000, increasing by 3% annually.

In connection with the settlement of the litigation relating to our Churchill, Pennsylvania property, we have agreed to market this property for sale. Accordingly, we anticipate this property will qualify for held for sale treatment and will be classified as discontinued operations effective with the fourth quarter of 2011.

Tenant Concentration — The Trust seeks to reduce its operating and leasing risks through diversification achieved by the geographic distribution of its properties, avoiding dependence on any single property, and a large tenant base. At September 30, 2011, the Trust has two tenants, Spectra Energy and Siemens Real Estate, which represented approximately 22.31% and 10.00%, respectively, of the Trust’s annualized base rental revenues from consolidated commercial operating properties.

Sealy Equity Investments in Operating Properties — As of September 30, 2011 we continue to hold equity interests in three real estate ventures with Sealy & Co. which have an aggregate of approximately 2,097,000 rentable square feet consisting of 18 office flex buildings and 13 light distribution and service center properties. The investment properties are located in Northwest Atlanta, Georgia (Northwest Business Park); Northwest Atlanta, Georgia (Newmarket); and Nashville, Tennessee (Airpark) and had occupancies of 77%, 52% and 82%, respectively, at September 30, 2011 as compared to occupancy of 75%, 67% and 88% at September 30, 2010. The properties continue to be aggressively marketed for lease. We received cash distributions from operations of $250,000 from the Nashville, Tennessee property for the nine months ended September 30, 2011. We received no cash distribution from the two Atlanta investments for the three and nine months ended September 30, 2011.

On September 29, 2011, we closed on a replacement first mortgage loan on our Sealy Northwest Business Park property. The new loan has an outstanding balance of $14,000,000, bears interest at Libor + 5.35% and matures on September 29, 2015. Proceeds from the loan were utilized to pay down the bridge loan made by us and the balance of the bridge loan was satisfied by additional equity of $4,650,000 from us and of $3,100,000 from our venture partner. The loan for the Newmarket property, which is $37,000,000, and matures in 2016, is currently in special servicing. We, together with our joint venture partner, are attempting to negotiate a restructuring of the debt with the special servicer. The venture has ceased making its debt service payments until the loan is restructured. There can be no assurance that a restructuring of the loan will be accomplished. The mortgage on the Nashville Airpark property matures in May 2012, and we, together with our joint venture partner, are currently seeking to negotiate an extension.

Marc Realty Equity Investments in Operating Properties- On June 1, 2011, we sold three of our downtown Chicago, Illinois equity investments for an aggregate selling price of $18,544,000 to our joint venture partner, Marc Realty. These were the properties located at 8 South Michigan, 11 East Adams, and 29 East Madison. The selling price was paid $6,000,000 in cash and a $12,544,000 secured promissory note. In addition, we have certain future participating rights if the properties are sold within a specified timeframe for amounts in excess of our sale price.

During the quarter ended September 30, 2011, Marc Realty made payments in full satisfaction of its $4,910,000 8 South Michigan loan and $2,265,000 11 East Adams loan. In addition, Marc Realty made $1,369,000 in payments on its 29 East Madison loan. As of September 30, 2011, the 29 East Madison loan had a balance of $4,000,000. We recognized $207,000 in gain related to the full repayment of the two loans.

As of September 30, 2011, we held equity interests in nine properties with Marc Realty which consist of an aggregate of approximately 1,406,000 rentable square feet of office and retail space which was 77.5% occupied as compared to 79.2% occupied at September 30, 2010.

Of the nine remaining properties, two are downtown Chicago properties which contain approximately 389,000 rentable square feet and accounted for $19,925,000 of our September 30, 2011 carrying value. These two properties had occupancy of 79% at September 30, 2011, compared to 77% occupancy at June 30, 2011.

The balance of the portfolio, located in the Chicago suburbs represents $23,494,000 of our September 30, 2011 carrying value, contains approximately 1,017,000 square feet and was 77% occupied at September 30, 2011 compared to 78.8% occupied at June 30, 2011.

At September 30, 2011, the Marc Realty properties are encumbered with $59,715,000 of mortgage debt, with no mortgage debt maturing in 2011, $10,086,000 maturing in 2012 and the remainder in 2013 or later.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

REIT Securities

During the first nine months of 2011, we sold a significant portion of our REIT preferred shares and had minimal new investment activity in REIT securities totaling $568,000. We sold REIT securities with an original cost of $14,695,000 and received cash proceeds of $26,281,000. As a result of these dispositions, as of September 30, 2011 our portfolio of REIT securities decreased to $6,652,000. In light of the recent decrease in market pricing of REIT securities, we have again begun to acquire certain REIT securities which we believe are undervalued.

Liquidity and Capital Resources

At September 30, 2011, we held $66,777,000 in unrestricted cash and cash equivalents and $6,652,000 in REIT securities. In addition, as of September 30, 2011 we had a $50,000,000 revolving line of credit with no borrowings outstanding.

We believe that cash flow from operations will continue to provide adequate capital to fund our operating and administrative expenses, as well as debt service obligations in the short term. As a REIT, we must distribute annually at least 90% of our REIT taxable income. As a result of this dividend requirement, we, like other REITs, are unable to reinvest all of our operating cash flow and are dependent on raising capital through equity and debt issuances or forming ventures with investors to obtain funds with which to expand our business. Accordingly, we anticipate that capital with which to make future investment and financing activities will be provided from borrowings, the issuance of additional equity and debt securities and proceeds from sales of existing assets.

Our primary sources of funds include:

	•		the use of cash and cash equivalents;

	•		rents and reimbursements received from our operating properties;

	•		payments received under our loan assets;

	•		disposition of REIT securities;

	•		sale of existing assets;

	•		cash distributions from joint ventures;

	•		borrowings under our credit facilities;

	•		asset specific borrowings; and

	•		the issuance of equity and debt securities.

Debt Maturities

We have no mortgage loans for consolidated properties maturing in 2011. At September 30, 2011, our balance sheet contains mortgage debt payable of $185,622,000. We have $8,900,000 of mortgage debt maturing in 2012, $15,794,000 maturing in 2013, and $23,875,000 maturing in 2014 with the remainder maturing in 2015 or later.

In addition, our Series B-1 Preferred Shares and Series C Preferred Shares have a mandatory redemption in February 2012 for an aggregate redemption price of $24,900,000.

Cash Flows

Our level of liquidity based upon cash and cash equivalents increased by approximately $21,520,000 from $45,257,000 at December 31, 2010 to $66,777,000 at September 30, 2011.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

Our cash flow activities for the nine months ended September 30, 2011 and 2010 are summarized as follows (in thousands):


	For Nine Months Ended September 30,
	2011			2010
Net cash flow provided by operating activities	$	29,659		$	14,482
Net cash flow used in investing activities		(10,127	)		(58,763	)
Net cash flow provided by financing activities		1,988			80,707

Increase in cash and cash equivalents	$	21,520		$	36,426

Operating Activities

For the nine months ended September 30, 2011, our operating activities generated consolidated net income of $21,623,000 and generated cash flow of $29,659,000. Our cash provided by operations reflects our net income adjusted by: (i)$13,290,000 of discount accretion received in cash; (ii) a decrease for non-cash items of $13,964,000 representing primarily loan discount accretion and unrealized gains on loan securities offset by adding back depreciation and amortization expenses and $3,000,000 for impairment charges; (iii) $8,417,000 of distributions from non-consolidated interests; and (iv) a net increase due to changes in other operating assets and liabilities of $293,000. See our discussion of Results of Operations below for additional details on our operations.

Investing Activities

Cash flow used in investing activities for the nine months ended September 30, 2011 was approximately $10,127,000 as compared to cash flows used in investing activities of approximately $58,763,000 for the comparable period in 2010. The change from 2010 of approximately $48,636,000 resulted primarily from repayments of loans receivable, return of capital distributions from our equity investments, increased proceeds from the sale of REIT securities carried at fair value, proceeds from payoff of loan securities and decreased investment in REIT security acquisitions.

Net cash used in investing activities of $10,127,000 for the nine months ended September 30, 2011 was comprised primarily of the following:

	•		$30,950,000 for investment in our Vintage Housing property joint venture;

	•		$20,641,000 for a new loan to our Sealy Northwest Atlanta joint venture;

	•		$18,093,000 for investment in our Lakeside Eagle loan joint venture;

	•		$17,525,000 for the acquisition of a new loan receivable;

	•		$8,037,000 for investment in our Gotham loan joint venture;

	•		$8,810,000 for investment in our other new joint ventures;

	•		$6,346,000 for additional loan advances under existing facilities;

	•		$5,788,000 for investment in capital and tenant improvements at our operating properties;

	•		$5,708,000 for preferred equity investment in 450 W 14^th St.;

	•		$2,011,000 for investment in our Marc Realty equity investments;

	•		$1,500,000 for preferred equity investment in Vintage Housing; and

	•		$568,000 for purchases of REIT securities carried at fair value.

These uses of cash flow were offset primarily by:

	•		$26,281,000 in proceeds from the sale of REIT securities carried at fair value;

	•		$26,432,000 in return of capital distributions including full returns of our investments in Lakeside Eagle and Gotham;

	•		$15,991,000 in proceeds from the repayment of our Sealy Northwest Atlanta loan;

	•		$8,544,000 in proceeds from the repayment on our Marc Realty loans;

	•		$6,500,000 in proceeds from the repayment of our Metropolitan Tower loan receivable;

	•		$6,000,000 in proceeds from the sale of three of our Marc Realty investments;

	•		$5,250,000 in proceeds from the repayment of our Beverly Hilton loan;

	•		$4,160,000 in repayments from Concord on our compliance loan receivable; and

	•		$2,500,000 in proceeds from the repayment of our Siete Square loan.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

Financing Activities

Cash flow provided by financing activities for the nine months ended September 30, 2011 was approximately $1,988,000 as compared to cash flow used in financing activities of approximately $80,707,000 for the comparable period in 2010. This change of approximately $78,719,000 resulted primarily from repayments on our revolving line of credit, principal payments on our mortgage loans payable and dividends paid.

Net cash provided by financing activities of $1,988,000 for the nine months ended September 30, 2011 was comprised primarily of the following:

	•		$61,386,000 of net proceeds from the issuance in April 2011 of 5,750,000 Common Shares;

	•		$27,324,000 drawn down on our revolving line of credit;

	•		$15,150,000 in proceeds from the issuance of the senior participation in the San Marbeya loan; and

	•		$11,000,000 in proceeds from the financing of our Plantation, Florida property.

These sources of cash flow were offset primarily by:

	•		$47,307,000 for mortgage loan repayments which, in addition to scheduled debt amortization, included $8,764,000 for the satisfaction of loans payable on our Andover, Massachusetts and Burlington, Vermont properties which matured in March 2011, $19,002,000 for the satisfaction of our loan payable which was scheduled to mature in June 2011 and $15,391,000 for the satisfaction of our loan payable which was scheduled to mature in June 2016;

	•		$52,774,000 for payments on our revolving line of credit; and

	•		$14,140,000 for dividend payments on our Common Shares.

Future Cash Commitments

In addition to our initial purchase price of certain loans and preferred equity investments, we have future funding requirements which total approximately $9,922,364 at September 30, 2011. In connection with the new lease agreement at our Churchill, Pennsylvania property we have committed to perform subdivision and utility work estimated to cost approximately $1,000,000.

Common Share Dividends

During 2011 we paid a quarterly dividend of $0.1625 per Common Share for each of the first three quarters of 2011. We paid a regular quarterly dividend of $0.40625 per Series B-1 Preferred Share and Series C Preferred Share in each of the first three quarters of 2011.

Comparability of Financial Data from Period to Period

The comparability of financial data from period to period is affected by several items including (i) the timing of our property acquisitions and leasing activities; (ii) the purchases and sales of assets and investments; (iii) when material other-than-temporary impairment losses on assets in our portfolio are taken; and (iv) the reclassification of assets. In this regard, the comparability of financial results for the periods presented were impacted by the addition of four operating properties (one direct acquisition and three loan foreclosures) in 2010, impairment losses recognized in 2011 on our investments in real estate and our equity investments, the gain on the extinguishment of debt recognized in 2011, the acquisition of several loan assets in 2010 and the first six months of 2011, and the divestiture of several REIT securities in 2010 and 2011.

Results of Operations

Our results are discussed below by business segment:

	•		Operating Properties — our wholly and partially owned operating properties;

	•		Loan Assets — our loans receivable, loan securities carried at fair value, and equity investments in loan assets;

	•		REIT Securities — our ownership of equity and debt securities in other real estate investment trusts; and

	•		Corporate — non-segment specific results which includes interest on cash reserves, general and administrative expenses and other non-segment specific income and expense items.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

The following table summarizes our assets by business segment (in thousands):


	September 30,		December 31,
	2011		2010

Operating properties	$	382,859	$	373,142
Loan assets		150,676		134,269
REIT securities		6,652		33,032
Corporate
Cash and cash equivalents		66,777		45,257
Restricted cash		4,916		8,593
Straight line rent receivable		9,666		8,729
Other accounts receivable and prepaids		2,714		3,673
Deferred financing costs		1,184		1,158
Discontinued Operations		1,491		2,275

Total Assets	$	626,935	$	610,128

The increase in operating property assets was due primarily to our Vintage Housing Portfolio acquisition which was primarily offset by the sale of three of our Marc Realty equity investments, the classification of our St. Louis, Missouri property to discontinued operations and a $3,000,000 impairment charge taken on our wholly owned Lisle, Illinois property referred to as 701 Arboretum.

The increase in loan assets was due primarily to the issuance and acquisition of new loan assets, for an aggregate investment of $84,883,000, which was partially offset by the repayment of loan assets for aggregate collections of $78,343,000.

The decrease in REIT securities assets was primarily the result of our divestiture of these assets during the first quarter of 2011. We received proceeds of $26,281,000 from the sale of securities in the first nine months of 2011 while only investing $568,000 in acquiring new securities during the same period.

Comparison of Nine Months ended September 30, 2011 versus Nine Months ended September 30, 2010

The following table summarizes our results from continuing operations before non-controlling interest by business segment for the nine months ended September 30, 2011 and 2010 (in thousands):


	2011			2010

Operating properties	$	1,964		$	3,284
Loan assets		28,451			12,258
REIT securities		(5	)		7,131
Corporate expenses		(8,789	)		(7,444	)


Income from continuing operations	$	21,621		$	15,229

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

Operating Properties

The following table summarizes our results from continuing operations for our operating properties business segment for the nine months ended September 30, 2011 and 2010 (in thousands):


	2011			2010

Rents and reimbursements	$	33,061		$	27,999
Operating expenses		(11,567	)		(5,579	)
Real estate taxes		(3,450	)		(2,012	)
Equity in income (loss) of Marc Realty investments		(319	)		1,494
Equity in income (loss) of Sealy Northwest Atlanta		622			(541	)
Equity in loss of Sealy Airpark Nashville		(728	)		(681	)
Equity in loss of Sealy Newmarket		(1,816	)		(750	)
Equity in income of Vintage		424			—

Operating income		16,227			19,930

Depreciation and amortization expense		(9,978	)		(7,050	)
Interest expense		(10,006	)		(9,596	)
Gain on extinguishment of debt		8,514			—
Impairment loss on investment in real estate		(3,000	)		—
Gain on sale of equity investments		207			—

Operating properties net income	$	1,964		$	3,284

Operating income from our operating properties, which we define as all items of income and expense directly derived from or incurred by this segment before depreciation and amortization, interest expense, impairments and gains or losses, decreased by $3,703,000 compared to the prior year period.

The following table breaks out our operating results from same store properties (properties held throughout both the current and prior year reporting periods) and new store properties (in thousands):

Consolidated Operating Properties


	For the Nine Months Ended
	September 30,
	2011		2010

Rents and reimbursements
Same store properties	$	27,633	$	27,983
New store properties		5,428		16

		33,061		27,999


Operating expenses
Same store properties		9,389		5,550
New store properties		2,178		29

		11,567		5,579


Real estate taxes
Same store properties		2,495		1,717
New store properties		955		295

		3,450		2,012


Consolidated operating properties operating income
Same store properties		15,749		20,716
New store properties		2,295		(308	)

	$	18,044	$	20,408

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

The decrease in operating income for our same store properties was primarily the result of operating expenses at our Churchill, Pennsylvania property which was partially offset by positive results from our new store properties.

	•		Rental revenues increased by $5,062,000 due to new store revenues of $5,428,000, while same store revenues declined by $350,000. Declines at our Churchill, Pennsylvania property and our Lisle, Illinois property were partially offset by increased revenue at our Andover, Massachusetts property and our One East Erie Chicago, Illinois property;

	•		Operating expenses increased by $5,988,000 due to increased expenses at our same store properties of $3,839,000 and expenses at our new store properties of $2,178,000. The increase in the same store operating expenses relates primarily to operating expenses of $3,902,000 at our Churchill, Pennsylvania property; and

	•		Real estate tax expense increased by $1,438,000 due to increased expenses at our new store properties of $660,000 and increases at our same store properties of $778,000. The increase in the same store real estate tax expense was primarily due to real estate taxes of $627,000 at our Churchill, Pennsylvania property and increased real estate taxes at the Lisle, Illinois property as a result of tax abatements recorded in 2010.

Depreciation and amortization expense increased by $2,928,000 in 2011 primarily as a result of our four property acquisitions in 2010. Interest expenses related to our operating properties increased by $410,000 primarily as a result of $1,164,000 of interest expense on our Connecticut multi-family property acquired in the fourth quarter of 2010 which was partially offset by reductions at our Lisle, Illinois; Andover, Massachusetts and Burlington, Vermont properties as a result of our paying off the loans. The gain on extinguishment of debt and the impairment charges relate to our Lisle, Illinois properties.

Non-Consolidated Operating Properties: Equity Investments

Operating results for our equity investments was a net loss of $1,817,000 for the nine months ended September 30, 2011 compared to a net loss of $478,000 for the nine months ended September 30, 2010.

	•		Operating income from our Sealy Northwest Atlanta investment increased by $1,163,000 due primarily to the discounted payoff of the first mortgage loan in June 2011. The discounted payoff resulted in an allocation of cancellation of debt income to us of approximately $5,522,000. This was partially offset by the recognition of a $2,900,000 other-than-temporary impairment charge in June 2011.

	•		Operating loss from our Sealy Newmarket investment increased by $1,066,000 due primarily to a $900,000 other-than-temporary impairment charge recognized in June 2011. In addition, we were allocated approximately $589,000 of additional interest expense during the nine months ended September 30, 2011 as a result of the first mortgage loan being in default while it is in special servicing. Rental revenues were also lower at this property during the current periods as a result of the loss of a significant tenant in April 2011.

	•		Operating income from our Marc Realty investments decreased by $1,813,000 primarily as a result of the sale of three investments on June 1, 2011. We have recognized a gain of $207,000 on these sales.

	•		Operating income from our Vintage portfolio which closed June 24, 2011 was $424,000 for the period.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

Loan Assets

The following table summarizes our results from our loan assets business segment for the nine months ended September 30, 2011 and 2010 (in thousands):


	2011			2010

Interest	$	8,440		$	3,397
Discount accretion		11,167			6,087
Equity in earnings of preferred equity investment in Marc Realty		253			253
Equity in earnings of preferred equity investment in 450 W 14th St		245			—
Equity in earnings of ROIC-Riverside LLC		702			239
Equity in earnings of WRT-46th Street Gotham LLC		621			—
Equity in earnings of ROIC-Lakeside Eagle LLC		666			—
Equity in earnings of Concord		3,028			—
Equity in loss of PSW NYC		—			(1,089	)
Equity in earnings of LW SOFI		1,117			—
Equity in earnings of RE CDO Management		23			—
Unrealized gain on loan securities carried at fair value		2,772			3,593

Operating income		29,034			12,480

General and administrative expense		(58	)		(222	)
Interest expense		(525	)		—

Loan assets net income	$	28,451		$	12,258

Operating income from loan assets, which we define as all items of income and expense directly derived from or incurred by this business segment before general and administrative and interest expense, increased by $16,554,000 as compared to the prior year period. The increase was due primarily to:

•

a $5,080,000 increase in discount accretion due primarily to the recognition of $3,504,000 as a result of the early pay off at par of our Metropolitan Tower loan;

•

a $5,043,000 increase in interest income due primarily to the acquisition of new loans throughout 2010 and 2011;

•

a $3,374,000 increase in equity in earnings recognized in 2011 on our loan assets held in joint ventures acquired subsequent to June 30, 2010; and

•

$3,028,000 in earnings from Concord as a result of cash distributions received in 2011.

These increases were partially offset by an $821,000 decrease in unrealized gain on loan securities in 2011 as compared to the same period in 2010.

Interest expense represents interest on our $15,150,000 secured financing of our San Marbeya loan receivable done in the first quarter of 2011.

REIT Securities

The following table summarizes our results from our REIT securities business segment for the nine months ended September 30, 2011 and 2010 (in thousands):


	2011			2010

Interest and dividends	$	662		$	2,263
Gain on sale of securities carried at fair value		131			588
Unrealized gain (loss) on securities carried at fair value		(798	)		4,280

Operating income (loss)	$	(5	)	$	7,131

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

Operating income from REIT securities, which we define as all items of income and expense directly derived from or incurred by this business segment before interest expense, decreased by $7,136,000 as compared to the prior year period. The decrease was due primarily to:

•

a $5,078,000 reduction in unrealized gain on securities carried at fair value primarily as a result of our divestiture of securities;

•

a $1,601,000 decrease in interest and dividend income primarily due to the sale of certain securities; and

•

a $457,000 reduction in realized gain on the sale of securities carried at fair value.

Corporate

The following table summarizes our results from our corporate business segment for the nine months ended September 30, 2011 and 2010 (in thousands):


	2011			2010

Interest income	$	1,008		$	94
General and administrative		(8,117	)		(5,901	)
Interest expense		(1,592	)		(1,530	)
State and local taxes		(88	)		(107	)

Operating loss	$	(8,789	)	$	(7,444	)

The increase in corporate operating loss for the comparable periods was due primarily to a $2,216,000 increase in general and administrative expenses due primarily to an increase in the base management fee of $2,299,000 as a result of an increase in the outstanding equity that is subject to the fee and the full impact in 2011 of the 2010 change in the fee structure offset by a $283,000 decrease in professional fees. The decrease in professional fees was primarily the result of $200,000 in costs incurred in 2010 related to pursuing potential investments.

State income taxes were $88,000 and $107,000 for the nine months ended September 30, 2011 and 2010, respectively, due primarily to our anticipated taxable income for state purposes, after deductions for dividends paid and after the utilization of net operating loss carryforwards, where applicable.

Discontinued Operations

The decrease in loss from discontinued operations results primarily from impairment charges of $2,720,000 recognized in 2010.

Comparison of Three Months ended September 30, 2011 versus Three Months ended September 30, 2010

The following table summarizes our results from continuing operations by business segment for the three months ended September 30, 2011 and 2010 (in thousands):


	2011			2010

Operating properties	$	5,001		$	1,351
Loan assets		9,033			3,810
REIT securities		(875	)		3,068
Corporate expenses		(2,861	)		(2,717	)


Income from continuing operations	$	10,298		$	5,512

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

Operating Properties

The following table summarizes results from continuing operations for our operating properties business segment for the three months ended September 30, 2011 and 2010 (in thousands):


	2011			2010

Rents and reimbursements	$	10,840		$	9,243
Operating expenses		(3,536	)		(1,812	)
Real estate taxes		(1,107	)		(952	)
Equity in income (loss) of Marc Realty investments		(199	)		1,187
Equity in loss of Sealy Northwest Atlanta		(119	)		(192	)
Equity in loss of Sealy Airpark Nashville		(275	)		(248	)
Equity in loss of Sealy Newmarket		(672	)		(301	)
Equity in earnings of Vintage		424			—

Operating income		5,356			6,925

Depreciation and amortization expense		(3,185	)		(2,378	)
Interest expense		(2,891	)		(3,196	)
Gain on extinguishment of debt		8,514			—
Impairment loss on investment in real estate		(3,000	)		—
Gain on sale of equity investments		207			—

Operating properties net income	$	5,001		$	1,351

Operating income from our operating properties for the three months ended September 30, 2011 decreased by $1,569,000 over the prior year period.

The following table breaks out our operating results from same store properties (properties held throughout both the current and prior year reporting periods) and new store properties (in thousands):

Consolidated Operating Properties


	For the Three Months Ended
	September 30,
	2011		2010

Rents and reimbursements
Same store properties	$	9,017	$	9,227
New store properties		1,823		16

		10,840		9,243


Operating expenses
Same store properties		2,729		1,783
New store properties		807		29

		3,536		1,812


Real estate taxes
Same store properties		848		657
New store properties		259		295

		1,107		952


Consolidated operating properties operating income
Same store properties		5,440		6,787
New store properties		757		(308	)

	$	6,197	$	6,479

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

The decrease in same store operating income was primarily the result of higher costs from our Churchill, Pennsylvania property and on our Jacksonville, Florida property, and lower revenue at our Lisle, Illinois properties.

•

Rental revenues increased by $1,597,000 due to new store properties’ revenues of $1,823,000, while same store properties’ revenues declined by $210,000. Declines at our Churchill, Pennsylvania property and our Lisle, Illinois property were partially offset by increased revenue at our One East Erie Chicago, Illinois property;

•

Operating expenses increased by $1,724,000 due to increased expenses at our same store properties of $946,000 and expenses at our new store properties of $778,000. The increase in same store operating expenses was primarily the result of a $638,000 increase in expenses at our Churchill, Pennsylvania property and increases in expenses at our One East Erie Chicago, Illinois and Jacksonville, Florida properties; and

•

Real estate tax expense increased by $155,000 primarily due to real estate taxes of $221,000 at our Churchill, Pennsylvania property.

Depreciation and amortization expense increased by $807,000 primarily as a result of our four property acquisitions in 2010. During 2011, interest expenses related to our operating properties decreased by $305,000 primarily as a result of interest savings on our Lisle, Illinois; Andover, Massachusetts and Burlington, Vermont properties whose loans were satisfied in 2011.

Non-Consolidated Operating Properties: Equity Investments

Operating results for our equity investments was a net loss of $841,000 for the three months ended September 30, 2011 compared to net income of $446,000 for the three months ended September 30, 2010.

•

Operating loss from our Sealy Newmarket investment increased by $371,000 due primarily to approximately $197,000 of additional interest expense during the three months ended September 30, 2011 as a result of the first mortgage loan being in default. Rental revenues were also lower at this property during the current period as a result of the loss of a significant tenant in April 2011.

•

Operating income from our Vintage investment was $424,000 for the three months ended September 30, 2011.

•

Operating loss from our Marc Realty investments increased by $1,386,000 due to the sale of three of these investments in June 2011.

Loan Assets

The following table summarizes results from our loan assets business segment for the three months ended September 30, 2011 and 2010 (in thousands):


	2011			2010

Interest	$	3,043		$	1,840
Discount accretion		2,374			2,345
Equity in earnings of preferred equity investment in Marc Realty		85			85
Equity in earnings of preferred equity investment in 450 W 14th St		172			—
Equity in earnings of ROIC-Riverside LLC		234			234
Equity in earnings of Concord		2,549			—
Equity in loss of PSW NYC		—			(1,089	)
Equity in earnings of LW SOFI		855			—
Equity in earnings of RE CDO Management		23			—
Unrealized gain (loss) on loan securities carried at fair value		(75	)		581

Operating income		9,260			3,996

General and administrative expense		(43	)		(186	)
Interest expense		(184	)		—

Loan assets net income	$	9,033		$	3,810

Operating income from loan assets increased by $5,264,000 from $3,996,000 for the three months ended September 30, 2010 to $9,260,000 for the three months ended September 30, 2011. The increase was due primarily to:

•

a $2,549,000 distribution from our equity investment in Concord in 2011;

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

•

a $2,139,000 increase in equity earnings from our loan investments held in joint ventures; and

•

a $1,203,000 increase in interest income primarily due to fluctuation in loan asset holdings.

The increases were partially offset by a $656,000 decrease in unrealized gain on loan securities.

REIT Securities

The following table summarizes results from our REIT securities business segment for the three months ended September 30, 2011 and 2010 (in thousands):


	2011			2010

Interest and dividends	$	86		$	763
Loss on sale of securities carried at fair value		—			(185	)
Unrealized gain (loss) on securities carried at fair value		(961	)		2,490

Operating income (loss)	$	(875	)	$	3,068

Operating loss from REIT securities increased by $3,943,000 from income of $3,068,000 for the three months ended September 30, 2010 to a loss of $875,000 for the three months ended September 30, 2011. The decrease was due primarily to:

•

a $3,451,000 reduction in unrealized gain on securities carried at fair value; and

•

a $677,000 decrease in interest and dividend income primarily due to the sale of certain securities.

Corporate

The following table summarizes results from our corporate business segment for the three months ended September 30, 2011 and 2010 (in thousands):


	2011			2010

Interest income	$	472		$	17
General and administrative		(2,850	)		(2,114	)
Interest expense		(471	)		(613	)
State and local taxes		(12	)		(7	)

Operating loss	$	(2,861	)	$	(2,717	)

The increase in operating loss from corporate operations for the comparable periods was due primarily to a $736,000 increase in general and administrative expenses due primarily to an increase in the base management fee of $708,000.

State income taxes were $12,000 and $7,000 for the three months ended September 30, 2011 and 2010, respectively, due primarily to our estimate of taxable income for state purposes, after deductions for dividends paid and after the utilization of net operating loss carry forwards, where applicable.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

Funds From Operations

The Trust has adopted the revised definition of Funds from Operations (“FFO”), adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”). Management considers FFO to be an appropriate measure of performance of a REIT. We calculate FFO by adjusting net income (loss) (computed in accordance with GAAP, including non-recurring items), for gains (or losses) from sales of properties, real estate related depreciation and amortization, and adjustment for unconsolidated partnerships and ventures. Management believes that in order to facilitate a clear understanding of the historical operating results of the Trust, FFO should be considered in conjunction with net income as presented in the consolidated financial statements included elsewhere herein. Management considers FFO to be a useful measure for reviewing the comparative operating and financial performance of the Trust because, by excluding gains and losses related to sales of previously depreciated operating real estate assets and excluding real estate asset depreciation and amortization (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO can help one compare the operating performance of a company’s real estate between periods or as compared to different companies.

The Trust’s calculation of FFO may not be directly comparable to FFO reported by other REITs or similar real estate companies that have not adopted the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently. FFO is not a GAAP financial measure and should not be considered as an alternative to net income (loss), the most directly comparable financial measure of our performance calculated and presented in accordance with GAAP, as an indication of our performance. FFO does not represent cash generated from operating activities determined in accordance with GAAP and is not a measure of liquidity or an indicator of our ability to make cash distributions. We believe that to further understand our performance, FFO should be compared with our reported net income and considered in addition to cash flows in accordance with GAAP, as presented in our consolidated financial statements.

Based on the October 31, 2011 updated guidance on reporting FFO, the Trust has excluded impairment losses on depreciable real estate as well as other-than-temporary impairment on equity method joint ventures in the calculations of FFO and has restated prior period calculations to be consistent with this presentation.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

The following presents a reconciliation of net income to funds from operations for the three and nine months ended September 30, 2011 and 2010 (in thousands, except per share amounts):


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2011			2010			2011			2010
Basic
Net income attributable to Winthrop Realty Trust	$	9,846		$	3,808		$	20,772		$	12,589
Real estate depreciation		2,094			1,569			6,298			4,583
Amortization of capitalized leasing costs		1,092			872			3,683			2,591
Loss on sale of real estate		58			—			58			—
Real estate depreciation and amortization of unconsolidated interests		2,996			2,245			7,635			6,646
Impairment loss on investments in real estate		3,000			1,720			3,000			2,720
Impairment loss on equity investments		—			—			3,800			—
Less: Non-controlling interest share of depreciation and amortization		(790	)		(787	)		(2,371	)		(2,371	)

Funds from operations		18,296			9,427			42,875			26,758
Series C preferred dividends		(59	)		(59	)		(176	)		(230	)

Allocation of earnings to Series B-1 Preferred Shares		(170	)		(63	)		(257	)		(137	)

Allocation of earnings to Series C Preferred Shares		(82	)		(53	)		(176	)		(242	)

FFO applicable to Common Shares — Basic	$	17,985		$	9,252		$	42,266		$	26,149

Weighted-average Common Shares		32,949			21,412			30,889			21,064

FFO Per Common Share — Basic	$	0.55		$	0.43		$	1.37		$	1.24


Diluted
Funds from operations	$	18,296		$	9,427		$	42,875		$	26,758

Series C Preferred Shares Dividend		(59	)		(59	)		(176	)		(230	)
Allocation of earnings to Series B-1 Preferred Shares (1)		(170	)		(63	)		(257	)		(137	)

Allocation of earnings to Series C Preferred Shares		(82	)		(53	)		(176	)		(242	)

FFO applicable to Common Shares	$	17,985		$	9,252		$	42,266		$	26,149


Weighted-average Common Shares		32,949			21,412			30,889			21,064
Stock options (2)		—			2			—			2
Convertible Series C Preferred Shares (3)		—			—			—			—

Diluted weighted-average Common Shares		32,949			21,414			30,889			21,066

FFO Per Common Share — Diluted	$	0.55		$	0.43		$	1.37		$	1.24


(1)		The Trust’s Series B-1 Preferred Shares were anti-dilutive for the three and nine months ended September 30, 2011 and 2010.

(2)		The Trust’s stock options were dilutive for the three and nine months ended September 30, 2010 and anti-dilutive for the three and nine months ended September 30, 2011.

(3)		The Trust’s Series C Preferred Shares were dilutive for the three and nine months ended September 30, 2010 and anti- dilutive for the three and nine months ended September 30, 2011.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

Critical Accounting Policies and Estimates

A summary of our critical accounting policies is included in our Annual Report on Form 10-K for the year ended December 31, 2010.

Recently Issued Accounting Standards

None.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011


ITEM 3.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We have exposure to fluctuations in market interest rates. Market interest rates are highly sensitive to many factors beyond our control. Various financial vehicles exist which would allow management to partially mitigate the potential negative effects of interest rate fluctuations on our cash flow and earnings.

The fair value of our debt, based on discounted cash flows at the current rate at which similar loans would be made to borrowers with similar credit ratings for the remaining term of such debt, was less than its carrying value by $10,870,000 and $22,042,000 at September 30, 2011 and December 31, 2010, respectively.

The following table shows what the annual effect a change in the LIBOR rate would have on interest expense based upon the unhedged balances in variable rate debt at September 30, 2011 (in thousands):


	Change in LIBOR(2)
	-0.24%			1%		2%		3%

Change in consolidated interest expense	$	—		$	—	$	—	$	—
Pro-rata share of change in interest expense of debt on non-consolidated entities (1)		(27	)		91		133		267


(Increase) decrease in net income	$	(27	)	$	91	$	133	$	267


(1)		Represents our pro-rata share of a change in interest expense in our Marc Realty equity investment. The amount does not reflect our equity investment in Concord which has been written down to zero.

(2)		The one-month LIBOR rate at September 30, 2011 was 0.24%.

The Trust completed its multi-stage investment in Vintage in June 2011. Vintage holds floating rate debt of approximately $146,565,000 and bears interest at a rate indexed to the Securities Industry and Financial Markets Association Municipal Swap Index (SIFMA). Based on our effective 75% ownership in Vintage, the annual effect of a change in the SIFMA rate of 1%, 2%, and 3% would increase our pro rata share of interest expense by approximately $1,099,000, $2,198,000, and $3,298,000, respectively.

We may utilize various financial instruments to mitigate the potential negative impact of interest rate fluctuations on our cash flows and earnings, including hedging strategies, depending on our analysis of the interest rate environment and the costs and risks of such strategies. In addition, as of September 30, 2011 and December 31, 2010 our variable rate loan assets with a face value aggregating $50,441,000 and $53,922,000, respectively, partially mitigate our exposure to change in interest rates.


ITEM 4.		CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), as appropriate, to allow timely decisions regarding required disclosure.

As of June 30, 2011, an evaluation was performed under the supervision and with the participation of our management, including the CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) under the Securities Exchange Act of 1934). Based on that evaluation, our management, including the CEO and CFO, concluded that our disclosure controls and procedures were effective as of September 30, 2011.

Other Matters

There have been no changes in our internal controls over financial reporting during the most recent quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

PART II. OTHER INFORMATION


ITEM 6.		EXHIBITS

Exhibits required by Item 601 of Regulation S-K are filed herewith or incorporated herein by reference and are listed in the attached Exhibit Index.

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Trust has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	Winthrop Realty Trust
Date: November 7, 2011	By:	/s/ Michael L. Ashner
		Michael L. Ashner
		Chief Executive Officer

Date: November 7, 2011	By:	/s/ Thomas C. Staples
		Thomas C. Staples
		Chief Financial Officer

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011

EXHIBIT INDEX


			Page
Exhibit		Description	Number

	3.1	Second Amended and Restated Declaration of Trust as of May 21, 2009 — Incorporated by reference to Exhibit 3.1 to the Trust’s Quarterly Report on Form 10-Q for the period ended June 30, 2009.		—

	3.2	By-laws of Winthrop Realty Trust as amended and restated on November 3, 2009 — Incorporated by reference to Exhibit 3.1 to the Trust’s Current Report on Form 8-K filed November 6, 2009.		—

	3.3	Amendment to By-laws — Incorporated by reference to Exhibit 3.1 to the Trust’s Current Report on Form 8-K filed March 6, 2010.		—

	4.1	Form of certificate for Common Shares of Beneficial Interest. Incorporated by reference to Exhibit 4.1 to the Trust’s Annual Report on Form 10-K for the year ended December 31, 2008.		—

	4.2	Warrant to purchase 500,000 shares of Beneficial Interest of Trust — Incorporated by reference to Exhibit 4(l) to the Trust’s Annual Report on Form 10-K for the year ended December 31, 1998.		—

	4.3	Agreement of Limited Partnership of WRT Realty L.P., dated as of January 1, 2005 — Incorporated by reference to Exhibit 4.1 to the Trust’s Form 8-K filed January 4, 2005.		—

	4.4	Amended and Restated Certificate of Designations for Series B-1 Cumulative Convertible Redeemable Preferred Shares of Beneficial Interest (“Series B-1 Certificate of Designations”) — Incorporated by reference to Exhibit 4.1 to the Trust’s Form 8-K filed June 21, 2005.		—

	4.5	Amendment No. 1 to Series B-1 Certificate of Designations — Incorporated by reference to Exhibit 4.1 to the Trust’s Form 8-K filed November 13, 2007.		—

	4.6	Certificate of Designations for Series C Cumulative Convertible Redeemable Preferred Shares of Beneficial Interest — Incorporated by reference to Exhibit 4.1 to the Trust’s Form 8-K filed November 2, 2009.		—

	10.1	Stock Purchase Agreement between the Trust and FUR Investors, LLC, dated as of November 26, 2003, including Annex A thereto, being the list of Conditions to the Offer — Incorporated by reference to Exhibit 10.1 to the Trust’s Form 8-K filed December 1, 2003.		—

	10.2	Second Amended and Restated Advisory Agreement dated March 5, 2009, between the Trust, WRT Realty L.P. and FUR Advisors LLC. Incorporated by reference to Exhibit 10.3 to the Trust’s Annual Report on Form 10-K for the year ended December 31, 2008.		—

	10.3	Amendment No. 1 to Second Amended and Restated Advisory Agreement — Incorporated by reference to Exhibit 10.30 to the Trust’s Quarterly Report on Form 10-Q for the period ended March 31, 2009.		—

	10.4	Amendment No. 2 to Second Amended and Restated Advisory Agreement — Incorporated by reference to Exhibit 10.1 to the Trust’s Form 8-K filed January 29, 2010.		—

	10.5	Exclusivity Services Agreement between the Trust and Michael L. Ashner — Incorporated by reference to Exhibit 10.4 to the Trust’s Form 8-K filed December 1, 2003.		—

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011


			Page
Exhibit		Description	Number

	10.6	Amendment No. 1 to Exclusivity Agreement, dated November 7, 2005 — Incorporated by reference to Exhibit 10.7 to the Trust’s Form 8-K filed November 10, 2005.		—

	10.7	Covenant Agreement between the Trust and FUR Investors, LLC — Incorporated by reference to Exhibit 10.5 to the Trust’s Form 8-K filed December 1, 2003.		—

	10.8	Amended and Restated Omnibus Agreement, dated March 16, 2005, among Gerald Nudo, Laurence Weiner and WRT Realty L.P. — Incorporated by reference to Exhibit 10.1 to the Trust’s Form 8-K filed March 18, 2005.		—

	10.9	Agreement, dated as of July 1, 2009, among Gerald Nudo, Laurence Weiner and WRT Realty L.P. Incorporated by reference to Exhibit 10.14 to the Trust’s Form 10-Q for the period ended June 30, 2009 filed August 10, 2009.		—

	10.10	Securities Purchase Agreement, dated February 25, 2005, between First Union Real Estate Equity and Mortgage Investments, Perrin Holden & Davenport Capital Corp. and the Investors named therein — Incorporated by reference to Exhibit 10.1 to the Trust’s Form 8-K filed March 3, 2005.		—

	10.11	Securities Purchase Agreement, dated June 15, 2005, between First Union Real Estate Equity and Mortgage Investments, Perrin Holden & Davenport Capital Corp. and the Investors named therein — Incorporated by reference to Exhibit 10.1 to the Trust’s Form 8-K filed June 21, 2005.		—

	10.12	Amended and Restated Registration Rights Agreement, dated June 20, 2005, between First Union Real Estate Equity and Mortgage Investments and the Investors named therein — Incorporated by reference to Exhibit 10.2 to the Trust’s Form 8-K filed June 21, 2005.		—

	10.13	Amended and Restated Investor Rights Agreement, dated June 20, 2005, between First Union Real Estate Equity and Mortgage Investments and the Investors named therein — Incorporated by reference to Exhibit 10.3 to the Trust’s Form 8-K filed June 21, 2005.		—

	10.14	Securities Purchase Agreement, dated November 7, 2005, between the Trust and Vornado Investments L.L.C. (“Vornado”) — Incorporated by reference to Exhibit 10.1 to the Trust’s Form 8-K filed November 10, 2005.		—

	10.15	Agreement between Michael L. Ashner and Winthrop Realty Trust dated July 23, 2006 — Incorporated by reference to Exhibit 10.2 to the Trust’s Form 8-K filed July 25, 2006.		—

	10.16	Winthrop Realty Trust 2007 Long Term Stock Incentive Plan — Incorporated by reference to the Trust’s Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on March 30, 2007.		—

	10.17	Form of Series B-1 and Series C Preferred Share Purchase Agreement, dated November 1, 2009 — Incorporated by reference to Exhibit 10.1 to the Trust’s Form 8-K filed November 2, 2009.		—

	10.18	Investor Rights Agreement (Series C Preferred Shares), dated November 1, 2009, between Winthrop Realty Trust and the investors party thereto — Incorporated by reference to Exhibit 10.2 to the Trust’s Form 8-K filed November 2, 2009.		—

	10.19	Amended and Restated Loan Agreement, dated as of March 3, 2011, between WRT Realty L.P. and KeyBank, National Association. — Incorporated by reference to Exhibit 10.19 to the Trust’s 10-K filed March 16, 2011.		—

WINTHROP REALTY TRUST
FORM 10-Q SEPTEMBER 30, 2011


			Page
Exhibit		Description	Number

	10.20	Guaranty from Winthrop Realty Trust and certain of its Subsidiaries in favor of KeyBank, National Association. — Incorporated by reference to Exhibit 10.20 to the Trust’s 10-K filed March 16, 2011.		—

	31	Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.		(1	)

	32	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.		(1	)

101.INS		XBRL Instance Document		(2	)

101.SCH		XBRL Taxonomy Extension Schema		(2	)

101.CAL		XBRL Taxonomy Extension Calculation Linkbase		(2	)

101.LAB		XBRL Taxonomy Extension Labels Linkbase Document		(2	)

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document		(2	)

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document		(2	)


(1)		filed herewith

(2)		The XBRL related information was previously furnished with the Registrant’s Form 10-Q for the quarter ended September 30, 2011 and is not deemed “filed” for purposes of Section 11 or 12 of the Securities Act of 1933, as amended (the “Securities Act”), or Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of those sections, and is not part of any registration statement to which it may relate, and is not incorporated by reference into any registration statement or other document filed under the Securities Act or the Exchange Act, except as set forth by specific reference in such filing or document.

Winthrop Realty Liquidating Trust - FORM 10-Q - November 7, 2011

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