critical accounting policies critical accounting policies are those that are both significant to the overall presentation of our financial condition and results of operations and require management to make difficult , complex or subjective judgments . for example , significant estimates and assumptions have been made with respect to revenue recognition , capitalization of costs related to real estate investments , potential impairment of real estate investments , operating cost reimbursements , and taxable income . minimum rental income attributable to leases is recorded when due from tenants . certain leases provide for additional percentage rents based on tenants ' sales volumes . these percentage rents are recognized when determinable by us . in addition , leases for certain tenants contain rent escalations and or free rent during the first several months of the lease term ; however , such amounts are not material . real estate assets are stated at cost less accumulated depreciation . all costs related to planning , development and construction of buildings prior to the date they become operational , including interest and real estate taxes during the construction period , are capitalized for financial reporting purposes and recorded as property under development until construction has been completed . the viability of all projects under construction or development are regularly evaluated under applicable accounting requirements , including requirements relating to abandonment of assets or changes in use . to the extent a project , or individual components of the project , are no longer considered to have value , the related capitalized costs are charged against operations . subsequent to completion of construction , expenditures for property maintenance are charged to operations as incurred , while significant renovations are capitalized . depreciation of the buildings is recorded on the straight-line method using an estimated useful life of forty years . we evaluate real estate for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows from the use of these assets . when any such impairment exists , the related assets will be written down to fair value and such excess carrying value is charged to income . the expected cash flows of a project are dependent on estimates and other factors subject to change , including ( 1 ) changes in the national , regional , and or local economic climates , ( 2 ) competition from other shopping centers , stores , clubs , mailings , and the internet , ( 3 ) increases in operating costs , ( 4 ) bankruptcy and or other changes in the condition of third parties , including tenants , ( 5 ) expected holding period , and ( 6 ) availability of credit . these factors could cause our expected future cash flows from a project to change , and , as a result , an impairment could be considered to have occurred . during 2011 and 2010 we recorded impairment charges of $ 13.5 million and $ 8.14 million , respectively , related to the carrying value of our real estate assets . 28 substantially all of our leases contain provisions requiring tenants to pay as additional rent a proportionate share of operating expenses ( “ operating cost reimbursements ” ) such as real estate taxes , repairs and maintenance , insurance , etc . the related revenue from tenant billings is recognized in the same period the expense is recorded . we have elected to be taxed as a reit under the internal revenue code since our 1994 tax year . as a result , we are not subject to federal income taxes to the extent that we distribute annually at least 90 % of our reit taxable income to our stockholders and satisfy certain other requirements defined in the internal revenue code . we established trs entities pursuant to the provisions of the reit modernization act . our trs entities are able to engage in activities resulting in income that previously would have been disqualified from being eligible reit income under the federal income tax regulations . as a result , certain activities of our company which occur within our trs entities are subject to federal and state income taxes . as of december 31 , 2011 and 2010 , we had accrued a deferred income tax amount of $ 705,000. in addition , we have recorded an income tax liability of $ 128,000 and $ 17,000 as of december 31 , 2011 and 2010 respectively . results of operations comparison of year ended december 31 , 2011 to year ended december 31 , 2010 minimum rental income increased $ 2,316,000 , or 8 % , to $ 32,671,000 in 2011 , compared to $ 30,355,000 in 2010. rental income increased $ 3,137,000 due to the acquisition of 10 properties in 2011 along with the full year impact of nine properties acquired in 2010. the increase was also the result of the development of a walgreens drug store in ann arbor , michigan in september 2010 , the development of a walgreens drug store located in atlantic beach , florida in october 2010 , the development of a walgreens drug store in st augustine shores , florida in november 2010 along with the redevelopment of dick 's sporting goods in boynton beach , florida in october 2010. our revenue increases from these developments amounted to $ 1,724,000. rental revenue decreased $ 2,466,000 due to the closure of borders stores due to the bankruptcy liquidation . in addition , rental income decreased $ 79,000 as a result of other rental income adjustments . story_separator_special_tag as of december 31 , 2011 , the net book value of the four mortgaged properties was approximately $ 9.1 million , and annualized base rent for the four mortgaged properties , one of which was currently occupied , was approximately $ .5 million , or 1.4 % of our annualized base rent as of december 31 , 2011. as previously disclosed , the lender declared all four crossed loans in default and accelerated our obligations thereunder . as a result of the borders liquidation program , we did not have sufficient cash flow from the properties to continue to pay the debt service on the crossed loans and elected not to pay the debt service . on march 6 , 2012 , we conveyed the four mortgaged properties , which were subject to the crossed loans , to the lender pursuant to a consensual deed-in-lieu-of-foreclosure process that satisfied the loans . 32 we paid off a note payable in the amount of $ 704,374 on march 31 , 2011. in august 2011 , we entered into a release agreement for the mortgage loan which was formerly secured by the mortgage on the leasehold interest in the former borders store in lawrence , kansas amounting to approximately $ 2.3 million . while the lender had a leasehold mortgage on the property , we owned the fee interest in the property . the underlying ground lease was in default subsequent to borders rejecting the lease and the lender did not cure the underlying default under the ground lease . the release agreement provided for the extinguishment of all liabilities due to the lender under the loan . the gain on extinguishment of $ 2.4 million has been reflected during 2011. in december 2011 , we conveyed the former borders corporate headquarters property in ann arbor , michigan , which was subject to a non-recourse mortgage loan in default , to the lender pursuant to a consensual deed-in-lieu-of-foreclosure process that satisfied the loan of approximately $ 5.5 million . capitalization as of december 31 , 2011 , our total market capitalization was approximately $ 368 million . market capitalization consisted of $ 119.3 million of debt ( including property related mortgages and the credit facility ) , and $ 248.7 million of shares of common stock ( based on the closing price on the nyse of $ 24.38 per share on december 31 , 2011 ) and op units at market value . our ratio of debt to total market capitalization was 32.4 % at december 31 , 2011. at december 31 , 2011 , the noncontrolling interest in the operating partnership represented a 3.41 % ownership in the operating partnership . the op units may , under certain circumstances , be exchanged for our shares of common stock on a one-for-one basis . we , as sole general partner of the operating partnership , have the option to settle exchanged op units held by others for cash based on the current trading price of our shares . assuming the exchange of all op units , there would have been 10,199,533 shares of common stock outstanding at december 31 , 2011 , with a market value of approximately $ 248.7 million . we completed a secondary offering of 1,495,000 shares of common stock in january/february of 2012. the offering , which included the full exercise of the overallotment option by the underwriters , raised net proceeds of approximately $ 35.1 million after deducting the underwriting discount and other expenses . the proceeds from the offering were used to pay down amounts outstanding under the credit facility and for general corporate purposes . 33 contractual obligations the following table outlines our contractual obligations ( in thousands ) , assuming no mortgage defaults , as of december 31 , 2011 : replace_table_token_12_th estimated interest payments are based on stated rates for mortgages payable , and for notes payable the interest rate in effect for the most recent quarter is assumed to be in effect through the respective maturity date . we plan to begin construction of additional pre-leased developments and may acquire additional properties , which will initially be financed by the credit facility . we will periodically refinance short-term construction and acquisition financing with long-term debt , medium term debt and or equity . off-balance sheet arrangements we do not engage in any off-balance sheet arrangements with unconsolidated entities or financial partnerships , such as structured finance or special purpose entities , that have or are reasonably likely to have a material effect on our financial condition , changes in financial condition , revenues or expenses , results of operations , liquidity , capital expenditure or capital resources . inflation our leases generally contain provisions designed to mitigate the adverse impact of inflation on net income . these provisions include clauses enabling us to pass through to our tenants certain operating costs , including real estate taxes , common area maintenance , utilities and insurance , thereby reducing our exposure to cost increases and operating expenses resulting from inflation . certain of our leases contain clauses enabling us to receive percentage rents based on tenants ' gross sales , which generally increase as prices rise , and , in certain cases , escalation clauses , which generally increase rental rates during the term of the leases . in addition , expiring tenant leases permit us to seek increased rents upon re-lease at market rates if rents are below the then existing market rates . funds from operations funds from operations ( “ ffo ” ) is defined by the national association of real estate investment trusts , inc. ( “ nareit ” ) to mean net income computed in accordance with u.s. generally accepted accounting principles ( “ gaap ” ) , excluding gains ( or losses ) from sales of property , plus real estate related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures . in addition ,

liquidity and capital resources our principal demands for liquidity are operations , distributions to our stockholders , debt repayment , development of new properties , redevelopment of existing properties and future property acquisitions . we intend to meet our short-term liquidity requirements , including capital expenditures related to the leasing and improvement of the properties , through cash flow provided by operations and the credit facility . we believe that adequate cash flow will be available to fund our operations and pay dividends in accordance with reit requirements for at least the next 12 months . we may obtain additional funds for future development or acquisitions through other borrowings or the issuance of additional shares of common stock . although market conditions have limited the availability of new sources of financing and capital , which may have an impact on our ability to obtain financing for planned new development projects in the near term , we believe that these financing sources will enable us to generate funds sufficient to meet both our short-term and long-term capital needs . we completed a secondary offering of 1,495,000 shares of common stock in january/february of 2012. the offering , which included the full exercise of the overallotment option by the underwriters , raised net proceeds of approximately $ 35.1 million after deducting the underwriting discount and other expenses . the proceeds from the offering were used to pay down amounts outstanding under the credit facility and for general corporate purposes . our cash flows from operations decreased $ 614,000 to $ 25,497,000 in 2011 , compared to $ 26,111,000 in 2010. cash used in investing activities decreased $ 3,936,000 to $ 29,252,000 in 2011 , compared to $ 33,188,000 in 2010. cash provided by financing activities decreased $ 1,817,000 to $ 5,165,000 in 2011 , compared to $ 6,982,000 in 2010. our cash and cash equivalents increased by $ 1,505,000 to $ 2,003,000 as of december 31 , 2011 as a result of the foregoing factors . 31 during 2011 , we spent approximately $ 497,000 at our existing community shopping centers for tenant improvement or allowance costs , $ 197,000 for leasing commissions and $ 75,000 for other capital items .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```liquidity and capital resources our principal demands for liquidity are operations , distributions to our stockholders , debt repayment , development of new properties , redevelopment of existing properties and future property acquisitions . we intend to meet our short-term liquidity requirements , including capital expenditures related to the leasing and improvement of the properties , through cash flow provided by operations and the credit facility . we believe that adequate cash flow will be available to fund our operations and pay dividends in accordance with reit requirements for at least the next 12 months . we may obtain additional funds for future development or acquisitions through other borrowings or the issuance of additional shares of common stock . although market conditions have limited the availability of new sources of financing and capital , which may have an impact on our ability to obtain financing for planned new development projects in the near term , we believe that these financing sources will enable us to generate funds sufficient to meet both our short-term and long-term capital needs . we completed a secondary offering of 1,495,000 shares of common stock in january/february of 2012. the offering , which included the full exercise of the overallotment option by the underwriters , raised net proceeds of approximately $ 35.1 million after deducting the underwriting discount and other expenses . the proceeds from the offering were used to pay down amounts outstanding under the credit facility and for general corporate purposes . our cash flows from operations decreased $ 614,000 to $ 25,497,000 in 2011 , compared to $ 26,111,000 in 2010. cash used in investing activities decreased $ 3,936,000 to $ 29,252,000 in 2011 , compared to $ 33,188,000 in 2010. cash provided by financing activities decreased $ 1,817,000 to $ 5,165,000 in 2011 , compared to $ 6,982,000 in 2010. our cash and cash equivalents increased by $ 1,505,000 to $ 2,003,000 as of december 31 , 2011 as a result of the foregoing factors . 31 during 2011 , we spent approximately $ 497,000 at our existing community shopping centers for tenant improvement or allowance costs , $ 197,000 for leasing commissions and $ 75,000 for other capital items .
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 Suspicious Activity Report : critical accounting policies critical accounting policies are those that are both significant to the overall presentation of our financial condition and results of operations and require management to make difficult , complex or subjective judgments . for example , significant estimates and assumptions have been made with respect to revenue recognition , capitalization of costs related to real estate investments , potential impairment of real estate investments , operating cost reimbursements , and taxable income . minimum rental income attributable to leases is recorded when due from tenants . certain leases provide for additional percentage rents based on tenants ' sales volumes . these percentage rents are recognized when determinable by us . in addition , leases for certain tenants contain rent escalations and or free rent during the first several months of the lease term ; however , such amounts are not material . real estate assets are stated at cost less accumulated depreciation . all costs related to planning , development and construction of buildings prior to the date they become operational , including interest and real estate taxes during the construction period , are capitalized for financial reporting purposes and recorded as property under development until construction has been completed . the viability of all projects under construction or development are regularly evaluated under applicable accounting requirements , including requirements relating to abandonment of assets or changes in use . to the extent a project , or individual components of the project , are no longer considered to have value , the related capitalized costs are charged against operations . subsequent to completion of construction , expenditures for property maintenance are charged to operations as incurred , while significant renovations are capitalized . depreciation of the buildings is recorded on the straight-line method using an estimated useful life of forty years . we evaluate real estate for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows from the use of these assets . when any such impairment exists , the related assets will be written down to fair value and such excess carrying value is charged to income . the expected cash flows of a project are dependent on estimates and other factors subject to change , including ( 1 ) changes in the national , regional , and or local economic climates , ( 2 ) competition from other shopping centers , stores , clubs , mailings , and the internet , ( 3 ) increases in operating costs , ( 4 ) bankruptcy and or other changes in the condition of third parties , including tenants , ( 5 ) expected holding period , and ( 6 ) availability of credit . these factors could cause our expected future cash flows from a project to change , and , as a result , an impairment could be considered to have occurred . during 2011 and 2010 we recorded impairment charges of $ 13.5 million and $ 8.14 million , respectively , related to the carrying value of our real estate assets . 28 substantially all of our leases contain provisions requiring tenants to pay as additional rent a proportionate share of operating expenses ( “ operating cost reimbursements ” ) such as real estate taxes , repairs and maintenance , insurance , etc . the related revenue from tenant billings is recognized in the same period the expense is recorded . we have elected to be taxed as a reit under the internal revenue code since our 1994 tax year . as a result , we are not subject to federal income taxes to the extent that we distribute annually at least 90 % of our reit taxable income to our stockholders and satisfy certain other requirements defined in the internal revenue code . we established trs entities pursuant to the provisions of the reit modernization act . our trs entities are able to engage in activities resulting in income that previously would have been disqualified from being eligible reit income under the federal income tax regulations . as a result , certain activities of our company which occur within our trs entities are subject to federal and state income taxes . as of december 31 , 2011 and 2010 , we had accrued a deferred income tax amount of $ 705,000. in addition , we have recorded an income tax liability of $ 128,000 and $ 17,000 as of december 31 , 2011 and 2010 respectively . results of operations comparison of year ended december 31 , 2011 to year ended december 31 , 2010 minimum rental income increased $ 2,316,000 , or 8 % , to $ 32,671,000 in 2011 , compared to $ 30,355,000 in 2010. rental income increased $ 3,137,000 due to the acquisition of 10 properties in 2011 along with the full year impact of nine properties acquired in 2010. the increase was also the result of the development of a walgreens drug store in ann arbor , michigan in september 2010 , the development of a walgreens drug store located in atlantic beach , florida in october 2010 , the development of a walgreens drug store in st augustine shores , florida in november 2010 along with the redevelopment of dick 's sporting goods in boynton beach , florida in october 2010. our revenue increases from these developments amounted to $ 1,724,000. rental revenue decreased $ 2,466,000 due to the closure of borders stores due to the bankruptcy liquidation . in addition , rental income decreased $ 79,000 as a result of other rental income adjustments . story_separator_special_tag as of december 31 , 2011 , the net book value of the four mortgaged properties was approximately $ 9.1 million , and annualized base rent for the four mortgaged properties , one of which was currently occupied , was approximately $ .5 million , or 1.4 % of our annualized base rent as of december 31 , 2011. as previously disclosed , the lender declared all four crossed loans in default and accelerated our obligations thereunder . as a result of the borders liquidation program , we did not have sufficient cash flow from the properties to continue to pay the debt service on the crossed loans and elected not to pay the debt service . on march 6 , 2012 , we conveyed the four mortgaged properties , which were subject to the crossed loans , to the lender pursuant to a consensual deed-in-lieu-of-foreclosure process that satisfied the loans . 32 we paid off a note payable in the amount of $ 704,374 on march 31 , 2011. in august 2011 , we entered into a release agreement for the mortgage loan which was formerly secured by the mortgage on the leasehold interest in the former borders store in lawrence , kansas amounting to approximately $ 2.3 million . while the lender had a leasehold mortgage on the property , we owned the fee interest in the property . the underlying ground lease was in default subsequent to borders rejecting the lease and the lender did not cure the underlying default under the ground lease . the release agreement provided for the extinguishment of all liabilities due to the lender under the loan . the gain on extinguishment of $ 2.4 million has been reflected during 2011. in december 2011 , we conveyed the former borders corporate headquarters property in ann arbor , michigan , which was subject to a non-recourse mortgage loan in default , to the lender pursuant to a consensual deed-in-lieu-of-foreclosure process that satisfied the loan of approximately $ 5.5 million . capitalization as of december 31 , 2011 , our total market capitalization was approximately $ 368 million . market capitalization consisted of $ 119.3 million of debt ( including property related mortgages and the credit facility ) , and $ 248.7 million of shares of common stock ( based on the closing price on the nyse of $ 24.38 per share on december 31 , 2011 ) and op units at market value . our ratio of debt to total market capitalization was 32.4 % at december 31 , 2011. at december 31 , 2011 , the noncontrolling interest in the operating partnership represented a 3.41 % ownership in the operating partnership . the op units may , under certain circumstances , be exchanged for our shares of common stock on a one-for-one basis . we , as sole general partner of the operating partnership , have the option to settle exchanged op units held by others for cash based on the current trading price of our shares . assuming the exchange of all op units , there would have been 10,199,533 shares of common stock outstanding at december 31 , 2011 , with a market value of approximately $ 248.7 million . we completed a secondary offering of 1,495,000 shares of common stock in january/february of 2012. the offering , which included the full exercise of the overallotment option by the underwriters , raised net proceeds of approximately $ 35.1 million after deducting the underwriting discount and other expenses . the proceeds from the offering were used to pay down amounts outstanding under the credit facility and for general corporate purposes . 33 contractual obligations the following table outlines our contractual obligations ( in thousands ) , assuming no mortgage defaults , as of december 31 , 2011 : replace_table_token_12_th estimated interest payments are based on stated rates for mortgages payable , and for notes payable the interest rate in effect for the most recent quarter is assumed to be in effect through the respective maturity date . we plan to begin construction of additional pre-leased developments and may acquire additional properties , which will initially be financed by the credit facility . we will periodically refinance short-term construction and acquisition financing with long-term debt , medium term debt and or equity . off-balance sheet arrangements we do not engage in any off-balance sheet arrangements with unconsolidated entities or financial partnerships , such as structured finance or special purpose entities , that have or are reasonably likely to have a material effect on our financial condition , changes in financial condition , revenues or expenses , results of operations , liquidity , capital expenditure or capital resources . inflation our leases generally contain provisions designed to mitigate the adverse impact of inflation on net income . these provisions include clauses enabling us to pass through to our tenants certain operating costs , including real estate taxes , common area maintenance , utilities and insurance , thereby reducing our exposure to cost increases and operating expenses resulting from inflation . certain of our leases contain clauses enabling us to receive percentage rents based on tenants ' gross sales , which generally increase as prices rise , and , in certain cases , escalation clauses , which generally increase rental rates during the term of the leases . in addition , expiring tenant leases permit us to seek increased rents upon re-lease at market rates if rents are below the then existing market rates . funds from operations funds from operations ( “ ffo ” ) is defined by the national association of real estate investment trusts , inc. ( “ nareit ” ) to mean net income computed in accordance with u.s. generally accepted accounting principles ( “ gaap ” ) , excluding gains ( or losses ) from sales of property , plus real estate related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures . in addition ,

