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## Rentals from Income Properties 

Rentals from income properties (“rentals”) include all amounts earned from tenants related to lease agreements, including basic rent, parking income, operating cost recoveries and realty tax recoveries. Rentals from properties sold or where an asset meets the held- for-sale criteria have been recorded under net earnings from discontinued operations during the year ended December 31, 2010 and 2009. 

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The increase in same-asset current rentals of $3.9 million for Q4 2010 as compared to Q4 2009 is primarily due to the following items: 

 an increase of $2.3 million of additional rent recoverable from tenants in accordance with their leases for items which were capitalized to building improvements; 

 an increase of $0.2 million from rent escalations during the term of tenant leases; 

 an increase of $2.4 million in tenant recoveries due to higher regular property operating expenses; offset by 

 same-asset current rentals from properties in the United States which have decreased by $1.1 million primarily due to the weakening of the U.S. dollar when converted into Canadian dollars. The average exchange rate for the three months ended December 31, 2010 was $1.00 Canadian for each $1.00 U.S. (Q4 2009 - $1.05). 

The increase in same-asset current rentals of $7.7 million for the year ended December 31, 2010 as compared to the same 2009 period is primarily due to the following items: 

 an increase of $8.8 million of additional rent recoverable from tenants in accordance with their leases for items which were capitalized to building improvements; 

 an increase of $4.0 million from rent escalations during the term of tenant leases; 

 an increase of $1.5 million in tenant recoveries due to higher regular property operating expenses; 

 an increase of $2.3 million due to lease terminations and higher recoveries in 2010 as compared to 2009 relating to the final reconciliation of tenant billings for the prior year; offset by 

 same-asset current rentals from properties in the United States which have decreased by $9.6 million primarily due to the weakening of the U.S. dollar when converted into Canadian dollars. The average exchange rate for the year ended December 31, 2010 was $1.03 Canadian for each $1.00 U.S. (December 31, 2009 - $1.14). 

The increase of $2.3 million in the same-asset straight lining of contractual rent for the three months ended December 31, 2010 was due to a calculation correction of $2.4 million. Without this one-time adjustment, straight lining of contractual rent for the three months and year ended December 31, 2010 would have been $2.4 million and $8.6 million, respectively. 

