Four of the Kmart stores paid percentage rent in addition to their minimum rent during 2003, Agree said as part of a recent SEC filing.

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

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