Pan Pacific Retail Properties Reports Solid 1st Quarter Results; 5.4% Growth in FFO Per Share, 97.1% Portfolio Occupancy

Pan Pacific Retail Properties, Inc. (NYSE:PNP), the
largest neighborhood shopping center real estate investment trust
(REIT) focused exclusively on the West Coast, today announced results
for the first quarter ended March 31, 2006. All per share amounts are
on a diluted basis.

   --  6.1% increase in total Funds From Operations (FFO) to $40.5
        million vs. 1Q'05(1)

   --  5.4% increase in FFO per share to $0.98 vs. 1Q'05(1)

   --  Net income of $24.3 million

   --  Earnings per share of $0.60

   --  97.1% portfolio occupancy rate at March 31, 2006

   --  199 leases executed, totaling 655,792 square feet

   --  20.5% increase in base rent on same-store new and renewed
        leases vs. 1Q'05

   --  3.1% increase in same-property net operating income vs. 1Q'05

   --  $10.1 million grocery-anchored shopping center acquisition

   --  27.0% debt to total market capitalization(2) ratio at March
        31, 2006

   --  3.2 to 1.0 interest coverage ratio

   --  Credit rating upgraded to Baa1 by Moody's Investors Services

   --  65.2% FFO payout ratio(1)

   --  8.5% increase in quarterly common dividend to $0.64 per share
        vs. $0.59

   (1) See the end of this press release for a reconciliation of
generally accepted accounting principles net income to FFO.

   (2) Based on the market closing price of Pan Pacific's common
stock on March 31, 2006, assuming the conversion of operating
subsidiary units to common stock, and total debt outstanding.

   Stuart A. Tanz, President and Chief Executive Officer of Pan
Pacific, stated, "Our portfolio continues to excel. First quarter
occupancy reached a new six-year high of 97.1% as our leasing team
executed a record number of leases and achieved a 20.5% increase, on
average, in same-store re-leasing base rent. Additionally, we are
continuing to focus on furthering our market presence in key West
Coast metropolitan regions through our acquisition and disposition
activities. With respect to our balance sheet, in light of our prudent
financial ratios and strong, ongoing performance, we were recently
awarded a rating upgrade by Moody's." Tanz further commented, "Having
completed a solid first quarter, we are on track to meet our
previously stated objectives for 2006."

   FINANCIAL RESULTS

   For the three months ended March 31, 2006, total Funds from
Operations (FFO) increased 6.1% to $40.5 million, compared with FFO
for the three months ended March 31, 2005 of $38.2 million. On a per
share basis, FFO increased 5.4% to $0.98 for the three months ended
March 31, 2006, compared to $0.93 for the three months ended March 31,
2005. A reconciliation of generally accepted accounting principles
(GAAP) net income to FFO is provided at the end of this press release.
   For the three months ended March 31, 2006, total revenue increased
7.3% to $79.4 million as compared to total revenue of $73.9 million
for the three months ended March 31, 2005.
   For the three months ended March 31, 2006, net income was $24.3
million or $0.60 per share, compared with net income of $24.0 million
or $0.59 per share for the three months ended March 31, 2005.
   At March 31, 2006, the Company's total market capitalization was
approximately $4.0 billion (based on the market closing price of Pan
Pacific's common stock on March 31, 2006, assuming the conversion of
operating subsidiary units to common stock, and total debt
outstanding). At March 31, 2006, the Company had approximately $1.1
billion in debt outstanding, equating to a debt-to-total market
capitalization ratio of 27.0%. The Company's debt was comprised of:
$654.0 million of fixed-rate, senior unsecured notes with a weighted
average interest rate of 6.3%, and a weighted average maturity of 6.1
years; $351.7 million of fixed-rate, mortgage debt with a weighted
average interest rate of 7.3%, and a weighted average maturity of 3.8
years; $73.5 million of floating-rate debt outstanding under the
Company's unsecured line of credit, which had a weighted average
interest rate of 5.4% at March 31, 2006; and $6.0 million of
floating-rate, property-level bonds bearing interest at a rate of 3.1%
as of March 31, 2006.
   For the quarter ended March 31, 2006, the Company's interest
coverage ratio was 3.2 to 1.0 (calculated as income from continuing
and discontinued operations, excluding gain on sale, plus
depreciation, amortization and interest expense, divided by interest
expense).

   Dividend Increase

   On February 8, 2006, the Board of Directors declared a quarterly
dividend of $0.64 per share, representing an 8.5% increase from $0.59
per share. The dividend was paid March 15, 2006 to stockholders of
record on February 24, 2006. The increased quarterly dividend equates
to $2.56 per share on an annualized basis. Since its initial public
offering in 1997, the Company has increased its dividend each year for
a total increase of approximately 76.6%, equating to an average
dividend increase of approximately 8.5% per year.

   OPERATING RESULTS

   Leasing Activity

   At March 31, 2006, the Company's portfolio was 97.1% leased to
3,485 tenants. For the three months ended March 31, 2006, the Company
executed 199 leases (new and renewed) for 655,792 square feet of gross
leasable area, and achieved a 20.5% increase over prior rents on a
same-store basis.

   Same Property Operating Results

   With respect to the properties owned and operated by the Company
for the entirety of both the three months ended March 31, 2006 and
2005, same property net operating income increased 3.1%.
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                     Same Property Operating Data
                            (In thousands)

                                                  Three Months
                                                      Ended
                                                    March 31,
                                                -----------------
                                                   2006     2005
                                                -------- --------
 Total revenue                                  $76,906  $74,725
 Operating expenses                              19,435   18,978
                                                -------- --------

 Operating income                               $57,471  $55,747  3.1%
                                                ======== ======== ====
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   INVESTMENT ACTIVITY

   On February 1, 2006, the Company acquired for $10.1 million Harbor
Towne Center, a 70,104 square foot grocery-anchored shopping center in
Oak Harbor, Washington, north of Seattle. Harbor Towne Center is
currently 100% leased and is anchored by Saar's Market. The property
was financed through a combination of borrowings under the Company's
$300 million unsecured line of credit and cash flow from operations.

   CAPITAL MARKETS ACTIVITY

   In March 2006, Moody's Investors Services upgraded the Company's
senior unsecured debt rating to Baa1 with a stable outlook from a
rating of Baa2 with a positive outlook.

   2006 EARNINGS GUIDANCE

   The Company reaffirmed its previously disclosed 2006, full-year
FFO guidance range of $3.97 to $4.01 per diluted share. (1) This
guidance is based on current expectations and is forward-looking.
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                                             Q2 '06       Year 2006
                                         -------------- --------------
Expected earnings per diluted share      $0.69 - $0.72  $2.89 - $2.93
Add: expected depreciation and
 amortization                                    $0.26          $1.04
Add: expected operating subsidiary
 minority interests                              $0.01          $0.04
Expected FFO per diluted share           $0.96 - $0.99  $3.97 - $4.01

(1) Based on an estimated 41,300,000 and 41,300,000 shares
outstanding, respectively.
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   1ST QUARTER 2006 CONFERENCE CALL

   On Thursday, April 27, 2006, at 12:00 noon Eastern Time, the
Company will be hosting a conference call to discuss its first quarter
results for 2006. The Company's remarks will be followed by a question
and answer period, which will be limited to questions from analysts.
Interested parties may participate in this conference call by dialing
[phone]. A taped replay of the call will be available through
May 27, 2006 at [phone], pass code 286, confirmation 196074.
   A live web cast (listen-only mode) of the conference call will be
available at www.pprp.com via a link to www.vcall.com. An online
replay will also be available through May 27, 2006.

   ABOUT PAN PACIFIC RETAIL PROPERTIES

   Pan Pacific Retail Properties, Inc. is an equity real estate
investment trust (REIT) traded on the New York Stock Exchange under
the symbol PNP. The Company is the largest neighborhood shopping
center REIT focused exclusively on the West Coast. Pan Pacific's
portfolio currently totals 139 properties, encompassing approximately
22.7 million square feet of retail space. The portfolio is principally
diversified across five distinct regions in the Western United States:
Northern California, Southern California, Washington, Oregon and
Nevada.
   Pan Pacific specializes in the acquisition, ownership and
management of community and neighborhood shopping centers for everyday
essentials. The Company's strategy is aimed at generating long-term
stable cash flow through maintaining a diverse portfolio and tenant
base, balanced with consistent growth through implementing its
acquisition and property management programs.
   Pan Pacific is headquartered in Vista (San Diego), California, and
has regional offices located in Sacramento, California; Kent,
Washington; Portland, Oregon; and Las Vegas, Nevada.
   Additional information on Pan Pacific is available on the
Company's web site at www.pprp.com.

   (Note: Certain matters discussed within this press release,
including, without limitation, our earnings guidance, are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 which reflect management's
current views with respect to future events and financial performance.
Forward-looking statements are subject to risks and uncertainties.
Factors that could cause actual results to differ materially from
expectations include market valuations of our stock, financial
performance and operations of our shopping centers, real estate market
conditions, execution of shopping center development programs,
successful completion of renovations, completion of pending
acquisitions and dispositions, including the completion of customary
due diligence and closing conditions, the Company's ability to
successfully integrate acquired assets, changes in the availability of
additional acquisition and disposition opportunities, changes in local
or national economic conditions, changes in tax laws, acts of
terrorism or war and other risks detailed from time to time in reports
filed with the Securities and Exchange Commission including the
Company's Annual Report on Form 10-K for the year ended December 31,
2005.)
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                      Consolidated Balance Sheets
                            (In thousands)


                                                  March      December
                                                   31,          31,
                                                  2006         2005
                                              ------------ -----------
                                               (unaudited)
ASSETS:
   Properties, at cost:
       Land                                      $572,660    $574,048
       Buildings and improvements               1,589,070   1,581,489
       Tenant improvements                         67,874      66,702
                                              ------------ -----------
                                                2,229,604   2,222,239
       Less accumulated depreciation and
        amortization                             (252,376)   (240,086)
                                              ------------ -----------
                                                1,977,228   1,982,153

   Investments in unconsolidated entity             1,357       1,379
   Cash and cash equivalents                        5,357       5,859
   Accounts receivable (net of allowance for
    doubtful accounts of $1,829 and $2,121,
    respectively)                                   7,896      10,813
   Accrued rent receivable (net of allowance
    for doubtful accounts of $3,148 and
    $3,283, respectively)                          28,618      28,699
   Notes receivable                                 3,671       3,046
   Deferred lease commissions (net of
    accumulated amortization of $10,754 and
    $9,769, respectively)                          16,072      15,526
   Prepaid expenses                                22,856      21,585
   Other assets                                    28,734      29,704
                                              ------------ -----------
                                               $2,091,789  $2,098,764
                                              ============ ===========

LIABILITIES AND STOCKHOLDERS' EQUITY:
   Notes payable                                 $357,749    $390,132
   Line of credit payable                          73,500      44,500
   Senior notes                                   653,965     653,908
   Accounts payable, accrued expenses and
    other liabilities                              44,302      43,387
                                              ------------ -----------
                                                1,129,516   1,131,927
   Minority interests                              24,985      28,794
                                              ------------ -----------

   Commitments and contingencies

   Stockholders' equity:
     Preferred stock par value $.01 per
      share, 30,000,000 authorized shares, no
      shares issued and outstanding at March
      31, 2006 and December 31, 2005,
      respectively                                      -           -
     Common stock par value $.01 per share,
      100,000,000 authorized shares,
      40,706,888 and 40,701,053 shares issued
      and outstanding, net of 1,190,999
      treasury shares, at March 31, 2006 and
      December 31, 2005, respectively                 408         407
     Additional paid in capital                   961,527     960,444
     Accumulated deficit                          (24,647)    (22,808)
                                              ------------ -----------
                                                  937,288    (938,043)
                                              ------------ -----------
                                               $2,091,789  $2,098,764
                                              ============ ===========



                   Consolidated Statements of Income
                              (unaudited)
                   (In thousands, except share data)


                                                   Three Months Ended
                                                        March 31,
                                                   -------------------
                                                       2006     2005
                                                   ---------- --------
REVENUE:
   Base rent                                         $61,418  $57,531
   Percentage rent                                     1,195      872
   Recoveries from tenants                            16,741   15,542
                                                   ---------- --------
                                                      79,354   73,945
                                                   ---------- --------

EXPENSES:
   Property operating                                 10,804   10,247
   Property taxes                                      6,749    6,370
   Depreciation and amortization                      15,980   13,675
   General and administrative                          3,608    4,068
                                                   ---------- --------
                                                      37,141   34,360
                                                   ---------- --------

OPERATING INCOME                                      42,213   39,585
                                                   ---------- --------

OTHER INCOME (EXPENSE):
   Interest expense                                  (18,188) (16,632)
   Income from unconsolidated entity                      80      154
   Other income                                          836    1,238
   Other expense                                        (252)    (252)
                                                   ---------- --------
                                                     (17,524) (15,492)
                                                   ---------- --------

INCOME BEFORE MINORITY INTERESTS                      24,689   24,093
    Minority interests                                  (614)    (618)
                                                   ---------- --------
INCOME FROM CONTINUING OPERATIONS                     24,075   23,475
    Discontinued operations                              180      519
                                                   ---------- --------
NET INCOME                                           $24,255  $23,994
                                                   ========== ========

Basic earnings per share:
    Income from continuing operations                  $0.60    $0.58
    Discontinued operations                               $-    $0.01
    Net income                                         $0.60    $0.59

Diluted earnings per share:
    Income from continuing operations                  $0.60    $0.58
    Discontinued operations                               $-    $0.01
    Net income                                         $0.60    $0.59



                 Calculation of Funds from Operations
                              (unaudited)
                   (In thousands, except share data)


                                                 Three Months Ended
                                                      March 31,
                                               -----------------------
                                                  2006        2005(a)
                                               ----------- -----------
FUNDS FROM OPERATIONS:

Net Income                                        $24,255     $23,994
   Plus depreciation and amortization expense      15,980      13,845
   Plus depreciation of unconsolidated entity          62          84
   Less corporate FF&E depreciation (included
    above)                                           (125)        (84)
   Less depreciation of minority interests            (67)        (66)
   Plus operating subsidiary minority
    interests                                         367         383
                                               ----------- -----------

Funds From Operations                             $40,472     $38,156
                                               =========== ===========

Funds From Operations Per Share                     $0.98       $0.93

Diluted Weighted Average Shares Outstanding    41,248,365  41,204,366


(a) For comparative purposes, amounts shown are as originally
reported.  The impact of revising the amounts for Statement of
Financial Accounting Standards No. 144 has been excluded here so that
the periods can be compared without the effect of reclassifying
operating results for assets sold in subsequent periods.  Revised
financial results, if applicable, can be found in the Company's most
current Form 10-Q and Form 10-K for 2005 filed with the Securities and
Exchange Commission.

The White Paper on Funds from Operations approved by the Board of
Governors of the National Association of Real Estate Investment Trusts
("NAREIT") in April 2002 (the "White Paper") defines Funds from
Operations as net income (computed in accordance with accounting
principles generally accepted in the United States of America,
"GAAP"), excluding gains (or losses) on sales of property, plus
depreciation and amortization and after adjustments for unconsolidated
partnerships and joint ventures.  We believe that Funds from
Operations (FFO) is an important supplemental measure of operating
performance for a real estate investment trust.  Because the
historical cost accounting convention used for real estate assets
requires straight-line depreciation (except on land), such accounting
presentation implies that the value of real estate assets diminishes
predictably over time.  Since real estate values instead have
historically risen and fallen with market conditions, presentations of
operating results for a real estate investment trust that uses
historical cost accounting for depreciation could be less informative.
The term FFO was designed by the real estate investment trust industry
to address this issue.  We compute Funds from Operations in accordance
with standards established by the White Paper.  Our computation of
Funds from Operations may, however, differ from the methodology for
calculating Funds from Operations used by other equity REITs and,
therefore, may not be comparable to these other REITs.  FFO does not
represent cash generated from operating activities in accordance with
GAAP, is not necessarily indicative of cash available to fund cash
needs and should not be considered as an alternative to net income.
FFO, as defined by us, may not be comparable to similarly entitled
items reported by other real estate investment trusts that do not
define it exactly as the NAREIT definition.
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