UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-Q
(Mark One)

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

For the quarterly period ended      June 30, 2008
                                    ------------------
                              OR
  [ ]            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    1-8594
                                            ------
                       PRESIDENTIAL REALTY CORPORATION
                       --------------------------------
             (Exact name of registrant as specified in its charter)

      Delaware                                  13-1954619
      --------                                  ----------
(State or other jurisdiction of             (I.R.S.  Employer
 incorporation or organization)              Identification No.)

180 South Broadway, White Plains, New York  10605
-------------------------------------------------
(Address of principal executive offices)

Registrant's telephone number, including area code  914-948-1300
                                                    ------------
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 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 the past 90 days.  Yes   x            No
                                       --------          --------

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.

   Large accelerated filer                      Accelerated filer
                          -------                                -------
   Non-accelerated filer        (Do not check if a smaller reporting company)
                         ------
   Smaller reporting company    x
                              -----
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).     Yes           No    x
                                          ----         ----
The number of shares outstanding of each of the registrant's classes of common
stock as of the close of business on August 7, 2008 was 442,533 shares of Class
A common and 3,057,042 shares of Class B common.

                PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
                -------------------------------------------------

                               Index to Form 10-Q
                         For the Quarterly Period Ended
                                  June 30, 2008





Part I   Financial Information (Unaudited)

  Item 1.         Financial Statements
                       Consolidated Balance Sheets (Unaudited)
                       Consolidated Statements
                         of Operations (Unaudited)
                       Consolidated Statement
                         of Stockholders' Equity (Unaudited)
                       Consolidated Statements
                         of Cash Flows (Unaudited)
                       Notes to Consolidated
                         Financial Statements (Unaudited)

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

  Item 3.         Quantitative and Qualitative Disclosures
                    about Market Risk

  Item 4.         Controls and Procedures


Part II  Other Information

  Item 2.         Unregistered Sales of Equity Securities
                    and Use of Proceeds

  Item 4.         Submission of Matters to a Vote of
                    Security Holders

  Item 6.         Exhibits





<TABLE>
PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited)
<CAPTION>



                                                                                       June 30,                December 31,
                                                                                         2008                      2007
                                                                                   -----------------         -----------------
Assets
<S>                                                                                     <C>                       <C>
  Real estate (Note 2)                                                                  $20,621,799               $21,041,049
    Less: accumulated depreciation                                                        4,873,785                 4,834,757
                                                                                   -----------------         -----------------

  Net real estate                                                                        15,748,014                16,206,292
  Net mortgage portfolio (of which $2,854,284 in 2008
      and $455,827 in 2007 are due within one year) (Note 3)                              5,004,633                 7,659,225
  Investments in and advances to joint ventures (Note 4)                                  3,186,744                 4,923,201
  Other investments (Note 5)                                                              1,000,000                 1,000,000
  Assets related to discontinued operations (Note 6)                                        564,843                      -
  Prepaid expenses and deposits in escrow                                                 1,280,016                 1,213,162
  Prepaid defined benefit plan costs                                                        269,342                   371,942
  Other receivables (net of valuation allowance of
    $68,439 in 2008 and $147,065 in 2007)                                                   464,806                   370,004
  Cash and cash equivalents                                                               2,518,311                 2,343,497
  Other assets                                                                              762,394                   861,965
                                                                                   -----------------         -----------------

Total Assets                                                                            $30,799,103               $34,949,288
                                                                                   =================         =================

Liabilities and Stockholders' Equity

  Liabilities:
    Mortgage debt (of which $1,523,705 in 2008 and
      $445,130 in 2007 are due within one year)                                         $18,698,432               $18,868,690
    Contractual pension and postretirement benefits liabilities                           2,022,388                 2,169,408
    Accrued liabilities                                                                   2,552,214                 2,431,698
    Accounts payable                                                                        570,905                   464,983
    Other liabilities                                                                       756,259                   755,770
                                                                                   -----------------         -----------------

Total Liabilities                                                                        24,600,198                24,690,549
                                                                                   -----------------         -----------------

  Stockholders' Equity:
     Common stock: par value $.10 per share
       Class A, authorized 700,000 shares, issued 478,940 shares,
          and 18,407 shares in 2008 and 5,375 shares in 2007 held in treasury                47,894                    47,894
       Class B               June 30, 2008           December 31, 2007                      352,455                   352,155
      -----------         ----------------          -------------------
      Authorized:               10,000,000                  10,000,000
      Issued:                    3,524,547                   3,521,547
      Treasury:                    260,505                      29,633

    Additional paid-in capital                                                            4,545,453                 4,486,713
    Retained earnings                                                                     4,182,154                 6,959,104
    Accumulated other comprehensive loss (Note 10)                                       (1,274,049)               (1,331,097)
    Treasury stock (at cost) (Note 11)                                                   (1,655,002)                 (256,030)
                                                                                   -----------------         -----------------

Total Stockholders' Equity                                                                6,198,905                10,258,739
                                                                                   -----------------         -----------------

Total Liabilities and Stockholders' Equity                                              $30,799,103               $34,949,288
                                                                                   =================         =================





  See notes to consolidated financial statements.
</TABLE>



<TABLE>
PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
<CAPTION>





                                                                               THREE MONTHS ENDED JUNE  30,
                                                                              --------------------------------

                                                                                  2008              2007
                                                                              -------------    ---------------
<S>                                                                             <C>                <C>
Revenues:
  Rental                                                                        $1,431,026         $1,345,687
  Interest on mortgages - notes receivable                                         242,508            295,712
  Interest on mortgages - notes receivable - related parties                        92,000             31,254
  Other revenues                                                                     1,198              1,249
                                                                              -------------    ---------------

Total                                                                            1,766,732          1,673,902
                                                                              -------------    ---------------

Costs and Expenses:
  General and administrative                                                       926,506          1,006,854
  Depreciation on non-rental property                                                9,169              7,111
  Rental property:
    Operating expenses                                                             683,782            619,691
    Interest on mortgage debt                                                      404,484            374,715
    Real estate taxes                                                              154,015            152,517
    Depreciation on real estate                                                    128,830            112,404
    Amortization of in-place lease values and mortgage costs                        41,177             84,816
                                                                              -------------    ---------------

Total                                                                            2,347,963          2,358,108
                                                                              -------------    ---------------

Other Income (Loss):
  Investment income                                                                 16,089             17,206
  Equity in the loss from joint ventures (Note 4)                                  (95,604)          (661,410)
                                                                              -------------    ---------------

Loss before minority interest                                                     (660,746)        (1,328,410)

Minority interest                                                                     -                  (825)
                                                                              -------------    ---------------

Loss from continuing operations                                                   (660,746)        (1,329,235)
                                                                              -------------    ---------------

Discontinued Operations (Note 6):
  Income from discontinued operations                                               33,343             25,909
  Net gain from sales of discontinued operations                                      -                88,946
                                                                              -------------    ---------------

Total income from discontinued operations                                           33,343            114,855
                                                                              -------------    ---------------

Net Loss                                                                         ($627,403)       ($1,214,380)
                                                                              =============    ===============
Earnings per Common Share (basic and diluted):
  Loss from continuing operations                                                   ($0.17)            ($0.34)
                                                                              -------------    ---------------

  Discontinued Operations:
    Income from discontinued operations                                               0.01               0.01
    Net gain from sales of discontinued operations                                    -                  0.02
                                                                              -------------    ---------------

  Total income from discontinued operations                                           0.01               0.03
                                                                              -------------    ---------------

  Net Loss per Common Share - basic and diluted                                     ($0.16)            ($0.31)
                                                                              =============    ===============

Cash Distributions per Common Share                                                  $0.16              $0.16
                                                                              =============    ===============

Weighted Average Number of Shares Outstanding - basic and diluted                3,878,734          3,939,103
                                                                              =============    ===============

See notes to consolidated financial statements.



PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)





                                                                                  SIX MONTHS ENDED JUNE 30,
                                                                              --------------------------------

                                                                                  2008              2007
                                                                              -------------    ---------------
Revenues:
  Rental                                                                        $2,916,338         $2,594,247
  Interest on mortgages - notes receivable                                         528,564            587,183
  Interest on mortgages - notes receivable - related parties                       127,500            221,989
  Other revenues                                                                     2,436              4,648
                                                                              -------------    ---------------

Total                                                                            3,574,838          3,408,067
                                                                              -------------    ---------------

Costs and Expenses:
  General and administrative                                                     1,935,927          1,990,008
  Depreciation on non-rental property                                               17,734             14,223
  Rental property:
    Operating expenses                                                           1,376,324          1,324,580
    Interest on mortgage debt                                                      777,836            753,761
    Real estate taxes                                                              308,031            305,034
    Depreciation on real estate                                                    243,754            223,498
    Amortization of in-place lease values and mortgage costs                        99,689            238,175
                                                                              -------------    ---------------

Total                                                                            4,759,295          4,849,279
                                                                              -------------    ---------------

Other Income (Loss):
  Investment income                                                                 36,280             33,909
  Equity in the loss from joint ventures (Note 4)                                 (456,400)        (1,017,465)
                                                                              -------------    ---------------

Loss before minority interest                                                   (1,604,577)        (2,424,768)

Minority interest                                                                     -                (2,222)
                                                                              -------------    ---------------

Loss from continuing operations                                                 (1,604,577)        (2,426,990)
                                                                              -------------    ---------------

Discontinued Operations (Note 6):
  Income (loss) from discontinued operations                                        58,516            (45,952)
  Net gain from sales of discontinued operations                                      -               735,705
                                                                              -------------    ---------------

Total income from discontinued operations                                           58,516            689,753
                                                                              -------------    ---------------

Net Loss                                                                       ($1,546,061)       ($1,737,237)
                                                                              =============    ===============
Earnings per Common Share (basic and diluted):
  Loss from continuing operations                                                   ($0.41)            ($0.62)
                                                                              -------------    ---------------

  Discontinued Operations:
    Income from discontinued operations                                               0.01                -
    Net gain from sales of discontinued operations                                    -                  0.18
                                                                              -------------    ---------------

  Total income from discontinued operations                                           0.01               0.18
                                                                              -------------    ---------------

  Net Loss per Common Share - basic and diluted                                     ($0.40)            ($0.44)
                                                                              =============    ===============

Cash Distributions per Common Share                                                  $0.32              $0.32
                                                                              =============    ===============

Weighted Average Number of Shares Outstanding - basic and diluted                3,906,860          3,938,243
                                                                              =============    ===============

See notes to consolidated financial statements.
</TABLE>



<TABLE>
PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited)
<CAPTION>

                                                                             Accumulated
                                                      Additional                Other                                   Total
                                            Common     Paid-in    Retained   Comprehensive  Treasury   Comprehensive  Stockholders'
                                            Stock      Capital    Earnings      Loss          Stock        Loss         Equity
                                           --------- ---------- ------------ ------------- ------------ ------------  -------------

<S>                                        <C>       <C>         <C>         <C>            <C>          <C>           <C>
Balance at January 1, 2008                 $400,049  $4,486,713  $6,959,104  ($1,331,097)   ($256,030)                 $10,258,739

Cash distributions ($.32 per share)              -           -   (1,230,889)          -            -                    (1,230,889)
Issuance and vesting of restricted stock        300      58,740          -            -            -                        59,040
Purchase of treasury stock                       -           -           -            -    (1,398,972)                  (1,398,972)
Comprehensive loss:
 Net loss                                        -           -   (1,546,061)          -            -    ($1,546,061)    (1,546,061)
 Other comprehensive income (loss) -
  Net unrealized loss on
   securities available for sale                 -           -           -        (2,010)          -         (2,010)        (2,010)
  Adjustment for contractual
   postretirement benefits                       -           -           -        59,058           -         59,058         59,058
                                                                                                        ------------
Comprehensive loss                                                                                      ($1,489,013)
                                                                                                        ============

                                           --------- ----------- ----------- ------------ ------------                 ------------
Balance at June 30, 2008                   $400,349  $4,545,453  $4,182,154  ($1,274,049) ($1,655,002)                  $6,198,905
                                           ========= =========== =========== ============ ============                 ============


See notes to consolidated financial statements.

</TABLE>



<TABLE>
 PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
<CAPTION>


                                                                                                SIX MONTHS ENDED JUNE 30,
                                                                                      ----------------------------------------------

                                                                                           2008                          2007
                                                                                      ----------------             -----------------
<S>                                                                                   <C>                          <C>
 Cash Flows from Operating Activities:
     Cash received from rental properties                                                  $3,123,958                    $2,883,172
     Interest received                                                                        511,628                       735,133
     Distributions received from joint ventures                                             1,280,057                     1,521,711
     Miscellaneous income                                                                         892                        44,178
     Interest paid on rental property mortgage debt                                          (689,975)                     (749,561)
     Cash disbursed for rental property operations                                         (1,937,443)                   (2,323,952)
     Cash disbursed for general and administrative costs                                   (1,820,593)                   (1,738,918)
                                                                                      ----------------             -----------------

 Net cash provided by operating activities                                                    468,524                       371,763
                                                                                      ----------------             -----------------

 Cash Flows from Investing Activities:
     Payments received on notes receivable                                                  2,798,273                       114,303
     Payments disbursed for additions and improvements                                       (243,610)                     (473,976)
     Proceeds from sales of properties                                                           -                          582,004
     Purchase of additional interest in partnership                                              -                          (53,694)
                                                                                      ----------------             -----------------

 Net cash provided by investing activities                                                  2,554,663                       168,637
                                                                                      ----------------             -----------------

 Cash Flows from Financing Activities:
     Principal payments on mortgage debt                                                     (218,512)                     (215,391)
     Distributions to minority partners                                                          -                           (5,000)
     Cash distributions on common stock                                                    (1,230,889)                   (1,260,262)
     Purchase of treasury stock                                                            (1,398,972)                     (166,590)
     Proceeds from dividend reinvestment plan                                                    -                          131,762
                                                                                      ----------------            ------------------

 Net cash used in financing activities                                                     (2,848,373)                   (1,515,481)
                                                                                      ----------------             -----------------


 Net Increase (Decrease) in Cash and Cash Equivalents                                         174,814                      (975,081)

 Cash and Cash Equivalents, Beginning of Period                                             2,343,497                     2,263,534
                                                                                      ----------------             -----------------

 Cash and Cash Equivalents, End of Period                                                  $2,518,311                    $1,288,453
                                                                                      ================             =================


 See notes to consolidated financial statements.
</TABLE>



<TABLE>
PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
<CAPTION>


                                                                                          SIX MONTHS ENDED JUNE 30,
                                                                                -----------------------------------------------

                                                                                        2008                          2007
                                                                                  -----------------             -----------------


<S>                                                                               <C>                           <C>
Reconciliation of Net Loss to Net Cash
  Provided by Operating Activities

Net Loss                                                                             ($1,546,061)                  ($1,737,237)
                                                                                  -----------------             -----------------

Adjustments to reconcile net loss to net
  cash provided by operating activities:
    Net gain from sales of discontinued operations                                          -                         (735,705)
    Equity in the loss from joint ventures                                               456,400                     1,017,465
    Depreciation and amortization                                                        372,306                       489,080
    Amortization of discount on mortgage payable                                          48,254                        55,899
    Net change in revenue related to acquired lease rights/obligations
       and deferred rent receivable                                                      (38,626)                      (61,558)
    Amortization of discounts on notes and fees                                         (143,681)                     (111,196)
    Minority interest                                                                       -                            2,222
    Issuance of stock to directors and officers                                           50,160                        10,425
    Distributions received from joint ventures                                         1,280,057                     1,521,711

    Changes in assets and liabilities:
    Decrease (increase) in other receivables                                             (71,395)                       16,215
    Increase (decrease) in accounts payable and accrued liabilities                       13,387                      (200,448)
    Increase in other liabilities                                                         14,081                        14,344
    Decrease in prepaid expenses, deposits in escrow
      and deferred charges                                                                34,890                        90,221
    Other                                                                                 (1,248)                          325
                                                                                  -----------------             -----------------

Total adjustments                                                                      2,014,585                     2,109,000
                                                                                  -----------------             -----------------

Net cash provided by operating activities                                               $468,524                      $371,763
                                                                                  =================             =================



SUPPLEMENTAL NONCASH DISCLOSURES:

  Satisfaction of mortgage debt as a result of assumption
    of the mortgage debt by the purchaser                                                                           $2,856,452
                                                                                                                =================

  Note receivable from sale of property                                                                               $200,000
                                                                                                                =================




See notes to consolidated financial statements.
</TABLE>






PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2008 (UNAUDITED)

Presidential Realty Corporation ("Presidential" or the "Company"), is operated
as a self-administrated, self-managed Real Estate Investment Trust ("REIT"). The
Company is engaged principally in the ownership of income producing real estate
and in the holding of notes and mortgages secured by real estate. Presidential
operates in a single business segment, investments in real estate related
assets.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Principles of Consolidation - The consolidated financial statements include
the accounts of Presidential Realty Corporation and its wholly owned
subsidiaries. Additionally, the consolidated financial statements include 100%
of the account balances of PDL, Inc. and Associates Limited Co-Partnership (the
"Hato Rey Partnership"). PDL, Inc. (a wholly owned subsidiary of Presidential
and the general partner of the Hato Rey Partnership) and Presidential own an
aggregate 60% general and limited partnership interest in the Hato Rey
Partnership (see Note 7). The consolidated financial statements for the six
months ended June 30, 2007 also included 100% of the account balances of another
partnership, UTB Associates (which was liquidated on December 31, 2007).
Presidential was the general partner of UTB Associates and owned a 100% interest
(previously a 75% interest, see Note 8). All significant intercompany balances
and transactions have been eliminated.

B. Net Loss Per Share - Basic and diluted net loss per share data is computed by
dividing net loss by the weighted average number of shares of Class A and Class
B common stock outstanding during each period. Nonvested shares are excluded
from the basic net loss per share computation. For the three months ended June
30, 2008 and June 30, 2007 and for the six months ended June 30, 2008 and June
30, 2007, the weighted average shares outstanding as used in the calculation of
diluted loss per share does not include 32,800, 33,300, 32,800 and 33,300,
respectively, of restricted shares to be issued, as their inclusion would be
antidilutive.

C. Basis of Presentation - The accompanying unaudited consolidated financial
statements have been prepared in accordance with accounting principles generally
accepted in the United States of America ("GAAP") for interim financial
information. The results for such interim periods are not necessarily indicative
of the results to be expected for the year. In the opinion of management, all
adjustments (consisting of only normal recurring accruals) considered necessary
for a fair presentation of the results for the respective periods have been
reflected. These consolidated financial statements and accompanying notes should
be read in conjunction with the Company's Form 10-KSB for the year ended
December 31, 2007.

D. Management Estimates - In preparing the consolidated financial statements in
conformity with GAAP, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities as of the date of the consolidated balance
sheets and the reported amounts of income and expense for the reporting period.
Actual results could differ from those estimates.

E. Purchase Accounting - In 2006 and 2007, the Company acquired an additional
25% and 1% limited partnership interest in the Hato Rey Partnership,
respectively. The Company allocated the fair value of acquired tangible and
intangible assets and assumed liabilities based on their estimated fair values
in accordance with the provisions of Accounting Research Bulletin ("ARB") No.
51, "Consolidated Financial Statements", and the Statement of Financial
Accounting Standards ("SFAS") No. 141, "Business Combinations", as a partial
step acquisition. No gain or goodwill was recognized on the recording of the
acquisition of the additional interests in the Hato Rey Partnership. Building
and improvements are depreciated on the straight-line method over thirty-nine
years. In-place lease values are amortized to expense over the terms of the
related tenant leases. Above and below market lease values are amortized as a
reduction of, or an increase to, rental revenue over the remaining term of each
lease. Mortgage discount is amortized to mortgage interest expense over the term
of the mortgage using the interest method.

F. Discontinued Operations - The Company complies with the provisions of SFAS
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". This
statement requires that the results of operations, including impairment, gains
and losses related to the properties that have been sold or properties that are
intended to be sold, be presented as discontinued operations in the statements
of operations for all periods presented and the assets and liabilities of
properties intended to be sold are to be separately classified on the balance
sheet. Properties designated as held for sale are carried at the lower of cost
or fair value less costs to sell and are not depreciated.

G. Equity Method - The Company accounts for its investments in joint ventures
using the equity method of accounting.

H. Accounting for Uncertainty in Income Taxes - On January 1, 2007, the Company
adopted the Financial Accounting Standards Board ("FASB") Interpretation No. 48,
"Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement
No. 109" ("FIN 48"). If the Company's tax positions in relation to certain
transactions were examined and were not ultimately upheld, the Company would be
required to pay an income tax assessment and related interest, or a deficiency
dividend and related interest, for prior years. Should such an assessment
require the Company to pay a deficiency dividend in order to continue to qualify
as a REIT, the Company would pay the deficiency dividend to its shareholders and
the related interest assessment to the taxing authorities.

I. Recent Accounting Pronouncements - In September, 2006, the FASB issued SFAS
No. 157, "Fair Value Measurements", which defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles
and expands disclosures about fair value measurements. SFAS No. 157 is effective
for fiscal years beginning after November 15, 2007. The adoption of this
standard on January 1, 2008 did not have a material effect on the Company's
consolidated financial statements.

In September, 2006, the FASB issued SFAS No. 158, "Employers' Accounting for
Defined Benefit Pension and Other Postretirement Plans - An Amendment of FASB
Statements No. 87, 88, 106 and 132(R)". SFAS No. 158 requires an employer to (i)
recognize in its statement of financial position an asset for a plan's
overfunded status or a liability for a plan's underfunded status; (ii) measure a
plan's assets and its benefit obligations that determine its funded status as of
the end of the employer's fiscal year (with limited exceptions); and (iii)
recognize changes in the funded status of a defined benefit postretirement plan
in the year in which the changes occur. Those changes will be reported in
comprehensive income. The Company previously adopted in 2006 the requirement to
recognize the funded status of a benefit plan and the disclosure requirements.
The requirement to measure plan assets and benefit obligations to determine the
funded status as of the end of the fiscal year and to recognize changes in the
funded status in the year in which the changes occur is effective for fiscal
years ending after December 15, 2008. The adoption of the measurement date
provisions of this standard is not expected to have a material effect on the
Company's consolidated financial statements.

In February, 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities". SFAS No. 159 permits entities to
choose to measure many financial assets and financial liabilities at fair value.
Unrealized gains and losses on items for which the fair value option has been
elected are reported in earnings. SFAS No. 159 is effective for fiscal years
beginning after November 15, 2007. The Company is not electing to measure its
financial assets or liabilities at fair value pursuant to this statement.

In December, 2007, the FASB issued No. 141, (revised 2007) "Business
Combinations" ("SFAS No. 141R"). SFAS No. 141R replaces SFAS No. 141, which the
Company previously adopted. SFAS No. 141R revises the standards for accounting
and reporting of business combinations. In summary, SFAS No. 141R requires the
acquirer of a business combination to measure, at fair value, the assets
acquired, the liabilities assumed, and any noncontrolling interest in the
acquiree at the acquisition date, with limited exceptions. SFAS No. 141R applies
to all business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after December
15, 2008. The Company does not believe that the adoption of this statement on
January 1, 2009 will have a material effect on the Company's consolidated
financial statements.

In December, 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in
Consolidated Financial Statements", which requires consolidated net income to be
reported at amounts that include the amounts attributable to both the parent and
noncontrolling interest. SFAS No. 160 is effective for fiscal years beginning on
or after December 15, 2008. The adoption of this standard is not expected to
have a material effect on the Company's consolidated financial statements.

In March, 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative
Instruments and Hedging Activities". SFAS No. 161 changes the reporting
requirements for derivative instruments and hedging activities under SFAS No.
133, "Accounting for Derivatives and Hedging Activities", by requiring enhanced
disclosures about (a) how and why an entity uses derivative instruments, (b) how
derivative instruments are accounted for under SFAS No. 133 and (c) the effect
of derivative instruments and hedging activities on an entity's financial
position, financial performance and cash flows. SFAS No. 161 is effective for
fiscal years beginning after November 15, 2008. The Company does not believe
that the adoption of this statement will have a material effect on the Company's
consolidated financial statements.

In April, 2008, the FASB issued FASB Staff Position ("FSP") No. FAS 142-3,
"Determination of the Useful Life of Intangible Assets". FSP No. FAS 142-3
amends the factors that should be considered in developing renewal or extension
assumptions used to determine the useful life of a recognized intangible asset
under SFAS No. 142, "Goodwill and Other Intangible Assets". The objective of FSP
No. FAS 142-3 is to improve the consistency between the useful life of a
recognized intangible asset under SFAS No. 142 and the period of expected cash
flows used to measure the fair value of the asset under SFAS No. 141R and GAAP.
FSP FAS No. 142-3 is effective for financial statements issued for years
beginning after December 15, 2008, and interim periods within those years and
applied prospectively to intangible assets acquired after the effective date.
The Company does not believe that the adoption of FSP FAS No. 142-3 will have a
material effect on the Company's consolidated financial statements.

In June, 2008, the FASB issued FSP No. EITF 03-6-1, "Determining Whether
Instruments Granted in Share-Based Payment Transactions are Participating
Securities". FSP No. EITF 03-6-1 affects entities which accrue non-returnable
cash dividends on share-based payment awards during the awards' service period.
The FASB concluded unvested share-based payment awards which are entitled to
cash dividends, whether paid or unpaid, are participating securities any time
the common shareholders receive dividends. Because the awards are considered
participating securities, the issuing entity is required to apply the two-class
method of computing basic and diluted earnings per share. FSP No. EITF 03-6-1 is
effective for fiscal years beginning after December 15, 2008, and early adoption
is not permitted. The Company does not believe that the adoption of FSP No. EITF
03-6-1 will have a material effect on the Company's consolidated financial
statements.

2. REAL ESTATE

   Real estate is comprised of the following:

                                    June 30,                December 31,
                                     2008                      2007
                                  -----------              ------------

Land                              $ 2,227,856              $ 2,309,930
Buildings                          18,267,972               18,605,700
Furniture and equipment               125,971                  125,419
                                  -----------              -----------
Total real estate                 $20,621,799              $21,041,049
                                  ===========              ===========

3. MORTGAGE PORTFOLIO

The components of the net mortgage portfolio are as follows:

                                 June 30,                December 31,
                                  2008                      2007
                               -----------              ------------

Notes receivable                $5,250,918               $8,051,342
Less: Discounts                    246,285                  392,117
                                ----------               ----------
Net mortgage portfolio          $5,004,633               $7,659,225
                                ==========               ==========

At June 30, 2008, all of the notes in the Company's mortgage portfolio are
current in accordance with their terms, as modified.

During the six months ended June 30, 2008, the Company received repayment of its
$1,500,000 loan receivable collateralized by ownership interests in Reisterstown
Square Associates, LLC, which owns Reisterstown Apartments in Baltimore,
Maryland, and a partial repayment of $1,079,239 on the $3,875,000 Fairfield
Towers note receivable. In addition, the Company also received repayment of its
$100,000 loan collateralized by the Pinewood property in Des Moines, Iowa and a
$75,000 partial repayment on the Mark Terrace note receivable.

In March, 2007, the Company sold its Cambridge Green property in Council Bluffs,
Iowa. As part of the sales price, the Company received a $200,000 secured note
receivable which matured on March 20, 2008. The note receivable has an interest
rate of 7% per annum, payment of which is deferred until maturity. At December
31, 2007, the accrued deferred interest was $11,083. In March, 2008, the Company
agreed to extend the maturity of the loan to December 31, 2008 and received a
$25,000 payment for $13,917 of principal and $11,083 of accrued deferred
interest. At June 30, 2008, the accrued deferred interest was $6,794, which was
recorded in interest income, and the loan balance was $186,083.

The $110,000 Mark Terrace note was due to mature on March 31, 2008. The Company
agreed to extend the maturity of the note to December 31, 2008 at its current
interest rate of 11% per annum. In April, 2008, the Company received a $75,000
payment of principal and subsequent to June 30, 2008, the Company received a
$35,000 payment on the remaining note balance.

The Company had a $3,875,000 note receivable, which was received by the Company
in connection with the sale of the Fairfield Towers mortgages in 1999 and which
was collateralized by security interests in the ownership interests in entities
that own various properties located in Maryland, New Jersey and Pennsylvania.
The loan was originally due in February, 2009, but the Company had the right to
require prepayment upon 90 days prior notice. On March 20, 2008, the Company
notified the borrower that the loan must be prepaid within 90 days from the date
of the notice. On June 3, 2008, the Company received a principal payment of
$1,079,239 on the loan and subsequent to June 30, 2008, the remaining loan
balance of $2,795,761 was paid.

4. INVESTMENTS IN AND ADVANCES TO JOINT VENTURES

The Company has investments in and loans to four joint ventures which own and
operate nine shopping malls located in seven states. These investments in and
advances to joint ventures were made to entities controlled by David
Lichtenstein, who also controls The Lightstone Group ("Lightstone"). The Company
accounts for these investments using the equity method.

The first investment, the Martinsburg Mall, was purchased by the Company in 2004
and, subsequent to closing, the Company obtained a mezzanine loan from
Lightstone in the amount of $2,600,000, which is secured by ownership interests
in the entity that owns the Martinsburg Mall. The loan matures on September 27,
2014, and the interest rate on the loan is 11% per annum. Lightstone manages the
Martinsburg Mall and David Lichtenstein received a 71% ownership interest in the
entity owning the Martinsburg Mall, leaving the Company with a 29% ownership
interest.

During 2004 and 2005, the Company made three mezzanine loans in the aggregate
principal amount of $25,600,000 to joint ventures controlled by David
Lichtenstein. These loans are secured by the ownership interests in the entities
that own the properties and the Company received a 29% ownership interest in
these entities. These loans mature in 2014 and 2015 and the interest rate on the
loans is 11% per annum. During 2006, the Company made an additional $335,000
mezzanine loan to Lightstone II, which loan was added to and has the same
interest rate and maturity date as the original Lightstone II loan. At June 30,
2008, the aggregate principal amount of loans to joint ventures controlled by
David Lichtenstein was $25,935,000.

The following table summarizes information on the shopping mall properties and
the mezzanine loans with respect thereto:





<TABLE>
<CAPTION>


                                                           Nonrecourse First Mortgage
Owning                                                         and Mezzanine Loans
Entity and                  Mezzanine Loans                        June 30, 2008
Property                    Advanced by      Approximate           Maturity  Interest
 Owned (1)                  the Company        Sq. Ft.     Balance   Date      Rate
----------                ---------------    -----------   ------- --------- --------
                                (Amounts in thousands)
<S>                       <C>                <C>           <C>      <C>      <C>
PRC Member LLC
Martinsburg Mall                                 552      $ 29,859 July, 2016   (2)
----------------
  Martinsburg, WV

Lightstone I
Four Malls                  $ 8,600
----------
Bradley Square Mall                              385        13,800 July, 2016   (2)
  Cleveland, TN

Mount Berry Square Mall                          478        22,475 July, 2016   (2)
  Rome, GA

Shenango Valley Mall                             508        14,744 July, 2016   (2)
  Hermitage, PA

West Manchester Mall                             733        29,600 Aug., 2008   (2)
  York, PA

Lightstone II
Shawnee/Brazos Malls          7,835                         39,500 Jan., 2009   (3)
--------------------
Brazos Mall                                      698
  Lake Jackson, TX

Shawnee Mall                                     444
  Shawnee, OK

Lightstone III
Macon/Burlington Malls        9,500                        155,237 June, 2015   5.78%
----------------------
Burlington Mall                                  412
  Burlington, NC

Macon Mall                                     1,446
  Macon, GA
                            -------            ------     --------
                            $25,935            5,656      $305,215
                            =======            ======     ========
</TABLE>

(1) Each individual owning entity is a single purpose entity that is prohibited
by its organizational documents from owning any assets other than the specified
shopping mall properties listed above.

(2) In June, 2006, the original $105,000,000 nonrecourse first mortgage loan
secured by the Martinsburg Mall and the Four Malls was refinanced with the
following mortgage loans: a $73,900,000 nonrecourse first mortgage loan with an
interest rate of 5.93% per annum, maturing on July 1, 2016, a $7,000,000
mezzanine loan with an interest rate of 12% per annum maturing on July 1, 2016
and a $29,600,000 nonrecourse first mortgage loan with an adjustable interest
rate based on the London Interbank Offered Rates ("LIBOR") plus 232 basis points
(approximately 4.79% at June 30, 2008), with a minimum interest rate of 7.89%.
The $73,900,000 first mortgage loan and the $7,000,000 mezzanine loan are
secured by the Martinsburg Mall and three of the Four Malls. The $29,600,000
first mortgage loan is secured by the West Manchester Mall and had an original
maturity date of June 8, 2008, which maturity date was extended until August 9,
2008 and informally thereafter while Lightstone I and the lender negotiate and
document the terms of a further extension.

(3) The interest rate is at the 30 day LIBOR rate plus 280 basis points
(approximately 5.27% at June 30, 2008). The loan matures in January, 2009, with
an option to extend the loan for one year with an extension fee of .125% of the
outstanding principal.

Under the equity method of accounting, the Company's investments in the joint
ventures, including the $25,935,000 of loans advanced to the joint ventures,
have been reduced by distributions received and losses recorded for the joint
ventures. Activity in investments in and advances to joint ventures for the
period ended June 30, 2008 is as follows:

                                                     Equity
                                                     in the
                                                     Income
                                                     (Loss)
                       Balance at                     from       Balance at
                      December 31,  Distributions     Joint        June 30,
                          2007         Received      Ventures       2008
                      ------------  ------------- -----------   -----------

Martinsburg Mall (1)  $     -       $  (120,427)  $ 120,427      $     -
Four Malls       (2)     688,735       (559,716)   (129,019)           -
Shawnee/Brazos
 Malls           (3)   4,234,466       (509,928)   (537,794)      3,186,744
Macon/Burlington
 Malls           (4)        -           (89,986)     89,986            -
                      ----------    -----------   ---------      ----------
                      $4,923,201    $(1,280,057)  $(456,400)     $3,186,744
                      ==========    ===========   =========      ==========

Equity in the income (loss) from joint ventures is as follows:

                           Three Months Ended            Six Months Ended
                                June 30,                    June 30,
                           2008         2007            2008         2007
                           ----         ----            ----         ----

Martinsburg Mall  (1)  $  79,992    $ (23,703)     $ 120,427   $   (83,384)
Four Malls        (2)     46,601     (343,967)      (129,019)     (416,677)
Shawnee/Brazos
 Malls            (3)   (222,197)    (151,380)      (537,794)     (284,501)
Macon/Burlington
 Malls            (4)       -        (142,360)        89,986      (232,903)
                       ---------    ---------      ---------   -----------
                       $ (95,604)   $(661,410)     $(456,400)  $(1,017,465)
                       =========    =========      =========   ===========

(1) The Company's share of the income (loss) from joint ventures for the
Martinsburg Mall is determined after the deduction for interest expense at the
rate of 11% per annum on the outstanding $2,600,000 loan from Lightstone. In
2007, the Company's basis of its investment in the Martinsburg Mall was reduced
by distributions and losses to zero and, accordingly, the Company only recorded
its share of the loss to the extent of its basis. Any future distributions
received from the Martinsburg Mall will be recorded in income. For the six
months ended June 30, 2008, the Company recorded $120,427 of distributions
received in income from joint ventures.

(2) Interest income earned by the Company at the rate of 11% per annum on the
outstanding $8,600,000 loan from the Company to Lightstone I is included in the
calculation of the Company's share of the income (loss) from joint ventures for
the Four Malls. In the second quarter of 2008, the Company's basis of its
investment in the Four Malls was reduced by distributions and losses to zero
and, accordingly, the Company only recorded its share of the loss to the extent
of its basis. Any future distributions received from the Four Malls will be
recorded in income. For the six months ended June 30, 2008, the Company recorded
a loss of $129,019 in loss from joint ventures.

(3) Interest income earned by the Company at the rate of 11% per annum on the
outstanding $7,835,000 loan from the Company to Lightstone II is included in the
calculation of the Company's share of the loss from joint ventures for the
Shawnee/Brazos Malls.

(4) Interest income earned by the Company at the rate of 11% per annum on the
outstanding $9,500,000 loan from the Company to Lightstone III is included in
the calculation of the Company's share of the income (loss) from joint ventures
for the Macon/Burlington Malls. In the fourth quarter of 2007, the Company's
basis of its investment in the Macon/Burlington Malls was reduced by
distributions and losses to zero and, accordingly, the Company only recorded its
share of the loss to the extent of its basis. Any future distributions received
from the Macon/Burlington Malls will be recorded in income. For the six months
ended June 30, 2008, the Company recorded $89,986 of distributions received in
income from joint ventures.

The Company prepares the summary of the condensed combined financial information
for the Martinsburg Mall, the Four Malls, the Shawnee/Brazos Malls and the
Macon/Burlington Malls based on information provided by The Lightstone Group.
The summary financial information below includes information for all of the
joint ventures. The condensed combined information is as follows:


<TABLE>
<CAPTION>




                                               June 30,                December 31,
                                                2008                       2007
                                            -------------              ------------
<S>                                         <C>                        <C>
                                                     (Amounts in thousands)

Condensed Combined Balance Sheets
  Net real estate                             $ 236,271                  $235,595
  In-place lease values and
   acquired lease rights                          9,957                    11,569
  Prepaid expenses and
   deposits in escrow                            18,595                    18,145
  Cash and cash equivalents                       2,438                     3,028
  Deferred financing costs                        2,064                     2,505
  Other assets                                    3,236                     7,307
                                              ---------                  --------

  Total Assets                                $ 272,561                  $278,149
                                              =========                  ========

  Nonrecourse mortgage debt                   $ 305,215                  $306,131
  Mezzanine notes payable                        55,488                    49,994
  Other liabilities                              29,205                    29,278
                                              ---------                  --------

  Total Liabilities                             389,908                   385,403
  Members' Deficit                             (117,347)                 (107,254)
                                              ---------                  --------
  Total Liabilities and
   Members' Deficit                           $ 272,561                  $278,149
                                              =========                  ========
</TABLE>

                          Three Months Ended           Six Months Ended
                               June 30,                    June 30,
                          2008         2007           2008          2007
                       ----------   -----------    -----------   -----------
                                      (Amounts in thousands)
Condensed Statements
 of Operations
  Revenues              $11,567       $13,143        $ 24,054      $ 27,002
  Interest on
    mortgage debt
    and other debt       (6,252)       (6,276)        (12,685)      (12,353)
  Other expenses         (7,918)       (8,117)        (15,493)      (15,663)
                        -------       -------        --------      --------
  Loss before
    depreciation
    and amortization     (2,603)       (1,250)         (4,124)       (1,014)

  Depreciation
    and amortization     (3,179)       (3,121)         (5,881)       (6,259)
                        -------       -------        --------      --------

  Net Loss              $(5,782)      $(4,371)       $(10,005)     $ (7,273)
                        =======       =======        ========      ========


As a result of the Company's use of the equity method of accounting with respect
to its investments in and advances to the joint ventures, the Company's
consolidated statements of operations reflect its proportionate share of the
income (loss) from the joint ventures. The Company's equity in the loss from
joint ventures of $456,400 for the six months ended June 30, 2008, is after
deductions in the aggregate amount of $543,539 for the Company's proportionate
share of noncash charges (depreciation of $448,321 and amortization of deferred
financing costs, in-place lease values and other costs of $95,218).
Notwithstanding the loss from the joint ventures, the Company is entitled to
receive its interest at the rate of 11% per annum on its $25,935,000 of loans to
the joint ventures. For the six months ended June 30, 2008, the Company received
distributions from the joint ventures in the amount of $1,280,057 which included
interest payments of $1,159,630 on the outstanding loans to the joint ventures
and return on investment in the amount of $120,427.

During the quarter ended March 31, 2008, Lightstone III defaulted on its monthly
payments of interest on the Company's $9,500,000 mezzanine loan relating to the
Macon/Burlington Malls and also failed to make the payments due on a portion of
the first mortgage loan secured by Macon/Burlington. Lightstone III has informed
the Company that it has been unable to negotiate an agreement with the holder of
the first mortgage to modify the terms of the first mortgage and the holder of
the first mortgage has declared the mortgage in default and accelerated the
unpaid principal balance of the mortgage. As a result of the continuing default
on the first mortgage loan, the Company does not expect to receive repayment of
the principal amount of its $9,500,000 loan to Lightstone III or any further
interest thereon. The carrying value of this investment was reduced to zero at
December 31, 2007.

The Company's equity in the loss from joint ventures of $1,017,465 for the six
months ended June 30, 2007, is after deductions in the aggregate amount of
$1,772,861 for the Company's proportionate share of noncash charges
(depreciation of $1,322,745 and amortization of deferred financing costs,
in-place lease values and other costs of $450,116). For the six months ended
June 30, 2007, the Company received distributions from the joint ventures in the
amount of $1,521,711, which included interest payments of $1,442,274 on the
outstanding loans to the joint ventures and return on investment in the amount
of $79,437.

The Lightstone Group is controlled by David Lichtenstein. At June 30, 2008, in
addition to Presidential's investments of $3,186,744 in these joint ventures
with entities controlled by Mr. Lichtenstein, Presidential had two loans that
were due from entities that are controlled by Mr. Lichtenstein in the aggregate
outstanding principal amount of $4,870,755 with a net carrying value of
$4,669,154. One of the loans in the outstanding principal amount of $2,795,761,
with a net carrying value of $2,594,160, is secured by interests in four
apartment properties and is also personally guaranteed by Mr. Lichtenstein up to
a maximum amount of $1,637,500. The second loan in the outstanding principal
amount of $2,074,994 is secured by interests in nine apartment properties.
Subsequent to June 30, 2008, the loan in the outstanding principal amount of
$2,795,761 was paid in full. The remaining loan in the outstanding principal
amount of $2,074,994 is in good standing.

The $7,855,898 net carrying value of investments in and advances to joint
ventures with entities controlled by Mr. Lichtenstein and loans outstanding to
entities controlled by Mr. Lichtenstein constitute approximately 26% of the
Company's total assets at June 30, 2008.



5. OTHER INVESTMENTS

At June 30, 2008 and December 31, 2007, the Company had a $1,000,000 investment
in Broadway Partners Feeder Fund A II, a blind pool of investment capital
sponsored by Broadway Real Estate Partners, LLC. The Company accounts for this
investment under the cost method.

6. DISCONTINUED OPERATIONS

For the periods ended June 30, 2008 and 2007, income (loss) from discontinued
operations includes 42 cooperative apartment units at the Towne House Apartments
in New Rochelle, New York and another cooperative apartment unit in New Haven,
Connecticut, which properties were designated as held for sale during the three
months ended June 30, 2008. The Company entered into a contract for sale for the
Towne House cooperative apartments in June, 2008 and sold the other cooperative
apartment unit in July, 2008. In addition, income (loss) from discontinued
operations for the periods ended June 30, 2007, included the Cambridge Green
property, which was sold in March, 2007, and another cooperative apartment unit
which was sold in June, 2007.

<TABLE>
The following table summarizes income (loss) for the properties sold or held for
sale:
<CAPTION>

                                     Three Months Ended        Six Months Ended
                                          June 30,                June 30,
                                     2008         2007        2008         2007
                                     ----         ----        ----         ----
<S>                                <C>          <C>         <C>            <C>
Revenues:
   Rental                          $143,922     $140,553    $285,508    $383,397
                                   --------     --------    --------    --------

Rental property expenses:
   Operating expenses               106,077      108,099     216,050     358,952
   Interest on mortgage debt           -            -           -         31,684
   Real estate taxes                   -            -           -         27,685
   Depreciation on real estate        4,592        6,604      11,129      13,184
                                   --------     --------    --------    --------
Total                               110,669      114,703     227,179     431,505
                                   --------     --------    --------    --------

Other income:
   Investment income                    90           59         187        2,156
                                   -------     --------    --------     --------

Income (loss) from
   discontinued operations          33,343       25,909      58,516      (45,952)

Net gain from sales of
   discontinued operations            -          88,946        -         735,705
                                  --------     --------    --------     --------

Total income (loss) from
   discontinued operations        $ 33,343     $114,855    $ 58,516     $689,753
                                  ========     ========    ========     ========
</TABLE>


The Company owns a small portfolio of cooperative apartments located in New York
and Connecticut. These apartments are held for the production of rental income
and generally are not marketed for sale. However, from time to time, the Company
will receive purchase offers for some of these apartments or decide to market
specific apartments and will make sales if the purchase price is acceptable to
management.

In June, 2008, the Company entered into a contract for the sale of 42
cooperative apartment units at Towne House located in New Rochelle, New York for
a sales price of $3,450,000. The sale is expected to close in the third quarter
of 2008. The gain from sale for financial reporting purposes is estimated to be
approximately $2,834,000 and the estimated net proceeds of sale will be
approximately $3,371,000.

In July, 2008, the Company sold one cooperative apartment unit located in New
Haven, Connecticut for a sales price of $122,000. The net proceeds of sale is
estimated to be approximately $113,990 and the gain from the sale for financial
reporting purposes is estimated to be approximately $85,800.

On March 21, 2007, the Company completed the sale of the Cambridge Green
property, a 201-unit apartment property in Council Bluffs, Iowa for a sales
price of $3,700,000. As part of the sales price, (i) the $2,856,452 outstanding
principal balance of the first mortgage debt was assumed by the buyer, (ii) the
Company received a $200,000 secured note receivable from the buyer, which
originally was due to mature on March 20, 2008 (see Note 3) and has an interest
rate of 7% per annum, and (iii) the balance of the sales price was paid in cash.
The net proceeds of sale were $664,780, which included the $200,000 note
receivable. The Company recognized a gain from the sale for financial reporting
purposes of $646,759 in March, 2007.

In June, 2007, the Company sold one cooperative apartment unit located in New
Haven, Connecticut for a sales price of $125,000. The net proceeds from the sale
were $117,224 and the Company recognized a gain from the sale for financial
reporting purposes of $88,946 in June, 2007.

The assets of the properties designated as held for sale at June 30, 2008 are
segregated in the consolidated balance sheet. The components are as follows:

                                                       June 30,
                                                         2008
                                                      ---------

Assets related to discontinued operations:
  Land                                                $  82,074
  Buildings                                             698,624
  Less:  accumulated depreciation                      (215,855)
                                                      ---------
Total                                                 $ 564,843
                                                      =========

7. HATO REY PARTNERSHIP

PDL, Inc. (a wholly owned subsidiary of Presidential) is the general partner of
the Hato Rey Partnership. Presidential and PDL, Inc. have an aggregate 60%
general and limited partner interest in the Hato Rey Partnership. The Company
exercises effective control over the partnership through its ability to manage
the affairs of the partnership in the ordinary course of business. Accordingly,
the Company consolidates the Hato Rey Partnership in the accompanying
consolidated financial statements.

The Hato Rey Partnership owns and operates the Hato Rey Center, an office
building, with 209,000 square feet of commercial space, located in Hato Rey,
Puerto Rico. During 2005 and 2006, three tenants at the building vacated a total
of 82,387 square feet of office space at the expiration of their leases. In
2006, the Hato Rey Partnership began a program of repairs and improvements to
the property and since that time has spent approximately $795,000 to upgrade the
physical condition and appearance of the property. The improvement program was
substantially completed by the end of 2007. In 2005, the Company agreed to lend
up to $2,000,000 to the Hato Rey Partnership to pay for the cost of improvements
to the building and fund any negative cash flows from the operation of the
property. The loan, which is advanced from time to time as funds are needed,
bore interest at the rate of 11% per annum until May 11, 2008, with interest and
principal to be paid out of the first positive cash flow from the property or
upon a refinancing of the first mortgage on the property. In September, 2007,
the Company agreed to lend an additional $500,000 to the Hato Rey Partnership
under the same terms as the original $2,000,000 loan, except that the interest
rate on the additional $500,000 loan would be at the rate of 13% per annum and
that the interest rate on the entire loan would be increased to 13% per annum to
the extent that the loan was not repaid on May 11, 2008. At June 30, 2008, the
Company had advanced $1,999,275 of the loan to the Hato Rey Partnership and
subsequent to June 30, 2008, the Company advanced an additional $100,000. The
$1,999,275 loan and accrued interest in the amount of $351,974 have been
eliminated in consolidation.

The first mortgage loan on the Hato Rey Center property is due on May 11, 2028
but the mortgage provides that if it was not repaid on or before May 11, 2008,
the interest rate on the loan would be increased by two percentage points (to
9.38% per annum, of which 2% per annum would be deferred until maturity) and all
cash flow from the property, after payment of all operating expenses, would be
applied to pay down the outstanding principal balance of the loan. The Company
did not repay the existing mortgage on May 11, 2008 and the mortgage provisions
described above became applicable. At June 30, 2008, the outstanding principal
balance of the loan was $15,396,219 and the deferred interest was $43,801.

For the six months ended June 30, 2008 and June 30, 2007, the Hato Rey
Partnership had a loss of $172,232 and $304,891, respectively. The minority
partners have no basis in their investment in the Hato Rey Partnership and, as a
result, the Company is required to record the minority partners' 40% share of
the loss which was $68,893 and $121,956, respectively. Therefore, the Company
recorded 100% of the loss from the partnership of $172,232 and $304,891 on the
Company's consolidated financial statements for the six months ended June 30,
2008 and 2007, respectively. Future earnings of the Hato Rey Partnership, should
they materialize, will be recorded by the Company up to the amount of the losses
previously absorbed that were applicable to the minority partners.

8. MINORITY INTEREST IN CONSOLIDATED PARTNERSHIP

During 2007, Presidential was the general partner of UTB Associates, a
partnership, which held notes receivable and in which Presidential had a 75%
interest. As the general partner of UTB Associates, Presidential exercised
effective control over this partnership through its ability to manage the
affairs of the partnership in the ordinary course of business, including the
ability to approve the partnership's budgets, and through its significant equity
interest. Accordingly, Presidential consolidated this partnership in the
accompanying consolidated financial statements for the three months and six
months ended June 30, 2007. The minority interest reflected the minority
partners' equity in the partnership.

In July, 2007, the Company purchased the remaining 25% limited partnership
interests for a purchase price of $42,508, which was effective as of June 30,
2007. As a result of the purchase, the Company owned 100% of UTB Associates. The
major asset of the partnership was a portfolio of notes receivable that amortize
monthly and have various interest rates. The Company liquidated the partnership
at December 31, 2007 and the remaining assets of the partnership were recorded
on the Company's consolidated balance sheet.

9. INCOME TAXES

Presidential has elected to qualify as a Real Estate Investment Trust under the
Internal Revenue Code. A REIT which distributes at least 90% of its real estate
investment trust taxable income to its shareholders each year by the end of the
following year and which meets certain other conditions will not be taxed on
that portion of its taxable income which is distributed to its shareholders.

The Company adopted FIN 48 on January 1, 2007. If the Company's tax positions in
relation to certain transactions were examined and were not ultimately upheld,
the Company would be required to pay an income tax assessment and related
interest, or a deficiency dividend and related interest, for prior years. Should
such an assessment require the Company to pay a deficiency dividend in order to
continue to qualify as a REIT, the Company would pay the deficiency dividend to
its shareholders and the related interest assessment to the taxing authorities.

Upon adoption of FIN 48 the Company recorded a reduction to the January 1, 2007
balance of retained earnings of $460,800 for accrued interest for prior years
related to the tax positions for which the Company may be required to pay a
deficiency dividend. In addition, the Company recorded interest expense of
$356,780 for the year ended December 31, 2007 (including $180,000 for the six
months ended June 30, 2007) and $147,526 for the six months ended June 30, 2008
for the interest related to these matters. The Company recognizes this interest
expense in general and administrative expenses in its consolidated statements of
operations. As of June 30, 2008, the Company had accrued $965,106 of interest
related to these matters, which is included in accrued liabilities in its
consolidated balance sheet. As of June 30, 2008, the tax years that remain open
to examination by the federal, state and local taxing authorities are the 2004 -
2006 tax years.

For the year ended December 31, 2007, the Company had taxable income (before
distributions to shareholders) of approximately $3,015,000 ($0.76 per share),
which is comprised of capital gains of $4,208,000 ($1.06 per share) and an
ordinary loss of $1,193,000 ($0.30 per share). The Company will apply its 2007
distributions and a portion of its 2006 loss carryforward to reduce its 2007
taxable income to zero. Therefore no provision for income taxes was required at
December 31, 2007.

As previously stated, in order to maintain REIT status, Presidential is required
to distribute 90% of its REIT taxable income (exclusive of capital gains). As a
result of the ordinary tax loss of $.30 per share for 2007, the Company will not
be required to make a distribution in 2008 in order to maintain its
qualification as a REIT.

For the six months ended June 30, 2008, the Company had a tax loss of
approximately $532,000 ($0.14 per share), which is comprised of capital gains of
approximately $734,000 ($0.20 per share) and an ordinary loss of $1,266,000
($0.34 per share).

Presidential has, for tax purposes, reported the gain from the sale of certain
of its properties using the installment method.

10. ACCUMULATED OTHER COMPREHENSIVE LOSS

The components of accumulated other comprehensive loss are as follows:

                                   June 30,        December 31,
                                     2008               2007
                                 -----------        -----------
Defined benefit plan liability   $(1,130,613)       $(1,130,613)
Contractual postretirement
 benefits liability                  (96,501)          (155,559)
Minimum contractual pension
 benefit liability                   (55,664)           (55,664)
Net unrealized gain on
 securities available
 for sale                              8,729             10,739
                                 -----------        -----------
Total accumulated other
 comprehensive loss              $(1,274,049)       $(1,331,097)
                                 ===========        ===========

The Company's other comprehensive income (loss) consists of the changes in the
net unrealized gain (loss) on securities available for sale and the adjustments
to the pension liabilities and the postretirement benefits liability, if any.
Thus, comprehensive income (loss), which consists of net income (loss) plus or
minus other comprehensive income, is as follows:

                               Three Months Ended         Six Months Ended
                                    June 30,                  June 30,
                              2008           2007        2008           2007
                           ----------    -----------  -----------   -----------

Net loss                   $(627,403)    $(1,214,380) $(1,546,061)  $(1,737,237)

Other comprehensive
 income (loss)-
  Net unrealized
   loss on securities
   available for sale         (1,408)         (5,420)      (2,010)       (3,749)
  Adjustment for
   contractual
   postretirement
   benefits                   29,529        (120,484)      59,058      (120,484)
                           ---------     -----------  -----------   -----------
Comprehensive loss         $(599,282)    $(1,340,284) $(1,489,013)  $(1,861,470)
                           =========     ===========  ===========   ===========



11. TREASURY STOCK

Treasury stock consists of the following:

                               June 30, 2008            December 31, 2007
                            Number       Total         Number        Total
                           of Shares     Cost         of Shares      Cost
                           ---------   ---------      ---------      -----

Class A common stock         18,407    $  107,696       5,375     $ 36,136

Class B common stock        260,505     1,547,306      29,633      219,894
                            -------    ----------      ------     --------
Total                       278,912    $1,655,002      35,008     $256,030
                            =======    ==========      ======     ========

During the six months ended June 30, 2008, the Company purchased 13,032 shares
of its Class A common stock and 230,872 shares of its Class B common stock as
follows:

                                Number of          Number of
                                Class A  Price Per Class B   Price Per  Total
Period      Purchased From       Shares    Share    Shares     Share    Paid
------   --------------------- --------- --------- --------- ---------  -----
May      Foundation controlled
          by a director and
          an officer of the
          Company          (1)     932    $5.375    4,072     $5.725  $   28,322

June     Private Investor  (2)  12,100     5.50   226,800      5.75    1,370,650
                                ------            -------             ----------
Total purchased during the
  six months ended
  June 30, 2008                 13,032            230,872             $1,398,972
                                ======            =======             ==========

Subsequent to June 30, 2008, the Company purchased an additional 18,000 shares
of its Class A common stock and 207,000 shares of its Class B common stock as
follows:

                                Number of          Number of
                                 Class A Price Per Class B   Price Per   Total
Period      Purchased From       Shares    Share    Shares     Share     Paid
------   --------------------- --------- --------- --------- ---------   -----
July     Private Investor        1,000     5.50     7,000      5.90   $   46,800

July     Private Investor  (2)  17,000     5.50   200,000      5.50    1,193,500
                                ------            -------             ----------

Total purchased
  subsequent to June 30, 2008   18,000            207,000             $1,240,300
                                ======            =======             ==========

(1) These shares were purchased at 1/8th of a point below market price.
(2) These shares were purchased pursuant to common stock repurchase agreements.

The Company has no specific plan or program to repurchase additional shares but
it may do so in the future.



12. COMMITMENTS AND CONTINGENCIES

Presidential is not a party to any material legal proceedings. The Company may
from time to time be a party to routine litigation incidental to the ordinary
course of its business.

In the opinion of management, all of the Company's properties are adequately
covered by insurance in accordance with normal insurance practices.

The Company is involved in an environmental remediation process for contaminated
soil found on its Mapletree Industrial Center property in Palmer, Massachusetts.
The land area involved is approximately 1.25 acres and the depth of the
contamination is at this time undetermined. Since the most serious identified
threat on the site is to songbirds, the proposed remediation will consist of
removing all exposed materials and a layer of soil (the depth of which is yet to
be determined). The Company estimates that the costs of the cleanup will not
exceed $1,000,000. The remediation will comply with the requirements of the
Massachusetts Department of Environmental Protection ("MADEP"). The MADEP has
agreed that the Company may complete the remediation over the next fifteen
years, but the Company expects to complete the project over the next ten years.
In order to proceed with the remediation process, the Company has been waiting
for MADEP to adopt hazard waste regulation 310 CMR 30. During the quarter ended
June 30, 2008, this regulation was adopted and the Company is currently in the
process of adopting a remediation plan that complies with regulation 310 CMR 30.

In accordance with the provisions of SFAS No. 5, "Accounting for Contingencies",
in the fourth quarter of 2006, the Company accrued a $1,000,000 liability which
was discounted by $145,546 and charged $854,454 to expense. The discount rate
used was 4.625%, which was the interest rate on 10 year Treasury Bonds. At June
30, 2008, the accrued liability balance was $943,672 and the discount balance
was $143,056.

Actual costs incurred may vary from these estimates due to the inherent
uncertainties involved. The Company believes that any liability in excess of
amounts provided which may result from the resolution of this matter will not
have a material adverse effect on the financial condition, liquidity or cash
flow of the Company.

For the six months ended June 30, 2007, the Company incurred environmental
expenses of $41,493 for further excavation and testing of the site. These
expenses were in addition to the $1,000,000 previously accrued in 2006 for the
costs of the cleanup of the site. There were no such additional environmental
expenses for the six months ended June 30, 2008.

13. CONTRACTUAL PENSION AND POSTRETIREMENT BENEFITS

<TABLE>
The following tables set forth the components of net periodic benefit costs for
contractual pension benefits:
<CAPTION>




                                              Three Months Ended       Six Months Ended
                                                   June 30,               June 30,
                                                2008       2007        2008        2007
                                              --------   --------    --------   --------

<S>                                           <C>        <C>         <C>       <C>
Service cost                                  $  -       $  4,356    $   -     $  8,712
Interest cost                                  19,398      31,106      38,796    62,213
Amortization of prior
  service cost                                (11,594)    (11,594)    (23,188)  (23,188)
Recognized actuarial loss                        -        105,591        -      211,182
                                              --------   ---------   --------- --------

Net periodic benefit cost                     $ 7,804    $129,459    $ 15,608  $258,919
                                              ========   =========   ========= ========

The following tables set forth the components of net periodic benefit costs for
contractual postretirement benefits:

                                                Three Months Ended       Six Months Ended
                                                     June 30,               June 30,
                                                 2008       2007         2008        2007
                                               --------   --------      --------   --------

Service cost                                   $   518    $(2,234)      $  1,036   $    973
Interest cost                                    9,697     12,763         19,392     22,090
Amortization of prior
  service cost                                     925      6,822          1,851     (5,890)
Recognized actuarial loss (gain)                  (631)    (2,397)        (1,262)    10,891
                                               -------    -------        -------   --------

Net periodic benefit cost                      $10,509    $14,954        $21,017   $ 28,064
                                               =======    =======        =======   ========

</TABLE>
During the six months ended June 30, 2008, the Company made contributions of
$108,330 and $16,258 for contractual pension benefits and postretirement
benefits, respectively. The Company anticipates additional contributions of
$108,330 and $18,742 for contractual pension benefits and postretirement
benefits, respectively, for the remainder of 2008.

14. DEFINED BENEFIT PLAN

<TABLE>
The following table sets forth the components of net periodic benefit costs:
<CAPTION>





                                       Three Months Ended      Six Months Ended
                                            June 30,              June 30,
                                       2008        2007      2008         2007
                                     --------   ---------  ---------    ---------

<S>                                  <C>        <C>        <C>          <C>
Service cost                         $ 59,414   $  58,496  $ 118,828    $ 116,992
Interest cost                          76,199     107,813    152,398      215,625
Expected return on
  plan assets                         (91,989)   (142,130)  (183,978)    (284,260)
Amortization of prior
  service cost                          3,154       3,154      6,308        6,308
Amortization of
  accumulated loss                      4,522       2,403      9,044        4,806
                                     --------   ---------   --------    ---------
Net periodic
  benefit cost                       $ 51,300   $  29,736  $ 102,600    $  59,471
                                     ========   =========  =========    =========
</TABLE>

The Company's funding policy for the defined benefit plan is based on
contributions that comply with the minimum and maximum amounts required by law.
During the six months ended June 30, 2008, the Company did not make a
contribution to the defined benefit plan for the 2008 plan year. The Company is
not required to make any contributions in 2008, but may decide to do so.


PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS
         FOR THE SIX MONTHS ENDED JUNE 30, 2008 AND 2007

Forward-Looking Statements

Certain statements made in this report may constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Such forward-looking statements include statements regarding the intent, belief
or current expectations of the Company and its management and involve known and
unknown risks, uncertainties and other factors that may cause the actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among other things, the
following:

    o    general economic and business conditions, which will, among other
         things, affect the demand for apartments, mall space or other
         commercial space, availability and credit worthiness of prospective
         tenants, rental rates and the terms and availability of financing;
    o    adverse changes in the real estate markets including, among other
         things, competition with other companies;
    o    risks of real estate development, acquisition, ownership and operation;
    o    governmental actions and initiatives; and
    o    environmental and safety requirements.

Critical Accounting Policies

In preparing the consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America ("GAAP"),
management is required to make estimates and assumptions that affect the
financial statements and disclosures. These estimates require difficult, complex
and subjective judgments. The Company's critical accounting policies are
described in its Form 10-KSB for the year ended December 31, 2007. There have
been no significant changes in the Company's critical accounting policies since
December 31, 2007.

Results of Operations

Financial Information for the three months ended June 30, 2008 and 2007:
-----------------------------------------------------------------------

Continuing Operations:

Revenues increased by $92,830 primarily as a result of increases in rental
revenues and interest income on mortgages-notes receivable-related parties. This
increase was partially offset by a decrease in interest income on mortgages -
notes receivable.

Rental revenues increased by $85,339 primarily due to increased occupancy rates
at the Hato Rey Center property, which increased rental revenues by $95,497.

Interest on mortgages-notes receivable-related parties increased by $60,746
primarily as a result of an increase of $61,500 in payments of interest received
on the Consolidated Loans (see Liquidity and Capital Resources - Consolidated
Loans below).

Interest on mortgages-notes receivable decreased by $53,204 primarily as a
result of repayments of $1,600,000 on notes receivable in the first quarter of
2008. Interest income on those notes decreased by $54,762 in the current period.

Costs and expenses decreased by $10,145 primarily due to decreases in general
and administrative expenses and amortization of in-place lease values and
mortgage costs. These decreases were partially offset by increases in rental
property operating expenses, interest on mortgage debt and depreciation expense.

General and administrative expenses decreased by $80,348 primarily as a result
of a decrease of $157,488 in fees for professional services and a decrease of
$126,100 in contractual pension benefit expenses. These decreases were partially
offset by increases in salary expense of $213,591. Salary expense increased
primarily due to an amendment of an executive employment contract which would
require payments upon the retirement of the executive, which resulted in salary
expense of $134,041. In addition, the vesting of restricted shares of the
Company's Class B common stock awarded to officers and employees resulted in
salary expense of $20,640. In the 2007 period there was a reversal of accrued
contractual bonuses of $44,185.

Rental property operating expenses increased by $64,091. This increase was
primarily a result of increases in utility expenses of $61,604 at the Hato Rey
Center property.

Interest on mortgage debt increased by $29,769 primarily as a result of a
$36,065 increase in mortgage interest expense on the Hato Rey Center property
first mortgage. The terms of the existing first mortgage provide for a 2% per
annum increase in the interest rate on the mortgage beginning on May 12, 2008.

Depreciation on real estate increased by $16,426 primarily as a result of an
$18,110 increase in depreciation on the Hato Rey Center property.

Amortization of in-place lease values and mortgage costs decreased by $43,639 as
a result of a $37,213 decrease in the amortization of in-place lease values and
a $6,426 decrease in the amortization of mortgage costs.

Equity in the loss from joint ventures decreased by $565,806 from a loss of
$661,410 in 2007 to a loss of $95,604 in 2008 primarily because the Company's
basis in some of these investments has been reduced to zero. Losses on those
investments will only be recorded to the extent of their basis and thereafter
distributions received will be recorded as income. (See Liquidity and Capital
Resources - Investments in and Advances to Joint Ventures below.)

Loss from continuing operations decreased by $668,489 from a loss of $1,329,235
in 2007 to a loss of $660,746 in 2008. The $668,489 decrease in loss was
primarily a result of a decrease of $565,806 in the equity in the loss from the
joint ventures and a $92,830 increase in revenues.

Discontinued Operations:

In 2008, the Company has two properties that were classified as discontinued
operations; the Towne House property in New Rochelle, New York, which consists
of 42 cooperative apartment units, and a cooperative apartment unit in New
Haven, Connecticut. These properties were designated as held for sale during the
quarter ended June 30, 2008. (See Liquidity and Capital Resources - Discontinued
Operations below).

In 2007, the Company had two properties that were classified as discontinued
operations; the Cambridge Green property in Council Bluffs, Iowa, which was sold
in March, 2007, and a cooperative apartment unit in New Haven, Connecticut,
which was sold in June, 2007.

The following table compares the total income from discontinued operations for
the three month periods ended June 30, for properties included in discontinued
operations:

                                                  2008            2007
                                                  ----            ----

Income (loss) from discontinued operations:

Cambridge Green, Council Bluffs, IA             $  -            $(1,640)
Cooperative apartment units, New Haven, CT          628            (310)
Towne House, New Rochelle, NY                    32,715          27,859
                                                -------         -------

Income from discontinued operations              33,343          25,909
                                                -------         -------

Net gain from sales of
  discontinued operations:
Cooperative apartment unit                         -             88,946
                                                -------        --------

Total income from
  discontinued operations                       $33,343        $114,855
                                                =======        ========

Financial Information for the six months ended June 30, 2008 and 2007:
---------------------------------------------------------------------

Continuing Operations:

Revenues increased by $166,771 primarily as a result of increases in rental
revenues, partially offset by decreases in interest income on mortgages-notes
receivable and interest income on mortgages-notes receivable-related parties.

Rental revenues increased by $322,091 primarily due to increased occupancy rates
at the Hato Rey Center property, which increased rental revenues by $332,373.
The $332,373 increase in rental revenues at the Hato Rey Center property
includes a lease termination fee in the amount of $52,360.

Interest on mortgages-notes receivable decreased by $58,619 primarily as a
result of repayments of $2,754,239 on notes receivable which were received in
2008. Interest income on those notes decreased by $57,100 in the 2008 period.

Interest on mortgages-notes receivable-related parties decreased by $94,489
primarily as a result of a decrease of $87,750 in payments of interest received
on the Consolidated Loans (see Liquidity and Capital Resources - Consolidated
Loans below).

Costs and expenses decreased by $89,984 primarily due to decreases in general
and administrative expenses and amortization of in-place lease values and
mortgage costs. These decreases were partially offset by increases in rental
property operating expenses, interest on mortgage debt and depreciation expense.

General and administrative expenses decreased by $54,081 primarily as a result a
decrease of $152,647 in fees for professional services and a decrease of
$250,358 in contractual pension benefit expenses. These decreases were partially
offset by increases in salary expense of $366,783. Salary expense increased
primarily due to an amendment of an executive employment contract which would
require payments upon the retirement of the executive, which resulted in salary
expense of $268,082. In addition, the vesting of restricted shares of the
Company's Class B common stock awarded to officers and employees resulted in
salary expense of $41,280.

Rental property operating expenses increased by $51,744 primarily as a result of
increases in utility expenses of $106,549 at the Hato Rey Center property. This
increase was partially offset by a $48,238 decrease in insurance expense.

Interest on mortgage debt increased by $24,075 primarily as a result of a
$36,568 increase in mortgage interest expense on the Hato Rey Center property
first mortgage.

Depreciation on real estate increased by $20,256 primarily as a result of a
$23,292 increase in depreciation on the Hato Rey Center property.

Amortization of in-place lease values and mortgage costs decreased by $138,486
as a result of a $129,728 decrease in the amortization of in-place lease values
and an $8,758 decrease in the amortization of mortgage costs.

Equity in the loss from joint ventures decreased by $561,065 from a loss of
$1,017,465 in 2007 to a loss of $456,400 in 2008 primarily because the Company's
basis in some of these investments has been reduced to zero. Losses on those
investments will only be recorded to the extent of their basis and thereafter
distributions received will be recorded as income. (See Liquidity and Capital
Resources - Investments in and Advances to Joint Ventures below.)

Loss from continuing operations decreased by $822,413 from a loss of $2,426,990
in 2007 to a loss of $1,604,577 in 2008. The $822,413 decrease in loss was
primarily a result of a decrease of $561,065 in the equity in the loss from the
joint ventures, a $166,771 increase in revenues and a $89,984 decrease in costs
and expenses.




Discontinued Operations:

The following table compares the total income from discontinued operations for
the six month periods ended June 30, for properties included in discontinued
operations:

                                                      2008       2007
                                                      ----       ----

Income (loss) from discontinued operations:

Cambridge Green, Council Bluffs, IA                 $  -       $(96,438)
Cooperative apartment units, New Haven, CT              879        (143)
Towne House, New Rochelle, NY                        57,637      50,629
                                                    -------    --------

Income (loss) from discontinued operations           58,516     (45,952)
                                                    -------    --------
Net gain from sales of discontinued operations:
Cambridge Green                                        -        646,759
Cooperative apartment unit                             -         88,946
                                                    -------    --------

Net gain from sales of
  discontinued operations                              -        735,705
                                                    -------    --------

Total income from
  discontinued operations                           $58,516    $689,753
                                                    =======    ========

Balance Sheet

Net mortgage portfolio decreased by $2,654,592 primarily as a result of the
$2,798,273 of payments received on its mortgage portfolio. In the first quarter
of 2008, the Company received repayment of its $1,500,000 mezzanine loan on the
Reisterstown Apartments property and repayment of its $100,000 note on the
Pinewood property. In the second quarter of 2008, the Company received a
principal payment of $1,079,239 on its note receivable relating to the sale of
the Fairfield Towers mortgages in 1999 and a $75,000 principal payment on its
Mark Terrace note receivable. This decrease was partially offset by the $135,895
of amortization of discounts on notes receivable.

Investments in and advances to joint ventures decreased by $1,736,457 as a
result of $1,280,057 of distributions received and $456,400 of equity in the
loss from the joint ventures.

Assets related to discontinued operations increased by $564,843. In the second
quarter of 2008, the Company classified two properties as discontinued
operations, Towne House (42 cooperative apartment units) in New Rochelle, New
York and one cooperative apartment unit in New Haven, Connecticut.

Prepaid expenses and deposits in escrow increased by $66,854 primarily as a
result of increases of $168,147 in prepaid expenses, offset by decreases of
$101,293 in deposits in escrow.

Cash and cash equivalents increased by $174,814 primarily as a result of the
$2,798,273 repayments received on the Company's mortgage portfolio, partially
offset by the distributions on common stock to shareholders of $1,230,889 and
the purchase of treasury stock of $1,398,972.

Other assets decreased by $99,571 primarily as a result of decreases of $71,005
of amortization of in-place lease values and $28,684 of amortization of mortgage
costs.

In January, 2008, three independent directors of the Company each received 1,000
shares of the Company's Class B common stock as a partial payment of directors'
fees for the 2008 year. The shares were valued at $5.92 per share, which was the
market value of the Class B common stock at the grant date, and, accordingly,
the Company recorded $17,760 in prepaid directors' fees (to be amortized during
2008) based on the market value of the stock. The Company recorded additions to
the Company's Class B common stock of $300 at par value of $.10 per share and
$17,460 to additional paid-in capital.

Treasury stock increased by $1,398,972 as a result of the Company's purchase of
230,872 shares of its Class B common stock at an average cost of $5.75 per share
and 13,032 shares of its Class A common stock at an average cost of $5.49 per
share. (See Liquidity and Capital Resources - Treasury Stock below.)

Liquidity and Capital Resources

Management believes that the Company has sufficient liquidity and capital
resources to carry on its existing business and, barring any unforeseen
circumstances, to pay the dividends required to maintain REIT status in the
foreseeable future. Except as discussed herein, management is not aware of any
other trends, events, commitments or uncertainties that will have a significant
effect on liquidity.

In 2008, Lightstone III defaulted on payments of interest due under the
Company's $9,500,000 loan related to the Macon/Burlington Malls (see Investments
in and Advances to Joint Ventures below). As a result, the Company does not
expect to receive approximately $1,060,000 of interest payments that are
contractually due to be received during 2008. Adverse economic conditions
affecting some of the Company's shopping mall joint ventures could also affect
the ability of its borrowers to make payments on the Company's other loans to
the joint ventures. Any further defaults on these loans would adversely affect
the liquidity of the Company and have a material adverse effect on the Company's
business, financial condition, results of operations and prospects.

The Company held a $3,875,000 note receivable which was due in February, 2009,
from an affiliate of Mr. Lichtenstein. However, the Company had the right to
require prepayment upon 90 days prior notice. On March 20, 2008, the Company
gave such notice to the borrower. In June, 2008, the Company received a
$1,079,239 partial repayment on the note and in July, 2008, the Company received
a $2,795,761 payment of the remaining outstanding balance of the note.

While no decision has been made with respect to dividends for future periods, if
the Company's cash flow were to be substantially reduced, the Company would be
able to reduce its dividend without affecting its ability to continue to qualify
as a real estate investment trust. The Company maintained the $.64 dividend rate
in 2007, paid a $.16 per share dividend for each of the first and second
quarters of 2008 and in August, 2008 declared a $.16 per share dividend for the
third quarter of 2008. However, no assurances can be given that the present
dividend rate will be maintained in the future.

If the Company's tax positions in relation to certain transactions were examined
and were not ultimately upheld, the Company would be required to pay an income
tax assessment and related interest, or a deficiency dividend and related
interest, for prior years. Should such an assessment require the Company to pay
a deficiency dividend in order to continue to qualify as a REIT, the Company
would pay the deficiency dividend to its shareholders and the related interest
assessment to the taxing authorities. The Company would be required to pay such
deficiency dividend within ninety days of such determination. If the Company had
to pay a deficiency dividend and interest thereon, the Company may have to
borrow funds or sell assets to do so.

Presidential obtains funds for working capital and investment from its available
cash and cash equivalents, from operating activities, from refinancing of
mortgage loans on its real estate equities or from sales of such equities, and
from repayments on its mortgage portfolio. The Company also has at its disposal
a $250,000 unsecured line of credit from a lending institution. At June 30,
2008, there was no outstanding balance due under the line of credit.

During the first six months of 2008, the Company paid cash distributions to
shareholders which exceeded cash flows from operating activities. Periodically
the Company receives balloon payments on its mortgage portfolio and net proceeds
from sales of discontinued operations and other properties. These payments are
available to the Company for distribution to its shareholders or the Company may
retain these payments for future investment. The Company may in the future, as
it did in the first six months of 2008, pay dividends in excess of its cash flow
from operating activities if the Board of Directors believes that the Company's
liquidity and capital resources are sufficient to pay such dividends. However,
no assurances can be given with respect to any dividends for future periods.

To the extent that payments received on its mortgage portfolio or payments
received from sales are taxable as capital gains, the Company has the option to
distribute the gain to its shareholders or to retain the gain and pay Federal
income tax on it. The Company does not have a specific policy as to the
retention or distribution of capital gains. The Company's dividend policy
regarding capital gains for future periods will be based upon many factors
including, but not limited to, the Company's present and projected liquidity,
its desire to retain funds available for additional investment, its historical
dividend rate and its ability to reduce taxes by paying dividends.

At June 30, 2008, Presidential had $2,518,311 in available cash and cash
equivalents, an increase of $174,814 from the $2,343,497 at December 31, 2007.
This increase in cash and cash equivalents was due to cash provided by operating
activities of $468,524 and cash provided by investing activities of $2,554,663,
offset by cash used in financing activities of $2,848,373.

Operating Activities

Cash from operating activities includes interest on the Company's mortgage
portfolio, net cash received from rental property operations and distributions
received from joint ventures. In 2008, cash received from interest on the
Company's mortgage portfolio was $511,268 and distributions received from the
joint ventures were $1,280,057. Net cash received from rental property
operations was $496,540. Net cash received from rental property operations is
net of distributions to minority partners, if any, but is before additions and
improvements and mortgage amortization.

Investing Activities

Presidential holds a portfolio of mortgage notes receivable. During 2008, the
Company received principal payments of $2,798,273 on its mortgage portfolio, of
which $2,775,818 represented prepayments and balloon payments.

During the first six months of 2008, the Company invested $243,610 in additions
and improvements to its properties.

Financing Activities

The Company's indebtedness at June 30, 2008, consisted of mortgage debt of
$18,698,432. The mortgage debt is collateralized by individual properties. The
$15,396,219 mortgage on the Hato Rey Center property and the $2,127,694 mortgage
on the Crown Court property are nonrecourse to the Company, whereas the
$1,087,437 Building Industries Center mortgage and the $87,082 Mapletree
Industrial Center mortgage are recourse to Presidential. In addition, some of
the Company's mortgages provide for Company liability for damages resulting from
specified acts or circumstances, such as for environmental liabilities and
fraud. Generally, mortgage debt repayment is serviced with cash flow from the
operations of the individual properties. During 2008, the Company made $218,512
of principal payments on mortgage debt.

The mortgages on the Company's properties are at fixed rates of interest and
will fully amortize by periodic principal payments, with the exception of the
Building Industries Center mortgage, which has a balloon payment of $1,072,906
due at maturity in January, 2009, and the Hato Rey Center mortgage. The
$15,396,219 Hato Rey Center mortgage matures in May, 2028, and had a fixed rate
of interest of 7.38% per annum until May, 2008; thereafter the interest rate
increased by 2% and additional repayments of principal will be required from
surplus cash flows from operations of the property (see Hato Rey Partnership
below).

During the first six months of 2008, Presidential declared and paid cash
distributions of $1,230,889 to its shareholders.

Treasury Stock Purchase

During the period ended June 30, 2008, the Company purchased 13,032 shares of
its Class A common stock and 230,872 shares of its Class B common stock.
Subsequent to June 30, 2008, the Company purchased an additional 18,000 shares
of its Class A common stock and 207,000 shares of its Class B common stock.
Details of these purchases are as follows:

<TABLE>
<CAPTION>


                               Number of            Number of
                               Class A   Price Per  Class B   Price Per      Total
Period      Purchased From       Shares    Share     Shares    Share          Paid
------   --------------------- --------- --------- --------- ---------        -----
<S>                            <C>       <C>       <C>       <C>              <C>
May      Foundation controlled
          by a director and
          an officer of the
          Company          (1)     932    $5.375    4,072     $5.725       $   28,322

June     Private Investor  (2)  12,100     5.50   226,800      5.75         1,370,650
                                ------            -------                  ----------
Total purchased for the
  period ended June 30, 2008    13,032            230,872                   1,398,972
                                ------            -------                  ----------

July     Private Investor        1,000     5.50     7,000      5.90            46,800

July     Private Investor  (2)  17,000     5.50   200,000      5.50         1,193,500
                                ------            -------                  ----------

Total purchased
  subsequent to June 30, 2008   18,000            207,000                   1,240,300
                                ------            -------                  ----------

Total                           31,032            437,872                  $2,639,272
                                ======            =======                  ==========

</TABLE>
(1) These shares were purchased at 1/8th of a point below market price.
(2) These shares were purchased pursuant to common stock repurchase agreements.

The Company believes that the repurchase of the Company's shares at or about
the current price for the Company's shares is an appropriate use of the
Company's cash available for investment and in the best interest of all of the
shareholders of the Company. However, the Company has no specific plan or
program to repurchase additional shares but it may do so in the future.


Investments in and Advances to Joint Ventures

Over the past several years the Company has made investments in and advances to
four joint ventures that own nine shopping malls. The Company has a 29%
ownership interest in these joint ventures and accounts for these investments
under the equity method. All of the investments in and advances to joint
ventures were made with various entities of the Lightstone Group ("Lightstone").
Each individual owning entity is a single purpose entity that is prohibited by
its organizational documents from owning any assets other than the nine shopping
mall properties.

The Company's investments in three of the joint ventures were mezzanine loans to
the various joint venture owning entities. These loans mature in 2014 and 2015
and have an annual interest rate of 11% per annum. At June 30, 2008, these loans
have an aggregate outstanding principal balance of $25,935,000. The loans are
secured by the ownership interests in the entities that own the malls, subject
to the first mortgage liens. The Company receives monthly payments of interest
on these loans from the joint ventures and records these payments as
distributions received to Investments in and advances to joint ventures.

The Company's investment in the Martinsburg Mall is a capital contribution to
the owning joint venture in the original amount of $1,438,410. The Company is
entitled to receive a preferential return on its capital contribution at the
rate of 11% per annum. The Company's investment in the Martinsburg Mall is
reduced by distributions received from the joint venture and the Company's share
of losses recorded for the joint venture (and increased by any income recorded
for the joint venture).

In addition, the owning entity of the Martinsburg Mall has a $2,600,000
mezzanine loan payable to Lightstone. The loan matures in 2014 and the interest
rate on the loan is 11% per annum. This loan is secured by an assignment of the
ownership interest in the entity that owns the mall, subject to the first
mortgage lien.

Under the equity method of accounting, the Company's investments in the joint
ventures, including the $25,935,000 of loans advanced to the joint ventures,
have been reduced by distributions received and losses recorded for the joint
ventures. Activity in investments in and advances to joint ventures for the
period ended June 30, 2008 is as follows:

                                                     Equity
                                                     in the
                                                     Income
                                                     (Loss)
                       Balance at                     from       Balance at
                      December 31,  Distributions     Joint        June 30,
                          2007         Received      Ventures       2008
                      ------------  ------------- -----------   -----------

Martinsburg Mall (1)  $     -       $  (120,427)   $ 120,427     $     -
Four Malls       (2)     688,735       (559,716)    (129,019)          -
Shawnee/Brazos
 Malls           (3)   4,234,466       (509,928)    (537,794)     3,186,744
Macon/Burlington
 Malls           (4)        -           (89,986)      89,986           -
                      ----------    -----------    ---------     ----------
                      $4,923,201    $(1,280,057)   $(456,400)    $3,186,744
                      ==========    ===========    =========     ==========


Equity in the income (loss) from joint ventures is as follows:

                          Three Months Ended            Six Months Ended
                                June 30,                    June 30,
                           2008         2007            2008         2007
                           ----         ----            ----         ----

Martinsburg Mall  (1) $  79,992     $ (23,703)     $ 120,427   $   (83,384)
Four Malls        (2)    46,601      (343,967)      (129,019)     (416,677)
Shawnee/Brazos
 Malls            (3)  (222,197)     (151,380)      (537,794)     (284,501)
Macon/Burlington
 Malls            (4)      -         (142,360)        89,986      (232,903)
                      ---------     ---------      ---------   -----------
                      $ (95,604)    $(661,410)     $(456,400)  $(1,017,465)
                      =========     =========      =========   ===========


(1) The Company's share of the income (loss) from joint ventures for the
Martinsburg Mall is determined after the deduction for interest expense at the
rate of 11% per annum on the outstanding $2,600,000 loan from Lightstone. In
2007, the Company's basis of its investment in the Martinsburg Mall was reduced
by distributions and losses to zero and, accordingly, the Company only recorded
its share of the loss to the extent of its basis. Any future distributions
received from the Martinsburg Mall will be recorded in income. For the six
months ended June 30, 2008, the Company recorded $120,427 of distributions
received in income from joint ventures.

(2) Interest income earned by the Company at the rate of 11% per annum on the
outstanding $8,600,000 loan from the Company to Lightstone I is included in the
calculation of the Company's share of the income (loss) from joint ventures for
the Four Malls. In the second quarter of 2008, the Company's basis of its
investment in the Four Malls was reduced by distributions and losses to zero,
and, accordingly, the Company only recorded its share of the loss to the extent
of its basis. Any future distributions received from the Four Malls will be
recorded in income. For the six months ended June 30, 2008, the Company recorded
a loss of $129,019 in loss from joint ventures.

(3) Interest income earned by the Company at the rate of 11% per annum on the
outstanding $7,835,000 loan from the Company to Lightstone II is included in the
calculation of the Company's share of the loss from joint ventures for the
Shawnee/Brazos Malls.

(4) Interest income earned by the Company at the rate of 11% per annum on the
outstanding $9,500,000 loan from the Company to Lightstone III is included in
the calculation of the Company's share of the income (loss) from joint ventures
for the Macon/Burlington Malls. In the fourth quarter of 2007, the Company's
basis of its investment in the Macon/Burlington Malls was reduced by
distributions and losses to zero and, accordingly, the Company only recorded its
share of the loss to the extent of its basis. Any future distributions received
from the Macon/Burlington Malls will be recorded in income. For the six months
ended June 30, 2008, the Company recorded $89,986 of distributions received in
income from joint ventures.

As a result of the Company's use of the equity method of accounting with respect
to its investments in and advances to the joint ventures, the Company's
consolidated statements of operations reflect its proportionate share of the
income (loss) from the joint ventures. The Company's equity in the loss from
joint ventures of $456,400 for the six months ended June 30, 2008 is after
deductions in the aggregate amount of $543,539 for the Company's proportionate
share of noncash charges (depreciation of $448,321 and amortization of deferred
financing costs, in-place lease values and other costs of $95,218).
Notwithstanding the loss from the joint ventures, the Company is entitled to
receive its interest at the rate of 11% per annum on its $25,935,000 of loans to
the joint ventures. For the six months ended June 30, 2008, the Company received
distributions from the joint ventures in the amount of $1,280,057, of which
$1,159,630 were interest payments received on the outstanding loans to the joint
ventures and $120,427 was a return on investment.

In February, 2008, Lightstone III defaulted on its monthly payments of interest
on the Company's $9,500,000 mezzanine loan relating to the Macon/Burlington
Malls. Lightstone III has also failed to make the payments due on a portion of
the first mortgage loan secured by the Macon/Burlington Malls. Lightstone III
has informed the Company that it has been unable to negotiate an agreement with
the holder of the first mortgage to modify the terms of the first mortgage and
the holder of the first mortgage has declared the mortgage in default and
accelerated the unpaid principal balance of the mortgage. As a result of the
continuing default on the first mortgage loan, the Company does not expect to
receive repayment of the principal amount of its $9,500,000 loan to Lightstone
III or any further interest thereon. The carrying value of this investment was
reduced to zero at December 31, 2007.

The Lightstone Group is controlled by David Lichtenstein. At June 30, 2008, in
addition to Presidential's investments of $3,186,744 in these joint ventures
with entities controlled by Mr. Lichtenstein, Presidential has two loans that
are due from entities that are controlled by Mr. Lichtenstein in the aggregate
outstanding principal amount of $4,870,755 with a net carrying value of
$4,669,154. One of the loans in the outstanding principal amount of $2,795,761,
with a net carrying value of $2,594,160, is secured by interests in four
apartment properties and is also personally guaranteed by Mr. Lichtenstein up to
a maximum amount of $1,637,500. Subsequent to June 30, 2008, this loan in the
outstanding principal amount of $2,795,761 was paid in full. The second loan in
the outstanding principal amount of $2,074,994 is secured by interests in nine
apartment properties and is in good standing.

The $7,855,898 net carrying value of investments in and advances to joint
ventures with entities controlled by Mr. Lichtenstein and loans outstanding to
entities controlled by Mr. Lichtenstein constitute approximately 26% of the
Company's total assets at June 30, 2008.

Discontinued Operations

The Company owns a small portfolio of cooperative apartments located in New York
and Connecticut. These apartments are held for the production of rental income
and generally are not marketed for sale. However, from time to time, the Company
will receive purchase offers for some of these apartments or decide to market
specific apartments and will make sales if the purchase price is acceptable to
management.

At June 30, 2008, assets related to discontinued operations were $564,843. These
assets relate to 42 cooperative apartment units at Towne House located in New
Rochelle, New York and one cooperative apartment unit located in New Haven,
Connecticut. There were no liabilities related to discontinued operations for
these properties.

At June 30, 2008, the carrying value of the Towne House cooperative apartment
units was $536,688 and the carrying value of the one cooperative apartment unit
in New Haven was $28,155.

In June, 2008, the Company entered into a contract for the sale of the 42
cooperative apartment units at Towne House for a sales price of $3,450,000. The
sale is expected to close in the third quarter of 2008. The gain from sale for
financial reporting purposes is estimated to be approximately $2,834,000 and the
estimated net proceeds of sale will be approximately $3,371,000.

In July, 2008, the Company sold one cooperative apartment unit located in New
Haven, Connecticut for a sales price of $122,000. The net proceeds of sale is
estimated to be approximately $113,990 and the gain from the sale for financial
reporting purposes is estimated to be approximately $85,800.


Hato Rey Partnership

At June 30, 2008, the Company has an aggregate 60% general and limited
partnership interest in the Hato Rey Partnership. The Hato Rey Partnership owns
and operates the Hato Rey Center, an office building in Hato Rey, Puerto Rico.

Three tenants vacated a total of 82,387 square feet of space to occupy their own
newly constructed office buildings and, as a result, by March 31, 2006, the
vacancy rate at the building was approximately 48%. In 2005, Presidential and
its partners agreed to undertake a program of repairs and improvements to the
building, which program was substantially completed by the end of 2007 at a cost
of approximately $795,000. Presidential believes that the improvement program
has accomplished its goal of bringing the building (which was constructed in
1967) up to modern standards for office buildings in the area. In order to pay
for the cost of the improvements to the building and fund negative cash flow
from the operation of the property during the period of high vacancies, in 2005
Presidential agreed to lend the partnership a total of $2,000,000 (subsequently
increased to 2,500,000). Presidential's loan bears interest at the rate of 11%
per annum (13% after May 11, 2008), with interest and principal to be paid from
the first positive cash flow from the property or upon a refinancing of the
first mortgage on the property. At June 30, 2008, total advances under the loan
were $1,999,275 and accrued interest on the loan was $351,974, all of which have
been eliminated in consolidation. Subsequent to June 30, 2008, the Company
advanced an additional $100,000 to the Hato Rey Partnership.

At June 30, 2008, the vacancy rate at the Hato Rey Center had been reduced to
approximately 32%. However, subsequent to June 30, 2008, the Company executed
leases for 13,485 square feet (for September 1, 20008 occupancy) and 11,042
square feet (for November 15, 2008 occupancy), which leases will decrease the
vacancy rate at the building to approximately 19%.

The Company had expected to refinance the existing $15,396,219 first mortgage on
the building in the second quarter of 2008, when the terms of the existing
mortgage would be automatically modified to increase the interest rate, but the
combination of the slower than anticipated leasing of vacant space and the
turmoil in the lending markets made a refinancing unfeasible. The modification
of the terms of the existing mortgage provided for a 2% increase in the interest
rate (from 7.38% to 9.38%), which additional interest will be deferred until the
maturity date of the mortgage in 2028. In addition, the modification provides
that all cash flow from the property, after payment of all operating expenses,
will be utilized to repay the outstanding principal of the mortgage loan. The
Company intends to refinance this mortgage when occupancy rates at the property
have improved and lending markets have returned to a more normal state. However,
until the first mortgage is refinanced, the Company will not receive any cash
payments on its loan to the Hato Rey Partnership since principal and interest on
the Company's loan are payable only out of operating cash flow or refinancing
proceeds and under the terms of the modified mortgage, all net cash flow will be
utilized to reduce principal on the first mortgage.

As stated above, an additional 24,527 square feet at the property was leased
subsequent to June 30, 2008 and management believes occupancy at the property
will continue to improve over the next few years.

Environmental Matters

Mapletree Industrial Center - Palmer, Massachusetts

The Company is involved in an environmental remediation process for contaminated
soil found on this property. The land area involved is approximately 1.25 acres
and the depth of the contamination is at this time undetermined. Since the most
serious identified threat on the site is to songbirds, the proposed remediation
will consist of removing all exposed materials and a layer of soil (the depth of
which is yet to be determined). The Company estimates that the costs of the
cleanup will not exceed $1,000,000. The remediation will comply with the
requirements of the Massachusetts Department of Environmental Protection
("MADEP"). The MADEP has agreed that the Company may complete the remediation
over the next fifteen years, but the Company expects to complete the project
over the next ten years. In order to proceed with the remediation process, the
Company was waiting for Massachusetts to complete the adoption of hazard waste
regulation 310 CMR 30. During the quarter ended June 30, 2008, this regulation
was adopted by the State of Massachusetts, and the Company is currently in the
process of working out the remediation plan.

In accordance with the provisions of SFAS No. 5, "Accounting for Contingencies",
in the fourth quarter of 2006, the Company accrued a $1,000,000 liability which
was discounted by $145,546 and charged $854,454 to expense. The discount rate
used was 4.625%, which was the interest rate on 10 year Treasury Bonds. At June
30, 2008, the accrued liability balance was $943,672 and the discount balance
was $143,056.

Actual costs incurred may vary from these estimates due to the inherent
uncertainties involved. The Company believes that any liability in excess of
amounts provided which may result from the resolution of this matter will not
have a material adverse effect on the financial condition, liquidity or cash
flow of the Company.

Consolidated Loans

Presidential holds two nonrecourse loans (the "Consolidated Loans"), from Ivy
Properties, Ltd. and its affiliates "(Ivy"). At June 30, 2008, the Consolidated
Loans have an outstanding principal balance of $4,770,500 and a net carrying
value of zero. Pursuant to existing agreements, the Company is entitled to
receive, as payments of principal and interest on the Consolidated Loans, 25% of
the cash flow of Scorpio Entertainment, Inc. ("Scorpio"), a company owned by two
of the Ivy principals (Steven Baruch who is an executive officer and Director of
Presidential and Thomas Viertel who is an executive officer of Presidential) to
carry on theatrical productions. Amounts received by Presidential from Scorpio
will be applied to unpaid and unaccrued interest on the Consolidated Loans and
recognized as income. The Company anticipates that these amounts may be material
from time to time. However, the profitability of theatrical production is by its
nature uncertain and management believes that any estimate of payments from
Scorpio on the Consolidated Loans for future periods is too speculative to
project. During the six months ended June 30, 2008 and 2007, the Company
received payments of $127,500 and $215,250, respectively, from Scorpio. The
Consolidated Loans bear interest at a rate equal to the JP Morgan Chase Prime
rate, which was 5% at June 30, 2008. At June 30, 2008, the unpaid and unaccrued
interest was $3,472,766 and such interest is not compounded.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

While the Company is not required as a smaller reporting company to comply with
this Item 3, it is providing the following general discussion of qualitative
market risk.

The Company's financial instruments consist primarily of notes receivable and
mortgage notes payable. Substantially all of these instruments bear interest at
fixed rates, so the Company's cash flows from them are not directly impacted by
changes in market rates of interest. Changes in market rates of interest impact
the fair values of these fixed rate assets and liabilities. However, because the
Company generally holds its notes receivable until maturity or prepayment and
repays its notes payable at maturity or upon sale of the related properties, any
fluctuations in values do not impact the Company's earnings, balance sheet or
cash flows. Nevertheless, since some of the Company's mortgage notes payable are
at fixed rates of interest and provide for yield maintenance payments upon
prepayment prior to maturity, if market interest rates are lower than the
interest rates on the mortgage notes payable, the Company's ability to sell the
properties securing the notes may be adversely affected and the net proceeds of
any sale may be reduced as a result of the yield maintenance requirements. The
Company does not own any derivative financial instruments or engage in hedging
activities.

ITEM 4.  CONTROLS AND PROCEDURES

a)       As of the end of the period covered by this quarterly report on Form
         10-Q, the Company carried out an evaluation, under the supervision and
         with the participation of our Chief Executive Officer and Chief
         Financial Officer, of the effectiveness of the design and operation of
         its disclosure controls and procedures. Based on this evaluation, our
         Chief Executive Officer and Chief Financial Officer concluded that our
         disclosure controls and procedures are effective in timely alerting
         them to material information required to be included in this report.

b)       There has been no change in the Company's internal control over
         financial reporting that occurred during the Company's most recent
         fiscal quarter that has materially affected or is reasonably likely to
         materially affect the Company's internal control over financial
         reporting.

PART II - OTHER INFORMATION

ITEM 2.  Unregistered Sales of Equity Securities and Use of Proceeds

(c) The following table sets forth the purchases by the Company of its equity
securities during the three months ended June 30, 2008. The Company does not
have a publicly announced plan or program for such purchases but it may purchase
additional shares in the future if it deems it appropriate under all the
circumstances. The table only lists the months in 2008 when such purchases were
made.



              Small Business Issuer Purchases of Equity Securities




                                                                    (d)
                                                    (c)           Maximum
                                                Total number    number (or
                                                 of shares      approximate
                                                (or units)      dollar value)
                    (a)              (b)       purchased as      of shares
              Total number of      Average       part of        (or units)
             shares (or units)      price        publicly     that may yet be
                purchased          paid per     announced     purchased under
           --------------------     share       plans or       the plans or
Period     Class A      Class B    (or unit)    programs         programs
------     ---------    -------    ---------   -----------   ---------------

May           932(1)                 $5.375       None             None
May                      4,072(1)     5.725       None             None
June       12,100(2)                  5.50        None             None
June                   226,800(2)     5.75        None             None
           ------      -------
           13,032      230,872
           ======      =======

(1) The shares purchased in May were purchased from a foundation controlled by a
director and an officer of the Company at a price of 1/8th of a point below
market.

(2) The shares purchased in June were purchased in a private transaction with a
shareholder in accordance with a common stock repurchase agreement.

ITEM 4.  Submission of Matters to a Vote of Security Holders

The Company held its Annual Meeting of Stockholders on June 16, 2008. The
following actions were taken at the Annual Meeting:

1. The following persons were elected as Directors by the holders of the
Company's Class A Common Stock:

                                          Votes                   Votes
                                           For                   Withheld
                                          -----                  --------

Robert Feder                             359,159                   1,752
Jeffrey F. Joseph                        358,855                   2,056
Robert E. Shapiro                        358,855                   2,056
Steven Baruch                            358,659                   2,252

2. The following persons were elected as Directors by the holders of the
Company's Class B Common Stock:

                                         Votes                    Votes
                                          For                   Withheld
                                         -----                  --------

Richard Brandt                         2,899,592                 175,509
Mortimer Caplin                        2,899,631                 175,470







ITEM 6.  Exhibits

10.1     Common Stock Repurchase Agreement as of June 6, 2008 between
         Presidential Realty Corporation and Wilshire Enterprises, Inc.

10.2     Common Stock Repurchase Agreement as of July 14, 2008 between
         Presidential Realty Corporation and Charles Frischer.

31.1     Certification of Chief Executive Officer of the Company
         pursuant to Rule 13a-14(a) of the Securities Exchange Act of
         1934, as amended.

31.2     Certification of Chief Financial Officer of the Company
         pursuant to Rule 13a-14(a) of the Securities Exchange Act of
         1934, as amended.

32.1     Certification of Chief Executive Officer of the Company pursuant
         to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
         the Sarbanes-Oxley Act of 2002.

32.2     Certification of Chief Financial Officer of the Company pursuant
         to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
         the Sarbanes-Oxley Act of 2002.



SIGNATURES

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

                                          PRESIDENTIAL REALTY CORPORATION
                                                (Registrant)



DATE:    August 8, 2008                    By: /s/ Jeffrey F. Joseph
                                          -------------------------------------
                                           Jeffrey F. Joseph
                                           President and Chief Executive Officer



DATE:    August 8, 2008                    By: /s/ Elizabeth Delgado
                                           -------------------------------------
                                           Elizabeth Delgado
                                           Treasurer