<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-K
(Mark One)

|X|   ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934.

                   For the fiscal year ended December 31, 2002

                                    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 1-15923

                              KRAMONT REALTY TRUST
             (Exact name of registrant as specified in its charter)

            MARYLAND                                  25-6703702
   (State of incorporation)             (I.R.S. employer identification no.)

         580 WEST GERMANTOWN PIKE, SUITE 200, PLYMOUTH MEETING, PA 19462
                    (Address of principal executive offices)

        Registrant's telephone number, including area code: 610-825-7100

           Securities registered pursuant to Section 12(b) of the Act:

<TABLE>
<CAPTION>
Title of Class                                  Name of exchange on which registered
--------------                                  ------------------------------------
<S>                                             <C>
COMMON SHARES OF BENEFICIAL INTEREST,                 NEW YORK STOCK EXCHANGE
$.01 PAR VALUE

9.75% SERIES B-1 CUMULATIVE CONVERTIBLE               NEW YORK STOCK EXCHANGE
PREFERRED SHARES OF BENEFICIAL INTEREST,
$.01 PAR VALUE

9.50% SERIES D CUMULATIVE REDEEMABLE                  NEW YORK STOCK EXCHANGE
PREFERRED SHARES OF BENEFICIAL INTEREST,
$.01 PAR VALUE
</TABLE>

Securities registered pursuant to Section 12(g) of the Act: NONE

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 and (2) has been subject to such filing requirements for
the past 90 days. YES |X| NO | |

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. | |

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes |X| No | |

The aggregate market value of the voting common shares held by non-affiliates of
the Registrant was approximately $340 million based on the closing price on the
New York Stock Exchange for such shares on June 28, 2002.

The aggregate market value of the voting common shares held by non-affiliates of
the Registrant was approximately $351 million based on the closing price on the
New York Stock Exchange for such shares on March 13, 2002.

The number of shares of the Registrant's Common Shares of Beneficial Interest
outstanding was 23,355,985 as of March 15, 2003.

<PAGE>

Portions of the Registrant's definitive proxy statement for the 2003 Annual
Meeting of Shareholders, to be filed not later than April 30, 2003, are
incorporated by reference into Items 10, 11, 12 and 13 of Part III of this Form
10-K.

                           Forward-Looking Statements

      Certain statements contained in this Annual Report may contain
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of
1934, as amended, and as such may involve known and unknown risks, uncertainties
and other factors which may cause our actual results, performance or
achievements to be materially different from future results, performance or
achievements expressed or implied by such forward-looking statements.
Forward-looking statements, which are based on certain assumptions and describe
our future plans, strategies and expectations, are generally identifiable by use
of the words "may," "will," "should," "expect," "anticipate," "estimate,"
"believe," "intend" or "project", or the negative thereof, or other variations
thereon or comparable terminology. Factors which could have a material adverse
effect on the operations and future prospects of our company include:

      -     our inability to identify properties to acquire or our inability to
            successfully integrate acquired properties and operations;

      -     the effect of general economic downturns on demand for leased space
            at and the amount of rents chargeable by neighborhood and community
            shopping centers;

      -     changes in tax laws or regulations, especially those relating to
            REITs and real estate in general;

      -     our failure to continue to qualify as a REIT under U.S. tax laws;

      -     the number, frequency and duration of tenant vacancies that we
            experience;

      -     the time and cost required to solicit new tenants and to obtain
            lease renewals from existing tenants on terms that are favorable to
            us;

      -     tenant bankruptcies and closings;

      -     the general financial condition of, or possible mergers or
            acquisitions involving, our tenants;

      -     competition from other real estate companies or from competing
            shopping centers or other commercial developments;

      -     changes in interest rates and national and local economic
            conditions;

      -     increases in our operating costs;

      -     the continued service of our senior executive officers;

      -     possible environmental liabilities;

      -     the availability, cost and terms of financing;

      -     the time and cost required to identify, acquire, construct or
            develop additional properties that result in the returns anticipated
            or sought;

      -     the costs required to re-develop or renovate any of our current or
            future properties; and

      -     our inability to obtain insurance coverage to cover liabilities
            arising from terrorist attacks or other causes or to obtain such
            coverage at commercially reasonable rates.

      You should also carefully consider any other factors contained in this
Annual Report, including the information incorporated by reference into Annual
Report. You should not rely on the information contained in any forward-looking
statements, and you should not expect us to update any forward-looking
statements.


                                      2
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                Form 10-K
Item No.                                                                        Report Page
--------                                                                        -----------

                                     PART I

<S>                                                                             <C>
1.  Business ................................................................        4
2.  Properties ..............................................................        9
3.  Legal Proceedings .......................................................       13
4.  Submission of Matters to a Vote of Security Holders .....................       13

                                     PART II

5.  Market for the Registrant's Common Equity and Related
    Shareholder Matters .....................................................       13
6.  Selected Financial Data .................................................       14
7.  Management's Discussion and Analysis of Financial Condition and
    Results of Operations ...................................................       15
7A. Quantitative and Qualitative Disclosures About Market Risk ..............       24
8.  Financial Statements and Supplementary Data .............................       25
9.  Changes in and Disagreements with Accountants on Accounting and Financial
    Disclosures .............................................................       48

                                    PART III

10. Trustees and Executive Officers of the Registrant .......................       48
11. Executive Compensation ..................................................       48
12. Security Ownership of Certain Beneficial Owners and Management and
    Related Shareholder Matters .............................................       48
13. Certain Relationships and Related Transactions ..........................       48
14. Controls and Procedures .................................................       48
15. Exhibits, Financial Statements Schedules and Reports on Form 8-K ........       48
</TABLE>


                                      3
<PAGE>

                                     PART I

BACKGROUND

Kramont Realty Trust, a Maryland real estate investment trust ("Kramont")
acquired its assets through the merger of Kranzco Realty Trust ("Kranzco") and
CV Reit, Inc. ("CV Reit") into Kramont in a merger effective as of June 16, 2000
(the "Merger"). The Agreement and Plan of Reorganization and Merger, dated as of
December 10, 1999, was adopted and approved by the shareholders of both
companies on June 6, 2000. Terms of the Merger called for holders of common
shares of both companies to each receive one common share of beneficial interest
of Kramont for each outstanding common share of CV Reit and Kranzco on a
tax-free basis, and for holders of Kranzco preferred shares to receive in
exchange for such Kranzco preferred shares, Kramont preferred shares with the
same rights. The Merger was accounted for as a purchase by CV Reit of Kranzco
for accounting purposes.

Kramont and its consolidated subsidiaries are hereinafter referred to as the
"Company."

ITEM 1. BUSINESS

Kramont is a self-administered, self-managed equity real estate investment trust
("REIT") which is engaged in the ownership, acquisition, redevelopment,
management and leasing of community and neighborhood shopping centers. Kramont
does not directly own any assets other than its interest in Kramont Operating
Partnership, L.P. ("Kramont OP") and conducts its business through Kramont OP
and its affiliated entities, including Montgomery CV Realty, L.P. ("Montgomery
OP", together with Kramont OP and their wholly-owned subsidiaries, hereinafter
collectively referred to as the "OPs"). The OPs, directly or indirectly, own all
of the Company's assets, including its interests in shopping centers.
Accordingly, the Company conducts its operations through an Umbrella Partnership
REIT ("UPREIT") structure. As of December 31, 2002, the Company owned 93.31% of
Kramont OP and is its sole general partner. As of December 31, 2002, Kramont
indirectly owned 99.87% of the partnership interests of Montgomery OP and owned
100% of its sole general partner. As of December 31, 2002, the OPs owned and
operated 80 shopping centers (one of which is held for sale) and 2 office
buildings, and managed 5 shopping centers for third parties, located in 15
states, and aggregating approximately 11.5 million square feet.

FINANCIAL  INFORMATION ABOUT INDUSTRY SEGMENTS

The Company's income-producing properties and other assets represent one
reportable segment as each of the income-producing properties have similar
economic and environmental conditions, business processes, types of customers
(i.e., tenants), and services provided, and because resource allocation and
other operating decisions are based on an evaluation of the entire portfolio. In
addition, due to the repayment of an 11% mortgage note (the "Hilcoast Note")
collateralized by first mortgages on the recreation facilities at the Century
Village at Pembroke Pines in December 2000, the Company believes the remaining
Mortgage Note Receivables are not material and no longer represent a separate
operating segment.

OPERATING STRATEGIES

Our primary business objectives are to increase Funds From Operations (see
Management's Discussion and Analysis of Results of Operations and Financial
Condition for a definition of Funds From Operations) and to enhance the value of
our properties. It has been our operating strategy to achieve these objectives
through:

      -     Efficient operation of our properties, including active leasing and
            property management, maintenance of high occupancy levels,
            increasing rental rates and controlling operating and capital costs.

      -     Acquisition of additional properties which satisfy our criteria, at
            favorable prices, including properties requiring renovation or
            re-leasing.

      -     Completion of strategic renovations and expansions to further
            maximize operating cash flows.

      -     Attainment of greater access to capital sources.


                                      4
<PAGE>

ACQUISITION STRATEGIES/INVESTMENT STRATEGIES

The Company intends to make acquisitions in a manner consistent with the
requirements of the Internal Revenue Code of 1986, as amended (the "Code") and
regulations promulgated thereunder applicable to REITs with respect to the
composition of the Company's portfolio and the derivation of income unless,
because of circumstances or changes in the Code (or any related regulation), the
board of trustees (the "Trustees") of the Company determine that it is no longer
in the best interests of the Company to qualify as a REIT. The Company's
acquisition strategy is to opportunistically acquire properties which need
replacement anchor tenants or where the Company's management expertise and
reputation can enhance value. That strategy includes acquiring and
rehabilitating properties in new markets with strong demographic characteristics
in order to reduce the Company's sensitivity to regional economic cycles. The
Company will seek to utilize its UPREIT structure to acquire interests in
properties in exchange for units of limited partner interest in Kramont OP ("OP
Units"). Since the Company is an UPREIT, potential transferors of property to
the Company may be able to transfer the property on a tax-deferred basis.

The Company will generally acquire fee simple or leasehold interests in real
property consistent with the Company's acquisition strategies set forth above.
However, the Company may make equity investments through joint ventures with
developers, owners or other persons which may provide for, among other terms,
(i) a cumulative preference as to cash distributions; (ii) a participation in
net cash flows from operations; and (iii) a participation in the appreciation of
the value of the underlying real property. The Company contemplates that it
would maintain at least equal control over the underlying real property to be
operated by any joint venture (including possibly the day-to-day management of
the real property) and additional investments in or sale or financing of such
underlying real property. The Company may also acquire investments in real
property or real estate oriented companies through issuance of debt or equity
securities in exchange for investments or by such other methods as the Trustees
deem to be in the best interests of the Company.

The Company may acquire all or some of the securities of other REITs or other
issuers or purchase or otherwise acquire its own shares. The Company does not
anticipate investing in issuers of securities, other than REITs, for the purpose
of exercising control or underwriting securities of other issuers or acquiring
any investments primarily for sale in the ordinary course of business or to hold
any investments with a view to making short-term profits from their sale.
Although the Company may make loans to other entities or persons, it has no
plans to do so. In the future, the Trustees will consider any transaction
involving loans to other entities or persons on a case by case basis.

FINANCING STRATEGIES

The Company intends to finance acquisitions with the most appropriate sources of
capital, as determined by the Trustees, which may include limited partner units
in Kramont OP, available cash flows from operations, the issuance of other
equity securities, the sale of investments and, within the debt guidelines
described above, bank and other institutional borrowings and the issuance of
debt securities. Future borrowings by the Company for acquisitions may be either
on a secured or unsecured basis.

The Company will not have a policy limiting the number or amount of mortgages
that may be placed on any particular property, but mortgage financing
instruments will usually limit additional indebtedness on specific properties.

OPERATING PRACTICES

Virtually all operating and administrative functions, such as leasing, data
processing, maintenance, finance, accounting, construction and legal, are
centrally managed at the Company's headquarters. In addition, the Company
maintains regional offices in Georgia, New York, Virginia, Florida, and
Pennsylvania. On-site functions such as security, maintenance, landscaping,
sweeping, plumbing, electrical, and other similar activities are either
performed by the Company or subcontracted. The costs of those functions are
passed through to tenants to the extent permitted by their respective leases.

The Company has computer software systems designed to support its operating and
administrative functions and to optimize management's ability to own, operate
and manage additional properties without significant increase in its


                                      5
<PAGE>

general and administrative expenses. The Company's systems allow instant access
to floor plans, store availability, lease data, tenants' sales history, cash
flows and budgets.

ASSETS

At December 31, 2002, the book value of the Company's assets amounted to $779.3
million, including $686.6 million in income-producing real estate and $33.3
million in real estate mortgage notes receivable. A description of the Company's
principal assets follows:

PROPERTIES

Income-Producing Real Estate and Properties Held for Sale - Please refer to Item
2. Properties.

MORTGAGE NOTES RECEIVABLE

At December 31, 2002, the Company's mortgage notes receivable amounted to $33.3
million including an aggregate of $9 million due from H. Irwin Levy, a Trustee.
They are secured by first mortgages on the recreation facilities at the three
Century Village adult condominium communities in southeast Florida. As of
December 31, 2002, none of the mortgage notes were delinquent.

The notes provide for self-amortizing equal monthly principal and interest
payments in the aggregate amount of $6.5 million per annum, through January
2012, and bear interest at annual rates ranging from 8.84% to 13.5%. The notes
are pledged as collateral for certain borrowings. Please refer to Item 13 -
Certain Relationships and Related Transactions regarding related party
transactions with Mr. Levy.

INVESTMENTS IN UNCONSOLIDATED AFFILIATES

Self-Storage Warehouse Partnerships

The Company owns 45% - 50% general and limited partnership interests in three
partnerships whose principal assets consist of self-storage warehouses located
in southeast Florida, with an aggregate of approximately 2,800 units and 320,000
square feet, managed by unaffiliated parties. The Company has no financial
obligations with respect to such partnerships except under state law, as general
partners. The Company receives monthly distributions from each of the
partnerships based on cash flows.

Drexel

Effective December 31, 1997, the Company acquired a 95% economic interest in
Drexel Realty, Inc. ("Drexel"), which for over 25 years has been engaged in the
development, construction, leasing, and management of real estate. Until the
Merger, Drexel managed the properties owned by Montgomery OP as well as six
other properties located in Pennsylvania and New Jersey owned by third parties.
During 2001, one management contract was terminated, primarily as a result of
Drexel's decision to concentrate mainly on management, leasing, and renovation
of the Company's properties. At this time, it is not contemplated that Drexel
will seek additional third party management contracts in the future. Currently,
the Company owns 1% of the voting stock and 99% of the voting stock of Drexel is
beneficially owned by Mr. Louis P. Meshon, Sr. and held in a voting trust and
100% of the non-voting interest is owned by the Montgomery OP. Mr. Meshon
currently serves as President of Drexel.

INDUSTRY FACTORS

Ownership of shopping centers involves risks arising from changes in economic
conditions, generally, and in the real estate market specifically, as well as
risks which result from property-specific factors such as the failure or
inability to make needed capital improvements, competition, reductions in
revenue arising from decreased occupancy or reductions in the level of rents
obtainable, and factors which increase the cost of operating, financing and
refinancing properties such as escalating interest rates and wage rates,
increased taxes, fuel costs and other operating expenses and casualties. All of
these kinds of risks can result in reduced net operating revenues available


                                      6
<PAGE>

for distribution. The Company's ability to manage the properties effectively
notwithstanding such risks and economic conditions will affect the funds
available for distribution.

The results of operations of the Company also depend upon the availability of
suitable opportunities for investment and reinvestment of the Company's excess
cash and on the yields available from time to time on real estate investments,
which in turn depend to a large extent on the type of investment involved,
prevailing interest rates, the nature and geographical location of the property,
competition, and other factors, none of which can be predicted with certainty.

MATERIAL TENANTS

The Company relies on major tenants to pay rent, and their inability to pay rent
may substantially reduce the Company's net income and cash available for
distributions to shareholders. The Company's four largest tenants are Wal-Mart
Stores, Inc. ("Wal-Mart"), Ahold USA, Inc. ("Ahold"), Kmart Corporation
("Kmart"), and TJX Companies, Inc. ("TJX"). As of December 31, 2002, Wal-Mart
represented approximately 6.6% of the Company's annualized minimum rents, Ahold
represented 4.6% of the Company's annualized minimum rents, Kmart represented
3.1% of the Company's annualized minimum rents, and TJX represented 2.8% of the
Company's annualized minimum rents. As of December 31, 2002, no other tenant
would have represented more than 2.0% of the aggregate annualized minimum rents
of the Company's shopping centers.

BANKRUPT TENANTS

The Company's business, results of operations and financial condition would be
materially adversely affected if a significant number of tenants at the shopping
centers fail to meet their lease obligations, including the obligation, in
certain cases to pay a portion of increases in the Company's operating expenses.
In the event of a default by a tenant, the Company may experience delays in
enforcing its rights as landlord and may incur substantial costs in protecting
its investment. If a tenant seeks protection under the bankruptcy laws, the
lease may be terminated or rejected in which case the amount of rent the Company
is able to collect will be substantially reduced and in some cases the Company
may not collect any rent. In addition, it is likely the Company would not be
able to recover any unamortized deferred costs related to such tenant.
Accordingly, the bankruptcy or insolvency of one or more major tenants or a
number of other tenants may materially adversely affect our business, results of
operations and financial condition.

Kmart has commenced bankruptcy proceedings. Our financial position may be
adversely affected if Kmart or a bankruptcy trustee or any other successor to
its assets in bankruptcy terminates or renegotiates the terms of Kmart leases or
closes Kmart stores at the Company's shopping centers. Kmart has announced that
it will close its store located in Manchester, Connecticut, which is one of the
Company's seven Kmart stores. The minimum rent payable under the lease for the
store to be closed, which may be rejected by Kmart, represents approximately
three-tenths of one-percent of the Company's total annualized minimum rents.

COMPETITION

The Company's competitors for acceptable investments include insurance
companies, pension funds, and other REIT's which may have investment objectives
similar to the Company's and some of which have greater financial resources than
the Company's. All of the shopping centers are located in areas which have
shopping centers and other retail facilities. Generally, there are other retail
properties within a five-mile radius of a shopping center. The amount of
rentable retail space in the vicinity of the Company's shopping centers could
have a material adverse effect on the amount of rent charged by the Company and
on the Company's ability to rent vacant space and/or renew leases of such
shopping centers. There are numerous commercial developers, real estate
companies, and major retailers that compete with the Company in seeking land for
development, properties for acquisition and tenants for properties, some of
which may have greater financial resources than the Company and more operating
or development experience than that of the Company. There are numerous shopping
facilities that compete with the Company's shopping centers in attracting
retailers to lease space. In addition, retailers at the shopping centers may
face increasing competition from the Internet, outlet malls, discount shopping
clubs, catalog companies, direct mail, telemarketing and home shopping TV. The
Company is not aware of statistics which would allow the


                                      7
<PAGE>

Company to determine its position relative to all of the Company's competitors
in the ownership and operation of shopping centers.

REAL ESTATE AND OTHER CONSIDERATIONS

As an owner and developer of real estate, the Company is subject to risks
arising in connection with such activities and with the underlying real estate,
including unknown deficiencies of and the ability to successfully develop or
manage recently acquired shopping centers, poor economic conditions in those
areas where shopping centers are located, defaults on tenant leases or
non-renewal of leases, tenant bankruptcies, competition, liquidity of real
estate, inability to rent vacant space, failure to generate sufficient income to
meet operating expenses, including debt service, capital expenditures and tenant
improvements, balloon payments on debt, environmental matters, financing
availability, financial and operating restrictions imposed by certain financing
arrangements, defaults under and failure to repay borrowings, fluctuations in
interest rates, changes in real estate and zoning laws, cost overruns, delays
and other risks of development activities. The success of the Company also
depends upon certain key personnel, its ability to maintain its qualification as
a REIT and trends in the national and local economy, including income tax laws,
governmental regulations and legislation, and population trends.

EMPLOYEES

As of December 31, 2002, the Company had approximately 136 full and part-time
employees. None of the Company's employees are subject to a collective
bargaining agreement and the Company has experienced no labor-related work
stoppages. The Company considers its relations with its personnel to be good.

ENVIRONMENTAL REGULATIONS

Various Federal, state, and local laws and regulations subject property owners
or operators to liability for the costs of removal or remediation of certain
hazardous or toxic substances located on or in the property. These laws often
impose liability without regard to whether the owner or operator responsible for
or even knew of the presence of such substances. The presence of or failure to
properly remediate hazardous or toxic substances (such as toxic mold) may
adversely affect our ability to rent, sell, or borrow against contaminated
property. Payment of such costs and expenses could adversely affect our ability
to make distributions or payments to our investors.

TAX STATUS

The Company expects to continue to qualify as a REIT. A trust, which qualifies
as a REIT is required to distribute at least 90% of ordinary taxable income for
a taxable year and can deduct distributions paid to shareholders of beneficial
interest with respect to such taxable year from taxable income.

A REIT is not required to distribute capital gain income but to the extent it
does not, it must pay the applicable capital gain income tax unless it has
ordinary losses to offset such capital gain income. The Company has historically
distributed to the Company's shareholders capital gain income arising from
principal repayments on the Company's mortgage notes receivable which are being
reported on the installment method for tax purposes.

The taxation of the Company and its shareholders could change if relevant
Federal, state or local income tax law provisions change.

INFORMATION ABOUT KRAMONT ON THE INTERNET

The Company's web site address on the Internet is www.kramont.com. By providing
a hyperlink on the Company's Internet web site to a third-party SEC filings web
site, the Company makes available free of charge through its Internet web site
its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports
on Form 8-K, and amendments to those reports filed or furnished pursuant to the
Section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended,
as soon as reasonably practicable after the Company electronically files such
material with, or furnishes it to, the Securities and Exchange Commission. The
Company does not maintain or provide such information directly to its Internet
web site. The Company makes no representations or warranties with respect to


                                       8
<PAGE>

the information contained on the third-party SEC filings web site and takes no
responsibility for supplementing, updating, or correcting any such information.

ITEM 2. PROPERTIES

REAL ESTATE - INCOME-PRODUCING

The Company, directly or indirectly, owns 79 income-producing neighborhood or
community shopping centers, 1 property held for sale, and 2 office buildings,
located in fifteen states comprising 10.6 million square feet. The properties
are diverse in size, ranging from 2,650 square feet to 387,000 square feet of
gross leasable area with an average of 130,000 square feet of gross leasable
area. The shopping centers generally attract local area customers and are
typically anchored by a supermarket, drugstore, or discount stores. The centers
are smaller than regional malls and do not depend on customers who travel long
distances. The tenant base generally concentrates on everyday purchases from
local customers. Anchor tenants attract shoppers who also often patronize the
smaller shops. At December 31, 2002, 88.01% of the gross leasable area of the
Company's income-producing real estate was leased. The Company has pledged 97.5%
of the book value of its income-producing real estate as collateral for
borrowings.

On September 30, 2002, the Company signed a definitive agreement to acquire 3
properties and 16 acres of land for development for approximately $12.5 million
in cash and shares of beneficial interest. The purchase includes a 31,500 square
foot Shop Rite Supermarket and a fully occupied 14,000 square foot office
building in Springfield, New Jersey, a 54,000 square foot Shop Rite Supermarket,
and an adjacent 16 acres of land approved for development in Somers Point, New
Jersey. The transaction is expected to be completed before the end of 2003 and
is subject to usual real estate due diligence.

PROPERTIES HELD FOR SALE

The properties held for sale at December 31, 2002, consist of three parcels of
unimproved commercial land, totaling 38 acres located in southeast Florida and a
shopping center in Hamden, Connecticut. These properties are carried at the
lower of cost or fair value less selling costs. Carrying amounts and subsequent
declines or gains in fair value are recorded in operations as incurred (see Note
2 to the consolidated financial statements in Item 8). Properties sold and held
for sale in prior periods have been reclassified to Properties Held for Sale on
the consolidated balance sheet and Discontinued Operations on the statement of
income in all periods presented.

Subsequent Events

On March 6, 2003 the Company sold a 28 acre parcel of unimproved land located in
Miramar, Florida. The sale price for the land was $3.6 million with net proceeds
of approximately $3.5 million. The Company will record a gain of approximately
$1.1 million. The Company will use the proceeds for general corporate purposes.

The following table sets forth certain pertinent information, as of December 31,
2002, regarding the Company's properties:

<TABLE>
<CAPTION>
                                                                                  GROSS
                                                        YEAR OF                  LEASABLE      LEASE
                                                         LATEST                   SQUARE     OCCUPANCY    PRINCIPAL TENANTS
                                             YEAR      RENOVATION/  OWNERSHIP      AREA        RATE       (LEASE EXPIRATION/
     PROPERTY            LOCATION          ACQUIRED     EXPANSION    INTEREST    (SQ. FT.)    12/31/02    OPTION EXPIRATION)
SHOPPING CENTERS
<S>                      <C>               <C>         <C>          <C>          <C>         <C>        <C>
CONNECTICUT
Groton Square            Groton              2000         2001         Fee         194,862      99.55%  Stop & Shop (2007/2027),
                                                                                                        Kohl's (2022/2042)
Killingly Plaza          Killingly           2002         N/A          Fee          75,376       98.42  Great Atlantic & Pacific
                                                                                                        (2010/2030)
Manchester Kmart Plaza   Manchester          2000         1998         Fee         183,377      100.00  Kmart (2007/2022) (6) (7),
                                                                                                        Pep Boys (2016/2036)
Milford                  Milford             2000         N/A       Leasehold       25,200      100.00  Xpect Discount Drug
                                                                      (2020)                            (2004/2009)
</TABLE>


                                       9
<PAGE>

<TABLE>
<S>                      <C>                 <C>     <C>       <C>            <C>          <C>     <C>
Orange                   Orange              2000    N/A       Leasehold       27,000      100.00  Big Bob's Carpet Outlet
                                                                 (2003)                            (2006)
Parkway Plaza I          Hamden              2000    N/A          Fee          72,530       17.99
                                                                                                   Marshalls (2005/2010),
Stratford Square         Stratford           2000    N/A          Fee         160,086       96.33  Entertainment Cinema
                                                                                                   (2009/2039)
FLORIDA
Century Plaza            Deerfield Beach     1982    2002         Fee          90,669       91.52  Broward County Library
                                                                                                   (2007/2013)
Village Oaks             Pensacola           2000    N/A          Fee         171,653      100.00  Wal Mart (2008/2038)

GEORGIA
Bainbridge Town Center   Bainbridge          2000    N/A          Fee         143,729       98.54  Kmart (2015/2065) (6),
                                                                                                   Food Lion (2010/2030)
Douglasville Crossing    Douglasville        2000    N/A          Fee         267,800       63.53  Wal Mart (2010/2040) (1),
                                                                                                   Rhodes Furniture (2003/2005)
Holcomb Bridge           Roswell             2000    N/A          Fee         105,420       92.44  Cub Foods Inc. (2008/2033) (1)
                                                                                                   (6), Georgetown Interiors
                                                                                                   (2003/2008)
Northpark                Macon               2000    1998         Fee         195,355       96.98  Kroger (2008/2028),
                                                                                                   Kmart (2013/2063) (6)
Park Plaza               Douglasville        2000    N/A          Fee          46,495       90.54  Kroger (9)
Snellville Oaks          Snellville          2000    N/A          Fee         220,885       98.10  Wal Mart (2011/2041) (1), Regal
                                                                                                   Cinema (2015/2025),
                                                                                                   Food Lion  (2011/2031)
Summerville              Summerville         2000    N/A          Fee          67,809       97.94  Wal Mart (2004/2034)
Tifton Corners           Tifton              2000    N/A          Fee         186,629       90.89  Wal Mart (2011/2041) (1),
                                                                                                   Bruno's (2010/2025)
Tower Plaza              Carrollton          2000    N/A          Fee          89,990       94.05  Bruno's (2007/2027)
Vidalia                  Vidalia             2000    N/A          Fee          93,696      100.00  Wal Mart (2005/2035) (1)
Village at Mableton      Mableton            2000    1998         Fee         239,474       90.42  Kmart (2014/2064) (6),
                                                                                                   Cub Foods (2009/2029) (1) (6),
                                                                                                   CVS (2004/2019) (1)

KENTUCKY
Harrodsburg Marketplace  Harrodsburg         2000    N/A          Fee          60,048      100.00  Kroger (2007/2027)

MARYLAND
Campus Village           College Park        2000    N/A          Fee          25,529      100.00
Coral Hills              Coral Hills         2000    N/A          Fee          82,550       85.74  Shoppers Food Warehouse
                                                                                                   (2004/2029), CVS (2008/2018)
Fox Run                  Prince Frederick    2000    1997         Fee         293,423       98.24  Kmart (2016/2066) (6),
                                                                                                   Giant Foods (2021/2051),
                                                                                                   Peebles (2012/2032)
MICHIGAN
Musicland                Livonia             2000    N/A          Fee          80,000      100.00  Media Play (2007/2027)

NEW JERSEY
Collegetown              Glassboro           2000    1995         Fee         251,015       99.16  Kmart (2006/2021) (6),
                                                                                                   Acme (2004/2044),
                                                                                                   Pep Boys (2015/2020)
Hillcrest Mall           Phillipsburg        2000    1985         Fee         220,985       48.82  Warren Hospital (2008/2018),
                                                                                                   Consolidated Stores (2004/2019)
Lakewood Plaza           Lakewood            1999    N/A          Fee         203,699       99.34  Shop Rite Supermarkets
                                                                                                   (2010/2030), Consolidated
                                                                                                   Stores (2007/2012)
Marlton Shopping         Evesham             1998    2001         Fee         157,188       96.13  T.J. Maxx (2011/2026)
Center- Phase I                                                                                    DSW (2011/2031),
                                                                                                   Somnia (2003/2013)
Marlton Shopping         Evesham             1998    2001         Fee         154,066       98.71  Burlington Coat Factory
Center- Phase II                                                                                   (2007/2031), Home Goods
                                                                                                   (2006/2021)
Rio Grande Plaza         Rio Grande          1997    1997         Fee         138,747       95.98  JC Penney (2012/2042),
                                                                                                   Peebles (2012/2022),
                                                                                                   Sears (2006/2026)
Suburban Plaza           Hamilton            2000    1999         Fee         244,718       35.11  Snyder Drug (2007)

NEW YORK
A & P Mamaroneck         Mamaroneck          2000    N/A          Fee          24,978      100.00  Great Atlantic & Pacific
                                                                                                   (2006/2016)
The Mall at Cross        Yonkers             2000    2000         Fee         263,568      100.00  National Wholesale Liquidators
County                                                                                             (2012/2032),
                                                                                                   TJ Maxx (2004/2014),
                                                                                                   Home Goods (2010/2025),
</TABLE>

                                       10
<PAGE>

<TABLE>
<S>                      <C>                 <C>     <C>       <C>            <C>          <C>     <C>
                                                                                                   The Sports Authority (2010/2025),
                                                                                                   Circuit City (2018/2038)
Highridge                Yonkers             2000    N/A          Fee          88,501      100.00  Pathmark (2003/2028)
North Ridge              New Rochelle        2000    N/A          Fee          42,131       99.75  Harmon Cosmetics (2007/2017),
                                                                                                   NRHMC (2011/2016)
Port Washington          Port Washington     2000    N/A       Leasehold       19,600      100.00  North Shore Farms (2003/2028)
                                                                 (2067)
Village Square           Larchmont           2000    N/A          Fee          17,028      100.00  Trader Joe's (2009/2024)

NORTH CAROLINA
Cary Plaza               Cary                2000    N/A          Fee          60,702      100.00  Food Lion (2010/2030) (1)
Magnolia Plaza           Morganton           2000    N/A          Fee         104,539       95.98  Ingles Supermarket (2007/2062)

OHIO
Pickaway Crossing        Circleville         2000    N/A          Fee         127,130      100.00  Wal Mart (2009/2039)

PENNSYLVANIA
550 W. Germantown Pike   Plymouth Meeting    2002    N/A          Fee           2,650        0.00
555 Scott Street         Wilkes-Barre        1997    N/A          Fee           8,400      100.00  Pet Supplies Plus (2005)
69th Street Plaza        Upper Darby         2000    1994         Fee          42,500      100.00  Snyder Drug (2003/2006)
Barn Plaza               Doylestown          2000    2002         Fee         213,108       68.06  Marshalls (2004/2019),
                                                                                                   Regal Cinemas, Inc. (2018/2027),
                                                                                                   Kohl's (2024/2054) (8)
Bensalem Square          Bensalem            2000    1983         Fee          72,558       99.43  Pathmark (2009/2039)
Bethlehem Square         Bethlehem           2000    1994         Fee         386,820      100.00  TJ Maxx (2006/2021),
                                                                                                   Home Depot (2010/2040),
                                                                                                   Giant Food Store (2010/2030) (1),
                                                                                                   Wal-Mart (2007/2027)
Bradford Mall            Bradford            2000    N/A        Fee (2)       287,975       55.59  Kmart (2004/2049) (6),
                                                                                                   Consolidated Stores (2007/2017),
Bristol Commerce         Bristol             2000    1993         Fee         273,119       54.59  Superfresh (2008/2038),
                                                                                                   Wal-Mart (2013/2063) (8)
Chesterbrook Village     Wayne               1997    1995         Fee         122,316       95.83  Genuardi Markets (2010/2030)
Collegeville             Collegeville        1998    1994         Fee         110,696       98.61  Acme (2008/2038),
                                                                                                   Annie Sez (2007/2017)
Chalfont Village         New Britain         1999    N/A          Fee          46,051      100.00
Cherry Square            Northampton         1999    N/A          Fee          75,005      100.00  Redners Supermarket (2016/2036)
County Line Plaza        Souderton           1997    1998         Fee         175,079       99.43  Woolco, Inc. (2007/2017) (1)(3),
                                                                                                   Clemens Markets (2007/2027)
Danville Plaza           Danville            1997    1987         Fee          24,052       96.41  CVS Pharmacy (2007/2027)
Dickson City             Dickson City        1997    1990         Fee          47,224       69.51  Office Max (2007/2017)
Franklin Center          Chambersburg        2000    N/A          Fee         174,892       87.94  Food Lion (2010/2030),
                                                                                                   Big Lots(2003/2013),
                                                                                                   Lowe's (2010/2019) (1)
Gilbertsville            Gilbertsville       1998    N/A          Fee          85,748      100.00  Weis Markets (2004/2019)
MacArthur Road           Whitehall           2000    N/A          Fee          50,856       92.92  Frank's Nursery (2012/2032)
New Holland Plaza        New Holland         1998    N/A          Fee          65,730       88.74  Amelia's Market (2010/2020),
Mount Carmel Plaza       Glenside            1997    N/A          Fee          14,504      100.00  Dollarland (2007/2017)
North Penn Marketplace   Upper Gwynedd       1998    N/A          Fee          57,898      100.00  Weis Markets (9)
                                                                                                   Eckerd Drugs (2003/2018)
Park Hills Plaza         Altoona             2000    1996         Fee         279,858       99.30  Weis Market (2022/2037),
                                                                                                   Dunham's Sporting Goods
                                                                                                   (2005/2015),
                                                                                                   Toys R Us(2015/2035),
                                                                                                   Staples(2010/2025),
                                                                                                   Superpetz (2005/2015)
Pilgrim Gardens          Drexel Hill         2000    N/A          Fee          83,358       81.97  Loehmann's (2008/2013) (6)
Street Road              Bensalem            2000    1995         Fee          68,031       98.57  Snyder Drug(2005/2008)

The Shoppes at Valley    Phoenixville        2000    2002         Fee         177,389       50.03  French Creek Outfitters
Forge                                                                                              (2005/2020),
                                                                                                   Staples (2011/2026),
                                                                                                   Redners Supermarket (2023/2030)
                                                                                                   (8)
Valley Fair              Tredyffrin          2000    2001         Fee         110,550       83.34  Oskar Huber Furniture (2011/2026)
                                                                                                   Chuck E. Cheese (2010/2025)
Village at Newtown       Newtown             1998    N/A          Fee         177,032       98.20  Genuardi Markets(2008/2028),
                                                                                                   Zany Brainy (2005/2015)
Village West             Allentown           2001    N/A          Fee         133,611      100.00  Giant Supermarket (2019/2039),
                                                                                                   CVS (2019/2029)
Whitehall Square         Whitehall           2000    2001         Fee         298,023       97.91  Stop & Shop (2006/2024),
                                                                                                   DrugEmporium (2006/2016),
                                                                                                   Today's Man (2006/2007),
</TABLE>


                                       11
<PAGE>

<TABLE>
<S>                        <C>               <C>     <C>          <C>         <C>          <C>       <C>
                                                                                                     The Sports Authority
                                                                                                     (2006/2036),  Kids R Us
                                                                                                     (2007/2027)
Whitemarsh                 Conshohocken      1997    2002         Fee          67,476      100.00    Clemens Markets (2022/2031)
Woodbourne Square          Langhorne         1997    N/A          Fee          29,976       99.57

RHODE ISLAND
Wampanoag Plaza            East Providence   2000    N/A          Fee         242,162       74.98    Shaw's Drugstores (2006/2016),
                                                                                                     Marshalls (2006/2006),
                                                                                                     Savers/TVI, Inc. (2010/2025)

SOUTH CAROLINA
East Main Centre           Spartanburg       2000    2000         Fee         190,686       84.42    Wal Mart (2009/2034),
                                                                                                     Tractor Supply (2015/2030)
Park Centre                Columbia          2000    2000         Fee         226,705       98.68    Wal Mart (2009/2039) (4),
                                                                                                     Piggly Wiggly(2012/2027),
                                                                                                     Steinmart (2010/2030)

TENNESSEE
Meeting Square             Jefferson City    2000    N/A          Fee          92,968      100.00    Wal Mart (2009/2039)(1),
                                                                                                     Food Lion (2009/2039)

VIRGINIA
Culpeper Town Mall         Culpeper          2000    1999         Fee         137,564       93.27    Tractor Supply (2012/2022) ,
                                                                                                     Food Lion (2019/2029)
Marumsco-Jefferson Plaza   Woodbridge        2000    N/A          Fee         323,236       73.85    Giant Food Store (2004/2024),
                                                                                                     Peebles (2004/2010),
                                                                                                     Consolidated Stores, Inc.
                                                                                                     (2007/2017)
Statler Crossing           Staunton          2000    N/A          Fee         166,944       96.89    Wal Mart (2009/2034)(5),
                                                                                                     Rack 'N Sack(2013/2028) (1)

OFFICE BUILDINGS
FLORIDA
Century Village            W. Palm Beach     1970    1995         Fee          22,786      100.00
Administration Building
PENNSYLVANIA
Plymouth Plaza             Plymouth Meeting  1997    1994         Fee          30,027       94.62    Kramont Realt Trust (2004)
                                                                           ----------    --------

  Total income-producing
        properties                                                         10,511,743       88.01

PROPERTY HELD FOR SALE

Parkway Plaza II           Hamden            2000    N/A          Fee          91,164        2.85
                                                                           ----------    --------

    Totals                                                                 10,602,907       87.28%
                                                                           ==========    ========
</TABLE>

Footnotes:  (1)   Includes space for which rent is being paid but is not
                  presently occupied.

            (2)   84,695 square feet gross of leasable area is subject to a
                  ground lease which expires in 2004. The Company is the lessee
                  under this ground lease.

            (3)   Lease is with Woolco, Inc. Sublease is with Kimsworth, Inc.

            (4)   Lease is with Wal-Mart Stores, Inc. Sublease is with Resource
                  Bancshares Mortgage Group

            (5)   Lease is with Wal-Mart Stores, Inc. Sublease is with Fisher
                  Auto Parts, Inc.

            (6)   Operating in bankruptcy.

            (7)   Kmart has announced that this store will close in 2003.

            (8)   Rent will commence in 2003 and is not included in occupancy
                  rate as of December 31, 2002.


                                       12
<PAGE>

            (9)   Tenant occupies space not owned by the Company and is not
                  included in the gross leasable area of the shopping center.

ITEM 3. LEGAL PROCEEDINGS

The Company is not presently involved in any material litigation nor, to its
knowledge, is any material litigation threatened against the Company or its
properties.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to a vote of security holders during the fourth quarter
of 2002.

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

The common shares of beneficial interest (the "Common Shares") are listed for
trading on the New York Stock Exchange under the symbol "KRT". The following
table sets forth the high and low sales prices per Common Share and the
distributions per Common Share which were declared by Kramont for each quarter
during the past two years.

                               Kramont
                             Market Price

<TABLE>
<CAPTION>
                           High              Low              Distributions Declared
                           ----              ---              ----------------------
2002

<S>                     <C>              <C>                  <C>
First Quarter           $    14.26       $   12.35               $        .325
Second Quarter               16.25           13.24                        .325
Third Quarter                15.94           11.10                        .325

Fourth Quarter               15.75           12.51                        .325
                                                                  ------------

                                                                  $       1.30
                                                                  ============

2001

First Quarter           $    11.39      $     9.00                $       .325
Second Quarter               13.78           10.05                        .325
Third Quarter                13.79           10.10                        .325

Fourth Quarter               15.08           11.90                        .325
                                                                  ------------

                                                                  $       1.30
                                                                  ============
</TABLE>

The Company has paid regular quarterly cash distributions on its common stock
and common shares of beneficial interest since it commenced operations in
January 1982. Future distributions paid by the Company will be at the discretion
of the Board of Trustees and will depend on the actual cash flow of the Company,
its financial condition, capital requirements, the annual distribution
requirements under the REIT provisions of the Code and such other factors as the
Board of Trustees deem relevant.

As of March 10, 2003, there were 23,355,985 Common Shares outstanding, and the
approximate number of holders of record of the Common Shares was 2,200. The
Company owns 23,355,985 Common OP Units in Kramont OP representing the sole
general partnership interest and 93.31% of the limited partnership interests in
Kramont OP. The Company indirectly owns 9,416,754 units of limited partnership
(also called "OP Units") in Montgomery OP representing a 99.87% partnership
interest in Montgomery OP and owned 100% of its sole general partner. The
holders of substantially all of the remaining OP Units have the right to require
Kramont OP or Montgomery OP, as the case may be, to redeem their OP Units for
cash at any time. However, upon a holder giving notice of the exercise


                                       13
<PAGE>

of this right, the Company has the right to acquire such holder's OP Units in
exchange for cash or, if certain conditions are satisfied, an equal number of
Kramont Common Shares.

Securities Authorized For Issuance Under Equity Compensation Plans

   The following table provides certain information regarding the securities
authorized for issuance under the Company's equity compensation plans, as of
December 31, 2002.

<TABLE>
<CAPTION>
                                           Number of                                  Number of
                                       Securities to be                               Securities
                                          Issued Upon      Weighted-Average           Remaining
                                          Exercise of       Exercise Price          Available for
                                          Outstanding       of Outstanding         Future Issuance
                                           Options,            Options,              Under Equity
                                         Warrants and        Warrants and            Compensation
                                            Rights              Rights                Plans (3)

      Plan Category                           (a)                (b)                      (c)
----------------------------           ----------------    -----------------       -----------------
<S>                                    <C>                 <C>                     <C>
Equity compensation plans
approved by shareholders (1)                462,750             $14.06                 3,098,750

Equity compensation plans
not approved by shareholders (2)                 --                 --                        --
                                            -------             ------                 ---------
Total                                       462,750             $14.06                 3,098,750
                                            =======             ======                 =========
</TABLE>

      (1)   The equity compensation plans which were approved by the Company's
            shareholders are the 1995 Incentive Plan, the Montgomery CV Trust
            Executive Stock Option Plan, the Drexel Realty, Inc. 1997 Stock
            Option Plan, the CV Reit, Inc. Non-Employee Director 1998 Stock
            Option Plan, and the 2000 Incentive Plan

      (2)   There are no equity compensation plans which were not approved by
            the Company's shareholders.

      (3)   Excludes securities reflected in column (a).

ITEM 6. SELECTED FINANCIAL DATA

The financial information included in the following table has been selected by
the Company and has been derived from the consolidated financial statements for
the periods indicated.

Under generally accepted accounting principals, the Merger was accounted for as
a purchase by CV Reit of Kranzco. Therefore, all of the financial information
prior to June 16, 2000, is for CV Reit. All of the financial information
included in the following table for periods on and after June 16, 2000 relates
to the Company as a combined entity.


<TABLE>
<CAPTION>
                                                         Years Ended December 31,
                                                (dollars in millions, except share data)
                                     2002            2001        2000 (a)       1999          1998
                                  -----------    -----------   -----------   -----------   -----------
<S>                               <C>            <C>           <C>           <C>           <C>
Revenues
 Rent                             $     105.1    $     101.6   $      66.4   $      25.6   $      17.2
 Interest and Other                       5.3            6.1           9.4           8.0           8.8
                                  -----------    -----------   -----------   -----------   -----------

Total Revenues                    $     110.4    $     107.7   $      75.8   $      33.6   $      26.0
                                  ===========    ===========   ===========   ===========   ===========
</TABLE>



                                       14
<PAGE>

<TABLE>
<S>                               <C>            <C>           <C>           <C>           <C>
Net income from discontinued
operations (b)                    $       (.2)   $       7.8   $        .3   $        --   $        --
                                  ===========    ===========   ===========   ===========   ===========

Income before preferred
 distribution                     $      18.0    $      25.8   $      17.6   $       7.2   $       8.8
                                  ===========    ===========   ===========   ===========   ===========

Net income to common
 shareholders                     $      11.0    $      18.3   $      13.4   $       7.2     $15.9 (c)
                                  ===========    ===========   ===========   ===========   ===========

Funds From Operations             $      27.0    $      28.5   $      22.7   $      10.8   $       9.5
                                  ===========    ===========   ===========   ===========   ===========
 (FFO) (d)

Per common share:

Net income to common
shareholders, basic and diluted   $       .54    $       .97   $       .97   $       .91   $      1.99
                                  ===========    ===========   ===========   ===========   ===========

 Dividends declared               $      1.30    $      1.30   $      1.27   $      1.16   $      1.16
                                  ===========    ===========   ===========   ===========   ===========

Weighted average common shares
outstanding, basic                 20,380,949     18,803,535    13,857,409     7,966,621     7,966,621
                                  ===========    ===========   ===========   ===========   ===========

Weighted average common shares
outstanding, diluted               20,401,095     18,815,657    13,858,427     7,966,621     7,966,621
                                  ===========    ===========   ===========   ===========   ===========

At Year End:
Total assets                      $     779.3    $     769.2   $     764.0   $     257.8   $     225.4
                                  ===========    ===========   ===========   ===========   ===========

Borrowings                        $     480.5    $     510.2   $     500.3   $     156.3   $     121.9
                                  ===========    ===========   ===========   ===========   ===========

Beneficiaries equity:
 Total                            $     253.9    $     219.0   $     225.2   $      77.6   $      79.6
                                  ===========    ===========   ===========   ===========   ===========
</TABLE>

      (a)   On June 16, 2000, Kramont acquired its assets through the merger of
            CV Reit and Kranzco into Kramont. See Item 7. Management's
            Discussion and Analysis of Results of Operation and Financial
            Condition and Note 1 to the consolidated financial statements.

      (b)   Effective January 1, 2002, the Company adopted SFAS 144 (See Note
            3). Prior periods have been reclassified.

      (c)   Includes $7 million benefit arising from the reversal of deferred
            tax liability.

      (d)   Funds From Operations ("FFO"), as defined by the National
            Association of Real Estate Investment Trusts (NAREIT), consists of
            net income (computed in accordance with generally accepted
            accounting principles) before depreciation and amortization of real
            property, extraordinary items and gains and losses on sales of real
            estate. Please refer to Item 7. Management's Discussion and Analysis
            of Financial Condition and Results of Operations for the calculation
            of FFO.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following discussion should be read in conjunction with the consolidated
financial statements of the Company and the notes thereto in Item 8
(collectively, the "financial statements").


                                       15
<PAGE>

                              RESULTS OF OPERATIONS

The Merger was accounted for as a purchase by CV Reit of Kranzco. Accordingly,
the operating results of the net assets acquired are included in the
consolidated financial statements from the effective date of the Merger which
was June 16, 2000. As a result, the Company believes the comparison for the
years ended December 31, 2001 and 2000 may not be meaningful.

                                   NET INCOME

                              2002 Compared to 2001

For the year ended December 31, 2002, net income to holders of Common Shares was
$11 million or $.54 per weighted average common share compared to $18.3 million
or $.97 per weighted average common share for the year ended December 31, 2001.
The discussion below highlights the major components which caused the decrease
in net income.

For the year ended December 31, 2002, rent and other revenue and operating
expenses increased by $3.2 million and $2 million, respectively (a net rental
income increase of $1.2 million). The rent revenue increase is primarily due to
increased rentals in the existing portfolio in the amount of $1.5 million and
$3.3 million in rents from the acquisition of two shopping centers on December
27, 2001 and April 26, 2002, offset by the loss of rent from tenant bankruptcies
in the amount of $1.6 million. Operating expenses increased during the twelve
months ended December 31, 2002, primarily due to the purchase of two shopping
centers which amounted to $606,000, an increase in real estate tax expense in
the amount of $800,000, and an increase in on-site management expense in the
amount of $600,000.

Interest income decreased by $431,000 during 2002, primarily attributable to a
reduction on the balance of the Company's mortgage notes receivable due to
scheduled repayments of principal in the amount of $237,000 and a decrease in
interest rates on the Company's cash deposits in the amount of $194,000. The
Company's mortgage notes receivables are long term and require self-amortizing
payments through 2012.

Interest expense decreased by $776,000 during 2002, primarily as a result of a
decrease in interest paid on the Company's variable rate debt of $919,000, and
the repayment of borrowings of $1.2 million, offset by an increase in interest
of $962,000 due to the assumption of debt in the acquisition of a shopping
center on December 27, 2001 and $335,000 expense due to the write-off of
deferred finance costs due to the prepayment of a credit facility in December,
2002.

Depreciation and amortization increased by $1.5 million, primarily due to
additional expense of $1 million as a result of capital expenditures in the
current year and a full year of depreciation on 2001 capital expenditures, and
the additional expense of $500,000 as a result of the acquisition of two
shopping centers on December 27, 2001 and April 26, 2002.

General and administrative expenses decreased by $353,000, principally due to a
decrease in performance related bonuses offset by an increase in the
amortization of restricted shares.

Preferred share distributions decreased by $444,000 due to the Company's
purchase of all 11,155 outstanding Series A-1 Increasing Rate Cumulative
Convertible Preferred Shares on May 15, 2002.

Net loss from discontinued operations was $156,000 for 2002 compared to net
income of $7.8 million for 2001. The 2002 amount consisted of a loss from the
sale of real estate in the amount of $45,000 and a loss from the operations of
properties sold and properties held for sale of $124,000. The 2002 amount
includes the net income from properties sold in 2002 as well as properties held
for sale. The 2001 amount consisted of a gain from the sale of real estate in
the amount of $5.1 million and income from the operations of properties sold and
properties held for sale of $3.2 million. The 2001 amount includes the net
income from properties sold in 2001 and 2002, as well as the properties held for
sale.


                                       16
<PAGE>

                              2001 Compared to 2000

For the year ended December 31, 2001, net income to holders of Common Shares was
$18.3 million or $.97 per weighted average common share compared to $13.4
million or $.97 per weighted average common share for the year ended December
31, 2000. The discussion below highlights the major components which caused the
increase in net income.

For the year ended December 31, 2001, rent and other revenue and operating
expenses increased by $34.7 million and $11.2 million, respectively (a net
rental income increase of $23.5 million), primarily due to the Merger.

Interest income decreased by $2.9 million during 2001, primarily attributable to
a reduction on the balance of the Company's mortgage notes receivable due to
scheduled repayments of principal and the prepayment of the Hilcoast Note in
December 2000. The Company's remaining mortgage notes receivables are long term
and require self-amortizing payments through 2012.

Interest expense increased by $9.2 million during 2001 principally as a result
of increased borrowings assumed in the Merger offset by decreased interest on
the Company's floating rate debt and a lower debt balance as a result of the
disposition of four properties in the fourth quarter of 2000 and in 2001, as
well as the repayment of debt from proceeds of the sale of the Hilcoast Note
Receivable in December 2000. Interest expense during 2000 also included an exit
fee of $478,000 for a credit facility that was repaid in August 2000.

Depreciation and amortization increased by $5.7 million, primarily as a result
of the Merger.

General and administrative expenses increased by $2.8 million, principally due
to increased personnel as a result of the Merger and performance related
bonuses, as well as the partial vesting of restricted shares awarded effective
September 1, 2001.

The $252,000 increase in equity in income of unconsolidated affiliates was
primarily attributable to the reduction of general and administrative charges
incurred by Drexel. As a result of the Merger, these general and administrative
charges were no longer incurred by Drexel and are incurred by Kramont OP.

Preferred share distributions increased by $3.3 million as a result of the
Merger.

Net income from discontinued operations was $7.8 million for 2001 compared to
$345,000 for 2000. The 2001 amount consisted of a gain from the sale of real
estate in the amount of $5.1 million and income from the operations of
properties sold and properties held for sale of $3.2 million. The 2001 amount
includes the net income from properties sold in 2001 and 2002, as well as the
properties held for sale. The 2000 amount consisted of a gain from the sale of
real estate in the amount of $150,000 and income from the operations of
properties sold and properties held for sale of $228,000. The 2000 amount
includes the net income from properties sold in 2000, 2001, and 2002, as well as
the properties held for sale.

                              FUNDS FROM OPERATIONS

The following schedule reconciles FFO to net income for the years presented (in
thousands):

<TABLE>
<CAPTION>
                                            2002       2001         2000
                                          -------    --------     --------
<S>                                       <C>        <C>          <C>
Net income to common shareholders         $10,951    $ 18,260     $ 13,391
Depreciation and amortization of
real property (including
unconsolidated affiliates) (1) (2)         16,036      14,998        9,413
(Gain) loss on sale of real estate (3)         42      (4,754)        (124)
                                          -------    --------     --------
FFO                                       $27,029    $ 28,504     $ 22,680
                                          =======    ========     ========
</TABLE>

(1)   Net of minority interests of $1,298, $1,042, and $846, respectively.

(2)   Depreciation related to unconsolidated affiliates of $192, $170, and $161,
      respectively.

(3)   Net of amounts attributable to minority interests of $3, ($337), and ($7),
      respectively.


                                       17
<PAGE>

      (e)   The Company believes that FFO should be considered in conjunction
            with net income, as presented in the statements of operations. The
            Company believes that FFO is an appropriate measure of operating
            performance because real estate depreciation and amortization
            charges are not meaningful in evaluating the operating results of
            the Company's properties and extraordinary items and the gain on the
            sale of real estate would distort the comparative measurement of
            performance and may not be relevant to ongoing operations. However,
            FFO does not represent cash generated from operating activities in
            accordance with generally accepted accounting principles and should
            not be considered as an alternative to either net income as a
            measure of the Company's operating performance or to cash flows from
            operating activities as an indicator of liquidity or cash available
            to fund all cash flow needs. Since all companies do not calculate
            FFO in a similar fashion, the Company's calculation, presented
            above, may not be comparable to similarly titled measures reported
            by other companies. Please refer to Item 6, Selected Financial Data,
            note d.

                         LIQUIDITY AND CAPITAL RESOURCES

Consolidated Statements of Cash Flows

Unrestricted cash and cash equivalents were $16.5 million, $9.2 million and
$10.4 million at December 31, 2002, 2001 and 2000, respectively.

Net cash provided by operating activities, as reported in the consolidated
statements of cash flows increased to $38.3 million in 2002 from $30.6 million
in 2001 and $20.5 million in 2000. The increase in cash flows from operating
activities is primarily due to an increase in accounts payable and other
liabilities of $4.8 million in 2002 compared to a decrease in accounts payable
and other liabilities of $4.7 million in 2001.

Net cash used in investing activities amounted to $14.1 million in 2002, which
decreased from net cash provided by investing activities of $5.7 million in
2001, and $23.5 million in 2000. The 2002 amounts reflect $9.8 million used for
the acquisition of a shopping center in Killingly, Connecticut and a
free-standing building in Plymouth Meeting, Pennsylvania, and $9.7 million used
for capital improvements, offset by $2 million of collections on mortgage notes
receivable and $2.6 million of proceeds from the sale of a free-standing
building in Frederick, Maryland and a shopping center in Columbus, Mississippi.
In 2001, net cash provided by investing activities was $5.7 million and reflects
$1.9 million of collections of mortgage notes receivable and $17.3 million of
proceeds from the sale of three shopping centers in Baltimore, Maryland,
Brookhaven, Mississippi, and Frederick, Maryland, partially offset by $13.9
million of capital improvements and $234,000 used for the purchase of a shopping
center in Allentown, Pennsylvania. In 2000 investing activities provided $23.5
million which reflects $1.6 million of collections on mortgage notes receivable
and $27.5 million for the payoff of the Hilcoast Note and $3.8 million of
proceeds from the sale of a free-standing building in Flint, Michigan, partially
offset by $6 million of capital improvements, net cash used for the merger of CV
Reit and Kranzco of $3.5 million and an increase in restricted cash of $700,000.

Net cash used in financing activities decreased to $16.9 million in 2002 from
net cash used in financing activities of $37.5 million in 2001, and $37.2
million in 2000. The 2002 amounts consist of cash distributions of $33.4 million
to shareholders, cash distributions of $2.1 million to minority interests, $29.7
million of net repayment of borrowings, $6.1 million used for the purchase of
11,155 shares of Preferred Series A-1 shares of beneficial interest, and $3
million of deferred finance costs, partially offset by $56.7 million of proceeds
from the issuance of new common shares of beneficial interest and $635,000 of
proceeds from the issuance of common shares of beneficial interest as a result
of the exercising of options. The 2001 amounts consist of cash distributions of
$32 million to shareholders, cash distributions of $1.7 million to minority
interests, $4.1 million of net repayment of borrowings, and $561,000 of deferred
finance costs, partially offset by $862,000 of proceeds from the issuance of
common shares of beneficial interest as a result of the exercising of options.
The 2000 amounts consist of cash distributions of $20.8 million to shareholders,
$1.7 million to minority interests, $2.5 million of deferred finance costs and
$2.3 million for the purchase of 146,800 shares of Preferred Series D shares of
beneficial interest, and $9.8 million of net repayment of borrowings.


                                       18
<PAGE>

Borrowings

At December 31, 2002, the Company's contractual obligations for borrowings are
as follows:

<TABLE>
<CAPTION>
                     Payments Due by Period
                         (in thousands)
     1 year       2 to 3 years    4 to 5 years    After 5 years
  ----------   ----------------  -------------   ----------------
<S>            <C>               <C>             <C>
    $ 229.7         $ 104.0         $ 31.5          $ 115.3
</TABLE>

At December 31, 2002, the Company's ability to borrow under lines of credit is
as follows:

<TABLE>
<CAPTION>
                           Commitment expiration per period
                                   (in thousands)
Total amounts available     1 year            2 to 3 years
-----------------------     ------            ------------
<S>                        <C>                <C>
         $31.7               $6.7                 $25.0
</TABLE>

Borrowings consist of $410.3 million of fixed rate indebtedness, with a weighted
average interest rate of 7.68% at December 31, 2002, and $70.2 million of
variable rate indebtedness with a weighted average interest rate of 4.81% at
December 31, 2002. The borrowings are collateralized by a substantial portion of
the Company's real estate and the Recreation Notes. The Company expects to
refinance certain of these borrowings, at or prior to maturity, through new
mortgage loans on real estate. The ability to do so, however, is dependent upon
various factors, including the income level of the properties, interest rates
and credit conditions within the commercial real estate market. Accordingly,
there can be no assurance that such refinancing can be achieved.

Effective December 20, 2002, the Company entered into a Loan Agreement (the
"Loan Agreement") with Fleet National Bank, N.A. on its own behalf and as agent
for certain other banks providing for a credit facility (the "Credit Facility").
As of December 30, 2002, the date of the initial funding, the maximum amount of
the Credit Facility is $100 million and the maximum amount the Company may
borrow is $68 million based on the current collateral. The maximum amount of the
Credit Facility may be increased to $125 million, under the terms and conditions
of the Loan Agreement. The Borrowing Base available to Kramont OP under the
Credit Facility is subject to increase or decrease from its current amount
pursuant to the terms of the Loan Agreement. The Credit Facility is a revolving
line of credit with a term of three years and is secured by guarantees by the
Company and those of its subsidiaries who have provided mortgages to the
lenders, sixteen first mortgages on shopping centers and a first priority
security interest in the membership interests and partnership interests of the
subsidiary entities. The Credit Facility contains various financial covenants
that must be observed. The Company was in compliance with these covenants at
December 31, 2002. Credit Facility borrowings bear interest at the Borrowers
election of (a) at the prime rate or the prime rate plus 25 basis points based
on the leverage ratio of the Company's and Kramont OP's total debt and
liabilities to its total asset value, or (b) London InterBank Offered Rate
("LIBOR") plus 175 to 225 basis points based on such ratio. Interest rates may
be set for one, three or six-month periods. Advances under the Credit Facility
may be used for general corporate purposes and, among other purposes, to fund
acquisitions, repayment of all or part of outstanding indebtedness, expansions,
renovations, financing and refinancing of real estate, closing costs and for
other lawful purposes. Additional provisions include arrangement and commitment
fees of up to $975,000, with the commitment fee subject to an increase of 1/2%
of subsequent commitments in excess of $100 million, and a fee applicable to the
unused portion of the maximum Credit Facility amount. The $68 million received
on December 30, 2002, was used to pay outstanding debt, including a portion of
the amount outstanding under the Company's credit facility with GMAC Commercial
Mortgage. On December 31, 2002, $25 million received from the issuance of equity
was used to decrease the outstanding balance of the Credit Facility to $43
million.

Effective August 1, 2000, the Company entered into an Amended and Restated Loan
and Credit Facility Agreement (the "Amended Facility") with GMAC Commercial
Mortgage ("GMAC") which increased the existing GMAC $100 million facility to a
$155 million facility. The Amended Facility is a non-revolving line of credit
with individual loan terms of three years if funds are advanced within the first
twelve months, and two years if funds are advanced during the thirteenth through
the eighteenth months. Advances under the Amended Facility: (1) must be secured
by assets based on specified aggregate loan to value and debt service coverage
ratios, (2) bear interest at an annual rate of one month LIBOR plus a spread
ranging from 245 to 295 basis points, based on loan to value ratios, and (3) may


                                       19
<PAGE>

be drawn only during the first eighteen months of the credit facility.
Additional provisions include a 1/2% commitment fee, a minimum net worth
covenant of $175 million, cross-default and cross-collateralization requirements
with respect to debt and properties within the Amended Facility and under
certain conditions an exit fee. Advances under the Amended Facility may be used
to fund acquisitions, expansions, renovations, financing and refinancing of real
estate. As of December 31, 2002, the Company had $9.3 million outstanding under
the $155 million Amended Facility.

In 1996, the Company entered into a seven year, fixed rate real estate mortgage
loan in the principal amount of $181.7 million (the "Mortgage Loan"), at a
weighted average interest rate of 7.96% per annum, which is inclusive of trustee
and servicing fees. The Mortgage Loan is secured by twenty-seven shopping center
properties (the "Mortgaged Properties"). The entire outstanding principal
balance of the Mortgage Loan is due in June 2003. As a condition of the Mortgage
Loan, Kranzco was required to establish a sinking fund account and a capital and
tenant improvement ("TI") reserve account. All funds in the capital and TI
reserve account may be used to fund capital improvements, repairs, alterations,
tenant improvements, and leasing commissions at the Mortgaged Properties. On
October 23, 2002, the Company obtained a commitment from Metropolitan Life
Insurance Company (the "Commitment") for a loan in the amount of $190 million to
replace the Mortgage Loan when it matures in June 2003. The terms of the
Commitment are for ten years with a weighted average interest rate of 6.12%,
interest only for the first two years, with amortization for the remainder of
the loan term. The closing of the Commitment is subject to certain closing
conditions.

In 1998, the Company obtained a $65.9 million fixed rate mortgage loan from
Salomon Brothers Realty Corp. This loan is secured by a first mortgage on nine
properties acquired by Kranzco in September 1998. The mortgage loan bears a
fixed interest rate of 7% per annum and requires monthly payments of interest
and principal based on a 30-year amortization. The loan matures on October 1,
2008. The outstanding balance on the mortgage loan was approximately $63.1
million as of December 31, 2002. Pursuant to the mortgage loan, the Company is
required to make monthly escrow payments to fund tenant improvements and repair
reserves.

In addition, the Company has twenty-six mortgage loans outstanding as of
December 31, 2002, secured by twenty-four shopping centers which were primarily
assumed in connection with various acquisitions of certain shopping centers.
These mortgage loans have maturity dates ranging from 2003 through 2012. Twenty
of the twenty-six mortgage loans have fixed interest rates ranging from 6.08% to
9.38%. The outstanding principal balance on these mortgage loans at December 31,
2002, was approximately $147 million. The remaining six mortgage loans, in the
aggregate amount of $18 million at December 31, 2002, have variable rates
ranging from 3.08% to 7.63%.

The Company also has $18.4 million of borrowings consisting of collateralized
mortgage obligations, net of unamortized discount, with a fixed effective
interest rate of 8.84% which are collateralized by the Recreation Notes and
require self-amortizing principal and interest payments through March 2007.

The Company has a line of credit with Wilmington Trust of Pennsylvania in the
amount of $3.5 million secured by two shopping centers with an interest rate
payable at a rate adjusted monthly to the sum of 30 day LIBOR plus 1.8%. The
line of credit matures on June 30, 2003. At December 31, 2002, there was no
outstanding balance on this line of credit.

On July 12, 2001, the Company established a secured line of credit in the amount
of $3.2 million with Wachovia Bank, N.A. This line is secured by a shopping
center and has an interest rate payable at a rate adjusted monthly to the sum of
30 day LIBOR plus 1.8%. The line of credit matures on August 1, 2003. No amounts
were outstanding at December 31, 2002 on this line of credit.

Capital Resources

On April 3, 2002, the Company filed a Shelf Registration Statement on Form S-3
("Shelf Registration") to register $150 million in common and preferred shares
of beneficial interest, depository shares, warrants and debt securities. The
Shelf Registration Statement became effective April 17, 2002.

On May 15, 2002, the Company purchased all 11,155 outstanding Series A-1
Increasing Rate Cumulative Convertible Preferred Shares for $6.1 million plus
costs.


                                       20
<PAGE>

On May 16, 2002, under the Shelf Registration, the Company sold 2.3 million of
its common shares of beneficial interest for proceeds of $31.3 million to Cohen
& Steers Capital Management, Inc. ("Cohen & Steers"), on behalf of itself and as
investment adviser to certain investment advisory clients. The Company used $6.1
million for the purchase of Series A-1 Preferred Shares, $8.4 million for the
purchase of a shopping center in Killingly, Connecticut, $1.1 million for the
purchase of a free standing building in Plymouth Meeting, Pennsylvania, and paid
down debt in the amount of $8 million. The Company intends to use the balance of
the proceeds for acquisitions, debt reductions, and other corporate purposes.

On December 31, 2002, under the Shelf Registration, the Company sold 1.8 million
of its common shares of beneficial interest for proceeds of $25.5 million to
Teachers Insurance and Annuity Association of America and certain investment
advisory clients of Kensington Investment Group, Inc. and Teachers Advisors,
Inc. The Company used $25 million to pay down the Credit Facility. The Company
intends to use the balance of the proceeds for general corporate purposes.

The Company's operating funds are generated from rent revenue net of operating
expense from income-producing properties and, to a much lesser extent, interest
income on the mortgage notes receivable. The Company believes that the operating
funds will be sufficient in the foreseeable future to fund operating and
administrative expenses, interest expense, recurring capital expenditures and
distributions to shareholders in accordance with REIT requirements. Sources of
capital for non-recurring capital expenditures and scheduled principal payments,
including balloon payments, on outstanding borrowings are expected to be
obtained from property refinancings, scheduled principal repayments on the
mortgage notes receivable, sales of non-strategic real estate, the Company's
lines of credit and/or potential debt or equity financing in the public or
private markets.

Acquisitions

On April 26, 2002, the Company completed the acquisition of a 75,400 square foot
shopping center located in Killingly, Connecticut for a purchase price of $8.4
million, including transaction costs of $68,000. The purchase was initially made
using cash and the property was subsequently pledged as collateral in the new
Credit Facility. A 50,000 square foot supermarket anchors the center.

On August 22, 2002, the Company completed the acquisition of a vacant 2,650
square foot free-standing building in Plymouth Meeting, Pennsylvania for a
purchase price of $1.1 million including transaction costs. The building is
currently vacant.

Dispositions

The Company has determined that certain properties do not fit the Company's core
portfolio. As a result, these properties have been sold, are under contract of
sale, or are held for sale. The Company sold two properties during 2002. They
include a free-standing building located in Frederick, Maryland sold on March
11, 2002, and a shopping center in Columbus, Mississippi sold on December 31,
2002; both properties were unencumbered. The free-standing building housed a
Taco Bell restaurant, and Kramont received gross proceeds of approximately
$750,000 as a result of the sale of this property. The shopping center was an
116,000 square foot neighborhood center and was 93% vacant at the time of the
sale. Kramont received gross proceeds of approximately $1.7 million as a result
of the sale of the property. The proceeds of the sale were used for general
corporate purposes.

Purchase Commitments

On September 30, 2002, the Company signed a definitive agreement to acquire 3
properties and 16 acres of land for development for approximately $12.5 million
in cash and shares of beneficial interest. The purchase includes a 31,500 square
foot Shop Rite Supermarket and a fully occupied 14,000 square foot office
building in Springfield, New Jersey, a 54,000 square foot Shop Rite Supermarket,
and an adjacent 16 acres of land approved for development in Somers Point, New
Jersey. The transaction is expected to be completed before the end of 2003 and
is subject to usual real estate due diligence.


                                       21
<PAGE>

Material Bankruptcies

Kmart has commenced bankruptcy proceedings. Our financial position may be
adversely affected if Kmart or a bankruptcy trustee or any other successor to
its assets in bankruptcy terminates or renegotiates the terms of Kmart leases or
closes Kmart stores at the Company's shopping centers. Kmart has announced that
it will close its store located in Manchester, Connecticut, which is one of the
Company's seven Kmart stores. The minimum rent payable under the lease for the
store to be closed, which may be rejected by Kmart, represents approximately,
three-tenths of one-percent of the Company's total annualized minimum rents.

                        TRANSACTIONS WITH RELATED PARTIES

Included in Mortgage Notes Receivable is a note due from Mr. Irwin Levy, in the
amount of $9 million at December 31, 2002. This note bears interest at 13.25%
and $1.2 million in interest income was recognized during 2002. The note was
issued prior to the prohibitions on related party loans as stated in the
Sarbanes-Oxley Act of 2002.

Since 1990, companies owned by Mr. Levy, a Trustee, and/or members of his family
have leased, managed and operated the recreation facilities at the Century
Villages in West Palm Beach, Deerfield Beach and Boca Raton, which are
collateral for certain notes the Company holds with an outstanding balance of
$33.3 million (including the $9 million discussed above) at December 31, 2002.
During 2002, the Company leased approximately 4,600 square feet of office space
to those companies and other companies controlled by Mr. Levy on a
month-to-month basis and received approximately $55,000 for payment of rent,
utilities, and operating expenses.

Mr. Louis P. Meshon, Sr., President, Chief Executive Officer and Trustee, and
Patricia Meshon, his wife, own 99% of the voting stock (a 5% equity interest) in
Drexel Realty, Inc. ("Drexel"), the management company in which Montgomery CV
Realty L.P. owns a 95% equity interest. Drexel manages four properties in which
Mr. Meshon has ownership interests. These properties paid Drexel $279,500 for
management and leasing services during 2002.

Mr. Milton S. Schneider, a Trustee, is the Chief Executive Officer of The
Glenville Group ("Glenville"), a company involved in the development, ownership,
and management of commercial and residential properties. The Company leases
approximately 2,300 square feet of office space to Glenville in accordance with
a five-year lease effective June 1, 1999 and expiring on May 31, 2004. Glenville
paid the Company approximately $58,000 for payment of rent, electric and other
operating expenses in 2002.

Related party transactions are more fully described in Note 6 to the financial
statements.

                          CRITICAL ACCOUNTING POLICIES

We prepare our financial statements in accordance with accounting principles
generally accepted in the United States of America. Preparing our financial
statements in accordance with generally accepted accounting principles requires
us to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. The following paragraphs include a discussion of
critical accounting policies. You should also review Note 1 to the financial
statements for further discussion of significant accounting policies.

Real Estate - Income-Producing

Real estate - income-producing ("Real Estate") is stated at cost less
accumulated depreciation. Costs directly related to the acquisition,
development, and construction of Real Estate are capitalized. Ordinary repairs
and maintenance are expensed as incurred, major replacements and betterments,
which improve or extend the life of the assets, are capitalized and depreciated
over their estimated lives.

On a periodic basis, management assesses whether there are any indicators that
the value of the Company's Real Estate may be impaired. A property's value may
be impaired only if management's estimate of the aggregate future cash flows, on
an undiscounted basis to be generated by the property are less than the carrying
value of the property.


                                       22
<PAGE>

If impairment has occurred, the loss shall be measured as the excess of the
carrying amount of the property over the fair value of the property. The
Company's estimates of aggregate future cash flows expected to be generated by
each property are based on a number of assumptions that are subject to economic
and market uncertainties, including, among others, demand for space, competition
for tenants, changes in market rental rates, and costs to operate each property.
As these factors are difficult to predict and are subject to future events that
may alter management's assumptions, the future cash flows estimated by
management in their impairment analyses may not be achieved.

Properties Held for Sale

Effective January 1, 2002, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets ("SFAS 144"). SFAS 144 requires that long-lived
assets that are to be disposed of by sale be measured at the lower of its
carrying amount or fair value less cost to sell. SFAS 144 broadens the
presentation of discontinued operations to include a component of a company.
Under SFAS 144, an individual income-producing property is considered a
component of the company. As a result, when assets are identified by the
management and a plan for sale, as defined by SFAS 144, has been adopted, the
Company estimates the fair value, net of selling costs, of such assets. Fair
value is estimated using estimated selling price of each property based on
discussions with potential buyers. If, in management's opinion, the fair value
less costs to sell of the assets, which have been identified for sale, is less
than the net carrying amount of the assets, the assets are written down. The
Company's estimate of fair value of each property is based on economic and
market conditions which are subject to change. Carrying amounts and subsequent
declines or gains in fair value are recorded in operations. If circumstances
arise that the Company decides not to sell a property previously classified as
held for sale, the property is reclassified as held and used. A property that is
reclassified shall be measured at the lower of its carrying amount before the
asset was classified as held for sale, adjusted for any depreciation expense
that would have been recognized had the asset been continuously classified as
held and used or fair value at the date of the decision not to sell.

Revenue Recognition

We recognize revenue from rentals on a straight-line basis over the terms of the
leases. Percentage rent is recognized in the period when sales breakpoints are
reached. The majority of our leases provide for reimbursement from tenants of
their share of common area maintenance costs, insurance and real estate taxes,
which are recorded on the accrual basis.

Allowance for Doubtful Accounts

Management periodically performs a detailed review of amounts due from tenants
to determine if accounts receivable balances are impaired based on factors
affecting the collectibility of those balances. Management's estimates of the
allowance for doubtful accounts requires management to exercise significant
judgment about the timing, frequency and severity of collection losses, which
affects the allowance and net income.

                    RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In July 2002, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 146, Accounting for Restructuring Costs
("SFAS 146"). SFAS 146 applies to costs associated with an exit activity
(including restructuring) or with a disposal of long-lived assets. Under SFAS
146, a company will record a liability for a cost associated with an exit or
disposal activity when that liability is incurred and can be measured at fair
value. SFAS 146 will require a company to disclose information about its exit
and disposal activities, the related costs, and changes in those costs in the
notes to the interim and annual financial statements that include the period in
which an exit activity is initiated and in any subsequent period until the
activity is completed. SFAS 146 is effective for exit or disposal activities
initiated after December 31, 2002. SFAS 146 does not currently affect the
Company.

In January 2003, the FASB issued FASB Interpretation No. 46, Consolidation of
Variable Interest Entities ("FIN 46"). FIN 46 provides new guidance for the
consolidation of variable interest entities for which the voting interest model
is difficult to apply. Many variable interest entities have commonly been
referred to as special-purpose entities or off-balance sheet structures. The new
guidance, however, applies to a larger population of entities. The


                                       23
<PAGE>

Company believes that the adoption of FIN 46 will not have a material impact on
the Company's financial position or results of operations.

                                    INFLATION

During recent years, the rate of inflation has remained at a low level and has
had minimal impact on the Company's operating results. Inflation rates may rise
in the future.

Most of the tenant leases contain provisions designed to lessen the impact of
inflation. These provisions include escalation clauses which generally increase
rental rates annually based on cost of living indexes (or based on stated rental
increases which are currently higher than recent cost of living increases), and
percentage rentals based on tenant's gross sales, which generally increase as
prices rise. Many of the leases are for terms of less than ten years which
increases the Company's ability to replace those leases which are below market
rates with new leases at higher base and/or percentage rentals. In addition,
most of the leases require the tenants to pay their proportionate share
annually, including increases, in operating expenses, including common area
maintenance, real estate taxes and insurance. However, in the event of
significant inflation, the Company's operating results could be adversely
affected if general and administrative expenses and interest expense increases
at a rate higher than rent income or if the increase in inflation exceeds rent
increases for certain tenant leases which provide for stated rent increases
(rather than based on cost of living indexes).

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's primary exposure to market risk is to changes in interest rates.
The Company has both fixed and variable rate debt. The Company has $480.5
million of debt outstanding as of December 31, 2002, of which $410.3 million, or
85.4%, has been borrowed at fixed rates ranging from 6.08% to 9.38% with
maturities through 2012. As these debt instruments mature, the Company typically
refinances such debt at their existing market interest rates which may be more
or less than interest rates on the maturing debt. Changes in interest rates have
different impacts on the fixed and variable rate portions of the Company's debt
portfolio. A change in interest rates impacts the net market value of the
Company's fixed rate debt, but has no impact on interest incurred or cash flows
on the Company's fixed rate debt. Interest rate changes on variable debt impacts
the interest incurred and cash flows but does not impact the net market value of
the debt instrument. Based on the variable rate debt of the Company as of
December 31, 2002, a 100 basis point increase in interest rates would result in
an additional $702,000 in interest incurred per year and a 100 basis point
decline would lower interest incurred by $702,000 per year. To ameliorate the
risk of interest rate increases, the Company has entered into interest rate swap
agreements in the notional amounts of $32.5 million. A 100 basis point increase
in interest rates would result in a $10.7 million decrease in the fair value of
the fixed rate debt and a 100 basis pint decline would result in a $9.6 million
increase in the fair value.

The Company also has $33.3 million of fixed rate mortgage notes receivable.
Changes in interest rates impacts the market value of the mortgage notes
receivable, but has no impact on interest earned or cash flows. A 100 basis
point increase in interest rates would result in a $1.6 million decrease in the
fair value of the mortgage notes receivable and a 100 basis point decline would
result in a $2.3 million increase in the fair value.


                                       24
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

             TABLE OF CONTENTS TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                                  PAGE
                                                                                                  ----
<S>                                                                                               <C>
      Report of Independent Certified Public Accountants                                           26

Consolidated Financial Statements:

      Balance Sheets - December 31, 2002 and 2001                                                  27
      Statements of Income - Years Ended December 31, 2002, 2001, and 2000                         28
      Statements of Other Comprehensive Income - Years Ended December 31, 2002, 2001, and 2000     28
      Statements of Beneficiaries' Equity - Years Ended December 31, 2002, 2001 and 2000           29
      Statements of Cash Flows - Years Ended December 31, 2002, 2001 and 2000                      30
      Notes to Consolidated Financial Statements                                                   31-43

Consolidated Financial Statements Schedules:

      Schedule III - Real Estate and Accumulated Depreciation                                      44-46
      Schedule IV - Mortgage Loans on Real Estate                                                  47
</TABLE>

Schedules, other than those listed above, are omitted because they are not
required, or because the information required is included in the consolidated
financial statements or the notes thereto.


                                       25
<PAGE>

                    REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Trustees of
Kramont Realty Trust
Plymouth Meeting, PA

We have audited the accompanying consolidated balance sheets of Kramont Realty
Trust and subsidiaries as of December 31, 2002 and 2001 and the related
consolidated statements of income, other comprehensive income, beneficiaries'
equity and cash flows for each of the three years in the period ended December
31, 2002. We have also audited the schedules listed in the accompanying index.
These financial statements and the schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and the schedules based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and schedules are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Kramont Realty Trust
and subsidiaries at December 31, 2002 and 2001, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2002, in conformity with accounting principles generally accepted
in the United States of America.

Also, in our opinion, the schedules present fairly, in all material respects,
the information set forth therein.

As explained in Note 1 to the consolidated financial statements, effective
January 1, 2002, Kramont Realty Trust and subsidiaries adopted the provisions of
Statement of Financial Accounting Standards No. 144, Accounting for Impairment
or Disposal of Long-Lived Assets. Also, as explained in Note 1 to the
consolidated financial statements, effective January 1, 2001, Kramont Realty
Trust and subsidiaries adopted the provisions of Statement of Financial
Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging
Activities.


BDO SEIDMAN, LLP
New York, New York
February 14, 2003


                                       26
<PAGE>

                      KRAMONT REALTY TRUST AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                  (dollars in thousands, except per share data)

<TABLE>
<CAPTION>
ASSETS                                                                                           December 31,

                                                                                              2002           2001
                                                                                           ---------      ---------
<S>                                                                                        <C>            <C>
Real estate - income-producing, net of accumulated depreciation                            $ 686,613      $ 684,608
Properties held for sale                                                                       9,713         11,742
Mortgage notes receivable                                                                     33,340         35,340
Investments in unconsolidated affiliates                                                       2,923          3,065
Cash and cash equivalents (includes $1,687 and $1,718 restricted)                             18,173         10,904
Other assets                                                                                  28,498         23,501
                                                                                           ---------      ---------

                                           Total assets                                    $ 779,260      $ 769,160
                                                                                           =========      =========

LIABILITIES AND BENEFICIARIES' EQUITY

LIABILITIES:
  Mortgages and notes payable                                                              $ 480,489      $ 510,212
  Accounts payable and other liabilities                                                      15,944         11,094
  Distributions payable                                                                        9,766          8,394
                                                                                           ---------      ---------

                                           Total liabilities                                 506,199        529,700
                                                                                           ---------      ---------


Minority interests in Operating Partnerships                                                  19,171         20,437
                                                                                           ---------      ---------

BENEFICIARIES' EQUITY:
Convertible preferred shares of beneficial interest, Series A-1, $0.01 par
value; authorized and issued 11,155 shares as of December 31, 2002 and 2001                        1              1
Convertible preferred shares of beneficial interest, Series B-1, $0.01 par
value; authorized 1,235,000 shares; issued and outstanding 1,183,240 shares as of
December 31, 2002 and 2001                                                                        11             11
Redeemable preferred shares of beneficial interest, Series D, $0.01 par value;
authorized 2,070,000 shares; issued 1,800,000 shares as of  December 31, 2002 and 2001            18             18
Common shares of beneficial interest, $0.01 par value; authorized
96,683,845 shares; outstanding, 23,075,985 and 18,872,295 as of December 31,
2002 and 2001, respectively                                                                      231            189
Additional paid-in capital                                                                   235,409        177,553
Retained earnings                                                                             28,988         45,574
Accumulated other comprehensive loss                                                          (1,613)        (1,214)
Treasury stock, cumulative preferred shares of beneficial interest Series A-1
11,155 shares as of December 31, 2002 and none at December 31, 2001                           (6,070)             0
Treasury stock, Redeemable preferred shares of beneficial interest Series D,
146,800 shares as of December 31, 2002 and December 2001, respectively, at cost               (2,349)        (2,349)
                                                                                           ---------      ---------

                                                                                             254,626        219,783

Unearned compensation on restricted shares of beneficial interest                               (736)          (760)
                                                                                           ---------      ---------

                                           Total beneficiaries' equity                       253,890        219,023
                                                                                           ---------      ---------

                                           Total liabilities and beneficiaries' equity     $ 779,260      $ 769,160
                                                                                           =========      =========
</TABLE>

          See accompanying notes to consolidated financial statements.


                                       27
<PAGE>

                      KRAMONT REALTY TRUST AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
             (dollars in thousands, except share and per share data)

<TABLE>
<CAPTION>
                                                                                   Years Ended December 31,
                                                                        ------------------------------------------------
                                                                            2002              2001              2000
                                                                        ------------      ------------      ------------
<S>                                                                     <C>               <C>               <C>
Revenues:
  Rent                                                                  $    105,109      $    101,604      $     66,359
  Interest, principally from mortgage notes                                    4,766             5,196             8,076
  Other                                                                          555               894             1,405
                                                                        ------------      ------------      ------------

                                                                             110,430           107,694            75,840
                                                                        ------------      ------------      ------------

Expenses:
  Interest                                                                    37,425            38,201            28,968
  Operating                                                                   30,341            28,337            17,142
  Depreciation and amortization                                               17,076            15,588             9,894
  General and administrative                                                   7,202             7,555             4,802
                                                                        ------------      ------------      ------------

                                                                              92,044            89,681            60,806
                                                                        ------------      ------------      ------------
                                                                              18,386            18,013            15,034
Equity in income of unconsolidated affiliates                                    722               737               485
Prepayment penalty                                                                --                --             2,994
Minority interests in income of Operating Partnerships                          (918)             (739)           (1,222)
                                                                        ------------      ------------      ------------
Net income from continuing operations                                         18,190            18,011            17,291
                                                                        ------------      ------------      ------------

Results from discontinued operations:
  Income (loss) from operations of properties sold or held for sale             (124)            3,231               228
  Gain (loss) on sale of properties                                              (45)            5,091               150
  Minority interests in discontinued operations                                   13              (546)              (33)
                                                                        ------------      ------------      ------------
Net (loss) income from discontinued operations                                  (156)            7,776               345
                                                                        ------------      ------------      ------------

Net income                                                                    18,034            25,787            17,636

Preferred share distributions                                                 (7,083)           (7,527)           (4,245)
                                                                        ------------      ------------      ------------

Net income to common shareholders                                       $     10,951      $     18,260      $     13,391
                                                                        ============      ============      ============

Per common share:
  Net income from continuing operations, basic and diluted              $        .55      $        .56      $        .95

  Net (loss) income from discontinued operations, basic and diluted     $       (.01)     $        .41      $        .02
                                                                        ------------      ------------      ------------
Total net income per share, basic and diluted                           $        .54      $        .97      $        .97
                                                                        ============      ============      ============
  Dividends declared                                                    $       1.30      $       1.30      $       1.27
                                                                        ============      ============      ============

  Average common shares outstanding:
    Basic                                                                 20,380,949        18,803,535        13,857,409
                                                                        ============      ============      ============
    Diluted                                                               20,401,095        18,815,657        13,858,427
                                                                        ============      ============      ============
</TABLE>


              CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME
                             (dollars in thousands)

<TABLE>
<CAPTION>
                                                                             Years Ended
                                                                             December 31,
                                                                -------------------------------------
                                                                   2002          2001          2000
                                                                 --------      --------      --------
<S>                                                              <C>           <C>           <C>
Net income                                                       $ 18,034      $ 25,787      $ 17,636

Change in fair value of cash flow hedges                           (1,519)       (1,811)           --
Reclassification adjustment for hedge losses included in net
income                                                              1,120           324            --
                                                                 --------      --------      --------

Comprehensive income                                             $ 17,635      $ 24,300      $ 17,636
                                                                 ========      ========      ========
</TABLE>

          See accompanying notes to consolidated financial statements.


                                       28
<PAGE>

                      KRAMONT REALTY TRUST AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF BENEFICIARIES' EQUITY
                                 (in thousands)

<TABLE>
<CAPTION>

                                                                                                    Preferred
                                                        Common                       Preferred      Shares of
                                                       Shares of                     Shares of     Beneficial      Additional
                                                       Beneficial        Par         Beneficial      Interest       Paid in
                                                        Interest        Value         Interest      Par Value       Capital
<S>                                                    <C>            <C>            <c>           <C>             <C>
BALANCE, JANUARY 1, 2000                               $    7,967     $       80             --     $       --     $   18,490

     Net Income                                                --             --             --             --             --

     Acquisition of Kranzco                                10,566            106          2,994             30        155,638
     Issuance of Common Shares - employee                      75              1             --             --            761

     OP Units exchanged for common shares                     145              1             --             --          1,338
     Repurchase of preferred D Shares                          --             --             --             --             --

     Amortization of unearned compensation                     --             --             --             --             --

     Distributions on Common Shares                            --             --             --             --             --
     Distributions on Preferred Shares                         --             --             --             --             --

                                                       ----------     ----------     ----------     ----------     ----------
BALANCE, DECEMBER 31, 2000                                 18,753            188          2,994             30        176,227
                                                       ----------     ----------     ----------     ----------     ----------

     Net Income                                                --             --             --             --             --

     Issuance of Common Shares - options exercised             83              1             --             --            861

     Amortization of unearned compensation                     --             --             --             --             --
     Restricted stock awards                                   36             --             --             --            465

     Cumulative effect of adoption of SFAS 133                 --             --             --             --             --
     Net loss in fair value of cash flow hedges                --             --             --             --             --

     Distributions on Common Shares                            --             --             --             --             --
     Distributions on Preferred Shares                         --             --             --             --             --

                                                       ----------     ----------     ----------     ----------     ----------
BALANCE, DECEMBER 31, 2001                                 18,872     $      189          2,994     $       30     $  177,553
                                                       ----------     ----------     ----------     ----------     ----------

     Net Income                                                --             --             --             --             --

     Issuance of Common Shares                              4,110             41             --             --         56,631
     Issuance of Common Shares - options exercised             55              1             --             --            635

     Repurchase of preferred D Shares                          --             --             --             --             --

     Amortization of unearned compensation                     --             --             --             --             --
     Restricted stock awards                                   39             --             --             --            590

     Net loss in fair value of cash flow hedges                --             --             --             --             --

     Distributions on Common Shares                            --             --             --             --             --
     Distributions on Preferred Shares                         --             --             --             --             --

                                                       ----------     ----------     ----------     ----------     ----------
BALANCE, DECEMBER 31, 2002                                 23,076     $      231          2,994     $       30     $  235,409
                                                       ==========     ==========     ==========     ==========     ==========

</TABLE>

<TABLE>
<CAPTION>
                                                                                                Unearned
                                                                                              Compensation
                                                                                              on Restricted
                                                                      Other                      Shares of
                                                       Retained   Comprehensive   Treasury      Beneficial
                                                       Earnings       Income        Stock        Interest
<S>                                                    <C>        <C>             <C>         <C>
BALANCE, JANUARY 1, 2000                               $ 58,992      $     --      $     --      $     --

     Net Income                                          17,636            --            --            --

     Acquisition of Kranzco                                  --            --            --            --
     Issuance of Common Shares - employee                    --            --            --          (762)

     OP Units exchanged for common shares                    --            --            --            --
     Repurchase of preferred D Shares                        --            --        (2,349)

     Amortization of unearned compensation                   --            --            --            82

     Distributions on Common Shares                     (20,598)           --            --            --
     Distributions on Preferred Shares                   (4,245)           --            --            --

                                                       --------      --------      --------      --------
BALANCE, DECEMBER 31, 2000                               51,785            --        (2,349)         (680)
                                                       --------      --------      --------      --------

     Net Income                                          25,787            --            --            --

     Issuance of Common Shares - options exercised           --            --            --            --

     Amortization of unearned compensation                   --            --            --           385
     Restricted stock awards                                 --            --            --          (465)

     Cumulative effect of adoption of SFAS 133               --           273            --            --
     Net loss in fair value of cash flow hedges              --        (1,487)           --            --

     Distributions on Common Shares                     (24,471)           --            --            --
     Distributions on Preferred Shares                   (7,527)           --            --            --

                                                       --------      --------      --------      --------
BALANCE, DECEMBER 31, 2001                             $ 45,574      $ (1,214)     $ (2,349)     $   (760)
                                                       --------      --------      --------      --------

     Net Income                                          18,034            --            --            --

     Issuance of Common Shares                               --            --            --            --
     Issuance of Common Shares - options exercised           --            --            --            --

     Repurchase of preferred D Shares                        --            --        (6,070)

     Amortization of unearned compensation                   --            --            --           614
     Restricted stock awards                                 --            --            --          (590)

     Net loss in fair value of cash flow hedges              --          (399)           --            --

     Distributions on Common Shares                     (27,537)           --            --            --
     Distributions on Preferred Shares                   (7,083)           --            --            --

                                                       --------      --------      --------      --------
BALANCE, DECEMBER 31, 2002                             $ 28,988      $ (1,613)     $ (8,419)     $   (736)
                                                       ========      ========      ========      ========
</TABLE>

          See accompanying notes to consolidated financial statements.


                                       29
<PAGE>

                      KRAMONT REALTY TRUST AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                                  Years Ended December 31,
                                                                                              2002          2001          2000
                                                                                           ---------     ---------     ---------
<S>                                                                                        <C>           <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                                               $  18,034     $  25,787     $  17,636
  Adjustments to reconcile net income to net cash provided by operating activities
      Depreciation and amortization                                                           18,548        16,861        11,543

      Amortization of unearned compensation on restricted shares of beneficial interest          614           385            82
      Equity in income of unconsolidated affiliates                                             (722)         (737)         (485)
      Minority interests in income of Operating  Partnership                                     905         1,285         1,255
      Loss (Gain) on sale of assets                                                               45        (5,091)       (3,144)
      Changes in assets and liabilities, net of effects from acquisitions:
      Increase in receivables, accrued income, prepaid  expenses and other assets             (3,941)       (3,251)       (4,461)

      Increase (decrease) in accounts payable and other liabilities                            4,808        (4,659)       (1,907)
                                                                                           ---------     ---------     ---------

Net cash provided by operating activities                                                     38,291        30,580        20,519
                                                                                           ---------     ---------     ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Collections on mortgage notes receivable                                                     2,000         1,900         1,645
  Proceeds from payoff of mortgage note receivable                                                --            --        27,495
  Acquisition of business, net of cash acquired                                                   --            --        (3,514)
  Acquisition of properties                                                                   (9,811)         (234)           --
  Capital improvements                                                                        (9,712)      (13,936)       (5,974)
  Proceeds from sale of real estate                                                            2,567        17,322         3,769
  Change in restricted cash                                                                       31          (144)         (684)

  Distributions from unconsolidated affiliates                                                   864           793           788

  Other                                                                                           10            --            --
                                                                                           ---------     ---------     ---------

Net cash provided by (used in) investing activities                                          (14,051)        5,701        23,525
                                                                                           ---------     ---------     ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from borrowings                                                                     5,977        12,440        72,879
  Repayments of borrowings                                                                   (78,689)      (16,526)      (82,683)
  Proceeds from line of credit, net                                                           42,988            --            --
  Cash distributions paid on common shares                                                   (26,091)      (24,444)      (16,813)
  Cash distributions paid on preferred shares                                                 (7,264)       (7,522)       (3,985)
  Cash received from stock issuance                                                           56,674            --            --
  Cash received from stock options exercised                                                     635           862            --
  Distributions to minority interests                                                         (2,057)       (1,711)       (1,705)
  Purchase of preferred shares                                                                (6,070)           --        (2,349)

  Deferred financing costs                                                                    (3,043)         (561)       (2,516)
                                                                                           ---------     ---------     ---------

Net cash used in financing activities                                                        (16,940)      (37,462)      (37,172)
                                                                                           ---------     ---------     ---------

Net (decrease) increase in unrestricted cash and cash
equivalents                                                                                    7,300        (1,181)        6,872
Unrestricted cash and cash equivalents at the beginning
of the year                                                                                    9,186        10,367         3,495
                                                                                           ---------     ---------     ---------
Unrestricted cash and cash equivalents at the end of the year                              $  16,486     $   9,186     $  10,367
                                                                                           =========     =========     =========

Supplemental disclosure of cash flow information:
  Cash paid for interest                                                                   $  36,996     $  38,027     $  27,786
                                                                                           =========     =========     =========
Acquisitions:
  Fair value of assets acquired                                                            $      --     $ (19,119)    $(536,061)
  Liabilities assumed or incurred                                                                 --        14,005       375,841
  Operating Partnership units issued                                                              --         4,880            --
  Preferred shares of beneficial interest issued                                                  --            --        51,040

  Common shares of beneficial interest issued                                                     --            --       105,666
                                                                                           ---------     ---------     ---------
  Cash (paid) for acquisitions, net of cash acquired                                       $      --     $    (234)    $  (3,514)
                                                                                           =========     =========     =========
Supplemental disclosure of non-cash transactions
  Restricted shares awarded                                                                $     590     $     465     $      --
                                                                                           =========     =========     =========
  Stock issued in exchange for promissory note                                             $      --     $      --     $     762
                                                                                           =========     =========     =========
  Adjustment to additional paid in capital as a result of acquisition                      $      --     $      --     $    (932)
                                                                                           =========     =========     =========
  Adjustment to minority interests as a result of acquisition                              $      --     $      --     $     932
                                                                                           =========     =========     =========
</TABLE>

          See accompanying notes to consolidated financial statements.


                                       30
<PAGE>

                      KRAMONT REALTY TRUST AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Business

Kramont is a self-administered, self-managed equity REIT which is engaged in the
ownership, acquisition, development, redevelopment, management and leasing of
community and neighborhood shopping centers located primarily in the eastern
United States. Kramont does not directly own any assets other than its interest
in Kramont OP and conducts its business through Kramont OP and its affiliated
entities, including Montgomery OP. The OPs, directly or indirectly, own all of
the Company's assets, including its interest in shopping centers. Accordingly,
the Company conducts its operations through an UPREIT structure. As of December
31, 2002, the Company owned 93.31% of Kramont OP and is its sole general
partner. As of December 31, 2002, Kramont indirectly owned 99.87% of the
partnership interest of Montgomery OP and owned 100% of its sole general
partner.

CV Reit and Kranzco entered into an Agreement and Plan of Reorganization and
Merger (the "Merger") dated as of December 10, 1999, which was adopted and
approved by the shareholders of both companies on June 6, 2000. Terms of the
Merger called for holders of common shares of both companies to each receive one
Common Share for each outstanding common share of CV Reit and Kranzco on a
tax-free basis and for holders of Kranzco preferred shares to receive in
exchange for such Kranzco preferred shares, Kramont preferred shares with the
same rights. The Merger was accounted for as a purchase by CV Reit of Kranzco
for accounting purposes because, among other things, for a period of at least
two years after the Merger a majority of the Board of Trustees of Kramont will
consist of former members of the CV Reit Board of Directors, and CV Reit's
former Chief Executive Officer became the Chief Executive Officer of Kramont.
Accordingly, the purchase price of $172 million, including $15 million of
acquisition costs, was allocated to Kranzco's assets acquired and liabilities
assumed based on their estimated fair values. The operating results of the net
assets acquired are included in the consolidated financial statements from the
effective date of the merger which was June 16, 2000. The historical amounts
included in the accompanying consolidated financial statements prior to June 16,
2000 represent those of CV Reit.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the
Company. The Company owns an approximately 95% economic interest in Drexel
Realty, Inc. ("Drexel"), a real estate management and leasing company, and owns
45%-50% interests in certain real estate partnerships, which are accounted for
on the equity method. Significant inter-company accounts and transactions have
been eliminated in consolidation.

Interest Rate Risk Management

Effective January 1, 2001, Kramont adopted Statement of Financial Accounting
Standards No. 133, Accounting for Derivative Instruments and Hedging Activities,
("SFAS 133") as amended and interpreted. SFAS 133 requires that all derivative
instruments, such as interest rate swap and cap contracts, be recognized in the
financial statements and measured at their fair market value. Changes in the
fair market value of derivative instruments are recognized each period in
current operations or beneficiaries' equity (as a component of accumulated other
comprehensive loss). For a derivative designated as part of a hedge transaction,
where it is recorded is dependent on whether it is a fair value hedge or a cash
flow hedge. For a derivative designated as a fair value hedge, the gain or loss
of the derivative in the period of change and the offsetting loss or gain of the
hedged item attributed to the hedged risk are recognized in results of
operations. For a derivative designated as a cash flow hedge, the effective
portion of the derivative's gain or loss is initially reported as a component of
other comprehensive income (loss) and subsequently reclassified into results of
operations when the hedged exposure affects results of operations. The
ineffective portion of the gain or loss of a cash flow hedge is recognized
currently in results of operations. For a derivative not designated as a hedging
instrument, the gain or loss is recognized currently in results of operations.
The adoption of SFAS 133 did not have a material impact on the results of
operations, but resulted in the cumulative effect of an accounting change of
$273,000 being recognized in other comprehensive income.


                                       31
<PAGE>

In the normal course of business, Kramont is exposed to changes in interest
rates. The objective in managing its exposure to interest rates is to decrease
the volatility that changes in interest rates might have on operations and cash
flows. To achieve this objective, Kramont uses interest rate swaps to hedge a
portion of total long-term debt that is subject to variable interest rates and
designates these instruments as cash flow hedges. Under these swaps, Kramont
agrees to pay fixed rates of interest (see Note 4d). These contracts are
considered to be a hedge against changes in the amount of future cash flows
associated with the interest payments on variable-rate debt obligations. These
interest rate swap agreements are entered into with a major financial
institution.

Accordingly, the interest rate swaps are reflected at fair value in the
consolidated balance sheet and the related gains or losses on these contracts
are recorded as a component of accumulated other comprehensive loss. The Company
does not enter into such contracts for speculative purposes. The fair value of
interest rate swap contracts are determined based on the fair market value as
determined by the counterparty.

As of January 1, 2002, Kramont had interest rate swap contracts to pay fixed
rates of interest (ranging from 6.088% to 6.78%) and receive variable rates of
interest based on LIBOR on an aggregate of $32.5 million notional amount of
indebtedness with maturity dates ranging from March 2004 through May 2004. These
hedges are highly effective and there is no ineffective portion. The aggregate
fair market value of all interest rate swap agreements was ($1,214,000) on
January 1, 2002. The aggregate fair market value of these interest rate swap
agreements was ($1,613,000) on December 31, 2002 and is included in accounts
payable and other liabilities on the consolidated balance sheet. Approximately
$1,210,000 is expected to be reclassified to the statement of income during
2003.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported statements of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Real Estate - Income-Producing

Real estate - income-producing ("Real Estate") is stated at cost, less
accumulated depreciation. Costs directly related to the acquisition,
development, and construction of Real Estate are capitalized. Ordinary repairs
and maintenance are expensed as incurred, major replacements, and betterments,
which improve or extend the life of the assets, are capitalized and depreciated
over their estimated useful lives. Depreciation is provided over the estimated
useful lives of the assets (7 to 40 years) on the straight-line method.

On a periodic basis, management assesses whether there are any indicators that
the value of the Company's Real Estate may be impaired. A property's value may
be impaired if management's estimate of the aggregate future cash flows, on an
undiscounted basis to be generated by the property are less than the carrying
value of the property. If impairment has occurred, the loss shall be measured as
the excess of the carrying amount of the property over the fair value of the
property. The Company's estimates of aggregate future cash flows expected to be
generated by each property are based on a number of assumptions that are subject
to economic and market uncertainties, including, among others, demand for space,
competition for tenants, changes in market rental rates, and costs to operate
each property. As these factors are difficult to predict and are subject to
future events that may alter management's assumptions, the future cash flows
estimated by management in their impairment analyses may not be achieved.

Properties Held for Sale

Effective January 1, 2002, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets ("SFAS 144"). SFAS 144 requires that long-lived
assets that are to be disposed of by sale be measured at the lower of its
carrying amount or fair value less cost to sell. SFAS 144 broadens the
presentation of discontinued operations to include a component of a company.
Under SFAS 144, an individual income-producing property is considered a
component of the company. As a result, when assets are identified by the
management and a plan for sale, as defined by SFAS 144, has been adopted, the
Company estimates the fair value, net of selling costs, of such assets. Fair
value is estimated using estimated selling price of each property based on
discussions with potential buyers. If, in management's opinion, the fair value
less


                                       32
<PAGE>

costs to sell of the assets, which have been identified for sale, is less than
the net carrying amount of the assets, the assets are written down. The
Company's estimate of fair value of each property is based on economic and
market conditions which are subject to change. Carrying amounts and subsequent
declines or gains in fair value are recorded in operations. If circumstances
arise that the Company decides not to sell a property previously classified as
held for sale, the property is reclassified as held and used. A property that is
reclassified shall be measured at the lower of its carrying amount before the
asset was classified as held for sale, adjusted for any depreciation expense
that would have been recognized had the asset been continuously classified as
held and used or fair value at the date of the decision not to sell.

The properties held for sale at December 31, 2002 consist of three parcels of
unimproved commercial land, totaling 38 acres located in southeast Florida and a
shopping center in Hamden, Connecticut (See Note 2). Properties sold and held
for sale in prior periods have been reclassified to Properties Held for Sale and
Discontinued Operations in all periods presented.

Revenue Recognition

Rental revenue is recognized on a straight-line basis over the terms of the
leases. Percentage rent is recognized in the period when the sales breakpoints
are reached. The majority of leases provide for reimbursement to the Company of
the tenants' share of common area maintenance costs, insurance, and real estate
taxes, which are recorded on the accrual basis.

Allowance for Doubtful Accounts

Management periodically performs a detailed review of amounts due from tenants
to determine if accounts receivable balances are impaired based on factors
affecting the collectibility of those balances. Management's estimates of the
allowance for doubtful accounts requires management to exercise significant
judgment about the timing, frequency and severity of collection losses, which
affects the allowance and net income.

Mortgage Notes Receivable

Mortgage notes receivable are carried at cost. Accrual of interest is
discontinued when management believes, after considering economic and business
conditions and collection efforts, that timely collection is doubtful.

In evaluating possible losses, management takes into consideration appropriate
information which may include the borrower's cash flow projections, historical
operating results and financial strength, pending sales, adverse conditions that
may affect the borrower's ability to repay, appraisals, and current economic
conditions.

Stock Options

The Company applies APB Opinion No. 25, Accounting for Stock Issued to
Employees, and related interpretations in accounting for its stock option plans.
Statement of Financial Accounting Standards No. 123 ("SFAS 123"), Accounting for
Stock-Based Compensation, requires the Company to provide pro forma information
regarding net income and net income per common share as if compensation cost for
stock options granted under the plans, if applicable, had been determined in
accordance with the fair value based method prescribed in SFAS 123. The Company
does not plan to adopt the fair value based method prescribed by SFAS 123.

The Company estimates the fair value of each stock option grant by using the
Black-Scholes option-pricing model with the following weighted average
assumptions used for grants: expected lives of ten years; dividend yield of
8.70%, volatility at 30%, risk free interest rate of 4.53% for 2002, dividend
yield of 12.00%, volatility at 25%, risk free interest rate of 6.14% for 2001,
and dividend yield of 12.54%, volatility at 21%, risk free interest rate of
6.33% for 2000.

Under accounting provisions of SFAS 123, the Company's net income to common
shareholders and net income per common share, would have been reduced to the pro
forma amounts indicated below (in thousands, except per share data):


                                       33
<PAGE>

<TABLE>
<CAPTION>
                                                          Years Ended December 31
                                                      2002          2001          2000
                                                   ----------    ----------    ----------
<S>                                                <C>           <C>           <C>
Net income to common shareholders
    Net income, as reported                        $   10,951    $   18,260    $   13,391
    Less fair value of stock
    options                                               170            81           180
                                                   ----------    ----------    ----------
    Pro forma                                      $   10,781    $   18,179    $   13,211
                                                   ==========    ==========    ==========

Net income per common share, basic and diluted:
    As reported                                    $      .54    $      .97    $      .97
                                                   ==========    ==========    ==========
    Pro forma                                      $      .53    $      .97    $      .95
                                                   ==========    ==========    ==========
</TABLE>

Dividends and Income Taxes

The Company expects to continue to qualify as a REIT under the provisions of
Sections 856-860 of the Internal Revenue Code of 1986, as amended (the "Code").
As a REIT, the Company was required to distribute at least 90% of its ordinary
taxable income to shareholders and was permitted to deduct such distributions
from taxable income. A REIT is not required to distribute capital gain income,
but to the extent it does not, it is required pay the applicable capital gain
income tax unless it has ordinary losses to offset such capital gain income.

The Company does not expect to be subject to Federal income taxes in the future
as it intends to distribute ordinary and capital gain income.

As of December 31, 2002, the Company has aggregate net operating loss
carryforwards for Federal tax purposes of approximately $13.5 million, of which
$7.1 million expires in 2007 and $6.4 million expires in 2006.

Net Income Per Common Share

Basic income per share is computed using net income applicable to common
shareholders divided by the weighted average number of common shares
outstanding. Diluted earnings per share include the dilutive effect of
outstanding options computed using the treasury stock method. The convertible
preferred shares were not dilutive and were therefore not included in the
computation of dilutive earnings per share.

Statements of Cash Flows

For financial statement purposes, the Company considers all highly liquid
investments with initial maturities of three months or less to be cash
equivalents. In addition, the Company classifies cash flows from derivatives
with the hedged item.

Reclassifications

Certain items have been reclassified to conform to the current year's
presentation.

New Pronouncements

In July 2002, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 146, Accounting for Restructuring Costs
("SFAS 146"). SFAS 146 applies to costs associated with an exit activity
(including restructuring) or with a disposal of long-lived assets. Under SFAS
146, a company will record a liability for a cost associated with an exit or
disposal activity when that liability is incurred and can be measured at fair
value. SFAS 146 will require a company to disclose information about its exit
and disposal activities, the related costs, and changes in those costs in the
notes to the interim and annual financial statements that include the period in
which an exit activity is initiated and in any subsequent period until the
activity is completed. SFAS 146 is effective for exit or disposal activities
initiated after December 31, 2002. SFAS 146 does not currently affect the
Company.

In January 2003, the FASB issued FASB Interpretation No. 46, Consolidation of
Variable Interest Entities ("FIN 46"). FIN 46 provides new guidance for the
consolidation of variable interest entities for which the voting interest


                                       34
<PAGE>

model is difficult to apply. Many variable interest entities have commonly been
referred to as special-purpose entities or off-balance sheet structures. The new
guidance, however, applies to a larger population of entities. The Company
believes that the adoption of FIN 46 will not have a material impact on the
Company's financial position or results of operations.

(2) REAL ESTATE

(a) Real Estate is located in 15 states and consists of (in thousands):

<TABLE>
<CAPTION>
                                                 December 31,      December 31,
                                                     2002              2001
                                                -------------     -------------
<S>                                             <C>               <C>
Income-producing:
Land                                            $     122,259     $     120,479
Shopping centers                                      607,876           591,265
Office buildings                                        5,086             5,014
                                                -------------     -------------
Total                                                 735,221           716,578
Less accumulated depreciation                         (48,608)          (32,150)
                                                -------------     -------------
Real Estate - income-producing, net             $     686,613     $     684,608
                                                =============     =============
Properties held for sale:
Land                                            $         840     $       1,331
Shopping centers                                        3,415             4,959
Undeveloped land                                        5,458             5,452
                                                -------------     -------------
Properties held for sale                        $       9,713     $      11,742
                                                =============     =============
</TABLE>

(b) Real Estate is leased to tenants under leases expiring at various dates
through 2024, some of which contain renewal options of up to 55 years. Most of
the leases require base rentals payable monthly in advance; additional rentals
based on reimbursements of common area maintenance, insurance and real estate
taxes and in some leases, based on a percentage of tenants' sales; and, rent
increases based on cost-of-living indexes.

During 2002, 2001, and 2000, the Company recognized income from reimbursements
of common area maintenance, insurance, real estate taxes and percentage rent of
$23.5 million, $22.8 million, and $15.4 million, respectively. As of December
31, 2002, future minimum rental income under non-cancelable operating leases,
excluding rentals from the exercise of renewal options, is as follows:

<TABLE>
<CAPTION>
Years ending December 31, (in thousands)

<S>                                              <C>
                       2003                      $ 78,501
                       2004                        71,156
                       2005                        62,251
                       2006                        55,460
                       2007                        44,969
                       ThereafteR                 192,009
                                                 --------
                       Total                     $504,346
                                                 ========
</TABLE>

(c) Real Estate with a net book value of $673.4 million, at December 31, 2002,
is pledged as collateral for borrowings (Note 4).

(d) On April 26, 2002, the Company completed the acquisition of a 75,400 square
foot shopping center located in Killingly, Connecticut for a purchase price of
$8.4 million, including transaction costs of $68,000. The purchase was
initially made using cash and the property was subsequently pledged as
collateral in the new Credit Facility. A 50,000 square foot supermarket anchors
the center.


                                       35
<PAGE>

(e) On August 22, 2002, the Company completed the acquisition of a vacant 2,650
square foot free-standing building in Plymouth Meeting, Pennsylvania for a
purchase price of $1.1 million including transaction costs. The building is
currently vacant.

(f) On December 27, 2001, the Company completed the acquisition of a 134,000
square foot shopping center in Allentown, Pennsylvania for a purchase price of
$19.1 million, including transaction costs of $234,000. The acquisition was
financed by the assumption of mortgage debt in the amount of $14 million and the
issuance of 348,544 Operating Partnership Units at a market price of $14.00 per
unit. The shopping center is anchored by a 58,000 square foot supermarket and a
10,000 square foot drug store.

(g) On March 11, 2002, the Company sold a free-standing building in Frederick,
Maryland, for net cash proceeds of $722,000 and recognized a gain of $211,000.

(h) On December 31, 2002, the Company sold a shopping center in Columbus,
Mississippi, for net cash proceeds of $1.6 million and recognized a loss of
$257,000.

(i) On April 13, 2001, the Company sold its 176,000 square foot shopping center
in Baltimore, Maryland for net cash proceeds of $9 million and recognized a gain
of $1.6 million.

(j) On August 30, 2001, the Company sold its 48,000 square foot shopping center
in Brookhaven, Mississippi for net cash proceeds of $1 million and recognized a
loss of $119,000.

(k) On October 12, 2001, the Company sold its 109,000 square foot shopping
center in Frederick, Maryland for net cash proceeds of $7 million and recognized
gain of $3.6 million.

(l) On October 31, 2000, the Company sold its 80,000 square foot, free-standing
property in Flint, Michigan for net cash proceeds of $1.6 million and recognized
a gain of $150,000.

Subsequent Events

On March 6, 2003 the Company sold a 28 acre parcel of unimproved land located in
Miramar, Florida. The sale price for the land was $3.6 million with net proceeds
of approximately $3.5 million. The Company will record a gain of approximately
$1.1 million. The Company will use the proceeds for general corporate purposes.

(3) MORTGAGE NOTES RECEIVABLE

At December 31, 2002, the Company's mortgage notes receivable consisted of $33.3
million collateralized by first mortgages on the recreation facilities at three
Century Village adult condominium communities in southeast Florida
(collectively, the "Recreation Notes"). The Recreation Notes provide for
self-amortizing equal monthly principal and interest payments due through 2012
per annum, bear interest ranging from 8.84% to 13.5% and contain certain
prepayment prohibitions. The Recreation Notes are pledged as collateral for
certain borrowings (see Note 4).

The mortgage notes receivable at December 31, 2002, mature as follows (in
thousands):

<TABLE>
<S>                                                       <C>
               One year or less                           $ 2,270
               After one year through five
               years                                       12,235
               After five years                            18,835
                                                          -------
               Totals                                     $33,340
                                                          =======
</TABLE>


                                       36
<PAGE>

(4) BORROWINGS

Borrowings consist of (in thousands):

<TABLE>
<CAPTION>
                                                                                                     December 31,   December 31,
                                                                                                     ------------   ------------
                                                                                                         2002           2001
                                                                                                         ----           ----
<S>                                                                                                  <C>            <C>
Mortgage notes payable through June 2003, interest only fixed payments at an
average rate of 7.96% per annum, collateralized by mortgages on twenty-seven
shopping centers (see Note 2)                                                                        $    181,700   $    181,700

Mortgage notes payable through August 2028, interest ranging from 3.08% to 9.38%
per annum, collateralized by mortgages on real estate (see Notes 2 and 4a)                                164,976        176,758

Mortgage notes payable through October 2008, interest fixed at 7.00% per annum,
collateralized by mortgages on nine shopping centers (see Note 2)                                          63,148         63,846

Mortgage notes payable through December 2005, interest at borrowers election of
prime plus .25% or one month LIBOR plus a minimum of 1.75% to a maximum of 2.25%
(4.50% at December 31, 2002), collateralized by mortgages on sixteen shopping centers (see Note 2)         42,988             --

Mortgage notes payable through August 2003 under a $155 million credit facility,
interest at one month LIBOR plus a minimum of 2.45% to a maximum of 2.95% (3.83%
at December 31, 2002), collateralized by mortgages on real estate (see Note 2)                              9,300         66,103

Collateralized Mortgage Obligations, net of unamortized discount of $167,000 and
$245,000 based on a fixed effective interest rate of 8.84% per annum,
collateralized by certain of the Recreation Notes (see Note 3), with quarterly
self-amortizing principal and interest payment required through March 2007                                 18,377         21,805
                                                                                                     ------------   ------------

Totals                                                                                               $    480,489   $    510,212
                                                                                                     ============   ============
</TABLE>

(a) Effective December 20, 2002, the Company entered into a Loan Agreement (the
"Loan Agreement") with Fleet National Bank, N.A. on its own behalf and as agent
for certain other banks providing for a credit facility (the "Credit Facility").
As of December 30, 2002, the date of the initial funding, the maximum amount of
the Credit Facility is $100 million and the maximum amount the Company may
borrow is $68 million based upon current collateral. The maximum amount of the
Credit Facility may be increased to $125 million, under the terms and conditions
of the Loan Agreement. The Borrowing Base available to Kramont OP under the
Credit Facility is subject to increase or decrease from its current amount
pursuant to the terms of the Loan Agreement. The Credit Facility is a revolving
line of credit with a term of three years and is secured by guarantees by the
Company and those of its subsidiaries who have provided mortgages to the
lenders, sixteen first mortgages on shopping centers and a first priority
security interest in the membership interests and partnership interests of the
subsidiary entities. The Credit Facility contains various financial covenants
that must be observed. The Company was in compliance with these covenants at
December 31, 2002. Credit Facility borrowings bear interest at the Borrower's
election of (a) at the prime rate or the prime rate plus 25 basis points based
on the leverage ratio of the Company's and Kramont OP's total debt and
liabilities to its total asset value, or (b) London InterBank Offered Rate
("LIBOR") plus 175 to 225 basis points based on such ratio. Interest rates may
be set for one, three or six-month periods. Advances under the Credit Facility
may be used for general corporate purposes and, among other purposes, to fund
acquisitions, repayment of all or part of outstanding indebtedness, expansions,
renovations, financing and refinancing of real estate, closing costs and for
other lawful purposes. Additional provisions include arrangement and commitment
fees of up to $975,000, with the commitment fee subject to an increase of 1/2%
of subsequent commitments in excess of $100 million, and a fee applicable to the
unused portion of the maximum Credit Facility amount.

(b) Certain loans require the Company to establish a sinking fund account and a
capital and tenant improvement ("TI") reserve account. Funds in the capital and
TI reserve accounts may be used to fund capital improvements, repairs,
alterations, tenant improvements and leasing commissions at the mortgaged
properties.


                                       37
<PAGE>

(c) Maturities of borrowings are as follows (in thousands):

<TABLE>
<CAPTION>
                            Years ending December 31,
<S>                                               <C>
                      2003                        $229,720
                      2004                          51,112
                      2005                          52,946
                      2006                          21,074
                      2007                          10,381
                      Thereafter                   115,256
                                                  --------
                      Total                       $480,489
                                                  ========
</TABLE>

(d) In March and May 1999, the Company entered into three interest rate swap
contracts with an aggregate notional amount of $32.5 million, which expire in
2004. The interest rate swaps have an effective interest rate of 6.19% on $32.5
million of the Company's debt.

(e) On October 23, 2002, the Company obtained a commitment from Metropolitan
Life Insurance Company (the "Commitment") for a loan in the amount of $190
million to replace its seven year, fixed rate real estate mortgage loan in the
principal amount of $181.7 million it matures in June 2003. The terms of the
Commitment are for ten years with a weighted average interest rate of 6.12%,
interest only for the first two years, with amortization for the remainder of
the loan term. The closing of the Commitment is subject to certain closing
conditions.

(5) CONTINGENCIES

The Company is subject to various claims and complaints relative to its business
activities. In the opinion of management, the ultimate disposition of these
matters will not have a material adverse effect on the Company's financial
position.

(6) RELATED PARTY TRANSACTIONS

Norman M. Kranzdorf ("Mr. Kranzdorf")

In connection with the Merger, the Company assumed the obligations of Kranzco
under a lease by Mr. Kranzdorf, a Trustee, to Kranzco of a three-story building
containing approximately 20,000 square feet located at 128 Fayette Street,
Conshohocken, Pennsylvania, which served as Kranzco's headquarters prior to the
Merger. From January 2001 through March 2001, the Company paid $18,000 in rent
under the lease. The Company also paid $3,313 during this period for real estate
taxes, utilities, repairs and other costs and expenses in connection with the
use and occupancy of the building. The building was sold by Mr. Kranzdorf on
March 15, 2001, and the lease was cancelled at that time.

Hilcoast/H. Irwin Levy ("Mr. Levy")

In 1981, CV Reit sold the recreation facilities at the Century Village in Boca
Raton to Mr. Levy, a Trustee, for $18 million, subject to a lease to a
corporation currently owned by Mr. Levy. (The annual net rental to Mr. Levy on
that lease is $2.2 million.) At closing, Mr. Levy issued a 30-year non-recourse
promissory note to CV Reit in the principal amount of $12.5 million which bears
interest at 13.25% per annum. At December 31, 2002, the outstanding balance on
this note was $9 million. During each of 2002, 2001, and 2000, the Company
recognized $1.2 million, $1.3 million, and $1.4 million, respectively, in
interest income on this note.

Since 1990, companies owned by Mr. Levy and/or certain members of his family
have leased, managed and operated the recreation facilities at the Century
Villages in West Palm Beach, Deerfield Beach and Boca Raton, which are
collateral for certain notes held by the Company with an outstanding balance of
$33.3 million (including the $9 million discussed above) at December 31, 2002.
During 2002, 2001, and 2000, the Company leased approximately 4,600 square feet
of office space to those companies and other companies controlled by Mr. Levy on
a month-to-month basis and received approximately $55,000, $60,500, and $53,200,
respectively, for payment of rent, utilities and operating expenses.


                                       38
<PAGE>

Mr. Levy is Chairman of the Board, Chief Executive Officer and a majority
stockholder of Hilcoast Development Corp. ("Hilcoast") which as of December 31,
1999, owed $24.7 million to the Company, consisting of an 11% mortgage note (the
"Hilcoast Note") collateralized by first mortgages on the recreation facilities
at the Century Village at Pembroke Pines, Florida active adult condominium
project. The Hilcoast Note required equal monthly payments of principal and
interest aggregating approximately $2.9 million per annum through 2023 and could
not be prepaid by Hilcoast without a prepayment penalty. The Board of Trustees
determined that the early prepayment of the Hilcoast Note was in the best
interest of the Company, and in December 2000, Hilcoast repaid the outstanding
balance of the note of $24.5 million and a prepayment penalty of $3 million to
the Company. Mr. Levy was excluded from the approval process. The Company
received a fairness opinion from Landauer Associates, Inc. as to the price and
amount of the prepayment penalty.

Effective July 31, 1992, CV Reit and Hilcoast entered into a consulting and
advisory agreement under which Hilcoast provided certain investment advisory,
consulting and administrative services to CV Reit, excluding matters related to
Hilcoast's loans from CV Reit. The agreement provided for the payment of $10,000
per month to Hilcoast, plus reimbursement for reasonable out-of-pocket expenses.
The agreement was amended upon closing of the Merger. The amended agreement
provided for the payment of $5,000 per month to Hilcoast, plus reimbursement for
reasonable out-of-pocket expenses. The amended agreement was terminated on
December 31, 2000. During 2000 the Company paid $90,000 plus expense
reimbursement.

Louis P. Meshon, Sr. ("Mr. Meshon")

On June 16, 2000, the Company sold to Mr. Meshon, Sr., President, Chief
Executive Officer, and a Trustee, 75,000 restricted Common Shares at the then
current market price per Common Share of $10.16 for a total of $762,000,
evidenced by a full recourse promissory note that matures on June 15, 2005. The
note and its collateral consisting of the restricted Common Shares, and Mr.
Meshon's obligations under the note, will terminate on the earlier to occur of:
(i) the note's full satisfaction, (ii) the note's fifth anniversary (if Mr.
Meshon is still employed by the Company), or (iii) the termination of Mr.
Meshon's employment following a change of control, termination of the employment
of Mr. Meshon without cause or by Mr. Meshon for good reason, or because of Mr.
Meshon's death or disability. The Company will pay to him an amount equal to any
taxes payable by him, on a full gross-up basis, at the time his obligations
under the note terminate. The note has been reflected as unearned compensation
in the statement of beneficiaries' equity and is being amortized over five years
to compensation expense. The note was issued prior to the prohibitions on
related party loans as stated in the Sarbanes-Oxley Act of 2002.

Louis P. Meshon, Sr. and Patricia Meshon, his wife, in the aggregate, own 99% of
the voting stock (a 5% equity interest) in Drexel Realty, Inc. ("Drexel"), the
management company in which Montgomery CV Realty L.P. owns 1% of the voting
stock and 100% of the non-voting stock (a 95% equity interest). In 2002, 2001,
and 2000 Drexel did not make any payments to Mr. Meshon.

In addition, Drexel manages the following third-party owned properties in which
Louis P. Meshon, Sr. has the following partnership interests:

<TABLE>
<CAPTION>
                                                                     Meshon Partnership
            Properties                                              Interest Percentage
            ----------                                              -------------------
<S>                                                                 <C>
      Renaissance Plaza                                                   20.75%

      Montgomery A.C., Inc. (owns 1% general partnership
      interest in Renaissance Plaza)                                      50.00%

      Laurel Mall (indirect ownership through MTGY
      Associates) (Louis P. Meshon, Sr. owns 100% of the
      corporate general partner of Laurel Mall)                           29.00%

      Lane Plaza Associates (holds a cash-flow mortgage
      on Weis Plaza, which is a third-party managed property)
      (Louis P. Meshon, Sr. is general partner of Lane Plaza
      Associates)                                                         25.00%
</TABLE>


                                       39
<PAGE>

In 2002, 2001, and 2000 the owners of these properties paid Drexel $279,500,
$292,000, and $295,000, respectively, for management and leasing services.

Milton S. Schneider ("Mr. Schneider")

     Mr. Schneider is the Chief Executive Officer of The Glenville Group, a
company involved in the development, ownership, and management of commercial and
residential properties. The Company leases approximately 2,300 square feet of
office space to The Glenville Group in accordance with a five-year lease
effective June 1, 1999 and expiring on May 31, 2004. During 2002, 2001, and 2000
The Glenville Group paid the Company approximately $58,100, $55,200, and
$48,900, respectively, for payment of rent, electric and other operating
expenses.

(7) FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair values of the Company's financial instruments are as follows
(in thousands):

<TABLE>
<CAPTION>
                                         as of December 31,
                                  2002                          2001
                        -------------------------------------------------------
                         Carrying                      Carrying
                          Amount       Fair Value       Amount       Fair Value
                        ----------     ----------     ----------     ----------
<S>                     <C>            <C>            <C>            <C>
Real estate mortgage
notes receivable        $   33,340     $   46,348     $   35,340     $   49,543

Cash and cash
equivalents                 18,173         18,173         10,904         10,904

Borrowings                (480,489)      (490,940)      (510,212)      (516,281)

Interest rate swaps         (1,613)        (1,613)        (1,214)        (1,214)
</TABLE>

Real estate mortgage notes receivable - The fair value of the fixed rate,
Recreation Notes (Note 3) is estimated by discounting the future cash flows
using the current rates at which similar loans would be made with similar credit
ratings and for the same remaining maturities.

Borrowing rates currently available to the Company for debt with similar terms
and remaining maturities are used to estimate the fair value of the Company's
borrowings.

(8) BENEFICIARIES' EQUITY

Shelf Registration

On April 3, 2002, the Company filed a Shelf Registration Statement on Form S-3
("Shelf Registration") to register $150 million in common and preferred shares
of beneficial interest, depository shares, warrants and debt securities. The
Shelf Registration Statement became effective April 17, 2002.

Equity Issuance

On May 16, 2002, under the Shelf Registration, the Company sold 2.3 million of
its common shares of beneficial interest for proceeds of $31.3 million to Cohen
& Steers Capital Management, Inc. ("Cohen & Steers"), on behalf of itself and as
investment adviser to certain investment advisory clients. The Company used $6.1
million for the purchase of Series A-1 Preferred Shares, $8.4 million for the
purchase of a shopping center in Killingly, Connecticut, $1.1 million for the
purchase of a free standing building in Plymouth Meeting, Pennsylvania, and paid
down debt in the amount of $8 million. The Company intends to use the balance of
the proceeds for acquisitions, debt reductions, and other corporate purposes.


                                       40
<PAGE>

On December 31, 2002, under the Shelf Registration, the Company sold 1.8 million
of its common shares of beneficial interest for proceeds of $25.5 million to
Teachers Insurance and Annuity Association of America and certain investment
advisory clients of Kensington Investment Group, Inc. and Teachers Advisors,
Inc. The Company used $25 million to pay down debt. The Company intends to use
the balance of the proceeds for general corporate purposes.

Subsequent Events

On January 3, 2003, under the Shelf Registration, the Company sold 280,000 of
its common shares of beneficial interest for proceeds of $4 million to Teachers
Insurance and Annuity Association of America and certain investment advisory
clients of Kensington Investment Group, Inc. and Teachers Advisors, Inc. The
Company used the $4 million to pay down debt.

Preferred Shares of Beneficial Interest

On May 15, 2002, the Company purchased all 11,155 Series A-1 Increasing Rate
Cumulative Convertible Shares of Beneficial Interest ("Preferred A") for $6.1
million, including costs. The purchase was recorded using the cost method. The
Preferred A's, with a face amount of $1,000 per share, had a distribution rate
of 6.50% of the redemption price during 2001 and thereafter.

The Series B-1 Cumulative Convertible Preferred Shares of Beneficial Interest
("Preferred B") with a face amount of $25.00 per share, have a liquidation
preference of $25.00 per share and a distribution rate of 9.75% of the
liquidation preference ($2.4375 per share) per annum, paid quarterly. The
Preferred Bs are convertible into Common Shares at $17.71 per share and are
redeemable after February 27, 2002 at $25.00 per share.

The Series D Cumulative Redeemable Preferred Shares of Beneficial Interest
("Preferred D") with a face amount of $25.00 per share, have a $25.00 per share
liquidation preference and a distribution rate of 9.50% of the liquidation
preference ($2.375 per share) per annum, paid quarterly. The Preferred Ds are
redeemable for cash after December 11, 2002 at the option of the Company for a
redemption price of $ 25.00 per share. On December 15, 2000, the Company
purchased 146,800 shares of Preferred D for $2,348,800 including costs. The
purchase was recorded using the cost method.

Stock Options

The Company maintains stock option plans for the granting of options to certain
executives, employees and non-employee directors. Under these plans, qualified
and nonqualified stock options to purchase up to 3,700,000 Common Shares of the
Company's common shares may be granted. Options become exercisable as determined
by the compensation committee of the Board of Trustees at the date of grant. The
maximum term of the options granted under each of the plans is ten years.

Changes in options outstanding are summarized as follows:

<TABLE>
<CAPTION>
                                                                                   Weighted
                                                                    Weighted        Average
                                                                     Average      Fair Value
                                                                    Exercise       Per Share
                                                                    Price Per     Of Options
                                                     Shares           Share         Granted
                                                   -----------     -----------    -----------
<S>                                                <C>             <C>            <C>
Stock options outstanding at January 1, 2000           295,000     $     13.62    $      2.88

2000:
            Granted - equal to market value            869,900     $     10.16    $       .08

2001:
            Granted - equal to market value             25,000     $     13.00    $       .51
            Exercised:                                 (83,700)    $     10.21    $       .53
            Expired:                                   (36,000)    $     15.42    $      1.75

2002:
            Granted - equal to market value            111,500     $     14.69    $      1.51
            Exercised:                                 (54,800)    $     11.58    $      1.21
            Expired:                                  (664,150)    $     19.97    $       .06
                                                   -----------
Stock options outstanding at December 31, 2002:        462,750
                                                   ===========
</TABLE>


                                       41
<PAGE>

Included in the 869,900 stock options granted in 2000 are 745,400 stock options
assumed in the acquisition of Kranzco. Total stock options available for future
grants are 3,098,750 as of December 31, 2002.

The following table summarizes information about stock options outstanding at
December 31, 2002:

<TABLE>
<CAPTION>
                               Options Outstanding                                  Options Exercisable

                          Number of         Weighted
                           Options           Average            Weighted           Number            Weighted
  Range of Exercise    Outstanding at       Remaining           Average        Exercisable at        Average
     Prices ($)           12/31/02      Contractual Life   Exercise Price ($)     12/31/02      Exercise Price ($)
---------------------  ---------------  -----------------  ------------------  ---------------  ------------------
<S>                    <C>              <C>                <C>                 <C>              <C>
   $ 10.16 - 10.44           34,500         7.57 years        $      10.20           19,800        $      10.23
   $ 12.50 - 17.13          411,750         6.27 years        $      14.17          386,750        $      14.21
   $ 19.06 - 21.50           16,500         3.84 years        $      19.55           16,500        $      19.55
                         ----------                                               ---------

   $ 10.16 - 21.50          462,750         6.28 years        $      14.06          423,050        $      14.23
                         ==========                                               =========
</TABLE>

Restricted Shares

On September 1, 2001, the Company awarded to certain executives and employees
35,683 restricted common shares of beneficial interest at the then current
market price per Common Share of $13.06 for a total value of $465,842. One-third
of the restricted common shares vested immediately. The remaining two-thirds
will vest equally on July 1, 2002 and on July 1, 2003 if the executive is an
employee of the Company on the respective dates. On April 1, 2002 the Company
awarded an executive 10,000 restricted shares of beneficial interest at the then
current market price of $13.55 for a total value of $135,500. One-third of the
restricted common shares vested immediately. The remaining two-thirds will vest
equally on March 31, 2003, and on March 31, 2004, if the executive is an
employee of the Company on the respective dates. On July 1, 2002, the Company
awarded to certain executives and employees 28,890 restricted shares of
beneficial interest at the then current market price per Common Share of $15.75
for a total value of $455,018. One-third of the restricted common shares vested
immediately. The remaining two-thirds will vest equally on July 1, 2003, and on
July 1, 2004, if the executive is an employee of the Company on the respective
dates.

The awarded shares entitle the executive to exercise all voting and/or
consensual powers pertaining to such shares and to receive any and all dividends
or other distributions on such shares. Any unvested shares shall immediately
vest in the event of a change in control of the Company, the death or permanent
disability of the executive or the termination of the executive without cause.

(9) EARNINGS PER SHARE

Basic and diluted earnings per share for the years ended December 31, 2002 and
2001 is calculated as follows (in thousands, except per share data):


                                       42
<PAGE>

<TABLE>
<CAPTION>
                                                                    Net Income
                                                                  Applicable to
                                                                      Common           Weighted
                                                                   Shareholders     Average Shares      Per Share
                                                                   (Numerator)      (Denominator)         Amount
                                                                 --------------    --------------    --------------
<S>                                                              <C>               <C>               <C>
For the year ended December 31, 2002
       Basic earnings per share                                  $       10,951        20,380,949    $          .54
       Effect of assumed conversion of employee stock options                --            20,146                --
                                                                 --------------    --------------    --------------

       Diluted earnings per share                                $       10,951        20,401,095    $          .54
                                                                 ==============    ==============    ==============

For the year ended December 31, 2001
       Basic earnings per share                                  $       18,260        18,803,535    $          .97
       Effect of assumed conversion of employee stock options                --            12,122                --
                                                                 --------------    --------------    --------------

       Diluted earnings per share                                $       18,260        18,815,657    $          .97
                                                                 ==============    ==============    ==============
</TABLE>

The Preferred B shares and 197,583 stock options have been excluded from above
calculation since they are antidilutive. There were no dilutive common stock
equivalents in 2000.

(10) BENEFIT PLAN

The Company has a defined contribution plan covering all full time employees
qualified under Section 401(k) of the Code in which the Company matches a
portion of an employee's salary deferral. The Company had two defined
contribution plans through June 30, 2001, which were combined effective July 1,
2001. The Company's contributions to these plans were $151,000, $112,500, and
$39,600 for the years ended December 31, 2002, 2001, and 2000, respectively.

(11) SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Selected quarterly financial data follows (in thousands, except per share data):

<TABLE>
<CAPTION>
                                                                           Quarters Ended
                                                     March 31          June 30         September 30      December 31
                                                 --------------     --------------    --------------    --------------
<S>                                                 <C>              <C>              <C>                <C>
2002:
    Revenues                                        $  26,753        $     27,220     $    27,214        $     29,243
    Income from continuing operations                   4,504               4,745           4,191               4,750
    Income (loss) from discontinued
    operations                                             94               (200)             210               (260)
    Net income                                          4,598               4,545           4,401               4,490
    Net income to common shareholders                   2,714               2,752           2,698               2,787
    Per common share, basic and diluted                   .14                 .14             .13                 .13

2001:
    Revenues                                       $   27,952        $     26,327     $    26,353        $     27,062
    Income from continuing operations                   4,866               4,258           4,288               4,599
    Income (loss) from discontinued
    operations                                            217               4,279              37               3,243
    Net income                                          5,083               8,537           4,325               7,842
    Net income to common shareholders                   3,206               6,655           2,441               5,958
    Per common share, basic and diluted                   .17                 .35             .13                 .32

2000:
    Revenues                                        $   8,938        $     11,543     $    27,202        $     28,157
    Income from continuing operations                   1,791               2,475           5,523               7,502
    Income (loss) from discontinued
    operations                                            (25)                 (2)            120                 252
    Net income                                          1,766               2,473           5,643               7,754
    Net income to common shareholders                   1,766               2,150           3,691               5,784
    Per common share, basic and diluted                   .22                 .22             .20                 .31
</TABLE>

Earnings per share for each quarter include the effect of shares issued in the
acquisition of Kranzco, and therefore, the sum of the quarters for 2000 do not
equal the full year earnings per share amount.


                                       43
<PAGE>

                      KRAMONT REALTY TRUST AND SUBSIDIARIES
             SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
                                DECEMBER 31, 2002
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                            Gross Amount
                                                                 Costs        at Which
                                                    Initial   Capitalized     Carried                        Date        Depreciable
                                                    Cost to  Subsequent to   December 31,  Accumulated    Constructed       Life
                Description           Encumbrances  Company   Acquisition        2002      Depreciation   or Acquired      (Years)
----------------------------------    ------------  -------   -----------   -------------  ------------   -----------    -----------
<S>                                   <C>           <C>      <C>            <C>            <C>            <C>            <C>
SHOPPING CENTERS
  PENNSYLVANIA
    555 Scott Street Center             $    --     $   736           --       $    736         (83)          1997        7 - 40 (1)
    550 West Germantown Pike                 --       1,079            2          1,081          --           2002        7 - 40 (1)
    69th Street Plaza                     2,479       3,620           21          3,641        (183)          2000        7 - 40 (1)
    Barn Plaza                           11,415      22,918        2,106         25,024      (1,245)          2000        7 - 40 (1)
    Bensalem Square                       4,281       6,282          154          6,436        (338)          2000        7 - 40 (1)
    Bethlehem Square                     16,249      28,014           89         28,103      (1,438)          2000        7 - 40 (1)
    Bradford Mall                                     3,825          150          3,975        (218)          2000        7 - 40 (1)
    Bristol Commerce Park                12,994      13,955          437         14,392        (819)          2000        7 - 40 (1)
    Chalfont Village Shopping
    Center                                   --       1,574          135          1,709        (148)          1999        7 - 40 (1)
    Cherry Square Shopping Center         2,704       6,831          156          6,987        (559)          1999        7 - 40 (1)
    Chesterbrook Village Center          10,546      13,359          651         14,010      (1,679)          1997        7 - 40 (1)
    Collegeville Shopping Center          4,521       7,179          609          7,788        (763)          1998        7 - 40 (1)
    County Line Plaza                     4,768       5,391        2,540          7,931      (1,039)          1997        7 - 40 (1)
    Danville Plaza                          588       1,556           46          1,602        (186)          1997        7 - 40 (1)
    Dickson City                             --       4,294           46          4,340        (481)          1997        7 - 40 (1)
    Franklin Center                       2,610       7,534           (2)         7,532        (387)          2000        7 - 40 (1)
    Gilbertsville Shopping Center         2,443       3,827          362          4,189        (455)          1998        7 - 40 (1)
    MacArthur Road                        2,308       3,059            4          3,063        (157)          2000        7 - 40 (1)
    Mount Carmel Plaza                      706       2,102           25          2,127        (242)          1997        7 - 40 (1)
    New Holland Plaza                       872       1,168          307          1,475        (166)          1998        7 - 40 (1)
    North Penn Marketplace                4,231       4,751          189          4,940        (519)          1998        7 - 40 (1)
    Park Hills Plaza                      9,602      15,085          479         15,564        (794)          2000        7 - 40 (1)
    Pilgrim Gardens                       4,058       4,501          195          4,696        (233)          2000        7 - 40 (1)
    Street Road                           4,127       6,165           53          6,218        (320)          2000        7 - 40 (1)
    Valley Fair                           8,262      14,355          799         15,154        (948)          2000        7 - 40 (1)
    Valley Forge Mall                     6,473       5,254        6,697         11,951        (451)          2000        7 - 40 (1)
    Village at Newtown                   21,110      27,657          134         27,791      (3,036)          1998        7 - 40 (1)
    Village West                         13,847      18,911          788         19,699        (393)          2001        7 - 40 (1)
    Whitehall Square                     15,176      23,239          181         23,420      (1,203)          2000        7 - 40 (1)
    Whitemarsh Shopping Center            6,887      10,771          310         11,081      (1,239)          1997        7 - 40 (1)
    Woodbourne Square                     1,658       4,267          307          4,574        (673)          1997        7 - 40 (1)
  GEORGIA
    Bainbridge Town Center                2,704       6,800          115          6,915        (384)          2000        7 - 40 (1)
    Douglasville Crossing                14,533      13,284           20         13,304        (680)          2000        7 - 40 (1)
    Holcomb Bridge                        6,016       7,066           16          7,082        (364)          2000        7 - 40 (1)
    Northpark                             4,728      12,255           80         12,335        (631)          2000        7 - 40 (1)
    Park Plaza                            3,832       3,137           23          3,160        (172)          2000        7 - 40 (1)
    Snellville Oaks                      11,855      11,220           16         11,236        (575)          2000        7 - 40 (1)
    Summerville Wal Mart Center           2,209       2,391           --          2,391        (122)          2000        7 - 40 (1)
    Tifton Corners                        8,338       8,923           26          8,949        (467)          2000        7 - 40 (1)
    Tower Plaza                           1,664       4,300           78          4,378        (237)          2000        7 - 40 (1)
    Vidalia Wal Mart Center               4,135       4,452           --          4,452        (226)          2000        7 - 40 (1)
    Village at Mableton                  10,098      12,680           28         12,708        (651)          2000        7 - 40 (1)
  CONNECTICUT
    Groton Square                        12,174      21,708        1,488         23,196      (1,179)          2000        7 - 40 (1)
    Killingly Plaza                       3,158       8,368           --          8,368        (126)          2002        7 - 40 (1)
    Manchester K Mart Plaza               2,522       4,529           59          4,588        (234)          2000        7 - 40 (1)
    Milford                               1,470       2,572            7          2,579        (165)          2000        7 - 40 (1)
    Orange                                  786         200           --            200         (13)          2000        7 - 40 (1)
    Parkway Plaza I                          --       3,612            1          3,613        (184)          2000        7 - 40 (1)
    Parkway Plaza II                         --       4,033           34          4,067        (204)          2000        7 - 40 (1)
    Stratford Square                      5,306      10,500          747         11,247        (643)          2000        7 - 40 (1)
</TABLE>


                                       44
<PAGE>

                      KRAMONT REALTY TRUST AND SUBSIDIARIES
             SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
                                DECEMBER 31, 2002
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                            Gross Amount
                                                                 Costs        at Which
                                                    Initial   Capitalized       Carried                       Date       Depreciable
                                                    Cost to  Subsequent to   December 31,  Accumulated    Constructed       Life
                Description           Encumbrances  Company   Acquisition        2002      Depreciation   or Acquired      (Years)
----------------------------------    ------------  -------   -----------   -------------  ------------   -----------    -----------
<S>                                   <C>           <C>      <C>            <C>            <C>            <C>            <C>
  NEW JERSEY
    Collegetown                           5,487      10,693          780         11,473        (654)          2000        7 - 40 (1)
    Hillcrest Mall                        5,384       6,817           42          6,859        (362)          2000        7 - 40 (1)
    Lakewood Plaza Shopping
    Center                               20,767      24,593          925         25,518      (2,195)          1999        7 - 40 (1)
    Marlton Shopping Center -
    Phase II                              9,300      12,524          207         12,731      (1,368)          1998        7 - 40 (1)
    Marlton Shopping Center -
    Phase I                              11,650      16,580        3,802         20,382      (2,179)          1998        7 - 40 (1)
    Rio Grande Plaza                      7,471      14,417           84         14,501      (1,644)          1997        7 - 40 (1)
    Suburban Plaza                       10,453      16,544           27         16,571        (843)          2000        7 - 40 (1)
  NEW YORK
    A&P Mamaroneck                        1,061       1,598           --          1,598         (80)          2000        7 - 40 (1)
    The Mall at Cross County             23,271      41,161        1,086         42,247      (2,284)          2000        7 - 40 (1)
    Highridge                             7,242      11,746           74         11,820        (610)          2000        7 - 40 (1)
    North Ridge                           2,597       6,886          455          7,341        (380)          2000        7 - 40 (1)
    Port Washington                         446         495           --            495         (25)          2000        7 - 40 (1)
    Village Square                        1,850       2,935           38          2,973        (155)          2000        7 - 40 (1)
  MARYLAND
    Campus Village                        2,267       3,377          172          3,549        (188)          2000        7 - 40 (1)
    Coral Hills                           5,246       6,562           69          6,631        (337)          2000        7 - 40 (1)
    Fox Run                              14,069      19,752          301         20,053      (1,036)          2000        7 - 40 (1)
  FLORIDA
    Century Plaza                         4,539       7,402          974          8,376      (1,360)          1976       15 - 39 (1)
    Village Oaks                          7,654       9,770         (234)         9,536        (485)          2000        7 - 40 (1)
  KENTUCKY
    Harrodsburg Marketplace               1,437       3,650           --          3,650        (186)          2000        7 - 40 (1)
  MICHIGAN
    Musicland                                --       3,700           --          3,700        (188)          2000        7 - 40 (1)
  NORTH CAROLINA
    Cary Plaza                              966       3,065           53          3,118        (159)          2000        7 - 40 (1)
    Magnolia Plaza                        2,156       4,900            7          4,907        (249)          2000        7 - 40 (1)
  OHIO
    Pickaway Crossing                     6,001       6,654           14          6,668        (338)          2000        7 - 40 (1)
  RHODE ISLAND
    Wamapnoag Plaza                       3,593       7,500           --          7,500        (381)          2000        7 - 40 (1)
  SOUTH CAROLINA
    East Main Centre                      2,118       5,682          867          6,549        (418)          2000        7 - 40 (1)
    Park Centre                           3,820       9,728           78          9,806        (499)          2000        7 - 40 (1)
  TENNESSEE
    Meeting Square                        2,329       2,467          129          2,596        (133)          2000        7 - 40 (1)
  VIRGINIA
    Culpepper Town Mall                   5,859       7,200          160          7,360        (383)          2000        7 - 40 (1)
    Marumsco-Jefferson Plaza             14,369      13,000          548         13,548        (766)          2000        7 - 40 (1)
    Statler Crossing                      6,093       6,054           46          6,100        (318)          2000        7 - 40 (1)
OFFICE BUILDINGS
    Century Village Administration           --         750          239            989        (440)          1970         5-30  (1)
         Building, Florida
    Plymouth Plaza, Pennsylvania          2,169       4,377          158          4,535        (516)          1997        7 - 40 (1)
                                      ---------   ---------     --------      ---------   ---------

                    Totals            $ 462,107   $ 707,870     $ 31,809      $ 739,679   $ (48,811)
                                      =========   =========     ========      =========   =========
</TABLE>

(1)   - Real Estate is depreciated over the estimated usefule lives of the
      assets (7 to 40 years) on the straight-line method


                                       45
<PAGE>

                      KRAMONT REALTY TRUST AND SUBSIDIARIES
             SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
                                DECEMBER 31, 2002
                                 (in thousands)

The changes in total real estate for the three years ended December 31, 2002,
are as follows:

<TABLE>
<CAPTION>
                                 2002          2001          2000
<S>                           <C>           <C>           <C>
Balance, beginning of year    $ 723,247     $ 702,447     $ 180,184
New property acquisitions         9,447        15,129       519,790
Capital improvements              9,712        13,681         5,973
Sale of real estate              (2,727)       (8,010)       (3,500)
                              ---------     ---------     ---------

Balance, end of  period       $ 739,679     $ 723,247     $ 702,447
                              =========     =========     =========
</TABLE>

The changes in accumulated depreciation for the three years ended December 31,
2002, are as follows:

<TABLE>
<CAPTION>

                                 2002         2001         2000
<S>                           <C>          <C>          <C>
Balance, beginning of year    $ 32,349     $ 17,166     $  7,108
Depreciation for the year       16,579       15,311       10,084
Sale of real estate               (117)        (128)         (26)
                              --------     --------     --------

Balance, end of  period       $ 48,811     $ 32,349     $ 17,165
                              ========     ========     ========
</TABLE>


                                       46
<PAGE>

                     KRAMONT REALTY TRUST AND SUBSIDIARIES
                   SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
                                DECEMBER 31, 2002
                                 (in thousands)

<TABLE>
<CAPTION>
                                           FINAL                                    FACE          CARRYING
                             INTEREST    MATURITY                                AMOUNT OF        AMOUNT OF
      DESCRIPTION              RATE        DATE      PERIODIC PAYMENT TERMS      MORTGAGES      MORTGAGES (A)
------------------------     ---------   ---------   ----------------------     ----------     --------------
<S>                          <C>        <C>          <C>                        <C>            <C>
Permanent -
    Recreation Facilities
    Century Village at:
      Boca Raton, FL          13.25%    12/31/2011    Level P&I due monthly       $ 12,533         $ 9,040
      West Palm Beach, FL     13.25%     1/15/2012    Level P&I due monthly         18,342          13,231
      Deerfield Beach, FL
        (2nd mortgage)        13.50%     1/15/2012    Level P&I due monthly         13,235           9,616
      Deerfield Beach, FL      8.84%      3/1/2007    Level P&I due monthly          3,485           1,453
                                                                                                   -------

                                                                                                   $33,340(b)
                                                                                                   =======
</TABLE>

Note: All loans are first mortgages except where noted, there are no prior liens
and no delinquent principal or interest.

      (a)   The tax carrying value of the notes is approximately $4 million.

      (b)   The changes in the carrying amounts are summarized as follows:

<TABLE>
<CAPTION>
                                         2002         2001         2000
<S>                                    <C>          <C>          <C>
     Balance, beginning of period      $ 35,340     $ 37,240     $ 63,385
     Advances on new mortgage loans                       --           --
     Collections of principal            (2,000)      (1,900)     (26,145)
                                       --------     --------     --------

     Balance, end of  period           $ 33,340     $ 35,340     $ 37,240
                                       ========     ========     ========
</TABLE>


                                       47
<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES

None

                                    PART III

ITEM 10. TRUSTEES AND EXECUTIVE OFFICERS OF THE REGISTRANT

Incorporated herein by reference to the "Election of Trustees", "Executive
Officers", and "Section 16(a) Beneficial Ownership Reporting Compliance"
sections of the Company's Proxy Statement in connection with its annual meeting
of shareholders to be held on June 10, 2003.

ITEM 11. EXECUTIVE COMPENSATION

Incorporated herein by reference to the "Executive Compensation" section of the
Company's Proxy Statement in connection with its annual meeting of shareholders
to be held on June 10, 2003.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED SHAREHOLDER MATTERS

Incorporated herein by reference to the "Security Ownership of Certain
Beneficial Owners and Management" section of the Company's Proxy Statement in
connection with its annual meeting of shareholders to be held on June 10, 2003,
and by reference to the "Securities Authorized for Issuance Under Equity
Compensation Plans" section of Item 5.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Incorporated herein by reference to the "Certain Relationships and Related
Transactions" section of the Company's Proxy Statement in connection with its
annual meeting of shareholders to be held on June 10, 2003.

ITEM 14.  CONTROLS AND PROCEDURES

In the 90 days prior to the filing date of this Annual Report on Form 10-K, the
Company's Chief Executive Officer and Chief Financial Officer evaluated the
effectiveness of the Company's "disclosure controls and procedures," as that
term is defined in Rule 13a-14(c) promulgated under the Securities and Exchange
Act of 1934, as amended (the "Exchange Act"). Based on that evaluation, the
Chief Executive Officer and Chief Financial Officer concluded that the
disclosure controls and procedures are effective to ensure that information
required to be disclosed by the Company in the reports that the Company files or
submits under the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the SEC's rules and forms, and to ensure
that such information is made known to the Chief Executive Officer and Chief
Financial Officer as appropriate to allow timely decisions regarding required
disclosure.

There have been no significant changes in the Company's internal controls or in
other factors that could significantly affect these controls subsequent to the
date the Chief Executive Officer and Chief Financial Officer completed their
evaluation. There were no significant deficiencies or material weaknesses, and
therefore no corrective actions with regard thereto.

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) (1) List of Consolidated Financial Statements:

        Report of Independent Certified Public Accountants

        Consolidated Balance Sheets - December 31, 2002 and 2001

        Consolidated Statements of Income - Years Ended December 31, 2002, 2001,
        and 2000


                                       48
<PAGE>

        Consolidated Statements of Other Comprehensive Income - Years
        Ended December 31, 2002, 2001, and 2000

        Consolidated Statements of Beneficiaries' Equity - Years Ended December
        31, 2002, 2001, and 2000

        Consolidated  Statements of Cash Flows - Years Ended  December 31, 2002,
        2001, and 2000

        Notes to Consolidated Financial Statements

    (2) List of Consolidated Financial Statements Schedules:

        Schedule III - Real Estate and Accumulated Depreciation

        Schedule IV - Mortgage Loans on Real Estate

    (3) See Exhibit Index at section (c) of this Item 15.

(b) Reports on Form 8-K:

            On December 30, 2002, the Company filed a Current Report on Form
            8-K, reporting under Item 5 - "Other Events" that the Company
            announced it had initiated funding pursuant to a Loan Agreement
            between the Company and Fleet National Bank, N.A on its own behalf
            and as agent for certain other banks providing for a credit
            facility.

            On December 31, 2002, the Company filed a Current Report on Form
            8-K, reporting under Item 5 - "Other Events" that the Company had
            agreed on December 30, 2002 to issue and sell 2,090,000 of its
            common shares in a public offering.

(c) The following exhibits are filed as part of, or incorporated by reference
into, this report:

<TABLE>
<CAPTION>
Exhibit
Number      Description
------      -----------
<S>         <C>
2.1         Agreement and Plan of Reorganization and Merger among Kranzco, KRT
            Trust, CV Reit, and Kramont, dated as of December 10, 1999.
            (Incorporated by reference to Exhibit 2.1 to the Company's
            Registration Statement on Form S-4, filed with the Commission on
            April 10, 2000 (File No. 333-34482)).

2.2         Amendment No. 1 to the Agreement and Plan of Reorganization and
            Merger among Kranzco, KRT Trust, CV Reit, and the Company, dated as
            of December 10, 1999. (Incorporated by reference to Exhibit 2.2 to
            the Company's Registration Statement on Form S-4, filed with the
            Commission on April 10, 2000 (File No. 333-34482)).

3.1         Articles of Amendment and Restatement of Kramont Realty Trust.
            (Incorporated by reference to Appendix D to the Company's
            Registration Statement on Form S-4, filed with the Commission on
            April 10, 2002 (File No. 333-34482))

3.2         Amended and Restated Bylaws of Kramont Realty Trust. (Incorporated
            by reference to Exhibit B to Appendix A to the Company's
            Registration Statement on Form S-4, filed with the Commission on
            April 10, 2002 (File No. 333-34482))

10.1        Agreement between Cenvill Investors, Inc. and H. Irwin Levy, dated
            December 31, 1981. (Incorporated by reference to Exhibit (2) (i) to
            the current report on Form 8-K filed by CV Reit to report event of
            December 31, 1981.)

10.2        Agreement of Lease between Cenvill Investors, Inc. and B.R.F., Inc.,
            dated December 30, 1981. (Incorporated by reference to Exhibit (2)
            (ii) to the current report on Form 8-K filed by CV Reit to report
            event of December 31, 1981.)

10.3        Agreement dated January 15, 1982, between Century Village, Inc. and
            Benenson Capital Company. (Incorporated by reference to Exhibit
            (2)(i) to the current report on Form 8-K filed by Cenvill Investors,
            Inc. (File No. 0-03427) to report event of January 15, 1982.)
</TABLE>


                                       49
<PAGE>

<TABLE>
<S>         <C>
10.4        Agreement dated January 15, 1982, between Century Village East, Inc.
            and CVRF Deerfield Limited. (Incorporated by reference to exhibit
            (2) (ii) to the current report on Form 8-K filed by Cenvill
            Investors, Inc. (File No. 0-03427) to report event of January 15,
            1982.)

10.5        Indenture for Collateralized Mortgage Obligations, dated as of
            December 30, 1991 between Recreation Mortgages, Inc. (Issuer) and
            Bankers Trust Company (Trustee). (Incorporated by reference to
            Exhibit (10)(xvi) to the Annual Report on Form 10-K of CV Reit for
            the fiscal year ended December 31, 1991.)

10.6        Restated Loan Agreement, dated July 31, 1992, between CV Reit, Inc.
            and Cenvill Development Corp. and certain subsidiaries and
            affiliates thereof. (Incorporated by reference to Exhibit (10)(xi)
            to the Annual Report on Form 10-K of CV Reit for the fiscal year
            ended December 31, 1992.)

10.7        Proposal for the Acquisition of Certain Assets, dated June 19, 1992,
            by and among CV Reit Cenvill Development Corp. and certain
            subsidiaries and affiliates thereof. (Incorporated by reference to
            Exhibit (10)(xiv) to the Annual Report on Form 10-K of the CV Reit
            for the fiscal year ended December 31, 1992.)

10.8        Order granting Motion of Debtor's [sic] for Approval of Sale of
            Assets dated July 17, 1992. (Incorporated by reference to Exhibit
            (10)(xv) to the Annual Report on Form 10-K of CV Reit for the fiscal
            year ended December 31, 1992.)

10.9        Consulting and Advisory Agreement, dated July 31, 1992, between CV
            Reit and Hilcoast Development Corp. (Incorporated by reference to
            Exhibit (10)(xviii) to the Annual Report on Form 10-K of CV Reit for
            the fiscal year ended December 31, 1992.)

10.10       Letter Agreements, dated July 11, 1994 and August 3, 1995, between
            CV Reit and Hilcoast Advisory Services, Inc. extending the
            Consulting and Advisory Agreement to July 31, 1995 and July 31,
            1996, respectively. (Incorporated by reference to Exhibit 10(vi) to
            the Quarterly Report on Form 10-Q of CV Reit for the quarter ended
            September 30, 1995.)

10.11       Letter Agreement, dated July 12, 1996, between CV Reit and Hilcoast
            Advisory Services, Inc. extending the Consulting and Advisory
            Agreement to July 31, 1997. (Incorporated by reference to Exhibit
            10(i) to the Quarterly Report on Form 10-Q of CV Reit for the
            quarter ended September 30, 1996.)

10.12       Letter agreement, dated June 10, 1997, between CV Reit and Hilcoast
            Advisory Services, Inc. extending the Consulting and Advisory
            Agreement to December 31, 1997. (Incorporated by reference to
            Exhibit 10(i) to the Quarterly Report on Form 10-Q of CV Reit for
            the quarter ended June 30,1997.)

10.13       Definitive Master Agreement, dated September 19, 1997, among CV
            Reit, Montgomery CV Realty Trust, and Drexel Realty, Inc., Royce
            Realty, Inc., Louis P. Meshon, Sr. and certain of the Meshon Parties
            named therein and the Levy Parties named therein. (Incorporated by
            reference to Appendix A to CV Reit's proxy statement filed on
            November 11, 1997.)

10.14       Supplemental Indenture No. 2 for Collateralized Mortgage
            Obligations, dated as of December 30, 1997 between Recreation
            Mortgages, L.P., (Issuer) and Bankers Trust Company (Trustee).
            (Incorporated by reference to the Annual Report on Form 10-K of CV
            Reit for fiscal year ended December 31, 1997.)

10.15       Real Estate Purchase Agreement dated September 29, 1997 by and
            between Newtown Village Partnership and RCEK, Inc., or its nominee
            or assignee. (Incorporated by reference to Exhibit 2.1 to the
            current report on Form 8-K filed by CV Reit on April 14, 1998.)
</TABLE>


                                       50
<PAGE>

<TABLE>
<S>         <C>
10.16       Letter Amendment to Real Estate Purchase Agreement dated December
            15, 1997 by and between Newtown Village Partnership and RCEK, Inc.
            (Incorporated by reference to Exhibit 2.2 to the current report on
            Form 8-K filed by CV Reit on April 14, 1998.)

10.17       Assignment of Real Estate Purchase Agreement dated January 26, 1998
            from RCEK, Inc. to Newtown Village Plaza Associates, L.P.
            (Incorporated by reference to Exhibit 2.3 to the current report on
            Form 8-K filed by CV Reit on April 14, 1998.)

10.18       Second Amendment to Real Estate Purchase Agreement dated February 5,
            1998 by and between Newtown Village Partnership and Newtown Village
            Plaza Associates, L.P. (Incorporated by reference to Exhibit 2.4 to
            the current report on Form 8-K filed by CV Reit on April 14, 1998.)

10.19       Third Amendment to Real Estate Purchase Agreement dated March 31,
            1998 by and between Newtown Village Partnership and Newtown Village
            Plaza Associates, L.P. (Incorporated by reference to Exhibit 2.5 to
            the current report on Form 8-K filed by CV Reit on April 14, 1998.)

10.20       Loan and Credit Facility Agreement dated as of March 31, 1998 by and
            between Montgomery CV Realty L.P. as Borrower, Century Plaza
            Associates, L.P. and CV Reit, Inc., as guarantors, and GMAC
            Commercial Mortgage Corporation, as Lender. (Incorporated by
            reference to Exhibit 5.1 to the current report on Form 8-K filed by
            CV Reit on April 15, 1998.)

10.21       $7,650,000 Promissory Note dated as of April 9, 1998 from Montgomery
            CV Realty L.P. to GMAC Commercial Mortgage Corporation.
            (Incorporated by reference to Exhibit 5.2 to the current report on
            Form 8-K filed by CV Reit on April 15, 1998.)

10.22       Mortgage and Security Agreement dated as of April 9, 1998 by Century
            Plaza Associates, L.P. to GMAC Commercial Mortgage Corporation.
            (Incorporated by reference to Exhibit 5.3 to the current report on
            Form 8-K filed by CV Reit on April 15, 1998.)

10.23       Guaranty and Suretyship Agreement dated as of April 9, 1998 by CV
            Reit to GMAC Commercial Mortgage Corporation. (Incorporated by
            reference to Exhibit 5.4 to the current report on Form 8-K filed by
            CV Reit on April 15, 1998.)

10.24       Contribution Agreement dated May 29, 1998 by and between Marlton
            Crossing Shopping Center Limited Partnership and Montgomery CV
            Realty L.P. (Incorporated by reference to Exhibit 2.1 to the current
            report on Form 8-K dated June 24, 1998, filed by CV Reit on July 7,
            1998.)

10.25       Assignment and Assumption of Contribution Agreement dated June 22,
            1998 by and between Montgomery CV Realty L.P. and Marlton Plaza
            Associates II, L.P. (Incorporated by reference to Exhibit 2.2 to the
            current report on Form 8-K dated June 24, 1998 filed by CV Reit on
            July 7, 1998.)

10.26       Mortgage and Security Agreement dated as of June 24, 1998 by and
            between Marlton Plaza Associates II, L.P., as Borrower, and GMAC
            Commercial Mortgage Corporation, as Lender. (Incorporated by
            reference to Exhibit 2.3 to the current report on Form 8-K dated
            June 24, 1998, filed by CV Reit on July 7, 1998.)

10.27       $11,650,000 Promissory Note dated as of June 24, 1998 from Marlton
            Plaza Associates II, L.P. to GMAC Commercial Mortgage Corporation.
            (Incorporated by reference to Exhibit 2.4 to the current report on
            Form 8-K dated June 24, 1998, filed by CV Reit on July 7, 1998.)

10.28       Real Estate Purchase Agreement dated January 27, 1998 by and between
            Seller and Purchaser. (Incorporated by reference to Exhibit 2.1 to
            the current report on Form 8-K dated June 25, 1998, filed by CV Reit
            on July 7, 1998.)
</TABLE>


                                       51
<PAGE>

<TABLE>
<S>         <C>
10.29       Amendment to Real Estate Purchaser Agreement dated February 26, 1998
            by and between Seller and Purchaser. (Incorporated by reference to
            Exhibit 2.2 to the current report on Form 8-K dated June 25, 1998,
            filed by CV Reit on July 7, 1998.)

10.30       Second Amendment to Real Estate Purchase Agreement dated March 31,
            1998 by and between Seller and Purchaser. (Incorporated by reference
            to Exhibit 2.3 to the current report on Form 8-K dated June 25,
            1998, filed by CV Reit on July 7, 1998.)

10.31       Mortgage and Security Agreement dated as of June 25, 1998 by and
            between Marlton Plaza Associates, L.P., as Borrower, and GMAC
            Commercial Mortgage Corporation, as Lender. (Incorporated by
            reference to Exhibit 2.4 to the current report on Form 8-K dated
            June 25, 1998, filed by CV Reit on July 7, 1998.)

10.32       $9,300,000 Promissory Note dated as of June 25, 1998 from Marlton
            Plaza Associates, L.P. to GMAC Commercial Mortgage Corporation.
            (Incorporated by reference to Exhibit 2.5 to the current report on
            Form 8-K dated June 25, 1998, filed by CV Reit on July 7, 1998.)

10.33       Guaranty and Suretyship Agreement dated as of June 25, 1998 by CV
            Reit to GMAC Commercial Mortgage Corporation. (Incorporated by
            reference to Exhibit 2.6 to the current report on Form 8-K dated
            June 25, 1998, filed by CV Reit on July 7, 1998.)

10.34       Guaranty and Suretyship Agreement dated as of June 25, 1998 by
            Montgomery CV Realty L.P. to GMAC Commercial Mortgage Corporation.
            (Incorporated by reference to Exhibit 2.7 to the current report on
            Form 8-K dated June 25, 1998, filed by CV Reit on July 7, 1998.)

10.35       Second Amendment to Loan and Credit Facility Agreement dated as of
            March 8, 1999, by and between Montgomery CV Realty, L.P. as
            Borrower, Century Plaza Associates, L.P. and CV Reit, as Guarantors,
            and GMAC Commercial Mortgage Corporation as Lender. (Incorporated by
            reference to Exhibit 10.36 Annual Report on Form 10-K dated December
            31, 1998 by CV Reit on March 29, 1999.)

10.36       $18,500,000 Note dated March 8, 1999 between Montgomery CV Realty,
            L.P. as Borrower and GMAC Commercial Mortgage Corporation as Lender.
            (Incorporated by reference to Exhibit 10.37 Annual Report on Form
            10-K dated December 31, 1998 by CV Reit on March 29, 1999.)

10.37       Collateral, Pledge, Assignment and Security Agreement, dated March
            8, 1999 between Montgomery CV Realty, L.P. and GMAC Commercial
            Mortgage Corporation. (Incorporated by reference to Exhibit 10.38
            Annual Report on Form 10-K dated December 31, 1998 by CV Reit on
            March 29, 1999.)


10.38       Agreement of Sale dated January 21, 1999 by and between Lakewood-9
            Investors, L.P. and ARC-Lakewood 9, L.L.C Montgomery CV Realty L.P.
            (Incorporated by reference to Exhibit 10.38 Annual Report on Form
            10-K of CV Reit for the fiscal year ended December 31, 1998.)

10.39       Reinstatement and Amendment Agreement of Sale dated February 5, 1999
            by and between Lakewood-9 Investors, L.P. and ARC-Lakewood-9, L.L.C.
            Montgomery CV Realty L.P. (Incorporated by reference to Exhibit 2.2
            to the current report on Form 8-K dated March 31, 1999, filed by CV
            Reit on April 7, 1999.)

10.40       Assignment of Agreement of Sale dated March 17, 1999 from Montgomery
            CV Realty L.P. to Lakewood Plaza 9 Associates, L.P. (Incorporated by
            reference to Exhibit 2.3 to the current report on Form 8-K dated
            March 31, 1999, filed by CV Reit on April 7, 1999.)

10.41       * Kranzco Realty Trust 1992 Employees Share Option Plan, as amended.
            (Incorporated by reference to Exhibit 10.10 of Kranzco's Annual
            Report on Form 10-K for the fiscal year ended December 31, 1992.)

10.42       * Kranzco Realty Trust 1992 Employees Share Option Plan, as amended.
            (Incorporated by reference to Exhibit 10.11 of Kranzco's Annual
            Report on Form 10-K for the fiscal year ended December 31,1992.)

10.43 *     Kranzco Realty Trust 1995 Incentive Plan. (Incorporated by reference
            to Exhibit 4.4 of Kranzco's Registration Statement on Form S-8 No.
            33-94294.)
</TABLE>


                                       52
<PAGE>

<TABLE>
<S>         <C>
10.44       Trust and Servicing Agreement, dated as of June 18, 1996, among KRT
            Origination Corp., GE Capital Management Corporation and State
            Street Bank and Trust Company. (Incorporated by reference to Exhibit
            10.43 of Kranzco's Annual Report on Form 10-K for the fiscal year
            ended December 31, 1996.)

10.45       Cash Collateral Account, Security, Pledge and Assignment Agreement,
            dated as of June 18, 1996, among the Borrowers, State Street Bank
            and Trust Company, as Agent, and KRT Origination Corp., as Lender.
            (Incorporated by reference to Exhibit 10.44 to Kranzco's Annual
            Report on Form 10-K for the fiscal year ended December 31, 1996.)

10.46       Cash Collateral Agreement, dated June 18, 1996, among the Borrowers,
            and State Street Bank and Trust Company, as Agent. (Incorporated by
            reference to Exhibit 10.45 to Kranzco's Annual Report on Form 10-K
            for the fiscal year ended December 31, 1996)

10.47       $123,700,000.00 Class A Mortgage Note dated June 18, 1996 made by
            the Borrowers in favor of KRT Origination Corp., as Lender.
            (Incorporated by reference to Exhibit 10.46 to Kranzco's Annual
            Report on Form 10-K for the fiscal year ended December 31, 1996.)

10.48       $20,600,000.00 Class B Mortgage Note dated June 18, 1996 made by the
            Borrowers in favor of KRT Origination Corp., as Lender.
            (Incorporated by reference to Exhibit 10.47 to Kranzco's Annual
            Report on Form 10-K for the fiscal year ended December 31, 1996.)

10.49       $28,900,000.00 Class C Mortgage Note dated June 18, 1996 made by the
            Borrowers in favor of KRT Origination Corp., as Lender.
            (Incorporated by reference to Exhibit 10.48 to Kranzco's Annual
            Report on Form 10-K for the fiscal year ended December 31, 1996.)

10.50       $8,500,000.00 Class D Mortgage Note dated June 18, 1996 made by the
            Borrowers in favor of KRT Origination Corp., as Lender.
            (Incorporated by reference to Exhibit 10.49 to Kranzco's Annual
            Report on Form 10-K for the fiscal year ended December 31, 1996.)

10.51       Form of Indenture of Mortgage, Deed of Trust, Security Agreement,
            Financing Statement, Fixture Filing and Assignment of Leases, Rents
            and Security Deposits made by the Borrowers, as grantor, for the
            benefit of KRT Origination Corp., as mortgagee, and filed in
            Connecticut, Maryland, New Jersey, New York and Pennsylvania with
            respect to Groton Square in Groton, Connecticut, Manchester Kmart in
            Manchester, Connecticut, Milford in Milford, Connecticut, Orange in
            Orange, Connecticut, Fox Run in Prince Frederick, Maryland,
            Hillcrest Plaza in Frederick, Maryland, Anneslie in Baltimore,
            Maryland, Suburban Plaza in Hamilton, New Jersey, Collegetown in
            Glassboro, New Jersey, Hillcrest Mall in Phillipsburg, New Jersey,
            The Mall at Cross County in Yonkers, New York, Highridge Plaza in
            Yonkers, New York, North Ridge in New Rochelle, New York, Village
            Square in Larchmont, New York, A&P Mamaroneck in Mamaroneck, New
            York, Port Washington in Port Washington, New York, Bethlehem in
            Bethlehem, Pennsylvania, Whitehall Square in Whitehall, ,
            Pennsylvania, Bristol Commerce Park in Bristol, Pennsylvania, Park
            Hills Plaza in Altoona, Pennsylvania, Barn Plaza in Doylestown,
            Pennsylvania, Best Plaza in Tredyffrin, Pennsylvania, Bensalem
            Square in Bensalem, Pennsylvania, Street Road in Bensalem,
            Pennsylvania, Pilgrim Gardens in Drexel Hill, Pennsylvania, 69th
            Street Plaza in Upper Darby, Pennsylvania and MacArthur Road in
            Whitehall, Pennsylvania (the "Properties"). (Incorporated by
            reference to Exhibit 10.50 to Kranzco's Annual Report on Form 10-K
            for the fiscal year ended December 31, 1996.)

10.52       Form of Unrecorded Indenture of Mortgage, Deed of Trust, Security
            Agreement, Financing Statement, Fixture Filing and Assignment of
            Leases, Rents and Security Deposits made by the Borrowers, as
            grantor, for the benefit of KRT Origination Corp., and held in
            escrow with respect to the Properties located in Maryland and in New
            York. (Incorporated by reference to Exhibit 10.51 to Kranzco's
            Annual Report on Form 10-K for the fiscal year ended December 31,
            1996.)

10.53       Escrow Agreement made among KRT Origination Corp., the Borrowers and
            Robinson Silverman Pearce Aronsohn & Berman LLP, as escrow agent,
            with respect to the unrecorded second mortgages covering the
            Properties located in New York and Maryland. (Incorporated by
            reference to Exhibit 10.52 to Kranzco's Annual Report on Form 10-K
            for the fiscal year ended December 31, 1996.)
</TABLE>


                                       53
<PAGE>

<TABLE>
<S>         <C>
10.54       Agreement dated October 30, 1997 between Kranzco and GP Development
            Corporation. (Incorporated by reference to Exhibit 2.1 of Kranzco's
            current report on Form 8-K dated November 25, 1997.)

10.55       Agreement and Plan of Merger dated October 30, 1997 between Kranzco,
            GP Development Corporation, the shareholders of GP Development
            Corporation and KR Atlanta, Inc. (Incorporated by reference to
            Exhibit 2.2 of Kranzco's current report on Form 8-K dated November
            25, 1997.)

10.56       Mortgage Note for $6,700,000.00, dated as of October 5, 1990, from
            Holcomb Bridge Partners, L.P., a Georgia limited partnership
            ("Holcomb"), in favor of Allstate Life Insurance Company
            ("Allstate") (relating to Holcomb Bridge Crossing). (Incorporated by
            reference to Exhibit 2.3 of Kranzco's current report on Form 8-K
            dated November 25, 1997.)

10.57       Modification of Mortgage Note, dated as of October 31, 1995, between
            Holcomb and Harris Trust and Savings Bank ("Harris Trust") (relating
            to Holcomb Bridge Crossing). (Incorporated by reference to Exhibit
            2.4 of Kranzco's current report on Form 8-K dated November 25,
            1997.)

10.58       Deed to Secure Debt, Assignment of Leases, Rents and Contracts,
            Security Agreement and Fixture Filing ("Deed to Secure Debt") from
            Holcomb to Allstate, dated as of October 5, 1990 (relating to
            Holcomb Bridge Crossing). (Incorporated by reference to Exhibit 2.5
            of Kranzco's current report on Form 8-K dated November 25, 1997.)

10.59       Modification of Deed to Secure Debt between Holcomb and Harris
            Trust, dated as of October 31, 1995 (relating to Holcomb Bridge
            Crossing). (Incorporated by reference to Exhibit 2.6 of Kranzco's
            current report on Form 8-K dated November 25, 1997.)

10.60       Real Estate Note for $3,725,000.00, dated as of August 6, 1987, from
            West Stewarts Mill Associates, Ltd., a Georgia limited partnership
            ("West Stewarts"), in favor of Confederation Life Insurance Company,
            a mutual insurance company incorporated in Canada ("Confederation"),
            first amendment thereto dated as of November 27, 1987, second
            amendment thereto dated as of November 1, 1993, third amendment
            thereto dated as of November 1, 1993 and fourth amendment thereto
            dated as of February 21, 1995 (relating to Park Plaza).
            (Incorporated by reference to Exhibit 2.7 of Kranzco's current
            report on Form 8-K dated November 25, 1997.)

10.61       Deed to Secure Debt and Security Agreement between West Stewarts and
            Confederation, dated as of August 6, 1987, first amendment thereto
            dated as of November 27, 1987 and second amendment thereto dated as
            of November 1, 1993 (relating to Park Plaza). (Incorporated by
            reference to Exhibit 2.8 of Kranzco's current report on Form 8-K
            dated November 25, 1997.)

10.62       Escrow Agreement, dated as of November 1, 1993, between
            Confederation and West Stewarts. (Incorporated by reference to
            Exhibit 2.9 of Kranzco's current report on Form 8-K dated November
            25, 1997.)

10.63       Promissory Note for $10,670,000.00, dated as of July 31, 1996, from
            Mableton Village Associates, L.L.C., a Georgia limited liability
            company ("Mableton Village"), in favor of Lehman Brothers Holdings,
            Inc. d/b/a Lehman Capital ("Lehman") (relating to The Village at
            Mableton). (Incorporated by reference to Exhibit 2.10 of Kranzco's
            current report on Form 8-K dated November 25, 1997.)

10.64       Deed to Secure Debt and Security Agreement, dated as of July 31,
            1996, between Mableton Village and Lehman (relating to The Village
            at Mableton). (Incorporated by reference to Exhibit 2.11 of
            Kranzco's current report on Form 8-K dated November 25, 1997.)

10.65       Sales Contract dated June 26, 1998 by and among Kranzco and Europco
            Property Investors II, Ltd., a Georgia limited partnership; Europco
            Property Investors III, Ltd., a Georgia limited partnership; Europco
            Property Investors IV, Ltd., a Georgia limited partnership; Secured
            Properties Investors V, L.P., a Georgia limited partnership; Secured
            Properties Investors VIII, L.P., a Georgia limited partnership;
            Secured Properties Investors IX, L.P. a Georgia limited partnership;
            and Tifton Partners, L.P., a Georgia limited partnership.
            (Incorporated by reference to Exhibit 2.1 of Kranzco's current
            report on Form 8-K dated June 26, 1998, filed July 16, 1998.)
</TABLE>


                                       54
<PAGE>

<TABLE>
<S>         <C>
10.66       Fixed Rate Note, dated September 29, 1998, made by the Borrowers
            named therein in favor of Salomon Brothers Realty Corp.
            (Incorporated by reference to Exhibit 10.38 of Kranzco's Quarterly
            Report on Form 10-Q for the quarter ended September 30, 1998.)

10.67       Guaranty, dated as of September 29, 1998, made by Kranzco, for the
            benefit of Salomon Brothers Realty Corp. (Incorporated by reference
            to Exhibit 10.39 of Kranzco's Quarterly Report on Form 10-Q for the
            quarter ended September 30, 1998.)

10.68       Form of Mortgage/Deed of Trust/Deed to secure Debt and Security
            Agreement, dated September 29, 1998, made by the Borrowers named
            therein for the benefit of Salomon Brothers Realty Corp. and filed
            in Florida, Georgia, Ohio, Tennessee, and Virginia with respect to
            Village Oaks, Pensacola, Florida; Vidalia Wal-Mart Center, Vidalia,
            Georgia; Summerville Wal-Mart Center, Summerville, Georgia; Tifton
            Corners, Tifton, Georgia; Douglasville Crossing, Douglasville,
            Georgia; Snellville Oaks, Snellville, Georgia; Pickaway Crossing,
            Circleville, Ohio; Meeting Square, Jefferson City, Tennessee; and
            Statler Crossing, Staunton, Virginia. (Incorporated by reference to
            Exhibit 10.40 of Kranzco's Quarterly Report on Form 10-Q for the
            quarter ended September 30, 1998.)

10.69       Unit Contribution Agreement among Kramont, Montgomery CV Realty
            L.P., Kramont Operating Partnership, L.P., CV Partner Holdings, L.P.
            and CV GP LP, dated as of March 28, 2000. (Incorporated by reference
            to Exhibit 10.3 of the Company's Registration Statement on Form S-4
            filed with the Commission on April 10, 2000 (File No. 333-34482).

10.70       Kramont Realty Trust 2000 Incentive Plan. (Incorporated by reference
            from Appendix F to the Joint Proxy Statement/Prospectus contained in
            the Company's Registration Statement on Form S-4 filed with the
            Commission on April 10, 2000 (File No. 333-34482)).

10.71       Amended and Restated Agreement of Limited Partnership of Kramont
            Operating Partnership, L.P., dated as of June 16, 2000.
            (Incorporated by reference to Exhibit 10.1 of the Company's
            Registration Statement on Form S-4 filed with the Commission on
            April 10, 2000 (File No. 333-34482)).

10.72       Second Amended and Restated Agreement of Limited Partnership of
            Montgomery CV Realty L.P., dated as of June 16, 2000. (Incorporated
            by reference to Exhibit 10.2 of the Company's Registration Statement
            on Form S-4 filed with the Commission on April 10, 2000 (File No.
            333-34482)).

10.73*      Employment Agreement between the Company and Louis P. Meshon, Sr.
            dated as of June 16, 2000. (Incorporated by reference from Exhibit M
            to the Joint Proxy Statement/Prospectus contained in the Company's
            Registration Statement on Form S-4 filed with the Commission on
            April 10, 2000 (File No. 333-34482)).

10.74*      Employment Agreement between the Company and Norman M. Kranzdorf
            dated of June 16, 2000. (Incorporated by reference from Exhibit L to
            the Joint Proxy Statement/Prospectus contained in the Company's
            Registration Statement on Form S-4 filed with the Commission on
            April 10, 2000 (File No. 333-34482)).

10.75       Amended and Restated Loan and Credit Facility Agreement dated as of
            August 1, 2000 by and between the Company, Kramont Operating
            Partnership, L.P., Montgomery CV Realty L.P., Century Plaza
            Associates, L.P., Marlton Plaza Associates, L.P., Lakewood Plaza 9
            Associates, L.P., Cherry Square MCV Associates, L.P., KR Bainbridge
            LLC, KR Barn, L.P., KR Bradford Mall, L.P., Lilac DE LLC, Culpeper
            Shopping Center Joint Venture, KRT Union LLC, KR Harrodsburg LLC, KR
            Morganton LLC, KR Tower Plaza LLC, KR Development, L.P. and KR
            Wampanoag, as borrowers, and GMAC Commercial Mortgage Corporation,
            as lender (incorporated by reference to Exhibit 5.1 to the Company's
            Current Report on Form 8-K, dated August 10, 2001).

10.76       Form of Guaranty of Recourse Obligations of Borrower by the Company,
            Kramont Operating Partnership, L.P., Montgomery CV Realty L.P.
            (incorporated by reference to Exhibit 5.2 to the Company's Current
            Report on Form 8-K, dated August 10, 2001)

10.77 *     Employment Agreement between the Company and George S. Demuth dated
            as of June 16, 2000.

10.78 *     Employment Agreement between the Company and Etta M. Strehle dated
            as of June 16, 2000.

10.79 *     Employment Agreement between the Company and Carl. E. Kraus dated as
            of March 21, 2002.

10.80       $190,000,000 Mortgage Loan Application dated October 22, 2002 by and
            between Kramont Operating Partnership, L.P., as applicant, and
            Metropolitan Life Insurance Company, as lender.
</TABLE>


                                       55


<PAGE>

<TABLE>

<S>         <C>
10.81       Loan Agreement dated as of December 20, 2002 by and between Kramont
            Operating Partnership, L.P., as borrower, Fleet National Bank,
            Wilmington Trust of Pennsylvania, Wachovia Bank National
            Association, Compass Bank, Firstrust Bank, as lenders, and Fleet
            National Bank, as administrative agent (incorporated by reference to
            Exhibit 5.1 to the Company's Current Report on Form 8-K, dated
            December 30, 2002).

 11         Statement regarding computation of per share earnings. Omitted;
            computation can be clearly determined from material contained in the
            report.

 21         Subsidiaries of the Company.

23.1        Consent of BDO Seidman, LLP.

99.1        Certification by Chief Executive Officer of Kramont Realty Trust
            pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.2        Certification by Chief Financial Officer of Kramont Realty Trust
            pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*           Management contract or compensatory plan or arrangement.
</TABLE>


                                       56
<PAGE>


                                  SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

                                    KRAMONT REALTY TRUST


March 17, 2003                      /s/ Louis P. Meshon, Sr.
                                    By:__________________________________
                                    Louis P. Meshon, Sr., President and
Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.

March 17, 2003                      /s/ Norman M. Kranzdorf

                                    ---------------------------------
                                    Norman M. Kranzdorf, Chairman of the Board
                                    and Trustee

March 17, 2003                      /s/ Louis P. Meshon, Sr.
                                    ---------------------------------
                                    Louis P. Meshon, Sr., President, Chief
                                    Executive Officer and Trustee (principal
                                    executive officer)

March 17, 2003                      /s/ Carl E. Kraus
                                    ---------------------------------
                                    Carl E. Kraus, Chief Financial Officer,
                                    Chief Investment Officer, and Treasurer
                                    (principal financial officer)

March 17, 2003                      /s/ George S. Demuth
                                    ---------------------------------
                                    George Demuth, Chief Operating Officer
                                    and Executive Vice President

March 17, 2003                      /s/ Etta M. Strehle
                                    ---------------------------------
                                    Etta M. Strehle, Chief Accounting Officer

March 17, 2003                      /s/ Bernard J. Korman
                                    ---------------------------------
                                    Bernard J. Korman, Trustee

March 17, 2003                      /s/ H. Irwin Levy
                                    ---------------------------------
                                    H. Irwin Levy, Trustee

March 17, 2003                      /s/ Milton S. Schneider
                                    --------------------------------
                                    Milton S. Schneider, Trustee

March 17, 2003                      /s/ E. Donald Shapiro
                                    --------------------------------
                                    E. Donald Shapiro, Trustee

                                       57
<PAGE>


March 17, 2003                      /s/ Alan L. Shulman
                                    --------------------------------
                                    Alan L. Shulman, Trustee


                                       58
<PAGE>

                                 CERTIFICATIONS

I, Louis P. Meshon, Sr. certify that:

1.    I have reviewed this annual report on Form 10-K of Kramont Realty Trust;

2.    Based on my knowledge, this annual report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this annual report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this annual report, fairly present in all material
      respects the financial condition, results of operations and cash flows of
      the registrant as of, and for, the periods presented in this annual
      report;

4.    The registrant's other certifying officers and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
      have:

            a.    designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this annual report is being prepared;

            b.    evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation Date");
                  and

            c.    presented in this annual report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.    The registrant's other certifying officers and I have disclosed, based on
      our most recent evaluation, to the registrant's auditors and the audit
      committee of registrant's board of directors (or persons performing the
      equivalent functions):

            a.    all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

            b.    any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

6.    The registrant's other certifying officers and I have indicated in this
      annual report whether there were significant changes in internal controls
      or in other factors that could significantly affect internal controls
      subsequent to the date of our most recent evaluation, including any
      corrective actions with regard to significant deficiencies and material
      weaknesses.


                                    /s/ Louis P. Meshon, Sr.
March 17, 2003                      ----------------------------------------
                                    Louis P. Meshon Sr., President and Chief
                                    Executive Officer
                                    (principal executive officer)


                                       59
<PAGE>

I, Carl E. Kraus, certify that:

1.    I have reviewed this annual report on Form 10-K of Kramont Realty Trust;

2.    Based on my knowledge, this annual report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this annual report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this annual report, fairly present in all material
      respects the financial condition, results of operations and cash flows of
      the registrant as of, and for, the periods presented in this annual
      report;

4.    The registrant's other certifying officers and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
      have:

            a.    designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this annual report is being prepared;

            b.    evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation Date");
                  and

            c.    presented in this annual report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.    The registrant's other certifying officers and I have disclosed, based on
      our most recent evaluation, to the registrant's auditors and the audit
      committee of registrant's board of directors (or persons performing the
      equivalent functions):

            a.    all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

            b.    any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

6.    The registrant's other certifying officers and I have indicated in this
      annual report whether there were significant changes in internal controls
      or in other factors that could significantly affect internal controls
      subsequent to the date of our most recent evaluation, including any
      corrective actions with regard to significant deficiencies and material
      weaknesses.


                                    /s/ Carl E. Kraus
March 17, 2003                      ----------------------------------------
                                    Carl E. Kraus, Chief Financial Officer,
                                    Chief Investment Officer and Treasurer
                                    (principal financial officer)


                                       60