<PAGE>   1


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


X    Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended June 30, 1999 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 1-10328

                            BRADLEY REAL ESTATE, INC.
             (Exact name of registrant as specified in its charter)

              Maryland                                04-6034603
     (State of Organization)                 (I.R.S. Identification No.)

                   40 Skokie Blvd., Northbrook, Illinois 60062
              (Address of Registrant's Principal Executive Offices)

Registrant's telephone number, including area code; (847) 272-9800

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.

                                 Yes  X   No
                                     ---     ---

Indicate the number of shares outstanding of each class of Common Stock as of
June 30, 1999:

     Shares of Common Stock, $.01 par value: 24,057,300 shares outstanding.



<PAGE>   2


                            BRADLEY REAL ESTATE, INC.
                           CONSOLIDATED BALANCE SHEETS
                    (Dollars in thousands, except share data)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                   June 30,   December 31,
                                                                                     1999         1998
                                                                                  ---------   ------------
<S>                                                                               <C>          <C>
ASSETS:

Real estate investments - at cost                                                 $ 970,710    $ 936,465
Accumulated depreciation and amortization                                           (69,713)     (59,196)
                                                                                  ---------    ---------

Net real estate investments                                                         900,997      877,269

Real estate investments held for sale                                                30,116       46,492

Other assets:
    Cash and cash equivalents                                                           108            -
    Rents and other receivables, net of allowance for doubtful accounts
      of $4,884 for 1999 and $4,078 for 1998                                         17,423       14,994
    Investment in partnership                                                             -       13,249
    Deferred charges, net and other assets                                           16,095       16,676
                                                                                  ---------    ---------

Total assets                                                                      $ 964,739    $ 968,680
                                                                                  =========    =========

LIABILITIES AND SHARE OWNERS' EQUITY:

Mortgage loans                                                                    $ 102,000    $ 103,333
Unsecured notes payable                                                             199,573      199,542
Line of credit                                                                      120,900      169,500
Accounts payable, accrued expenses and other liabilities                             28,068       29,415
                                                                                  ---------    ---------

Total liabilities                                                                   450,541      501,790
                                                                                  ---------    ---------

Exchangeable limited partnership units                                               20,542       21,573
Series B preferred units                                                             49,100            -
                                                                                  ---------    ---------

Total minority interest                                                              69,642       21,573
                                                                                  ---------    ---------

Share Owners' equity:

    Shares of preferred stock and paid-in capital, par value $.01 per
      share; liquidation preference $25.00 per share:
         Authorized 20,000,000 shares; issued and outstanding 3,478,471
            and 3,478,493 shares of Series A Convertible Preferred Stock
            at June 30, 1999 and December 31, 1998, respectively                     86,809       86,809
    Shares of common stock and paid-in capital, par value $.01 per share:
      Authorized 80,000,000 shares; issued and outstanding 24,057,300 and
         23,958,662 shares at June 30, 1999 and December 31, 1998, respectively     350,653      349,254
    Shares of excess stock, par value $.01 per share:
      Authorized 50,000,000 shares; 0 shares issued and outstanding                       -            -
    Retained earnings                                                                 7,094        9,254
                                                                                  ---------    ---------

Total share owners' equity                                                          444,556      445,317
                                                                                  ---------    ---------

Total liabilities and share owners' equity                                        $ 964,739    $ 968,680
                                                                                  =========    =========
</TABLE>



        The accompanying notes are an integral part of these consolidated
                             financial statements.

                                       2

<PAGE>   3


                            BRADLEY REAL ESTATE, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                  (Dollars in thousands, except per share data)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                             Three months ended       Six months ended
                                                                                   June 30,               June 30,
                                                                           ---------------------    --------------------
                                                                              1999        1998        1999        1998
                                                                            --------    --------    --------    --------
<S>                                                                         <C>         <C>         <C>         <C>
REVENUE:
         Rental income                                                      $ 36,872    $ 30,601    $ 75,582    $ 59,337
         Other income                                                            686         440       1,329       1,059
                                                                            --------    --------    --------    --------
                                                                              37,558      31,041      76,911      60,396
                                                                            --------    --------    --------    --------
EXPENSES:
         Operations, maintenance and management                                5,405       4,443      12,083       8,776
         Real estate taxes                                                     5,556       5,295      11,671      10,776
         Mortgage and other interest                                           7,182       6,585      14,869      12,143
         General and administrative                                            1,866       1,717       4,067       3,120
         Depreciation and amortization                                         6,484       5,631      12,941      10,594
                                                                            --------    --------    --------    --------
                                                                              26,493      23,671      55,631      45,409
                                                                            --------    --------    --------    --------

Income before equity in earnings of partnership and provision for loss on
  real estate investment                                                      11,065       7,370      21,280      14,987
Equity in earnings of partnership                                                153           -         500           -
Provision for loss on real estate investment                                       -           -           -        (875)
                                                                            --------    --------    --------    --------

Income before allocation to minority interest                                 11,218       7,370      21,780      14,112
Income allocated to exchangeable limited partnership units                      (452)       (406)       (921)       (797)
Income allocated to Series B preferred units                                  (1,109)          -      (1,565)          -
                                                                            --------    --------    --------    --------

Net income                                                                     9,657       6,964      19,294      13,315

Preferred share distributions                                                 (1,826)          -      (3,652)          -
                                                                            --------    --------    --------    --------

Net income attributable to common share owners                              $  7,831    $  6,964    $ 15,642    $ 13,315
                                                                            ========    ========    ========    ========

Earnings per share:
         Basic                                                              $   0.33    $   0.29    $   0.65    $   0.57
                                                                            ========    ========    ========    ========
         Diluted                                                            $   0.33    $   0.29    $   0.65    $   0.57
                                                                            ========    ========    ========    ========
</TABLE>



        The accompanying notes are an integral part of these consolidated
                              financial statements.

                                       3

<PAGE>   4


                            BRADLEY REAL ESTATE, INC.
           CONSOLIDATED STATEMENTS OF CHANGES IN SHARE OWNERS' EQUITY
                  (Dollars in thousands, except per share data)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                     Preferred           Common
                                                                      shares             shares
                                                                        and                and           Retained
                                                                  paid-in capital    paid-in capital     earnings       Total
                                                                  ---------------    ---------------     ---------    ---------
<S>                                                                  <C>                <C>              <C>          <C>
Balance at December 31, 1998                                         $  86,809          $ 349,254        $   9,254    $ 445,317
     Net income                                                              -                  -            9,637        9,637
     Distributions on common stock ($0.37 per share)                         -                  -           (8,900)      (8,900)
     Distributions on preferred stock ($0.525 per share)                     -                  -           (1,826)      (1,826)
     Exercise of stock options                                               -                123                -          123
     Dividend reinvestment and stock purchase plan participation             -              1,522                -        1,522
     Reallocation of minority interest                                       -               (154)               -         (154)
     Shares issued in exchange for limited partnership units                 -                  6                -            6
                                                                     ---------          ---------        ---------    ---------

Balance at March 31, 1999                                               86,809            350,751            8,165      445,725

     Net income                                                              -                  -            9,657        9,657
     Distributions on common stock ($0.37 per share)                         -                  -           (8,902)      (8,902)
     Distributions on preferred stock ($0.525 per share)                     -                  -           (1,826)      (1,826)
     Dividend reinvestment and stock purchase plan participation             -                (40)               -          (40)
     Reallocation of minority interest                                       -                (58)               -          (58)
                                                                     ---------          ---------        ---------    ---------

Balance at June 30, 1999                                             $  86,809          $ 350,653        $   7,094    $ 444,556
                                                                     =========          =========        =========    =========
</TABLE>





















        The accompanying notes are an integral part of these consolidated
                              financial statements.

                                       4

<PAGE>   5


                            BRADLEY REAL ESTATE, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                              Six months ended
                                                                                                  June 30,
                                                                                           ----------------------
                                                                                              1999         1998
                                                                                           ---------    ---------
<S>                                                                                        <C>          <C>
Cash flows from operating activities:
     Net income                                                                            $  19,294    $  13,315
     Adjustments to reconcile net income to net cash provided by operating activities:
         Depreciation and amortization                                                        12,941       10,594
         Equity in earnings of partnership                                                      (500)           -
         Amortization of debt premiums, net of discounts                                        (479)           -
         Provision for loss on real estate investment                                              -          875
         Income allocated to minority interest                                                 2,486          797
     Change in operating assets and liabilities:
         (Increase) decrease in rents and other receivables                                      860       (1,325)
         Increase (decrease) in accounts payable, accrued expenses and other liabilities      (1,748)       6,978
         Increase in deferred charges                                                         (1,064)      (2,037)
                                                                                           ---------    ---------
              Net cash provided by operating activities                                       31,790       29,197
                                                                                           ---------    ---------

Cash flows from investing activities:
     Expenditures for real estate investments                                                (21,636)    (108,512)
     Expenditures for capital improvements                                                    (6,934)      (5,309)
     Net proceeds from sale of properties                                                     16,899        1,869
     Cash distributions from partnership                                                       3,943            -
                                                                                           ---------    ---------
              Net cash used in investing activities                                           (7,728)    (111,952)
                                                                                           ---------    ---------

Cash flows from financing activities:
     Borrowings from line of credit                                                           46,900      118,050
     Payments under line of credit                                                           (95,500)    (123,550)
     Proceeds from issuance of unsecured notes payable                                             -       99,051
     Expenditures for financing costs                                                            (59)      (5,979)
     Principal payments on mortgage loans                                                       (823)        (534)
     Distributions paid to common share owners                                               (17,802)     (16,571)
     Distributions paid to limited partnership unit holders                                   (1,044)        (967)
     Distributions paid to preferred unit holders                                             (1,565)           -
     Distributions paid to preferred share owners                                             (3,652)           -
     Net proceeds from stock offerings                                                             -        7,489
     Proceeds from exercise of stock options                                                     123            4
     Net proceeds from dividend reinvestment and stock purchase plan                           1,482        2,710
     Net proceeds from issuance of Series B preferred units                                   49,100            -
     Payments to redeem limited partnership units                                             (1,114)           -
                                                                                           ---------    ---------
              Net cash provided by (used in) financing activities                            (23,954)      79,703
                                                                                           ---------    ---------

Net increase (decrease) in cash and cash equivalents                                             108       (3,052)

Cash and cash equivalents:
     Beginning of period                                                                           -        4,747
                                                                                           ---------    ---------
     End of period                                                                         $     108    $   1,695
                                                                                           =========    =========

Supplemental cash flow information:
     Interest paid, net of amount capitalized                                              $  15,499    $   8,358
                                                                                           =========    =========
</TABLE>




       The accompanying notes are an integral part of these consolidated
                             financial statements.

                                       5

<PAGE>   6


                            BRADLEY REAL ESTATE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 1999
                                   (Unaudited)


NOTE 1 - BASIS OF PRESENTATION

The accompanying interim financial statements have been prepared by the Company,
without audit, and in the opinion of management reflect all normal recurring
adjustments necessary for a fair presentation of results for the unaudited
interim periods presented. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested that these
condensed financial statements be read in conjunction with the financial
statements and the notes thereto for the fiscal year ended December 31, 1998.

NOTE 2 - EARNINGS PER SHARE

Basic earnings per share ("EPS") is computed by dividing income available to
common share owners by the weighted average number of common shares outstanding
for the period. Diluted EPS is computed by reflecting the potential dilution
that could occur if securities or other contracts to issue common stock were
exercised or converted into common stock or resulted in the issuance of common
stock that then shared in the earnings of the Company. A reconciliation of the
numerator and denominator of the basic EPS computation to the numerator and
denominator of the diluted EPS computation, is as follows:


<TABLE>
<CAPTION>
                                                                     Three months ended            Six months ended
                                                                           June 30,                    June 30,
                                                                  -------------------------   -------------------------
                                                                     1999          1998          1999          1998
                                                                  -----------   -----------   -----------   -----------
<S>                                                               <C>           <C>           <C>           <C>
NUMERATOR:
----------

Basic
     Net income attributable to common share owners               $ 7,831,000   $ 6,964,000   $15,642,000   $13,315,000
                                                                  ===========   ===========   ===========   ===========
Diluted
     Net income attributable to common share owners               $ 7,831,000   $ 6,964,000   $15,642,000   $13,315,000
     Income allocated to exchangeable limited partnership units       452,000       406,000       921,000       797,000
                                                                  -----------   -----------   -----------   -----------
     Adjusted net income                                          $ 8,283,000   $ 7,370,000   $16,563,000   $14,112,000
                                                                  ===========   ===========   ===========   ===========

DENOMINATOR:
------------

Basic
     Weighted average common shares                                24,056,671    23,702,522    24,026,988    23,503,183
                                                                  ===========   ===========   ===========   ===========
Diluted
     Weighted average common shares                                24,056,671    23,702,522    24,026,988    23,503,183
     Effect of dilutive securities:
         Stock options                                                 40,101        50,014        34,823        49,450
         Exchangeable limited partnership units                     1,387,823     1,381,352     1,414,264     1,408,182
                                                                  -----------   -----------   -----------   -----------
     Weighted average shares and assumed conversions               25,484,595    25,133,888    25,476,075    24,960,815
                                                                  ===========   ===========   ===========   ===========

Basic earnings per share                                          $      0.33   $      0.29   $      0.65   $      0.57
                                                                  ===========   ===========   ===========   ===========
Diluted earnings per share                                        $      0.33   $      0.29   $      0.65   $      0.57
                                                                  ===========   ===========   ===========   ===========
</TABLE>


For the six months ended June 30, 1999 and 1998, options to purchase 609,250
shares of common stock at prices ranging from $19.90 to $21.35 and 153,500
shares of common stock at prices ranging from $21.25 to $21.35 were outstanding
during each of the respective periods but were not included in the computation
of diluted EPS because the options' exercise prices were greater than the
average market prices of the common shares during those periods. For the six
months ended June 30, 1999, preferred stock distributions of $3,652,000 and the
effect on the denominator of the conversion of the convertible preferred stock
outstanding during the quarter into 3,550,912 shares of common stock were not
included in the computation of diluted EPS because the impact on basic EPS was
anti-dilutive.




                                       6

<PAGE>   7


For the three months ended June 30, 1999 and 1998, options to purchase 158,750
shares of common stock at prices ranging from $20.25 to $21.35 and 153,500
shares of common stock at prices ranging from $21.25 to $21.35 were outstanding
during each of the respective periods but were not included in the computation
of diluted EPS because the options' exercise prices were greater than the
average market prices of the common shares during those periods. For the three
months ended June 30, 1999, preferred stock distributions of $1,826,000 and the
effect on the denominator of the conversion of the convertible preferred stock
outstanding during the quarter into 3,550,910 shares of common stock were not
included in the computation of diluted EPS because the impact on basic EPS was
anti-dilutive.

Income allocated to the minority interest reflects weighted average limited
partnership units ("LP Units") of interest in Bradley Operating Limited
Partnership (the "Operating Partnership") outstanding of 1,414,264 and 1,408,182
for the six months ended June 30, 1999 and 1998, respectively, and 1,387,823 and
1,381,352 for the three months ended June 30, 1999 and 1998, respectively. As of
June 30, 1999 and 1998, there were 1,381,353 and 1,381,742 LP Units outstanding.
The Operating Partnership is a limited partnership of which the Company
currently owns an 88% economic interest.

NOTE 3 - SUPPLEMENTAL CASH FLOW DISCLOSURE

During the first quarter of 1999, 411 shares of common stock were issued in
exchange for an equivalent number of LP Units held by the minority interest.
During the second quarter of 1999, the acquisition of the Company's non-owned
portion of a joint venture resulted in a non-cash reclassification of investment
in partnership to real estate investments of $6,556,000 and a non-cash transfer
of a $3,100,000 note receivable.

NOTE 4 - ACQUISITION AND DISPOSITION ACTIVITY

At June 30, 1999, the Company was holding for sale three enclosed malls, all
acquired in connection with the merger acquisition of Mid-America Realty
Investments, Inc. ("Mid-America"). During the second quarter, the Company
completed the sales of an additional three properties, for an aggregate gross
sales price of $17,325,000. These three properties, all acquired in connection
with the merger acquisition of Mid-America, had been held for sale since the
merger acquisition. Two of these properties, Macon County Plaza and Town West
Shopping Center, are shopping centers located in the Southeast region of the
United States and are not aligned with the Company's strategic market focus. The
third property, Monument Mall, is an enclosed mall and, like the three
properties currently held for sale, is not aligned with the Company's strategic
property focus. The dispositions of the three properties held for sale are
expected to be completed during 1999, although there can be no assurance that
any such dispositions will occur.

In connection with the merger acquisition of Mid-America, the Company acquired a
50% interest in a joint venture that owned two neighborhood shopping centers and
one enclosed mall. During the second quarter, the joint venture sold Imperial
Mall, the enclosed mall located in Hastings, Nebraska, to the same buyer of
Monument Mall for $12,100,000 including the issuance of a $3,100,000 note at
9.0%, secured by a second deed of trust. Subsequently, the Company acquired the
50% non-owned portion of the joint venture for a purchase price equal to
$7,750,000 subject to customary closing costs and pro-rations. As a result, the
two neighborhood shopping centers previously owned by the joint venture are now
wholly-owned by the Company and are consolidated for financial reporting
purposes.

During the second quarter of 1999, the Company also completed the acquisitions
of two shopping centers located in Michigan and Ohio, aggregating approximately
264,000 square feet for a total purchase price of $13,853,000. Both of these
shopping centers are expected to be substantially redeveloped, bringing the
number of active redevelopment projects being undertaken by the Company to four.
The estimated total incremental capital investment for these four projects is
approximately $32 million.

NOTE 5 - SEGMENT REPORTING

As of June 30, 1999, the Company owned 96 shopping centers located primarily in
the Midwest region of the United States. Such shopping centers are typically
anchored by grocery and drug stores complemented with stores providing a wide
range of other goods and services to shoppers. During the first half of 1998,
the Company also owned a mixed-use office property located in downtown Chicago,
Illinois, which was sold in July 1998. Because this property required a
different operating strategy and management expertise than all other properties
in the portfolio, it was considered a separate reportable segment.

The Company assesses and measures operating results on an individual property
basis for each of its 96 shopping centers without differentiation, based on net
operating income, and then converts such amounts in the aggregate to a
performance measure referred to as Funds from Operations ("FFO"). Since all of
the Company's shopping centers exhibit similar economic characteristics, cater
to the day-to-day living needs of their respective surrounding communities, and
offer similar degrees of risk and opportunities for growth, the shopping centers
have been aggregated and reported as one operating segment.

The revenue and net operating income for the reportable segments and for the
Company, the computation of FFO for the Company, and a reconciliation to net
income attributable to common share owners, are as follows for each of the three
and six month periods ended June 30, 1999 and 1998 (dollars in thousands):


                                       7

<PAGE>   8


<TABLE>
<CAPTION>
                                                          Three months ended       Six months ended
                                                                June 30,               June 30,
                                                         --------------------    --------------------
                                                           1999        1998        1999        1998
                                                         --------    --------    --------    --------
<S>                                                      <C>         <C>         <C>         <C>
TOTAL PROPERTY REVENUE:
Mixed-use office property                                $      -    $  3,570    $      -    $  7,273
Shopping center properties                                 37,345      27,379      76,410      52,929
                                                         --------    --------    --------    --------
                                                           37,345      30,949      76,410      60,202
                                                         --------    --------    --------    --------

TOTAL PROPERTY OPERATING EXPENSES:
Mixed-use office property                                       -       1,279           -       2,831
Shopping center properties                                 10,961       8,459      23,754      16,721
                                                         --------    --------    --------    --------
                                                           10,961       9,738      23,754      19,552
                                                         --------    --------    --------    --------
Net operating income                                       26,384      21,211      52,656      40,650
                                                         --------    --------    --------    --------

NON-PROPERTY (INCOME) EXPENSES:
Other non-property income                                    (213)        (92)       (501)       (194)
Equity in earnings of partnership, excluding
  depreciation and amortization                              (210)          -        (600)          -
Mortgage and other interest                                 7,182       6,585      14,869      12,143
General and administrative                                  1,866       1,717       4,067       3,120
Amortization of deferred finance and non-real estate
  related costs                                               280         226         559         467
Preferred share distributions                               1,826           -       3,652           -
Income allocated to Series B preferred units                1,109           -       1,565           -
                                                         --------    --------    --------    --------
                                                           11,840       8,436      23,611      15,536
                                                         --------    --------    --------    --------

Funds from Operations                                    $ 14,544    $ 12,775    $ 29,045    $ 25,114
                                                         ========    ========    ========    ========

RECONCILIATION TO NET INCOME ATTRIBUTABLE TO COMMON
SHARE OWNERS:
Funds from Operations                                    $ 14,544    $ 12,775    $ 29,045    $ 25,114
Depreciation of real estate assets and amortization of
  tenant improvements                                      (5,553)     (4,315)    (11,002)     (8,246)
Amortization of deferred leasing commissions                 (353)       (791)       (784)     (1,284)
Other amortization                                           (298)       (299)       (596)       (597)
Depreciation and amortization included in equity in
  earnings of partnership                                     (57)          -        (100)          -
Income allocated to exchangeable limited partnership
  units                                                      (452)       (406)       (921)       (797)
Provision for loss on real estate investment                    -           -           -        (875)
                                                         --------    --------    --------    --------

Net income attributable to common share owners           $  7,831    $  6,964    $ 15,642    $ 13,315
                                                         ========    ========    ========    ========
</TABLE>












                                       8

<PAGE>   9



ITEM 2   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

RESULTS OF OPERATIONS

Throughout 1998, we acquired 44 shopping centers and a 50% interest in a joint
venture that owned two neighborhood shopping centers and one enclosed mall for
an aggregate cost of approximately $362 million. Of these acquisitions, we
acquired 22 of the shopping centers and the joint venture interest in connection
with the merger acquisition of Mid-America in August 1998. During the second and
third quarters of 1998, we also completed the sales of two properties that did
not meet our strategic focus for an aggregate net sales price of $84 million,
resulting in a net gain of $29.7 million. This gain is net of a provision for
loss on real estate investment of $875,000 reflected in the first quarter of
1998.

During the second quarter of 1999, we completed the acquisitions of two shopping
centers for an aggregate purchase price of $13.9 million, and sold three
properties for an aggregate gross sales price of $17.3 million. During the
second quarter of 1999, we also acquired the 50% non-owned portion of the two
shopping centers held by the joint venture acquired in connection with the
merger acquisition of Mid-America. As a result, these two shopping centers are
consolidated for financial reporting purposes.

Differences in results of operations for the six and three-month periods ended
June 30, 1999 compared with the same periods in 1998 were driven in large part
from the acquisition activity. Including the provision for loss on real estate
investment in 1998, net income attributable to common share owners increased
$2,327,000, or 17%, from $13,315,000 in the first half of 1998 to $15,642,000 in
the first half of 1999. Basic and diluted net income per share increased $0.08
per share, or 14%, from $0.57 per share in the first half of 1998 to $0.65 per
share in the first half of 1999. For the quarter ended June 30, 1999, net income
attributable to common share owners increased $867,000, or 12%, from $6,964,000
in the quarter ended June 30, 1998 to $7,831,000 in the quarter ended June 30,
1999. Basic and diluted net income per share increased $0.04 per share, or 14%,
from $0.29 per share in the quarter ended June 30, 1998 to $0.33 per share in
the quarter ended June 30, 1999. Our results of operations for the first half of
1998 and 1999 reflect 51 properties that were held both six-month periods and 50
properties that we purchased or sold between the two periods. Our results of
operations for the second quarter of 1998 and 1999 reflect 56 properties that
were held both quarters and 45 properties that we purchased or sold between the
two periods.

Property Specific Revenues And Expenses (in thousands of dollars):

<TABLE>
<CAPTION>
                                          Six months ended
                                               June 30,                                      Properties
                                         ------------------                 Acquisitions/    Held Both
                                           1999       1998    Difference    Dispositions      Periods
                                         -------    -------   ----------    ------------     ----------
<S>                                      <C>        <C>        <C>             <C>            <C>
Rental income                            $75,582    $59,337    $16,245         $14,862        $ 1,383
Operations, maintenance and management    12,083      8,776      3,307           2,636            671
Real estate taxes                         11,671     10,776        895             752            143
Depreciation and amortization             12,941     10,594      2,347           2,402            (55)
</TABLE>

<TABLE>
<CAPTION>
                                         Three months ended
                                               June 30,                                      Properties
                                         ------------------                 Acquisitions/    Held Both
                                           1999       1998    Difference    Dispositions      Periods
                                         -------    -------   ----------    ------------     ----------
<S>                                      <C>        <C>        <C>             <C>            <C>
Rental income                            $36,872    $30,601    $ 6,271         $ 6,065        $   206
Operations, maintenance and management     5,405      4,443        962             966             (4)
Real estate taxes                          5,556      5,295        261             410           (149)
Depreciation and amortization              6,484      5,631        853           1,132           (279)
</TABLE>


Results attributable to acquisition and disposition activities:

Rental income increased from $59,337,000 in the first half of 1998 to
$75,582,000 in the first half of 1999 and from $30,601,000 in the second quarter
of 1998 to $36,872,000 in the second quarter of 1999. Approximately $14,862,000
of the increase during the six-month period was attributable to acquisition
activities, including $10,205,000 for properties acquired in connection with the
merger acquisition of Mid-America, partially offset by $6,208,000 attributable
to disposition activities, primarily One North State. Approximately $6,065,000
of the increase during the three-month period was attributable to acquisition
activities, including $4,987,000 for properties acquired in connection with the
merger acquisition of Mid-America, partially offset by $3,180,000 attributable
to disposition activities, primarily One North State.



                                       9

<PAGE>   10


Operations, maintenance and management expense increased from $8,776,000 in the
first half of 1998 to $12,083,000 in the first half of 1999 and from $4,443,000
in the second quarter of 1998 to $5,405,000 in the second quarter of 1999.
Approximately $2,636,000 of the increase during the six-month period was
attributable to acquisition and disposition activities, including an increase of
$1,830,000 for properties acquired in connection with the merger acquisition of
Mid-America. For the three-month period, approximately $966,000 of the increase
was attributable to acquisition and disposition activities, including an
increase of $849,000 for properties acquired in connection with the merger
acquisition of Mid-America.

Real estate taxes increased from $10,776,000 in the first half of 1998 to
$11,671,000 in the first half of 1999 and from $5,295,000 in the second quarter
of 1998 to $5,556,000 in the second quarter of 1999. Approximately $752,000 of
the increase during the six-month period was attributable to acquisition and
disposition activities, including an increase of $1,285,000 for properties
acquired in connection with the merger acquisition of Mid-America, partially
offset by a decrease of $1,655,000 for properties sold, primarily One North
State. For the three-month period, approximately $410,000 of the increase was
attributable to acquisition and disposition activities, including an increase of
$634,000 for properties acquired in connection with the merger acquisition of
Mid-America, partially offset by a decrease of $682,000 for properties sold,
primarily One North State.

Depreciation and amortization increased from $10,594,000 in the first half of
1998 to $12,941,000 in the first half of 1999 and from $5,631,000 in the second
quarter of 1998 to $6,484,000 in the second quarter of 1999. Approximately
$2,402,000 of the increase during the six-month period was attributable to
acquisition and disposition activities, including an increase of $949,000 for
properties acquired in connection with the merger acquisition of Mid-America.
For the three-month period, approximately $1,132,000 of the increase was
attributable to acquisition and disposition activities, including an increase of
$498,000 for properties acquired in connection with the merger acquisition of
Mid-America.

Results for properties fully operating throughout both periods:

Several factors affected the comparability of results for properties fully
operating throughout both six and three-month periods ended June 30, 1999 and
1998. Winter storms in the Midwest occurring during the first quarter of 1999
resulted in an increase in the level of snow removal expenses of approximately
$564,000 during the first half of 1999 compared with the first half of 1998.
This increase in operations, maintenance and management expense was mitigated by
the recoverability of such expenses through operating expense reimbursements,
which were $512,000 higher during the first half of 1999 compared with the first
half of 1998. Additionally, two large tenants, Montgomery Ward at Heritage
Square, and HomePlace at Har Mar Mall, vacated their respective stores during
1998 after declaring bankruptcy in July 1997 and January 1998, respectively.
Rental income decreased from the first half of 1998 at these two shopping
centers by $624,000 and $412,000, respectively, and by $302,000 and $303,000
respectively, during the second quarter of 1999 from the second quarter of 1998.
A 62,000 square-foot lease with Carson Pirie Scott commenced July 14, 1999,
which replaces approximately one half the space previously occupied by
Montgomery Ward. We are currently negotiating leases to replace the remaining
space previously occupied by Montgomery Ward and the space vacated by HomePlace.

Finally, our company, as well as most other real estate companies, was affected
by a consensus reached by the Emerging Issues Task Force ("EITF") of the
Financial Accounting Standards Board regarding the accounting for percentage
rents. On May 22, 1998, the EITF reached a consensus under Issue No. 98-9,
Accounting for Contingent Rent in Interim Financial Periods, that despite the
fact that the achievement of a future specified sales target of a lessee may be
considered as probable and reasonably estimable at some earlier point in the
year, a lessor should defer recognition of contingent rental income until such
specified targets are met. The pronouncement was effective May 23, 1998. Because
the majority of our retail tenant leases have sales years ending in December or
January, a substantial portion of percentage rental income from such leases is
now recognized in the first quarter, once it is determined that specified sales
targets have been achieved. Previously, we recognized percentage rental income
each period based on reasonable estimates of tenant sales. Largely due to the
implementation of EITF 98-9, therefore, percentage rental income for properties
held throughout both quarters ended June 30, 1999 and 1998 decreased by
$331,000. Percentage rental income for properties held throughout both six-month
periods ended June 30, 1999 and 1998 decreased by only $165,000 due to the
increase in percentage rents during the first quarter of 1999 from the first
quarter of 1998.

In addition to the changes in rental income described above, during the first
half of 1999 compared with the first half of 1998, rental income increased
$271,000 at Rollins Crossing and $179,000 at Burning Tree Plaza, due to a 71,000
square-foot lease with Regal Cinema at Rollins Crossing and a 24,000 square-foot
lease with Dunham's Athleisure at Burning Tree Plaza, both commencing in the
fourth quarter of 1998. For the second quarter of 1999 rental income for these
shopping centers increased $120,000 and $95,000, respectively from the second
quarter of 1998. Additionally, rental income increased $171,000 at Sun Ray
Shopping Center for the six-month period of 1999 due to an increase in tax
reimbursements primarily resulting from a tax abatement received in the first
quarter of 1998, contributing to an increase in real estate taxes of $171,000
from the six-month period in the prior year. Rental income increased $96,000 at
Brookdale Square for the six-month period of 1999 primarily due to the receipt
of a termination fee from Brookdale Cinema in the first quarter of 1999 and the
commencement of a 22,000 square-foot lease with Pep Boys. Rental income
increased at Speedway Super Center by $670,000 and $476,000 for the six and
three-month periods respectively, ended June 30, 1999 from the same periods in
the prior year due to the receipt of a termination fee from PetsMart in the
second quarter of 1999 and due to the commencement of several new leases.

                                       10

<PAGE>   11


Non-Property Specific Revenues and Expenses:

Other income increased from $1,059,000 during the first half of 1998 to
$1,329,000 during the first half of 1999, and from $440,000 for the second
quarter of 1998 to $686,000 for the second quarter of 1999. Other income
contains both property specific and non-property specific income; however, the
increase is primarily attributable to property specific sources. The increase in
other income resulted from an increase in other property income generated from
properties acquired during 1998, primarily from four enclosed malls acquired in
connection with the merger acquisition of Mid-America, partially offset by a
reduction in other income of $159,000 at Grandview Plaza for the six-month
period for insurance proceeds in excess of the net book value of assets
destroyed and costs incurred for a fire at Grandview Plaza in 1997 received and
recognized in the first quarter of 1998.

Mortgage and other interest expense increased from $12,143,000 during the first
half of 1998 to $14,869,000 during the first half of 1999, and from $6,585,000
for the second quarter of 1998 to $7,182,000 for the second quarter of 1999.
Mortgage debt of $37,933,000 assumed in connection with the merger acquisition
of Mid-America, as well as $25,753,000 in mortgage indebtedness assumed upon the
acquisitions of three additional shopping centers during 1998, partially offset
by the repayment in the third quarter of 1998 of mortgage notes secured by
Richfield Hub and Hub West aggregating $10 million, contributed to an increase
in interest expense of $1,686,000 for the six-month period and $817,000 for the
second quarter. A higher weighted average balance outstanding on the line of
credit during the first half of 1999 compared with the first half of 1998,
partially offset by a lower weighted average interest rate in 1999, resulted in
an increase in interest expense of $502,000. A slightly lower weighted average
balance outstanding on the line of credit during the second quarter of 1999
compared with the second quarter of 1998 resulting from the pay-down of
approximately $49,100,000 with net proceeds from the issuance on February 23,
1999 of Series B Preferred Units, combined with a slightly lower weighted
average interest rate, resulted in a decrease in interest expense of $256,000
for the second quarter of 1999 compared with the second quarter of 1998. On
January 28, 1998, the Operating Partnership issued $100 million, 7.2% ten-year
unsecured Notes maturing January 15, 2008. Proceeds from the offering were used
to reduce outstanding borrowings under the line of credit, which had been
increased throughout 1997 primarily to fund acquisition activity. Interest
incurred on these unsecured Notes in the first half of 1998 amounted to
$6,829,000 compared with $7,403,000 for the full six months in 1999, an increase
of $574,000. Our total weighted average interest rate decreased to 7.05% for the
second quarter of 1999 from 7.20% for the second quarter of 1998.

General and administrative expense increased from $3,120,000 during the first
half of 1998 to $4,067,000 during the first half of 1999, and from $1,717,000
for the quarter ended June 30, 1998 to $1,866,000 for the quarter ended June 30,
1999. The increase primarily resulted from the growth of the Company, including
increases in salaries for additional personnel, investor relations for a larger
share owner base, and franchise taxes and related fees for a larger equity base
and expanded geographic market.

While the capital markets for REITs have remained challenging, during February
1999, we took advantage of an opportunity to replace $50 million of short term
floating rate debt under the line of credit with the issuance of 8.875% Series B
Cumulative Redeemable Perpetual Preferred Units (the "Series B Preferred
Units"). Although the spread between the interest rate currently available under
the line of credit facility and the rate associated with the Series B Preferred
Units is dilutive in the short-term, the infusion of such permanent capital
reduced the amount of outstanding indebtedness and increased the capacity under
the line of credit, providing us with additional flexibility to take advantage
of the favorable acquisition, development, and redevelopment opportunities we
continue to identify from both prospective acquisitions in our target markets
and from shopping centers in our core portfolio. Distributions on the Series B
Preferred Units were $1,565,000 during the first half of 1999, and $1,109,000
during the quarter ended June 30, 1999, the first full quarterly period that the
Series B Preferred Units have been outstanding.

Distributions on the Series A Convertible Preferred Stock issued in connection
with the merger acquisition of Mid-America in August 1998 were $3,652,000 for
the first half of 1999, and $1,826,000 during the second quarter of 1999.

LIQUIDITY AND CAPITAL RESOURCES

General

We fund operating expenses and distributions primarily from operating cash
flows, although we may also use our bank line of credit for these purposes. We
fund acquisitions and capital expenditures primarily from the line of credit
and, to a lesser extent, operating cash flows, as well as through the issuance
of securities. We may also acquire properties through the direct issuance of
debt and equity securities of the Company, or through the issuance of limited
partnership units in the Operating Partnership to the seller or contributor of
the acquired properties. Additionally, we may dispose of certain non-core
properties, reinvesting the proceeds from such dispositions into properties with
better growth potential and that are more consistent with our strategic focus.
In addition, we may acquire partial interests in real estate assets through
participation in joint venture transactions.

We focus our investment activities on community and neighborhood shopping
centers, primarily located in the midwestern United States, anchored by regional
and national grocery store chains. We will continue to seek acquisition
opportunities of individual properties and property portfolios and of private
and public real estate entities in both primary and secondary Midwest markets,
where we can utilize our

                                       11

<PAGE>   12


extensive experience in shopping center renovation, expansion, re-leasing and
re-merchandising to achieve long-term cash flow growth and favorable investment
returns. Additionally, we expect to continue to engage in development
activities, either directly or through contractual relationships with
independent development companies, to develop community and neighborhood
shopping centers in selected Midwest markets where we anticipate that value can
be created from new developments more effectively than from acquisitions of
existing shopping center properties. We would also consider investment
opportunities in markets beyond the Midwest in the event such opportunities were
on a scale that enabled us to actively manage, lease, develop and redevelop
shopping centers consistent with our focus that create favorable investment
returns and increase value to our share owners.

We consider our liquidity and ability to generate cash from operating and from
financing activities to be sufficient to meet our operating expense, development
costs, debt service and distribution requirements for at least a year. Despite a
current difficult capital markets environment for REITs, we also believe we have
sufficient liquidity and flexibility to be able to continue to take advantage of
favorable acquisition and development opportunities. However the utilization of
available liquidity for such opportunities will be carefully calibrated to
changing market conditions.

As of June 30, 1999, our financial liquidity was provided by $108,000 in cash
and cash equivalents and by the unused balance on our bank line of credit of
$129.1 million. As of June 30, 1999, we were holding for sale three properties
with an aggregate book value of $30.1 million. We expect to complete the sales
of these properties during the second half of 1999, although we can give no
assurance that any such sales will occur. Proceeds received from a sale of any
of such properties would provide us with additional liquidity. In addition, we
have an effective "shelf" registration statement under which the Company may
issue up to $201.4 million in equity securities, and an additional "shelf"
registration statement under which the Operating Partnership may issue up to
$400 million in unsecured, non-convertible investment grade debt securities. The
"shelf" registration statements provide the Company and its Operating
Partnership with the flexibility to issue additional equity or debt securities
from time to time when we determine that market conditions and the opportunity
to utilize the proceeds from the issuance of such securities are favorable. The
Operating Partnership has also implemented a Medium-Term Note program providing
it with the added flexibility of issuing Medium-Term Notes due nine months or
more from date of issue in varying amounts in an aggregate principal amount of
up to $150 million from time to time using the debt "shelf" registration in an
efficient and expeditious manner.

Mortgage debt outstanding at June 30, 1999 consisted of fixed-rate notes
totaling $102.0 million with a weighted average interest rate of 7.51% maturing
at various dates through 2016. Short-term liquidity requirements include debt
service payments due within one year. Scheduled principal payments of mortgage
debt totaled $823,000 during the six-month period ended June 30, 1999, with
another $1.2 million of scheduled principal amortization due for the remainder
of the year. We have no maturing debt until February 2000, when $6.0 million in
mortgage debt becomes due, and December 2000, when the line of credit expires.
While we currently expect to fund short-term and long-term liquidity
requirements primarily through a combination of issuing additional investment
grade unsecured debt securities and equity securities and with borrowings under
the bank line of credit, there can be no assurance that we will be able to repay
or refinance indebtedness on commercially reasonable or any other terms.

Operating Activities

Net cash flows provided by operating activities increased to $31,790,000 during
the first half of 1999, from $29,197,000 during the same period in 1998. This
increase occurred despite an increase of $7,141,000 in interest paid, net of
amount capitalized, from $8,358,000 during the first half of 1998 to $15,499,000
during the first half of 1999, while interest expense increased during these
same periods by only $2,726,000. The increase in interest payments primarily
resulted from a $3,600,000 semi-annual interest payment due January 1999 on $100
million of 7.2% ten-year bonds, accrued in the prior year. Excluding the
semi-annual interest payment, cash provided by operating activities increased
$6,193,000. This increase is primarily due to the growth of our portfolio, from
53 properties at January 1, 1998 (66 properties at June 30, 1998), to 96
properties at June 30, 1999.

For the six months ended June 30, 1999, funds from operations ("FFO") increased
$3,931,000, or 16%, from $25,114,000 to $29,045,000. For the three months ended
June 30, 1999, FFO increased $1,769,000, or 14%, from $12,775,000 to
$14,544,000. The Company generally considers FFO to be a relevant and meaningful
supplemental measure of the performance of an equity REIT because it is
predicated on a cash flow analysis, contrasted with net income, a measure
predicated on generally accepted accounting principles which gives effect to
non-cash items such as depreciation. We compute FFO in accordance with the March
1995 "White Paper" on FFO published by the National Association of Real Estate
Investment Trusts ("NAREIT"), as income before allocation to minority interest
(computed in accordance with generally accepted accounting principles),
excluding gains or losses from debt restructuring and sales of property, plus
depreciation and amortization, and after preferred stock distributions and
adjustments for unconsolidated partnerships. Adjustments for unconsolidated
partnerships are computed to reflect FFO on the same basis. In computing FFO, we
do not add back to net income the amortization of costs incurred in connection
with our financing activities or depreciation of non-real estate assets. 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 cash flow as a measure of liquidity. Since the NAREIT White Paper
provides guidelines only for computing FFO, the computation of FFO may vary from
one REIT to another. FFO is not necessarily indicative of cash available to fund
cash needs.


                                       12

<PAGE>   13


Investing Activities

Net cash flows from investing activities increased to a use of cash of
$7,728,000 during the first half of 1999, from a use of cash of $111,952,000
during the same period in 1998. During the first half of 1999, we completed the
acquisitions of two shopping centers located in Michigan and Ohio aggregating
264,000 square feet for an aggregate purchase price of approximately
$13,853,000, and sold three properties aggregating 434,000 square feet for an
aggregate net sales price of $16,899,000. During this period, we also acquired
the 50% non-owned portion of two shopping centers held by our joint venture
acquired in connection with the merger acquisition of Mid-America, for a
purchase price of approximately $7,750,000. The acquisition of the 50% non-owned
portion of the joint venture was completed after the joint venture sold an
enclosed mall to a third party for $12,100,000, including the assumption of a
$3,100,000 note receivable. Cash distributions received from the joint venture
during the first half of 1999 amounted to $3,943,000.

During the first half of 1998, we completed the acquisitions of fourteen
shopping centers located in Illinois, Indiana, Kentucky, Michigan and Wisconsin
aggregating 1.7 million square feet for an aggregate purchase price of
approximately $111,783,000, and completed the sale of one shopping center for a
net sales price of $1,869,000.

Financing Activities

Net cash flows from financing activities decreased to a use of cash of
$23,954,000 during the first half of 1999 from a source of cash of $79,703,000
during the same period in 1998. Distributions to common and preferred share
owners, as well as to the minority interest, were $24,063,000 in the first half
of 1999, and $17,538,000 in the first half of 1998.

The two shopping centers acquired during the first half of 1999 were acquired
with cash provided by our line of credit. Of the fourteen shopping centers
acquired during the first half of 1998, thirteen were acquired with cash
provided by our line of credit, and one was acquired with a combination of cash
provided by the line of credit and the assumption of $5,173,000 in non-recourse
mortgage indebtedness.

On February 23, 1999, we issued two million 8.875% Series B Cumulative
Redeemable Perpetual Preferred Units to two institutional investors at a price
of $25.00 per unit. Net proceeds from the issuance of approximately $49.1
million were used to reduce outstanding borrowings under the line of credit,
strengthening our capital structure, replacing floating rate debt with permanent
capital, and thereby adding liquidity, flexibility and additional capital to
fund our acquisition and development activities.

In the prior year period, we issued $100 million, 7.2% ten-year unsecured Notes
maturing January 15, 2008, and issued 392,638 shares of common stock to a unit
investment trust, raising net proceeds of $7,489,000. Proceeds from the
offerings were used to reduce outstanding borrowings under the line of credit.

Capital Strategy

We continue to identify favorable acquisition, development, and redevelopment
opportunities from both prospective acquisitions in our target markets and from
shopping centers in our core portfolio. We have expanded our internal
development capabilities to take advantage of such higher yielding investment
opportunities, which we expect to result in part from our existing relations
with the dominant grocery store operators in our Midwest markets. During the
second quarter of 1999, we continued the redevelopment of Prospect Plaza,
located in Gladstone, Missouri, and acquired two additional redevelopment
projects, Cherry Hill Marketplace located in Westland, Michigan, and 30th Street
Plaza located in Canton, Ohio. The redevelopment of Prospect Plaza is expected
to be complete in early 2000, with the redevelopments of Cherry Hill Marketplace
and 30th Street Plaza expected to be completed later in 2000. During the first
quarter of 1999, we finalized the necessary leasing transactions to commence our
planned redevelopment of the Commons of Chicago Ridge, a shopping center in our
core portfolio located in metropolitan Chicago. These projects are the types of
redevelopment investment opportunities upon which we will continue to focus. The
redevelopments will represent an incremental investment of approximately $32
million, and are expected to generate high returns on invested capital while
adding substantial long-term value to the centers. We also continue to establish
a pipeline of development opportunities and potential acquisitions of shopping
centers where our redevelopment experience can create similar enhanced returns.
We expect to finance these acquisition, development, and redevelopment
opportunities with a combination of proceeds from the sale of non-core assets,
retained cash, external capital and possible joint ventures.

Year 2000 Issues

Many existing computer software programs and operating systems were designed
such that the year 1999 is the maximum date that they will be able to process
accurately. The failure of our computer software programs and operating systems
to process the change in calendar year from 1999 to 2000 may result in system
malfunctions or failures. In the conduct of our operations, we rely on equipment
manufacturers and commercial computer software primarily provided by independent
software vendors, and we have undertaken an assessment of our vulnerability to
the so-called "Year 2000 issue" with respect to our equipment and computer
systems.

We have undertaken a five-step program in order to achieve Year 2000 readiness,
including:

                                       13

<PAGE>   14


-    Awareness - Education involving all levels of Bradley personnel regarding
     Year 2000 implications.

-    Inventory - Creating a checklist and conducting surveys to identify Year
     2000 compliance issues in all systems, including both mechanical and
     information systems. The surveys were also designed to identify critical
     outside parties such as banks, tenants, suppliers and other parties with
     whom we do a significant amount of business, for purposes of determining
     potential exposure in the event such parties are not Year 2000 compliant.

-    Assessment - Based upon the results of the inventory and surveys, assessing
     the nature of identified Year 2000 issues and developing strategies to
     bring our systems into substantial compliance with respect to Year 2000.

-    Correction and Testing - Implementing the strategy developed during the
     assessment phase.

-    Implementation - Incorporating repaired or replaced systems into our
     systems environment.

The program, which is ongoing, has yielded the following conclusions:

With respect to our potential exposure to information technology systems,
including our accounting and lease management systems, we believe that such
commercial software is Year 2000 ready. This assessment is based upon
installation and testing of upgraded software provided by software vendors, as
well as formal and informal communications with software vendors and literature
supplied with certain software.

In the operation of our properties, we have acquired equipment with embedded
technology such as microcontrollers which operate heating, ventilation and air
conditioning systems ("HVAC"), fire alarms, security systems, telephones and
other equipment utilizing time-sensitive technology. We have evaluated the
potential exposure to such non-information technology systems and believe that
such equipment is Year 2000 ready. This assessment is based upon formal and
informal communications with software vendors, literature supplied with the
software, literature supplied in connection with maintenance contracts, and test
evaluations of the software and equipment.

We have incurred less than $50,000 to bring our information technology systems
and equipment with embedded time-sensitive technology Year 2000 ready, and do
not expect to incur more the $10,000 to continue to monitor our Year 2000
readiness.

The failure of our tenants' or suppliers' computer software programs and
operating systems to process the change in calendar year from 1999 to 2000 may
also result in system malfunctions or failures. Such an occurrence would
potentially affect the ability of the affected tenant or supplier to operate its
business and thereby raise adequate revenue to meet its contractual obligations
to us. As a result, we may not receive revenue or services we had otherwise
expected to receive pursuant to existing leases and contracts. We have completed
an inventory of the tenants, suppliers and other parties with whom we do a
significant amount of business and have conducted surveys of such parties to
identify the potential exposure in the event they are not Year 2000 ready in a
timely manner. Based on the responses received, we are not aware of any party
that is anticipating a material Year 2000 readiness issue. Although the
investigations and assessments of possible Year 2000 issues are still ongoing,
we do not anticipate a material impact on our business, operations or financial
condition even if one or more parties is not Year 2000 ready in a timely manner,
because the number and nature of our tenant base are diverse, and because we do
not rely on a concentration of suppliers and other parties to conduct our
business.

Although we are aware that we may not, in fact, be Year 2000 ready upon the year
2000, at this time we have not adopted a contingency plan for the conduct of our
own operations because we expect to be Year 2000 ready in advance of 2000.
However, we will continue to monitor our progress and state of readiness, and
will be prepared to adopt a contingency plan with respect to areas in which
evidence arises that we may not become Year 2000 ready in sufficient time. It is
possible that an aggregation of tenants, suppliers, and other parties who
experience Year 2000 related system malfunctions or failures may have a material
impact on our business, operations, and financial condition. Although we believe
that we will be able to adopt appropriate contingency plans to deal with any
Year 2000 readiness issue that any other party, excluding public utilities, with
whom we have significant relationships may experience as we continue our Year
2000 assessment and testing, we cannot be certain at this time that such
contingency plans will be effective in limiting the harm caused by such third
parties' system malfunctions and failures.

The reasonably likely worst case scenario that could affect our operations would
be a widespread prolonged power failure affecting a substantial portion of the
midwestern states in which our shopping centers are located. In the event of
such a widespread prolonged power failure, a significant number of tenants may
not be able to operate their stores and, as a result, their ability to pay rent
could be substantially impaired. We are not aware of an economically feasible
contingency plan which could be implemented to prevent such a power failure from
having a material adverse effect on our operations.




                                       14

<PAGE>   15


FORWARD LOOKING STATEMENTS

Statements made or incorporated in this Form 10-Q include "forward-looking"
statements. Forward-looking statements include, without limitation, statements
containing the words "anticipates," "believes," "expects," "intends," "future,"
and words of similar import which express our belief, expectations or intentions
regarding our future performance or future events or trends. We caution you
that, while forward-looking statements reflect our good faith beliefs, they are
not guarantees of future performance and involve known and unknown risks,
uncertainties and other factors, which may cause actual results, performance or
achievements to differ materially from anticipated future results, performance
or achievements expressed or implied by such forward-looking statements as a
result of factors outside of our control. Certain factors that might cause such
a difference include, but are not limited to, the following: Real estate
investment considerations, such as the effect of economic and other conditions
in general and in the midwestern United States in particular; the financial
viability of our tenants; the continuing availability of retail center
acquisitions and development opportunities in the Midwest on favorable terms;
the availability of equity and debt capital in the public markets; the fact that
returns from development and acquisition activity may not be at expected levels;
the need to renew leases or relet space upon the expiration of current leases;
and the financial flexibility to refinance debt obligations when due. The
statements made under the caption "Risk Factors" included in the Company's Form
10-K for 1998 are incorporated herein by reference.






















                                       15

<PAGE>   16


PART II - OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS
               Not applicable

Item 2.  CHANGES IN SECURITIES
               Not applicable

Item 3.  DEFAULTS UPON SENIOR SECURITIES
               Not applicable

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

At the Company's Annual Meeting of Stockholders held May 13, 1999, shares were
voted on the following matter (number of shares rounded to nearest full share):

               Election of Directors:

               Nominee                      For             Withheld
               -------                      ---             --------

               Thomas P. D'Arcy          23,274,748         105,386
               Joseph E. Hakim           23,259,913         120,221
               William L. Brown          23,256,339         123,795

Item 5.  OTHER INFORMATION
               Not applicable

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)   Exhibit No.        Description
               -----------        -----------

               10.3            Amendment to 1993 Stock Option and Incentive
                               Plan, dated May 13, 1999.

               10.4            Form of Severance Benefit Agreement entered into
                               with each of Thomas P. D'Arcy, President and
                               Chief Executive Officer; Richard L. Heuer,
                               Executive Vice President; Irving E. Lingo, Jr.,
                               Executive Vice President and Chief Financial
                               Officer; E. Paul Dunn, Executive Vice President
                               of Asset Management; Steven St. Peter, Executive
                               Vice President of Leasing; Marianne Dunn, Senior
                               Vice President; Frank J. Comber, Vice President
                               of Construction; and David M. Garfinkle, Vice
                               President and Controller.

               27              Financial Data Schedule

         (b)   Reports on Form 8-K
               -------------------
               Not applicable











                                       16

<PAGE>   17


                                   SIGNATURES

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

Date: August 12, 1999


                                          Bradley Real Estate, Inc.
                                                  Registrant



                                          By:   /s/ Thomas P. D'Arcy
                                             -------------------------------
                                              Thomas P. D'Arcy
                                              President and CEO


                                          By:   /s/ Irving E. Lingo, Jr.
                                             -------------------------------
                                              Irving E. Lingo, Jr.
                                              Chief Financial Officer




















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