SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                   ----------

                                   FORM 10-Q

(Mark One)
  X  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

                       For the quarter 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: 1-8073


                                  CV REIT, INC.
             (Exact name of registrant as specified in its charter)


     Delaware                           59-0950354
(State of Incorporation)      (I.R.S. Employer Identification No.)



100 Century Boulevard, West Palm Beach, Florida              33417
  (Address of principal executive offices)                (Zip Code)


Registrant's telephone number, including area code:  561-640-3155

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

                                         Name of each exchange
   Title of each class                    on which registered

 Common stock, par value               New York Stock Exchange
     $.01 per share



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 (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

<PAGE>
                                       2


                         CV REIT, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             (dollars in thousands)



                                                         June 30,        Dec.31,
               ASSETS                                      1999           1998
                                                          --------      --------

Real estate - income producing,
  net of accumulated depreciation ..................      $172,950      $142,408
Real estate mortgage notes
  receivable .......................................        64,312        64,988
Investments in unconsolidated affiliates ...........         3,061         3,323
Cash and cash equivalents (includes
  $882 and $930 restricted) ........................         6,280         4,775
Other real estate (net of allowance
  for losses of $2,401) ............................         5,490         5,463
Other ..............................................         6,617         4,465
                                                          --------      --------
                                                          $258,710      $225,422
                                                          ========      ========

     LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
  Borrowings .......................................      $157,439      $121,933
  Accounts payable and other
    liabilities ....................................         5,977         6,282
                                                          --------      --------
      Total liabilities ............................       163,416       128,215
                                                          --------      --------
Minority interests in Operating
  Partnership ......................................        16,984        17,650
                                                          --------      --------

Stockholders' equity:
  Common stock, $.01 par-shares authorized
    20,000,000; outstanding 7,966,621 ..............            80            80
  Additional paid-in capital .......................        18,490        18,490
  Retained earnings ................................        59,740        60,987
                                                          --------      --------
      Total stockholders' equity ...................        78,310        79,557
                                                          --------      --------
                                                          $258,710      $225,422
                                                          ========      ========



          See accompanying notes to consolidated financial statements.

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                                       3



                         CV REIT, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                  (dollars in thousands, except per share data)



                                   Three Months Ended     Six Months Ended
                                         June 30,              June 30,
                                ----------------------  ------------------------
                                   1999         1998         1999         1998
                                ---------  -----------  -----------  -----------
Revenues:
  Rent ........................ $   6,480  $     3,743  $    12,049  $     6,537
  Interest, principally from
    mortgage notes ............     2,008        2,250        4,021        4,704
                                ---------  -----------  -----------  -----------
                                    8,488        5,993       16,070       11,241
                                ---------  -----------  -----------  -----------
Expenses:
  Interest ....................     2,958        1,883        5,424        3,318
  Operating ...................     1,873        1,120        3,581        1,974
  General and administrative ..       495          369          875          718
  Depreciation and amortization     1,040          585        1,913        1,029
                                ---------  -----------  -----------  -----------
                                    6,366        3,957       11,793        7,039
                                ---------  -----------  -----------  -----------
                                    2,122        2,036        4,277        4,202

Equity in income of unconsoli-
  dated affiliates ............        (2)         122           15          253
Gain on sale of real estate ...      --          2,347         --          2,347
Non-recurring professional fees      (285)        --           (285)        --
Minority interests in income
  of Operating Partnership ....     (290)        (825)        (633)      (1,245)
                                ---------  -----------  -----------  -----------
Net income .................... $   1,545  $     3,680  $     3,374  $     5,557
                                =========  ===========  ===========  ===========


Per common share:
  Net income, basic and diluted $     .19  $       .46  $       .42  $       .70
                                =========  ===========  ===========  ===========
  Dividends declared .......... $     .29  $       .29  $       .58  $       .58
                                =========  ===========  ===========  ===========
  Average common shares
    outstanding:
      Basic ................... 7,966,621    7,966,621    7,966,621    7,966,621
                               ==========  ===========  ===========  ===========
      Diluted ................. 7,966,621    7,966,621    7,966,621    7,969,844
                               ==========  ===========  ===========  ===========



          See accompanying notes to consolidated financial statements.



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                                       4


                 CV REIT, INC. AND SUBSIDIARIES
          CONSOLIDATED STATEMENT OF RETAINED EARNINGS
                         (in thousands)







Balance at December 31, 1998 ...............................           $ 60,987

Net income for the six months
  ended June 30, 1999 ......................................              3,374

Dividends declared .........................................             (4,621)
                                                                       --------

Balance at June 30, 1999 ...................................           $ 59,740
                                                                       ========




          See accompanying notes to consolidated financial statements.



<PAGE>
                                       5


                         CV REIT, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)


                                                             Six Months Ended
                                                                  June 30,
                                                           --------------------
                                                              1999        1998
                                                           --------    --------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income ...........................................   $  3,374    $  5,557
  Adjustments to reconcile net income to
    net cash provided by operating activities:
      Depreciation and amortization ....................      1,913       1,029
      Equity in depreciation and amortization of
        unconsolidated affiliates ......................         91          86
      Minority interests in income of
        Operating Partnership ..........................        633       1,245
      Gain on sale of real estate ......................       --        (2,347)
      Changes in assets and liabilities, net
         of effects from acquisitions:
           (Increase) decrease in other assets .........       (948)     (2,163)
           (Decrease) increase in accounts
              payable and other liabilities ............       (379)         83
                                                           --------    --------
Net cash provided by operating activities ..............      4,684       3,490
                                                           --------    --------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Acquisitions of real estate ..........................       (402)    (17,127)
  Capital improvements .................................       (974)       (201)
  Fundings on real estate mortgage notes ...............       --        (5,190)
  Collections on real estate mortgage notes ............        676      16,764
  Proceeds from the sale of real estate ................       --         4,151
  Other ................................................        192         (96)
                                                           --------    --------
Net cash used in investing activities ..................       (508)     (1,699)
                                                           --------    --------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from borrowings .............................     24,858       7,650
  Repayments of borrowings .............................    (21,438)     (3,419)
  Cash dividends paid ..................................     (4,627)     (4,624)
  Distributions to minority interests ..................       (870)       (519)
  Redemption of Operating Partnership units ............       (546)       --
                                                           --------    --------
Net cash used in financing activities ..................     (2,623)       (912)
                                                           --------    --------
Net increase in unrestricted cash and
  cash equivalents .....................................      1,553         879
Unrestricted cash and cash equivalents at
  beginning of the period ..............................      3,845      11,954
                                                           --------    --------
Unrestricted cash and cash equivalents at
  end of the period ....................................   $  5,398    $ 12,833
                                                           ========    ========


<PAGE>
                                       6


                         CV REIT, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)



                                                            Six Months Ended
                                                                  June 30,
                                                           --------------------
                                                             1999        1998
                                                           --------    --------

Supplemental disclosure of cash flow information:
  Cash paid for interest ...............................   $  5,174    $  3,054
                                                           ========    ========


Acquisitions:
  Fair value of assets acquired ........................   ($32,685)   ($61,751)
  Liabilities assumed or incurred ......................     32,283      44,474
  Operating Partnership units issued ...................       --           150
                                                           --------    --------
  Cash paid for acquisitions, net of cash acquired .....   ($   402)   ($17,127)
                                                           ========    ========




          See accompanying notes to consolidated financial statements.


<PAGE>
                                       7


                         CV REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




(1) Organization, Business and Basis of Presentation

Organization and Business

CV Reit, Inc. ("CV Reit") is a real estate investment trust ("REIT") which until
December 31, 1997, was principally  engaged in investing in real estate mortgage
notes. Effective December 31, 1997, CV Reit and its subsidiaries converted to an
Umbrella Partnership REIT (UPREIT) structure as part of a series of transactions
which closed on that date and which included the following:  (1) a newly created
Operating Partnership, Montgomery CV Realty L.P. (together with its wholly-owned
subsidiaries hereinafter collectively referred to as the "OP"), acquired 100% of
the ownership interests in ten commercial  properties,  and an approximately 95%
economic interest in Drexel Realty,  Inc.  ("Drexel"),  a real estate management
and  leasing  company  and  (2)  CV  Reit  and  its   subsidiaries   transferred
substantially  all of their net assets (or the economic  benefit thereof) to the
OP.  As a  result,  CV  Reit,  through  a  wholly-owned  subsidiary,  indirectly
currently  owns  84.5% of the OP,  is the OP's  sole  general  partner  and is a
self-administered,  self-managed  equity REIT. As of June 30, 1999, the OP owned
19 shopping centers and two office buildings, located in the Mid-Atlantic region
and Florida aggregating over 1.8 million square feet.


Basis of Presentation

The accompanying  consolidated  financial  statements include the accounts of CV
Reit and all subsidiaries  ("the  Company"),  including the OP. The Company owns
99% of the non-voting  common stock and a 95% economic  interest in Drexel,  and
owns 45%-50% interests in certain real estate partnerships,  which are accounted
for on the equity method.  Significant  intercompany  accounts and  transactions
have been eliminated in consolidation.

The consolidated  financial statements included herein have been prepared by the
Company,  without audit, pursuant to the rules and regulations of the Securities
and Exchange  Commission.  Certain information and footnote disclosures normally
included in financial  statements prepared in accordance with generally accepted
accounting  principles have been  consolidated or omitted pursuant to such rules
and regulations; however, the Company believes that the disclosures are adequate
to make the  information  presented not  misleading.  It is suggested that these
consolidated  financial  statements  be read in  conjunction  with the financial
statements and the notes thereto included in the Company's annual report on Form
10-K for the fiscal year ended December 31, 1998.

The consolidated  financial  statements for the interim periods included herein,
which are  unaudited,  include,  in the opinion of management,  all  adjustments
(consisting only of normal recurring  accruals)  necessary to present fairly the
financial  position  and  results of  operations  of the Company for the periods
presented.  The  results  of  operations  for  interim  periods  should  not  be
considered indicative of results to be expected for the full year.



<PAGE>
                                       8

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 revenues could differ from those estimates.


(2)  Real Estate - Income Producing ("Real Estate")

(a) Real Estate is located in the  Mid-Atlantic  region and Florida and consists
of (in thousands):
                                                          June 30,     Dec. 31,
                                                            1999         1998
                                                         ---------    ---------

Shopping centers .....................................   $ 172,616    $ 140,212
Office buildings .....................................       5,345        5,338
                                                         ---------    ---------
Totals ...............................................     177,961      145,550

Less accumulated depreciation ........................      (5,011)      (3,142)
                                                         ---------    ---------
Net Real Estate ......................................   $ 172,950    $ 142,408
                                                         =========    =========


(b) On March 31, 1999,  the OP purchased an  approximately  202,499  square foot
shopping center,  located in New Jersey,  for a purchase price of $24.6 million,
including transaction costs, substantially all of which was financed by mortgage
debt. The OP was required to deposit an additional $1 million with the lender in
connection with future capital improvements.

On May 18, 1999, the OP purchased an  approximately  75,000 square foot shopping
center, located in Pennsylvania,  for a purchase price of $6.8 million including
transaction costs, substantially all of which was financed by mortgage debt.

The  acquisitions  were accounted for as purchases;  accordingly,  the operating
results of the net assets  acquired are included in the  consolidated  financial
statements from their respective purchase dates.

In addition,  the OP has several pending acquisitions of shopping centers for an
aggregate  purchase  price  of $24  million.  See  Management's  Discussion  and
Analysis of Results of  Operations  and  Financial  Condition  -  Liquidity  and
Capital   Resources  -  Acquisitions   for  a  discussion  of  these   potential
acquisitions.

(c) Real Estate with a net book value of $167.4  million,  at June 30, 1999,  is
pledged as collateral for borrowings (Note 4).


<PAGE>
                                       9


(3)  Real Estate Mortgage Notes Receivable

At June 30, 1999, the Company's real estate mortgage notes receivable  consisted
of $24.8 million due from Hilcoast  Development Corp. (the "Hilcoast  Recreation
Note"),  collateralized  by first mortgages on the recreation  facilities at the
Century  Village at Pembroke  Pines adult  condominium  community  in  southeast
Florida, and $39.5 million,  collateralized by first mortgages on the recreation
facilities at the three  previously  completed  Century  Village  communities in
southeast  Florida   (collectively,   the  "Recreation   Notes").  The  Hilcoast
Recreation  Note  provides  for  self-amortizing  equal  monthly  principal  and
interest  payments due through July 31, 2023,  bears  interest at 11% per annum,
and may not be prepaid by Hilcoast without a prepayment  penalty.  The remaining
Recreation Notes principally provide for self-amortizing equal monthly principal
and interest  payments due through 2012,  with interest rates  averaging 13% per
annum,  and contain certain  prepayment  prohibitions.  The Recreation Notes are
pledged as collateral for borrowings (Note 4).


(4)  Borrowings

Borrowings consist of (in thousands):
                                                              June 30,  Dec. 31,
                                                                 1999     1998
Mortgage notes payable through September                      --------  --------
  2008, interest ranging from 6.09% to
  10.28%, collateralized by Real Estate
  (Note 2) .................................................. $ 79,236  $ 74,528

Mortgage notes payable in November 2000 under
  $100 million credit facility, interest at one
  month LIBOR (5.24% at June 30, 1999) plus
  1.75%, collateralized by Real Estate (Note 2)
  and the Hilcoast Recreation Note (Note 3)
  See Management's Discussion and Analysis of
  Results of Operations and Financial Condition -
  Liquidity and Capital Resources - Borrowings
  for a description of the terms .............................  49,036    16,950

Collateralized Mortgage Obligations, net of
  unamortized discount of $496,000 and
  $584,000 based on an  effective  interest
  rate of 8.84%,  collateralized  by
  certain of the Recreation Notes (Note 3),
  quarterly  self-amortizing principal
  and interest payments required
  through March 2007 .........................................  29,167    30,455
                                                              --------  --------
          Totals ............................................ $157,439  $121,933
                                                              ========  ========


The Company has three interest rate swap  contracts  with an aggregate  notional
amount of $28.7 million. Two of the contracts,  which expire in March 2004, have
been outstanding  since March 1999 and the third contract,  which expires in May
2004,  has been  outstanding  since May 1999.  The  interest  rate swaps have an
effective interest rate of 6.63%.


<PAGE>
                                       10


(5)  Segment Reporting

Statement of Financial Accounting Standards No. 131, "Disclosures about Segments
of an Enterprise and Related Information",  requires disclosure of financial and
descriptive  information about the Company's reportable operating segments.  The
operating  segments presented are the segments of the Company for which separate
financial  information  is  available  and  operating  performance  is evaluated
regularly  by senior  management  in deciding how to allocate  resources  and in
assessing  performance.  The Company  evaluates the performance of its operating
segments  generally  based on net operating  income  (before and after  interest
expense) and Funds From  Operations  ("FFO" - see  Management's  Discussion  and
Analysis of Results of Operations  and  Financial  Condition for a definition of
FFO and a reconciliation of FFO to net income).

Effective  December 31, 1997,  the Company  became an equity REIT engaged in the
acquisition,  leasing and  management  of  neighborhood  or  community  shopping
centers,  located in  Pennsylvania,  New Jersey and Florida.  Prior to 1998, the
Company's  only  principal  business  segment  consisted of  investments in real
estate mortgage notes. Although the Company no longer invests in new real estate
mortgage  notes,  it continues to hold its  Recreation  Notes (Note 3) and, as a
result,  the  following  segment  disclosure   includes   information  on  those
investments (in thousands):

                                          Income
                                       Producing
                                    Real Estate,     Real
                                     Principally     Estate
                                        Shopping    Mortgage
                                         Centers     Notes    Other Consolidated
                                         -------     ------   ------   ---------
Quarter Ended June 30, 1999:

Rent revenues .......................    $ 6,461     $ --      $ 19     $ 6,480
                                         =======     ======    ====     =======
Real estate net operating
  income ............................    $ 4,627     $ --      $(20)    $ 4,607

Net interest income (expense) .......     (2,122)     1,140      32        (950)
                                         -------     ------    ----     -------
Net operating income after
  net interest ......................    $ 2,505     $1,140    $ 12     $ 3,657
                                         =======     ======    ====     =======
FFO - OP ............................                                   $ 3,204
                                                                        =======


Quarter Ended June 30, 1998:

Rent revenues .......................    $ 3,684     $ --      $ 59     $ 3,743
                                         =======     ======    ====     =======
Real estate net operating
  income ............................    $ 2,602     $ --      $ 21     $ 2,623

Net interest income (expense) .......     (1,107)     1,426      48         367
                                         -------     ------    ----     -------
Net operating income after
  net interest ......................    $ 1,495     $1,426    $ 69     $ 2,990
                                         =======     ======    ====     =======

FFO - OP ............................                                   $ 2,786
                                                                        =======


<PAGE>
                                       11

                                            Income
                                         Producing
                                      Real Estate,    Real
                                       Principally    Estate
                                          Shopping    Mortgage
                                           Centers    Notes   Other Consolidated
                                         ---------    ------- ------  ----------

Six Months Ended June 30, 1999:

Rent revenues .........................   $ 12,011    $ --     $ 38    $ 12,049
                                          ========    ======   ====    ========
Real estate net operating
  income ..............................   $  8,508    $ --     $(40)   $  8,468

Net interest income (expense) .........     (3,848)    2,387     58      (1,403)
                                          --------    ------   ----    --------
Net operating income after net
  interest ............................   $  4,660    $2,387   $ 18    $  7,065
                                          ========    ======   ====    ========
FFO - OP ..............................                                $  6,291
                                                                       ========
At June 30, 1999:
 Investment in real estate and
 real estate mortgage notes ...........  $172,950(a) $64,312  $ 8,551  $245,813
                                         ========    =======  =======  ========
Borrowings ............................  $120,036    $37,403   $  --   $157,439
                                         ========    =======  =======  ========



Six Months Ended June 30, 1998:

Rent revenues ..........................    $ 6,274     $ --      $263   $6,537
                                            =======     ======    ====   ======
Real estate net operating
  income ...............................    $ 4,404     $ --      $159   $4,563

Net interest income (expense) ..........     (1,819)     3,010     195    1,386
                                            -------     ------    ----   ------
Net operating income after net
  interest .............................    $ 2,585     $3,010    $354   $5,949
                                            =======     ======    ====   ======
FFO - OP ...............................                                 $5,570
                                                                         ======
At June 30, 1998:
  Investment in real estate and
 real estate mortgage notes ............   $129,612(a) $66,078 $ 8,738 $204,428
                                           ========    ======= ======= ========
Borrowings .............................   $ 82,882    $31,685 $  --   $114,567
                                           ========    ======= ======= ========

(a) Includes  $32,411 and $61,406 of additions  during the six months ended June
30, 1999 and 1998.


<PAGE>
                                       12

(6) Redemption of Certain Minority Interests


During the quarter  ended June 30,  1999,  the OP  redeemed  43,018 OP units for
approximately $546,000, resulting in an increase in CV Reit's indirect ownership
of the OP from 84.2% to 84.5%.


(7) Non-Recurring Professional Fees


During the  quarter  ended June 30,  1999,  the  Company  expensed  $285,000  of
professional  fees as a result of the termination of  negotiations  related to a
proposed merger.


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


                              Results of Operations

Net Income

         Three Months Ended June 30, 1999 and 1998


For the quarter ended June 30, 1999, net income was $1,545,000 or $.19 per share
compared to $3,680,000 or $.46 per share for the same period of 1998.

Net income for the quarter ended June 30, 1998 includes a $2.3 million gain from
the sale of real estate.

During the quarter  ended June 30, 1999,  rent revenue,  operating  expenses and
interest expense increased by $2,737,000, $753,000 and $1,075,000,  respectively
(a net increase of $909,000),  primarily due to the acquisition of nine shopping
centers since mid-1998 (the "Shopping Center  Acquisitions").  The increase also
reflects  improved  operating  results from existing centers which experienced a
$125,000  increase in net rental income (rent revenue less operating  expenses).
We expect continued  increases in rent revenue,  operating expenses and interest
expense  due to the  acquisition  of  Cherry  Square  Shopping  Center  ("Cherry
Square"),  a 75,000 square foot shopping center, on May 18, 1999, for a purchase
price of $6.8 million,  including transaction costs,  substantially all of which
was  financed by mortgage  debt,  and in the event  certain  additional  planned
acquisitions are consummated (see Liquidity and Capital Resources Acquisitions).

Interest  income  decreased  by  $242,000  during  the  second  quarter of 1999,
primarily  attributable  to a reduction in the average balance of mortgage notes
receivable.  These notes  principally  consisted of a line of credit and certain
other loans to Hilcoast which matured and were repaid during 1998. Our remaining
mortgage  notes  receivable are long term and require  self-amortizing  payments
through  2023.  Accordingly,  interest  income is  anticipated  to  continue  to
decrease although to a lesser extent, due to scheduled repayments.

General and  administrative  expenses  increased  by $126,000  during the second
quarter of 1999 primarily due to higher legal and other professional fees.

<PAGE>
                                       13


Depreciation and  amortization  increased by $455,000 due to the Shopping Center
Acquisitions. We expect continued increases in depreciation and amortization due
to the Cherry Square acquisition.

Net income for the quarter ended June 30, 1999 includes $285,000 of professional
fees  expensed  as a result of the  termination  of  negotiations  related  to a
proposed merger.



         Six Months Ended June 30, 1999 and 1998

For the six months ended June 30, 1999,  net income was  $3,374,000  or $.42 per
share compared to $5,557,000 or $.70 per share for the same period of 1998.

Net income for the six months  ended June 30, 1998  includes a $2.3 million gain
from the sale of real estate.

During the six months ended June 30, 1999, rent revenue,  operating expenses and
interest   expense   increased  by  $5,512,000,   $1,607,000,   and  $2,106,000,
respectively  (a net  increase of  $1,799,000),  primarily  due to the  Shopping
Center Acquisitions.  The increase also reflects improved operating results from
existing  centers  which  experienced  a $270,000  increase in net rental income
(rent revenue less operating expenses).

Interest  income  decreased  by  $683,000  during  the first six months of 1999,
primarily  attributable  to a reduction in the average balance of mortgage notes
receivable.  These notes  principally  consisted of a line of credit and certain
other loans to Hilcoast,  which matured and were repaid during 1998. The average
interest  rate  on  these  notes  approximated  10.4%  and the  repayments  were
generally utilized to acquire shopping centers in 1998.

General and administrative  expenses increased by $157,000 during the six months
ended June 30, 1999 primarily due to higher professional fees.

Depreciation and  amortization  increased by $884,000 due to the Shopping Center
Acquisitions.

Net  income  for the six  months  ended  June  30,  1999  includes  $285,000  of
professional  fees  expensed  as a result  of the  termination  of  negotiations
related to a proposed merger.


Funds From Operations

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,  certain  non-recurring items,  extraordinary
items, gains and losses on sales of real estate and income taxes.


<PAGE>
                                       14

The following schedule reconciles FFO to net income (in thousands):

                                                Three                Six
                                             Months Ended         Months Ended
                                               June 30,             June 30,
                                           ----------------    ----------------
                                            1999      1998      1999      1998
                                           ------   -------    ------   -------
Net income .............................   $1,545   $ 3,680    $3,374   $ 5,557
Minority interests in income
  of OP ................................      290       825       633     1,245
Depreciation and amortization
  of real property (including
  unconsolidated affiliates ............    1,084       628     1,999     1,115
Non-recurring professional fees ........      285      --         285      --
Gain on sale of real estate ............     --      (2,347)     --      (2,347)
                                           ------   -------    ------   -------
FFO - OP ...............................   $3,204   $ 2,786    $6,291   $ 5,570
                                           ======   =======    ======   =======
FFO - CV Reit (a) ......................   $2,698   $ 2,276    $5,297   $ 4,551
                                           ======   =======    ======   =======
-------
(a) CV Reit's interests in the OP averaged 84.2% in 1999 and 81.7% in 1998.


We believe 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 our  properties  and would  distort  the
comparative   measurement  of  performance  and  are  not  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
our  operating  performance  or to cash flows from  operating  activities  as an
indicator  of  liquidity  or cash  available  to fund all cash  flow  needs.  In
addition,  since  other  REITs may not  calculate  FFO in the same  manner,  FFO
presented herein may not be comparable to that reported by other REITs.


                         Liquidity and Capital Resources

Consolidated Statements of Cash Flows

Net cash  provided by  operating  activities,  as  reported in the  Consolidated
Statements of Cash Flows, amounted to $4.7 million for the six months ended June
30, 1999  compared to $3.5  million for the same period in 1998.  These  amounts
generally reflect FFO and net changes in assets and liabilities.

Net cash used by  investing  activities  for the six months  ended June 30, 1999
decreased to $.5 million from $1.7 million for the same period in 1998. The 1999
amounts  reflect  $1 million of  capital  improvements  partially  offset by $.7
million of net  collections on real estate mortgage notes  receivable.  The 1998
amounts principally consist of $17.1 million of cash required in connection with
the  acquisition  of four  shopping  centers  in the first  six  months of 1998,
partially  offset by $11.6 million of net  collections  on real estate  mortgage
notes receivable and $4.2 million received from the sale of real estate.


<PAGE>
                                       15


Net cash used in  financing  activities  increased  to $2.6  million for the six
months ended June 30, 1999 from $.9 million  during the same period of 1998. The
1999  amounts  principally  consist  of cash  distributions  of $4.6  million to
stockholders  and $.9 million to minority  interests,  partially  offset by $3.4
million  of net  proceeds  from  borrowings.  The 1998  amounts  consist of cash
distributions  amounting  to $4.6  million to  stockholders  and $.5  million to
minority  interests,  partially  offset by $4.2  million  of net  proceeds  from
borrowings.

Borrowings

At June 30, 1999, our borrowings increased to $157.4 million from $121.9 million
at December 31, 1998. The $35.5 million increase included $32.1 million borrowed
under the Line of Credit (see below) to finance two shopping center acquisitions
in 1999. Scheduled principal payments over the next five years are $82.8 million
with $74.6 million due thereafter.

Borrowings  include $128.3 million,  collateralized by a substantial  portion of
our Real Estate and our Hilcoast  Recreation  Note,  including $49 million under
the Line of  Credit  (see  below).  We  expect  to  refinance  certain  of these
borrowings,  at or prior to maturity,  through new mortgage loans on Real Estate
including  refinancing under the Line of Credit.  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. As
a result  of  refinancing  three  mortgage  loans in 1999,  we have been able to
reduce the weighted  average  effective  fixed interest rate on $23.5 million of
mortgage  loans from 7.48% to 6.53%.  We were also able to obtain an  additional
$5.2 million in cash in connection with the refinancings.

The remaining $29.1 million of borrowings  consists of  Collateralized  Mortgage
Obligations  (the  "CMO's")  which are  collateralized  by $39.5  million of the
Recreation  Notes and require  self-amortizing  principal and interest  payments
through  March 2007.  During the term of the CMO's,  the  scheduled  annual debt
service  requirement  approximates $5.2 million compared to annual principal and
interest payments scheduled to be received under the related Recreation Notes of
$6.5 million.

Effective  March  31,  1998,  we  entered  into an  agreement  with a  financial
institution which provides us with a three year non-revolving line of credit for
up to $100 million (the "Line of  Credit").  Advances  under the Line of Credit:
(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  1.75% and (3) may be drawn  only  during the first two years of the
credit  facility  and must be repaid by certain  dates  during  the third  year.
Additional  provisions include a 1% commitment fee, a minimum net worth covenant
and cross-default and cross-collateralization  requirements.  Advances under the
Line of Credit are used to fund acquisitions, expansions, renovations, financing
and refinancing of real estate,  including reimbursement of equity advances, and
require certain  performance  covenants.  In March 1999, we pledged the Hilcoast
Recreation  Note as  collateral  for future  borrowings  under an $18.5  million
promissory note (the "Pembroke Note") as part of the Line of Credit.  As of June
30, 1999,  we had borrowed $49 million under the Line of Credit  including  $8.2
million under the Pembroke Note.

<PAGE>
                                       16

Capital Resources

Our operating  funds are expected to be principally  generated from rent revenue
from income producing properties and interest income on the Recreation Notes. We
believe that our operating funds will be sufficient in the foreseeable future to
fund operating and administrative expenses,  interest expense, recurring capital
expenditures   and   distributions  to  stockholders  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  refinancing,  scheduled
principal  repayments on the Recreation Notes, sales of non-strategic other real
estate,  the Line of Credit  and/or  potential  debt or equity  financing in the
public or private markets.

Acquisitions

During the six months ended June 30, 1999, we completed the  acquisition  of two
shopping  centers for an aggregate  purchase price of $31.2  million,  including
transaction costs,  substantially all of which was financed by mortgage debt. In
connection  with the  Lakewood  acquisition,  we were  required  to  deposit  an
additional  $1  million  with the  lender  in  connection  with  future  capital
improvements.

In  addition,  we have  entered  into  conditional  agreements  to acquire  four
shopping centers in Pennsylvania and New Jersey for an aggregate  purchase price
of approximately $24 million.  The acquisitions are subject to due diligence and
certain  other  conditions  and  there  can be no  assurance  that  they will be
consummated.

We are also in various stages of negotiating acquisitions of additional shopping
centers.  However,  there is no  assurance  that we will be able to complete any
such acquisition. In the event properties are acquired in the future, the OP may
issue additional OP units, pay cash, or a combination  thereof. If cash payments
are required in excess of funds  available  under the Line of Credit,  we may be
required to seek outside financing which may or may not be available.

Our policy is to acquire additional properties only if they are income producing
and any proposed acquisition requires a resolution by a majority of our Board of
Directors that the  acquisition  will not adversely  affect our ability to pay a
quarterly dividend of at least 29 cents per share.  Under the OP agreement,  all
of the  activities  of the OP must  generally  be  conducted  with a view toward
enabling the OP to make quarterly  distributions  to all partners of at least 29
cents per OP unit and such additional amount, if required,  to enable CV Reit to
pay a  regular  quarterly  dividend  of at  least  29  cents  per  share  to its
stockholders.  As of June 30,  1999,  there  were  1,462,406  OP  units  held by
minority interests.

                                    Inflation

During recent  years,  the rate of inflation has remained at a low level and had
minimal impact on our operating results.

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  our 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 of  increases  in
operating  expenses,  including common area  maintenance,  real estate taxes and
insurance.

<PAGE>
                                       17


However, in the event of significant  inflation,  our operating results could be
adversely affected if general and  administrative  expenses and interest expense
increase  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).


                                 Year 2000 Issue

As many computer  systems,  software  programs and other equipment with embedded
chips or processors  (collectively,  "Information  Systems") use only two digits
rather than four to define the  applicable  year,  they may be unable to process
accurately  certain data,  during or after the year 2000. As a result,  business
and governmental  entities are at risk for possible  miscalculations  or systems
failures  causing  disruptions  in their business  operations.  This is commonly
known  as the  Year  2000  ("Y2K")  issue.  The  Y2K  issue  concerns  not  only
Information  Systems  used  solely  within a  company  but also  concerns  third
parties,  such as customers,  vendors and creditors,  using information  Systems
that may interact with or affect a company's operations.

Our State of Readiness

We have implemented a Y2K readiness  program with the objective of having all of
our significant  Information  Systems  functioning  properly with respect to Y2K
before  January 1, 2000.  The first  component of our  readiness  program was to
identify  our  internal  Information  Systems  that are  susceptible  to  system
failures  or  processing  errors as a result of the Y2K  issue.  This  effort is
substantially  complete  and any  issues  that arose  have been  identified  and
corrected where necessary.

As to the second component of the Y2K readiness program,  we have identified our
significant tenants,  vendors and creditors that are believed,  at this time, to
be critical to business  operations  subsequent to January 1, 2000.  Through the
use of questionnaires,  interviews,  on-site visits and other available means we
have  ascertained  that we have no significant  exposure to Y2K problems at this
time.  However,  there can be no assurance that the Information Systems provided
by or utilized by other companies  which affect their  operations will be timely
converted in such a way as to allow them to continue normal business  operations
or furnish products, services or data to us without disruption.

Risks

If needed  remediations and conversions to the Information  Systems are not made
on a timely basis by our  materially-significant  customers or vendors, we could
be affected by business disruption,  operational problems, financial loss, legal
liability to third parties and similar risks, any of which could have a material
adverse  effect on our  operations,  liquidity or financial  condition.  Factors
which could cause material differences in results, many of which are outside our
control,  include,  but are not limited to, the accuracy of  representations  by
manufacturers of our Information  Systems that their products are Y2K complaint,
the ability of our tenants  and  vendors to identify  and resolve  their own Y2K
issues and our ability to respond to unforeseen Y2K complications.

<PAGE>
                                       18


Y2K Costs

Our total cost of these Y2K  compliance  activities  is not  expected  to exceed
$25,000.  The costs and time  necessary  to complete  the Y2K  modification  and
testing processes are based on our best estimates,  which were derived utilizing
numerous  assumptions of future events  including the continued  availability of
certain resources,  third party  modification plans and other factors.  However,
there can be no  assurance  that these  estimates  will be  achieved  and actual
results could differ from the estimates. Our Y2K readiness program is an ongoing
process and the estimates of costs and completion  dates for various  components
of the Y2K readiness program described above are subject to change.


         Forward Looking Information: Certain Cautionary Statements

Certain statements contained in "Management's Discussion and Analysis of Results
of Operations and Financial Condition" and elsewhere in this Form 10-Q, that are
not related to  historical  results,  are forward  looking  statements,  such as
anticipated   liquidity   and  capital   resources,   completion   of  potential
acquisitions and  collectibility of real estate mortgage notes  receivable.  The
matters  referred to in forward  looking  statements are based on assumptions of
future  events which may not prove to be accurate and which could be affected by
the  risks and  uncertainties  involved  in our  business;  accordingly,  actual
results may differ  materially  from those  projected and implied in the forward
looking statements.  These risks and uncertainties  include, but are not limited
to,  the effect of  conditions  in the  commercial  real  estate  market and the
economy in general,  the level and volatility of interest  rates,  the impact of
current or pending  legislation and  regulation,  as well as certain other risks
described  in the  Form  10-Q.  Subsequent  written  and  oral  forward  looking
statements  attributable  to our  company  or  persons  acting on its behalf are
expressly qualified in their entirety by cautionary statements in this paragraph
and elsewhere described in this Form 10-Q and in other reports we filed with the
Securities and Exchange Commission.


<PAGE>
                                       19

         PART II.  Other Information


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

The Annual Meeting of  Stockholders  of the Company was held on June 7, 1999. At
that meeting the  stockholders  elected two  directors,  who were elected by the
following  vote:  Milton S. Schneider - Votes For:  7,143,211;  Votes  Withheld:
17,246; and Alan L. Shulman - Votes For: 7,143,220; Votes Withheld: 17,237.

In  addition,  the  stockholders  were asked to ratify BDO  Seidman,  LLP as the
Company's  independent  auditiors for the Company's  fiscal year ending December
31, 1999. The number of votes were as follows: For: 7,082,166;  Against: 21,113;
Abstain: 57,178.


Item 6 - Exhibits and Reports on Form 8-K:


         Exhibits:

            27     Financial Data Schedule

         Reports on Form 8-K:


                NONE








                                   SIGNATURES



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


                                            CV REIT, INC.
                                -------------------------------------
                                             (Registrant)


                                   /s/ Louis P. Meshon
August 9, 1999                   _____________________________________
                                Louis P. Meshon Sr., President


                                   /s/ Elaine Hauff
August 9, 1999                   _____________________________________
                                Elaine Hauff, Vice President,
                                Treasurer and Principal Financial
                                and Accounting Officer