U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q



(Mark One)

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

         For the quarterly period ended     September 30, 1997

[  ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         EXCHANGE ACT

         For the transition period from __________________  to  ________________

                      Commission file number     1-10641


                           MILESTONE PROPERTIES, INC.
             (Exact name of registrant as specified in its charter)


           DELAWARE                                    65-0158204
(State or Other Jurisdiction of          (I.R.S. Employer Identification Number)
 

5200 TOWN CENTER CIRCLE, BOCA RATON  FLORIDA                         33486
---------------------------------------------                    -------------
 (Address of principal executive offices)                         (Zip Code)  

                                 (561) 394-9533
              ---------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)

--------------------------------------------------------------------------------
(Former name,former address and former fiscal year,if changed since last report)

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 past 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

As of November 7,1997,  4,213,368  shares of the registrant's  common stock, par
value $.01 per share, and 3,033,995 shares of the registrant's  $.78 Convertible
Series A preferred stock, par value $.01 per share, were outstanding.



<PAGE>



Part I: Financial Information
Item 1. Financial Statements

                   MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
              September 30, 1997 (Unaudited) and December 31, 1996
<TABLE>
<CAPTION>

                                                                                September 30, 1997   December 31, 1996
                                                                                ------------------   -----------------
<S>                                                                              <C>                  <C>
Assets:
Current Assets:
    Cash and cash equivalents ..................................................   $     6,403,371    $     3,141,839
    Loans receivable ...........................................................         1,528,985          1,684,585
    Accounts receivable ........................................................         1,156,570          1,360,621
    Accrued interest receivable ................................................         6,670,810          9,646,886
    Due from related party .....................................................           316,472            599,093
    Prepaid expenses and other .................................................           433,008            430,603
    Reverse repurchase agreements ..............................................        25,109,375         34,718,749
    Available-for-sale securities ..............................................        25,811,048         32,314,853
                                                                                   ---------------      -------------

         Total current assets ..................................................        67,429,639         83,897,229

    Property, improvements and equipment, net ..................................        19,734,745         18,884,467
    Wraparound notes, net ......................................................        66,704,261         71,431,945
    Deferred income tax asset, net .............................................         1,551,916          3,272,873
    Investment in affiliate ....................................................         2,674,099          3,959,433
    Management contract rights, net ............................................           313,305            426,467
    Goodwill and organizational cost, net ......................................           167,148            222,863
                                                                                   ---------------      -------------

         Total assets ..........................................................   $   158,575,113    $   182,095,277
                                                                                   ===============      =============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
    Accounts payable and accrued expenses ......................................   $     1,171,633    $     2,031,513
    Accrued interest payable ...................................................           491,225          1,139,941
    Master lease payable .......................................................        10,423,492         14,445,351
    Due to related party .......................................................                 0             61,688
    Current portion of mortgages and notes payable .............................         2,958,441          2,862,274
    Income taxes payable .......................................................         2,343,925          3,250,744
    Loans payable ..............................................................        19,392,453         23,829,335
    Treasury notes sold short ..................................................        24,980,404         33,952,346
                                                                                   ---------------      -------------

         Total current liabilities .............................................        61,761,573         81,573,192

    Mortgages and notes payable ................................................        69,382,575         71,562,942
                                                                                   ---------------      -------------

         Total liabilities .....................................................       131,144,148        153,136,134
                                                                                   ---------------      -------------

Commitments and Contingencies

Stockholders' equity:
    Common stock ($0.01 par value, 10,000,000 shares
       authorized, 4,905,959 and 4,743,155 issued,
       respectively) ...........................................................            49,061             47,433
    Preferred stock (Series A $0.01 par value, 10,000,000
         shares authorized, 3,033,995 and 3,182,184
        shares issued and outstanding, respectively) ...........................            30,341             31,822
    Additional paid-in surplus .................................................        48,105,428         48,105,575
    Unrealized holding gain (loss) - available-for-sale securities
       (Net of tax liability (benefit) of $1,262,446 and
       $(151,552), respectively)...........................................              1,893,066           (220,396)
    Accumulated deficit ........................................................       (19,206,513)       (15,564,873)
    Shares held in treasury - 692,591 shares at cost ...........................        (3,440,418)        (3,440,418)
                                                                                    ---------------      -------------

         Total stockholders' equity ............................................        27,430,965         28,959,143
                                                                                    ---------------      -------------

         Total liabilities and stockholders' equity ............................     $ 158,575,113        182,095,277
                                                                                    ===============      =============
</TABLE>

           See Accompanying Notes to Consolidated Financial Statements


<PAGE>

                   MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF REVENUES AND EXPENSES
                                   (Unaudited)
             For the Three Months Ended September 30, 1997 and 1996

<TABLE>
<CAPTION>

                                                                                September 30, 1997   September 30, 1996
<S>                                                                                <C>                 <C>
REVENUES:
     Rent ......................................................................   $     2,621,451    $     2,724,853
     Interest income ...........................................................         3,301,217          4,705,171
     Revenue from management company operations ................................           166,223            174,655
     Tenant reimbursements .....................................................           228,049            383,317
     Management and reimbursement income .......................................            49,085            278,086
     Percentage rent ...........................................................            87,090            187,126
     Amortization of discount - available-for-sale securities ..................            99,273             77,186
     Unrealized loss on treasury notes sold short ..............................          (243,438)          (373,674)
     Gain/(loss) on realization of wraparound notes ............................                 0           (101,244)
     Gain/(loss) on sale of available-for-sale securities ......................                 0           (589,048)
                                                                                    ---------------    ---------------

     Total revenues ............................................................         6,308,950          7,466,428
                                                                                    ---------------    ---------------


EXPENSES:
     Master lease expense ......................................................         3,445,833          3,823,927
     Interest expense ..........................................................         2,266,653          3,129,830
     Depreciation and amortization .............................................           221,518            185,832
     Salaries, general and administrative ......................................           563,654            656,195
     Property expenses .........................................................           388,318            309,471
     Expenses for management company operations ................................           322,628            235,026
     Professional fees .........................................................           119,512            247,465
                                                                                    ---------------    ---------------

     Total expenses ............................................................         7,328,116          8,587,746
                                                                                    ---------------    ---------------

Loss before income taxes .......................................................        (1,019,166)        (1,121,318)

Provision for income taxes .....................................................           166,297            238,824
                                                                                    ---------------    ---------------

Net loss .......................................................................   $    (1,185,463)   $    (1,360,142)
                                                                                    ===============    ===============

Loss per share of common stock .................................................   $         (0.28)   $         (0.36)
                                                                                    ===============    ===============

Weighted average number of shares of common stock ..............................         4,211,275          3,793,783
                                                                                    ===============    ===============

</TABLE>

           See Accompanying Notes to Consolidated Financial Statements


<PAGE>


                   MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF REVENUES AND EXPENSES
                                   (Unaudited)
              For the Nine Months Ended September 30, 1997 and 1996
<TABLE>
<CAPTION>


                                                                                September  30, 1997   September 30, 1996
<S>                                                                                <C>               <C>
REVENUES:
     Rent .......................................................................   $     7,968,967 $     8,533,067
     Interest income ............................................................         9,970,738      13,330,312
     Revenue from management company operations .................................           450,665         557,274
     Tenant reimbursements ......................................................           786,783         991,177
     Management and reimbursement income ........................................           357,228         835,811
     Percentage rent ............................................................           288,528         249,106
     Amortization of discount - available-for-sale securities ...................           278,709         203,696
     Unrealized(loss)/ gain on treasury notes sold short ........................          (194,073)      2,067,859
     Gain on realization of wraparound notes ....................................                 0         393,768
     Loss on sale of available-for-sale securities ..............................          (784,121)       (589,048)
                                                                                     ---------------   -------------

     Total revenues .............................................................        19,123,424      26,573,022
                                                                                     ---------------   -------------


EXPENSES:
     Master lease expense .......................................................        10,423,492      11,589,060
     Interest expense ...........................................................         6,905,585       8,589,126
     Depreciation and amortization ..............................................           602,434         549,994
     Salaries, general and administrative .......................................         1,755,863       2,729,012
     Property expenses ..........................................................         1,281,214       1,521,025
     Expenses for management company operations .................................           981,497         774,441
     Professional fees ..........................................................           555,294         862,092
                                                                                      ---------------   -------------
     Total expenses .............................................................        22,505,379      26,614,750
                                                                                      ---------------   ------------- 

Loss before income taxes ........................................................        (3,381,955)        (41,728)

Provision for income taxes ......................................................           259,685         677,849
                                                                                      ---------------   -------------

Net loss ........................................................................   $    (3,641,640)    $  (719,577)
                                                                                      ===============   =============

Loss per share of common stock ..................................................   $         (0.87)    $     (0.19)
                                                                                      ===============   =============

Weighted average number of shares of common stock ...............................         4,196,233       3,793,783
                                                                                      ===============   =============

</TABLE>

                     See Accompanying Notes to Consolidated Financial Statements


<PAGE>



                   MILESTONE PROPERTIES, INC AND SUBSIDIARIES                   

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                   (Unaudited)

                  For the Nine Months Ended September 30, 1997
<TABLE>
<CAPTION>
                                                                                                                                    
                                                                                               
                                               Common Stock             Preferred Stock         Treasury Stock 
                                                                                               
                                            Shares      Amount         Shares     Amount      Shares       Cost     

<S>                                      <C>          <C>           <C>        <C>           <C>       <C>
Balance January 1, 1997                  4,743,155    $ 47,433      3,182,184   $ 31,822    (692,591)  $(3,440,418) 

Conversion of preferred stock              162,804       1,628       (148,189)    (1,481)                        
  into common stock

Net loss for the nine months
 ended September 30, 1997                                                                      

Unrealized holding gain -
 available-for-sale securities                                                                 

                                       ----------------------------------------------------------------------------

Balance September 30, 1997             4,905,959      $49,061        3,033,995  $ 30,341     (692,591) $(3,440,418)
                                       =========       ======        =========    ======     =========  =========== 


                                                       Unrealized                                   
                                                     Holding (Loss)/                              
                                       Additional       Gain on                                      
                                       Paid-in       Available-for-       Accumulated     Stockholders'   
                                       Surplus       Sale Securities        Deficit          Equity       
                                                                                             
<S>                                    <C>            <C>                <C>               <C>                                      
Balance January 1, 1997               $48,105,575       $(220,396)       $(15,564,873)     $28,959,143             
                                                                                                  
Conversion of preferred stock               (147)                                                    0     
  into common stock                                                                               
                                                                                                  
Net loss for the nine months                                                                      
 ended September 30, 1997                                                  (3,641,640)      (3,641,640)            
                                                                                                  
Unrealized holding gain -                                                                         
 available-for-sale securities                          2,113,462                            2,113,462             
                                                                                                  
                                     -----------------------------------------------------------------
                                                                                                  
Balance September 30, 1997           $48,105,428       $1,893,066        $(19,206,513)     $27,430,965             
                                      ==========        =========         ============      ==========             
                                                                                             
</TABLE>
                              

           See Accompanying Notes to Consolidated Financial Statements
<PAGE>

                   MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
              For the Nine Months Ended September 30, 1997 and 1996
<TABLE>
<CAPTION>

                                                                                September 30, 1997   September 30,1996
<S>                                                                               <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES ...........................................                                                    
Net loss .......................................................................   $    (3,641,640)   $      (719,577)
Adjustments to reconcile net loss to
       net cash used in operating activities
     Depreciation and amortization .............................................           602,434            549,994
     Deferred income  taxes ....................................................           334,282          1,344,001
     Unrealized (loss)/ gain on treasury notes sold short ......................           194,073         (2,067,859)
     Amortization of discount - available for sale securities ..................          (278,709)          (203,696)
     Realized loss on sale of available for sale securities ....................           784,122            589,048
     Gain on realization of wraparound notes ...................................                 0           (393,768)
     Change in operating assets and liabilities net:
       Decrease in accounts receivable .........................................           386,047            248,554
       Decrease/(increase) in due from related party ...........................           282,621           (129,291)
       Decrease in accrued interest receivable .................................         2,794,080          3,225,430
       Increase in prepaid expenses and other ..................................            (2,405)           (21,487)
       Decrease in accrued litigation settlement expenses ......................                 0           (215,000)
       Decrease in accrued expenses ............................................          (859,880)        (1,065,814)
       Decrease in accrued interest payable ....................................          (648,716)          (248,996)
       Decrease in master lease payable ........................................        (4,021,859)        (4,129,247)
       Decrease in income taxes payable ........................................          (906,819)          (717,365)
       Decrease in due to related party ........................................           (61,688)           (56,613)
                                                                                   ---------------    ---------------

       Net cash used in operating activities ...................................        (5,044,057)        (4,011,686)
                                                                                   ---------------    ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Principal repayments on loans receivable ..................................           155,601             43,696
     Principal repayments on wraparound notes ..................................         4,727,684          4,747,664
     Purchase of building and land .............................................        (1,100,000)                 0
     Purchase of leasehold improvements ........................................          (183,836)          (200,000)
     Proceeds from realization of wraparound notes .............................                 0          1,916,979
     Proceeds from the sale of available for sale securities ...................         9,498,529         14,478,872
     Proceeds from redemption of investment in affiliate .......................         1,285,334          2,270,833
     Purchase of available for sale securities .................................                 0        (20,142,060)
     Proceeds from treasury notes sold short ...................................                 0         13,989,845
     Proceeds from redemption of reverse repurchase agreements .................         9,415,301                  0
     Purchase of treasury notes ................................................        (9,166,015)                 0
     Purchase of reverse repurchase agreements .................................                 0        (13,898,183)
                                                                                   ---------------    ---------------

       Net cash provided by investing activities ...............................        14,632,598          3,207,646
                                                                                   ---------------    ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Distributions paid to preferred stockholders ..............................                 0           (666,622)
     Principal payments on mortgages and notes payable .........................        (2,084,200)        (3,568,982)
     Proceeds from loans payable ...............................................                 0         14,522,045
     Principal payments on loans payable .......................................        (4,436,882)       (11,522,409)
     Amounts received on treasury notes payable ................................           194,073          2,067,859
                                                                                   ---------------    ---------------

       Net cash (used in) provided by financing activities .....................        (6,327,009)           831,891
                                                                                   ---------------    ---------------

NET INCREASE  IN CASH AND
CASH EQUIVALENTS ...............................................................         3,261,532             27,851

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD .................................         3,141,839          2,562,506
                                                                                   ---------------    ---------------

CASH AND CASH EQUIVALENTS, END OF PERIOD .......................................   $     6,403,371    $     2,590,357
                                                                                   ===============    ===============

SUPPLEMENTAL DISCLOSURES OF CASH
     FLOW INFORMATION

     Cash paid during the period for interest ..................................   $     7,554,301    $     8,838,121
                                                                                   ===============    ===============

     Cash paid during the period for income taxes ..............................   $       854,429    $       237,621
                                                                                   ===============    ===============
</TABLE>
           See Accompanying Notes to Consolidated Financial Statements

<PAGE>
                           MILESTONE PROPERTIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)


         The  accompanying   consolidated   financial  statements  of  Milestone
Properties,  Inc ("Milestone") and its wholly owned subsidiaries  (together with
Milestone,  the  "Company")  have been  prepared in  accordance  with  generally
accepted  accounting  principles for interim financial  information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes  required by generally accepted
accounting  principles  for  complete  financial  statements.  In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included.  The financial  statements
as of and for the periods ended  September 30, 1997 and 1996 are unaudited.  The
results of operations for the interim periods are not necessarily  indicative of
the results of operations for the fiscal year. Certain  information for 1996 has
been  reclassified  to  conform  to the 1997  presentation.  These  consolidated
financial statements should be read in conjunction with the financial statements
and footnotes  included thereto in Milestone's  Annual Report on Form 10-KSB for
the year ended December 31, 1996.


         1. Acquisition and Disposition of Real Estate Related Assets

     On September 24, 1997 the Company completed the purchase of Pine Oak Plaza,
a 16,994  square  foot  shopping  center  located in Sunrise  (Broward  County),
Florida,  from REC I  Corporation  for  approximately  $1,100,000  in cash.  The
shopping center is occupied by local tenants subject to operating leases ranging
from four to thirteen years with various  renewal options and is currently 93.5%
occupied.  This  property  can be  classified  as a  neighborhood  or  community
unanchored strip center and is located in a secondary type market.

     On October 30, 1997, the Company  recognized its position in its wraparound
note on a  property  located  in  Marion,  Ohio as a result  of the sale of such
property  by the  owners.  The sale  price  of the  property  was  approximately
$2,750,000,  which  resulted  in a book gain of  approximately  $200,000  to the
Company.

     On November 10, 1997,  Milestone  Asset  Management,  Inc., a  wholly-owned
subsidiary   of   Milestone   ("MAMI"),   sold   its   remaining   holdings   of
available-for-sale  securities  consisting  of the  Nomura  Series  1996-MDV  B2
("MDV"), DLJ 1994-MF11 B2 ("B2"), and DLJ 1994-MF11 B3 ("B3") (collectively, the
"Certificates").  The $16,700,000 par MDV Certificate was sold for  $14,680,344,
of which the Company  received net proceeds of $4,433,245 and used the remaining
$10,247,099  to pay  off  the  balance  of the  financing  associated  with  the
Certificates.  The $5,000,000 par B2 and the $8,560,000 par B3 Certificates were
sold for an aggregate of $12,556,138, of which the Company received net proceeds
of $3,181,273,  and used the remaining  $9,374,865 to pay off the balance of the
financing associated with the Certificates.

     At the time of the sale of the Certificates, MAMI had outstanding U.S.
 Treasury Note short positions


<PAGE>



totaling   $25,500,000   associated  with  the  Certificates,   which  MAMI  had
established to mitigate  interest rate risk. In connection  with the sale of the
Certificates,  MAMI  closed  all of  its  remaining  U.S.  Treasury  Note  short
positions.


     The sale of the Certificates and the close of the U.S.  Treasury Note short
positions  did not occur in and has not been  reflected  in the  Company's  1997
third  quarter  consolidated  financial  statements.  The Company will realize a
pre-tax  book  gain in the  fourth  quarter  of 1997  for such  transactions  of
approximately $4,500,000; however, $3,155,446 of such gain is already recognized
in the Company's  September 30, 1997 Balance Sheet as an unrealized holding gain
on   available-for-sale   securities.   In  connection  with  the  sale  of  the
Certificates,  the close of the U.S. Treasury Note short position,  and the 1997
operations of MAMI, the Company will pay bonuses of approximately  $1,200,000 to
several executive officers of the Company pursuant to MAMI's long term incentive
plan.

2.   Legal Proceedings

     Milestone entered into a Stipulation and Agreement of Settlement on October
30,  1997  (the  "Settlement  Agreement"),  providing  for the  settlement  (the
"Settlement") of a derivative and class action lawsuit,  John Winston v. Leonard
S. Mandor,  Robert A. Mandor,  Joan LeVine,  Harvey  Jacobson,  Gregory McMahon,
Geoffrey  Aaronson,  Milestone  Properties,  Inc. and Concord Assets Group, Inc.
(the  "Action"),  which  was  filed in the  Court of  Chancery  of the  State of
Delaware (the "Delaware  Court") in January 1996. The action was brought against
Milestone,  members of its Board of Directors, and Concord Assets Group, Inc., a
New York corporation ("Concord"),  the executive officers and directors of which
are also executive officers and directors of Milestone.  The plaintiff, a holder
of the MPI Preferred  Stock  purporting to bring the Action on behalf of himself
and other MPI Preferred Stockholders,  brought the Action in connection with (i)
Milestone's  acquisition  in  October  1995  of  certain  wraparound  notes  and
mortgages  and fee  properties  from  certain  affiliates  of Concord,  (ii) the
transfer in August and October 1995 of 16 of  Milestone's  retail  properties to
Union  Property  Investors,  Inc., a then  wholly-owned  Delaware  subsidiary of
Milestone  ("UPI"),  and (iii) the subsequent  distribution of all of the issued
and outstanding shares of UPI's common stock to Milestone's common  stockholders
on a share-for-share  basis and for no consideration  (the events referred to in
clauses  (i)  through  (iii)  above are  collectively  referred to herein as the
"Transactions").

       The  Settlement  is  subject  to  approval  by the  Delaware  Court,  the
condition that  stockholders  owning more than 10% of the MPI Preferred Stock do
not opt out of the Settlement, and certain other conditions.

       If the  Settlement  is  approved  and  consummated,  the  Action  will be
dismissed,  Milestone's  stockholders will release all derivative claims arising
in connection with the  Transactions  and the holders of the MPI Preferred Stock
between  October 23, 1995 and the date on which the  Settlement  is  consummated
will  release any claims  they may have  against  Milestone  and the other named
defendants arising out of the Transactions.  Each MPI Preferred  Stockholder who
does not opt out of the  Settlement  and who owns  shares  of the MPI  Preferred
Stock on the date the Settlement is consummated  will surrender  their shares of
MPI Preferred Stock to Concord Milestone Preferred,  Inc., a Delaware subsidiary
of Concord  ("CMP"),  and  receive in exchange  for each share of MPI  Preferred
Stock surrendered, $0.75 in cash payable by Milestone and one share of preferred
stock of CMP (the "CMP Preferred  Stock").  The CMP Preferred  Stock will have a
liquidation


<PAGE>



preference  of $2.25 per share,  will be required to be redeemed by CMP at $2.25
per share  after five  years,  and will have no voting or  dividend  rights.  In
addition,  any CMP Preferred Stockholder who does not want to wait the full five
years for such  shares to be  redeemed  can have  shares  redeemed by CMP at the
following prices prior to the fifth year:  within 2 years after the Settlement -
$1.00 per share;  2-3 years after the  Settlement  - $1.40 per share;  3-4 years
after the  Settlement - $1.60 per share;  4-5 years after the Settlement - $1.90
per share. CMP's redemption obligations will be secured by a letter of credit.

      Subject to approval by the Delaware  Court,  Milestone  will be sending to
the Settlement Class and the other stockholders of Milestone a notice which will
describe more fully the terms of the Settlement.

      The foregoing  description of the Settlement and the Settlement  Agreement
is qualified in its entirety by reference to the Settlement Agreement, a copy of
which was filed with the Securities and Exchange Commission on November 12, 1997
as an Exhibit to Milestone's Form 8-K.


3.    Recently Issued Accounting Pronouncements

     The Financial  Accounting  Standards  Board has recently issued several new
accounting  pronouncements.  Statement No. 128, "Earnings per Share" establishes
standards for computing and presenting  earnings per share, and is effective for
financial  statements  for both interim and annual periods ending after December
15, 1997. Statement No. 129, "Disclosure of Information about Capital Structure"
establishes  standards  for  disclosing  information  about an entity's  capital
structure,  and is effective for financial  statements  for periods ending after
December  15,  1997.  Statement  No.  130,  "Reporting   Comprehensive   Income"
establishes  standards for reporting and display of comprehensive income and its
components, and is effective for fiscal years beginning after December 15, 1997.
Statement  No. 131,  "Disclosure  about  Segments of an  Enterprise  and Related
Information"  establishes standards for the way that public business enterprises
report information about operating  segments in annual financial  statements and
requires that those  enterprises  report  selected  information  about operating
segments  in  interim  financial   reports  issued  to  shareholders.   It  also
establishes  standards  for related  disclosures  about  products and  services,
geographic areas, and major customers, and is effective for financial statements
for periods beginning after December 15, 1997.

     Management  of the Company does not believe that these new  standards  will
have a material effect on the Company's reported  operating  results,  per share
amounts, financial position or cash flows.

<PAGE>

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

General

     Certain  statements  made in this  report may  constitute  "forward-looking
statements" within the meaning of the Private  Securities  Litigation Reform Act
of 1995.  Such  forward-looking  statements  involve  known and  unknown  risks,
uncertainties and other factors which may cause the actual results,  performance
or achievements of Milestone Properties, Inc. ("Milestone") and its wholly owned
subsidiaries (together with Milestone, the "Company") to be materially different
from any future  results,  performance or  achievements  expressed or implied by
such  forward-looking  statements.  Such  factors  include,  among  others,  the
following:  general  economic and business  conditions,  which will, among other
things,  affect  demand  for  retail  space or retail  goods,  availability  and
creditworthiness  of  prospective  tenants,   lease  rents  and  the  terms  and
availability of financing; adverse changes in the real estate markets including,
among  other  things,  competition  with other  companies;  risks of real estate
development  and  acquisition;   governmental   actions  and  initiatives;   and
environmental/safety requirements.

     The  Company is engaged in the  business  of owning,  acquiring,  managing,
developing and investing in real estate and real estate related assets.

Results of Operations

Three Months Ended September 30, 1997 Compared to Three Months Ended September
30, 1996

     The Company  recognized a net loss of $1,185,463 for the three months ended
September 30, 1997 as compared to a net loss of  $1,360,142  for the same period
in 1996 due to the following factors:

     Revenues for the three months ended September 30, 1997 were  $6,308,950,  a
decrease of  $1,157,478  or 16%,  from  $7,466,428  for the three  months  ended
September  30,  1996.  Such  decrease  was  primarily  due to: (1) a decrease in
interest  income of $1,403,954  resulting  primarily  from (a) a decrease in the
number of wrap around notes to 28 for the three months ended  September 30, 1997
from 32 for the same period in 1996  resulting in a decrease in interest  income
of approximately  $284,000; and (b) a decrease in available-for-sale  securities
held by the Company to two for the three  months ended  September  30, 1997 from
four for the same period in 1996  resulting in a decrease in interest  income of
$907,569;  (2) a decrease in management  and tenant  reimbursements  of $229,001
resulting  primarily from the termination of the Management  Services  Agreement
between Union  Property  Investors and the Company in February  1997; and (3) no
gain or loss on the sale of  available-for-sale  securities for the three months
ended  September  30,  1997  compared  to a loss  of  $589,049  on the  sale  of
available-for-sale securities for the same period in 1996.

     Operating  expenses  for the three  months  ended  September  30, 1997 were
$4,839,945,  a decrease of $432,139, or 8%, from $5,272,084 for the three months
ended  September 30, 1996. Such decrease was primarily due to: (1) a decrease in
master lease  expense of $378,094 due to a decrease in the number of  properties
leased by the Company to 28 for the three months ended  September  30, 1997 from
32 for the same  period in 1996;  and (2) a  decrease  in  professional  fees of
approximately  $128,000 due to non-recurring  transaction  costs associated with
the disposition of real estate related assets in the third quarter of 1996.

<PAGE>

     Interest  expense  for the  three  months  ended  September  30,  1997  was
$2,266,653, a decrease of $863,177, or 28%, from $3,129,830 for the three months
ended  September  30, 1996.  Such  decrease was  primarily  due to a decrease in
financing arrangements related to the available-for-sale  securities held by the
Company to two for the three months ended  September  30, 1997 from four for the
same period in 1996 resulting in a decrease in interest expense of approximately
$588,000.

     Depreciation and amortization for the three months ended September 30, 1997
was $ 221,518,  an increase  of $35,686,  or 19%,  from  $185,832  for the three
months  ended   September  30,  1996.  Such  increase  was  due  to  accelerated
amortization of management contract rights.


Nine Months Ended September 30, 1997 Compared to Nine Months Ended September 
30, 1996

     The Company  recognized a net loss of $3,641,640  for the nine months ended
September  30, 1997 as compared to a net loss of $719,577 for the same period in
1996 due to the following factors:

     Revenues for the nine months ended September 30, 1997 were  $19,123,424,  a
decrease of  $7,449,598,  or 28%,  from  $26,573,022  for the nine months  ended
September  30,  1996.  Such  decrease  was  primarily  due to: (1) a decrease in
interest  income of $3,359,574  resulting  primarily  from (a) a decrease in the
number of  wraparound  notes to 28 for the nine months ended  September 30, 1997
from 32 for the same period in 1996  resulting in a decrease in interest  income
of approximately  $787,000; and (b) a decrease in available-for-sale  securities
held by the Company to two for the nine  months  ended  September  30, 1997 from
four for the same period in 1996  resulting in a decrease in interest  income of
$2,006,660;  (2) a decrease  in rents of  $564,100  resulting  primarily  from a
decrease  in the number of  properties  leased by the Company to 28 for the nine
months  ended  September  30, 1997 from 32 for the same  period in 1996;  (3) an
unrealized  holding loss on U.S.  Treasury  Notes sold short of $194,703 for the
nine months ended  September 30, 1997 compared to an unrealized  holding gain of
$2,067,859 for the same period in 1996;  (4) no gain or loss on the  realization
of wraparound  notes for the nine months ended  September 30, 1997 compared to a
gain of  $393,768 on the  realization  of  wraparound  notes for the nine months
ended September 30, 1996; (5) a realized loss on the sale of  available-for-sale
securities of $784,121 for the nine months ended  September 30, 1997 compared to
a realized loss on the sale of available-for-sale securities of $589,048 for the
same period in 1996; and (6) a decrease in management and  reimbursement  income
of $478,583 resulting  primarily from the termination of the Management Services
Agreement between Union Property Investors and the Company in February 1997.

          Operating  expenses for the nine months ended  September 30, 1997 were
$14,997,360,  a decrease of $2,478,270,  or 14%, from  $17,475,630  for the nine
months ended  September  30, 1996.  Such  decrease was  primarily  due to: (1) a
decrease in master lease expense of  $1,165,568  due to a decrease in the number
of  properties  leased by the Company to 28 for the nine months ended  September
30,  1997  from 32 for the same  period in 1996;  (2) a  decrease  in  salaries,
general and  administrative  expenses of $973,149  resulting  primarily from (a)
executive bonuses which were approved by the Compensation Committee of the Board
of  Directors  and  paid in  April  1996 of  approximately  $401,000;  and (b) a
decrease in the number of employees from 1996 to 1997 resulting in a decrease in
salary expense of  approximately  $550,000;  and (3) a decrease in  professional
fees of $306,798 due to  non-recurring  transaction  costs  associated  with the
disposition of real estate related assets in the third quarter of 1996.

<PAGE>

      Interest  expense  for the  nine  months  ended  September  30,  1997  was
$6,905,585,  a decrease of  $1,683,541,  or 20%,  from  $8,589,126  for the nine
months ended  September 30, 1996.  Such decrease was primarily due to a decrease
in financing arrangements related to the  available-for-sale  securities held by
the Company to two for the nine months  ended  September  30, 1997 from four for
the  same  period  in 1996  resulting  in a  decrease  in  interest  expense  of
approximately $1,382,000.

      Depreciation and amortization for the nine months ended September 30, 1997
was $602,434,  an increase of $52,440, or 10%, from $549,994 for the nine months
ended September 30, 1996.  Such increase was due to accelerated  amortization of
management contract rights.


Liquidity and Capital Resources

           The $16,700,000 par MDV  Certificate  was sold for  $14,680,344.  The
Company received net proceeds of $4,433,245,  and used the remaining $10,247,099
to pay off the balance of the financing  associated  with the  Certificate.  The
$5,000,000  par  B2 and  the  $8,560,000  par  B3  Certificates  were  sold  for
$12,556,138.  The Company  received  net  proceeds of  $3,181,273,  and used the
remaining $9,374,865 to pay off the balance of the financing associated with the
Certificates.

         The  Company,  as the  holder of  222,750  shares of  Kranzco  Series C
Cumulative   Redeemable  Preferred  Shares  is  entitled  to  receive  from  the
redemption of such shares,  in five equal  installments over the next 15 months,
an aggregate amount of cash equal to approximately $2,227,500,  plus interest at
the rate of 8% per annum on the applicable outstanding balance of such shares.

         The Company has no present  intention to declare or pay cash  dividends
on the Common Stock or the Company's $.78 Convertible  Series A preferred stock,
par value $.01 per share (the "MPI Preferred Stock"), in the foreseeable future.
See Part II - Item 5. Other  Information.  The cumulative period relating to the
payment of dividends on the MPI  Preferred  Stock expired on September 30, 1995.
Any  decision as to the future  payment of  dividends on the Common Stock or the
MPI  Preferred  Stock  will  depend on the  results  of  operations,  investment
opportunities  for available  fund,  the financial  condition of the Company and
such other factors as Milestone's Board of Directors,  in its discretion,  deems
relevant.

            Cash  generated by the sale of the  Certificates,  the redemption of
the Kranzco Series C Cumulative  Redeemable Preferred Stock and the cash on hand
at  September  30, 1997 may be used to fund (i) the cash  payments to be made by
the Company  pursuant to a Settlement  that Milestone has recently  entered into
relating to a purported  class action brought against  Milestone,  (ii) expenses
relating to the Settlement, (iii) bonus payments to be made to several executive
officers of the Company under the long term  incentive  plan of Milestone  Asset
Management,  Inc., a  wholly-owned  subsidiary of Milestone  ("MAMI"),  (iv) the
Company's  real estate  investment  and  development  activities,  and (v) other
general  corporate  purposes.  See Part II - Other  Information.  Item 1.  Legal
Proceedings for a description of the terms of the Settlement.

          Management is not aware of any other trends,  events,  commitments  or
uncertainties,  that  will or are  likely to  materially  impact  the  Company's
liquidity.

<PAGE>

Cash Flows

          Net cash  used in  operating  activities  of  $5,044,057  for the nine
months  ended  September  30, 1997  included (1) a net loss of  $3,641,640;  (2)
adjustments for non-cash items of $1,636,202;  and (3) a net change in operating
assets and  liabilities  of  $3,038,619,  compared to net cash used in operating
activities of  $4,011,686  for the nine months ended  September 30, 1996,  which
included (1) a net loss of $719,577;  (2)  adjustments  of $182,280 for non-cash
items; and (3) a net change of $3,109,829 in operating assets and liabilities.

          Net cash provided by investing  activities of $14,632,598 for the nine
months ended September 30, 1997 included (1) proceeds from principal  repayments
on  loans  receivable  and  wraparound  notes of  $4,883,285;  (2)  purchase  of
building,  land and leasehold improvements of $1,283,836;  (3) proceeds from the
sale  of  available-for-sale   securities  of  $9,498,529;   (4)  proceeds  from
redemption  of  investment  in  affiliate  of  $1,285,334;   (5)  proceeds  from
redemption of reverse repurchase  agreements of $9,415,301;  and (6) purchase of
treasury  notes of  $9,166,015,  compared  to net  cash  provided  by  investing
activities of  $3,207,646  for the nine months ended  September 30, 1996,  which
included:  (1)  principal  repayments  of  $4,791,360  on loans  receivable  and
wraparound  notes;  (2) proceeds of $2,270,833  from redemption of investment in
affiliate;  (3) purchase of $20,142,060 of  available-for-sale  securities;  (4)
proceeds from U.S.  Treasury  Notes sold short of  $13,989,845;  (5) proceeds of
$1,916,979 from the realization of wraparound notes; (6) purchase of $200,000 of
leasehold   improvements;   (7)  proceeds  of  $14,478,872   from  the  sale  of
available-for-sale  securities;  and (8)  purchase  of  $13,898,183  of  reverse
repurchase agreements.

        Net cash used in financing  activities of $6,327,009 for the nine months
ended September 30, 1997 included (1) principal  payments on mortgages and notes
payable of  $2,084,200;  (2) principal  payments on loans payable of $4,436,882;
and (3) amounts received on U.S. Treasury Notes payable of $194,073, compared to
net cash provided by financing  activities of $831,891 for the nine months ended
September  30, 1996,  which  included;  (1)  distributions  of $666,622  paid to
preferred  stockholders;  (2) principal  payments of $3,568,982 on mortgages and
notes  payable;  (3) proceeds of $14,522,045  from loans payable;  (4) principal
payments of $11,522,409 on loans  payable;  and (5) $2,067,859  received on U.S.
Treasury Notes payable.

           See Part II - Other Information. Item 1 Legal Proceedings and Item 5.
Other  Information  for a description  of certain  transactions  which  occurred
subsequent  to  September  30, 1997 which may impact the  Company's  future cash
flows.


Item 3.         Quantitative and Qualitative Disclosures About Market Risk.

          Not applicable.


<PAGE>
                            PART II - OTHER INFORMATION
Item 1.       Legal Proceedings.

      Milestone  entered  into a  Stipulation  and  Agreement of  Settlement  on
October 30, 1997 (the "Settlement Agreement"), providing for the settlement (the
"Settlement") of a derivative and class action lawsuit,  John Winston v. Leonard
S. Mandor,  Robert A. Mandor,  Joan LeVine,  Harvey  Jacobson,  Gregory McMahon,
Geoffrey  Aaronson,  Milestone  Properties,  Inc. and Concord Assets Group, Inc.
(the  "Action"),  which  was  filed in the  Court of  Chancery  of the  State of
Delaware (the "Delaware  Court") in January 1996. The action was brought against
Milestone,  members of its Board of Directors, and Concord Assets Group, Inc., a
New York corporation ("Concord"),  the executive officers and directors of which
are also executive officers and directors of Milestone.  The plaintiff, a holder
of the MPI Preferred  Stock  purporting to bring the Action on behalf of himself
and other MPI Preferred Stockholders,  brought the Action in connection with (i)
Milestone's  acquisition  in  October  1995  of  certain  wraparound  notes  and
mortgages  and fee  properties  from  certain  affiliates  of Concord,  (ii) the
transfer in August and October 1995 of 16 of  Milestone's  retail  properties to
Union  Property  Investors,  Inc., a then  wholly-owned  Delaware  subsidiary of
Milestone  ("UPI"),  and (iii) the subsequent  distribution of all of the issued
and outstanding shares of UPI's common stock to Milestone's common  stockholders
on a share-for-share  basis and for no consideration  (the events referred to in
clauses  (i)  through  (iii)  above are  collectively  referred to herein as the
"Transactions").

      The Settlement is subject to approval by the Delaware Court, the condition
that stockholders owning more than 10% of the MPI Preferred Stock do not opt out
of the Settlement, and certain other conditions.

      If the  Settlement  is  approved  and  consummated,  the  Action  will  be
dismissed,  Milestone's  stockholders will release all derivative claims arising
in connection with the  Transactions  and the holders of the MPI Preferred Stock
between  October 23, 1995 and the date on which the  Settlement  is  consummated
will  release any claims  they may have  against  Milestone  and the other named
defendants arising out of the Transactions.  Each MPI Preferred  Stockholder who
does not opt out of the  Settlement  and who owns  shares  of the MPI  Preferred
Stock on the date the Settlement is consummated  will surrender  their shares of
MPI Preferred Stock to Concord Milestone Preferred,  Inc., a Delaware subsidiary
of Concord  ("CMP"),  and  receive in exchange  for each share of MPI  Preferred
Stock surrendered, $0.75 in cash payable by Milestone and one share of preferred
stock of CMP (the "CMP Preferred  Stock").  The CMP Preferred  Stock will have a
liquidation  preference  of $2.25 per share,  will be required to be redeemed by
CMP at $2.25 per share  after five  years,  and will have no voting or  dividend
rights. In addition, any CMP Preferred Stockholder who does not want to wait the
full five years for such shares to be redeemed  can have shares  redeemed by CMP
at the  following  prices  prior to the  fifth  year:  within 2 years  after the
Settlement - $1.00 per share;  2-3 years after the Settlement - $1.40 per share;
3-4 years after the Settlement - $1.60 per share; 4-5 years after the Settlement
- $1.90 per share.  CMP's redemption  obligations will be secured by a letter of
credit.

      Subject to approval by the Delaware  Court,  Milestone  will be sending to
the Settlement Class and the other stockholders of Milestone a notice which will
describe more fully the terms of the Settlement.

      The foregoing  description of the Settlement and the Settlement  Agreement
is qualified in its entirety by reference to the Settlement Agreement, a copy of
which was filed as an Exhibit to Milestone's  Form 8-K filed with the Securities
and Exchange Commission on November 12, 1997.

<PAGE>

Item 5.             Other Information.

      Milestone's Board of Directors determined not to pay a dividend on the MPI
Preferred  Stock for the quarters  ended June 30, 1997 and  September  30, 1997.
After  September  30, 1995,  holders of the MPI  Preferred  Stock were no longer
entitled to receive  dividends on a cumulative basis. As a result of Milestone's
non-payment  of the dividend for the quarter ended June 30, 1997,  which was the
sixth  quarter for which no dividend was paid on the MPI  Preferred  Stock,  and
under  Milestone's  Certificate of Designations for the MPI Preferred Stock, the
number  of  persons  entitled  to serve as  directors  on  Milestone's  Board of
Directors has been increased by one, and the holders of the MPI Preferred Stock,
who currently elect one member of Milestone's  Board of Directors,  are entitled
to elect a second  member of the Board of Directors  to fill such newly  created
directorship.

     On   November   10,   1997,   MAMI   sold   its   remaining   holdings   of
available-for-sale  securities  consisting  of the  Nomura  Series  1996-MDV  B2
("MDV"), DLJ 1994-MF11 B2 ("B2"), and DLJ 1994-MF11 B3 ("B3") (collectively, the
"Certificates").  The $16,700,000 par MDV Certificate was sold for  $14,680,344,
of which the Company  received net proceeds of $4,433,245 and used the remaining
$10,247,099  to pay  off  the  balance  of the  financing  associated  with  the
Certificate.  The $5,000,000 par B2 and the $8,560,000 par B3 Certificates  were
sold for an aggregate of $12,556,138, of which the Company received net proceeds
of $3,181,273  and used the  remaining  $9,374,865 to pay off the balance of the
financing associated with the Certificates.

     At the time of the sale of the  Certificates,  MAMI  had  outstanding  U.S.
Treasury  Note  short  positions  totaling   $25,500,000   associated  with  the
Certificates,  which MAMI had  established  to mitigate  interest  rate risk. In
connection with the sale of the  Certificates,  MAMI closed all of its remaining
U.S. Treasury Note short positions.

      The sale of the Certificates and the close of the U.S. Treasury Note short
positions  did not occur in and has not been  reflected  in the  Company's  1997
third  quarter  consolidated  financial  statements.  The Company will realize a
pre-tax  book  gain in the  fourth  quarter  of 1997  for such  transactions  of
approximately $4,500,000; however, $3,155,446 of such gain is already recognized
in the Company's  September 30, 1997 Balance Sheet as an unrealized holding gain
on   available-for-sale   securities.   In  connection  with  the  sale  of  the
Certificates,  the close of the U.S. Treasury Note short position,  and the 1997
operations of MAMI, the Company will pay bonuses of approximately  $1,200,000 to
several executive officers of the Company pursuant to MAMI's long term incentive
plan.


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

            (a)The following exhibit is included herein:

               Exhibit 27 -  Financial  Data  Schedule  Article 5  included  for
               Electronic  Data  Gathering,   Analysis,  and  Retrieval  (EDGAR)
               purposes  only.   This  Schedule   contains   summary   financial
               information  extracted from the  consolidated  balance sheets and
               consolidated  statements  of revenues and expenses of the Company
               as of and for the nine month period ended September 30, 1997, and
               is  qualified  in its  entirety by  reference  to such  financial
               statements.


            (b)No  reports  on Form 8-K were  filed  during  the  quarter  ended
               September  30,  1997.  A Form 8-K was filed on November  12, 1997
               relating to the Settlement  Agreement described in this report in
               Item 1 - Legal Proceedings.

<PAGE>
                                                          SIGNATURES

               In accordance with 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.




                                                      MILESTONE PROPERTIES, INC.
                                                             (Registrant)




Date: November 11, 1997                   /s/: Robert A. Mandor
                                          Robert A. Mandor
                                          President and Chief Financial Officer






Date: November 11, 1997                    /s/: Patrick S. Kirse
                                           Patrick S. Kirse
                                           Vice President of Accounting
                                           and Controller