UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                    FORM 10-Q

(Mark One)

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

         For the quarterly period ended     September 30, 1999


[  ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
         THE EXCHANGE ACT OF 1934.

         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 No.)
  incorporation or organization)

150 E. Palmetto Park Rd. 4th Floor, Boca Raton, FL                  33432
(Address of principal executive offices)                         (Zip Code)

Registrant's telephone number, including area code            (561) 394 - 9533
                                                       ------------------------


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  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

         As of November 12, 1999,  4,943,633 shares of the  Registrant's  Common
Stock,  par value  $.01 per share,  were  outstanding  and 16,423  shares of the
Registrant's $.78 Convertible Series A Preferred Stock were outstanding.


<PAGE>


Part I: Financial Information
Item 1. Financial Statements

                   MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
              September 30, 1999 (Unaudited) and December 31, 1998

<TABLE>
<CAPTION>
                                                                     September 30, 1999       December 31, 1998
ASSETS
Current Assets:
<S>                                                                     <C>                    <C>
    Cash and cash equivalents                                           $   6,169,638          $     11,826,301
    Restricted cash                                                           222,000                   222,000
    Reserved cash for settlement                                            1,650,393                         0
    Loans receivable                                                        1,389,521                 1,444,442
    Accounts receivable                                                       641,543                   812,555
    Accrued interest receivable                                             2,993,377                 5,185,432
    Due from related party                                                    972,760                   837,400
    Prepaid expenses and other                                              1,231,787                 1,231,663
                                                                       --------------                 ----------
         Total current assets                                              15,271,019                21,559,793

Property, improvements and equipment, net                                  21,302,107                21,517,884
Wraparound notes, net                                                      29,866,432                39,529,787
Deferred income tax asset, net                                              1,843,545                 2,994,070
Investment in joint ventures                                                  708,093                         0
Investments in preferred stock                                                      0                   445,500
Management contract rights, net                                               136,798                   193,600
Goodwill and other, net                                                       638,046                   681,562
                                                                       --------------                   -------

         Total assets                                                   $  69,766,040          $     86,922,196
                                                                         ==============          ==============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
    Accounts payable and accrued expenses                               $   1,317,985          $      2,436,964
    Accrued litigation payable                                              2,393,811                 9,692,454
    Accrued interest payable                                                  392,757                   306,846
    Master lease payable                                                    4,666,721                 8,962,828
    Current portion of mortgages and notes payable                          4,807,798                 5,782,950
    Income taxes payable                                                    2,777,427                 2,836,496
                                                                       --------------                 ---------
         Total current liabilities                                         16,356,499                30,018,538

Mortgages and notes payable                                                39,643,945                42,194,179
                                                                       ---------------               ----------

         Total liabilities                                                 56,000,444                72,212,717
                                                                            ----------               ----------

Commitments and Contingencies
Stockholders' equity:
   Common stock ($.01 par value, 10,000,000 shares authorized,
     4,943,633 issued and outstanding at September 30, 1999 and
     December 31, 1998; 692,591 shares in treasury)                          49,436                     49,436
   Preferred stock (Series A $.01 par value, $10 liquidation
     preference, 10,000,000 and 1,000,000 shares authorized,
     16,423 and 2,999,707 shares issued and outstanding at
     September 30, 1999 and December 31, 1998, respectively)                    164                     29,997
   Additional paid in surplus                                            45,527,013                 45,497,180
   Accumulated deficit                                                  (28,370,599)               (27,426,716)
   Shares held in treasury - at cost                                    ( 3,440,418)                (3,440,418)
                                                                        ------------            ---------------
     Total stockholders' equity                                           13,765,596                14,709,479
                                                                          ----------             --------------

     Total liabilities and stockholders' equity                      $    69,766,040              $ 86,922,196
                                                                     ===============            ===============

                             See Accompanying Notes to Consolidated Financial Statements

</TABLE>
                                                          2

<PAGE>



                   MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF REVENUES AND EXPENSES
                                   (Unaudited)
             For the Three Months Ended September 30, 1999 and 1998

<TABLE>
<CAPTION>
                                                                 September 30, 1999        September 30, 1998

REVENUES
<S>                                                                  <C>                       <C>
   Rent                                                              $   1,815,324             $   2,414,928
   Interest income                                                       1,172,416                 2,216,211
   Revenue from management company operations                              148,336                   143,012
   Tenant reimbursements                                                   214,761                   200,322
   Management and reimbursement income                                      20,129                    26,480
   Percentage rent                                                          84,041                    46,050
   Gain on sale of real estate and real estate related assets            1,488,523                 1,284,617
                                                                       -----------                ----------

       Total revenues                                                    4,943,530                 6,331,620
                                                                       -----------                 ---------

EXPENSES
   Master lease expense                                                  1,549,217                 3,421,815
   Interest expense                                                        914,896                 1,345,002
   Depreciation and amortization                                           193,793                    87,881
   Salaries, general and administrative                                  1,219,811                   583,014
   Property expenses                                                       474,799                   348,797
   Expenses for management company operations                              171,242                   242,988
   Professional fees                                                       127,127                   298,491
                                                                       -----------                ----------

       Total expenses                                                    4,650,885                 6,327,988
                                                                        ----------                 ----------

Income before income taxes                                                 292,645                     3,632

Provision (benefit) for income taxes                                       964,986                  (367,821)
                                                                         ---------                  ---------

Net (loss) income attributable to common stockholders               $     (672,341)            $     371,453
                                                                       ============             =============

(Loss) income per common share, basic and diluted                 $         ( 0.16)          $          0.09
                                                                     ==============           ===============

Weighted average common shares outstanding                               4,250,992                 4,230,245
                                                                       ===========               ===========



                             See Accompanying Notes to Consolidated Financial Statements
</TABLE>


                                                          3

<PAGE>

                   MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF REVENUES AND EXPENSES
                                   (Unaudited)
              For the Nine Months Ended September 30, 1999 and 1998

<TABLE>
<CAPTION>

                                                                 September 30, 1999        September 30, 1998

REVENUES
<S>                                                                  <C>                       <C>
   Rent                                                              $   5,804,790             $   7,759,148
   Interest income                                                       3,913,787                 6,684,142
   Revenue from management company operations                              477,234                   358,016
   Tenant reimbursements                                                   750,211                   733,924
   Management and reimbursement income                                      60,952                    82,466
   Percentage rent                                                         262,487                   357,057
   Gain on sale of real estate and real estate related assets            2,762,316                 1,366,507
                                                                     -------------               ------------

       Total revenues                                                   14,031,777                17,341,260
                                                                      ------------                ----------

EXPENSES
   Master lease expense                                                  5,172,613                10,313,481
   Interest expense                                                      2,904,141                 4,445,607
   Depreciation and amortization                                           576,714                   493,902
   Salaries, general and administrative                                  2,654,853                 1,787,370
   Property expenses                                                     1,417,163                 1,261,268
   Expenses for management company operations                              615,641                   766,288
   Professional fees                                                       469,299                   826,130
                                                                    --------------               -----------

       Total expenses                                                   13,810,424                19,894,046
                                                                      ------------                -----------

Income (loss) before income taxes                                          221,353                (2,552,786)

Provision (benefit) for income taxes                                     1,165,236                (1,353,443)
                                                                     -------------                -----------

Net loss attributable to common stockholders                        $     (943,883)              $(1,199,343)
                                                                       ============               ===========

Loss per common share, basic and diluted                       $             (0.22)          $         (0.28)
                                                                  =================           ===============

Weighted average common shares outstanding                               4,250,992                 4,229,979
                                                                     =============               ===========


                             See Accompanying Notes to Consolidated Financial Statements
</TABLE>


                                                          4

<PAGE>

                   MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                   (Unaudited)
                  For the Nine Months Ended September 30, 1999

<TABLE>
<CAPTION>



                                                     Common Stock              Preferred Stock             Treasury Stock

                                                  Shares        Cost         Shares          Cost      Shares          Cost
=============================================== =========== ===========  ==============  =========== ===========  ==============
<S>                                               <C>        <C>              <C>         <C>          <C>        <C>
Balance, January 1, 1999                          4,943,633  $   49,436       2,999,707   $   29,997   (692,591)  $  (3,440,418)

Cancellation of Series A Preferred Stock                                    (2,983,284)     (29,833)

Net loss for the nine  months
          ended September 30, 1999
                                                 ---------- ----------- ---------------  -----------  ----------  --------------
Balance, September 30, 1999                       4,943,633    $ 49,436          16,423        $ 164   (692,591)   $ (3,440,418)
                                                =========== ===========  ==============  =========== ===========  ==============




                                                  Additional
                                                    paid in       Accumulated     Stockholders'
                                                    surplus         deficit          equity
=============================================== =============== ===============  ===============
<S>                                                <C>          <C>                 <C>
Balance, January 1, 1999                           $ 45,497,180 $  (27,426,716)     $ 14,709,479

Cancellation of Series A Preferred Stock                 29,833                                0

Net loss for the nine  months
          ended September 30, 1999                                    (943,883)        (943,883)
                                                ---------------  --------------   --------------
Balance, September 30, 1999                        $ 45,527,013  $ (28,370,599)     $ 13,765,596
                                                =============== ===============  ===============


                              See Accompanying Notes to Consolidated Financial Statements
</TABLE>


                                                           5

<PAGE>



                   MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
              For the Nine Months Ended September 30, 1999 and 1998

<TABLE>
<CAPTION>

                                                                       September 30, 1999        September 30, 1998
CASH FLOW FROM OPERATING ACTIVITIES
<S>                                                                        <C>                        <C>
   Net loss                                                               $    (943,883)             $ (1,199,343)
   Adjustments to reconcile net loss to net cash used in
        operating activities:
   Depreciation and amortization                                                576,714                    493,902
   Deferred taxes                                                             1,150,525                 (1,514,641)
   Gain on sale of real estate and real estate related assets                (2,721,750)                (1,366,507)
   Changes in operating assets and liabilities
         Decrease in accounts receivable                                        137,579                    437,420
         Increase in due from related party                                    (135,360)                  (260,125)
         Decrease in accrued interest receivable                              2,225,488                  2,908,176
         Increase in prepaid expenses and other                                 (57,886)                (1,536,320)
         Decrease in accounts payable and accrued expenses                   (1,118,979)                  (542,624)
         Decrease in accrued litigation payable                              (7,298,643)                         0
         Increase in accrued interest payable                                    85,911                     40,066
         Decrease in master lease payable                                    (4,296,107)                (3,489,028)
         Decrease in income taxes payable                                       (59,069)                         0
                                                                      ------------------          ----------------

         Net cash used in operating activities                              (12,455,460)                (6,029,024)
                                                                         ---------------                -----------

CASH FLOW FROM INVESTING ACTIVITIES
   Principal repayments on loans receivable                                      54,921                     50,713
   Principal repayments on wraparound notes                                   3,782,763                  5,017,620
   Investment in wraparound notes                                                     0                   (108,838)
   Investment in affiliate                                                     (708,093)                         0
   Purchase of building and land                                                      0                 (6,825,000)
   Purchase of leasehold improvements                                          (342,532)                  (302,465)
   Proceeds from realization of real estate related assets, net               8,742,017                    950,334
   Proceeds from the sale of property                                                 0                    319,230
   Proceeds from redemption of investments in preferred stock                    445,500                 1,336,500
                                                                        ----------------                 ----------

         Net cash provided by investing activities                            11,974,576                   438,094
                                                                          --------------                 ----------

CASH FLOW FROM FINANCING ACTIVITIES
   Proceeds from mortgages and notes payable                                   1,750,000                 9,180,000
   Principal payments on mortgages and notes payable                          (5,275,386)               (3,824,663)
   Reserved cash for settlement                                               (1,650,393)                        0
                                                                          ---------------              --------------

         Net cash (used in) provided by financing activities                  (5,175,779)                5,355,337
                                                                          ---------------                ----------

NET DECREASE IN CASH AND CASH EQUIVALENTS                                     (5,656,663)                 (235,593)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                11,826,301                13,435,237
                                                                           -------------                ----------

CASH AND CASH EQUIVALENTS, END OF PERIOD                                 $     6,169,638            $   13,199,644
                                                                          ==============             =============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

         Cash paid during the period for interest                         $    4,314,309           $     4,405,541
                                                                           =============            ==============


         Cash paid during the period for income taxes                   $         59,069          $        185,472
                                                                         ===============           ===============



                            See Accompanying Notes to Consolidated Financial Statements
</TABLE>

                                                         6

<PAGE>



                   MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)

The accompanying consolidated financial statements of Milestone Properties, Inc.
("Milestone") and its wholly owned  subsidiaries  (collectively,  Milestone with
its  subsidiaries  is 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, 1999 and 1998
are unaudited.  The results of operations for the interim  periods shown in this
report  are not  necessarily  indicative  of the  results  of  operations  to be
expected for the fiscal year. Certain information for 1998 has been reclassified
to  conform  to the 1999  presentation.  These  consolidated  interim  financial
statements  should be read in conjunction with the annual  financial  statements
and footnotes  included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1998.

The  Company  is  engaged  in  the  business  of  owning,  acquiring,  managing,
developing  and  investing  in  commercial  real estate and real estate  related
assets.  The  Company is  primarily  engaged  in the  ownership,  operation  and
management of interests in commercial real estate  properties,  currently (as of
the date of this filing)  consisting of (i) 10 properties owned in fee (the "Fee
Properties"),  (ii) the ownership of wraparound notes (the  "Wraparound  Notes")
and wraparound  mortgages (the  "Wraparound  Mortgages"  and,  together with the
Wraparound  Notes,  the "Wrap  Debt")  which are secured by 17  commercial  real
properties (the "Underlying  Properties" and,  together with the Fee Properties,
the "Properties")  and (iii) the operation and management of the Properties.  At
September 30, 1999, the Company possessed interests in 32 commercial real estate
properties  consisting of (i) 10 properties  owned in fee and (ii) the ownership
of wraparound  notes and  wraparound  mortgages  secured by 22  commercial  real
properties.  At  September  30,  1998,  the Company  possessed  interests  in 33
commercial real properties  consisting of (i) 6 properties owned in fee and (ii)
the  ownership  of  wraparound  notes and  wraparound  mortgages  secured  by 27
commercial real properties.

1.       Acquisition and Disposition of Real Estate Related Assets

On April 6, 1999, a wraparound note held by the Company on a 125,803 square foot
shopping center property  located in Pascagoula,  Mississippi  (the  "Pascagoula
Property"),  was paid as a result of the sale of the Pascagoula  Property by its
owner,  an affiliate of the Company (the  partnership  that owned the Pascagoula
Property),  to an unrelated  third  party.  In  connection  with the sale of the
Pascagoula Property,  the Company, as the master lessee on a master lease on the
Pascagoula  Property,  canceled  the subject  master  lease.  As a result of the
payment of the  wraparound  note,  the  Company  realized  net cash  proceeds of
approximately $2,178,000 and a book gain of approximately $845,000 in the second
quarter of 1999.



                                                         7

<PAGE>



On April 27, 1999, a wraparound note held by the Company on a 52,700 square foot
shopping  center  property  located in Baton Rouge,  Louisiana (the "Baton Rouge
Property"),  was paid as a result of the sale of the Baton Rouge Property by its
owner, an affiliate of the Company (the  partnership  that owned the Baton Rouge
Property), to an unrelated third party. In connection with the sale of the Baton
Rouge Property, the Company, as the master lessee on a master lease on the Baton
Rouge  Property,  canceled  the subject  master  lease.  Of the gross  proceeds,
$1,896,208 was used to satisfy the  underlying  mortgage debt on the Baton Rouge
Property. As a result of the payment of the wraparound note and the satisfaction
of the  underlying  mortgage  debt,  the Company  realized net cash  proceeds of
approximately $2,045,000 and a book gain of approximately $389,000 in the second
quarter of 1999.

On July 30, 1999, a wraparound  note held by the Company on a 31,170 square foot
single  tenant  commercial  building  located  in  Franklin,  Pennsylvania  (the
"Franklin Property"),  was paid as a result of the sale of the Franklin Property
by its owner,  an  affiliate  of the  Company  (the  partnership  that owned the
Franklin Property),  to an unrelated third party. In connection with the sale of
the Franklin  Property,  the Company,  as the master lessee on a master lease on
the Franklin Property, canceled the subject master lease. Of the gross proceeds,
$1,348,000  was used to defease  the  underlying  bond debt.  As a result of the
payment of the  wraparound  note,  the  Company  realized  net cash  proceeds of
approximately $896,000 and a book gain of approximately  $1,544,000 in the third
quarter of 1999.

On October 21, 1999, five wraparound  notes held by the Company on five separate
single-tenant  commercial buildings  (collectively the "Five Properties"),  were
paid as a result of the sale of the Five Properties by their owners,  affiliates
of the Company (the  partnerships  that owned the Five  Properties) to unrelated
parties.  In conjunction with the sale of the Five Properties,  the Company,  as
the master lessee on a master lease on the Five Properties, canceled the subject
master lease.  The  negotiated  sales prices of the Five  Properties  aggregated
$12,500,000.  As a result of the sale of the Five Properties, the payment of the
wraparound  notes and the  assumption  of the  underlying  mortgage  debt by the
buyers, the Company received approximately $5,400,000 in cash and will realize a
pre-tax book gain of approximately $2,200,000 in the fourth quarter of 1999.

2.       Income Taxes

The Company is required by Statement of Financial  Accounting  Standards  (SFAS)
No. 109 to record a deferred tax asset or liability for the basis of an asset or
liability that is temporarily different for financial reporting purposes and tax
reporting  purposes.  Income taxes for interim  periods are  generally  computed
using the  effective  tax rate  estimated to be  applicable  for the full fiscal
year.   The  interim  tax   provision  is  adjusted  for  specific   significant
transactions  which affect  deferred tax assets or liabilities as recorded under
SFAS 109.

During 1999,  the wraparound  notes held by the Company on the eight  properties
described in note 1. above were satisfied.  Relating to such  wraparound  notes,
the Company had previously  recorded deferred tax assets which were (or will be)
realized  through the provision for income taxes.  As a consequence of realizing
the deferred tax assets specifically  recorded for these wraparound notes, which
is a non-cash tax  adjustment,  the Company's  effective tax rate for the period
ended September 30, 1999 is  significantly  different from the expected  federal
tax rate of 35%,  and the  expected  rate for the entire  year 1999 will also be
significantly  different.  The Company did not realize any  deferred  tax assets
from property sales in the corresponding third quarter of 1998.

                                                         8

<PAGE>




In prior years,  the Company  recorded income tax provisions  related to certain
investment  transactions.  The Company no longer  believes that the income taxes
payable  resulting from these provisions is a necessary  liability,  and it will
reverse  these  accruals,  amounting to  approximately  $2,700,000 in the fourth
quarter of 1999.  The reversal of these accruals will reduce the 1999 income tax
provision, but will not affect cash or liquidity.

3.       Legal Proceedings

As  previously  reported,  the Company is the plaintiff in a Florida state court
action against  certain  insurance  companies (the "National  Union Action") for
their  refusal to contribute  to the  settlement of certain  previously-reported
actions (known as the "Winston  Actions") which involved the Company and certain
of its present and former  officers and directors.  The National Union Action is
currently  in  discovery,  and the  Company  is not in a  position  to render an
opinion as to its outcome.

For a detailed  description of the Winston Actions,  the settlement thereof, and
the  commencement  of the  National  Union  Action,  please  see  the  Company's
Quarterly  Report  on Form 10-Q for the  quarter  ended  June 30,  1999 (and the
cross-references therein).

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

General

This Quarterly  Report on Form 10-Q for the interim  period ended  September 30,
1999  filed  by  Milestone   contains  or  incorporates  by  reference   certain
forward-looking  statements  within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and Milestone
intends  that such  forward-looking  statements  be subject to the safe  harbors
created thereby. Such forward-looking statements involve risks and uncertainties
and include,  but are not limited to,  statements  regarding  future  events and
Milestone's  plans,   goals  and  objectives.   Such  statements  are  generally
accompanied  by words such as  "intend,"  "anticipate,"  "believe,"  "estimate,"
"expect" or similar terms. Milestone's actual results may differ materially from
such  statements.  Factors that could cause or  contribute  to such  differences
include,   without  limitation,   the  following:  (i)  its  plans,  strategies,
objectives, expectations and intentions are subject to change at any time at its
discretion;  (ii) general  economic and business  conditions,  which may,  among
other  things,  affect  the  demand  for  retail  space or  retails  goods,  the
availability and creditworthiness of prospective  tenants,  rental terms and the
terms and  availability of financing,  are subject to change at any time;  (iii)
adverse  changes  in  real  estate  markets   including,   among  other  things,
competition  with  other  companies;  (iv)  adverse  changes  in the  properties
Milestone  owns which could require the  expenditure of funds to fix or maintain
such  properties;   (v)  the  general  risks  of  real  estate  development  and
acquisitions,  such  as  changes  in  demographics,  construction  delays,  cost
overruns,  work stoppages and slowdowns,  the cost and  availability  of skilled
labor and weather conditions; (vi) governmental actions and initiatives, such as
seizures of property,  condemnation  and  construction of alternative  roadways;
(vii)  environmental and safety  conditions and hazards;  (viii) the adequacy of
Year 2000 compliance measures; and (ix) other risks and uncertainties  indicated
from  time to time in  Milestone's  filings  with the  Securities  and  Exchange
Commission and

                                                         9

<PAGE>



in the documents  incorporated herein by reference.  Although Milestone believes
that the assumptions  underlying its forward-looking  statements are reasonable,
any of the assumptions could prove inaccurate and,  therefore,  Milestone cannot
make  any  assurances  that the  results  contemplated  in such  forward-looking
statements will be realized.  The inclusion of such forward- looking information
should not be regarded as a representation by Milestone or any other person that
the future  events,  plans or  expectations  contemplated  by Milestone  will be
achieved.  Furthermore,  past  performance  is not  necessarily  an indicator of
future performance.

The  Company  is  engaged  in  the  business  of  owning,  acquiring,  managing,
developing  and  investing  in  commercial  real estate and real estate  related
assets.  The  Company is  primarily  engaged  in the  ownership,  operation  and
management of interests in commercial real estate  properties,  currently (as of
the date of this filing)  consisting of (i) 10 properties owned in fee (the "Fee
Properties"),  (ii) the ownership of wraparound notes (the  "Wraparound  Notes")
and wraparound  mortgages (the  "Wraparound  Mortgages"  and,  together with the
Wraparound  Notes,  the "Wrap  Debt")  which are secured by 17  commercial  real
properties (the "Underlying  Properties" and,  together with the Fee Properties,
the "Properties")  and (iii) the operation and management of the Properties.  At
September 30, 1999, the Company possessed interests in 32 commercial real estate
properties  consisting of (i) 10 Fee  Properties and (ii) Wrap Debt interests in
22 Underlying Properties. At September 30, 1998, the Company possessed interests
in 33 commercial  real  properties  consisting of (i) 6 Fee  Properties and (ii)
Wrap Debt interests in 27 Underlying Properties.


Impact of Year 2000

The Year 2000 problem  arises from the  historic use of only two digits  (rather
than four) for the  designation of a year in date  information  within  computer
programs. If not corrected,  any of the Company's equipment or software programs
that perform time sensitive  calculations may incorrectly identify the year 2000
and beyond or not  function  after  December  31,  1999.  This  could  result in
miscalculations  or a major failure of certain systems.  The Company may also be
vulnerable to the Year 2000 problems of its tenants,  financial  institutions or
other service  vendors and/or other  companies  with which it conducts  business
(e.g., utility companies, etc).

Early in calendar  year 1998,  the Company  developed  and initiated a Year 2000
compliance program, including information systems modifications, in an effort to
ensure  that its  business  is not  interrupted  by the Year 2000  problem.  The
Company's Year 2000 compliance program is broken into the following components:

Renovating   internal  systems  and  applications  and  ensuring  compliance  of
peripheral third party systems.  The Company's internal systems and applications
include  the  accounting  system,  the lease  asset  management  system  and the
operating  system (AS 400).  As a result of the  Company's  commitment to ensure
that its systems are year 2000 compliant,  management decided to replace the old
AS400 with a new AS400.  The new AS400 was installed  during September 1999. The
Company  uses a  number  of  third  party  package  systems  to  supplement  its
internally  developed  programs.  From time to time,  the  Company  updates  the
accounting  system and the  operating  system with upgrades it receives from the
software  manufacturers.  The software  manufacturers  have informed the Company
that they will continue to provide all updates  necessary for such systems to be
Year 2000

                                                        10

<PAGE>



compliant.  These software  manufacturers have provided all such upgrades to the
Company  which has  installed  all  updates  received  to date.  The lease asset
management system is in the final stages of testing.


Ensuring Year 2000 compliance by external  companies that conduct  business with
the Company. The Company has contacted all of its major tenants which remit rent
and other payments to the Company and financial  institutions  which process the
rental and other  payments  from  major  tenants  on behalf of the  Company,  to
inquire about their Year 2000 compliance. The Company has not received responses
from all those  contacted,  but those who have  responded have not indicated any
problems at this time.

Implementing  standards and  conducting  testing in an effort to ensure that the
Company's existing and future systems are Year 2000 compliant.  All new systems,
whether hardware or software,  are tested before  implementation in an effort to
ensure Year 2000 compliance.

The Company  believes  that the total cost of its Year 2000  compliance  program
will not exceed  $50,000.  The new AS400 will be leased over the next 5 years at
an annual lease rate of $7,500. To date, the Company has incurred  approximately
$15,000 of such  expenses  which  includes  hardware and software  purchases and
upgrades.  The  Company  does  not  anticipate  that the  costs of any  required
modifications to its information  technology or embedded technology systems will
have a material adverse effect on its financial position,  results of operations
or liquidity, although there can be no assurances that this will be the case.

Although the Company  systems  upgrading was finalized  during  September  1999,
there can be no assurances that the system will work properly  independently  or
in conjunction with the systems of any third parties.  In addition,  the Company
would  continue to bear the risk of a material  adverse  affect,  if any, if its
third party systems do not appropriately  address their own Year 2000 compliance
issues.  The Company's  current estimates of the impact of the Year 2000 problem
on its operations  and financial  results do not include costs and time that may
be  incurred  as a result  of other  companies'  failure  to  become  Year  2000
compliant  on a timely  basis,  which costs could be  material.  There can be no
assurance that such other  companies  will achieve Year 2000  compliance or that
any  conversions  by such  companies  to  become  Year  2000  compliant  will be
compatible with the Company's computer and operating  systems.  The inability of
the Company or any of its material  third parties to become Year 2000  compliant
in a timely  manner  could  have a  material  adverse  effect  on the  Company's
financial condition or results of operations.

In the event that the Company or material  third parties fail to complete  their
Year 2000 compliance programs successfully and on time, the Company's ability to
operate its business,  service  tenants,  bill,  collect its revenue in a timely
manner,  pay  debts  and  communicate  generally  could be  adversely  affected.
Although there can be no assurance that the conversion of the Company's  systems
will be successful or that the Company's key third-party relationships will have
successful conversion programs, management does not expect that any such failure
would have a  material  adverse  effect on the  financial  position,  results of
operations or liquidity of the Company, although there can be no assurances that
this will be the case.

The Company has day-to-day  operational  contingency plans, and management is in
the process of updating these plans for possible Year 2000 specific  operational
requirements. If the Company's

                                                        11

<PAGE>



major tenants,  financial  institutions or third party systems are not Year 2000
compliant,  it may have to arrange  for  alternative  sources of services in the
fall of 1999 in  preparation  for the Year 2000.  The Company  does not have any
other  contingency  plans with respect to other problems that could arise in its
business  as a result  of the Year  2000  problem.  Any of  these  could  have a
material  adverse  effect on the  Company's  financial  condition  or results of
operations.

Results of Operations

Three Months Ended  September 30, 1999 compared to Three Months Ended  September
30, 1998

For the three months ended September 30, 1999, the Company recognized a net loss
of  $672,341,  or $0.16  per  share  of  common  stock,  on  total  revenues  of
$4,943,530.  For  the  three  months  ended  September  30,  1998,  the  Company
recognized a net gain of $371,453,  or $0.09 per share of common stock, on total
revenues of $6,331,620.

Total revenues for the three months ended September 30, 1999 were $4,943,530, as
compared to $6,331,620 for the three months ended September 30, 1998, a decrease
of $1,388,090, or 22%.

Rent  decreased by $599,604,  or 25%, to  $1,815,324  for the three months ended
September  30,  1999 as  compared  to  $2,414,928  for the  three  months  ended
September 30, 1998. This decrease is primarily due to property sales in 1998 and
1999.

Interest  income  decreased by  $1,043,795,  or 47% to $1,172,416  for the three
months ended  September 30, 1999  compared to $2,216,211  the three months ended
September 30, 1998. This decrease is primarily due to property sales in 1998 and
1999 by the owners of the  underlying  properties  which  caused the  Company to
receive final payment in the respective year of sale on wraparound notes held by
the Company.

Gain on sale of real estate and real estate  related  assets was  $1,488,523 for
the three  months ended  September  30, 1999 as compared to  $1,284,617  for the
three months ended  September  30, 1998.  The increase is due to the sale of the
Franklin property during the third quarter of 1999.

Total expenses for the three months ended September 30, 1999 were $4,650,885, as
compared to $6,327,988 for the three months ended September 30, 1998, a decrease
of  $1,677,103,  or 27%, due  primarily to a decrease in master lease expense of
$1,872,598  resulting from a decrease in the number of properties  leased by the
Company as a result of the sale of some of the  underlying  properties  by their
owners during 1998 and 1999.

Interest  expense for the three months ended September 30, 1999 was $914,896,  a
decrease  of  $430,106,  or 32%,  from  $1,345,002  for the three  months  ended
September 30, 1998.  Such decrease is due to a reduction in the underlying  debt
of the Company resulting from property sales in 1998 and 1999.

Salaries,  general  and  administrative  expense  for  the  three  months  ended
September  30,  1999 was  $1,219,811,  an  increase  of  $636,797,  or 109% from
$583,014 for the three months ended  September 30, 1998.  The increase is due to
the Company's  repurchase of 222,200 options to purchase shares of the Company's
common stock from certain executives of the Company for approximately $650,000,

                                                        12

<PAGE>



which  amount  represents  the excess of the current  market price of the common
stock over the exercise price of the options.


Nine Months Ended September 30, 1999 compared to Nine Months Ended September 30,
1998

For the nine months ended September 30, 1999, the Company  recognized a net loss
of  $943,883,  or $0.22  per  share  of  common  stock,  on  total  revenues  of
$14,031,777.  For  the  nine  months  ended  September  30,  1998,  the  Company
recognized  a net loss of  $1,199,343,  or $0.28 per share of common  stock,  on
total revenues of $17,341,260.

Total revenues for the nine months ended September 30, 1999 were $14,031,777, as
compared to $17,341,260 for the nine months ended September 30, 1998, a decrease
of $3,309,483, or 19%.

Rent  decreased by  $1,954,358,  or 25% to $5,804,790  for the nine months ended
September 30, 1999 as compared to $7,759,148 for the nine months ended September
30, 1998. This decrease is primarily due to property sales in 1998 and 1999.

Interest  income  decreased by  $2,770,355,  or 41% to  $3,913,787  for the nine
months ended September 30, 1999 compared to $6,684,142 for the nine months ended
September 30, 1998. This decrease is primarily due to property sales in 1998 and
1999 by the owners of the  underlying  properties  which  caused the  Company to
receive final payment in the respective year of sale on wraparound notes held by
the Company.

Gain on sale of real estate and real estate  related  assets was  $2,762,316 for
the nine months ended  September 30, 1999  compared to  $1,366,507  for the nine
months ended  September 30, 1998.  The increase is due to the property  sales of
Pascagoula, Baton Rouge and Franklin.

Total expenses for the nine months ended September 30, 1999 were $13,810,424, as
compared to $19,894,046 for the nine months ended September 30, 1998, a decrease
of  $6,083,622,  or 31%, due  primarily to a decrease in master lease expense of
approximately  $5,140,868  resulting from a decrease in the number of properties
leased  by the  Company  as a  result  of the  sale of  some  of the  underlying
properties by their owners during 1998 and 1999.

Interest expense for the nine months ended September 30, 1999 was $2,904,141,  a
decrease of  $1,541,466,  or 35%,  from  $4,445,607  for the nine  months  ended
September 30, 1998.  Such decrease is due to a reduction in the underlying  debt
of the Company resulting from property sales in 1998 and 1999.

Salaries, general and administrative expense for the nine months ended September
30, 1999 was $2,654,853 an increase of $867,483,  or 49% from $1,787,370 for the
nine months  ended  September  30, 1998.  The  increase is primarily  due to the
repurchase of 222,200 options to purchase shares of the Company's  common stock,
from certain executives of the Company for approximately $650,000,  which amount
represents  the excess of the current  market price of the common stock over the
exercise price of the options.




                                                        13

<PAGE>



Cash Flows

For the nine months ended September 30, 1999, the Company had a decrease in cash
and cash  equivalents of $5,656,663,  as compared to a decrease in cash and cash
equivalents  of $235,593 for the nine months ended  September 30, 1998.  For the
nine months ended  September  30, 1999,  cash used in operating  activities  was
$12,455,460, cash provided by investing activities was $11,974,576 and cash used
in  financing  activities  was  $5,175,779.   The  decrease  in  cash  and  cash
equivalents is primarily due to the payment of approximately  $8,949,000 of cash
to the exchange agent in connection with the  cancellation of Series A Preferred
Stock in accordance  with the  settlement  of the Winston  Actions (the "Winston
Settlement Agreement"). For a detailed description of the other Winston Actions,
the settlement  thereof,  please see the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1999 (and the cross-references therein).

Liquidity and Capital Resources

Approximately  $2,883,000 of underlying debt on the property  located in Quincy,
Illinois,  (the "Quincy  Property") came due in July 1998. The mortgagee holding
the underlying debt did not demand payment while the  partnership  that owns the
Quincy Property  attempted to sell the Quincy Property.  Although the underlying
debt on the  Quincy  Property  has not  been  satisfied,  regular  monthly  debt
payments have been made by the Company through March 1999. On March 1, 1999, the
mortgagee  holding the  underlying  debt sent a demand letter seeking to collect
the  outstanding  balance.  At this time, the  partnership  that owns the Quincy
Property expects to convey ownership and title of the property to the mortgagee.
If conveyance occurs, the Company expects to record a book gain of approximately
$1,660,000 but no cash proceeds.

During 1999, the Company has invested approximately  $1,035,000 in joint venture
partnerships  with  unrelated  third  parties,  which  has  contracted  for  the
acquisition of four land parcels in the South Florida area. Currently,  all such
investment is at risk.

The  Company's  existing  borrowings  and  the  encumbrances  on the  properties
securing  those  borrowings  may inhibit,  or result in  increased  costs to the
Company in  connection  with,  its ability to incur future  indebtedness  and/or
raise substantial equity capital in the marketplace.

The Company has invested available funds in secure, short-term, interest bearing
investments.  The Company believes that its levels of working capital, liquidity
and funds from operations are sufficient to support present operations.

As a result of, and in connection  with, the settlement of the Winston  Actions,
the Company has disbursed  approximately  $10.3 million,  which amount  includes
$1.7  million  which  is held in  trust  by the  exchange  agent  as  settlement
consideration  to be paid to Series A Preferred  Stockholders,  defendants's and
plaintiff's attorneys fees, court and Commission filing fees, printing costs and
other expenses.  The Company,  however,  is considering  whether to, and ways it
could,  raise  cash to make  additional  investments  in  suitable  real  estate
properties.  If the Company  determines to raise additional funds, it may decide
to do so  through a public or  private  sale of debt or  equity  securities,  by
selling or  realizing  on assets  (including,  but not limited to,  sales of its
properties and interest in the Wrap Debt), through corporate  borrowings,  or by
other means.

                                                        14

<PAGE>



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



Item 3.        Quantitative and Qualitative Disclosure about Market Risk.

At September 30, 1999, the Company was not invested in any market risk sensitive
instruments held for either trading purposes or for purposes other than trading.
Also, the Company does not have any variable or adjustable rate mortgages on any
of its  properties.  As a result,  the Company is not  subject to interest  rate
risk,  foreign  currency  exchange  rate risk,  commodity  price risk,  or other
relevant market risks, such as equity price risk.


                                                        15

<PAGE>



                                            PART II - OTHER INFORMATION

Item 1.        Legal Proceedings

As  previously  reported,  the Company is the plaintiff in a Florida state court
action against  certain  insurance  companies (the "National  Union Action") for
their  refusal to contribute  to the  settlement of certain  previously-reported
actions (known as the "Winston  Actions") which involved the Company and certain
of its present and former  officers and directors.  The National Union Action is
currently  in  discovery,  and the  Company  is not in a  position  to render an
opinion as to its outcome.

For a detailed description of the other Winston Actions, the settlement thereof,
and the  commencement  of the National  Union  Action,  please see the Company's
Quarterly  Report  on Form 10-Q for the  quarter  ended  June 30,  1999 (and the
cross-references therein).


Item 2.        Other Information

Milestone's  Board of Directors  determined  not to declare any dividends on the
Series A Preferred Stock during the years ended December 31, 1996, 1997 and 1998
and during the nine months ended September 30, 1999. The last dividend  declared
by  Milestone  was for the  quarter  ended  December  31,  1995  and was paid on
February 15, 1996 at $0.195 per share of Series A Preferred Stock.

After September 30, 1995,  holders of the Series A Preferred Stock have not been
entitled to receive dividends on a cumulative basis. Pursuant to the Certificate
of  Designations  of the Series A  Preferred  Stock,  after  such date,  no cash
dividend may be paid on the Common Stock unless full  dividends of $0.195 on all
outstanding  shares of Series A Preferred  Stock for the then current  quarterly
dividend  period are declared and either paid or sufficient sums for the payment
thereof  are  set  apart.  As  a  result  of  Milestone's  Board  of  Directors'
determination  not to declare a dividend  for the quarter  ended June 30,  1997,
which was the sixth consecutive quarter for which no dividend was declared,  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 Series A Preferred
Stock, who are otherwise entitled to elect one member of the Board of Directors,
became  entitled to elect a second member of the Board of Directors to fill such
newly created  directorship.  At the annual meeting of  stockholders  on May 28,
1999, the Series A Preferred  Stockholders  elected Harvey Shore to the Board of
Directors to fill such newly created directorship. Any decision as to the future
payment of dividends on the Series A Preferred  Stock will depend on the results
of operations and the financial  condition of the Company and such other factors
as Milestone's Board of Directors,  in its discretion,  deems relevant. See Part
I-Financial  Information,  Item  2.  Management's  Discussion  and  Analysis  of
Financial Condition and Results of Operation, Liquidity and Capital Resources.








                                                        16

<PAGE>



Item 3.        Exhibits and Reports on Form 8-K

         (a)       The following exhibits are included herein:

                   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,  1999,  and is  qualified  in its  entirety  by
                             reference to such financial statements.

         (b)       Reports on Form 8-K:  There were no reports filed on Form 8-K
                   during the third quarter of 1999.






                                                        17

<PAGE>


                                                    SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.


                                   MILESTONE PROPERTIES, INC.
                                   (Registrant)



Date:    November 12, 1999        By    /s/ Robert A. Mandor
                                        ---------------------------------------
                                        Robert A. Mandor
                                        President and Chief Financial Officer



Date:    November 12, 1999       By    /s/ Patrick S. Kirse
                                       ---------------------------------------
                                       Patrick S. Kirse
                                       Vice President of Accounting
                                       (Principal Accounting Officer)









                                                        18