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     March 31, 1998

[  ]     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)
   Incorporation or Organization)

150 E. Palmetto Park Rd. 4th Floor, Boca Raton, FL                  33432
----------------------------------------------------         ------------------
 (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  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 May 8, 1998,  3,033,995 shares of the registrant's common stock, par value
$.01 per share, and 4,213,368 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
                March 31, 1998 (Unaudited) and December 31, 1997
<TABLE>
<CAPTION>
                                                                                  March 31, 1998   December 31, 1997
                                                                                ----------------   -----------------
Assets:
Current Assets:
<S>                                                                                <C>              <C>          
    Cash and cash equivalents ..................................................   $  12,230,077    $  13,435,237
    Restricted Cash ............................................................         222,000          222,000
    Loans receivable ...........................................................       1,496,176        1,512,744
    Accounts receivable ........................................................       1,154,306        1,265,625
    Accrued interest receivable ................................................       1,870,514        8,465,528
    Due from related party .....................................................         469,805          391,851
    Prepaid expenses and other .................................................         978,399        1,034,613
                                                                                   -------------    -------------       
         Total current assets ..................................................      18,421,277       26,327,598

    Property, improvements and equipment, net ..................................      19,540,217       19,610,060
    Wraparound notes, net ......................................................      52,849,581       59,402,931
    Deferred income tax asset, net .............................................       4,586,209        4,058,358
    Investments in preferred stock .............................................       1,783,100        2,228,600
    Management contract rights, net ............................................         263,723          290,926
    Goodwill and other, net ....................................................         743,068          304,639
                                                                                   -------------    -------------

         Total assets ..........................................................   $  98,187,175    $ 112,223,112
                                                                                   =============    =============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
    Accounts payable and accrued expenses ......................................   $     615,417    $   2,015,942
    Accrued interest payable ...................................................         355,381          259,116
    Master lease payable .......................................................       3,439,381       13,637,564
    Due to related party .......................................................         100,680                0
    Current portion of mortgages and notes payable .............................      38,169,505       38,456,766
    Income taxes payable .......................................................       2,822,119        2,822,119
                                                                                   -------------    ------------- 

         Total current liabilities .............................................      45,502,483       57,191,507

    Mortgages and notes payable ................................................      27,470,179       29,282,798
                                                                                   -------------    -------------

         Total liabilities .....................................................      72,972,662       86,474,305
                                                                                   -------------    -------------

Commitments and Contingencies

Stockholders' equity:
    Common stock ...............................................................   
       ($0.01 par value, 10,000,000 shares authorized, 4,905,959
       issued and outstanding: 692,591 shares in treasury) .......... ..........          49,060           49,060
    Preferred stock (Series A $0.01 par value, $10
       liquidation preference 10,000,000 shares
        authorized, 3,033,995 shares issued and
       outstanding) ............................................................          30,341           30,341
    Additional paid-in surplus .................................................      48,105,428       48,105,428
    Accumulated deficit ........................................................     (19,529,898)     (18,995,604)
    Shares held in treasury - 692,591 shares at cost ...........................      (3,440,418)      (3,440,418)
                                                                                   -------------    -------------

         Total stockholders' equity ............................................      25,214,513       25,748,807
                                                                                   -------------    -------------

         Total liabilities and stockholders' equity ............................   $  98,187,175    $ 112,223,112
                                                                                   =============    =============
</TABLE>


    See Accompanying Notes to Consolidated Financial Statements

                                                             1
<PAGE>

                   MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF REVENUES AND EXPENSES
                                   (Unaudited)
               For the Three Months Ended March 31, 1998 and 1997

<TABLE>
<CAPTION>
                                                                                    March 31, 1998     March 31, 1997
                                                                                   ---------------    ---------------
REVENUES:
<S>                                                                                <C>                <C>            
     Rent ......................................................................   $     2,745,805    $     2,871,450
     Interest income ...........................................................         2,240,556          3,376,327
     Revenue from management company operations ................................           195,842            200,691
     Tenant reimbursements .....................................................           257,384            357,989
     Management and reimbursement income .......................................            29,051            263,132
     Percentage rent ...........................................................           109,248             70,076
     Amortization of discount - available-for-sale securities ..................                 0             89,300
     Unrealized gain on treasury notes sold short ..............................                 0            403,430
     Gain on realization of wraparound notes ...................................            81,890                  0
     Loss on sale of available-for-sale securities .............................                 0           (784,122)
                                                                                   ---------------    ---------------

     Total revenues ............................................................         5,659,776          6,848,273
                                                                                   ---------------    ---------------


EXPENSES:
     Master lease expense ......................................................         3,445,833          3,531,826
     Interest expense ..........................................................         1,519,598          2,263,277
     Depreciation and amortization .............................................           208,073            193,108
     Salaries, general and administrative ......................................           576,328            605,018
     Property expenses .........................................................           443,666            434,724
     Expenses for management company operations ................................           268,265            285,340
     Professional fees .........................................................           219,345            206,938
                                                                                   ---------------    ---------------

     Total expenses ............................................................         6,681,108          7,520,231
                                                                                   ---------------    ---------------

Loss before income taxes .......................................................        (1,021,332)          (671,958)

Benefit for income taxes .......................................................          (487,038)          (322,921)
                                                                                   ---------------    ---------------

Net loss .......................................................................   $      (534,294)   $      (349,037)
                                                                                   ===============    ===============

Loss attributable to common stockholders .......................................   $         (0.13)   $         (0.08)
                                                                                   ===============    ===============

Weighted average common shares outstanding .....................................         4,213,368          4,188,451
                                                                                   ===============    ===============
</TABLE>

           See Accompanying Notes to Consolidated Financial Statements

                                                         2
<PAGE>

                   MILESTONE PROPERTIES, INC AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                   (Unaudited)

                    For the Three Months Ended March 31, 1998
<TABLE>
<CAPTION>

                                               Common Stock        Preferred Stock          Treasury Stock       
                                           ------------------    --------------------     --------------------     
                                           Shares     Amount      Shares       Amount     Shares       Cost        
                                           --------  --------    ---------- ---------    ---------   ---------
<S>                                       <C>        <C>         <C>        <C>          <C>        <C>          
Balance January 1, 1998                   4,905,959  $ 49,060    3,033,995  $   30,341   (692,591)  (3,440,418)  

Net loss for the three months ended 
March 31, 1998                                                               


Balance March 30, 1998                    4,905,959  $ 49,060    3,033,995   $  30,341    (692,591)  $(3,440,418) 
                                          =========   ========   =========     =======   ==========  ============ 



                                                                Additional                                   
                                                                Paid-in        Accumulated      Stockholders'  
                                                                Surplus           Deficit       Equity         
                                                                                           
                                                                -------------  ------------    ------------    
<S>                                                             <C>           <C>              <C>             
 Balance January 1, 1998                                        $48,105,428   $(18,995,604)    $25,748,807     
                                                                                                              
 Net loss for the three months ended
 March 31, 1998                                                                   (534,294)       (534,294)    
                                                                                                                
                                                                                                              
 Balance March 30, 1998                                         $48,105,428   $(19,529,898)    $25,214,513     
                                                                ===========    ============    ===========     

</TABLE>
           See Accompanying Notes to Consolidated Financial Statements
                                            
                                                                    3
<PAGE>
                   MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
               For the Three Months Ended March 31, 1998 and 1997

<TABLE>
<CAPTION>

CASH FLOWS FROM OPERATING ACTIVITIES ..........................      March 31, 1998       March 31, 1997
                                                                  -----------------    -----------------

<S>                                                               <C>                  <C>               
Net loss ......................................................   $        (534,294)   $        (349,037)
Adjustments to reconcile net loss to
       net cash used in operating activities
     Depreciation and amortization ............................             208,073              193,108
     Deferred income  taxes ...................................            (527,851)             280,032
     Unrealized gain on treasury notes sold short .............                   0             (403,430)
     Amortization of discount - available-for-sale securities .                   0              (89,300)
     Realized loss on sale of available-for-sale securities ...                   0              784,122
     Gain on realization of wraparound notes ..................              81,890                    0
     Change in operating assets and liabilities net:
       Decrease in accounts receivable ........................             111,319              437,000
       Increase in due from related party .....................             (77,954)            (239,786)
       Decrease in accrued interest receivable ................           6,595,014            7,231,812
       Decrease (increase) in prepaid expenses and other ......            (400,786)             210,873
       Decrease in accounts payable and accrued expenses ......          (1,400,525)          (1,452,816)
       Increase (decrease) in accrued interest payable ........              96,265             (654,360)
       Decrease in master lease payable .......................         (10,198,183)         (10,735,449)
       Decrease in income taxes payable .......................                   0             (645,724)
       Increase (decrease) in due to related party ............             100,680              (61,688)
                                                                  -----------------    -----------------

       Net cash used in operating activities ..................          (5,946,352)          (5,494,643)
                                                                  -----------------    -----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Principal repayments on loans receivable .................              16,568              124,072
     Principal repayments on wraparound notes .................           5,061,340            4,727,683
     Issuance of wraparound notes .............................              15,000                    0
     Purchase of leasehold improvements .......................             (92,456)              (9,965)
     Proceeds from realization of wraparound notes ............              75,000                    0
     Proceeds from the sale of available-for-sale securities ..                   0            9,498,529
     Proceeds from redemption of investments in preferred stock             445,500              394,333
     Proceeds from redemption of reverse repurchase agreements                    0            9,803,443
     Purchase of treasury notes ...............................                   0           (9,166,015)
                                                                  -----------------    -----------------

       Net cash provided by investing activities ..............           5,520,952           15,372,080
                                                                  -----------------    -----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Principal payments on mortgages and notes payable ........            (779,760)            (962,167)
     Principal payments on loans payable ......................                   0           (6,533,401)
     Amounts received on treasury notes payable ...............                   0              403,430
                                                                  -----------------    -----------------

       Net cash used in financing activities ..................            (779,760)          (7,092,138)
                                                                  -----------------    -----------------

NET (DECREASE)  INCREASE  IN CASH AND
CASH EQUIVALENTS ..............................................          (1,205,160)           2,785,299

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ................          13,435,237            3,141,839
                                                                  -----------------    -----------------

CASH AND CASH EQUIVALENTS, END OF PERIOD ......................   $      12,230,077    $       5,927,138
                                                                  =================    =================

SUPPLEMENTAL DISCLOSURES OF CASH
     FLOW INFORMATION

     Cash paid during the period for interest .................   $       1,423,333    $       2,917,637
                                                                  =================    =================

     Cash paid during the period for income taxes .............   $          40,813    $          64,823
                                                                  =================    =================
</TABLE>

           See Accompanying Notes to Consolidated Financial Statements

                                                                    4

<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 March 31, 1998 and 1997 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  1997  has  been
reclassified to conform to the 1998 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-K for the
year ended December 31, 1997.

     1. Disposition and Acquisition of Real Estate Related Assets

On February 9, 1998, the Company  realized its position in its  wraparound  note
that had a carrying  value of $1,477,010 on the property  located in Chili,  New
York as a result of the assignment of the  wraparound  note on such property for
$75,000  in cash.  The  assignment  resulted  in the  relief  of a  non-recourse
underlying mortgage on such property that had a principal balance outstanding of
$1,477,010.

On April 1, 1998,  the Company  completed  the purchase of Regency Walk Shopping
Center,  a 34,436 square foot shopping center located in  Jacksonville,  Florida
(Duval County),  from Ashman, a Florida general  partnership,  for $2,150,000 in
cash.  The  shopping  center is  occupied  by local  tenants  who are subject to
operating leases ranging from two to nine years with various renewal options and
is currently 92% occupied. Subsequently, on April 2, 1998, the Company secured a
$1,840,000  first mortgage loan from Secore  Financial  Corporation  which bears
interest at a rate of 7.87%.  Such first mortgage requires monthly principal and
interest payments of $13,335 based upon a 30 year self liquidating  amortization
schedule, with a balloon payment of $1,643,670 due May 1, 2008.

On April 17, 1998,  the Company  completed  the purchase of Orange Park Shopping
Center,  a 21,509 square foot shopping  center  located in Orange Park,  Florida
(Clay County), from Makela Development Group, a Florida general partnership, for
$1,500,000 in cash and debt  financing.  Simultaneously  with the purchase,  the
Company  obtained a $1,300,000 first mortgage loan from Heller  Financial,  Inc.
The  shopping  center is occupied by local  tenants who are subject to operating
leases  ranging  from two to six  years  with  various  renewal  options  and is
currently 95% occupied. The first mortgage bears interest at a rate of 7.39% and
requires monthly  principal and interest payments of $8,992 based upon a 30 year
self liquidating amortization schedule, with a balloon payment of $1,147,640 due
April 1, 2008.

On April 17,  1998,  the  Company as the  wraparound  mortgagee,  completed  the
refinancing of Morgantown Plaza, located in Natchez,  Mississippi,  on behalf of
the wraparound  mortgagor (i.e. the Partnership that owns the related property.)
The $2,200,000  first mortgage loan obtained from Secore  Financial  Corporation
bears  interest at a rate of 7.59% and requires  monthly  principal and interest
payments of $15,519 based upon a 30 year self liquidating amortization schedule,
with a balloon  payment of $1,951,893 due May 1, 2008. The Company also extended
the wraparound  mortgage on such property to mature May 1, 2008. Such wraparound
mortgage will require cash flow payments beginning after December 31, 1998.

                                                                 5

<PAGE>



On May 1, 1998 the Company secured a $1,160,000  first mortgage loan from Heller
Financial, Inc. on its Pine Oak property located in Sunrise Florida, which bears
interest at a rate of 7.48%. Such first mortgage requires monthly principal and
interest  payments of $8,095 based upon a 30 year self liquidating  amortization
schedule, with a balloon payment of $1,027,679 due May 1, 2008.

2.   Legal Proceedings

As previously  reported,  on January 30, 1996 Milestone,  its Board of Directors
and  Concord  Assets  Group,  Inc.  ("Concord"),  a New  York  corporation,  the
executive  officers  and  directors  of which are also  executive  officers  and
directors of Milestone,  were named as  defendants  in a purported  class action
lawsuit  (the  "Winston  Action")  which  was  brought  by a Series A  Preferred
Stockholder  purporting  to bring the  action on  behalf  of  himself  and other
holders of the Company's $.78 Convertible  Series A Preferred Stock (the "Series
A Preferred Stock"),  par value $.01 per share, $10 liquidation  preference,  in
connection  with  (i)  Milestone's   acquisition  in  October  1995  of  certain
wraparound  notes,   wraparound   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. ("UPI"), a then
wholly-owned   Delaware   subsidiary  of  Milestone  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").

Also as  previously  reported,  on October 30,  1997,  Milestone  entered into a
Stipulation  and Agreement of Settlement  (the "Winston  Settlement  Agreement")
providing for the settlement  (the "Winston  Settlement") of the Winston Action.
If the Winston Settlement had been approved and consummated,  the Winston Action
would have been  dismissed,  Milestone's  stockholders  would have  released all
derivative claims arising in connection with the Transactions and the holders of
the Series A Preferred  Stock between October 23, 1995 and the date on which the
Winston  Settlement was consummated would have released any claims they may have
had  against  Milestone  and  the  other  named  defendants  arising  out of the
Transactions.  Each  Series A Preferred  Stockholder  who did not opt out of the
Winston  Settlement and who owned shares of the Series A Preferred  Stock on the
date the Winston  Settlement was consummated would have received $0.75 per share
in cash from the Company and one share of preferred  stock of Concord  Milestone
Preferred,  Inc., a Delaware  corporation  affiliated with Concord ("CMP") ( the
"CMP" Preferred  Stock),  in exchange for each share of Series A Preferred Stock
surrendered.  The CMP Preferred Stock would have had a liquidation preference of
$2.25 per share,  would have been  required  to be  redeemed by CMP at $2.25 per
share after five  years,  and would have had no voting or  dividend  rights;  in
addition, the CMP Preferred Stock would have been subject to optional redemption
in  accordance  with a schedule  during the five year period  prior to mandatory
redemption.  CMP's redemption obligations would have been secured by a letter of
credit.  The Winston  Settlement  was subject to approval by the Delaware  Court
after a hearing,  and was also subject to a number of conditions  which may have
been waived at the option of the Company and the other defendants, including the
condition that stockholders owning more than 10% of the Series A Preferred Stock
did not opt out of the Winston Settlement.

In April 1998,  counsel for the  plaintiff  to the  Winston  Action  advised the
Company  that the  plaintiff  would  not  proceed  with the  Winston  Settlement
Agreement and counsel for the Company advised the Court of Chancery of the State
of Delaware that the parties would resume litigation of the matter.

The foregoing  description of the Winston  Settlement and the Winston Settlement
Agreement is  qualified  in its entirety by reference to the Winston  Settlement
Agreement, a copy of which was filed with the Securities and Exchange Commission
on November 12, 1997 as Exhibit 2 to Milestone's Form 8-K.


                                                                 6

<PAGE>



As previously reported,  on January 29, 1998,  Milestone,  along with certain of
its directors,  commenced a lawsuit in the United States  District Court for the
Southern  District of New York against  National Union and  Stonewall.  National
Union had issued a directors and officers  insurance  and company  reimbursement
policy (the  "National  Policy") for Milestone and its directors with a limit of
$2,000,000.  Stonewall had issued an excess directors and officers liability and
company  reimbursement  policy (the  "Stonewall  Policy") for  Milestone and its
directors  with a  limit  of  $2,000,000.  Pursuant  to the  Winston  Settlement
Agreement,  had the Winston  Settlement been  consummated,  Milestone would have
paid approximately $2,225,000,  plus the plaintiff's legal fees in an amount not
to exceed  $650,000  and would have  incurred  other legal  expenses.  Milestone
believes  that the  amount  it and  certain  of its  directors  would  have paid
pursuant to the Winston Settlement  Agreement and as a result of the litigation,
had the Winston  Settlement been consummated,  are covered losses under both the
National  Union Policy and the Stonewall  Policy.  In addition,  the Company has
incurred  approximately  $440,000 in legal fees in defending  Milestone  and its
directors in connection with the Winston Action,  which it believes is a covered
loss under the National Union and Stonewall policies.  National Union refused to
contribute  to the Winston  Settlement,  as set forth in the Winston  Settlement
Agreement,  asserting that the Winston Settlement does not encompass any covered
loss (as defined in the National  Policy).  Stonewall also refused to contribute
to the Winston Settlement. In the complaint, the plaintiffs allege that National
Union and Stonewall  wrongfully  failed to contribute to the Winston  Settlement
and seek  reimbursement  from  National  Union and Stonewall up to the limits of
their respective  policies.  National Union and Stonewall have both answered the
complaint  and have  denied  liability.  As a result of the  termination  of the
Winston Settlement Agreement,  Milestone and its directors will request that the
United States  District  Court for the Southern  District of New York put on the
suspense calendar the action against Stonewall and National Union. At this time,
the  Company is not in a position to render an opinion as to the outcome of this
action.

3.     Recently Issued Accounting Pronouncements

In June 1997,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial Accounting Standards No. 130 "Reporting  Comprehensive  Income" ("SFAS
No. 130").  SFAS No. 130  establishes  standards for reporting and displaying of
comprehensive  income  and  its  components  in a full  set of  general  purpose
financial statements.  SFAS No. 130 mandates that all items that are required to
be recognized under accounting  standards as components of comprehensive  income
be reported in a financial  statement that is displayed in equal prominence with
all other financial  statements.  It does not require a specific format for such
financial  statements,  but  requires  that  an  enterprise  display  an  amount
representing  total  comprehensive  income  for the  period in such a  financial
statement.  SFAS No.  130 is  effective  for both  interim  and  annual  periods
beginning after December 15, 1997. Comparative financial statements provided for
earlier  periods are required to be  reclassified  to reflect the  provisions of
SFAS No. 130.

The  Company  adopted  SFAS No. 130 in the first  quarter of 1998.  There are no
components  of  comprehensive  income for the three months ended March 31, 1998.
For the three  months  ended  March  31,  1997 the  Company  had  components  of
comprehensive  income, as defined in SFAS No. 130, of approximately  $329,000 of
unrealized gains (net of tax of $72,795) on available-for-sale securities. Under
SFAS No. 130 the Company has a comprehensive loss of approximately $21,000.



                                                                 7

<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 Section 27A of the Securities Act of 1933, as
amended (the "Securities Act") and Section 21E of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). Such  forward-looking  statements include
statements  regarding the intent,  belief or current  expectations  of Milestone
Properties,  Inc.  ("Milestone")  and its wholly-owned  subsidiaries  (together,
Milestone with its subsidiaries is hereinafter referred to as the "Company") and
its  management  and involve known and unknown  risks,  uncertainties  and other
factors which may cause the actual  results,  performance or achievements of 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 other  things,  the  following:  general  economic  and
business  conditions,  which  will,  among other  things,  affect the 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 environment/safety requirements.

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

Recent Developments

The Company and Societe Generale Securities Corporation ("SGSC") entered into an
agreement (the "SGSC  Agreement")  on January 9, 1998,  effective as of December
24,  1997,  pursuant  to which the Company  retained  SGSC to act as a financial
advisor  to the  Company  and  two  of its  affiliates  (the  "Affiliates"),  in
connection with any transaction involving a proposed sale (a "Proposed Sale") by
the Affiliates of certain  shopping  center  properties and any proposed sale by
the  Company  of certain  fee  interest  properties  owned by the  Company.  The
shopping  center  properties  to be  sold  by  the  Affiliates  are  subject  to
wraparound  notes  (the  "Wraparound  Notes")  and  wraparound   mortgages  (the
"Wraparound Mortgages" and, together with the Wraparound Notes, the "Wrap Debt")
which  are  secured  by  commercial  properties.  Such  Wrap Debt is held by the
Company  and  would  need  to be  released  prior  to  the  consummation  of any
transaction.  The  properties  to be sold  and the  Wrap  Debt to be  repaid  in
connection  with a Proposed Sale could  represent a  substantial  portion of the
Company's real estate related assets.

Neither  the  Company  nor the  Affiliates  have  entered  into any  commitment,
agreement or understanding  with any prospective  purchaser for a Proposed Sale,
and  there can be no  assurance  that  SGSC  will be able to  identify  suitable
candidates to undertake a Proposed Sale, or that if identified,  the Company and
the  Affiliates  will be willing and able to consummate a Proposed Sale on terms
acceptable to them.

On February 9, 1998, the Company  realized its position in its  wraparound  note
that had a carrying  value of $1,477,010 on the property  located in Chili,  New
York as a result of the assignment of the  wraparound  note on such property for
$75,000  in cash.  The  assignment  resulted  in the  relief  of a  non-recourse
underlying mortgage on such property that had a principal balance outstanding of
$1,477,010.

On March 6, 1998,  the Company  entered into a contract in  connection  with the
contemplated  sale of its Mountain  View Mall property  located in Bend,  Oregon
(the "Bend Property").  Under the terms of the contract, the potential purchaser
has deposited a total of $400,000 as a good faith deposit of which  $100,000 has
become  non-refundable.  The sale of the Bend Property,  if  consummated,  would
represent  approximately 17% of the Company's total assets and would relieve the
Company of approximately 23% of its total liabilities.



                                                                 8

<PAGE>



On April 1, 1998,  the Company  completed  the purchase of Regency Walk Shopping
Center,  a 34,436 square foot shopping center located in  Jacksonville,  Florida
(Duval County),  from Ashman, a Florida general  partnership,  for $2,150,000 in
cash.  The  shopping  center is  occupied  by local  tenants  who are subject to
operating leases ranging from two to nine years with various renewal options and
is currently 92% occupied. Subsequently, on April 2, 1998, the Company secured a
$1,840,000  first mortgage loan from Secore  Financial  Corporation  which bears
interest at a rate of 7.87%.  Such first mortgage requires monthly principal and
interest payments of $13,335 based upon a 30 year self liquidating  amortization
schedule with a balloon payment of $1,641,114 due May 1, 2008.

On April 17, 1998,  the Company  completed  the purchase of Orange Park Shopping
Center,  a 21,987 square foot shopping  center  located in Orange Park,  Florida
(Clay County), from Makela Development Group, a Florida general partnership, for
$1,500,000 in cash and debt  financing.  Simultaneously  with the purchase,  the
Company  obtained a $1,300,000 first mortgage loan from Heller  Financial,  Inc.
The  shopping  center is occupied by local  tenants who are subject to operating
leases  ranging  from two to six  years  with  various  renewal  options  and is
currently  100%  occupied.  The first mortgage bears interest at a rate of 7.39%
and requires monthly  principal and interest  payments of $8,992 based upon a 30
year self liquidating amortization schedule with a balloon payment of $1,149,319
due April 1, 2008.

In April 1998,  counsel for the  plaintiff in a purported  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.  ("Concord"),  a New York corporation,  the executive
officers and  directors of which are also  executive  officers and  directors of
Milestone), (the "Winston Action") brought in the Court of Chancery of the State
of Delaware (the "Delaware  Court") by a holder of Milestone's  $.78 Convertible
Series A Preferred  Stock (the "Series A Preferred  Stock"),  par value $.01 per
share,  $10  liquidation  preference,  on behalf of himself  and other  Series A
Preferred  Stockholders  against  Milestone  and  certain of its  directors  (as
previously  reported)  advised the Company that the plaintiff  would not proceed
with a certain  Stipulation and Agreement of Settlement (the "Winston Settlement
Agreement")  which had been entered into by the parties to the Winston Action on
October 30, 1997 (as previously  reported).  Counsel for the Company has advised
the Delaware  Court that the parties will resume  litigation of the matter.  See
Part II-Other Information, Item 1. Legal Proceedings.

As a result of the termination of the Winston Settlement Agreement,  the Company
and its  directors  will request that the United  State  District  Court for the
Southern District of New York put on the suspense calendar the action brought by
Milestone and certain of its directors  against  National  Union Fire  Insurance
Company of  Pittsburgh,  Pa.  ("National  Union") and  Stonewall  Surplus  Lines
Insurance Company  ("Stonewall"),  in connection with certain costs and expenses
associated  with the Winston Action and the settlement of the Winston Action (as
previously reported). See Part II-Other Information, Item 1. Legal Proceedings.

The Company has received  communications  from the New York Stock  Exchange (the
"Exchange")  with respect to the  Company's  compliance  with certain  continued
listing  criteria in connection with the Company's  Common Stock, par value $.01
per share, and Preferred  Stock.  The Company's  management and its counsel have
had a meeting with  representatives of the Exchange with respect to such issues.
Although the Exchange has made no decision to delist any class of the  Company's
stock at the present time,  there can be no assurances that it will not do so in
the future.



                                                                 9

<PAGE>



Results of Operations

Three Months Ended March 31, 1998 Compared to Three Months Ended March 31, 1997

The Company  recognized  a net loss of $534,294 for the three months ended March
31, 1998 as  compared to a net loss of $349,037  for the same period in 1997 due
to the following factors:

Revenues for the three months ended March 31, 1998 were  $5,659,776,  a decrease
of $1,188,497 or 17%, from $6,848,273 for the three months ended March 31, 1997.
Such decrease was primarily due to the net of: (1) a decrease in interest income
of  $1,135,771  resulting  primarily  from  (a) a  decrease  in  the  number  of
properties  with interest  bearing  wraparound  notes to 27 for the three months
ended March 31, 1998 from 29 for the same period in 1997 resulting in a decrease
in  interest   income  of   approximately   $132,000   and  (b)  a  decrease  in
available-for-sale  securities  held by the Company to none for the three months
ended  March  31,  1998  from two for the same  period  in 1997  resulting  in a
decrease in  interest  income of  $915,580;  (2) a decrease  in  management  and
reimbursement income of $234,081 resulting primarily from the termination of the
Management  Services  Agreement between Union Property Investors and the Company
in  February  1997;  (3) no  gain or  loss  on the  sale  of  available-for-sale
securities  for the three  months  ended  March 31,  1998  compared to a loss of
$784,122  on the sale of  available-for-sale  securities  for the same period in
1997; (4) no unrealized  gain or loss on U.S.  Treasury Notes sold short for the
three  months  ended March 31, 1998  compared to an  unrealized  holding gain of
$403,430 on U.S.  Treasury  Notes sold short for the same period in 1997;  (5) a
gain on the  realization of wraparound  notes of $81,890  compared to no gain or
loss on the  realization of wraparound  notes for the same period in 1997; (6) a
net  decrease  in  rental  income of  $125,645  resulting  primarily  from a net
decrease in the number of  properties  leased by the Company to 31 for the three
months  ended  March  31,  1998  from 32 for the same  period in 1997 and (7) no
amortization of discount on  available-for-sale  securities for the three months
ended March 31, 1998 compared to  amortization of $89,300 for the same period in
1997.

Operating expenses for the three months ended March 31, 1998 were $4,953,437, an
increase of $110,409,  or 2%, from  $5,063,846  for the three months ended March
31,  1997.  Such  increase  was  primarily  due to the net of: (1) a decrease in
master  lease  expense of $85,993 due to a decrease in the number of  properties
leased by the  Company to 27 for the three  months  ended March 31, 1998 from 29
for  the  same  period  in  1997;  (2)  a  decrease  in  salaries,  general  and
administrative  expenses  of  approximately  $28,690 due to a decrease in rental
expense for the three months ended March 31, 1998 compared to the same period in
1997;  (3) a decrease in expenses for management  company  operations of $17,075
due to a decrease in the number of properties leased by the Company;  and (4) an
increase  in  professional  fees of  $12,407  due to fees  associated  with  the
reduction of real estate taxes for the leased properties.

Interest  expense for the three  months ended March 31, 1998 was  $1,519,598,  a
decrease of $743,679,  or 33%, from  $2,263,277 for the three months ended March
31,  1997.   Such  decrease  was  primarily  due  to  a  decrease  in  financing
arrangements related to the available-for-sale securities held by the Company to
none for the three  months  ended March 31, 1998 from two for the same period in
1997 resulting in a decrease in interest expense of approximately $599,000.

Depreciation  and  amortization  for the three  months  ended March 31, 1998 was
$208,073,  an increase of $14,965,  or 8%, from  $193,108  for the three  months
ended March 31, 1997. Such increase was primarily due to approximately  $353,153
of property improvement purchases made during 1997.



                                                                 10

<PAGE>



Liquidity and Capital Resources

The  Company,  as the holder of 178,360  shares of Kranzco  Series C  Cumulative
Redeemable  Preferred  Shares as of March 31, 1998,  is entitled to receive from
the  redemption  of such  shares,  in four equal  installments  over the next 10
months,  an aggregate  amount of cash equal to  approximately  $1,178,360,  plus
interest at the rate of 8% per annum on the  applicable  outstanding  balance of
such shares.

Milestone  has no present  intention  to declare  or pay cash  dividends  on the
Series  A  Preferred  Stock  or  Common  Stock in the  foreseeable  future.  The
cumulative period relating to the payment of dividends on the Series A Preferred
Stock expired on September 30, 1995. If Milestone  declares further dividends on
the  Series A  Preferred  Stock or the  Common  Stock  and the  payment  thereof
utilizes all, or  substantially  all, of its available cash flow after taxes and
expenses,  the  Company  will  require  other  sources of funding to allow it to
effect the  contemplated  purchases  of  additional  commercial  real estate and
accomplish its other  long-term  goals.  Accordingly,  no assurance can be given
that Milestone will declare or pay dividends on the Series A Preferred Stock or,
subject to the preference on the Series A Preferred  Stock, the Common Stock, in
the future,  and  currently  has no  intention  to do so. Any decision as to the
future payment of dividends on the Series A Preferred Stock or Common Stock will
depend on the results of  operations,  investment  opportunities  for  available
funds,  the  financial  condition  of the  Company  and such  other  factors  as
Milestone's  Board of Directors deems relevant.  See Part II-Other  Information,
Item 5. Other Information.

Cash  generated  by the  (i)  redemption  of the  Kranzco  Series  C  Cumulative
Redeemable Preferred Stock and (ii) financing of properties previously purchased
for cash as well as the cash on hand at March 31, 1998,  may be used to fund (i)
the Company's real estate  investment,  acquisition and development  activities,
(ii) ongoing legal fees  including  expenses  relating to the Winston Action and
the terminated  Winston  Settlement  Agreement and (iii) other general corporate
purposes.  See  Part  II-Other  Information,  Item 1.  Legal  Proceedings  for a
discussion of the Winston Action and the Winston Settlement Agreement.

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 and to
continue to fund future growth and business  opportunities  as the Company seeks
to maximize shareholder value.

Other than as 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.

Cash Flows

Net cash used in operating  activities of $5,946,352  for the three months ended
March 31, 1998 included (1) a net loss of $534,294; (2) adjustments for non-cash
items of $237,888 and (3) a net change in operating  assets and  liabilities  of
$5,174,170,  compared to net cash used in operating activities of $5,494,643 for
the  three  months  ended  March  31,  1997,  which  included  (1) a net loss of
$349,037; (2) adjustments of $764,532 for non-cash items and (3) a net change of
$5,910,138 in operating assets and liabilities.

Net cash provided by investing  activities  of  $5,520,952  for the three months
ended March 31, 1998  included (1) proceeds from  principal  repayments on loans
receivable  and wraparound  notes of $5,077,908;  (2) the issuance of Wraparound
Notes of $15,000;  (3) the purchase of leasehold  improvements  of $92,456;  (4)
proceeds from  redemption  of investment in preferred  stock of $445,500 and (5)
proceeds from the  realization of wraparound  notes of $75,000,  compared to net
cash provided by investing  activities of $15,372,080 for the three months ended
March 31, 1997, which included:  (1) principal repayments of $4,851,755 on loans
receivable and wraparound notes; (2)

                                                                 11

<PAGE>



proceeds of $394,333  from  redemption of  investment  in preferred  stock;  (3)
proceeds  of  $9,498,529  from the sale of  available-for-sale  securities;  (4)
purchase of U.S. Treasury Notes for $9,166,015;  (5) proceeds of $9,803,443 from
the  redemption  of  reverse  repurchase  agreements  and  (6) the  purchase  of
leasehold improvements of $9,965.

Net cash used in  financing  activities  of $779,760  for the three months ended
March 31, 1998  included  principal  payments on mortgages  and notes payable of
$779,760,  compared to net cash used in financing  activities of $7,092,138  for
the three months ended March 31, 1997, which included; (1) principal payments of
$962,167 on mortgages and notes payable; (2) principal payments of $6,533,401 on
loans payable and (3) $403,430 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 March 31, 1998 which may impact the Company's future cash flows.

Item 3.            Quantitative and Qualitative Disclosure About Market Risk.

                        Not applicable.

                                                                 12

<PAGE>

 PART II - OTHER INFORMATION

Item 1.       Legal Proceedings.

As previously  reported,  on January 30, 1996 Milestone,  its Board of Directors
and Concord were named as defendants in the Winston  Action which was brought by
a Series A  Preferred  Stockholder  purporting  to bring the action on behalf of
himself  and  other  Series A  Preferred  Stockholders  in  connection  with (i)
Milestone's  acquisition in October 1995 of certain wraparound notes, wraparound
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.("UPI"),  a then wholly-owned Delaware subsidiary
of  Milestone  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").

Also as  previously  reported,  on October 30,  1997,  Milestone  entered into a
Stipulation  and Agreement of Settlement  (the "Winston  Settlement  Agreement")
providing for the settlement  (the "Winston  Settlement") of the Winston Action.
If the Winston Settlement had been approved and consummated,  the Winston Action
would have been  dismissed,  Milestone's  stockholders  would have  released all
derivative claims arising in connection with the Transactions and the holders of
the Series A Preferred  Stock between October 23, 1995 and the date on which the
Winston  Settlement was consummated would have released any claims they may have
had  against  Milestone  and  the  other  named  defendants  arising  out of the
Transactions.  Each  Series A Preferred  Stockholder  who did not opt out of the
Winston  Settlement and who owned shares of the Series A Preferred  Stock on the
date the Winston  Settlement was consummated would have received $0.75 per share
in cash from the Company and one share of preferred  stock of Concord  Milestone
Preferred,  Inc., a Delaware  corporation  affiliated with Concord ("CMP") ( the
"CMP" Preferred  Stock),  in exchange for each share of Series A Preferred Stock
surrendered.  The CMP Preferred Stock would have had a liquidation preference of
$2.25 per share,  would have been  required  to be  redeemed by CMP at $2.25 per
share after five  years,  and would have had no voting or  dividend  rights;  in
addition, the CMP Preferred Stock would have been subject to optional redemption
in  accordance  with a schedule  during the five year period  prior to mandatory
redemption.  CMP's redemption obligations would have been secured by a letter of
credit.  The Winston  Settlement  was subject to approval by the Delaware  Court
after a hearing,  and was also subject to a number of conditions  which may have
been waived at the option of the Company and the other defendants, including the
condition that stockholders owning more than 10% of the Series A Preferred Stock
did not opt out of the Winston Settlement.

In April 1998,  counsel for the  plaintiff  to the  Winston  Action  advised the
Company  that the  plaintiff  would  not  proceed  with the  Winston  Settlement
Agreement  and  counsel  for the Company  advised  the  Delaware  Court that the
parties would resume litigation of the matter.

The foregoing  description of the Winston  Settlement and the Winston Settlement
Agreement is  qualified  in its entirety by reference to the Winston  Settlement
Agreement, a copy of which was filed with the Securities and Exchange Commission
on November 12, 1997 as Exhibit 2 to Milestone's Form 8-K.

As previously reported,  on January 29, 1998,  Milestone,  along with certain of
its directors,  commenced a lawsuit in the United States  District Court for the
Southern  District of New York against  National Union and  Stonewall.  National
Union had issued a directors and officers  insurance  and company  reimbursement
policy (the  "National  Policy") for Milestone and its directors with a limit of
$2,000,000.  Stonewall had issued an excess directors and officers liability and
company  reimbursement  policy (the  "Stonewall  Policy") for  Milestone and its
directors  with a  limit  of  $2,000,000.  Pursuant  to the  Winston  Settlement
Agreement,  had the Winston  Settlement been  consummated,  Milestone would have
paid approximately $2,225,000,  plus the plaintiff's legal fees in an amount not
to exceed  $650,000  and would have  incurred  other legal  expenses.  Milestone
believes  that the  amount  it and  certain  of its  directors  would  have paid
pursuant to the Winston Settlement  Agreement and as a result of the litigation,
had

                                                                 13

<PAGE>



the Winston  Settlement  been  consummated,  are covered  losses  under both the
National  Union Policy and the Stonewall  Policy.  In addition,  the Company has
incurred  approximately  $440,000 in legal fees in defending  Milestone  and its
directors in connection with the Winston Action,  which it believes is a covered
loss under the National Union and Stonewall policies.  National Union refused to
contribute  to the Winston  Settlement,  as set forth in the Winston  Settlement
Agreement,  asserting that the Winston Settlement does not encompass any covered
loss (as defined in the National  Policy).  Stonewall also refused to contribute
to the Winston Settlement. In the complaint, the plaintiffs allege that National
Union and Stonewall  wrongfully  failed to contribute to the Winston  Settlement
and seek  reimbursement  from  National  Union and Stonewall up to the limits of
their respective  policies.  National Union and Stonewall have both answered the
complaint  and have  denied  liability.  As a result of the  termination  of the
Winston Settlement Agreement,  Milestone and its directors will request that the
United States  District  Court for the Southern  District of New York put on the
suspense calendar the action against Stonewall and National Union. At this time,
the  Company is not in a position to render an opinion as to the outcome of this
action.


Item 5.             Other Information.

Milestone's Board of Directors determined not to pay any dividends on the Series
A Preferred  Stock during the years ended December 31, 1996 and 1997 and for the
quarter ended March 31, 1998.  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  having a
liquidation  preference of $10.00 per share,  were no longer 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 pay a
dividend for the quarter  ended June 30, 1997,  which was the sixth  consecutive
quarter for which no dividend was paid, 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 currently elect one member of
the Board of  Directors,  are entitled to elect a second  member of 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.




                                                                 14

<PAGE>



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 three month period ended March 31, 1998, and is
               qualified  in  its  entirety  by  reference  to  such   financial
               statements.

            (b)On January  15,  1998,  a Form 8-K was filed with the  Commission
               reporting that the Company entered into an agreement with Societe
               Generale  Securities  Corporation  pursuant  to which the Company
               retained  SGSC to act as financial  advisor  involving a proposed
               sale of certain properties.

             (c) On April 29,  1998,  a Form 8-K was filed  with the  Commission
                 reporting  that the  plaintiff  in the Winston  Action will not
                 proceed with a previously announced settlement agreement.












                                                                 15

<PAGE>



                                                             SIGNATURES

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

                        




                                          MILESTONE PROPERTIES, INC.
                                                             (Registrant)





Date: March 8, 1998                     /s/ Robert A. Mandor
                                        --------------------
                                        Robert A. Mandor
                                        President and Chief Financial Officer


Date: March 8, 1998                      /s/ Patrick S. Kirse
                                         --------------------
                                         Patrick S. Kirse
                                         Vice President of Accounting
                                         (Principal Accounting Officer)


                                                                 16