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     June 30, 1997

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

         For the transition period from __________________  to  _______________

                         Commission file number 1-10641


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


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


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

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

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

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

Yes  X     No

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


<PAGE>

Part I: Financial Information
 Item 1. Financial Statements

                   MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                 June 30, 1997 (Unaudited) and December 31, 1996
<TABLE>
<CAPTION>
                                                                                    June 30, 1997  December 31, 1996
                                                                                    -------------  -----------------
<S>                                                                                  <C>            <C>
ASSETS:
Current Assets:
    Cash and cash equivalents ..................................................   $   5,603,255    $   3,141,839
    Loans receivable ...........................................................       1,544,906        1,684,585
    Accounts receivable ........................................................         862,509        1,360,621
    Accrued interest receivable ................................................       4,542,942        9,646,886
    Due from related party .....................................................         740,735          599,093
    Prepaid expenses and other .................................................         135,773          430,603
    Reverse repurchase agreements ..............................................      25,232,500       34,718,749
    Available-for-sale securities ..............................................      23,699,225       32,314,853
                                                                                   -------------    -------------

         Total current assets ..................................................      62,361,845       83,897,229

    Property, improvements and equipment, net ..................................      18,637,821       18,884,467
    Wraparound notes, net ......................................................      66,704,261       71,431,945
    Deferred income tax asset, net .............................................       2,552,810        3,272,873
    Investment in affiliate ....................................................       3,119,599        3,959,433
    Management contract rights, net ............................................         373,008          426,467
    Goodwill and organizational cost, net ......................................         185,720          222,863
                                                                                   -------------    -------------

         Total assets ..........................................................   $ 153,935,064    $ 182,095,277
                                                                                   =============    =============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
    Accounts payable and accrued expenses ......................................   $     620,973    $   2,031,513
    Accrued interest payable ...................................................         801,622        1,139,941
    Master lease payable .......................................................       7,181,351       14,445,351
    Due to related party .......................................................               0           61,688
    Current portion of mortgages and notes payable .............................       2,926,385        2,862,274
    Income taxes payable .......................................................       2,434,373        3,250,744
    Loans payable ..............................................................      17,843,513       23,829,335
    Treasury notes sold short ..................................................      24,736,964       33,952,346
                                                                                   -------------    -------------

         Total current liabilities .............................................      56,545,181       81,573,192

    Mortgages and notes payable ................................................      69,980,985       71,562,942
                                                                                   -------------    -------------

         Total liabilities .....................................................     126,526,166      153,136,134
                                                                                   -------------    -------------

Commitments and Contingencies

Stockholders' equity:
    Common stock ($0.01 par value, 10,000,000 shares
       authorized, 4,903,605 and 4,743,155 issued
       respectively) ...........................................................          49,038           47,433
    Preferred stock (Series A $0.01 par value, 10,000,000
         shares authorized, 3,036,139 and 3,182,184
        shares issued and outstanding, respectively) ...........................          30,362           31,822
    Additional paid-in surplus .................................................      48,105,431       48,105,575
    Unrealized holding gain (loss) -  available-for-sale  securities (Net of tax
       liability (benefit) of $ 457,427 and
       $(151,552), respectively)................................................         685,535         (220,396)
    Accumulated deficit ........................................................     (18,021,050)     (15,564,873)
    Shares held in treasury - 692,591 shares at cost ...........................      (3,440,418)      (3,440,418)
                                                                                    -------------    -------------

         Total stockholders' equity ............................................      27,408,898       28,959,143
                                                                                    -------------    -------------

         Total liabilities and stockholders' equity ............................   $ 153,935,064    $ 182,095,277
                                                                                    =============    =============
</TABLE>
           See accompanying Notes to Consolidated Financial Statements
<PAGE>

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

                                                              June 30, 1997   June 30, 1996
                                                              -------------   -------------
<S>                                                           <C>             <C>
REVENUES:
     Rent ...................................................   $ 2,476,066    $ 2,868,250
     Interest income ........................................     3,293,194      4,545,626
     Revenue from management company operations .............        83,751        202,908
     Tenant reimbursements ..................................       200,745        259,195
     Management and reimbursement income ....................        45,011        279,503
     Percentage rent ........................................       131,363         43,776
     Amortization of discount - available-for-sale securities        90,136         66,457
     Unrealized (loss)/gain on treasury notes sold short ....      (354,065)     1,124,295
     Gain on realization of wraparound notes ................             0        495,012
                                                                  -----------   ----------

     Total revenues .........................................     5,966,201      9,885,022
                                                                  -----------   ----------


EXPENSES:
     Master lease expense ...................................     3,445,833      3,801,156
     Interest expense .......................................     2,375,655      3,101,675
     Depreciation and amortization ..........................       187,808        180,831
     Salaries, general and administrative ...................       587,191      1,329,759
     Property expenses ......................................       458,172        507,088
     Expenses for management company operations .............       373,529        303,089
     Professional fees ......................................       228,844        327,927
                                                                  ----------    ----------
     Total expenses .........................................     7,657,032      9,551,525
                                                                  ----------    ----------

(Loss) income before income taxes ...........................    (1,690,831)       333,497

Provision for income taxes ..................................       416,309        155,511
                                                                  ----------    ----------

Net (loss) income ........................................... $  (2,107,140)   $   177,986
                                                                 ===========    ==========

(Loss) income per share of common stock ..................... $       (0.50)   $      0.05
                                                                 ===========    ==========

Weighted average number of shares of common stock ...........     4,192,211      3,793,783
                                                                 ===========    ==========

</TABLE>
           See accompanying Notes to Consolidated Financial Statements

<PAGE>

                   MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF REVENUES AND EXPENSES
                                   (Unaudited)
                 For the Six Months Ended June 30, 1997 and 1996
<TABLE>
<CAPTION>
                                                               June 30, 1997    June 30, 1996
                                                               -------------    -------------
<S>                                                              <C>             <C>
REVENUES:
     Rent ...................................................   $  5,347,516    $  5,808,214
     Interest income ........................................      6,669,521       8,625,141
     Revenue from management company operations .............        284,442         382,619
     Tenant reimbursements ..................................        558,734         607,860
     Management and reimbursement income ....................        308,143         557,725
     Percentage rent ........................................        201,439          61,980
     Amortization of discount - available-for-sale securities        179,436         126,510
     Unrealized gain on treasury notes sold short ...........         49,365       2,441,533
     Gain on realization of wraparound notes ................              0         495,012
     Loss on sale of available-for-sale securities ..........       (784,122)              0
                                                                 ------------   ------------

     Total revenues .........................................     12,814,474      19,106,594
                                                                 ------------   ------------   


EXPENSES:
     Master lease expense ...................................      6,977,659       7,765,133
     Interest expense .......................................      4,638,932       5,459,295
     Depreciation and amortization ..........................        380,916         364,162
     Salaries, general and administrative ...................      1,192,209       2,072,817
     Property expenses ......................................        892,896       1,211,554
     Expenses for management company operations .............        658,869         539,415
     Professional fees ......................................        435,782         614,628
                                                                ------------    ------------   

     Total expenses .........................................     15,177,263      18,027,004
                                                                ------------    ------------   

(Loss) income before income taxes ...........................     (2,362,789)      1,079,590

Provision for income taxes ..................................         93,388         439,025
                                                                ------------    ------------   

Net (loss) income ...........................................   $ (2,456,177)   $    640,565
                                                                ============    ============   

(Loss) income per share of common stock .....................   $      (0.59)   $       0.17
                                                                ============    ============   


Weighted average number of shares of common stock ...........      4,192,211       3,793,783
                                                                ============    ============ 
</TABLE>

           See accompanying Notes to Consolidated Financial Statements


<PAGE>
                   MILESTONE PROPERTIES, INC AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                   (Unaudited)
                     For the Six Months Ended June 30, 1997
<TABLE>
<CAPTION>

                                                              Common Stock           Preferred Stock            Treasury Stock      
                                                         ---------------------    -------------------        -----------------------
                                                           Shares       Amount      Shares     Amount        Shares         Cost    
                                                         ---------    --------    ---------  --------       ---------   ------------
<S>                                                      <C>          <C>         <C>        <C>            <C>         <C>

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

Conversion of preferred stock into common stock            160,450       1,605     (146,045)   (1,460)                              


Net loss for the six months ended June 30, 1997                                                                                     

Unrealized holding gain - available-for-sale securities                                                                             
                                                         ---------    --------    ---------  --------       ---------   ------------
              
Balance June 30, 1997                                    4,903,605    $ 49,038    3,036,139  $ 30,362       (692,591)   $(3,440,418)
                                                         =========    ========    =========  ========       =========   ============

                  
                                                                      Unrealized
                                                                      Holding (loss)
                                                         Additional   Gain on              
                                                         Paid-in      Available-for-       Accumulated      Stockholders'          
                                                         Surplus      Sales Securities     Deficit          Equity
                                                         ----------   ----------------     -------------    -------------   
<S>                                                      <C>          <C>                  <C>              <C>            
Balance January 1, 1997                                  $48,105,575  $ (220,396)          $(15,564,873)    $28,959,143    

Conversion of preferred stock into common stock                 (144)                                                 0 


Net loss for the six months ended June 30, 1997                                              (2,456,177)     (2,456,177)            

Unrealized holding gain - available-for-sale securities                   905,931                               905,931         
                                                         ------------   ---------           ------------     ---------- 
              
Balance June 30, 1997                                    $48,105,431   $ 685,535           $(18,021,050)   $27,408,898   
                                                         ============   =========           ============    ===========

</TABLE>

           See accompanying Notes to Consolidated Financial Statements

<PAGE>

                   MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                 For the Six Months Ended June 30, 1997 and 1996

<TABLE>
<CAPTION>

CASH FLOWS FROM OPERATING ACTIVITIES                            June 30, 1997    June 30,1996
                                                                -------------   -------------                     
<S>                                                              <C>             <C>                    
Net (loss) income ............................................  $  (2,456,177)  $     640,565
Adjustments to reconcile net (loss) income to
       net cash used in operating activities
     Depreciation and amortization ...........................        380,916         364,162
     Deferred taxes ..........................................        138,407       1,088,502
     Unrealized gain on treasury notes sold short ............        (49,365)     (2,441,533)
     Amortization of discount - available-for-sale securities        (179,436)       (126,510)
     Realized loss on sale of available-for-sale securities ..        784,122               0
     Gain  on realization of wraparound notes ................              0        (495,012)
     Change in operating assets and liabilities net:
       Decrease in accounts receivable .......................        680,112         664,089
       Increase in due from related party ....................       (141,642)       (206,958)
       Decrease in accrued interest receivable ...............      4,921,944       5,779,833
       Decrease in prepaid expenses and other ................        294,830          81,360
       Decrease in accrued litigation settlement expenses ....              0        (215,000)
       Decrease in accrued expenses ..........................     (1,410,540)       (912,239)
       Decrease in accrued interest payable ..................       (338,319)       (122,100)
       Decrease in master lease payable ......................     (7,264,000)     (7,864,787)
       Decrease in income taxes payable ......................       (816,371)       (767,687)
       Decrease in due to related party ......................        (61,688)        (97,124)
                                                                  ------------    ------------

       Net cash used in operating activities .................     (5,517,207)     (4,630,439)
                                                                  ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Principal repayments on loans receivable ................        139,680          26,733
     Principal repayments on wraparound notes ................      4,727,684       4,747,664
     Purchase of leasehold improvements ......................        (43,668)              0
     Proceeds from realization of wraparound notes ...........              0       2,157,439
     Proceeds from the sale of available-for-sale securities .      9,498,529               0
     Proceeds from redemption of investment in affiliate .....        839,834       2,000,000
     Purchase of available-for-sale securities ...............              0      (8,452,060)
     Proceeds from treasury notes sold short .................              0       9,203,125
     Proceeds from redemption of reverse repurchase agreements      9,436,884               0
     Purchase of treasury notes ..............................     (9,166,017)              0
     Purchase of reverse repurchase agreements ...............              0      (9,601,171)
                                                                  ------------    ------------

       Net cash provided by investing activities .............     15,432,926          81,730
                                                                  ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Distributions paid to preferred stockholders ............              0        (666,622)
     Principal payments on mortgages and notes payable .......     (1,517,846)     (2,967,583)
     Proceeds from loans payable .............................              0       6,339,045
     Principal payments on loans payable .....................     (5,985,822)     (1,818,847)
     Amounts received on treasury notes payable ..............         49,365       2,441,533
                                                                  ------------    ------------

       Net cash (used in) provided by financing activities ...     (7,454,303)      3,327,526
                                                                  ------------    ------------

NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS .............................................      2,461,416      (1,221,183)

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

CASH AND CASH EQUIVALENTS, END OF PERIOD .....................   $  5,603,255    $  1,341,323
                                                                  ============    ============

SUPPLEMENTAL DISCLOSURES OF CASH
     FLOW INFORMATION

     Cash paid during the period for interest ................   $  4,977,251    $  4,812,167
                                                                  ============    ============

     Cash paid during the period for income taxes ............   $    793,651    $    117,723
                                                                  ============    ============

</TABLE>

           See accompanying Notes to Consolidated Financial Statements
<PAGE>

                           MILESTONE PROPERTIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (Unaudited)


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


1.   Recently Issued Accounting Pronouncement

     The  Financial  Accounting  Standards  Board issued  Statement of Financial
Accounting  Standards  No. 128,  "Earnings  per Share" in  February,  1997.  The
pronouncement  established  standards for computing and presenting  earnings per
share,  and is effective for the Company's 1997 year-end  financial  statements.
The  Company's  management  has  determined  that this  standard will not have a
significant  impact on the Company's  computation or  presentation of net income
per common share.

2.    Legal Proceedings

     As previously reported, on January 30, 1996, an action was commenced in the
Court of  Chancery  of the State of  Delaware  (the  "Delaware  Court")  against
Milestone,  its Board of Directors and Concord Assets Group,  Inc.  ("Concord").
Concord's  executive  officers and  directors  are also  executive  officers and
directors of  Milestone.  The  plaintiff,  a Series A Preferred  Stockholder  of
Milestone purporting to bring the action on behalf of himself and other Series A
Preferred Stockholders, brought the action, seeking, among other things, damages
from Milestone,  by reason of, among other things,  (i) Milestone's  acquisition
and assumption in October 1995 (the  "Acquisition") of certain wraparound notes,
wraparound  mortgages  and fee  properties  (collectively,  the  "Assets")  from
certain  affiliates  of Concord,  (ii) the transfer (the  "Transfer")  to UPI in
August 4, 1995 and October 30, 1995 of 16 of Milestone's  retail properties (the
"UPI  Properties"),  and (iii) the subsequent  distribution of all of the issued
and outstanding shares of UPI's common stock to Milestone's Common  Stockholders
<PAGE>

on a  share-for-share  basis  and for no  consideration  (the  "Spin-Off")  (the
Acquisition,  the Transfer and the Spin-Off are collectively  referred to herein
as the  "Transactions").  The plaintiff  alleged  that,  in connection  with the
above,  Milestone and its directors  engaged in  self-dealing,  violated federal
securities  laws, and breached their fiduciary  duties to the Series A Preferred
Stockholders  and sought an injunction  against such  violations.  The plaintiff
claimed, among other things, that, as a result of such actions,  Milestone would
not have  sufficient  funds to pay dividends on the Series A Preferred Stock and
that the Assets were  grossly  inferior to the UPI  Properties.  The  defendants
moved  to  dismiss  the  plaintiff's  original  complaint  and  thereafter,  the
plaintiff amended his complaint to allege further causes of action,  including a
claim of rescission.  The defendants moved to dismiss the amended complaint, and
after hearing  arguments  thereon,  the Delaware Court dismissed the plaintiff's
claim for recision of both the  Transfer and the Spin-Off and reserved  decision
on the defendants' motion to dismiss the plaintiff's claim for damages and other
relief.  On December 9, 1996,  the plaintiff  requested  that the Delaware Court
dismiss the amended complaint,  and  simultaneously  filed a purported new class
action.  On January 14, 1997, the  defendants  filed a motion to dismiss or stay
the purported new class action,  and the Delaware  Court heard oral arguments on
such motion on April 15,  1997.  On May 12, 1997,  the  Delaware  Court issued a
decision on the  defendants'  motions and  dismissed the  plaintiff's  breach of
fiduciary duty and statutory claims (although the Delaware Court has allowed the
plaintiff  to  replead  the  fiduciary  duty  claim),  but did not  dismiss  the
plaintiff's  claim that the  Transfer  and the  Spin-Off did not comply with the
Certificate of Designations  for the Series A Preferred  Stock. On June 4, 1997,
the plaintiff  appealed the Delaware  Court's  dismissal of the  fiduciary  duty
claims, and the defendants filed a cross-appeal on June 11, 1997.

     On July 15, 1997, Milestone  tentatively agreed to a proposed settlement of
the purported class action (the "Proposed  Settlement").  In connection with the
Proposed Settlement, the Supreme Court of the State of Delaware entered an order
consented to by the parties extending the time for the filing of the plaintiff's
opening  brief to August 28, 1997.  Under the terms of the Proposed  Settlement,
Milestone would be released from all claims by its stockholders  relating to the
Transactions and all other matters relating to the pending action. In connection
with the Proposed Settlement, Milestone would pay each of its Series A Preferred
Stockholders who are holders of such Series A Preferred Stock at the time of the
consummation  of the  Proposed  Settlement  an amount of cash equal to $0.75 per
share of Series A  Preferred  Stock,  and each share of the  Series A  Preferred
Stock would be exchanged for a share of a new preferred  stock to be issued by a
subsidiary of Concord.  The new preferred stock of the Concord  subsidiary would
have a $2.25 per share  liquidation  preference,  would not be  entitled  to any
dividend  rights  and would be  subject  to  mandatory  redemption  on the fifth
anniversary of the Proposed  Settlement at $2.25 per share, and would be secured
by a  letter  of  credit  in an  amount  equal  to the  value  of the  aggregate
redemption  price. The defendants would have the right to terminate the Proposed
Settlement  if the  holders  of more than 10% of the  Series A  Preferred  Stock
opt-out  of the  Proposed  Settlement.  The  Proposed  Settlement  is subject to
certain conditions,including approval of the Proposed Settlement by the Delaware
Court,  approval  by  Milestone's   insurance  carrier,   clearance  of  various
securities matters, and the execution of a definitive settlement agreement.

<PAGE>

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

General

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

Results of Operations

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

     The Company  recognized a net loss of $2,107,140 for the three months ended
June 30, 1997 as compared to net income of $177,986  for the same period in 1996
due to the following factors:

     Revenues  for the three  months  ended  June 30,  1997 were  $5,966,201,  a
decrease of $3,918,821,  or 40%, from $9,885,022 for the three months ended June
30,  1996.  Such  decrease  was  primarily  due to the net of: (1) a decrease in
interest  income of $1,252,432  resulting  primarily  from (a) a decrease in the
number of  wraparound  notes to 28 for the three months ended June 30, 1997 from
32 for the same period in 1996  resulting  in a decrease  in interest  income of
approximately $336,000; and (b) a decrease in mortgage backed securities held by
the  Company to two for the three  months  ended June 30, 1997 from four for the
same period in 1996 resulting in a decrease in interest income of  approximately
$806,585;  (2) a decrease in rents of $392,184  resulting from a decrease in the
number of properties leased by the Company to 28 for the three months ended June
30, 1997 from 32 for the same period in 1996  resulting  in a decrease in rental
income  of  approximately  $260,000;  (3) an  unrealized  holding  loss  on U.S.
Treasury  Notes sold short of $354,065  for the three months ended June 30, 1997
compared to an  unrealized  holding  gain of  $1,124,295  for the same period in
1996;  and (4) no gain or loss on the  realization  of wraparound  notes for the
three  months  ended  June  30,  1997  compared  to a gain  of  $495,012  on the
realization of wraparound notes for the three months ended June 30, 1996.

     Operating   expenses  for  the  three  months  ended  June  30,  1997  were
$5,093,569,  a decrease of  $1,175,450,  or 19%, from  $6,269,019  for the three
months ended June 30, 1996. Such decrease was primarily due to the net of: (1) a
decrease  in net lease  expense of  $355,323  due to a decrease in the number of
properties  leased by the Company to 28 for the three months ended June 30, 1997
from 32 for the same  period in 1996;  (2) a decrease  in  property  expenses of
$48,916 attributable to (a) a decrease in the number of properties leased by the
Company  to 28 in 1997  from 32 in 1996  resulting  in a  decrease  in  property
expenses  of  approximately  $23,000;  (b) a decline  in snow  removal  costs of
approximately  $14,000 for the three months ended June 30, 1997  compared to the
same period in 1996;(c) a decrease in insurance expense of approximately $20,000
due to a lower  premium for the three months  ended June 30,  1997;  and (d)such
decreases   were   partially   offset  by  an  increase  in  other  expenses  by
approximately $8,000; and (3) a decrease in salaries, general and administrative
expense of $742,568  resulting  primarily from (a) executive  bonuses which were
approved by the  Compensation  Committee of the Board of  Directors  and paid in
April of 1996 of  approximately  $401,000;  and (b) a decrease  in the number of
employees  from  1996 to 1997  resulting  in a  decrease  in salary  expense  of
approximately $200,000.

      Interest  expense for the three months ended June 30, 1997 was $2,375,655,
a decrease of $726,020,  or 23%, from $3,101,675 for the three months ended June
30,  1996.   Such  decrease  was  primarily  due  to  a  decrease  in  financing
arrangements  related to the mortgage  backed  securities held by the Company to
two for the three  months  ended June 30,  1997 from four for the same period in
1996 resulting in a decrease in interest expense of approximately $584,000.


<PAGE>



     Depreciation  and amortization for the three months ended June 30, 1997 was
$187,808, an increase of $6,977, or 4%, from $180,831 for the three months ended
June 30, 1996.  Such  increase was primarily  due to  approximately  $200,000 of
property improvement purchases made throughout 1996.




Six Months Ended June 30, 1997 Compared to Six Months Ended June 30, 1996

     The Company  recognized a net loss of  $2,456,177  for the six months ended
June 30, 1997 as compared to net income of $640,565  for the same period in 1996
due to the following factors:

     Revenues  for the six  months  ended  June 30,  1997  were  $12,814,474,  a
decrease of $6,292,120,  or 33%, from  $19,106,594 for the six months ended June
30,  1996.  Such  decrease  was  primarily  due to the net of: (1) a decrease in
interest  income of $1,955,620  resulting  primarily  from (a) a decrease in the
number of wraparound  notes to 28 for the six months ended June 30, 1997 from 32
for the same  period in 1996  resulting  in a  decrease  in  interest  income of
approximately $590,000; and (b) a decrease in mortgage backed securities held by
the Company to two for the six months ended June 30, 1997 from four for the same
period in 1996  resulting  in a decrease  in  interest  income of  approximately
$1,099,091; (2) a decrease in rents of $460,698 resulting from a decrease in the
number of  properties  leased by the Company to 28 for the six months ended June
30, 1997 from 32 for the same period in 1996  resulting  in a decrease in rental
income of approximately $513,000,  which was offset by rental increases;  (3) an
unrealized holding gain on U.S. Treasury Notes sold short of $49,365 for the six
months ended June 30, 1997 compared to an unrealized  holding gain of $2,441,533
for the  same  period  in  1996;  (4) no gain  or  loss  on the  realization  of
wraparound  notes for the six months  ended June 30, 1997  compared to a gain of
$495,012 on the  realization  of wraparound  notes for the six months ended June
30, 1996; and (5) a realized loss on the sale of available-for-  sale securities
of $784,122 for the six months  ended June 30, 1997  compared to no such gain or
loss for the same period in 1996.

     Operating expenses for the six months ended June 30, 1997 were $10,157,415,
a decrease of $2,046,132, or 17%, from $12,203,547 for the six months ended June
30, 1996.  Such  decrease was primarily due to the net of: (1) a decrease in net
lease expense of $787,474 due to a decrease in the number of  properties  leased
by the Company to 28 for the six months ended June 30, 1997 from 32 for the same
period in 1996; (2) a decrease in property expenses of $318,658  attributable to
(a) a decrease in the number of  properties  leased by the Company to 28 in 1997
from 32 in 1996  resulting in a decrease in property  expenses of  approximately
$110,000;  (b) a decline in snow removal costs of approximately  $66,000 for the
six months  ended June 30, 1997  compared to the same period in 1996;  and (c) a
decrease in insurance  expense of  approximately  $40,000 due to a lower premium
for the six months ended June 30, 1997; and (3) a decrease in salaries,  general
and administrative  expense of $880,608  resulting  primarily from (a) executive
bonuses  which  were  approved  by the  Compensation  Committee  of the Board of
Directors  and  paid  in  April  of 1996 of  approximately  $401,000;  and (b) a
decrease in the number of employees from 1996 to 1997 resulting in a decrease in
salary expense of approximately $200,000.

      Interest expense for the six months ended June 30, 1997 was $4,638,932,  a
decrease of $820,363,  or 15%, from $5,459,295 for the six months ended June 30,
1996.  Such decrease was  primarily due to a decrease in financing  arrangements
related to the mortgage backed securities held by the Company to two for the six
months ended June 30, 1997 from four for the same period in 1996  resulting in a
decrease in interest expense of approximately $709,000.


<PAGE>



     Depreciation  and  amortization  for the six months ended June 30, 1997 was
$380,916,  an increase of $16,754, or 5%, from $364,162 for the six months ended
June 30, 1996.  Such  increase was primarily  due to  approximately  $200,000 of
property improvement purchases made throughout 1996.


Liquidity and Capital Resources

     The Company, as the holder of 267,300 shares of Kranzco Series C Cumulative
Redeemable  Preferred  Shares is entitled to receive from the redemption of such
shares,  in six equal  installments over the next 18 months, an aggregate amount
of cash equal to approximately  $2,673,000,  plus interest at the rate of 8% per
annum on the applicable  outstanding  balance of such shares. Such funds will be
available to fund the Company's  obligations and its real estate  investment and
development activities.

     The Company also expects, to the extent necessary, to have adequate sources
of cash and/or cash producing assets to meet the expected future liquidity needs
arising from the  fluctuations of gain or loss inherent when  marking-to-market,
monthly, the assets and liabilities associated with the investment activities of
Milestone Asset Management Inc., a wholly-owned subsidiary of Milestone.

     The Company has no present  intention  to declare or pay cash  dividends on
the Common Stock or the Company's $.78 Convertible Series A preferred stock, par
value  $.01 per share  (the  "Series A  Preferred  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 the Company  declares future
dividends on its Common Stock or Series A Preferred  Stock, the Company may need
to  obtain   additional   funds  through  equity  or  debt  financing  or  other
arrangements in order to fund the Company's projected  operations.  No assurance
can be given that additional  financing would be available if and when needed or
on  terms  acceptable  to the  Company.  In  addition,  the  Company's  existing
borrowings may inhibit or result in increased costs to the Company in seeking to
obtain such  additional  financing.  Any  decision  as to the future  payment of
dividends on the Common Stock or 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 II - Other Information, Item 1. Legal Proceedings, for a discussion of
cash requirements under the Proposed Settlement, as defined therein.]

     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  $5,517,207  for the six months
ended June 30, 1997 included (1) a net loss of $2,456,177;  (2)  adjustments for
non-cash  items of  $1,074,644;  and (3) a net  change in  operating  assets and
liabilities of $4,135,674,  compared to net cash used in operating activities of
$4,630,439 for the six months ended June 30, 1996, which included (1) net income
of $640,565;  (2)  adjustments  for non-cash items of $1,610,391;  and (3) a net
change in operating assets and liabilities of $3,660,613.

     Net cash provided by investing activities of $15,432,926 for the six months
ended June 30, 1997  included (1) proceeds  from  principal  repayments on loans
receivable  and  wraparound  notes of  $4,867,364;  (2)  purchase  of  leasehold
improvements  of  $43,668;  (3)  proceeds  from the  sale of  available-for-sale
securities  of  $9,498,529;  (4)  proceeds  from  redemption  of  investment  in
affiliate  of $839,834;  (5)  proceeds  from  redemption  of reverse  repurchase
agreements  of  $9,436,884;  and (6)  purchase  of treasury notes of $9,166,017,
compared to net cash  provided by  investing  activities  of $81,730 for the six
months  ended  June  30,  1996,  which  included  (1)  proceeds  from  principal
repayments on loans receivable and wraparound notes of $4,774,397;  (2) proceeds
from realization of wraparound notes of $2,157,439; (3) proceeds from redemption

<PAGE>



of investment  in affiliate of  $2,000,000;  (4) purchase of  available-for-sale
securities of  $8,452,060;  (5) proceeds from U.S.  Treasury  Notes payable sold
short of  $9,203,125;  and (6)  purchase  of reverse  repurchase  agreements  of
$9,601,171.

     Net cash used in  financing  activities  of  $7,454,303  for the six months
ended June 30, 1997  included  (1)  principal  payments on  mortgages  and notes
payable of $1,517,846 (2) principal  payments on loans payable of $5,985,822 and
(3) amounts received on U.S. Treasury Notes payable of $49,365,  compared to net
cash provided by financing  activities  of  $3,327,526  for the six months ended
June 30, 1996,  which included (1)  distributions  of $666,622 paid to preferred
stockholders;   (2)  principal  payments  on  mortgages  and  notes  payable  of
$2,967,583;  (3)  proceeds  from loans  payable  of  $6,339,045;  (4)  principal
payments  on loans  payable of  $1,818,847;  and (5)  amounts  received  on U.S.
Treasury Notes payable of $2,441,533.


Item 3.         Quantitative and Qualitative Disclosures About Market Risk.

     Not applicable.




<PAGE>



PART II - OTHER INFORMATION

 Item 1.       Legal Proceedings.

     As previously reported, on January 30, 1996, an action was commenced in the
Court of  Chancery  of the State of  Delaware  (the  "Delaware  Court")  against
Milestone,  its Board of Directors and Concord Assets Group,  Inc.  ("Concord").
Concord's  executive  officers and  directors  are also  executive  officers and
directors of  Milestone.  The  plaintiff,  a Series A Preferred  Stockholder  of
Milestone purporting to bring the action on behalf of himself and other Series A
Preferred Stockholders, brought the action, seeking, among other things, damages
from Milestone,  by reason of, among other things,  (i) Milestone's  acquisition
and assumption in October 1995 (the  "Acquisition") of certain wraparound notes,
wraparound  mortgages  and fee  properties  (collectively,  the  "Assets")  from
certain  affiliates  of Concord,  (ii) the transfer (the  "Transfer")  to UPI in
August 4, 1995 and October 30, 1995 of 16 of Milestone's  retail properties (the
"UPI  Properties"),  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  "Spin-Off")  (the
Acquisition,  the Transfer and the Spin-Off are collectively  referred to herein
as the  "Transactions").  The plaintiff  alleged  that,  in connection  with the
above,  Milestone and its directors  engaged in  self-dealing,  violated federal
securities  laws, and breached their fiduciary  duties to the Series A Preferred
Stockholders  and sought an injunction  against such  violations.  The plaintiff
claimed, among other things, that, as a result of such actions,  Milestone would
not have  sufficient  funds to pay dividends on the Series A Preferred Stock and
that the Assets were  grossly  inferior to the UPI  Properties.  The  defendants
moved  to  dismiss  the  plaintiff's  original  complaint  and  thereafter,  the
plaintiff amended his complaint to allege further causes of action,  including a
claim of rescission.  The defendants moved to dismiss the amended complaint, and
after hearing  arguments  thereon,  the Delaware Court dismissed the plaintiff's
claim for recision of both the  Transfer and the Spin-Off and reserved  decision
on the defendants' motion to dismiss the plaintiff's claim for damages and other
relief.  On December 9, 1996,  the plaintiff  requested  that the Delaware Court
dismiss the amended complaint,  and  simultaneously  filed a purported new class
action.  On January 14, 1997, the  defendants  filed a motion to dismiss or stay
the purported new class action,  and the Delaware  Court heard oral arguments on
such motion on April 15,  1997.  On May 12, 1997,  the  Delaware  Court issued a
decision on the  defendants'  motions and  dismissed the  plaintiff's  breach of
fiduciary duty and statutory claims (although the Delaware Court has allowed the
plaintiff  to  replead  the  fiduciary  duty  claim),  but did not  dismiss  the
plaintiff's  claim that the  Transfer  and the  Spin-Off did not comply with the
Certificate of Designations  for the Series A Preferred  Stock. On June 4, 1997,
the plaintiff  appealed the Delaware  Court's  dismissal of the  fiduciary  duty
claims, and the defendants filed a cross-appeal on June 11, 1997.

     On July 15, 1997, Milestone  tentatively agreed to a proposed settlement of
the purported class action (the "Proposed  Settlement").  In connection with the
Proposed Settlement, the Supreme Court of the State of Delaware entered an order
consented to by the parties extending the time for the filing of the plaintiff's
opening  brief to August 28, 1997.  Under the terms of the Proposed  Settlement,
Milestone would be released from all claims by its stockholders  relating to the
Transactions and all other matters relating to the pending action. In connection
with the Proposed Settlement, Milestone would pay each of its Series A Preferred
Stockholders who are holders of such Series A Preferred Stock at the time of the
consummation  of the  Proposed  Settlement  an amount of cash equal to $0.75 per
share of Series A  Preferred  Stock,  and each share of the  Series A  Preferred
Stock would be exchanged for a share of a new preferred  stock to be issued by a
subsidiary of Concord.  The new preferred stock of the Concord  subsidiary would
have a $2.25 per share  liquidation  preference,  would not be  entitled  to any
dividend  rights  and would be  subject  to  mandatory  redemption  on the fifth
anniversary of the Proposed  Settlement at $2.25 per share, and would be secured
by a  letter  of  credit  in an  amount  equal  to the  value  of the  aggregate
redemption  price. The defendants would have the right to terminate the Proposed
Settlement  if the  holders  of more than 10% of the  Series A  Preferred  Stock
opt-out  of the  Proposed  Settlement.  The  Proposed  Settlement  is subject to
certain conditions,


<PAGE>



including approval of the Proposed Settlement by the Delaware Court, approval by
Milestone's insurance carrier,  clearance of various securities matters, and the
execution of a definitive settlement agreement.


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 six month period  ended June 30,  1997,  and is
               qualified  in  its  entirety  by  reference  to  such   financial
               statements.


            (b)No reports on form 8-K were filed during the quarter for which 
               this report is being filed.
               

<PAGE>
                                                        SIGNATURES

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




                                                    MILESTONE PROPERTIES, INC.
                                                          (Registrant)




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



Date: August 11, 1997                     /s/ Joan LeVine                       
                                          ------------------------------------- 
                                          Joan LeVine
                                          Senior Vice President, Treasurer
                                          and Controller