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



                                    FORM 10-K

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

For the fiscal year ended December 31, 2007 or

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

For the transition period from ____________________ to ________________________

                                           Commission file number:  0001368757


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

                  MARYLAND                                  20-5188065
         (state or other jurisdiction of                (I.R.S. Employer
         incorporation or organization)                 Identification No.)


444 Merrick Road, Lynbrook, New York                          11563
(Address of principal executive offices)                    (Zip Code)

Registrant's telephone number, including area code (516) 881-3535

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

      Title of each class             Name of each exchange on which registered
               NONE                                    NONE

Securities registered pursuant to section 12(g) of the Act:  NONE

Indicate by check mark if the  registrant is a well-known  seasoned  issuer,  as
defined in Rule 405 of the Securities Act. Yes [ ] No [X]

Indicate  by  check  mark if the  registrant  is not  required  to file  reports
pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]

<PAGE>

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 [ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. Yes [ ] No [X]

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates  computed by reference to the price at which the common equity
was last sold, or the average bid and asked priced of such common equity,  as of
[the last business day of the registrant's most recently completed second fiscal
quarter]: N/A

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated  filer, a  non-accelerated  filer or a smaller reporting company (as
defined in Rule 12b-2 of the Exchange Act). Check one:

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer
[X]or a smaller reporting company [ ]

Indicate the number of shares outstanding of each of the registrant's classes of
common stock,  as of the latest  practicable  date. As of March 30, 2008,  there
were 13,472,281 shares of common stock issued and outstanding.


<PAGE>



                                 GTJ REIT, INC.

                           ANNUAL REPORT ON FORM 10-K

                      FOR THE YEAR ENDED DECEMBER 31, 2007

                                TABLE OF CONTENTS

                                                                    PAGE
PART I
ITEM 1.       BUSINESS...............................................1
ITEM 1A.      RISK FACTORS...........................................23
ITEM 1B.      UNRESOLVED STAFF COMMENTS..............................32
ITEM 2.       PROPERTIES.............................................33
ITEM 3.       LEGAL PROCEEDINGS......................................35
ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF
              SECURITY HOLDERS.......................................35
PART II
ITEM 5.       MARKET FOR THE REGISTRANT'S COMMON EQUITY,
              RELATED STOCKHOLDER MATTERS AND ISSUER
              PURCHASES OF EQUITY SECURITIES.........................36
ITEM 6.       SELECTED FINANCIAL DATA................................37
ITEM 7.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF
              FINANCIAL CONDITION AND RESULTS OF OPERATIONS..........38
ITEM 7A.      QUANTITATIVE AND QUALITATIVE DISCLOSURES
              ABOUT MARKET RISK......................................52
ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA............F-1 - F-51
ITEM 9.       CHANGES IN AND DISAGREEMENTS WITH
              ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
              DISCLOSURE.............................................53
ITEM 9A.      CONTROLS AND PROCEDURES................................53
ITEM 9B.      OTHER INFORMATION......................................53
PART III
ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF
              THE REGISTRANT.........................................54
ITEM 11.      EXECUTIVE COMPENSATION.................................58
ITEM 12.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
              OWNERS AND MANAGEMENT .................................71
ITEM 13.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ........71
ITEM 14.      PRINCIPAL ACCOUNTANT'S FEES AND SERVICES...............74
PART IV
ITEM 15.      EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.............75



<PAGE>


                                     PART I

                           FORWARD-LOOKING STATEMENTS

Certain  information  included  in this  Annual  Report  contains or may contain
certain  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"). Historical
results  and trends  should  not be taken as  indicative  of future  operations.
Forward-looking statements,  which are based on certain assumptions and describe
future plans, strategies and expectations,  are generally identifiable by use of
the words "believe," "expect," "intend,"  "anticipate,"  "estimate,"  "project,"
"prospects,"  or similar  expressions.  Our  ability  to predict  results or the
actual effect of future plans or strategies  is  inherently  uncertain.  Factors
which  could  have a  material  adverse  effect  on our  operations  and  future
prospects on a consolidated  basis  include,  but are not limited to: changes in
economic  conditions   generally  and  the  real  estate  market   specifically;
legislative  or  regulatory  changes,  including  changes to laws  governing the
taxation of REITs;  availability  of  capital;  interest  rates;  our ability to
service our debt; competition; supply and demand for operating properties in our
current and proposed market areas; generally accepted accounting principles; and
policies and guidelines  applicable to REITs;  and  litigation.  These risks and
uncertainties should be considered in evaluating  forward-looking statements and
undue reliance should not be placed on such statements.  Although we believe the
assumptions underlying the forward-looking  statements,  and the forward-looking
statements  themselves,   are  reasonable,  any  of  the  assumptions  could  be
inaccurate and, therefore,  there can be no assurance that these forward-looking
statements will prove to be accurate. In light of the significant  uncertainties
inherent in these forward-looking  statements, the inclusion of this information
should not be regarded as a  representation  by us or any other  person that our
objectives and plans, which we consider to be reasonable,  will be achieved. The
forward-looking  statements are made as of the date of this Annual  Report,  and
the Registrant assumes no obligation to update the forward-looking statements or
to update the reasons actual  results could differ from those  projected in such
forward-looking statements.

ITEM 1. BUSINESS

Introduction

     The use of the  words  "we",  "us" or "our"  refers to GTJ  REIT,  Inc.,  a
Maryland corporation,  and its subsidiaries,  except where the context otherwise
requires.

     We were formed on June 23, 2006.  On July 24, 2006,  we entered  into,  and
subsequently  closed on March 29, 2007, merger agreements (the  "Agreements") by
and between  TRIBORO COACH CORP., a New York  corporation  ("Triboro");  JAMAICA
CENTRAL  RAILWAYS,  INC., a New York corporation  ("Jamaica");  GREEN BUS LINES,
INC., a New York  corporation  ("Green"  and together  with Triboro and Jamaica,
collectively  referred to as the "Bus  Companies" and each referred to as a "Bus
Company");  and TRIBORO  ACQUISITION,  INC.,  a New York  corporation  ("Triboro
Acquisition");  JAMAICA  ACQUISITION,  INC.,  a New York  corporation  ("Jamaica
Acquisition");  and GREEN  ACQUISITION,  INC.,  a New York  corporation  ("Green
Acquisition"  and together  with  Jamaica  Acquisition  and Triboro  Acquisition
collectively referred to as the "Acquisition  Subsidiaries" and each referred to
as an  "Acquisition  Subsidiary").  The  result of the  mergers  was to effect a
reorganization (the  "Reorganization")  of the Bus Companies whereby each of the
Bus Companies  would become a wholly-owned  subsidiary of us by merging with and


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<PAGE>

into one of the Acquisition Subsidiaries.  The Bus Companies had long historical
roots  in the  operation  of  private  bus  routes  in New  York  City.  The bus
businesses  of the Bus Companies had been acquired by New York City in late 2005
and early 2006,  leaving the Bus Companies with (a) a portfolio of real property
comprised of six rentable parcels, (b) outdoor maintenance businesses, and (c) a
paratransit  business.  There is also an insurance  subsidiary which insured the
former bus company operations, and is being wound down as cases are resolved.

     Effective July 1, 2007 we will be taxed as a real estate  investment  trust
("REIT") under Section  856(c) of the Internal  Revenue Code of 1986, as amended
(the "Code").

     We currently own seven rentable parcels of real property, four of which are
leased to the City of New York,  two of which are leased to  commercial  tenants
(all  six on a  triple  net  basis),  and  one of  which  is  used by one of our
subsidiaries and the remainder of which is leased to a commercial tenant.  There
is an additional property of negligible size which is not rentable. In addition,
we operate a group of outdoor maintenance businesses and a paratransit business.
There is also an  insurance  subsidiary  which  insured  the former bus  company
operations, and is being wound down as cases are resolved.

Description of REIT Business

     Our REIT business consists of the acquisition,  ownership and management of
real properties. We currently own seven rentable parcels of real property. For a
description,  please see "Portfolio of Real Properties".  We intend to develop a
real property portfolio beyond these seven parcels.

     Investing in real properties

     We seek to acquire quality real properties at favorable  prices rather than
lesser real  properties  at low prices.  We believe  that  quality  tenants seek
well-managed   properties   that  offer   superior  and   dependable   services,
particularly in competitive markets.

     We believe that a critical  success factor in property  acquisition lies in
possessing the  flexibility to move quickly when an opportunity  presents itself
to buy or sell a property.  We believe that employing highly qualified  industry
professionals will allow us to better achieve this objective.

     We intend to acquire fee ownership of real  properties,  but may also enter
into joint venture  arrangements.  We seek to maximize current and long-term net
income and the value of our  assets.  Our policy is to acquire  assets  where we
believe opportunities exist for reasonable investment returns.

     Decisions  relating to the purchase or sale of  properties  are made by our
Board of Directors.  Our Board of Directors is  responsible  for  monitoring the
administrative procedures,  investment operations and performance of our company
to ensure our  policies  are carried  out.  Our Board of  Directors  reviews our
investment  policies to determine that our policies are in the best interests of
our stockholders and set forth their  determinations in the minutes of the board
meetings.  Stockholders  have no voting rights with respect to implementing  our


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<PAGE>

investment  objectives and policies,  all of which are the responsibility of our
Board of Directors and may be changed at any time.

     Types of investments

     We intend to invest primarily in quality real properties.  To the extent it
is in the interests of our stockholders, we will seek to invest in a diversified
portfolio of real  properties  within our geographic  area that will satisfy our
primary  investment  objectives of providing our  stockholders  with stable cash
flow,  preservation of capital and growth of income and principal without taking
undue risk.  Because a significant  factor in the valuation of  income-producing
real  property  is the  potential  for future  income,  we  anticipate  that the
majority of  properties  we acquire will have both the  potential  for growth in
value and providing cash distributions to stockholders.

     We intend to acquire  properties  with  mortgage or other debt. We may also
acquire  properties  for  shares  of our  common  stock.  As to real  properties
purchased  using our revolving  credit,  we  anticipate  we will incur  mortgage
indebtedness  by obtaining  loans secured by selected  properties,  if favorable
financing  terms are  available.  The proceeds  from such loans would be used to
restore funds borrowed under our revolving credit.

     We do not intend to incur  aggregate  indebtedness  in excess of 75% of the
gross  fair  market  value of our real  properties.  Fair  market  value will be
determined by an internal or  independent  certified  appraiser and in a similar
manner as the fair market determination at the time of purchase  satisfactory to
our Board of Directors.

     Considerations related to possible real property acquisitions

     The following  considerations  are evaluated by us in relation to potential
purchases of real property:

          o geographic location and type;

          o construction quality and condition;

          o potential for capital appreciation;

          o the general credit quality of current and potential tenants;

          o the potential for rent increases;

          o the interest rate environment;

          o potential for economic growth in the tax and regulatory  environment
     of the community in which the property is located;

          o potential for expanding the physical layout of the property;

          o occupancy and demand by tenants for  properties of a similar type in
     the same geographic vicinity;

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<PAGE>

          o prospects for liquidity  through sale,  financing or  refinancing of
     the real property;

          o  competition  from  existing  properties  and the  potential for the
     construction of new properties in the area; and

          o treatment under  applicable  federal,  state and local tax and other
     laws and regulations.

     We will not close the purchase of any  property  unless and until we obtain
an environmental  assessment, a Phase I review, for each real property purchased
and are generally satisfied with the environmental status of the real property.

     In  determining  whether to purchase a  particular  real  property,  we may
obtain an option on such  property.  The amount  paid for an option,  if any, is
normally  surrendered  if the real  property is not  purchased,  and is normally
credited against the purchase price if the real property is purchased.

         In purchasing real properties, we will be subject to risks, including:

          o changes in general economic or local conditions;

          o changes in supply of or demand for similar  competing  properties in
     an area;

          o changes in interest  rates and  availability  of permanent  mortgage
     funds which may render the sale of a property difficult or unattractive;

          o changes in tax, real estate, environmental and zoning laws;

          o periods of high interest rates and tight money supply which may make
     the sale of properties more difficult;

          o tenant turnover; and

          o general overbuilding or excess supply in the market area.

     We  anticipate  that the purchase  price of properties we acquire will vary
depending on a number of factors,  including size and location. In addition, our
cost will vary based on the amount of debt we incur in connection with financing
the  acquisition.  We may not be able to  purchase a diverse  portfolio  of real
properties  unless we find sources of financing.  It is difficult to predict the
actual number of properties  that we will actually  acquire because the purchase
prices of properties varies widely and our investment in each will vary based on
the amount and cost of leverage we use.

     Real property acquisition process

     We intend to acquire real properties using our  wholly-owned  subsidiaries.
In addition to fee simple  interests,  we may acquire  long-term  ground leases.
Other  methods of acquiring a real property may be used when  advantageous.  For
example, we may acquire properties through a joint venture or the acquisition of


                                       4
<PAGE>

substantially  all of the  interests  of an entity that in turn owns a parcel of
real property.

     We currently have a $72.5 million revolving line of credit with a financial
institution,  which we plan to use to facilitate our acquisition  opportunities,
with the intention of placing permanent  financing on the acquired property at a
later date and  restoring our  revolving  line of credit with the  proceeds.  We
believe our line of credit will allow us to secure acquisition  contracts faster
after we identify a strategic property, and will be an attractive feature of our
bids to sellers  seeking to complete a sale  quickly.  As of March 30, 2008,  we
have approximately $43,000,000 outstanding under our line of credit.

     We may  commit  to  purchase  real  properties  subject  to  completion  of
construction in accordance  with terms and conditions  specified by our Board of
Directors.  In such cases, we will be obligated to purchase the real property at
the completion of construction,  provided that (1) the construction  conforms to
definitive  plans,  specifications  and  costs  approved  by us in  advance  and
embodied in the  construction  contract and (2) an agreed upon percentage of the
real  property  is  leased  beforehand.  We would  receive a  certificate  of an
architect,  engineer or other appropriate party,  stating that the real property
complies with all plans and  specifications.  Our intent is to leave development
risk with the developer.

     If  remodeling  is required  prior to the purchase of a real  property,  we
would anticipate paying a negotiated maximum amount either upon completion or in
installments  commencing prior to completion.  Such amount would be based on the
estimated cost of such  remodeling.  In such  instances,  we would also have the
right to review the  seller's  books  during  and  following  completion  of the
remodeling to verify actual costs. In the event of substantial disparity between
estimated and actual costs, an adjustment in purchase price may be negotiated.

     We are not specifically limited in the number or size of real properties we
may acquire.  The number and mix of  properties  we may acquire will depend upon
real estate and market conditions and other  circumstances  existing at the time
we are acquiring our real properties.

     Joint ventures

     We may invest in general  partnership and joint venture  arrangements  with
other real estate investors. You should note that there is a potential risk that
we or our joint venture  partner will be unable to agree on a matter material to
the  joint  venture  on  joint  venture  decisions  and we may not  control  the
decision.  Furthermore,  we  cannot  assure  you  that we will  have  sufficient
financial resources to exercise any right of first refusal that may be part of a
partnership or joint venture agreement.


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<PAGE>

     Our policies with respect to borrowing

     We  presently  anticipate  that  we  will  borrow  funds  to  acquire  real
properties.  We  may  later  refinance  or  increase  mortgage  indebtedness  by
obtaining  additional  loans  secured by  selected  properties.  We will use the
proceeds from such loans to restore our revolving credit, which can then be used
to acquire  additional  real  properties  for the purpose of increasing our cash
flow  and  providing  further  diversification.  We  anticipate  that  aggregate
borrowings, both secured and unsecured, will not exceed 75% of our real property
fair market value.  Our Board of Directors  reviews our aggregate  borrowings to
ensure that such  borrowings  are  reasonable in relation to our assets.  We may
also incur indebtedness to finance improvements to properties and, if necessary,
for working capital needs or to meet the distribution requirements applicable to
us under the federal tax laws.

     When   incurring   secured  debt,   we  will  seek  to  incur   nonrecourse
indebtedness,  which means that the lenders'  rights in the event of our default
generally  will be limited to  foreclosure  on the  property  that  secured  the
obligation, but we may have to accept recourse financing, where we remain liable
for any  shortfall  between the debt and the  proceeds of sale of the  mortgaged
real  property.  If we incur mortgage  indebtedness,  we will endeavor to obtain
level payment  financing,  meaning that the amount of debt service payable would
be  substantially  the same each year,  although  some  mortgages  are likely to
provide for one large  payment  and we may incur  floating  or  adjustable  rate
financing when our Board of Directors determines it to be in our best interest.

     Our Board of Directors  controls our policies with respect to borrowing and
may change such policies at any time without stockholder approval.

     Sale or other disposition of our real property

     Our Board of Directors determines whether a particular real property should
be sold or otherwise  disposed of after  consideration of the relevant  factors,
including  performance  or  projected  performance  of the  property  and market
conditions, with a view toward achieving our principal investment objectives.

     When appropriate to minimize our tax liabilities, we may structure the sale
of a real property as a "like-kind  exchange"  under the federal income tax laws
so that we may acquire  qualifying  like-kind  replacement  property meeting our
investment objectives without recognizing taxable gain on the sale. Furthermore,
our general policy will be to reinvest in additional  real  properties  proceeds
from  the  sale,  financing,  refinancing  or  other  disposition  of  our  real
properties  that  represent  our initial  investment  in such real  property or,
secondarily,  to use such  proceeds  for the  maintenance  or repair of existing
properties  or to increase  our  reserves for such  purposes.  The  objective of
reinvesting such portion of the sale,  financing and refinancing  proceeds is to
increase  the total value of real estate  assets that we own,  and the cash flow
derived from such assets to pay distributions to our stockholders.

     Despite this policy,  our Board of Directors may determine to distribute to
our  stockholders  all or a portion of the  proceeds  from the sale,  financing,
refinancing or other disposition of real properties.  In determining whether any
of such  proceeds  should  be  distributed  to our  stockholders,  our  Board of
Directors  considers,  among other factors,  the desirability of real properties


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available for purchase,  real estate market  conditions and compliance  with the
REIT  distribution  requirements.  Alternatively,  our  Board of  Directors  may
determine not to make distributions of capital.

     In connection  with a sale of a property,  our preference will be to obtain
an  all-cash  sale price.  However,  we may accept a purchase  money  obligation
secured  by a  mortgage  on  the  property  as  partial  payment.  There  are no
limitations or restrictions on our taking such purchase money  obligations.  The
terms of payment  upon sale will be  affected by custom in the area in which the
property being sold is located and the then economic  conditions.  To the extent
we receive notes,  securities or other property instead of cash from sales, such
proceeds, other than any interest payable on such proceeds, will not be included
in net sale  proceeds  available  for  distribution  until and to the extent the
notes or other  property  are  actually  paid,  sold,  refinanced  or  otherwise
disposed  of.  Thus,  the  distribution  of the  proceeds  of a sale to you as a
stockholder,  may be delayed  until such time.  In such cases,  we will  receive
payments  in the year of sale in an  amount  less  than the  selling  price  and
subsequent payments will be spread over a number of years.

     A real  property may be sold before the end of the planned  holding  period
if:

          o in the judgment of our Board of  Directors,  the value of a property
     may decline;

          o an opportunity has arisen to improve other or acquire properties;

          o we can increase cash flow through the  disposition  of the property;
     or

          o in our  judgment,  the sale of the property is otherwise in our best
     interest.

     The  determination  of  whether  a  particular  property  should be sold or
otherwise disposed of will be made after  consideration of the relevant factors,
including  prevailing  economic  conditions,  with a view to  achieving  maximum
capital appreciation. We cannot assure you that this objective will be realized.
The selling  price of a property  will be determined in large part by the amount
of rent  payable  under the  lease.  If a tenant  has a  repurchase  option at a
formula price or if operating expenses increase without a commensurate  increase
in rent under our gross leases, we may be limited in realizing any appreciation.
In connection  with our sales of properties,  we may lend the purchaser all or a
portion of the purchase price. In these instances, our taxable income may exceed
the cash  received in the sale.  The terms of payment will be affected by custom
in the area in which the property being sold is located and the  then-prevailing
economic conditions.

     We do not  intend  to sell the real  properties  we  acquired  from the Bus
Companies for a period of 10 years after we made our REIT  election,  until that
is, July,  2017. Under current tax law, if a real property thus acquired is sold
within such 10 year period,  we would be taxed on the gain from the sale of such
real property in the hands of the Bus Companies,  and a  distribution  of any of
the profits would be taxed to the  stockholder as a dividend.  This would result
in high and double taxation.



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     Purchases of Leases

     To the extent  consistent with REIT status, we may acquire long-term ground
leases,  or master  leases for real property we can then sublet as determined by
our Board of Directors.

     Making loans and investments in mortgages

     We do not plan to make loans to other entities or persons unless secured by
mortgages,  although we may advance funds to our subsidiaries.  We will not make
or invest in  mortgage  loans  unless we  obtain  an  appraisal  concerning  the
underlying property from a certified independent  appraiser.  In addition to the
appraisal,  we will  obtain a  customary  lender's  title  insurance  policy  or
commitment as to the priority of the mortgage or condition of the title.

     We will not make or invest in  mortgage  loans on any one  property  if the
aggregate  amount of all mortgage loans  outstanding on the property,  including
the loans of our company, would exceed an amount equal to 75% of the fair market
value of the  property,  unless  we find  substantial  justification  due to the
presence of other underwriting criteria.

     Investment in securities

     We will not invest in equity  securities  of another  entity,  other than a
wholly-owned subsidiary,  directly or indirectly,  unless our Board of Directors
approves the investment as part of a real property  investment.  We may purchase
our own securities if the Board of Directors  determines  such purchase to be in
our best interests.  We may in the future acquire some, all or substantially all
of the  securities  or assets of other  REITs or  similar  entities  where  that
investment   would  be  consistent   with  our  investment   policies  and  REIT
qualification requirements. There are no limitations on the amount or percentage
of our total  assets that may be  invested  in any one issuer,  other than those
imposed by the gross income and asset tests that we must satisfy to qualify as a
REIT. In any event,  we do not intend that our  investments  in securities  will
require us to register as an "investment  company" under the Investment  Company
Act of 1940, and we would intend to divest  securities  before any  registration
would be required.

     Changes in our investment objectives

     Subject to the  limitations  in our  charter,  our bylaws and the  Maryland
General  Corporation Law ("MGCL"),  our business and policies will be controlled
by our Board of  Directors.  Our Board of  Directors  has the right to establish
policies  concerning  investments and the right, power and obligation to monitor
our  procedures,  investment  operations and  performance of our company.  Thus,
stockholders must be aware that the Board of Directors, acting consistently with
our organizational  documents,  applicable law and their fiduciary  obligations,
may elect to modify our objectives and policies from time to time.

     Distribution policy

     We cannot assure you that we will make distributions.  In order to continue
to qualify as a REIT for federal  income tax purposes,  we are  required,  among
other  things,  to  distribute  each  taxable  year at least 90% of our net REIT
income, other than net capital gains, but we may be unable to do so.



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     We have a policy of making distributions on a quarterly basis. We will seek
to avoid, to the extent possible,  the fluctuations in distributions  that might
result if distribution payments were based solely on actual cash received during
the  distribution  period.  To implement  this policy,  we may use cash received
during prior periods or cash received  subsequent to the distribution period and
prior to the  payment  date for such  distribution  payment,  to pay  annualized
distributions  consistent with the distribution  level  established from time to
time by our Board of Directors.  Our ability to maintain this policy will depend
upon the availability of cash and applicable requirements for qualification as a
REIT under the federal  income tax laws.  Therefore,  we cannot  assure you that
there will be cash available to pay distributions or that distributions will not
fluctuate.   If  cash  available  for   distribution   is  insufficient  to  pay
distributions  to you as a  stockholder,  we may obtain the  necessary  funds by
borrowing,  issuing new securities or selling assets. These methods of obtaining
funds could affect future distributions by increasing operating costs.

     To the extent that  distributions  to our  stockholders are made out of our
current or accumulated earnings and profits, such distributions would be taxable
as ordinary income. To the extent that our distributions  exceed our current and
accumulated  earnings  and profits,  such  amounts  will  constitute a return of
capital to our  stockholders  for federal income tax purposes,  to the extent of
their basis in their stock, and thereafter will constitute capital gain.

     One Time Earnings and Profits Distribution

     On August 20, 2007,  the Board of Directors of GTJ REIT declared a one time
special  distribution  of accumulated  earnings and profits on GTJ REIT's common
stock of $6.40 per share,  payable in cash and in common stock. For the purposes
of the special distribution,  our common stock was valued at $11.14. The special
distribution totaled $62,057,728.  The holders of our shares, and the holders of
shares of the Bus Companies, as of the close of business on August 20, 2007, the
record date for the special distribution (the "Holders"),  were eligible for the
special  distribution.  The Holders were  required to make an election as to the
amount of our shares and/or cash the Holders  wished to receive as such Holders'
respective portion of the special distribution. Holders were advised, due to the
limitation  of  the  aggregate   amount  of  cash   available  for  the  special
distribution,  that their actual  distribution  may not be in the  proportion of
cash and  shares  they  elected,  but  could be  based  on a pro  ration  of the
available cash after all elections (ie: not on a first come-first served basis).
In October 2007, we paid or accrued approximately $20,000,000 in cash and issued
3,775,400  of  our  shares,   valued  at  approximately   $42,000,000,   to  our
stockholders in connection with the special distribution.



                                       9
<PAGE>

     Portfolio of Real Properties

     165-25 147th  Avenue.  165-25 147th Avenue,  Jamaica,  New York (the "147th
Avenue Property") is owned in fee simple.  The 147th Avenue Property consists of
a 151,068  square foot  industrial  building  located on 6.567 acres.  The 147th
Avenue  Property is  comprised  of three  parcels.  The main parcel  contains an
entire block which is bordered by Rockaway  Boulevard to the South, 167th Avenue
to the North,  146th  Avenue to the West and 147th  Avenue to the East. A second
parcel is located on the SE corner of 147th  Avenue and 167th Street and a third
parcel is located on the NE corner of 147th  Avenue and 167th  Street.  The real
property  is  leased to New York  City as a bus  depot  for an  initial  term of
twenty-one  years with a first year rent of $2,795,000 which rent escalates to a
21st year rent of $4,092,000.  Rent  continues to escalate  during the following
two fourteen year extension terms.

     49-19 Rockaway Beach Boulevard. 49-19 Rockaway Beach Boulevard, Queens, New
York (the "Rockaway Beach Property") is owned in fee simple.  The Rockaway Beach
Property  consists of a 28,790 square foot  industrial  building on 3.026 acres.
The  Rockaway  Beach  Property  is  located  on both the north and south side of
Rockaway  Beach  Boulevard.  One parcel is located on the South side of Rockaway
Beach  Boulevard  between  Beach  47th and Beach  49th  Street.  This  parcel is
developed with a 28,790 square foot industrial building. The second parcel which
is comprised of six contiguous tax lots is located on the North side of Rockaway
Beach  Boulevard  between Beach 49th Street and Beach 50th Street.  The Rockaway
Beach  property  has been  leased to New York City as a bus depot for an initial
term of 21 years with a first year rent of $605,000  escalating over the term to
a 21st year rent of  $886,000.  The rent  escalates  during  the  following  two
fourteen year extension terms.

     85-01 24th Avenue.  85-01 24th Avenue,  East Elmhurst,  New York (the "24th
Avenue Property") is owned in fee simple. The 24th Avenue Property consists of a
118,430 square foot industrial  building on 6.432 acres. The 24thAvenue Property
is located on the block front bordered by 23rd Avenue to the North,  24th Avenue
to the  South,  85th  Street  to the West and  87th  Street  to the East in East
Elmhurst, New York. The 24th Avenue Property has been leased to New York City as
a bus  depot  for an  initial  term  of 21  years,  with a  first  year  rent of
$2,585,000  escalating  during the term to a 21st year rent of  $3,785,000.  The
rent escalates during the two fourteen year extension terms.

     114-15 Guy Brewer Boulevard. 114-15 Guy Brewer Boulevard, Jamaica, New York
(the "Guy  Brewer  Property")  is owned in fee simple.  The Guy Brewer  Property
consists of a 75,800  square foot  industrial  building on 4.616 acres.  The Guy
Brewer  Property  is  located  on the NE corner of 115th  Avenue  and Guy Brewer
Boulevard in Jamaica,  New York. The Guy Brewer  Property has been leased to New
York City as a bus depot for an  initial  term of twenty  one years with a first
year  rent  of  $1,515,000  escalating  to  a  21st  year  rent  of  $2,218,000.
Escalations continue during the following two fourteen year renewal terms.

     612 Wortman Avenue.  612 Wortman Avenue,  Brooklyn,  New York (the "Wortman
Property")  is  owned  in  fee  simple.  The  Wortman  Property  consists  of an
industrial  building of 27,250 square feet located on 10.389 acres.  The Wortman
Property is located along the entire block front surrounded by Wortman Avenue to
the North, Cozine Avenue to the Sourth,  Fountain Avenue to the East and Montauk
Avenue to the West.  An  additional  parcel made up of three tax lots is located
along the  entire  block  front  bordered  by  Cozine  Avenue,  Milford  Avenue,
Flatlands  Avenue and Logan Street.  The Wortman Property is primarily leased to


                                       10
<PAGE>

Varsity Bus Co., Inc.  ("Varsity Bus") as a bus depot,  which purchased  certain
bus  routes  and  buses  from the Bus  Companies  in 2003  (see  "Related  Party
Transactions").  Varsity has  occupied a portion of the Wortman  Property  since
2003  based on an oral  agreement,  and has now  entered  into a  written  lease
related to its tenancy.  Under the lease, Varsity is leasing 195,813 square feet
of outdoor parking and  approximately  11,852 square feet of indoor  maintenance
and office space for $231,800 per year from  September  2005 to January 2006 and
for $311,800 per year from February 2006 to August 2006,  increasing by the cost
of living index from September 2006 to August 2010, when the term ends.  Varsity
also pays a 60% share of utility and building maintenance costs. Varsity has the
right to terminate the term on six months'  notice at an earlier  date.  Varsity
also has the  right to lease  the space  for up to  four-five  year  consecutive
extension  terms  after 2010 at a rental  rate equal to 90% of then fair  market
value at the  beginning of the first  extension  term,  with rent for  following
years at a compounding of annual CPI index increases. The balance of the Wortman
Property is occupied by Transit Facility Management,  Inc. ("TFM"), a subsidiary
of the Company,  as a bus depot. TFM operates a fleet of buses.  Rent is accrued
at the rate of  approximately  $150,000 per year at the present time for its use
of the  Wortman  Property.  In the event TFM is not able to renew its  agreement
with the Metropolitan Transit Authority,  it is anticipated that TFM will vacate
its space at the Wortman Property.  In such event, we anticipate we will be able
to lease such vacated space to one or more third parties for vehicle parking and
servicing.

     23-85 87th Street.  23-85 87th Street,  East Elmhurst,  New York (the "87th
Street Property") is owned in fee simple. The 87th Street Property consists of a
52,020 square foot industrial  building on 7.016 acres. The 87th Street Property
is located on the block front bordered by 23rd Avenue to the North,  24th Avenue
to the  South,  87th  Street  to the West and  89th  Street  to the East in East
Elmhurst,  New York.  The 87th  Street  Property  is  leased to Avis  Rent-A-Car
Systems, Inc. as an automobile leasing and maintenance depot under a lease dated
October  31,  2003 with a term  ending  October  31,  2023,  with a base rent of
$1,800,000 per year. For the sixth,  eleventh and sixteenth years, the base rent
will be increased by the greater of 105% of the immediately  preceding base rent
or the cumulative cost of living index increase for the preceding five years but
not in excess of 115% of the  immediately  preceding base rent. The initial base
rent has been reduced to $1,530,000 per year until rezoning takes place at which
time the initial base rent will be increased to $1,800,000 per year.

     8 Farm Springs  Road. 8 Farm Springs  Road,  Farmington,  Connecticut  (the
"Farm  Springs  Property")  is owned in fee simple.  The Farm  Springs  Property
consists of a 107,654 square foot  industrial  building on  approximately  10.53
acres.  The Farm  Springs  Property  has been leased to the  Hartford  Insurance
Company as a an office  building for a term of 10 years with current annual rent
of $2,161,692 escalating to $2,290,877 in 2012, in which year the lease expires.

     No plans for renovation or improvement

     Our real properties except for the 87th Street Property and the Farm Spring
Property, are used as bus depots. We have no plans or obligations to renovate or
develop any of our real properties.




                                       11
<PAGE>

     Financing

     On July 2, 2007, we and certain subsidiaries (the "Borrowers") entered into
a Loan Agreement,  dated as of June 30, 2007 (the "Loan Agreement") with ING USA
Annuity And Life  Insurance  Company;  ING Life  Insurance and Annuity  Company;
Reliastar Life Insurance Company;  and Security Life Of Denver Insurance Company
(the  "Lenders").  Pursuant to the terms of the Loan Agreement,  the Lenders are
providing  multiple  loan  facilities  in  the  amounts  and on  the  terms  and
conditions  set  forth  in  such  Loan  Agreement.  The  aggregate  of all  loan
facilities  under the Loan Agreement shall not exceed  $72,500,000.  Interest on
the loan is paid  monthly.  The  principal  shall be paid on the  maturity  date
pursuant  to the  terms  set forth in the Loan  Agreement,  namely  July 1, 2010
unless otherwise extended or renewed.

     The loan facilities are  collateralized by: (1) an Assignment of Leases and
Rents on four bus  depot  properties  (the  "Depots")  owned by  certain  of the
Borrowers and leased to the City of New York,  namely (a) 49-19  Rockaway  Beach
Boulevard;  (b) 165-25 147th Avenue;  (iii) 85-01 24th Avenue and (d) 114-15 Guy
Brewer Boulevard;  (2) Pledge Agreements under which (i) the Company pledged its
100%  stock  ownership  in each of: (a) Green  Acquisition,  Inc.;  (b)  Triboro
Acquisition,  Inc. and (c) Jamaica  Acquisition,  Inc., (ii) Green  Acquisition,
Inc.  pledged its 100%  ownership  interest in each of (a) 49-19  Rockaway Beach
Boulevard, LLC and (b) 165-25 147th Avenue, LLC, (iii) Triboro Acquisition, Inc.
pledged its 100% ownership  interest in 85-01 24th Avenue,  LLC, and (d) Jamaica
Acquisition,  Inc.  pledged  its 100%  membership  interest in 114-15 Guy Brewer
Boulevard,  LLC, and (3) a LIBOR Cap Security Agreement under which GTJ Rate Cap
LLC, a wholly  owned  subsidiary  of the  Company,  pledged  its  interest in an
interest  rate cap  transaction  evidenced by the  Confirmation  and ISDA Master
Agreement, dated as of December 13, 2006, with SMBC Derivative Products Limited.
The Company had assigned its interest in the interest  rate cap  transaction  to
GTJ Rate Cap LLC prior to entering  into the Loan  Agreement.  $1,000,000 of the
loan is  secured  by a  mortgage  in the  amount  of  $1,000,000  on the  Depots
collectively.

     In  addition  to  customary  non-financial  covenants,  the  Borrowers  are
obligated  to  comply  with the  following  financial  ratio  covenants  (1) the
Borrowers will not permit the ratio of (a) Consolidated net Operating Income for
any period of four consecutive  Fiscal Quarters to (b) Consolidated Debt Service
for such period,  to be less than 1.3 to 1.0; (2) the Borrowers  will not permit
the ratio of (a) Consolidated Net Operating Income from Unencumbered  Assets for
any period of four  consecutive  Fiscal Quarters to (b)  Consolidated  Unsecured
Debt  Service for such period,  to be less than 1.3. to 1.0;  (3) the  Borrowers
will not  permit  the  ratio of (a)  Consolidated  Debt at any time to (b) Total
Assets Value at such time, of (a) Total Unencumbered Assets Value at any time to
(b) Consolidated Unsecured Debt at such time, to be less than 1.5 to 1.0.

     As of March  30,  2008,  we had  borrowed  an  aggregate  of  approximately
$43,000,000 under the Loan Agreement.

     Competitive Position of Our Real Properties

     We believe our real properties  dedicated to use as bus depots,  located in
New York City, are in a favorable competitive position, as we believe that there
are not many sites in Queens and  Brooklyn,  New York that are  suitable  as bus
depots or for the mass  parking  of  automobiles.  We believe  the Farm  Springs
Property is in a favorable  competitive  position since it is located in an area
of  Hartford,  Connecticut  which  also  is  the  residence  of  many  corporate



                                       12
<PAGE>

executives,  and offers very short  commutation  times for such persons,  and in
addition, is close to major highways and has substantial parking.

     Insurance Coverage

     Our real  properties  are  covered  under an umbrella  liability  insurance
policy. We believe that our insurance is adequate in amount and coverage.

     Occupancy

     Our real properties are fully occupied. New York City is the sole tenant of
four of the real properties,  (147th Avenue  Property,  Rockaway Beach Property,
24th Avenue Property and Guy Brewer Property) Avis Rent A Car is the sole tenant
of the fifth real property (87th  Property),  Varsity Bus is the majority tenant
of the sixth real property (Wortman Property),  the balance of which is occupied
by TFM, and Hartford Life  Insurance is the sole tenant of the seventh  property
(Farm  Springs  Property).  The loss of these  above-mentioned  tenants or their
inability to pay rent could have a material  adverse  effect on our business and
results of  operation.  Notwithstanding  this,  it is possible that TFM will not
occupy a portion of the Wortman property after September 2008, and we believe we
can  find  another  tenant  to park  and  service  vehicles  at  such  location.

     Expiration of Our Leases

     The New York City leases expire in 2026 and 2027. The Avis Rent A Car lease
expires in 2023.  The  Hartford  lease  expires in 2012.  Such lease  represents
approximately  19% of our  building  space,  approximately  22% of our  land and
approximately  19% of our gross rental income.  The Varsity Bus lease expires in
2010. Such lease  represents  approximately 9% of our building space, 15% of our
land and approximately 3% of our gross rental income.  The TFM usage is expected
to expire in September 2008. As our subsidiary,  it does not make rent payments.
If such usage  terminates as anticipated,  we will seek to lease such space as a
vehicle depot and maintenance facility.



                                       13
<PAGE>

     Depreciation

     The  following  table  provides  information  on  depreciation  of our real
property:
<TABLE>
<CAPTION>

                                                                                 Depreciation        Remaining
                                                               Tax Basis         Method              Life
------------------------------------------------------------   ----------------  ------------        ---------
<C>                                                            <C>                                   <C>
147th Street Property and Rockaway Beach Property              $ 3,448,262       MACRS               20 years
24th Avenue Property                                           $ 1,993,628       MACRS               20 years
Guy Brewer Property                                            $ 2,520,674       MACRS               20 years
Wortman Property and 87th Street Property                      $ 3,589,790       MACRS               20 years
</TABLE>

     Real property taxes

     The following table provides information on real property taxes of our real
property. We are not planning any improvements to any of the real property.
<TABLE>
<CAPTION>

                                                                                                      Current
                                                                                       Tax            Annual
                                                                                       Rate           Amount
-------------------------------------------------------------------------------       -------       ---------------
<C>                                                                                   <C>           <C>
147th Street Property                                                                 10.0590    %  $       376,435
Rockaway Beach Property                                                               10.0590    %  $        67,822
24th Avenue Property                                                                  10.0590    %  $       346,281
Guy Brewer Property                                                                   10.0590    %  $       147,809
Wortman Property                                                                      10.0590    %  $       131,281
87th Street Property                                                                  10.0590    %  $       489,180
Farm Springs Property                                                                   2.595    %  $       222,279
</TABLE>


     Certain Rental Data

     The following table sets forth certain rental data of our real property. It
should be noted that rentals include outdoor parking and indoor  maintenance and
office  space.  For  purposes  of the  following,  aggregate  rent is divided by
aggregate  square footage used,  since the leases do not  differentiate  between
outdoor  parking and indoor  maintenance and office space. No data prior to 2006
is provided for the real  properties  leased to New York City since before then,
the same were used by the Bus Companies for their bus operations.  No data prior
to 2003 is provided  for the 87th Street  Property and Wortman  Property,  since
before then, the same were used by the Bus Companies for their operations.




                                       14
<PAGE>

<TABLE>
<CAPTION>

                                                                                   Rental Per Square
                                                                                   Foot For 2007
                                                                                   Building                Land
-------------------------------------------------------------------------------    ---------------         ---------
<C>                                                                                 <C>                    <C>
147th Avenue Property (New York City)                                               $18.50                 $9.77
Rockaway Beach Property (New York City)                                             $21.01                 $4.59
24th Avenue Property (New York City)                                                $21.83                 $9.23
Guy Brewer Property (New York City)                                                 $19.99                 $7.53
Wortman Property (Varsity Bus lease only)                                           $12.29                 $0.74
87th Street Property (Avis Rent A Car)                                              $29.41                 $5.13
Farm Springs Property (Hartford Insurance)                                          $20.08                 $4.71

</TABLE>

     Environmental Matters

     The Company's real property,  except for the Farm Springs Property, has had
activity  regarding  removal and replacement of underground  storage tanks. Upon
removal  of the old  tanks,  any soil  found to be  unacceptable  was  thermally
treated off site to burn off contaminants.  Fresh soil was brought in to replace
earth which had been removed.  There are still some levels of  contamination  at
the  sites,  and  groundwater  monitoring  programs  have been put into place at
certain locations.  In July 2006, the Company entered into an informal agreement
with the New York State  Department  of  Environmental  Conservation  ("NYSDEC")
whereby the Company has  committed to a three-year  remedial  investigation  and
feasibility study (the "Study") for all site locations. In conjunction with this
informal  agreement,  the Company has retained the services of an  environmental
engineering firm to assess the cost of the Study.

     The Company's  engineering  report has an estimated cost range in which the
low-end of the range,  of  approximately  $5.2  million (of which the  Company's
portion is $1.4 million) was only for the Study.  In addition,  a high-end range
estimate,  of  approximately  $10.4 million (of which the Company's  portion was
$2.8) was included which  provided a "worst case"  scenario  whereby the Company
would be required  to perform  full  remediation  on all site  locations.  While
management  believes  that the amount of the Study and  related  remediation  is
likely to fall within the estimated cost range,  no amount within that range can
be determined to be the better  estimate.  Therefore,  management  believes that
recognition of the low-range  estimate is appropriate.  While  additional  costs
associated with environmental remediation and monitoring are probable, it is not
possible at this time to reasonably estimate the amount of any future obligation
until the Study has been completed.

     As of December 31, 2007, the Company has recorded a liability of $1,033,136
related to its  portion of the Study as  disclosed  in the  engineering  report.
Presently,  the Company is not aware of any claims or  remediation  requirements
from any local, state or federal government agencies.  Each of the properties is
a commercial zone and is still used as transit depots,  including maintenance of
vehicles.

     Our tenants are responsible for environmental conditions which occur during
their tenancies, based on the terms of their respective leases.




                                       15
<PAGE>

     Competition for Additional Real Properties

     Our real property  operations are subject to normal  competition with other
investors to acquire real property and to profitably  manage such real property.
Numerous other REITs,  banks,  insurance companies and pension funds, as well as
corporate and individual developers and owners of real estate,  compete with GTJ
REIT in  seeking  properties  for  acquisition  and for  tenants.  Many of these
competitors have  significantly  greater financial  resources than us. Since our
real properties are leased under long-term lease  arrangements  that are not due
to  expire in the next  twelve  months,  except  for a  portion  of the  Wortman
property,  we  do  not  currently  face  any  immediate  competitive  re-leasing
pressures except for the same.

     Employees

     Our executive offices are located at 444 Merrick Road, Lynbrook,  New York.
We have four  employees  involved on a full time or part time basis with respect
to its REIT operations we believe that our  relationship  with such employees is
good.

Outdoor Maintenance and Paratransit Business Operations

     We, through our wholly-owned  subsidiary,  Shelter Express Corp., operate a
group of outdoor maintenance  businesses and a paratransit  business.  These are
not REIT  subsidiaries  and are taxed as ordinary  businesses.  The  majority of
these  operations are based in the New York  metropolitan  area, with additional
operations   based  in  the  Los  Angeles,   California  and  Phoenix,   Arizona
metropolitan  areas.  This  group also  includes a number of other  subsidiaries
which are inactive  and have little or no assets.  The active  subsidiaries  are
described below.

     New York metropolitan area operations

     These operations include MetroClean Express Corp.  ("MetroClean"),  Shelter
Express Corp. ("Shelter Express"),  Shelter Electric Maintenance Corp. ("Shelter
Electric"), and Transit Facility Management Corp. ("TFM").

     MetroClean

     MetroClean  was  founded in 1998 and has two major  divisions,  the outdoor
advertising service division and the traffic control services division.

     The  outdoor  advertising  service  division  provides  services to outdoor
advertising  agencies  for which we install and  maintain  bus  shelters,  urban
panels,  banners,  murals,  kiosks,  automated  pay toilets,  video  screens and
information  centers.  The  work  provided  under  these  contracts  is for  the
installation  and  maintenance  of these  structures,  as well as the posting of
advertisements in their customers' illuminated and nonilluminated display boxes.

     The  traffic  control  services  division  provides  operation  support  to
engineering and construction  companies for which it protects road crews working
on highways and roadways.  With the use of safety barriers and vehicles equipped
with  protectors  and  attenuators,   our  crews  secure  work  areas  to  allow
contractors  to conduct their  services.  Other aspects of this division are the
installation  of concrete  barriers  which  provide  protection  and security on



                                       16
<PAGE>

highways and  buildings.  In addition,  this  division owns and offers for lease
bucket trucks, light towers,  cargo vans, back-up trucks,  display boards, arrow
boards,  concrete  barriers,   wooden  barriers,   man-lifts  and  under  bridge
inspection units.

     Shelter Express

     In 2006,  a new  contract  was  awarded  by New  York  City to  Cemusa  USA
("Cemusa"),  a Spanish corporation currently doing business in Miami, Boston and
San Antonio under the contract. Cemusa is expected to replace the existing 3,200
New York  City bus  shelters,  install  over 330  newsstands  and  construct  20
automated  pay  toilets.  On June 26,  2006,  Shelter  Express  entered  into an
agreement  with Cemusa to provide  labor,  equipment and  supervision to service
existing  bus  shelters  throughout  New York  City.  During the five year term,
Shelter Express will maintain all shelters existing at the beginning of the term
which are not subsequently removed.  Removals are expected to begin in year 3 of
the term and will be carried out for Cemusa by Shelter Express.  Shelter Express
is negotiating  with Cemusa for the  installation and maintenance of replacement
shelters.  There can be no assurance this latter agreement will be entered into,
and  Shelter  Express  does not believe a failure to enter into the same will be
materially adverse to its present business.

     Shelter Electric

     Shelter Electric is a licensed electrical contractor which provides support
services  for the  activities  of  MetroClean  Express and  Shelter  Express and
services  other  customers.  Based on the  growth  and  development  of  outdoor
furniture  advertising,  Shelter Electric clients now also include Clear Channel
Outdoor for  electrification of bus shelters in Westchester County, New York and
wall  hangings in malls and Titan  Outdoor for outdoor  kiosks,  CBS Outdoor for
urban panels.

     Los Angeles metropolitan area operations

     Shelter  Clean,  Inc. is based in Los Angeles,  California.  Shelter Clean,
Inc. was established in 2000 and provides support services for outdoor furniture
advertisements  to  advertising  agencies.  Shelter  Clean  also  engages in the
installation,  maintenance,  posting repair and cleaning of bus shelters, kiosks
and other related  structures  where  additional  displays are located.  Shelter
Clean's  major  contracts at the present  time are with CBS  Outdoor,  JC DeCaux
Outdoor, Van Wagner Outdoor, Orange County Transit Authority and the City of Los
Angeles  Department  of  Transportation.  As part of its services  Shelter Clean
provides its customers with site selection and marking,  permit  acquisition and
execution,  sub-contractor liaison,  assembly and installation,  record keeping,
cost  analysis and  inventory  control.  Its services  include  cleaning,  trash
containment, damage repair, graffiti removal, glass replacement, lighting repair
and repainting.

     Phoenix area operations

         On May 1, 2006 Shelter Clean of Arizona commenced outdoor maintenance
operations in Phoenix, Arizona with a three year contract and the possibility of
a two year extension option. This operation requires capital expenditures for
leased premises and trucks and other equipment. At present, we operate 24
vehicles providing bus shelter maintenance services for the City of Phoenix and
other services for the adjoining City of Glendale.




                                       17
<PAGE>

     Transit Facility Management

     TFM is one of several  private  paratransit  bus companies in New York City
under contract to the Metropolitan  Transit  Authority as part of the joint plan
between the Metropolitan  Transit  Authority and the New York City Department of
Transportation to provide paratransit  service.  This service is provided by the
Metropolitan   Transportation  Authority  to  comply  with  the  Americans  with
Disabilities  Act of 1990. TFM began  operating  paratransit  service in October
2001,  providing  door-to-door  public  transportation  service  to people  with
disabilities unable to use conventional public transit services. The routes held
by TFM include transit services in each of the five boroughs of New York City.

     Starting  with a  fleet  of 50 vans in  2001  TFM has  expanded  and is now
operating 95 vans and 5 sedans with approximately  208,000 service vehicle hours
and carrying 303,000 passengers annually. The vans are purchased by the New York
City  Transit  Authority  and provided  without  charge to TFM.  These  vehicles
provide  seating  capacity  for 7  passengers  and  availability  of up to three
wheelchair passengers.

     The  paratransit  service  is  regulated  by  the  New  York  City  Transit
Authority.  Based  on the  need for this  particular  service  for the  disabled
community, there is growth potential over the next several years. TFM's contract
with the Metropolitan Transit Authority,  as extended,  expires on September 30,
2008. At the present time,  TFM's agreement will not be renewed,  in which event
TFM will wind up its operations following such expiration.

     Employees

     Shelter  Express,  MetroClean  and  Shelter  Electric  had a  total  of 211
employees  as of  March 1,  2008,  165 of whom are  union  members.  TFM had 227
employees as of March 1, 2008,  171 of whom are union  members.  Shelter  Clean,
Inc.  (California)  had 90 employees as of March 1, 2008, none of whom are union
members.  Shelter  Clean of Arizona,  Inc. had 28 employees as of March 1, 2008,
none of whom are union members.  The union agreements expire in 2009 for Shelter
Electric while Shelter Express and Metro Clean union agreements  expire in 2010.
TFM's union  agreement  expires in 2011.  We consider our  relations  with these
employees to be good.

     Litigation

     The outdoor  maintenance  and  paratransit  businesses  are  presently  not
parties to any  litigation  except  litigation  in the ordinary  course of their
business, carrying no material liabilities for such businesses.

     Competition

     Each of the outdoor maintenance businesses faces substantial competition in
its respective market. Competition is based on price and level of service. These
companies compete with companies with greater financial and physical  resources,
including greater numbers of vehicles and other equipment.  The Company believes
that its outdoor services  operations are significant in each market in which it
operates as a percentage of all such services in the market.



                                       18
<PAGE>

Our Compliance with Governmental Regulations

     Many laws and government  regulations  are applicable to our properties and
changes in these laws and regulations,  or their  interpretation by agencies and
the courts, occur frequently.

     Costs of Compliance with the Americans with Disabilities Act.

     Under the  Americans  with  Disabilities  Act of 1990,  or ADA,  all public
accommodations  must meet  federal  requirements  for access and use by disabled
persons.  Although we believe that we are in substantial compliance with present
requirements  of the ADA, none of our  properties  have been  audited,  nor have
investigations of our properties been conducted to determine compliance.  We may
incur additional costs in connection with the ADA. Additional federal, state and
local laws also may require  modifications  to our  properties  or restrict  our
ability to renovate our  properties.  We cannot  predict the cost of  compliance
with the ADA or other legislation.  If we incur substantial costs to comply with
the  ADA  or  any  other  legislation,   our  financial  condition,  results  of
operations,  cash flow and ability to satisfy our debt service  obligations  and
pay liquidating distributions could be adversely affected.

     Costs of Government Environmental Regulation and Private Litigation.

     Environmental  laws and regulations hold us liable for the costs of removal
or  remediation  of certain  hazardous or toxic  substances  which may be on our
properties.  These laws could impose liability  without regard to whether we are
responsible for the presence or release of the hazardous  materials.  Government
investigations  and  remediation  actions  may have  substantial  costs  and the
presence of hazardous  substances on a property could result in personal  injury
or similar claims by private  plaintiffs.  Various laws also impose liability on
persons  who  arrange  for the  disposal  or  treatment  of  hazardous  or toxic
substances for the cost of removal or remediation of hazardous substances at the
disposal or treatment facility. These laws often impose liability whether or not
the person  arranging  for the  disposal  ever owned or  operated  the  disposal
facility. As the owner and operator of our properties,  we may be deemed to have
arranged for the disposal or treatment of hazardous or toxic substances.

     Use of Hazardous Substances by Some of Our Tenants.

     Some of our  tenants  may  handle  hazardous  substances  and wastes on our
properties  as  part  of  their  routine  operations.   Environmental  laws  and
regulations  subject these tenants,  and potentially us, to liability  resulting
from such activities.  We require the tenants,  in their leases,  to comply with
these  environmental  laws and  regulations  and to indemnify us for any related
liabilities.  We are unaware of any material  noncompliance,  liability or claim
relating to hazardous or toxic  substances  or petroleum  products in connection
with any of our properties.

     Other Federal, State and Local Regulations.

     Our properties are subject to various  federal,  state and local regulatory
requirements,  such as state and local fire and life safety requirements.  If we
fail to comply with these various requirements,  we may incur governmental fines
or private damage awards.  While we believe that our properties are currently in
material  compliance with all of these regulatory  requirements,  we do not know
whether existing  requirements  will change or whether future  requirements will
require us to make significant  unanticipated  expenditures  that will adversely



                                       19
<PAGE>

affect our ability to make  liquidating  distributions to our  stockholders.  We
believe,  based in part on engineering  reports which we generally obtain at the
time we  acquire  the  properties,  that  all of our  properties  comply  in all
material respects with current regulations. However, if we were required to make
significant expenditures under applicable regulations,  our financial condition,
results  of  operations,  cash flow and  ability  to  satisfy  our debt  service
obligations and to pay liquidating distributions could be adversely affected.


ITEM 1A.                         RISK FACTORS


     You should carefully  consider the specific factors listed below,  together
with the cautionary statement under the caption "Cautionary  Statement Regarding
Forward Looking Statements" and the other information included in this Report on
Form 10-K. If any of the following risks actually occur, our business, financial
condition or results of operations could be adversely affected.  In such case, a
stockholder may lose all or part of any investment in our common stock.

Risks Related to our Organization and Structure

     Our company is newly  formed,  which makes our future  performance  and the
     performance of your investment difficult to predict.

     Our company was  incorporated  on June 23, 2006. We have no prior operating
history as a REIT.  Therefore,  our future performance and the performance of an
investment in our common stock can not be predicted at this time.

     Our failure to qualify as a REIT would subject us to corporate  income tax,
     which would materially impact funds available for distribution.

     We are operating in a manner so as to qualify as a REIT for federal  income
tax  purposes  beginning  with the tax year July 1, 2007 to December  31,  2007.
Qualifying as a REIT will require us to meet several tests  regarding the nature
of our assets and income on an ongoing basis. A number of the tests  established
to qualify as a REIT for tax purposes are factually  dependent.  Therefore,  you
should be aware that while we intend to qualify as a REIT, it is not possible at
this early  stage to assess our  ability to  satisfy  these  various  tests on a
continuing basis.  Therefore, we cannot assure you that our company will in fact
qualify as a REIT or remain qualified as a REIT.

     If we fail to qualify as a REIT in any year,  we would pay  federal  income
tax on our net income.  We might need to borrow money or sell assets to pay that
tax. Our payment of income tax would  substantially  decrease the amount of cash
available to be distributed to our stockholders. In addition, we no longer would
be  required  to  distribute  substantially  all of our  taxable  income  to our
stockholders.  Unless our failure to qualify as a REIT is excused  under  relief
provisions  of the federal  income tax laws,  we could not re-elect  REIT status
until the fifth calendar year following the year in which we failed to qualify.

     In  addition,  even if we qualify as a REIT in any year,  we would still be
subject to federal taxation on certain types of income. For example, we would be



                                       20
<PAGE>

subject to federal income taxation on the net income earned by our "taxable REIT
subsidiaries",  that  is,  our  corporate  subsidiaries  with  respect  to which
elections  are  made to  treat  the  same  as  separate,  taxable  subsidiaries,
presently including our outdoor maintenance and paratransit businesses.

     We may have to spin off our taxable REIT  subsidiaries,  which would reduce
     our value.

     On a going  forward  basis,  at least 75% of our assets must be those which
may be held by REITs. Our outdoor  maintenance and paratransit  business assets,
and any other  assets we may add to that  group,  are not  qualified  to be held
directly by a REIT. Accordingly,  we may be required, in the future, to spin off
these  businesses  in order to protect our status as a REIT. If we do so, we may
be distributing a significant portion of our assets,  which could materially and
adversely  affect the value of our common  stock.  It should be noted,  however,
that such distribution would be made to the then holders of our common stock.

Real property business risks

     The majority of our real properties are currently comprised of six rentable
     real  properties in the New York area, and we may not grow or diversify our
     real estate portfolio substantially in the future, leaving us vulnerable to
     New York area problems.

     We own seven income producing real properties,  six of which are located in
New York City and one of which is located near  Hartford,  Connecticut.  The six
New York City real  properties  are  commercial  and are  located  in Queens and
Brooklyn,  New York. New York City is the sole tenant of four of the properties.
The lack of  diversity  in the  properties  which we own,  and  their  principal
tenant,  New York City,  should we not  diversify,  could  increase your risk of
owning our shares. Adverse conditions at that limited number of properties or in
the location in which the properties  exist would have a direct  negative impact
on your return as a stockholder.

Negative characteristics of real property investments

     Financing of our real property could lead to loss of the same if there is a
     default.

     The growth and diversification of our real property business is expected to
be financed by borrowed  funds. We may borrow sums up to 75% of the value of our
real property portfolio.  Such loans may result in substantial  interest charges
which can materially reduce distributions to our stockholders. The documentation
related to such loans is expected to contain covenants  regulating the manner in
which  we  may  conduct  our  businesses  and  may  restrict  us  from  pursuing
opportunities which could be beneficial to our stockholders.  In addition, if we
are unable to meet our payment or other obligations to our lenders, we risk loss
of some or all of our real property portfolio.

     We  depend  upon our  tenants  to pay rent in a timely  manner,  and  their
     inability or refusal to pay rent will substantially  reduce our collections
     and payment of our indebtedness,  leading to possible defaults,  and reduce
     cash available for distribution to our stockholders.

     Our real property,  particularly those we may purchase in the future,  will
be subject to varying  degrees of risk that generally arise from such ownership.
The underlying value of our properties and the ability to make  distributions to



                                       21
<PAGE>

you depend upon the ability of the tenants of our properties to generate  enough
income to pay their rents in a timely manner.  Their inability or  unwillingness
to do so may be impacted by employment and other  constraints on their finances,
including  debts,  purchases  and other  factors.  Additionally,  the ability of
commercial  tenants of commercial  properties would depend upon their ability to
generate  income in excess  of their  operating  expenses  to make  their  lease
payments to us.  Changes  beyond our control may  adversely  affect our tenants'
ability to make lease payments and consequently would substantially  reduce both
our income from operations and our ability to make  distributions  to you. These
changes include, among others, the following:

          o changes in national, regional or local economic conditions;

          o changes in local market conditions; and

          o  changes  in  federal,  state  or  local  regulations  and  controls
     affecting  rents,  prices  of  goods,   interest  rates,  fuel  and  energy
     consumption.

     Due to these  changes or others,  tenants may be unable to make their lease
payments.  A default by a tenant, the failure of a tenant's guarantor to fulfill
its obligations or other premature termination of a lease could,  depending upon
the  size  of the  leased  premises  and  our  ability  to  successfully  find a
substitute  tenant,  have a  materially  adverse  effect on our revenues and the
value  of our  common  stock  or our  cash  available  for  distribution  to our
stockholders.

     If we are unable to find tenants for our properties,  particularly those we
may purchase in the future,  or find replacement  tenants when leases expire and
are not renewed by the tenants, our revenues and cash available for distribution
to our stockholders will be substantially reduced.

     Competition  may adversely  affect  acquisition  of properties  and leasing
operations.  We  compete  for the  purchase  of  commercial  property  with many
entities,  including other publicly traded REITs.  Many of our competitors  have
substantially   greater  financial   recourses  than  ours.  In  addition,   our
competitors may be willing to accept lower returns on their investments.  If our
competitors  prevent us from buying the  properties  that we have  targeted  for
acquisition, we may not be able to meet our property acquisition and development
goals. We may incur costs on unsuccessful  acquisitions that we will not be able
to recover. The operating performance of our property acquisitions may also fall
short  of  our   expectations,   which  could  adversely  affect  our  financial
performance.

     If our  competitors  offer space at rental rates below our current rates or
the market rates, we may lose current or potential  tenants to other  properties
in our markets and we may need to reduce rental rates below our current rates in
order to retain  tenants  upon  expiration  of their  leases.  As a result,  our
results of operations and cash flow may be adversely affected.




                                       22
<PAGE>

     Lack of diversification and liquidity of real estate will make it difficult
     for us to sell underperforming  properties or recover our investment in one
     or more properties.

          Our business is subject to risks associated with investment  primarily
     in real property.  Real property investments are relatively  illiquid.  Our
     ability to vary our  portfolio in response to changes in economic and other
     conditions  will be limited.  We cannot  assure you that we will be able to
     dispose of a property when we want or need to. Consequently, the sale price
     for any property we may purchase in the future may not recoup or exceed the
     amount of our investment.

     Our real property  portfolio  currently  includes six real properties which
     have been,  and continue to be, used as a bus depot or automobile  facility
     and has certain  environmental  conditions resulting in continuing exposure
     to environmental liabilities.

     Generally  our  real  property  have had  activity  regarding  removal  and
replacement of underground  storage tanks and soil removal.  Upon removal of the
old  tanks,  any soil found to be  unacceptable  was heated off site to burn off
contaminants. Fresh soil was brought in to replace earth which had been removed.
There are still  some  levels of  contamination  at the sites,  and  groundwater
monitoring  programs  have been put into place.  Closures  of existing  New York
State Department of  Environmental  Control spill numbers may be warranted if it
can be shown that the remaining  degree of impact is non  threatening and within
acceptable  levels.  Each of the properties is in a commercial zone and is still
used as a transit depot  including  maintenance  of vehicles.  We can not assess
what further liability may arise from these sites.

     Discovery of previously undetected  environmentally hazardous conditions at
     our real  properties  would result in additional  expenses,  resulting in a
     decrease in our revenues and the return on your shares of common stock.

     Under various federal,  state and local environmental laws,  ordinances and
regulations, a current or previous real property owner or operator may be liable
for the cost to remove or remediate  hazardous or toxic  substances on, under or
in such  property.  These costs  could be  substantial.  Such laws often  impose
liability  whether or not the owner or operator knew of, or was responsible for,
the presence of such hazardous or toxic substances.  Environmental laws also may
impose  restrictions  on the manner in which  property may be used or businesses
may be operated, and these restrictions may require substantial  expenditures or
prevent us from  entering  into  leases  with  prospective  tenants  that may be
impacted  by  such  laws.   Environmental   laws  provide  for   sanctions   for
noncompliance  and may be  enforced  by  governmental  agencies  or, in  certain
circumstances,  by private parties.  Certain  environmental  laws and common law
principles  could be used to impose  liability  for  release of and  exposure to
hazardous  substances,  including  asbestos-containing  materials  into the air.
Third  parties may seek  recovery  from real  property  owners or operators  for
personal  injury  or  property  damage  associated  with  exposure  to  released
hazardous  substances.  The cost of defending  against  claims of liability,  of
complying  with  environmental  regulatory  requirements,   of  remediating  any
contaminated  property,  or of paying  personal  injury  claims could reduce the
amounts available for distribution to you.

     A number of risks to which our real  properties  may be exposed  may not be
     covered by insurance, which could result in losses which are uninsured.

     We could  suffer a loss due to the cost to repair any damage to  properties
that are not insured or are underinsured.  There are types of losses,  generally




                                       23
<PAGE>

of a catastrophic nature, such as losses due to terrorism,  wars, earthquakes or
acts of God, that are either uninsurable or not economically  insurable.  We may
acquire  properties  that are  located  in areas  where  there  exists a risk of
hurricanes,  earthquakes,  floods or other acts of God.  Generally,  we will not
obtain insurance for hurricanes, earthquakes, floods or other acts of God unless
required by a lender or we determine that such insurance is necessary and may be
obtained on a cost-effective  basis. If such a catastrophic event were to occur,
or cause the  destruction of one or more of our  properties,  we could lose both
our invested capital and anticipated profits from such property.

     You  may  not  receive  any  distributions  from  the  sale  of  one of our
     properties,  or not receive such distributions in a timely manner,  because
     we may  have to  provide  financing  to the  purchaser  of  such  property,
     resulting in an inability or delay of distributions to stockholders.

     If we sell a property or our  company,  you may  experience  a delay before
receiving  your  share of the  proceeds  of such  liquidation.  In a  forced  or
voluntary liquidation,  we may sell our properties either subject to or upon the
assumption of any then outstanding mortgage debt or, alternatively,  may provide
financing to purchasers.  We may take a purchase money  obligation  secured by a
mortgage as partial payment.  To the extent we receive promissory notes or other
property  instead of cash from sales,  such  proceeds,  other than any  interest
payable on those  proceeds,  will not be available  for  distribution  until the
promissory  notes or other  property  are actually  paid,  sold,  refinanced  or
otherwise  disposed of. In many cases,  we will receive initial down payments in
the  year of sale in an  amount  less  than the  selling  price  and  subsequent
payments will be spread over a number of years. Therefore,  you may experience a
delay in the distribution of the proceeds of a sale until such time.

     Our outdoor maintenance businesses and paratransit business depend on large
     direct or indirect municipal contracts, which are subject to the conduct of
     customers and municipalities and require substantial capital,  which may be
     difficult to obtain.

     We operate several outdoor maintenance  businesses  including bus shelters,
bill boards  advertising  displays  and  outdoor  construction  and  maintenance
support.  Much of this  business  is related to large  customer  contracts  with
municipalities.  The loss by customers of one or more of those  contracts  would
have a material  adverse effect on our business.  In addition,  these businesses
have required significant capital and may require significant additional capital
in the future.  In addition to the risk related to  additional  investment,  the
capital may have to be funded by borrowing or asset sales since funding from our
REIT operations is not likely, increasing the cost of such capital.

     There will be a discontinuance of our paratransit operations

     In February  2008, we were notified by the New York City Transit  Agency of
the Metropolitan Transit Authority (the "Agency") that a Request for Proposal to
renew our existing  paratransit  service contract after September 30, 2008 would
not be considered by the Agency.  We are determining  what action it should take
in response to such  notification.  The paratransit  operations have contributed
losses to our operations for relevant periods.  However, we had made a bid for a
new contract commencing after September 30, 2008, which, if accepted, would have
resulted in profitable  operations.  The paratransit  operations represent about
25% of our non-REIT revenues.




                                       24
<PAGE>

Risks related to possible conflicts of interest

     Our officers and directors may have other interests which may conflict with
     their duties to us and our stockholders, and which may have adverse effects
     on the interests of us and our stockholders

     Our officers and directors may have other  interests  which could  conflict
with their duties to us and our stockholders, and which may have adverse effects
on the  interests  of us and our  stockholders.  For  example,  certain  of such
persons may have interests in other real estate related ventures and may have to
determine  how to allocate an  opportunity  between us and such other  ventures.
Also,  such persons may have to decide on whether we should  purchase or dispose
of real  property  from or to an entity with which they are related,  or conduct
other transactions, and if so, the terms thereof. Such determinations may either
benefit us or be  detrimental  to us. Our officers and directors are expected to
behave in a fair manner  toward us, and we require that  potential  conflicts be
brought to the attention of our Board of Directors and that  determinations will
be made by a majority of directors who have no interest in the  transaction.  As
of this time,  only one  officer  and  director,  Paul  Cooper,  conducts a real
property business apart from his activities with us.

Risks related to our common stock

     The absence of a public  market for our common stock will make it difficult
     for a  stockholder  to sell  shares,  which  may  have  to be  held  for an
     indefinite period.

     Prospective  stockholders  should  understand  that our  common  stock,  is
illiquid,  and they must be prepared to hold their shares of common stock for an
indefinite length of time. There has been no public market for our common stock,
and initially we do not expect a market to develop.  We have no current plans to
cause our common stock to be listed on any securities  exchange or quoted on any
market system or in any established market either immediately or at any definite
time in the future. While our Board of Directors may attempt to cause our common
stock to be listed or quoted in the future,  there can be no assurance that this
event will occur.  Accordingly,  stockholders  will find it  difficult to resell
their shares of common  stock.  Thus,  our common  stock should be  considered a
long-term investment. In addition, there are restrictions on the transfer of our
common  stock.  In order to qualify as a REIT,  our shares must be  beneficially
owned by 100 or more  persons  at all times and no more than 50% of the value of
our issued and outstanding shares may be owned directly or indirectly by five or
fewer  individuals and certain  entities at all times. Our charter provides that
no person  may own more than 9.9% of the issued  and  outstanding  shares of our
common  stock.  Any  attempted  ownership  of our shares that would  result in a
violation  of one or more of these  limits  will  result  in such  shares  being
transferred  to an "excess  share trust" so that such shares will be disposed of
in a manner consistent with the REIT ownership  requirements.  In addition,  any
attempted transfer of our shares that would cause us to be beneficially owned by
less than 100 persons will be void ab initio (i.e., the attempted  transfer will
be considered to never have occurred).

     Our  stockholders'  interests  may be diluted by  issuances  under our 2007
     Incentive Award Plan and other common stock  issuances,  which could result
     in lower returns to our stockholders.




                                       25
<PAGE>

     We have adopted the 2007 Incentive Award Plan, under which 1,000,000 shares
of common  stock is reserved  for  issuance,  and under which we may grant stock
options,  restricted  stock  and  other  performance  awards  to  our  officers,
employees,  consultants and independent  directors.  The effect of these grants,
including the subsequent exercise of stock options, could be to dilute the value
of the stockholders' investments.

     In  addition,  our Board of Directors is  authorized,  without  stockholder
approval,  to cause us to issue additional shares of our common stock, or shares
of preferred  stock on which it can set the terms,  and to raise capital through
the  issuance  of  options,   warrants  and  other  rights,  on  terms  and  for
consideration  as the Board of Directors in its sole  discretion  may determine,
subject to certain  restrictions  in our charter in the  instance of options and
warrants. Any such issuance could result in dilution to stockholders.  The Board
of Directors may, in its sole discretion,  authorize us to issue common stock or
other interests or our securities to persons from whom we purchase real property
or other assets,  as part or all of the purchase price.  The Board of Directors,
in its sole  discretion,  may  determine  the value of any common stock or other
equity or debt  securities  issued in  consideration  of  property  or  services
provided, or to be provided, to us.

Federal income tax requirements

     The requirement to distribute at least 90% of our net income may require us
     to incur debt, sell assets or issue  additional  securities for cash, which
     would increase the risks associated with your investment.

     In  order  to  qualify  as a  REIT,  we  must  distribute  annually  to our
stockholders  at least 90% of our net income,  other than any net capital gains.
To the  extent  that we  distribute  at least  90% but less than 100% of our net
income in a calendar year, we will incur no federal  corporate income tax on our
distributed  net income,  but will incur a federal  corporate  income tax on any
undistributed  amounts. In addition, we will incur a 4% nondeductible excise tax
if the actual  amount we distribute  to our  stockholders  in a calendar year is
less than a minimum amount  specified under federal income tax law. We intend to
distribute at least 90% of our net income to our stockholders  each year so that
we will  satisfy  the  distribution  requirement  and avoid  the 4% excise  tax.
However,  we could be required to include  earnings in our taxable income before
we actually receive the related cash. That timing difference could require us to
borrow funds or raise additional  capital to meet the  distribution  requirement
and avoid  corporate  income tax and the 4% excise tax in a particular  year. In
case we don't distribute 100% of our net income,  we will be subject to taxation
at the REIT level on the amount of undistributed net income and to the extent we
distribute such amount, you will be subject to taxation on it at the stockholder
level.

     The minimum distribution  requirements for REIT's may require us to borrow,
sell  assets  or  issue   additional   securities  for  cash  to  make  required
distributions, which would increase the risks associated with your investment in
our company.

     Under existing tax law, we would be taxed at the corporate level if, within
10  years of our  election  to be  taxed  as a REIT,  we sell any real  property
acquired in the  Reorganization  in a taxable  transaction.  For that reason, we
presently  intend  to hold  such  real  property  for at  least  10 years of our
election to be taxed as a REIT.  This policy would  eliminate a sale as a way to
obtain  liquidity and would prevent a sale which would otherwise be made to take
advantage of favorable market conditions.



                                       26
<PAGE>

     Distributions may include a return of capital,  or an amount which would be
     taxable as a capital gain to our stockholders.

     Distributions  payable to stockholders may include a return of capital,  as
distinct from a return on capital.  To the extent that our distributions  exceed
our undistributed earnings and profits, such amounts will constitute a return of
capital for federal income tax purposes,  to the extent of a stockholder's basis
in  the  stock,  and  thereafter  will  constitute  capital  gain.  We  borrowed
approximately  $20,000,000  to make a portion of the $20 million cash payment as
part of the one-time special  distribution of earnings and profits. In addition,
we may be  required,  in the  future to  borrow to make all or a portion  of the
distribution of real property  related income required to retain its status as a
REIT, or in the alternative,  to sell equity securities to obtain funds for such
purpose.

Acquisition risks

     Our inability to identify or find funding for acquisitions could prevent us
     from  diversification  or growth and could adversely impact the value of an
     investment in us.

     We may not be able to identify or obtain  financing  to acquire  additional
real  properties.  We are required to distribute at least 90% of our net income,
excluding net capital gains, to our  stockholders in each taxable year, and thus
our  ability  to  retain  internally  generated  cash  is  very  limited.  Also,
acquisition  capital may be required by our outdoor  maintenance and paratransit
businesses.  Accordingly,  our ability to acquire  properties or to make capital
improvements to or remodel  properties will depend on our ability to obtain debt
financing from third parties or the sellers of properties.

     If mortgage debt is unavailable at reasonable  rates, we may not be able to
finance the purchase of additional properties.  If we place mortgage debt on our
current  properties,  we will run the  risk of being  unable  to  refinance  the
additional properties when the loans become due, or of being unable to refinance
on  favorable  terms.  If  interest  rates  are  higher  when we  refinance  the
properties,  our  income  would  be  reduced.  We may  be  unable  to  refinance
properties. If any of these events occurs, our cash flow would be reduced. This,
in turn,  would reduce cash available for  distribution to our  stockholders and
may hinder our ability to raise more capital.

     We plan to incur  mortgage  and other  indebtedness,  which could result in
     material damage to our business if there is a default.

     Significant  borrowings  by us will  increase the risks of owning shares of
our  company.  If there is a shortfall  between the cash flow  generated  by our
properties and the cash flow needed to service our indebtedness, then the amount
available for  distributions to our stockholders  will be reduced or eliminated.
In addition,  incurring  mortgage debt increases the risk of loss since defaults
on  indebtedness  secured  by  a  property  may  result  in  lenders  initiating
foreclosure  actions. In that case, we could lose the property securing the loan
that is in default, thus reducing the value of your investment. If any mortgages
or  other   indebtedness   contain   cross-collateralization   or  cross-default
provisions, a default on a single loan could affect multiple properties.

     Additionally, when providing financing, a lender may impose restrictions on
us that affect our distribution and operating  policies and our ability to incur



                                       27
<PAGE>

additional  debt. Loan documents we enter into may contain  covenants that limit
our ability to further  mortgage the property,  merge with another  company,  or
discontinue  insurance  coverage.  These  or other  limitations  may  limit  our
flexibility and our ability to achieve our operating  plans. Our failure to meet
such  restrictions  and covenants  could result in an event of default under our
line of credit and result in the foreclosure of some or all of our properties.

     Investing in properties through joint ventures creates a risk of loss to us
     as a result of the  possible  inaction  or  misconduct  of a joint  venture
     partner.

     Joint  venture  investments  may  involve  risks  not  present  in a direct
acquisition, including, for example:

          o the risk that our  co-venturer  or  partner in an  investment  might
     become bankrupt;

          o the risk  that  such  co-venturer  or  partner  may at any time have
     economic or business  interests  or goals which are  inconsistent  with our
     business interests or goals; or

          o the risk that such  co-venturer  or partner  may be in a position to
     take  action  contrary to our  instructions  or requests or contrary to our
     policies or objectives,  such as selling a property at a time when it would
     have adverse consequences for our stockholders.

     Actions  by  such a  co-venturer  or  partner  might  have  the  result  of
subjecting the applicable  property to liabilities in excess of those  otherwise
contemplated  and may  have the  effect  of  reducing  our  cash  available  for
distribution.  It also may be difficult  for us to sell our interest in any such
joint venture or partnership in such property.

Borrowings may increase our business risks

     Income  distributions may cause us to borrow,  resulting in borrowing costs
     and risk of defaults.

         We are required to distribute at least 90% of our net income, excluding
net capital gains to our stockholders in each taxable year. However, depending
on the size of our operations, we will require a minimum amount of capital to
fund our daily operations. In addition, we may require working capital for our
outdoor maintenance businesses and paratransit business. We may have to obtain
financing from either affiliated or unaffiliated sources to meet such cash
needs. This financing may not be available to us on acceptable terms or at all,
which could adversely affect our operations and decrease the value of your
investment in our company.

     In addition,  in October,  2007, we utilized  $20,000,000 from our ING loan
facility  in  connection  with  our  distribution  of  undistributed  historical
earnings and profits to our stockholders.

     As we incur indebtedness  which will be needed for operations,  we increase
     the  expenses of our  operations,  which could result in a decrease in cash
     available for distribution to our stockholders.


                                       28
<PAGE>

     The risk  associated  with your ownership of our common stock depends upon,
among  other  factors,  the  amount  of  debt  we  incur.  We  intend  to  incur
indebtedness  in connection  with our  acquisition  of  properties.  We may also
borrow for the  purpose of  maintaining  our  operations  or funding our working
capital  needs.   Lenders  may  require   restrictions  on  future   borrowings,
distributions  and  operating  policies.  We  also  may  incur  indebtedness  if
necessary to satisfy the federal  income tax  requirement  that we distribute at
least 90% of our net income, excluding net capital gains, to our stockholders in
each taxable year. Borrowing increases our business risks.

     Debt  service  increases  the  expense  of  operations  since  we  will  be
responsible for retiring the debt and paying the attendant  interest,  which may
result in decreased cash available for distribution to you as a stockholder.  In
the event the fair market value of our  properties  were to  increase,  we could
incur more debt  without a  commensurate  increase  in cash flow to service  the
debt. In addition,  our Board of Directors can change our policy relating to the
incurrence of debt at any time without stockholder approval.

     We will incur indebtedness secured by our properties, which may subject our
     properties to foreclosure in the event of a default.

     Incurring mortgage  indebtedness  increases the risk of possible loss. Most
of our  borrowings  to acquire  properties  would be secured by mortgages on our
properties. If we default on our secured indebtedness,  the lender may foreclose
and we could lose our entire  investment  in the  properties  securing such loan
which would adversely  affect  distributions  to  stockholders.  For federal tax
purposes,  any such foreclosure would be treated as a sale of the property for a
purchase  price  equal to the  outstanding  balance  of the debt  secured by the
mortgage  and, if the  outstanding  balance of the debt  secured by the mortgage
exceeds the basis of the property to our company,  there could be taxable income
upon a  foreclosure.  Such  taxes  would be payable by us if the sale was of our
current real  properties and took place within 10 years after our REIT election.
To the extent lenders require our company to cross-collateralize our properties,
or our loan  agreements  contain  cross-default  provisions,  a default  under a
single loan agreement could subject multiple properties to foreclosure.

     Increases in interest  rates will  increase the amount of our debt payments
     and increased  interest  payments will adversely affect our ability to make
     cash distributions to our stockholders.

     A change in economic  conditions  which  results in higher  interest  rates
would increase debt service  requirements on variable rate debt and could reduce
the amounts  available for  distribution  to you as a  stockholder.  A change in
economic  conditions could cause the terms on which borrowings  become available
to be unfavorable. In such circumstances,  if we are in need of capital to repay
indebtedness in accordance with its terms or otherwise,  we could be required to
liquidate  one or more of our  investments  in properties at times which may not
permit realization of the maximum return on such investments.

     Difficulty obtaining permanent financing would limit the possible growth in
     our real property operations.

     The United  States is  presently  experiencing  a  reduction  in  available
credit.  When we acquire real property using our revolving credit  facility,  we
plan to refinance the same with permanent mortgage lending on the real property.



                                       29
<PAGE>

If due to a lending  contraction we are unable to find such financing with terms
acceptable  to us, we would be unable to restore the  borrowings  made under our
revolving  credit  facility and we would be limited in further  acquirements  of
real property.  At the present time, we have approximately $30 million available
for such purpose under our revolving credit facility.

Our ability to change policies without a stockholder vote

     Our policies, including the limits on debt, may be changed or eliminated by
     our Board of Directors at any time without a vote of our stockholders.

     Our policies,  including  policies intended to protect you as a stockholder
and the policies  described in this annual report with respect to  acquisitions,
financing,  limitations on debt and investment limitations, have been determined
by our Board of  Directors  and can be changed at any time without a vote of our
stockholders  or notice to you as a  stockholder  if our Board of  Directors  so
determines  in the  exercise  of  its  duties.  Therefore,  these  policies  and
limitations may not be meaningful to protect your interests as a stockholder.

Possible adverse consequences of limits on ownership and transfer of our shares

          The  limitation  on ownership of our stock in our charter will prevent
          you from  acquiring  more than 9.9% of our common  stock and may force
          you to sell common stock back to us.

     Our charter limits the beneficial and constructive ownership of our capital
stock by any single  stockholder to 9.9% of the number of outstanding  shares of
each class or series of our stock  including our common stock. We refer to these
limitations as the ownership  limits.  Our charter also prohibits the beneficial
or  constructive  ownership of our capital stock by any  stockholder  that would
result in (1) our  capital  stock  being  beneficially  owned by fewer  than 100
persons,  (2) five or fewer  individuals,  including  natural  persons,  private
foundations, specified employee benefit plans and trusts, and charitable trusts,
owning more than 50% of our capital  stock,  applying  broad  attribution  rules
imposed by the federal tax laws, (3) our company otherwise failing to qualify as
a REIT for federal tax  purposes.  In addition,  any  attempted  transfer of our
capital stock that would result in the Company being  beneficially owned by less
than 100 persons will be void ab initio (i.e.,  such transfer will be considered
to never have happened). If you acquire shares in excess of the ownership limits
or in violation of the ownership limitations, we:

          o will consider the transfer (in whole or part) to be null and void;

          o will not reflect the transaction on our books;

          o may institute legal action to enjoin the transaction;

          o will not pay dividends or other distributions to you with respect to
     those excess shares;

          o will not recognize your voting rights for those excess shares; and

          o will  consider the excess  shares held in trust for the benefit of a
     charitable beneficiary.




                                       30
<PAGE>

     If such shares are  transferred  to a trust for the benefit of a charitable
beneficiary,  you will be paid for such excess shares a price per share equal to
the  lesser of the price you paid or the  "market  price" of our  stock.  Unless
shares of our common stock are then traded on a national  securities exchange or
quoted on a national  market  system,  the market price of such shares will be a
price  determined  by our Board of  Directors  in good  faith.  If shares of our
common  stock  are  traded  on a  national  securities  exchange  or quoted on a
national  market system,  the market price will be the average of the last sales
prices  or the  average  of the  last  bid  and  ask  prices  for  the  date  of
determination.

     If you acquire our common stock in violation of the ownership limits or the
restrictions on transfer described above:

          o you may lose your power to dispose of the stock;

          o you may not  recognize  profit  from the  sale of such  stock if the
     "market price" of the stock increases; and

          o you may  incur a loss  from  the sale of such  stock if the  "market
     price" decreases.

Anti-takeover provisions related to us

     Our  Stockholder  Rights  Agreement  is  designed  to  discourage  takeover
     attempts without approval of our Board of Directors, which could discourage
     a potential takeover bid and the related payment to our stockholders.

     The  Stockholder  Rights  Agreement  provides  that a right is deemed to be
issued and outstanding in conjunction with each outstanding  share of our common
stock. If any person or group,  as defined in the agreement,  acquires more than
15% of our  outstanding  common  stock  without  the  approval  of our  Board of
Directors,  each holder of a right, other than such 15% or more holder(s),  will
be entitled to  purchase  1000th of a share of our Series A preferred  stock for
$50.00  which is  convertible  into our common  stock at  one-half of the market
value of our common stock, or to purchase,  for each right, $50.00 of our common
stock at  one-half  of the  market  value.  The effect of this  provision  is to
materially  dilute the  holdings of such 15% or more  holders and  substantially
increase  the cost of  acquiring a  controlling  interest in us.  These types of
provisions  generally  inhibit tender offers or other purchases of a controlling
interest in a company such as ours.

     Limitations on share ownership and transfer may deter a sale of our company
     in which you could profit.

     The  limits on  ownership  and  transfer  of our equity  securities  in our
charter may have the effect of delaying,  deferring or  preventing a transaction
or a change in control of our  company  that might  involve a premium  price for
your common stock. The ownership limits and restrictions on transferability will
continue to apply until our Board of Directors  determines  that it is no longer
in our best interest to continue to qualify as a REIT.



                                       31
<PAGE>

     Our  ability to issue  preferred  stock  with  terms  fixed by the Board of
     Directors may include a preference in distributions  superior to our common
     stock  and  also may  deter or  prevent  a sale of our  company  in which a
     stockholder could otherwise profit.

     Our ability to issue  preferred  stock and other  securities  without  your
approval also could deter or prevent  someone from  acquiring  our company.  Our
charter  authorizes  our Board of Directors to issue up to 10 million  shares of
preferred  stock.  Our Board of Directors  may  establish  the  preferences  and
rights,   including  a  preference  in  distributions  superior  to  our  common
stockholders,  of any issued  preferred  stock designed to prevent,  or with the
effect of preventing, someone from acquiring control of our company.

     Maryland  anti-takeover  statute restrictions may deter others from seeking
     to  acquire  our  company in a  transaction  in which a  stockholder  could
     profit.

     Maryland law contains  many  provisions,  such as the business  combination
statute and the control share acquisition statute, that are designed to prevent,
or have the effect of preventing,  someone from acquiring control of our company
without  approval of our Board of Directors.  Our bylaws exempt our company from
the control  share  acquisition  statute  (which  eliminates  voting  rights for
certain levels of shares that could  exercise  control over us) and our Board of
Directors  has  adopted a  resolution  opting  out of the  business  combination
statute (which  prohibits a merger or  consolidation of us and a 10% stockholder
for a period of time) with respect to affiliates of our company. However, if the
bylaw  provisions  exempting  our  company  from the control  share  acquisition
statute or the board resolution opting out of the business  combination  statute
were  repealed  by the  Board  of  Directors,  in  its  sole  discretion,  these
provisions of Maryland Law could delay or prevent  offers to acquire our company
and increase the difficulty of consummating any such offers.

     Because of our staggered Board of Directors,  opposition  candidates  would
     have to be elected in two  separate  years to  constitute a majority of the
     Board of  Directors,  which  may  deter a change of  control  from  which a
     stockholder could profit.

     We presently  have a seven person Board of Directors.  Each director has or
will have a three year term, and only  approximately  one-third of the directors
will stand for election each year. Accordingly, in order to change a majority of
our Board of  Directors,  a third  party would have to wage a  successful  proxy
contest in two  successive  years,  which is a  situation  that may deter  proxy
contests.

     Certain  provisions of our charter make stockholder  action more difficult,
     which could deter changes beneficial to our stockholders.

     We  have  certain  provisions  in  our  charter  and  bylaws  that  require
super-majority  voting and regulate the opportunity to nominate directors and to
bring proposals to a vote by the stockholders.


ITEM 1B.                        UNRESOLVED STAFF COMMENTS

None.



                                       32
<PAGE>

ITEM 2.                           PROPERTIES


Portfolio of Real Estate Investments

     The  following  table sets forth  information  relating to each of our real
estate  investments  in  addition  to the  specific  mortgages  encumbering  the
properties:

<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------------
                                 Portfolio of Real Properties as of March 30, 2008:

----------------------------------------------------------------------------------------------------------------------
Property and        Year          Leasable space    Average Annual   Total            Mortgage       Depreciated
Location            Acquired      - approximate     Occupancy Rate   Annualized       Balance        Cost of Land,
                                  sq. ft.                            Rents Based on   $(000)         Buildings &
                                                                     Occupancy                       Equipment $(000)
                                                                     $(000)
------------------- ------------- ----------------- ---------------- ---------------- -------------- -----------------
<C>                                        <C>           <C>         <C>              <C>            <C>
147th Avenue        A             Building 151,068       100%        $2,795,000       $1,000 B       $   749,000
Property,                         Land 286,057
Jamaica, NY
------------------- ------------- ----------------- ---------------- ---------------- -------------- -----------------
Rockaway Beach      A             Building 28,790        100%        $  605,000       $1,000 B       $   558,000
Property, Queens,                 Land 131,802
NY
------------------- ------------- ----------------- ---------------- ---------------- -------------- -----------------
24th Avenue         A             Building 118,430       100%        $2,585,000       $1,000 B       $39,083,000
Property,                         Land 280,180
Elmhurst, NY
------------------- ------------- ----------------- ---------------- ---------------- -------------- -----------------
Guy Brewer          A             Building 75,800        100%        $1,515,000       $1,000 B       $23,106,000
Property,                         Land 201,078
Jamaica, NY
------------------- ------------- ----------------- ---------------- ---------------- -------------- -----------------
Wortman Property,    A            Building 27,250        100%        $  334,936       $0             $14,468,000
Brooklyn, NY                      Land 452,535
------------------- ------------- ----------------- ---------------- ---------------- -------------- -----------------
87th Street         A             Building 52,020        100%        $1,584,665       $0             $ 9,024,000
Property, East                    Land
Elmhurst, NY                      309,142
------------------- ------------- ----------------- ---------------- ---------------- -------------- -----------------
Farm Springs        2008          Building 107,654       100%        $2,161,292       $0             Not presently
Property,                         Land 458,687                                                       available.
Hartford, CT
------------------- ------------- ----------------- ---------------- ---------------- -------------- -----------------
</TABLE>

A.   Acquired by the Company in 2007 upon the reorganization.  The Bus Companies
     acquired these properties from 10 to 70 years ago.



                                       33
<PAGE>

B.   These  properties  are all  subject to a mortgage  to ING in the  principal
     amount of $1,000,000.

For additional  information about our portfolio of real estate investments,  see
Item 1 - Business-Portfolio of Real Properties.

Insurance

     We believe that we have property and liability  insurance  with  reputable,
commercially  rated  companies.  We also  believe  that our  insurance  policies
contain commercially  reasonable  deductibles and limits,  adequate to cover our
properties.  We expect to maintain this type of insurance coverage and to obtain
similar  coverage  with respect to any  additional  properties we acquire in the
near future.  Further,  we have title insurance relating to our properties in an
aggregate amount that we believe to be adequate.

Regulations

     Our real  properties,  as well as any  other  real  properties  that we may
acquire in the  future,  are subject to various  federal,  state and local laws,
ordinances  and   regulations.   They  include,   among  other  things,   zoning
regulations, land use controls, environmental controls relating to air and water
quality,  noise pollution and indirect  environmental  impacts such as increased
motor  vehicle  activity.  We believe  that we have all  permits  and  approvals
necessary under current law to operate our properties.

Real Property Used By Us in Our Businesses

The real properties used by us for the day to day conduct of our business are as
follows (all of which are leased):
<TABLE>
<CAPTION>


     ------------------------------ ------------------------- ------------------------ -------------------------
                                    Square Footage/           Monthly Rent/
     Location                       Facility                  Expiration               Purpose
     ------------------------------ ------------------------- ------------------------ -------------------------
     Lynbrook, NY                   7,000 office              $16,713 / 8/31/10        Executive Offices
     ------------------------------ ------------------------- ------------------------ -------------------------
<S>                                 <C>                       <C>
     Long Island City, NY           14,000 building on        $16,667 / monthly        Shelter Express Corp,
                                    50,000 lot                                         MetroClean New York,
                                                                                       Shelter Electric Corp.
     ------------------------------ ------------------------- ------------------------ -------------------------
     Long Island City, NY           6,000  lot                $4,000 / 1/31/10         Shelter Electric Corp.
     ------------------------------ ------------------------- ------------------------ -------------------------
     New Rochelle, NY               13,000 building and land  $6,382.57 / 7/31/13      Metroclean Express Corp
                                                                                       New York
     ------------------------------ ------------------------- ------------------------ -------------------------
     Wortman Avenue, NY             144,533 square feet       $12,500 / monthly        TFM
     ------------------------------ ------------------------- ------------------------ -------------------------
     Phoenix, AZ                    6,200 building on         $3,200 / 4/30/09         Shelter Clean of
                                    20,478 lot                                         Arizona, Inc.
     ------------------------------ ------------------------- ------------------------ -------------------------
     Burbank, CA                    10,000 building on        $10,000                  Shelter Clean, Inc.
                                    20,000 lot                per month
                                    / 4/30/10
     ------------------------------ ------------------------- ------------------------ -------------------------
     Signal Hill, CA                6,256 building on         $5,000 per month /       Shelter Clean, Inc.
                                    20,250 lot                6/30/10
     ------------------------------ ------------------------- ------------------------ -------------------------
</TABLE>



                                       34
<PAGE>

ITEM 3.                         LEGAL PROCEEDINGS

     On March 26, 2007, there was a joint special meeting of the shareholders of
the Bus  Companies.  The business  considered  at the meeting was the merger of:
Green with and into  Green  Acquisition,  Inc.;  Triboro  with and into  Triboro
Acquisition, Inc.; and Jamaica with and into Jamaica Acquisition, Inc. Appraisal
rights  were  perfected  by  shareholders  of the Bus  Companies  who would have
received approximately 366,133 shares of our common stock to be issued following
the mergers.  The mergers were carried out on March 29, 2007.  Consequently,  we
made good  faith  offers to such  shareholders  based on the value of our common
share of $7.00 per share, eighty percent (80%) of which was advanced to them. On
May 25, 2007, Green Acquisition,  Triboro  Acquisition and Jamaica  Acquisition,
commenced  appraisal  proceedings in Nassau County Supreme Court, as required by
the  New  York  Business   Corporation  Law.  Eight  of  the  shareholders  (the
"Claimants")  who sought  appraisal  rights  (the  others had either  settled or
withdrawn their demands) have answered the petition filed in connection with the
appraisal proceeding and moved for pre-trial  discovery.  In March 2008, certain
pre-trial  discovery was ordered by the Court and provided by the Bus Companies.
In addition, a tentative hearing date was set for early September, 2008.

     Collectively,  the  Claimants  have been paid  $1,351,120  pursuant  to the
Registrant's  good faith offer. The Claimants would have received  approximately
241,272 shares of the Registrant's common stock following the mergers of the Bus
Companies.  The Registrant's  ultimate liability cannot presently be determined.
The Registrant is vigorously defending the action. In addition, two shareholders
have been paid an aggregate of $435,457 pursuant to the good faith offer.  These
shareholders would have received approximately 62,208 shares.

     In addition to the above,  we are  involved in several  lawsuits  and other
disputes  which arose in the ordinary  course of business;  however,  management
believes  that  these  matters  will  not  have  a  material   adverse   effect,
individually  or in the aggregate,  on the  Registrant's  financial  position or
results of operations.

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.




                                       35
<PAGE>

                                    PART II


ITEM 5. MARKET FOR REGISTRANT'S  COMMON EQUITY,  RELATED STOCKHOLDER MATTERS AND
        ISSUER PURCHASES OF EQUITY SECURITIES


Market for Common Equity

     There is no public  market  for our  common  stock,  and we do not expect a
market to develop  in the near  future.  We have no  current  plans to cause our
common  stock to be listed on any  securities  exchange  or quoted on any market
system in any established  market either  immediately or at any definite time in
the future.  Therefore,  it is likely that a stockholder may not be able to sell
such  stockholder's   common  stock  at  a  time  or  price  acceptable  to  the
stockholder.

Outstanding Common Stock and Holders

     As of March 30, 2008, we had 13,472,281 shares issued and outstanding, held
by approximately 384 shareholders of record.

Distributions

     Our Board of  Directors  declares  and pays  distributions  on a  quarterly
basis. For the period July 1, 2007 (the date as of which we elected REIT status)
to December 31, 2007, we declared  aggregate  distributions of $0.215, per share
to the holders of record. This does not include a one time special  distribution
of  accumulated  earnings and profits of $6.40 per share paid in October,  2007.
The following table shows the declaration dates and the amounts  distributed per
share.

<TABLE>
<CAPTION>
-------------------------------------- ---------------------------------------- --------------------------------------
<S>                                    <C>                                      <C>
Declaration Date                       Distribution Date                        Amount Paid Per Share
-------------------------------------- ---------------------------------------- --------------------------------------
September 30, 2007                     October 15, 2007                         $0.11
-------------------------------------- ---------------------------------------- --------------------------------------
December 20, 2007                      January 15, 2008                         $0.105
-------------------------------------- ---------------------------------------- --------------------------------------
                                       Total                                    $0.215
-------------------------------------- ---------------------------------------- --------------------------------------
</TABLE>

     Although we intend to continue to declare and pay quarterly  distributions,
no  assurances  can be  made  as to the  amounts  of any  future  payments.  The
declaration of any future distributions is within the discretion of the Board of
Directors  and  will be  dependent  upon,  among  other  things,  our  earnings,
financial  condition  and  capital  requirements,  as well as any other  factors
deemed relevant by the Board of Directors.  Two principal factors in determining
the amounts of  distributions  are (i) the  requirement of the Internal  Revenue
Code that a REIT  distribute  to  shareholders  at least 90% of its REIT taxable
income, and (ii) the amount of available cash.



                                       36
<PAGE>

Equity Compensation Plan Information

     We have reserved  1,000,000  shares of common stock for issuance  under our
2007 Incentive  Award Plan.  The 2007  Incentive  Award Plan was approved by our
stockholders  on February 7, 2008. We have not issued any shares of common stock
under this plan. See Item 11 of this Report Form 10-K for additional information
regarding our 2007 Stock Incentive Plan.

     The following  information is provided as of December 31, 2007 with respect
to compensation plans,  including individual  compensation  arrangements,  under
which our equity securities are authorized for issuance:

<TABLE>
<CAPTION>

------------------------------ --------------------------- --------------------------- -------------------------------
<S>                             <C>                        <C>                          <C>
                               (a)                         (b)                         (c)
------------------------------ --------------------------- --------------------------- -------------------------------
                                                                                        Number of securities
                                                                                        remaining available for
                                Number of securities to    Weighted-average exercise    future issuance under equity
                                be issued upon exercise    price of outstanding         compensation plans (excluding
                                of outstanding options,    options warrants and         securities reflected in
                                warrants and rights        rights                       column (a)
------------------------------ --------------------------- --------------------------- -------------------------------
Plan category
------------------------------ --------------------------- --------------------------- -------------------------------
Equity compensation plans
approved by security holders
(1)                                     255,000                      11.14                        745,000
------------------------------ --------------------------- --------------------------- -------------------------------
Equity compensation plans
not approved by security
holders                                    -                           -                             -
------------------------------ --------------------------- --------------------------- -------------------------------
Total                                   255,000                        -                          745,000
------------------------------ --------------------------- --------------------------- -------------------------------
</TABLE>

(1)  This equity  compensation is under the 2007 Stock Incentive Award Plan. The
     Plan was approved by stockholders on February 7, 2008.

Purchase of Equity Securities by the Issuer and Affiliated Purchasers

     We did not have a plan for the purchase of any shares of our common  stock,
and did not purchase any of the same in the year ended December 31, 2007.

ITEM 6.                         SELECTED FINANCIAL DATA

     The following selected financial data as of and for the year ended December
31, 2007 are derived from our financial statements and the notes thereto both of
which appear  elsewhere  in this annual  report that have been audited by Weiser
LLP, our  independent  registered  public  accounting  firm.  The following data
should be read in  conjunction  with  "Management's  Discussion  and Analysis of
Financial Condition and Results of Operations" and with our financial statements
and notes thereto.



                                       37
<PAGE>


Selected Financial Data
(in thousands, except per share data)
<TABLE>
<CAPTION>

Year Ended December 31,                      2007            2006           2005            2004             2003
--------------------------------------    ------------    -----------    -----------    -------------    -------------
Balance Sheet Data:
<S>                                       <C>             <C>            <C>            <C>              <C>
Total Assets                              $   124,697     $ 23,942       $  27,082      $   27,397       $    26,360
                                          ============    ===========    ===========    =============    =============
Notes Payable and Credit Facility         $    20,000     $      -       $       -      $        -       $         -
                                          ============    ===========    ===========    =============    =============

Operating Data:
Total Revenues                            $    43,072     $  3,908       $       -      $        -       $         -
                                          ============    ===========    ===========    =============    =============
Total Expenses                            $    36,420     $    940       $     317      $      332       $       357
                                          ============    ===========    ===========    =============    =============
Income (Loss) from Continuing
Operations                                $     5,724     $  1,551       $     389      $       63       $   (3,404)
                                          ============    ===========    ===========    =============    =============

Per Share Data:
Income from Continuing Operations
Basic and Diluted                         $      0.70     $  411.29      $  103.20      $    16.64       $  (878.66)
                                          ============    ===========    ===========    =============    =============

Other Data:
Net Cash Flow (Used in) Provided by:
Operating activities                      $     (279)     $  (2,619)     $  (1,846)     $    1,267       $     2,427
                                          ============    ===========    ===========    =============    =============

Investing Activities                      $     7,957     $   11,427     $     (32)     $     (71)       $     (844)
                                          ============    ===========    ===========    =============    =============
Financing Activities                      $   (5,277)     $    (300)     $    (301)     $     (42)       $     (606)
                                          ============    ===========    ===========    =============    =============
</TABLE>


ITEM 7.              MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                     FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The  following  discussions  contain  forward-looking  statements  that  involve
numerous risks and  uncertainties.  Our actual  results could differ  materially
from those  discussed  in the  forward-looking  statements  as a result of these
risks  and  uncertainties,  including  those  set  forth  in this  report  under
"Forward-Looking  Statements"  and under  "Risk  Factors."  You should  read the
following  discussion in  conjunction  with  "Selected  Financial  Data" and our
consolidated financial statements and notes appearing elsewhere in this filing.

Executive Summary

     The  Company,  a  REIT,  is  a  fully  integrated,   self-administered  and
self-managed  real estate  company,  engaged in the  acquisition,  ownership and
management of real properties. The Company currently owns seven rentable parcels
of real property, four of which are leased to the City of New York, two of which
are leased to  commercial  tenants  (all six on a triple net basis),  and one of
which  is  used  by one of the  Company's  subsidiaries  and  also  leased  to a
commercial tenant.  There is an additional  property of negligible size which is
not rentable.  Additionally,  in connection with the Tax Relief Extension Act of
1999 ("RMA"),  the Company is permitted to participate in activities outside the
normal  operations  of the REIT so long as these  activities  are  conducted  in
entities  which elect to be treated as taxable  subsidiaries  under the Internal
Revenue  Code,  as amended  (the  "Code"),  subject to certain  limitations.  In
addition,  the  Company  owns a group of outdoor  maintenance  businesses  and a
paratransit  business.  The Company  will  consider  other  investments  through
taxable REIT subsidiaries should suitable opportunities arise.

     The  Company  continues  to  seek   opportunities  to  acquire   stabilized
properties.  To the  extent  it is in the  interests  of our  stockholders,  the



                                       38
<PAGE>

Company will seek to invest in a diversified portfolio of real properties within
the Company's geographic area that will satisfy the Company's primary investment
objectives  of  providing  the  Company's  stockholders  with  stable cash flow,
preservation of capital and growth of income and principal  without taking undue
risk. Because a significant factor in the valuation of income-producing property
is the potential for future income, the Company anticipates that the majority of
properties that it will acquire will have both the potential for growth in value
and provide for cash distributions to stockholders.

Critical Accounting Policies

     Critical  accounting  policies  are those  that are both  important  to the
presentation of the Company's  financial condition and results of operations and
require management's most difficult,  complex or subjective judgments. Set forth
below is a summary of the  accounting  policies  that  management  believes  are
critical to the  preparation  of the  consolidated  financial  statements.  This
summary should be read in conjunction  with the more complete  discussion of the
Company's  accounting policies included in Note 1 to the consolidated  financial
statements of the Company.

     Revenue Recognition-Real Estate Operations:

     The Company  recognizes  revenue in accordance  with Statement of Financial
Accounting  Standards No.  13,"Accounting for Leases",  as amended,  referred to
herein  as  SFAS  13.  SFAS  13  requires   that  revenue  be  recognized  on  a
straight-line  basis over the term of the lease unless  another  systematic  and
rational  basis is more  representative  of the time  pattern  in which  the use
benefit is derived  from the leased  property.  In those  instances in which the
Company funds tenant improvements and the improvements are deemed to be owned by
the  Company,  revenue  recognition  will  commence  when the  improvements  are
substantially completed and possession or control of the space is turned over to
the tenant.  When the Company  determines  that the tenant  allowances are lease
incentives, the Company commences revenue recognition when possession or control
of the  space is  turned  over to the  tenant  for  tenant  work to  begin.  The
properties are being leased to tenants under  operating  leases.  Minimum rental
income is recognized on a straight-line basis over the term of the lease.

     Property   operating  expense   recoveries  from  tenants  of  common  area
maintenance,  real  estate and other  recoverable  costs are  recognized  in the
period the related expenses are incurred.

     Revenue Recognition--Outside Maintenance and Shelter Cleaning Operations:

     Cleaning and  maintenance  revenue is  recognized  upon  completion  of the
related service.

     Revenue Recognition--Paratransit Operations:

     Paratransit   revenues  are  recognized  upon  completion  of  the  related
transportation service.


     Accounts Receivable:

     Accounts  receivable consist of trade receivables  recorded at the original
invoice amount,  less an estimated allowance for uncollectible  accounts.  Trade



                                       39
<PAGE>

credit is  generally  extended on a  short-term  basis;  thus trade  receivables
generally do not bear interest. Trade receivables are periodically evaluated for
collectibility  based on past credit  histories with customers and their current
financial   condition.   Changes  in  the  estimated   collectability  of  trade
receivables  are recorded in the results of  operations  for the period in which
the estimate is revised.  Trade  receivables that are deemed  uncollectible  are
offset against the allowance for uncollectible  accounts.  The Company generally
does not require collateral for trade receivables.

     Real Estate Investments:

     Real estate assets are stated at cost, less  accumulated  depreciation  and
amortization.  All capitalizable costs related to the improvement or replacement
of  real  estate   properties  are  capitalized.   Additions,   renovations  and
improvements  that enhance  and/or extend the useful life of a property are also
capitalized.  Expenditures  for ordinary  maintenance,  repairs and improvements
that do not materially prolong the normal useful life of an asset are charged to
operations as incurred.

     Upon the acquisition of real estate properties,  the fair value of the real
estate  purchased is allocated to the acquired  tangible  assets  (consisting of
land, buildings and buildings improvements) and identified intangible assets and
liabilities  (consisting of above-market  and  below-market  leases and in-place
leases) in accordance with SFAS No. 141,  "Business  Combinations."  The Company
utilizes  methods similar to those used by independent  appraisers in estimating
the  fair  value of  acquired  assets  and  liabilities.  The fair  value of the
tangible  assets of an acquired  property  considers  the value of the  property
"as-if-vacant." The fair value reflects the depreciated  replacement cost of the
asset.  In  allocating  purchase  price  to  identified  intangible  assets  and
liabilities of an acquired property,  the value of above-market and below-market
leases are estimated  based on the differences  between (i) contractual  rentals
and the estimated market rents over the applicable lease term discounted back to
the date of  acquisition  utilizing a discount rate adjusted for the credit risk
associated with the respective  tenants and (ii) the estimated cost of acquiring
such  leases  giving  effect  to  the  Company's  history  of  providing  tenant
improvements and paying leasing  commissions,  offset by a vacancy period during
which such space would be leased.  The  aggregate  value of  in-place  leases is
measured  by the excess of (i) the  purchase  price  paid for a  property  after
adjusting  existing  in-place  leases  to  market  rental  rates  over  (ii) the
estimated  fair value of the property  "as-if-vacant,"  determined  as set forth
above.

     Above and below  market  leases  acquired are recorded at their fair value.
The capitalized above-market lease values are amortized as a reduction of rental
revenue over the remaining  term of the  respective  leases and the  capitalized
below-market  lease values are  amortized as an increase to rental  revenue over
the remaining term of the  respective  leases.  The value of in-place  leases is
based  on the  Company's  evaluation  of the  specific  characteristics  of each
tenant's lease.  Factors  considered  include estimates of carrying costs during
expected  lease-up  periods,  current  market  conditions,  and costs to execute
similar  leases.  The value of in-place  leases are amortized over the remaining
term of the  respective  leases.  If a tenant  vacates  its  space  prior to its
contractual  expiration date, any unamortized  balance of the related intangible
asset is expensed.



                                       40
<PAGE>

     Asset Impairment:

     The  Company  applies  SFAS No.  144,  "Accounting  for the  Impairment  or
Disposal  of  Long-Lived   Assets",  to  recognize  and  measure  impairment  of
long-lived assets. Management reviews each real estate investment for impairment
whenever  events or  circumstances  indicate  that the carrying  value of a real
estate investment may not be recoverable.  The review of recoverability is based
on an  estimate  of the future  cash flows that are  expected to result from the
real estate investment's use and eventual disposition. These cash flows consider
factors such as expected future operating income, trends and prospects,  as well
as  the  effects  of  leasing  demand,  competition  and  other  factors.  If an
impairment  event exists due to the projected  inability to recover the carrying
value of a real estate investment,  an impairment loss is recorded to the extent
that the carrying value exceeds estimated fair value.  Management is required to
make subjective  assessments as to whether there are impairments in the value of
its real  estate  properties.  These  assessments  have a direct  impact  on net
income,  because  an  impairment  loss is  recognized  in the  period  that  the
assessment is made.

     Income Taxes:

     Effective July 1, 2007, the Company has elected to be taxed as a REIT under
the Internal  Revenue Code of 1986,  as amended.  Accordingly,  the Company will
generally  not be subject  to federal  income  taxation  on that  portion of its
income that qualifies as REIT taxable income,  to the extent that it distributes
at least 90% of its taxable income to its shareholders and complies with certain
other requirements as defined under Section 856 through 860 of the Code.

     In connection with Tax Relief Extension Act of 1999 ("RMA"), the Company is
permitted to participate in certain  activities so long as these  activities are
conducted in entities which elected to be treated as taxable  subsidiaries under
the Code.  As such the Company is subject to  federal,  state and local taxes on
the income from these  activities.  The Company  accounts for income taxes under
the asset and liability  method,  as required by the provisions of SFAS No. 109,
"Accounting  for Income  Taxes."  Under  this  method,  deferred  tax assets and
liabilities are determined based on differences  between financial reporting and
tax bases of assets and liabilities and are measured using the enacted tax rates
and laws that will be in effect when the differences are expected to reverse.

     The Company  provides a valuation  allowance  for  deferred  tax assets for
which it does not  consider  realization  of such  assets to be more likely than
not.

     Results of Operations

     The following  results of operations  pertain  solely to Green Bus Company,
Inc.,  and  Subsidiary  for the years ended  December  31, 2005 and 2006 and the
period January 1, 2007 to March 31, 2007 and GTJ REIT, Inc. for the period April
1, 2007 to December 31, 2007. The results of operations for Triboro, Jamaica and
GTJ for the period from March 29, 2007 to March 31,  2007 are not  reflected  in
the accompanying  consolidated  statements of income of the Company for the year
ended  December  31,  2007 as such  amounts  were not deemed to be  material  in
relation to the Company's consolidated financial statements as a whole.




                                       41
<PAGE>

Year Ended December 31, 2007 vs. Year Ended December 31, 2006

     The following table sets forth the results of operations of the Company for
the years indicated (in thousands):
<TABLE>
<CAPTION>

                                                                  Years Ended December 31,
                                                          ----------------         ---------------
                                                                2007                    2006
                                                          ----------------         ---------------
Revenues:
<S>                                                    <C>                   <C>
    Property rentals                                   $             9,451   $             3,908
    Outdoor maintenance and cleaning operations                     24,084                     -
    Paratransit operations                                           9,537                     -
                                                          ----------------         ---------------
         Total revenues                                             43,072                 3,908
Operating expenses:
    General and administrative expenses                              9,167                   659
    Equipment maintenance and garage expenses                        3,612                     -
    Transportation expenses                                          7,240                     -
    Contract maintenance and station expenses                       10,778                     -
    Insurance and safety expenses                                    2,724                     -
    Operating and highway taxes                                      1,758                     -
    Other operating expenses                                           575                     -
    Depreciation and amortization expense                              566                   281
                                                          ----------------         ---------------
         Total operating expenses                                   36,420                   940
         Operating income                                            6,652                 2,968
Other income (expense):
    Interest income                                                    887                     -
    Interest and debt expense (including
    amortization of deferred financing
    costs of $101)                                                    (812)                    -
    Change in insurance reserves                                       254                     -
    Other                                                             (127)                    -
                                                          ----------------         ---------------
       Total other income (expense):                                   202                     -
Income from continuing operations before income
taxes and equity in earnings (loss) of affiliated
companies                                                            6,854                 2,968
Provision for income taxes                                          (1,190)                 (916)
Equity in earnings (loss) of affiliated companies,
net of tax                                                              60                  (501)
                                                          ----------------         ---------------
Income from continuing operations                                    5,724                 1,551

Discontinued Operation:
    Loss from operations of discontinued
    operation, net of taxes                                           (324)               (7,995)
    Gain on sale of discontinued operation, net of
    taxes                                                                -                 8,269
                                                          ----------------         ---------------
    (Loss) income from discontinued operation, net
    of taxes                                                          (324)                  274
Net income                                             $             5,400   $             1,825
                                                          ================         ===============
</TABLE>




                                       42
<PAGE>


     Property Rental Revenues

     Property  rentals  revenue of  $9,451,000  for the year ended  December 31,
2007,  primarily  represents  revenue  from  the  Company's  rental  properties.
Property  rental for the year ended December 31, 2006  represented  revenue only
from Green which had rental operations revenue of $3,908,000.


     Outside Maintenance Operations Revenues

     Outside  Maintenance  Operations  revenue of $24,084,000 for the year ended
December 31, 2007 represents revenue from the Company's Outdoor  Maintenance and
Cleaning Operations segment. There were no comparable revenues in 2006.

     Paratransit Operations Revenues

     Paratransit  Operations  revenue of $9,537,000  for the year ended December
31, 2007,  represents revenue from the Company's Paratransit  Operations.  There
were no comparable revenues in 2006.

     Operating Expenses

     Operating  expenses for the year ended  December 31, 2007 were  $36,420,000
versus  $940,000 for the year ended  December 31, 2006.  Operating  expenses for
2007 included expenses for the newly merged company,  whereas operating expenses
for 2006 only included the expenses of Green.

     Other Income (Expense)

     Other  income for the year ended  December  31, 2007 was income of $202,000
versus $0 for the year ended  December 31, 2006,  as other income  (expense) for
the year ended December 31, 2006  aggregated an expense of $8,269,000  which was
included in discontinued  operations,  which  primarily  pertains to the pension
related expenses that were recorded in 2006.

     Provision for Income Taxes

     The provision for income taxes represents federal, state and local taxes on
income before income taxes. The provision for income taxes was $1,190,000 for an
effective  tax rate of 17.4% for the year ended  December  31, 2007 and $916,000
for an effective tax rate of 51.0% for the year ended December 31, 2006.




                                       43
<PAGE>

     Equity in Earnings (Loss) Of Affiliated Companies, Net of Taxes

     Equity in earnings of  affiliated  companies,  net of taxes was $60,000 for
the year ended  December 31, 2007 compared to a loss $501,000 for the year ended
December 31, 2006. Since the affiliated  companies are owned 100% by the Company
after the  reorganization  on March 29, 2007,  the results of operations of such
former  affiliated  companies  are  included  in  the  consolidated  results  of
operations of the Company.

     Loss from Discontinued Operation, Net of Taxes

     (Loss)  income  from  discontinued  operation,  net of taxes  reflects  the
operating  results  of  Green's  bus  operations.   The  discontinued  operation
reflected a loss of $324,000 for the year ended December 31, 2007. The 2007 loss
primarily   pertains  to  the  winding  down  of  the  bus  operations  with  no
corresponding   income.  The  discontinued   operation  reflected  a  loss  from
operations  of $7,995,000  offset by the gain from the sale of the  discontinued
operation of $8,269,000  for the year ended  December 31, 2006  resulting in net
income from discontinued operations of $274,000.

     Net Income

     For the year  ended  December  31,  2007,  the  Company  had net  income of
$5,400,000 versus net income of $1,825,000 for the year ended December 31, 2006.
Net income for 2007 is attributable  to continuing  operations of $5,724,000 and
loss from  discontinued  operations  of  $324,000.  The net  income  for 2006 is
attributable to income from continuing  operations of $1,551,000 and income from
discontinued operations of $274,000.

Year Ended December 31, 2006 vs. Year Ended December 31, 2005

     The following table sets forth the results of operations of the Company for
the years indicated (in thousands):





                                       44
<PAGE>

<TABLE>
<CAPTION>
                                                                                       Year Ended December 31,
                                                                                      2006                  2005
                                                                                ------------------     ---------------
<S>                                                                                       <C>                   <C>
                                                                                          $ 3,908               $   -
Property rentals revenue
                                                                                ------------------     ---------------
Operating expenses:
      General and administrative expenses                                                     659                   -
      Depreciation and amortization expense                                                   281                 317
                                                                                ------------------     ---------------
         Total operating expenses                                                             940                 317
         Operating income (loss)                                                            2,968                (317)
                                                                                ------------------     ---------------
Income from continuing operations before income taxes and equity in earnings
(loss) of affiliated companies                                                              2,968                (317)
Provision for income taxes                                                                   (916)               (684)
Equity in earnings (loss) of affiliated companies, net of tax                                (501)              1,390
                                                                                ------------------     ---------------
Income from continuing operations                                                           1,551                 389

Discontinued Operation:
    (Loss) income from operations of discontinued operation, net of taxes                  (7,995)              1,338

    Gain on sale of discontinued operation, net of taxes                                    8,269                   -
                                                                                ------------------     ---------------
    Income from discontinued operation, net of taxes                                          274               1,338
Net Income                                                                                $ 1,825             $ 1,727
                                                                                ==================     ===============
</TABLE>


     Property Rentals

     Operating  revenue and subsidies for 2006 represents rental income from New
York City for the  recently  signed  leases for Green's  real  properties.  Such
leases were not applicable in 2005.

     General and Administrative Expenses

     For 2006,  general  and  administrative  expenses  were  $659,000  and were
primarily  related to $462,000 of environmental  clean-up costs and professional
fees and other expenses totaling $197,000. There were no such expenses in 2005.

     Depreciation and Amortization Expense

     For 2006,  depreciation and amortization  expense decreased by $36,000 from
$281,000 in 2006 to  $317,000 in 2005.  Depreciation  and  amortization  expense
represents depreciation on Green's owned real properties.

     Provision for Income Taxes

     The provision for income taxes represents  federal,  state, and local taxes
on income before income  taxes.  For 2006,  the provision for taxes was $916,000
compared to a provision for taxes of $684,000 in 2005.




                                       45
<PAGE>

     Equity in Earnings (Loss) of Affiliated Companies, Net of Tax

     For 2006, equity in earnings (loss) of affiliated companies, net of tax was
($501,000),  versus  $1,390,000  for 2005,  for a decrease  of  $1,891,000.  The
decrease was related to decreased  earnings from Green's forty percent  interest
in GTJ and Command.

     Income from Discontinued Operation, Net of Tax

     Income from  discontinued  operation,  net of tax  reflects  the  operating
results  of  Green's  bus  operations.  For  2006,  the  discontinued  operation
reflected a loss from operations of $7,995,000  offset by the gain from the sale
of the  discontinued  operation of $8,269,000  versus  income from  discontinued
operations of $1,338,000 in 2005.

     Gain on Sale of Discontinued Operation, Net of Taxes

     Gain on sale of discontinued  operation,  net of taxes reflects the gain on
the sale of Green's bus operations to New York City in 2006.

     Net Income

     For  2006,  Green  had net  income  of  $1,825,000  versus  net  income  of
$1,727,000 for 2005. The change was due to the factors discussed above.

Liquidity and Capital Resources

     At  December  31,  2007,  the  Company  had  unrestricted   cash  and  cash
equivalents  of  $11,920,000  compared to $9,519,000  at December 31, 2006.  The
Company funds operating  expenses and other short-term  liquidity  requirements,
including debt service and dividend distributions from operating cash flows; the
Company also has used its secured  revolving credit facility for these purposes.
The Company  believes  that its net cash  provided by  operations,  coupled with
availability  under  the  revolving  credit,  will be  sufficient  to  fund  its
short-term liquidity requirements for 2008 and to meet its dividend requirements
to maintain its REIT status.

     Financings

     On July 2, 2007, GTJ REIT entered into a Loan  Agreement,  dated as of June
30, 2007 (the "Loan Agreement"),  among GTJ REIT and certain direct and indirect
subsidiaries of GTJ REIT, namely, Green Acquisition,  Inc., Triboro Acquisition,
Inc. and Jamaica  Acquisition,  Inc.,  165-25 147th Avenue,  LLC, 49-19 Rockaway
Beach Boulevard,  LLC, 85-01 24th Avenue, LLC, 114-15 Guy Brewer Boulevard, LLC,
(collectively, the "Borrowers"); and ING USA Annuity and Life Insurance Company;
ING Life Insurance and Annuity Company;  Reliastar Life Insurance  Company;  and
Security Life Of Denver Insurance Company  (collectively,  the "Initial Lenders"
and,  together  with any other  Lenders  from  time to time  party  hereto,  the
"Lenders").  Pursuant  to the  terms of the Loan  Agreement,  the  Lenders  will
provide  multiple loan facilities in the amounts and on the terms and conditions
set forth in such Loan Agreement. The aggregate of all loan facilities under the
Loan  Agreement  shall not  exceed  $72,500,000.  On July 2, 2007,  the  Initial




                                       46
<PAGE>

Lenders made an initial  $17,000,000  term loan. In addition to the initial term
loan,  the  Lenders  collectively  made a  mortgage  loan of  $1,000,000  to the
Borrowers.  Interest on the loans shall be paid  monthly.  The interest  rate on
both loans  aggregates to 6.59% per annum.  The  principal  shall be paid on the
maturity date pursuant to the terms set forth in the Loan Agreement, namely July
1, 2010,  unless otherwise  extended or renewed.  The revolving credit under the
Loan Agreement has a maximum amount of $54,500,000.

     The loan facilities are  collateralized by: (1) an Assignment of Leases and
Rents on four bus  depot  properties  (the  "Depots")  owned by  certain  of the
Borrowers and leased to the City of New York,  namely (a) 49-19  Rockaway  Beach
Boulevard;  (b) 165-25  147th  Avenue;  (c) 85-01 24th Avenue and (d) 114-15 Guy
Brewer Boulevard;  (2) Pledge Agreements under which (i) the Registrant  pledged
its 100% stock  ownership in each of: (a) Green  Acquisition,  Inc.; (b) Triboro
Acquisition, Inc. and (c) Jamaica Acquisition, Inc. (ii) Green Acquisition, Inc.
pledged  its  100%  membership  interest  in  each  of (a)  49-19Rockaway  Beach
Boulevard,  LLC and (b) 165-25 147th  Avenue,  LLC,  (iii)  Triboro  Acquisition
pledged its 100% membership  interest in 85-01 24th Avenue, LLC, and (d) Jamaica
Acquisition pledged its 100% membership interest in 114-15 Guy Brewer Boulevard,
LLC,  and (3) a LIBOR Cap  Security  Agreement  under  which GTJ Rate Cap LLC, a
wholly owned  subsidiary of the Registrant,  pledged its interest in an interest
rate cap transaction  evidenced by the Confirmation  and ISDA Master  Agreement,
dated as of December  13,  2006,  with SMBC  Derivative  Products  Limited.  The
Registrant had assigned its interest in the interest rate cap transaction to GTJ
Rate Cap LLC prior to entering into the Loan  Agreement.  $1,000,000 of the loan
is secured by a mortgage in the amount of $1,000,000 on the Depots  collectively
($250,000 for each Depot).

     In  addition  to  customary  non-financial  covenants,  the  Borrowers  are
obligated to comply with the  following  financial  covenants  (1) the Borrowers
will not  permit  the ratio of (a)  Consolidated  Net  Operating  Income for any
period of four consecutive  Fiscal Quarters to (b) Consolidated Debt Service for
such period,  to be less than 1.3 to 1.0; (2) the Borrowers  will not permit the
ratio of (a) Consolidated Net Operating Income from Unencumbered  Assets for any
period of four consecutive  Fiscal Quarters to (b)  Consolidated  Unsecured Debt
Service for such period,  to be less than 1.3 to 1.0; (3) the Borrowers will not
permit the ratio of (a) Consolidated  Debt at any time to (b) Total Assets Value
at such time,  to be greater  than 0.6 to 1.0;  and (4) the  Borrowers  will not
permit  the  ratio of (a)  Total  Unencumbered  Assets  Value at any time to (b)
Consolidated Unsecured Debt at such time, to be less than 1.5 to 1.0.

     As March 31, 2008, $43,214,528 was outstanding under this Loan Agreement.

     Earnings and Profit Distribution

     In 2007,  the  Company  was  required  to make a one-time  distribution  of
undistributed  historical  earnings and profits of the Bus Companies.  On August
20, 2007, the Board of Directors of GTJ REIT declared a special  distribution of
accumulated  earnings  and profits on GTJ REIT's  common  stock of $6.40 per GTJ
REIT share,  payable in $20,000,000 of cash and in 3,775.400  shares of GTJ REIT
common  stock.  For the purposes of the special  distribution,  common stock was
valued at $11.14, as indicated in the proxy  statement/prospectus dated February
9, 2007 filed with the Securities and Exchange Commission and distributed to the
stockholders  of the Bus Companies in connection with the March 26, 2007 special
joint  meeting of the  stockholders  of the Bus  Companies at which meeting such
stockholders  voted on a  reorganization  of those  companies  with and into GTJ



                                       47
<PAGE>

REIT. The special distribution aggregated  $62,060,000.  The holders of GTJ REIT
shares,  and the  holders  of  shares of the Bus  Companies,  as of the close of
business on August 20, 2007, the record date for the special  distribution  (the
"Holders"),  were  eligible  for the  special  distribution.  The  Holders  were
required to make an election as to the amount of GTJ REIT shares and/or cash the
Holders  wished  to  receive  as  their   respective   portion  of  the  special
distribution.  Holders were  advised,  due to the  limitation  of the  aggregate
amount  of cash  available  for the  special  distribution,  that  their  actual
distribution  might not be in the  proportion  of cash and GTJ REIT  shares they
elected,  but could be based on a pro  ration of the  available  cash  after all
elections (ie: not on a first come-first served basis).  GTJ REIT calculated the
proportion  of cash and GTJ REIT  shares  that were  distributed  to the Holders
based  upon the  Holder's  election  and the  amount of cash  available  for the
special distribution.

     In October 2007,  cash of  $20,000,000  and shares of 3,775,400 of GTJ REIT
stock,  valued at an estimated  $42,060,000  were  distributed,  or reserved for
distribution,  to the  Holders.  Such cash was  borrowed  against the  revolving
credit from the Lenders.

     Contractual Obligations

     GTJ REIT through its subsidiaries  leases certain operating  facilities and
certain  equipment  under  operating  leases,  expiring at various dates through
fiscal year 2014. In addition, GTJ REIT through its subsidiaries has a revolving
credit as described in detail above.  The table below  summarizes  the principal
balances of the Company's  obligations for indebtedness and lease obligations as
of  December  31,  2007 in  accordance  with their  required  payment  terms (in
thousands):
<TABLE>
<CAPTION>

                                                                  Payments due by calendar year period
                                                -------------------------------------------------------------------------
                                                    Total               2008      2009-2010     2011-2012      Thereafter
                                                -------------------------------------------------------------------------
<S>                                              <C>            <C>          <C>              <C>           <C>
Contractual Obligations-Credit Facility          $      20,000  $          - $       20,000   $         -   $          -
Operating Lease Obligations                              2,809           689          1,180           610            330
                                                -------------------------------------------------------------------------
                                                 $      22,809  $        689 $       21,180   $       610   $        330
                                                ==============  ============ ==============   ===========   ============
</TABLE>


Net Cash Flows

     Year Ended  December 31, 2007 vs. Year Ended  December  31, 2006

     Operating Activities

     Net cash used in operating activities was $279,000 for 2007 versus net cash
used in operating  activities of $2,619,000 in 2006. For 2007,  cash provided by
operating  activities  was  primarily  related  to (i)  income  from  continuing
operations of  $5,724,000  and a decrease in operating  subsidies  receivable of
$3,184,000,  reduced by (ii) a decrease in income taxes  payable of  $5,890,000,
(iii) an increase in accounts  receivable of $1,909,000  and (iv) an increase of
due from affiliates of $1,535,000.  For 2006, cash used in operating  activities
of  $2,619,000  was primarily  related to (i) net cash used in the  discontinued
operation  of  $5,610,000,  (ii) a decrease  in  accounts  payable  and  accrued
expenses of $3,036,000, (iii) provisions for injuries and damages of $2,470,000,
reduced by (iv) a decrease in operating  subsidies  receivable of $4,792,000 and
(v) an increase in income taxes payable of $3,912,000.


                                       48
<PAGE>

     Investing Activities

     Net cash  provided by investing  activities  was  $7,957,000 in 2007 versus
$11,427,000 in 2006. The 2007 balance primarily pertains to cash acquired in the
merger of $8,670,000 and proceeds from the sale of investments of $970,000.  The
2006  balance  primarily   pertains  to  the  proceeds  from  the  sale  of  the
discontinued operation of $11,143,000.

     Financing Activities

     Net cash  used in  financing  activities  in 2007 of  $5,277,000  primarily
pertains to the E&P distribution of $19,094,000, principal payments on the notes
payable of $2,086,000 and the buy-back of common stock of $1,787,000, reduced by
the  proceeds  from  the  revolving  credit  facility.  Cash  used in  financing
activities was $300,000 for 2006 and related to the payment of dividends

     Year Ended  December 31, 2006 vs. Year Ended  December  31, 2005

     Operating Activities

     Cash used in operating  activities  for 2006 was  $2,619,000 as compared to
cash used in operations  of  $1,846,000  in 2005, a difference of $773,000.  For
2006, cash used in operating  activities of $2,619,000 was primarily  related to
(i) provisions for injuries and damages claims of $2,470,000, (ii) provision for
deferred taxes of $117,000,  (iii) increases in deferred leasing  commissions of
$1,221,000,  (iv) decreases in accounts payable of $3,036,000,  (v) decreases in
other current  liabilities  of  $1,138,000,  and (vi)  decreases in cash used in
discontinued  operation  of  $5,610,000.  These  decreases  in  cash  flow  were
partially  offset by (i) net earnings from continuing  operations of $1,551,000,
(ii) decreases in operating subsidies and other amounts due from the City of New
York of  $4,792,000,  (iii)  decreases  in prepaid  expenses and other assets of
$216,000,  (iv) decreases in prepaid income taxes of $104,000,  (v) increases in
income tax payable of $3,912,000, (vi) equity in loss of affiliated companies of
$501,000, and (vi) decrease in due from affiliates of $610,000.

     Investing Activities

     Cash provided by investing  activities of  $11,427,000  for 2006  increased
$11,459,000  versus $32,000 used in investing  activities for 2005. The increase
was primarily  related to cash proceeds  received from the sale of  discontinued
operation totaling $11,143,000.

    Financing Activities

     Cash used in  financing  activities  was $300,000 for 2006 and $301,000 for
2005. Cash used in financing  activities in 2006 and 2005 related to the payment
of dividends.



                                       49
<PAGE>

     Possible Acquisitions

     The Board of  Directors  of GTJ REIT  intends to expand  its real  property
holdings. This would be done through cash purchases of properties that the Board
of Directors  determines to be consistent  with the  investment  policies of GTJ
REIT  which  would  be  funded  initially  from  the  revolving  credit.  It  is
anticipated that once these properties are purchased using the revolving credit,
permanent  mortgage  financing  will be  placed on the real  properties  and the
revolving credit will be paid down accordingly. It is also possible that GTJ and
its subsidiaries  will desire to make an acquisition,  some of which may need to
be funded  by GTJ  REIT.  GTJ REIT  would,  in that  case,  and  subject  to the
direction  of the Board of  Directors,  provide such  financing,  which again is
expected to be obtained  from the  $72,500,000  revolving  credit  facility.  On
February 1, 2008,  the Company  entered into an agreement to purchase a property
located in the Hartford,  Connecticut  area. In connection  with this agreement,
the  Company  has made an  initial  deposit  in the  amount of  $2,300,000.  The
purchase price of the property is approximately $23,300,000. The closing of this
transaction  occurred on March 3, 2008. The acquisition cost was funded from the
Company's secured credit facility.

     Cash payments for financing

     Payment of  interest  under the  $72,500,000  revolving  credit,  and under
permanent  mortgages,  will  consume  a  portion  of the cash  flow of GTJ REIT,
reducing  net  income  and  the  resulting  distributions  to  be  made  to  the
stockholders of GTJ REIT.

     Trend in financial resources

     Other  than  the  revolving  credit  facility  discussed  above  under  ING
Financing  Agreement,  GTJ REIT can expect to receive  additional  rent payments
over time due to scheduled increases in rent set forth in the leases on its real
properties.  It should be noted,  however, that the additional rent payments are
expected  to result in an  approximately  equal  obligation  to make  additional
distributions  to  stockholders,  and will  therefore  not  result in a material
increase in working capital.

     Environmental Matters

     The  Company's  real  property  has  had  activity  regarding  removal  and
replacement of underground  storage  tanks.  Upon removal of the old tanks,  any
soil  found  to be  unacceptable  was  thermally  treated  off  site to burn off
contaminants. Fresh soil was brought in to replace earth which had been removed.
There are still  some  levels of  contamination  at the sites,  and  groundwater
monitoring programs have been put into place at certain locations. In July 2006,
the  Company  entered  into  an  informal  agreement  with  the New  York  State
Department  of  Environmental  Conservation  ("NYSDEC")  whereby the Company has
committed to a three-year  remedial  investigation  and  feasibility  study (the
"Study") for all site locations.

     In conjunction with this informal  agreement,  the Company has retained the
services of an  environmental  engineering firm to assess the cost of the Study.
The  Company's  engineering  report  has an  estimated  cost  range in which the
low-end of the range,  of  approximately  $5.2  million (of which the  Company's
portion is $1.4 million) was only for the Study.  In addition,  a high-end range
estimate,  of  approximately  $10.4 million (of which the Company's  portion was
$2.8) was included which  provided a "worst case"  scenario  whereby the Company
would be required  to perform  full  remediation  on all site  locations.  While
management  believes  that the amount of the Study and  related  remediation  is
likely to fall within the estimated cost range,  no amount within that range can
be determined to be the better  estimate.  Therefore,  management  believes that



                                       50
<PAGE>

recognition of the low-range  estimate is appropriate.  While  additional  costs
associated with environmental remediation and monitoring are probable, it is not
possible at this time to reasonably estimate the amount of any future obligation
until the Study has been  completed.  As of December 31,  2007,  the Company has
recorded  a  liability  of  $1,033,000  related  to its  portion of the Study as
disclosed in the engineering report.  Presently, the Company is not aware of any
claims or remediation  requirements from any local,  state or federal government
agencies.  Each of the  properties  is a  commercial  zone and is still  used as
transit depots, including maintenance of vehicles.


     Inflation

     Low to moderate  levels of  inflation  during the past  several  years have
favorably impacted the Company's  operations by stabilizing  operating expenses.
At the same time,  low  inflation  has had the  indirect  effect of reducing the
Company's ability to increase tenant rents.  However,  the Company's  properties
have tenants whose leases include expense reimbursements and other provisions to
minimize the effect of inflation.





                                       51
<PAGE>

ITEM 7A.        QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


     The primary  market  risk  facing the Company is interest  rate risk on its
variable-rate  mortgage loan payable and secured revolving credit facility.  The
Company will, when  advantageous,  hedge its interest rate risk using derivative
financial instruments. The Company is not subject to foreign currency risk.

     The  Company is exposed to  interest  rate  changes  primarily  through the
secured floating-rate revolving credit facility used to maintain liquidity, fund
capital  expenditures  and  expand its real  estate  investment  portfolio.  The
Company's  objectives with respect to interest rate risk are to limit the impact
of interest rate changes on operations and cash flows,  and to lower its overall
borrowing  costs. To achieve these  objectives,  the Company may borrow at fixed
rates and may enter into derivative financial  instruments such as interest rate
caps in order to  mitigate  its  interest  rate risk on a related  variable-rate
financial  instrument.  The Company does not enter into  derivative  or interest
rate transactions for speculative purposes.

     At December  31,  2007,  debt  consisted of  variable-rate  mortgage  loans
payable,  and the variable-rate  secured revolving credit facility.  The average
interest  rate on the  $20.0  million  of  indebtedness  outstanding  was  6.9%,
maturing  in 2010.  Based on the amount of  variable-rate  debt  outstanding  at
December 31,  2007,  if interest  rates  either  increase or decrease by 1%, the
Company's net income would decrease or increase  respectively  by  approximately
$200,000 per annum.


ITEM 8.          FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


                         GTJ REIT, INC. AND SUBSIDIARIES
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

                                                                                                               Page

<S>            <C> <C>      <C>                                                                                  <C>
Report of Independent Registered Public Accounting Firm........................................................F-1
Consolidated Balance Sheets as of December 31, 2007 and 2006...................................................F-2
Consolidated Statements of Income for the years ended December 31, 2007, 2006 and 2005.........................F-3
Consolidated Statements of Stockholders' Equity for the years ended December 31, 2007, 2006 and  2005..........F-4
Consolidated Statements of Cash Flows for the years ended December 31, 2007, 2006 and 2005.....................F-5
Notes to Consolidated Financial Statements.....................................................................F-7

</TABLE>



                                       52
<PAGE>


            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Stockholders of
GTJ REIT, Inc. and Subsidiaries

     We have audited the accompanying  consolidated  balance sheets of GTJ REIT,
Inc. and Subsidiaries  (the "Company") as of December 31, 2007 and 2006, and the
related   consolidated   statements   of   income,   stockholders'   equity  and
comprehensive  income,  and cash  flows for each of the years in the  three-year
period ended December 31, 2007. These consolidated  financial statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

     We  conducted  our audits in  accordance  with the  standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
consolidated  financial statements are free of material  misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the  consolidated  financial  statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall consolidated  financial statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

     In our opinion,  the consolidated  financial  statements  referred to above
present fairly, in all material respects, the consolidated financial position of
the Company as of December 31, 2007 and 2006,  and the  consolidated  results of
their  operations  and their cash flows for each of the years in the  three-year
period ended  December 31, 2007,  in  conformity  with U.S.  generally  accepted
accounting principles.

     As discussed in Notes 12 and 16 to the consolidated  financial  statements,
the December 31, 2006  consolidated  financial  statements have been restated to
reflect the  correction  of an error  related to federal and state income taxes.
The error  and  certain  disclosures  in  connection  with the  presentation  of
liabilities,  income and cash flows have been  restated to correct the error and
to provide additional  disclosure.  The effect of this adjustment is to increase
net income by  approximately  $600,000 or $159.29 per common  share for the year
ended December 31, 2006.

Weiser LLP
New York, New York
April 30, 2008




                                       F-1
<PAGE>

                         GTJ REIT, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)
<TABLE>
<CAPTION>

                                                                                         December 31,
                                                                           ------------------------------------------
ASSETS                                                                             2007                  2006
                                                                           -------------------- ---------------------
                                                                                                     (Restated)
Real estate at cost:
<S>                                                                       <C>                     <C>
    Land                                                                  $            85,051     $                434
    Buildings and improvements                                                          7,974                    6,591
                                                                           ------------------        -----------------
                                                                                       93,025                    7,025
   Less: accumulated depreciation and amortization                                     (6,036)                  (5,476)
                                                                           ------------------        -----------------
   Net real estate for investment                                                      86,989                    1,549
Cash and cash equivalents                                                              11,920                    9,519
Available for sale securities                                                           4,815                    1,219
Restricted cash                                                                         2,852                      451
Accounts receivable                                                                     8,477                        -
Operating subsidies receivable                                                              -                      492
Due from affiliates                                                                         -                    5,402
Investments in affiliates                                                                   -                    1,971
Other assets, net                                                                       6,259                    2,108
Deferred charges, net of accumulated amortization                                       2,462                    1,221
Machinery and equipment, net                                                              923                       10
                                                                           ------------------        -----------------
   Total assets                                                           $           124,697     $             23,942
                                                                           ==================        =================

LIABILITIES AND STOCKHOLDERS' EQUITY

Secured revolving credit facility                                         $            20,000     $                  -
Accounts payable and accrued expenses                                                   2,170                       18
Income taxes payable                                                                        -                    4,240
Due to affiliates                                                                           -                    1,183
Unpaid losses and loss adjustment expenses                                              2,959                        -
Other liabilities, net                                                                  5,355                      907
                                                                           ------------------       ------------------
                                                                                       30,484                    6,348
                                                                           ------------------       ------------------
Commitments and contingencies
Stockholders' equity:
   Preferred stock, $.0001 par value; 10,000,000 shares authorized
and none issued and outstanding                                                             -                        -
   Common stock, $.0001 par value; 100,000,000 shares authorized
and 13,472,281 shares issued and outstanding at December 31, 2007
and common stock, no par value, 4,750 shares authorized and
3,766.50 shares issued and outstanding at December 31, 2006                                 1                      377
   Additional paid-in capital                                                         136,687                        -
   Cumulative distributions in excess of net income at December 31,
2007 and retained earnings at December 31, 2006                                       (42,985)                  16,789
   Accumulated other comprehensive income                                                 510                      428
                                                                           ------------------       ------------------
                                                                                       94,213                   17,594
                                                                           -----------------        ------------------
   Total liabilities and stockholders' equity                             $           124,697     $             23,942
                                                                           ==================       ==================
</TABLE>

     The  accompanying  notes  and  report  of  independent   registered  public
accounting firm should be read in conjunction  with the  consolidated  financial
statements.




                                       F-2
<PAGE>


                         GTJ REIT, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                 (in thousands, except share and per share data)
<TABLE>
<CAPTION>

                                                                              Years Ended December 31,
                                                          ------------------------------------------------------------------
                                                                   2007                   2006                   2005
                                                          ---------------------  ---------------------   -------------------
Revenues:                                                                               (Restated)
<S>                                                        <C>                    <C>                     <C>
    Property rentals                                       $             9,451    $              3,908    $                -
    Outdoor maintenance and cleaning operations                         24,084                       -                     -
    Paratransit operations                                               9,537                       -                     -
                                                          ---------------------  ---------------------   -------------------
         Total revenues                                                 43,072                   3,908                     -
                                                          ---------------------  ---------------------   -------------------
Operating expenses:
    General and administrative expenses                                  9,167                     659                     -
    Equipment maintenance and garage expenses                            3,612                       -                     -
    Transportation expenses                                              7,240                       -                     -
    Contract maintenance and station expenses                           10,778                       -                     -
    Insurance and safety expenses                                        2,724                       -                     -
    Operating and highway taxes                                          1,758                       -                     -
    Other operating expenses                                               575                       -                     -
    Depreciation and amortization expense                                  566                     281                   317
                                                          ---------------------  ---------------------   -------------------
         Total operating expenses                                       36,420                     940                   317
         Operating income (loss)                                         6,652                   2,968                  (317)
Other income (expense):
    Interest income                                                        887                       -                     -
    Interest and debt discount expense (including
amortization of deferred financing costs of $101)                         (812)                      -                     -
    Change in insurance reserves                                           254                       -                     -
    Other                                                                 (127)                      -                     -
                                                          ---------------------  ---------------------   -------------------
       Total other income (expense):                                       202                       -                     -
Income (loss) from continuing operations before income
taxes and equity in earnings (loss) of affiliated
companies                                                                6,854                   2,968                  (317)
Provision for income taxes                                              (1,190)                   (916)                 (684)
Equity in earnings (loss) of affiliated companies, net
of tax                                                                      60                    (501)                1,390
                                                          ---------------------  ---------------------   -------------------
Income from continuing operations                                        5,724                   1,551                   389

Discontinued Operation:
    Income (loss) from operations of discontinued
    operation, net of taxes                                               (324)                 (7,995)                1,338
    Gain on sale of discontinued operation, net of taxes                     -                   8,269                     -
                                                          ---------------------  ---------------------   -------------------
    Income (loss) from discontinued operation, net of                     (324)                    274                 1,338
    taxes

Net income                                                 $             5,400    $              1,825    $           $1,727
                                                          ====================    ====================    ==================
Income per common share--basic and diluted:
    Income from continuing operations                     $              0.70    $             411.79    $           103.20
                                                          ====================    ====================    ==================
    Income (loss) from operations of discontinued
    operation, net of taxes                               $            (0.04)    $          (2,122.78)   $           355.31
                                                          ====================    ====================    ==================
    Gain on sale of discontinued operation, net of
    taxes                                                 $                 -    $           2,195.52    $                -
                                                          ====================    ====================    ==================
Net income                                                $              0.66    $             484.53    $           458.51
                                                          ====================    ====================    ==================
Weighted-average common shares outstanding--basic and
diluted                                                              8,126,995                3,766.50              3,766.50
                                                          ====================    ====================    ==================
</TABLE>

     The  accompanying  notes  and  report  of  independent   registered  public
accounting firm should be read in conjunction  with the  consolidated  financial
statements.



                                       F-3
<PAGE>

                         GTJ REIT, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                 (in thousands, except share and per share data)
<TABLE>
<CAPTION>

                               Preferred Stock       Common Stock

                                                                               Cumulative Distributions in
                                                                                  Excess of Net Income at  Accumulated
                               Out-              Out-                Additional   December 31, 2007 and    Other           Total
                              standing           standing            Paid-        Retained Earnings at   Comprehensive Stockholders'
                               Shares   Amount   Shares      Amount  In-Capital   December 31, 2006       Income          Equity
                             ---------- ------- --------- --------- ------------- --------------------- -------------- -------------
<S>                 <C> <C>                         <C>        <C>          <C>           <C>              <C>             <C>
Balance at December 31, 2004          -       -      3,767     $377         $ -           $13,839          $ (7,955)       $ 6,261

Dividends paid, $79.80 per
share                                 -       -          -        -           -              (301)                  -         (301)

Comprehensive income:

Net income                            -       -          -        -           -             1,727                 -          1,727

Unrealized loss on
available-for-sale
securities, net                       -       -          -        -           -                 -                (8)           (8)

Additional minimum pension
liability, net of tax of
$2,498,735                            -       -          -        -           -                 -            (3,748)       (3,748)

Additional minimum pension
liability, investment in
affiliate                             -       -          -        -           -                 -              (544)         (544)
                                                                                                                     -------------

Total comprehensive (loss)            -       -          -        -           -                 -                  -       (2,573)
                              ---------- ------- --------- --------- ----------- -----------------     -------------- -------------

Balance at December 31, 2005          -       -      3,767      377           -            15,265           (12,255)         3,387

Dividends paid, $79.80 per
share                                 -       -          -        -           -              (301)                  -         (301)

Comprehensive income:

Net income, as restated               -       -          -        -           -             1,825                  -         1,825

Minimum pension liability
adjustment                            -       -          -        -           -                 -             12,255        12,255

Unrealized gain on
available-for-sale
securities, net                       -       -          -        -           -                 -                428           428
                                                                                                                     -------------

Total comprehensive income            -       -          -        -           -                 -                  -        14,508
                              ---------- ------- --------- --------- ----------- -----------------     -------------- -------------

Balance at December 31, 2006          -       -      3,767      377           -            16,789                428        17,594

Dividends paid, $39.82 per
share                                 -       -          -        -           -             (150)                  -         (150)

Shares issued in connection
with merger                           -       - 10,000,361        1         (1)                 -                  -             -

Recapitalization of company           -       -     (3,767)    (377)      96,417                 -                  -        96,040

Buy back of shares due to
appraisal rights                      -       -   (303,480)       -     (1,786)                 -                  -       (1,786)

Dividends paid, $0.05 per
share                                 -       -          -        -           -             (485)                  -         (485)

Earnings & profits
distribution paid, $0.11
per share                             -       -          -        -           -           (1,067)                  -       (1,067)

Earnings & profits
distribution paid, $0.105
per share                             -       -          -        -           -           (1,415)                  -       (1,415)

Distribution of historical
earnings & profits, $11.14
per share                             -       -  3,775,400        -      42,057          (62,057)                  -      (20,000)

Comprehensive income:

Net income                            -       -          -        -           -             5,400                  -         5,400

Unrealized gain on
available-for-sale
securities, net                       -       -          -        -           -                 -                 82            82
                                                                                                                      -------------

Total comprehensive income            -       -          -        -           -                 -                  -         5,482
                              ---------- ------- --------- --------- ----------- -----------------     -------------- -------------
Balance at December 31, 2007          -   $   - 13,472,281    $   1   $ 136,687         $(42,985)             $  510     $  94,213
                              ========== ======= ========= ========= =========== =================     ============== =============
</TABLE>


     The  accompanying  notes  and  report  of  independent   registered  public
accounting firm should be read in conjunction  with the  consolidated  financial
statements.


                                       F-4
<PAGE>

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

<TABLE>
<CAPTION>

                                                                                    Year Ended December 31,
                                                                     --------------------------------------------------------
                                                                          2007              2006                2005
                                                                     --------------    ----------------     -----------------
                                                                                         (Restated)
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                           <C>      <C>                  <C>

Net income                                                            $       5,400    $          1,825     $          1,727

Loss from discontinued operation                                                324                (274)              (1,338)
                                                                     --------------    ----------------     -----------------
Income from continuing operations                                             5,724               1,551                  389

Adjustments to reconcile net income to net cash used in operating
activities

Cash provided by (used in) operating activities:

    Provisions for deferred taxes                                               242                (117)                 203

    Changes in insurance reserves                                            (1,382)                  -                    -

    Provisions for injuries and damages claims                                    -              (2,470)              (1,481)

    Equity in earnings of affiliated companies, net of tax                      (60)                501               (1,390)

    Depreciation and amortization                                               566                 281                  317

    Unrealized gain (loss) on available for sale securities                      60                (428)                   8

    Other                                                                        71                   -                    -

    Amortization of deferred charges                                            148

Changes in operating assets and liabilities:

  Operating subsidies receivable-injuries and damages withholding             3,184               4,792                  463

  Accounts receivable                                                        (1,909)                  -                    -

  Other receivables                                                               -                 (31)                (120)

  Due to (from) affiliates, net                                              (1,535)                610                  (46)

  Prepaid expenses and other assets                                             852                (216)                 724

  Deferred charges                                                                -              (1,220)                   -

  Accounts payable and accrued expenses                                         298              (3,036)                 311

  Income taxes payable                                                       (5,890)              3,912                  316

  Other liabilities                                                            (324)             (1,138)               3,217

Net cash used in discontinued operation                                        (324)             (5,610)              (4,757)
                                                                     --------------    ----------------     -----------------
Net cash used in operating activities                                          (279)             (2,619)              (1,846)
                                                                     --------------    ----------------     -----------------
Investing activities:

  Cash acquired in merger                                                     8,670                   -                   -

  Purchases of property and equipment                                          (637)                  -                   (3)
  Due from affiliates                                                             -                   -                   12

  Purchase of investments                                                      (374)                (50)                 (41)

  Proceeds from sale of investments                                             970                 335                   -

  Reclassification from cash to investments                                  (1,458)                  -                   -

  Restricted cash                                                               786                   -                   -

  Proceeds from sale of discontinued operation                                    -              11,143                   -
                                                                     --------------    ----------------     -----------------
Net cash provided by (used in)  investing activities                          7,957              11,427                 (32)
Financing activities:
  Proceeds from revolving credit facility                                    20,000                   -                   -
  Principal repayments on notes payable, bank                                (2,086)                  -               2,400
  Payment of deferred financing costs                                          (608)                  -                   -
  Buy back of common stock                                                   (1,787)                  -              (2,400)
  Dividends paid                                                             (1,702)               (300)               (301)
  E&P Distribution                                                          (19,094)                  -                   -
                                                                     --------------    ----------------     -----------------
Net cash used in financing activities                                        (5,277)               (300)               (301)
                                                                     --------------    ----------------     -----------------
Net increase (decrease) in cash and cash equivalents                          2,401               8,508              (2,179)
                                                                     --------------    ----------------     -----------------
Cash and cash equivalents at the beginning of year                            9,519               1,011               3,190
                                                                     --------------    ----------------     -----------------
Cash and cash equivalents at the end of year                         $       11,920    $          9,519    $          1,011
                                                                     ==============    ================    ==================
Supplemental cash flow information:

Interest paid                                                        $          685    $             12   $               3
                                                                     ==============    ================    ==================
Cash paid for taxes                                                  $        6,056    $            238    $            224
                                                                     ==============    ================    ==================

</TABLE>

     The  accompanying  notes  and  report  of  independent   registered  public
accounting firm should be read in conjunction  with the  consolidated  financial
statements.



                                       F-5
<PAGE>

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

Supplemental non-cash investing activities-Merger with Triboro

<TABLE>
<CAPTION>
                                                                                          Years Ended December 31,
                                                                      ---------------------------------------------------
                                                                           2007               2006              2005
                                                                      ---------------    --------------- -- -------------
<S>                                                                         <C>                    <C>              <C>
Cash and cash equivalents                                                   $  4,559               $  -             $  -
Operating subsidies receivables                                                1,752                  -                -
Deferred leasing commissions                                                     782                  -                -
Other assets, net                                                              1,512                  -                -
Securities available for sale                                                  1,362                  -                -
Property and equipment                                                        39,400                  -                -
Income tax payable                                                              (294)                 -                -
Other liabilities, net                                                          (629)                 -                -

Fair value of real property through its ownership interest in GTJ             15,638                  -                -
Fair value of operating assets and liabilities through its                                            -                -
ownership interest in GTJ                                                      2,320
                                                                      ---------------    ---------------    -------------

Total purchase price in common stock                                        $ 66,402               $  -             $  -
                                                                      ===============    ===============    =============

Supplemental non-cash investing activities-Merger with Jamaica

                                                                                         Years Ended December 31,
                                                                      ---------------------------------------------------
                                                                           2007               2006              2005
                                                                      ---------------    --------------- -- -------------
Cash and cash equivalents                                                   $    190                 $ -             $  -
Operating subsidies receivables                                                  941                   -                -
Other assets, net                                                                964                   -                -
Securities available for sale                                                    440                   -                -
Property and equipment                                                        23,100                   -                -
Income tax payable                                                              (157)                  -                -
Other liabilities, net                                                          (422)                  -                -

Fair value of real property through its ownership interest in GTJ              7,819                   -                -
Fair value of operating assets and liabilities through its
ownership interest in GTJ                                                      1,160                   -                -
                                                                    ----------------     ---------------    -------------

Total purchase price in common stock                                        $34,035                 $  -             $  -
                                                                    ================     ===============    =============

</TABLE>

     The  accompanying  notes  and  report  of  independent   registered  public
accounting firm should be read in conjunction  with the  consolidated  financial
statements.



                                       F-6
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

     Description of Business

     GTJ REIT,  Inc. (the "Company" or "GTJ REIT") was  incorporated in Maryland
on June 23, 2006 as a blank check company and was formed to engage in any lawful
act or activity  including,  without  limitation or obligation,  qualifying as a
real estate  investment  trust under  Sections 856 through 860, or any successor
sections of the Internal  Revenue Code of 1986,  as amended  (the  "Code"),  for
which corporations may be organized under Maryland General  Corporation Law. The
Company has focused primarily on the ownership and management of commercial real
estate  primarily  located in New York City.  The Company,  through its non-REIT
subsidiaries  provides outdoor  maintenance and shelter  cleaning  operations to
outdoor advertising companies in New York, New Jersey, Arizona and California.

     At March 29, 2007, the Company commenced  operations upon the completion of
the Reorganization  described below. Effective July 1, 2007, the Company elected
REIT  status.  The  Company  has  selected  December  31 as its fiscal year end.
Additionally,  in connection with the Tax Relief  Extension Act of 1999 ("RMA"),
the  Company is  permitted  to  participate  in  activities  outside  the normal
operations  of the REIT so long as these  activities  are  conducted in entities
which elect to be treated as taxable  subsidiaries  under the  Internal  Revenue
Code, as amended (the "Code"), subject to certain limitations.

     At December 31, 2007, the Company owned six  properties  containing a total
of approximately 453,000 square feet of leasable area.  See Note 19.

     Reorganization

     On  July  24,  2006,  the  Company  entered  into  merger   agreements  and
subsequently  closed on March 29, 2007 into merger agreements (the "Agreements")
with by and among  TRIBORO  COACH  CORP.,  a New York  corporation  ("Triboro");
JAMAICA CENTRAL RAILWAYS,  INC., a New York corporation  ("Jamaica");  GREEN BUS
LINES,  INC., a New York  corporation  ("Green"  and  together  with Triboro and
Jamaica, collectively referred to as the "Bus Companies" and each referred to as
a "Bus Company");  GTJ REIT, TRIBORO  ACQUISITION,  INC., a New York corporation
("Triboro  Acquisition");  JAMAICA  ACQUISITION,  INC.,  a New York  corporation
("Jamaica  Acquisition");  and GREEN  ACQUISITION,  INC., a New York corporation
("Green   Acquisition,"  and  together  with  Jamaica  Acquisition  and  Triboro
Acquisition collectively referred to as the "Acquisition  Subsidiaries" and each
referred  to as an  "Acquisition  Subsidiary").  The effect of the mergers is to
complete a Reorganization ("Reorganization") into the Company.

     Under the terms of the  Agreements,  each share of common stock of each Bus
Company issued and outstanding shares immediately prior to the effective time of
the mergers, was converted into the right to receive the following shares of the
Company's common stock:





                                       F-7
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

          o    Each share of Green common stock was converted into  1,117.429975
               shares of the Company's common stock.

          o    Each  share  of  Triboro   common   stock  was   converted   into
               2,997.964137 shares of the Company's common stock.

          o    Each share of Jamaica common stock was converted into  195.001987
               shares of the Company's common stock.

     The  Bus  Companies,  including  their  subsidiaries,  own a  total  of six
rentable parcels of real property at December 31, 2007, four of which are leased
to the City of New York ("City"),  one of which is leased to a commercial tenant
(all five on a triple  net  basis),  and one of which is used in part by the Bus
Companies'  existing  operations  and the  remainder  of  which is  leased  to a
commercial tenant, not on a triple net basis. There is an additional property of
negligible  size which is not  rentable.  Prior to the  Reorganization,  the Bus
Companies  and their  subsidiaries,  collectively,  operated  a group of outdoor
maintenance  businesses and a paratransit business,  which have been acquired as
part of the merger.

     On July 1,  2007,  the  Company  adopted  a Real  Estate  Investment  Trust
("REIT")  structure.  In order to adopt a REIT  structure,  it was  necessary to
combine the Bus Companies and their subsidiaries under a single holding company,
the "Reorganization." The Company is the holding company. The Company has formed
three  wholly-owned  New York  corporations and each of the Bus Companies merged
with  one of these  subsidiaries  to  become  wholly-owned  subsidiaries  of the
Company.  The mergers  required the approval of the holders of at least 66 2/3 %
of the outstanding shares of common stock of each of Green, Triboro and Jamaica,
voting separately and not as one class, which was obtained on March 26, 2007.

     Based on third-party  valuations of the real property,  outdoor maintenance
businesses,  and the paratransit business,  and considering the ownership of the
same in whole or part by each of the Bus Companies, the Company has been advised
by an outside  appraisal  firm that the  relative  valuation  of each of the Bus
Companies (as part of GTJ REIT, Inc.) is  Green--42.088%,  Triboro--38.287%  and
Jamaica--19.625%.  Accordingly,  under the Reorganization,  10,000,361(including
361  fractional  shares)  shares of the Company  common stock were  distributed.
4,208,800  shares  to  the  shareholders  of  Green,  3,828,700  shares  to  the
shareholders of Triboro and 1,962,500 shares to the shareholders of Jamaica,  in
such case in proportion to the outstanding  shares held by such  shareholders of
each Bus Company, respectively.

     As  part  of  becoming  a  REIT,  the  Company  was  required,   after  the
Reorganization,  to  make  a  distribution  of  the  Bus  Companies'  historical
undistributed  earnings and profits,  calculated to be an estimated  $62,060,000
(see Note 9). The Company distributed  $20,000,000 in cash, and 3,775,400 shares
of the Company's common stock, valued at $11.14 per share calculated as follows:


                                       F-8
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

        Total Value of the Bus Companies                    $    173,431,797
        Assumed E&P--Cash distribution                            20,000,000
                                                            -----------------

        Total value after cash distribution                      153,431,797
        Assumed E&P--Stock distribution                           42,000,000
                                                            -----------------

        Total value after stock distribution                $    111,431,797
                                                            =================

        Reorganization shares                                     10,000,000
        Share Value Post Earnings and Profits               $        11.14
                                                            ==================

     The   Reorganization  was  accounted  for  under  the  purchase  method  of
accounting  as required by Statement of Financial  Accounting  Standards No. 141
"Business  Combinations",  ("SFAS No. 141") issued by the  Financial  Accounting
Standards  Board.  Since GTJ REIT has been formed to issue  equity  interests to
effect a business combination,  as required by SFAS No. 141, one of the existing
combining  entities was required to be determined  the acquiring  entity.  Under
SFAS No. 141, the  acquiring  entity is the  combining  entity whose owners as a
group  retained  or  received  the larger  portion  of the voting  rights in the
combined entity. As a result of the  Reorganization,  Green  stockholders have a
42.088% voting interest,  Triboro  shareholders  have a 38.287% voting interest,
and Jamaica  shareholders  have a 19.625% voting interest.  Additionally,  under
SFAS No. 141, in determining the acquiring  entity,  consideration  was given to
which  combining  entity  initiated  the  combination  and  whether  the assets,
revenues,  and earnings of one of the combining  entities  significantly  exceed
those of the others.

     Each  stockholder  elected a combination of cash and stock,  or exclusively
cash or stock.  If more than  $20,000,000  of cash was elected in the  aggregate
cash distributed to each  stockholder  electing to receive some or all of his or
her  distribution  in cash  was to be  reduced  such  that  the  aggregate  cash
distribution will total $20,000,000, and the balance of the distribution to each
such  stockholder  will be made  in the  Company's  common  stock.  The  Company
distributed  $19,093,564  in cash and 3,775,399  shares of common stock (with an
approximate value of $42,060,000). The remaining balance of $906,436 is included
in other  liabilities  in the  consolidated  balance sheet at December 31, 2007.
Green's assets at December 31, 2006 total $23.9 million as compared to Triboro's
assets of $19.4  million,  and Jamaica's  assets of $10.2  million,  and Green's
revenues  on a going  forward  basis are  expected to exceed that of Triboro and
Jamaica.  As a result  of these  facts,  Green was  deemed to be the  accounting
acquirer for this  transaction  and the historical  financial  statements of the
newly formed Company are those of Green.


                                       F-9
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

     Under the purchase method of accounting, Triboro's and Jamaica's assets and
liabilities  were  acquired by Green and have been recorded at their fair value.
Accordingly, under the Reorganization, 10,000,000 shares of the Company's common
stock were distributed, 4,208,800 shares to the shareholders of Green, 3,828,700
shares to the  shareholders of Triboro and 1,962,500  shares to the shareholders
of Jamaica,  in such case in proportion to the  outstanding  shares held by such
shareholders of each Bus Company, respectively.

     The following  table  summarizes the fair values of the assets acquired and
liabilities  assumed at the date of  acquisition.  The fair  values are based on
third-party valuations.  The fair value of net assets acquired for the remaining
interest in GTJ, not previously owned by Green, exceeded the total consideration
for  the  acquisition  by  approximately  $5,957,000  (of  which  an  additional
adjustment  of  $1,077,000  was recorded at December 31, 2007 to adjust  certain
acquired deferred tax  liabilities),  also resulting in negative  goodwill.  The
excess  (negative  goodwill)  was  allocated  on a pro rata basis to  long-lived
assets.

     The following table  summarizes the allocation of the purchase price in the
form of a condensed  balance sheet  reflecting  the estimated fair values (after
the allocation of negative goodwill) of the amounts assigned to each major asset
and liability  caption of the acquired  entities at the date of acquisition  (in
thousands):

<TABLE>
<CAPTION>
                                                Triboro           Jamaica            Total
                                           ----------------- -----------------------------------
<S>                                        <C>               <C>               <C>
Issuance of stock                          $         66,402  $          34,035 $        100,437
                                           ----------------- -----------------------------------

Cash and cash equivalents                             6,126                974            7,100
Restricted cash                                       1,275                637            1,912
Accounts receivable                                   2,627              1,314            3,941
Operating subsidies receivables                       1,752                941            2,693
Deferred leasing commissions                            782                  -              782
Other assets                                          2,682              1,549            4,231
Securities available for sale                         1,668                593            2,261
Real property and equipment                          55,038             30,919           85,957
Machinery and equipment                                 149                 75              224
                                           ----------------- -----------------------------------

Total assets                               $         72,099  $          37,002 $        109,101
                                           ----------------- -----------------------------------

Accounts payable and accrued  expenses                  741                371            1,112
Revolving Credit                                        168                 84              252
Note payable                                            666                333              999
Income tax payable                                      294                157              451
Deferred tax liability                                  248                124              372
Unpaid losses and loss adjustment expenses            1,736                868            2,604
Other liabilities                                     1,844              1,030            2,874
                                           ----------------- -----------------------------------

Total liabilities                          $          5,697  $           2,967 $          8,664
                                           ----------------- -----------------------------------

Fair value of net assets acquired          $         66,402  $          34,035 $        100,437
                                           ================= ===================================
</TABLE>



                                       F-10
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

     The results of operations for Triboro,  Jamaica and GTJ for the period from
March 29, 2007 to March 31, 2007, are not reflected in the Company's results for
the year ended December 31, 2007 in the accompanying  consolidated statements of
income as the results were deemed to be immaterial.

     Unaudited Pro-Forma Financial Information

     The  following  presents  the  unaudited   pro-forma  combined  results  of
operations of the Company with Green, Jamaica,  Triboro and GTJ included for the
periods  preceding the merger on March 29, 2007 (in thousands,  except per share
data).

<TABLE>
<CAPTION>
                                                                 For the Years Ended December 31,

------------------------------------------------------------------------------------------------
                                                                    2007            2006
------------------------------------------------------------------------------------------------

<S>                                                             <C>              <C>
Revenues                                                        $       54,081   $     43,172
                                                               ================ ==============
Net income (loss) from continuing
operations                                                      $        6,705   $      1,169
                                                               ================ ==============
Net income (1)                                                  $        6,291   $      9,400
                                                               ================ ==============

Pro-forma basic and diluted
   net income per common share                                  $         0.59   $       0.94
                                                               ================ ==============

Pro-forma weighted average
   common shares outstanding
   - basic and diluted                                              10,593,109     10,000,361
                                                               ===============  =============
</TABLE>

(1)  Net income for the years ended  December 31, 2007 and 2006 includes  (loss)
     income  from  discontinued  operation,  net  of  taxes  of  $(452,000)  and
     $8,231,000, respectively.


     The pro  forma  combined  results  are not  necessarily  indicative  of the
results that actually would have occurred if the mergers of Triboro, Jamaica and
GTJ had  been  completed  as of the  beginning  of 2007 or  2006,  nor are  they
necessarily indicative of future consolidated results.

     Prior to the  Reorganization,  Green operated franchised transit bus routes
in the City of New York  pursuant to an  operating  authority  which  expired on
April 30, 2005,  and an  Operating  Assistance  Agreement  ("OAA") with the City
which   expired  on  September   30,  1997,   Green  and  the  City,  by  mutual
understanding,  continued  to  abide  by the  terms  of  the  OAA.  Funding  for
continuation of operations of the Company's  franchised  transit bus routes were
dependent  upon  the  continuation  of its  operating  authority  and  operating
assistance relationship with the City (see Note 3).


                                       F-11
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

Principles of Consolidation

     The  consolidated  financial  statements  include the accounts of GTJ REIT,
Inc.,  and  its  wholly  owned  subsidiaries.   All  intercompany  accounts  and
transactions  have been  eliminated.  The  Company has  included  the results of
operations of acquired companies from the closing date of the acquisition. Since
the  operating  cycle of real  estate  companies  tends to exceed one year,  the
Company has presented an unclassified balance sheet.

Reclassifications:

     Certain  prior  period  amounts  have been  reclassified  to conform to the
current year presentation.

Use of Estimates:

     The  preparation  of the  Company's  consolidated  financial  statements in
conformity with generally accepted accounting principles in the United States of
America  ("GAAP")   requires   management  to  make  estimates,   judgments  and
assumptions that affect the reported amounts of assets and liabilities, revenues
and expenses and related  disclosure of contingent assets and liabilities at the
date of the consolidated  financial statements.  The Company bases its estimates
on historical  experience and on various other  assumptions that are believed to
be reasonable under the  circumstances,  the results of which form the basis for
making  judgments about the carrying  values of assets and liabilities  that are
not readily  apparent from other  sources.  Actual results may differ from these
estimates  under  different  assumptions  or conditions.  Significant  estimates
include those related to uncollectible receivables, the usefulness of long lived
assets   including   property  and  equipment,   income  taxes,   contingencies,
environmental matters and insurance liabilities.

Real Estate Investments:

     Real estate assets are stated at cost, less  accumulated  depreciation  and
amortization. All capitalizable costs related to the improvement or replacements
of  real  estate   properties  are  capitalized.   Additions,   renovations  and
improvements  that enhance  and/or extend the useful life of a property are also
capitalized.  Expenditures  for ordinary  maintenance,  repairs and improvements
that do not materially prolong the normal useful life of an asset are charged to
operations as incurred.


                                       F-12
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

     Upon the acquisition of real estate properties,  the fair value of the real
estate  purchased is allocated to the acquired  tangible  assets  (consisting of
land, buildings and buildings improvements) and identified intangible assets and
liabilities  (consisting of above-market  and  below-market  leases and in-place
leases) in accordance with SFAS No. 141,  "Business  Combinations."  The Company
utilizes  methods similar to those used by independent  appraisers in estimating
the  fair  value of  acquired  assets  and  liabilities.  The fair  value of the
tangible  assets of an acquired  property  considers  the value of the  property
"as-if-vacant." The fair value reflects the depreciated  replacement cost of the
asset.  In  allocating  purchase  price  to  identified  intangible  assets  and
liabilities of an acquired property,  the value of above-market and below-market
leases are estimated  based on the differences  between (i) contractual  rentals
and the estimated market rents over the applicable lease term discounted back to
the date of  acquisition  utilizing a discount rate adjusted for the credit risk
associated with the respective  tenants and (ii) the estimated cost of acquiring
such  leases  giving  effect  to  the  Company's  history  of  providing  tenant
improvements and paying leasing  commissions,  offset by a vacancy period during
which such space would be leased.  The  aggregate  value of  in-place  leases is
measured  by the excess of (i) the  purchase  price  paid for a  property  after
adjusting  existing  in-place  leases  to  market  rental  rates  over  (ii) the
estimated  fair value of the property  "as-if-vacant,"  determined  as set forth
above.

     Above and below  market  leases  acquired are recorded at their fair value.
The capitalized above-market lease values are amortized as a reduction of rental
revenue over the remaining  term of the  respective  leases and the  capitalized
below-market  lease values are  amortized as an increase to rental  revenue over
the remaining term of the  respective  leases.  The value of in-place  leases is
based  on the  Company's  evaluation  of the  specific  characteristics  of each
tenant's lease.  Factors  considered  include estimates of carrying costs during
expected  lease-up  periods,  current  market  conditions,  and costs to execute
similar  leases.  The value of in-place  leases are amortized over the remaining
term of the  respective  leases.  If a tenant  vacates  its  space  prior to its
contractual  expiration date, any unamortized  balance of the related intangible
asset is expensed.

Depreciation and Amortization:

     The  Company   uses  the   straight-line   method  for   depreciation   and
amortization.  Properties are depreciated over the estimated useful lives of the
properties,  which  range  from  10  to  25  years.  Property  improvements  are
depreciated  over the  estimated  useful  lives  that range from 10 to 25 years.
Furniture and fixtures,  equipment,  and  transportion  equipment is depreciated
over  the  estimated  useful  lives  that  range  from  8 to  25  years.  Tenant
improvements are amortized over the shorter of the life of the related leases or
their useful life.


                                       F-13
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

Deferred Charges:

     Deferred  charges  consist  principally of leasing  commissions  (which are
amortized  ratably over the life of the tenant leases) and financing fees (which
are amortized over the terms of the respective agreements).  Deferred charges in
the  accompanying  consolidated  balance  sheets  are  shown  at  cost,  net  of
accumulated  amortization  of $2,462,000  and $1,221,000 as of December 31, 2007
and 2006, respectively.

Asset Impairment:

     The  Company  applies  SFAS No.  144,  "Accounting  for the  Impairment  or
Disposal of Long-Lived Assets" ("SFAS 144"), to recognize and measure impairment
of  long-lived  assets.  Management  reviews  each real  estate  investment  for
impairment whenever events or circumstances  indicate that the carrying value of
a real estate investment may not be recoverable. The review of recoverability is
based on an estimate  of the future cash flows that are  expected to result from
the real  estate  investment's  use and  eventual  disposition.  Such  cash flow
analysis  include factors such as expected future operating  income,  trends and
prospects,  as well as the  effects of  leasing  demand,  competition  and other
factors. If an impairment event exists due to the projected inability to recover
the carrying value of a real estate  investment,  an impairment loss is recorded
to the extent that the carrying value exceeds  estimated fair value.  Management
is required to make  subjective  assessments as to whether there are impairments
in the value of its real  estate  properties.  These  assessments  have a direct
impact on net income,  because an  impairment  loss is  recognized in the period
that the assessment is made.

     When  impairment   indicators  were  present,   investments  in  affiliated
companies  were reviewed for  impairment by comparing  their fair value to their
respective  carrying  amounts.  The Company  made its  estimate of fair value by
considering  certain factors including  discontinued cash flow analyses.  If the
fair value of the investment had dropped below the carrying  amount,  management
considered several factors when determining whether other-than-temporary decline
in market value had occurred, including the length of the time and the extent to
which the fair value had been below cost, the financial  condition and near-term
prospects of the  affiliated  company,  and other factors  influencing  the fair
market value, such as general market conditions.

Reportable Segments:

     The Company operates in four reportable  segments:  Real Estate Operations,
Outside Maintenance and Shelter Cleaning Operations,  Insurance Operations,  and
Paratransit Operations, all of which are conducted throughout the U.S., with the
exception of the Insurance Operations which are conducted in the Cayman Islands.



                                       F-14
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

     o    Real Estate  Operations rents Company owned real estate located in New
          York.

     o    Outside  Maintenance and Shelter Cleaning  Operations  provide outside
          maintenance  and  shelter  cleaning  services  to outdoor  advertising
          companies in New York, New Jersey, Arizona and California.

     o    Insurance  Operations  assumes  reinsurance of worker's  compensation,
          vehicle  liability  and  covenant  liability  of the  Company  and its
          affiliated  Companies from an unrelated insurance company based in the
          United States of America.

     o    Paratransit  Operations  provide  paratransit  service in New York for
          physically  and  mentally  challenged  persons  who are  unable to use
          standard public transportation (see Note 19).

Revenue Recognition--Real Estate Operations:

     The Company  recognizes  revenue in accordance  with Statement of Financial
Accounting Standards No.  13,"Accounting for Leases" ("SFAS No. 13), as amended.
SFAS No. 13 requires that revenue be recognized  on a  straight-line  basis over
the term of the lease  unless  another  systematic  and  rational  basis is more
representative  of the time pattern in which the use benefit is derived from the
leased  property.   In  those  instances  in  which  the  Company  funds  tenant
improvements and the improvements are deemed to be owned by the Company, revenue
recognition will commence when the improvements are substantially  completed and
possession  or  control  of the space is  turned  over to the  tenant.  When the
Company determines that the tenant allowances are lease incentives,  the Company
commences revenue  recognition when possession or control of the space is turned
over to the tenant for tenant work to begin.  The properties are being leased to
tenants  under  operating  leases.  Minimum  rental  income is  recognized  on a
straight-line  basis  over the term of the  lease.  The  excess  of  amounts  so
recognized  over  amounts due  pursuant  to the  underlying  leases  amounted to
approximately $2,524,000 at December 31, 2007.

     Property   operating  expense   recoveries  from  tenants  of  common  area
maintenance,  real  estate and other  recoverable  costs are  recognized  in the
period the related expenses are incurred.

Revenue Recognition--Outside Maintenance and Shelter Cleaning Operations:

     Cleaning and  maintenance  revenue is  recognized  upon  completion  of the
related service.

Revenue Recognition--Insurance Operations:

     Premiums  are  recognized  as  revenue  on a pro rata basis over the policy
term. The portion of premiums that will be earned in the future are deferred and
reported as unearned premiums.


                                       F-15
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

Revenue Recognition--Paratransit Operations:

     Paratransit  and operations are recognized  upon  completion of the related
transportation service.

Earnings Per Share Information:

     In accordance with SFAS No. 128,  "Earnings Per Share",  basic earnings per
common share  ("Basic EPS") is computed by dividing the net income (loss) by the
weighted-average  number of common  shares  outstanding.  Diluted  earnings  per
common  share  ("Diluted  EPS")  are  computed  by  dividing  net  income by the
weighted-average  number of common shares and dilutive common share  equivalents
and  convertible  securities  then  outstanding.  There  were  no  common  stock
equivalents  for any of the  periods  presented  in the  Company's  consolidated
statements of operations

     The  following  table sets forth the  computation  of basic and diluted per
share information (in thousands, except share and per share data):

<TABLE>
<CAPTION>

                                                                      Year Ended December 31,
  Numerator:                                                    2007            2006           2005
                                                                             (Restated)
                                                              ------------  -------------    -----------
<S>                                                           <C>           <C>               <C>
  Net income                                                  $    5,400    $      1,825      $    1,727
  Denominator:                                                ============  =============     ==========
  Weighted average common shares outstanding-basic and
  diluted                                                      8,126,995        3,766.50        3,766.50
  Basic and Diluted Per Share Information:                    ============  =============     ==========
  Net income per share--basic and diluted                     $     0.66       $  484.53      $   458.51
                                                              ============  =============     ==========
</TABLE>


Discontinued Operations:

     The consolidated financial statements of the Company present the operations
of Green's Bus operations as discontinued operations in accordance with SFAS No.
144.

Cash and Cash Equivalents:

     The  Company   considers  all  highly  liquid   investments  with  original
maturities  of  three  months  or  less  at the  date  of  purchase  to be  cash
equivalents.


                                       F-16
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

Restricted Cash:

     Restricted  cash  includes  certain  certificates  of deposit  amounting to
$451,000  at  December  31,  2007 and  2006  that are on  deposit  with  various
government  agencies as  collateral  to meet  statutory  self-insurance  funding
requirements.  In addition,  at December 31, 2007, AIG held $2,400,759 on behalf
of the  Company  that was  restricted  by AIG for the  purpose of the payment of
insurance losses.

Accounts Receivable:

     Accounts  receivable consist of trade receivables  recorded at the original
invoice amount,  less an estimated  allowance for  uncollectible  accounts.  The
Company has a contract with the City of New York which requires retainage in the
amount of  $586,792  as of  December  31,  2007 which is  included  in  accounts
receivable  in the  accompanying  consolidated  balance  sheet.  Trade credit is
generally  extended on a short-term basis;  thus trade receivables  generally do
not  bear  interest.   Trade   receivables   are   periodically   evaluated  for
collectibility  based on past credit  histories with customers and their current
financial   condition.   Changes  in  the  estimated   collectability  of  trade
receivables  are recorded in the results of  operations  for the period in which
the estimate is revised.  Trade  receivables that are deemed  uncollectible  are
offset against the allowance for uncollectible  accounts.  The Company generally
does not require collateral for trade receivables.

Available for Sale Securities:

     The Company  accounts for its available  for sale  securities in accordance
with SFAS No.  115,  "Accounting  for  Certain  Investments  in Debt and  Equity
Securities."  Management  determines  the  appropriate  classification  of  debt
securities at the time of purchase and reevaluates  such  designation as of each
balance  sheet date.  Debt  securities  are  classified  as  available-for-sale.
Available-for-sale  securities  are carried at fair value,  with the  unrealized
gains and losses, net of tax, reported in accumulated other comprehensive income
(loss), a component of stockholders' equity.  Interest on securities is included
in interest income. Realized gains and losses and declines in value judged to be
other-than-temporary  on  available-for-sale  securities  are  included  in  the
accompanying  consolidated  statement of income.  The cost of securities sold is
based on the specific identification method.  Estimated fair value is determined
based on market quotes.


                                       F-17
<PAGE>

                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

     The following is a summary of available for sale securities at December 31,
2007 and 2006 (in thousands):

<TABLE>
<CAPTION>

                                                              Available-for-Sale Securities
                                                  ------------------------------------------------------

                                                                  Gross         Gross
                                                                Unrealized    Unrealized     Estimated
                                                     Cost         Gains         Losses       Fair Value
                                                  -----------   -----------   -----------    -----------

December 31, 2007


<S>                                             <C>            <C>           <C>           <C>
Equity securities                               $          -   $       468   $         -   $        468

Money market fund                                      1,439            19             -          1,458

U.S. Treasury/U.S. Government debt                     2,888            21          (20)          2,889
securities
                                                  -----------   -----------   -----------    -----------


Total available-for-sale securities             $      4,327   $       508   $      (20)    $     4,815
                                                  ===========   ===========   ===========    ===========


                                                              Available-for-Sale Securities
                                                  ------------------------------------------------------

                                                                  Gross         Gross
                                                                Unrealized    Unrealized     Estimated
                                                     Cost         Gains         Losses       Fair Value
                                                  -----------   -----------   -----------    -----------

December 31, 2006


Equity securities                               $          -  $        448  $          -    $        448

U.S. Treasury/U.S. Government debt                       791             -          (20)             771
securities
                                                  -----------   -----------   -----------    -----------


Total available-for-sale securities             $        791  $        448  $       (20)    $      1,219
                                                  ===========   ===========   ===========    ===========
</TABLE>


     Other  comprehensive  income for the years ended December 31, 2007 and 2006
includes  unrealized  holding  gains  of  approximately  $82,000  and  $428,000,
respectively.

Income Taxes:

     Effective July 1, 2007, the Company has elected to be taxed as a REIT under
the Internal  Revenue Code of 1986,  as amended (the "Code").  Accordingly,  the
Company will generally not be subject to federal income taxation on that portion
of its income  that  qualifies  as REIT  taxable  income,  to the extent that it
distributes at least 90% of its taxable income to its  shareholders and complies
with certain other  requirements as defined under Section 856 through 860 of the
Code. The Company has eliminated deferred tax assets and liabilities aggregating
approximately  $575,377 and  $306,905,  which are included in the  provision for
income taxes in the accompanying  consolidated  statement of income for the year
ended December 31, 2007 (see Note 12).

     In  connection  with the RMA, the Company is permitted  to  participate  in
certain  activities so long as these  activities are conducted in entities which
elected  to be  treated  as  taxable  subsidiaries  under the Code.  As such the
Company is subject to  federal,  state and local  taxes on the income from these
activities.  The Company accounts for income taxes under the asset and liability


                                       F-18
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):


method,  as required by the provisions of SFAS No. 109,  "Accounting  for Income
Taxes." Under this method,  deferred tax assets and  liabilities  are determined
based on  differences  between  financial  reporting and tax bases of assets and
liabilities  and are measured  using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse.

     The Company  provides a valuation  allowance  for  deferred  tax assets for
which it does not  consider  realization  of such  assets to be more likely than
not.

Comprehensive Income:

     The  Company   follows  the   provisions   of  SFAS  No.  130,   "Reporting
Comprehensive  Income"  ("SFAS No. 130").  SFAS No. 130 sets forth rules for the
reporting and display of comprehensive  income and its components.  SFAS No. 130
requires  unrealized  gains  or  losses  on  the  Company's   available-for-sale
securities  to be  included  in  comprehensive  income,  net of  taxes  and as a
component of stockholders' equity.

Environmental Matters:

     Accruals for environmental  matters are recorded when it is probable that a
liability  has been  incurred and the amount of the  liability can be reasonably
estimated,  based on current law and existing  technologies.  These accruals are
adjusted  periodically  as assessment  and  remediation  efforts  progress or as
additional technical or legal information become available.

     Environmental  costs are  capitalized  if the costs  extend the life of the
property,  increase its capacity,  and/or mitigate or prevent contamination from
future  operations.  Environmental  costs are also capitalized in recognition of
legal asset retirement obligations resulting from the acquisition,  construction
and/or  normal  operation  of a  long-lived  asset.  Costs  related to  remedial
investigation and feasibility studies, environmental contamination treatment and
cleanup  are  charged  to  expense.  Estimated  future  incremental  operations,
maintenance  and management  costs directly  related to remediation  are accrued
when such costs are probable and estimable (see Notes 7 and 13).

Insurance Liabilities:

     The liability for losses and  loss-adjustment  expenses  includes an amount
for  claims  reported  and a  provision  for  adverse  claims  development.  The
liability for claims reported is based on the advice of an independent attorney,
while the liability for adverse  claims  development  is based on the director's
best estimates.  Such liabilities are necessarily  based on estimates and, while
the directors  believe that the amounts are adequate,  the ultimate  liabilities
may be in excess  of or less  than the  amounts  recorded  and it is  reasonably
possible that the expectations associated with these amounts could change in the
near-term (that is within one year) and that the effect of such changes could be
material to the consolidated  financial statements.  The methods for making such
estimates  and  for  establishing  the  resulting  liabilities  are  continually
renewed, and any adjustments are reported in current earnings.


                                       F-19
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

Fair Value of Financial Instruments:

     The carrying value of cash and cash equivalents,  restricted cash, accounts
receivable,  prepaid  expenses  and  other  assets,  accounts  payable,  accrued
expenses  and other  liabilities  are  reasonable  estimates of their fair value
because of the  short-term  nature of the  instruments.  The  carrying  value of
long-term debt  consisting of its credit  facility  approximates  its fair value
based upon  current  rates at which the Company  could borrow funds with similar
remaining maturities.

Concentrations of Credit Risk:

     Financial   instruments   that   potentially   subject   the   Company   to
concentrations  of credit risk consist of cash  equivalents  investments,  which
from  time-to-time  exceed  the  Federal  depository  insurance  coverage.  Cash
balances  are  insured  by  the  Federal  Deposit  Insurance  Corporation  up to
$100,000.

Derivative Financial Instruments:

     The Company utilizes derivative financial statements,  principally interest
rate caps, to manage its exposure in fluctuations to interest rates. The Company
has established  policies and procedures for risk assessment,  and the approval,
reporting and  monitoring of derivative  financial  instrument  activities.  The
Company  has not  entered  into,  and does not  plan to enter  into,  derivative
financial  instruments for trading or speculative  purposes.  Additionally,  the
Company has a policy of only entering derivative  contracts with major financial
institutions.

     SFAS  No.  133   "Accounting   for  Derivative   Instruments   and  Hedging
Activities",  requires  the Company to measure  derivative  instruments  at fair
value  and to  record  them in the  consolidated  balance  sheet  as an asset or
liability, depending on the Company's rights or obligations under the applicable
derivative  contract.  The Company's  derivative  instruments are primarily cash
flow  hedges  that  limit the base rate of  variable  rate  debt.  For cash flow
hedges,  the  ineffective  portion  of a  derivative's  change in fair  value is
immediately recognized in operations,  if applicable,  and the effective portion
of the fair value  difference  of the  derivative  is  reflected  separately  in
stockholders' equity as accumulated other comprehensive income.


                                       F-20
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

Recently Issued Accounting Pronouncements:

     In September 2006, the Financial Accounting Standards Board ("FASB") issued
Statement  of  Financial  Accounting  Standard  ("SFAS")  No.  157,  "Fair Value
Measurements".  This  statement  defines  fair value,  establishes  a fair value
hierarchy  to  be  used  in  GAAP  and  expands  disclosures  about  fair  value
measurements.  Although  this  statement  does not  require  any new fair  value
measurements,  the application could change current  practice.  The statement is
effective for fiscal years  beginning  after November 15, 2007.  Management does
not believe that adoption of this statement  will have a material  impact on the
financial position or results of operations of the Company.

     In September  2006, the FASB issued SFAS No. 158 Employers'  Accounting for
Defined  Benefit Pension and Other  Postretirement  Plans - an Amendment of FASB
Statements  No. 87, 88, 106, and 132(R).  This  statement  requires a company to
recognize  the funded status of a benefit plan as an asset or a liability in its
statement of financial position.  In addition,  a company is required to measure
plan  assets  and  benefit  obligations  as of the date of its  fiscal  year-end
statement of financial  position.  The recognition  provision of this statement,
along with  additional  disclosure  requirements,  is effective for fiscal years
ending  after  December  15,  2006,  while the  measurement  date  provision  is
effective for fiscal years ending after December 15, 2008.  Management  does not
believe  that  adoption  of this  statement  will have a material  impact on the
financial position or results of operations of the Company.

     Effective  January  1,  2007,  the  Company  adopted  Financial  Accounting
Standards  Board  Interpretation  No. 48,  "Accounting for Uncertainty in Income
Taxes" ("FIN 48") -- an  interpretation  of FASB Statement No. 109,  "Accounting
for Income  Taxes." FIN 48 addresses the  determination  of whether tax benefits
claimed or  expected  to be claimed on a tax return  should be  recorded  in the
financial  statements.  Under FIN 48, the Company may  recognize the tax benefit
from an uncertain  tax position  only if it is more likely than not that the tax
position will be sustained on  examination by the taxing  authorities,  based on
the  technical  merits  of the  position.  The tax  benefits  recognized  in the
financial  statements  from  such a  position  should be  measured  based on the
largest  benefit  that has a greater  than  fifty  percent  likelihood  of being
realized  upon   ultimate   settlement.   FIN  48  also  provides   guidance  on
de-recognition,   classification,   interest  and  penalties  on  income  taxes,
accounting in interim periods and requires increased disclosures. At the date of
adoption, and as of December 31, 2007, the Company does not have a liability for
unrecognized tax benefits.


                                       F-21
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

     In  February,  2007,  FASB issued SFAS No. 159,  "The Fair Value Option for
Financial Assets and Financial  Liabilities including an amendment of SFAS 115."
This statement  provides  companies with an option to report selected  financial
assets and  liabilities  at fair value.  This  statement is effective for fiscal
years  beginning  after  November  15,  2007  with  early  adoption   permitted.
Management does not believe that adoption of this statement will have a material
impact on the financial position or results of operations of the Company.

     In December  2007, the FASB issued SFAS No. 141R,  "Business  Combinations"
which replaces SFAS 141. The statement retains the purchase method of accounting
for acquisitions, but requires a number of changes, including changes in the way
assets and liabilities are recognized in purchase accounting, the recognition of
assets  acquired  and  liabilities  assumed  arising  from  contingencies,   the
capitalization  of  in-process  research  and  development  at fair  value,  and
requires the expensing of  acquisition-related  costs as incurred. The statement
will apply prospectively to business combinations for which the acquisition date
is on or after the beginning of the first annual  reporting  period beginning on
or after  December 15, 2008.  The Company is currently  evaluating the effect of
this statement.

     In  December  2007,  the FASB  issued  Statement  of  Financial  Accounting
Standards  No.  160,   "Noncontrolling   Interests  in  Consolidated   Financial
Statements, an amendment of ARB No. 51" ("SFAS 160"). This statement will change
the   accounting   and   reporting   for  minority   interests   which  will  be
re-characterized  as  noncontrolling  interests and classified as a component of
equity.  SFAS 160 is effective for fiscal years  beginning on or after  December
15,  2008.  SFAS 160  requires  retroactive  adoption  of the  presentation  and
disclosure   requirements  for  existing  minority  interests  for  all  periods
presented. The Company is currently evaluating the effect of this statement.

     In March  2008,  the FASB  issued No. 161,  "Disclosures  about  Derivative
Instruments  and Hedging  Activities,  an  amendment of FASB  Statement  No. 133
("SFAS  161").  SFAS  161  requires  enhanced   disclosures  about  an  entity's
derivative  and hedging  activities  and thereby  improves the  transparency  of
financial reporting. This Statement is effective for financial statements issued
for fiscal years and interim  periods  beginning  after November 15, 2008,  with
early application encouraged.  This Statement encourages,  but does not require,
comparative disclosures for earlier periods at initial adoption. Management does
not believe that adoption of this statement  will have a material  impact on the
financial position or results of operations of the Company.


                                       F-22
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

2. REAL ESTATE:

     The Company's  components of Rental  property  consist of the following (in
thousands):

                                                           December 31,
                                                         2007           2006
                                                  -------------- --------------
Land                                                   $ 85,051        $   434
Buildings and improvements                                7,974          6,591
Accumulated depreciation and amortization                (6,036)        (5,476)
                                                  -------------- --------------
Total                                                  $ 86,989       $  1,549
                                                  ============== ==============

     Substantially  all these  assets have been pledged as  collateral  for debt
obligations (see Note 8).

3. DISCONTINUED OPERATIONS:

     On  November  29,  2005,  the  Company   entered  into  an  agreement  (the
"Agreement") and subsequently  closed on January 9, 2006 (the "Transition Date")
with the City to buy all of the  Company's  assets used in  connection  with the
Company's bus operations (the "Acquired  Assets").  The Acquired Assets included
fixtures,  furniture and  equipment;  maintenance  records;  personnel  records;
operating schedules; and the intangible value of the development, administration
and  maintenance of such assets,  including the value related to the development
and training of employees,  the value related to the  development  of routes and
operating  schedules,  and going concern value or good will for a purchase price
of  $9,460,000.  Under the  terms of the  Agreement,  the City  paid  additional
consideration as follows: (1) an amount equal to the actual invoice cost for the
Company's  inventory  of spare  parts  and  fluids,  provided  that the  Company
represent  and  warrant  to the City that it has paid or will pay such  invoiced
amounts; (2) an amount equal to the book value (net of accumulated depreciation)
of the Company's  other tangible  assets that are Acquired Assets as of the date
of closing;  (3) if all of the Claimants in the Non-Union  Employees v. New York
City Department of Transportation  and Green Bus Lines, Inc. execute  Settlement
Authorization  Forms, the City will pay the Company an additional  $189,200.  If
less than 100% of the Claimants execute Settlement Authorization Forms, the City
will pay the Company an additional  amount to be determined by  multiplying  the
percentage of the Claimants who executed the Forms by $300,000,  and the Company
will receive 37.84% of the amount.

     Under the Agreement, the City assured, defended and indemnified the Company
against  the  following:  (1)  all  claims  as  a  result  from  operations  and
maintenance  of buses up through and  including  the  Transition  Date;  (2) all
claims,  losses or damages for bodily injury and/or  property  damage  resulting
from or alleged to result from the operation  and/or  maintenance of buses up to
the  Transition  Date;  (3) any and all  funding  obligations,  claims,  losses,
damages, fines, costs and expenses associated with any withdrawal,  termination,
freezing or other liability related to the various pension plans; (4) all claims
with respect to accrued leave; (5) any claims made by any union or any member of
any union arising under any collective bargaining  agreement;  (6) obligation to
pay  additional  or  retrospective  premiums  in  connection  with any  Workers'
Compensation  Retrospective  Policy;  (7) obligation to pay accumulated  holiday
pay; and (8) any claim or demand is made, any and all claims asserted by vendors
in regard to Bus Service, up through and including the Transition Date.


                                       F-23
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

3.  DISCONTINUED OPERATIONS (Continued):

     In connection with the Agreement,  the City leased the depot and facilities
from the Company  located at 165-25  147th  Avenue,  Jamaica,  New York,  for an
initial term of 21 years with a first-year  rent of  $2,795,000  and a 21st-year
rent of $4,092,000 and the depot located at 49-19 Rockaway Beach Blvd., Arverne,
New York, for an initial term of 21 years with a first-year rent of $605,000 and
a 21st-year rent of $866,000.

     The  leases  are  "triple  net"  leases in that the City  agrees to pay all
expenses on the property.  Each lease has two renewal terms at the City's option
of 14 years each so that the total  term is a maximum  of 49 years.  The term of
each lease  commenced on the date the Company in question closed the sale of the
bus company to the City.  The terms of the leases are  consistent  with  current
market rates.

     In  connection  with  Green's  agreement  to sell all of its assets used in
connection with it's bus operations,  the results of Green's bus operations have
been  presented  as  discontinued   operations  in  the  Company's  consolidated
financial statements for all periods presented.

     The  following  table sets forth the detail of Green's  income  (loss) from
discontinued operations for the years ended December 31, 2007, 2006 and 2005 (in
thousands):

                                                           Bus Operations
                                                         ------------------
For the year ended December 31, 2007:
  Revenues from discontinued operation                   $               -
                                                          ================

  Loss from operations of discontinued operation         $            (209)
  Provision for  income taxes                                         (115)
                                                          ----------------

  Loss from discontinued operation, net of taxes         $            (324)
                                                          ================

  For the year ended December 31, 2006:
  Revenues from discontinued operation                   $           3,864
                                                          ================

  Loss from operations of discontinued operation         $         (11,215) (1)
  Benefit from  income taxes                                         3,320
                                                          ----------------

  Loss from discontinued operation, net of taxes         $          (7,995)
                                                          ================

  Gain on sale of discontinued operation                 $          11,723
  Provision for income taxes                                        (3,454)
                                                          ----------------
  Gain on sale of discontinued operation, net of         $           8,269
  taxes                                                   ================

  For the year ended December 31, 2005:
  Revenues from discontinued operation                   $          75,942
                                                          ================

  Income from operations of discontinued operation       $           1,156 (1)
  Benefit for income taxes                                            (182)
                                                          ----------------

  Income from discontinued operation, net of taxes       $           1,338
                                                          ================


                                       F-24
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

3.  DISCONTINUED OPERATIONS (Continued):

     (1) Operating  assistance  provided by state and local governments  totaled
$3,307,576  and  $47,491,337  for the years  ended  December  31, 2006 and 2005,
respectively and are included in (loss) income from discontinued operation.

     The gain on sale of discontinued operation is calculated as follows:

     Gross proceeds from sale of discontinued operation     $11,142,885
     Write-off of liabilities assumed by New York City        2,262,994
     Net book value of assets sold                           (1,682,885)
                                                             -----------
     Gain on sale of discontinued operation                  11,722,994
                                                             ===========

     Net cash used in  discontinued  operations  was $324,000,  $5,610,000,  and
$4,757,000, for the years ended December 31, 2007, 2006, and 2005, respectively.


4. OTHER ASSETS, NET:

     Other assets, net, consist of the following (in thousands):

<TABLE>
<CAPTION>

                                                            Years Ended December 31,
                                                       ---------------------------------
                                                           2007                2006
                                                       ---------------- ----------------

<S>                                                    <C>              <C>
      Deferred acquisition costs                       $           -    $         958
      Discontinued operations                                    647                -
      Prepaid expenses                                         1,010               18
      Prepaid and refundable income taxes                      1,510                -
      Deferred taxes, net                                        263              520
      Rental income in excess of amount billed                 2,524              581
      Other assets                                               305               31
                                                       ---------------- ----------------
                                                       $       6,259   $        2,108
                                                       ================ ================
</TABLE>



                                       F-25
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007


5. INVESTMENT IN AFFILIATES:

     The Company  had 40%  interest in Command  Bus  Company,  Inc.,  and G.T.J.
Company, Inc. ("GTJ Co.") These companies did not declare dividends during 2007,
2006, and 2005.  Summary  combined  financial  information for these  affiliates
through  the  date  of the  reorganization  whereby  the  Company  acquired  the
remaining  60% interest and has  consolidated  these  entities  from the date of
acquisition is as follows (in thousands).

Year Ended December 31, 2007:
<TABLE>
<CAPTION>
                                                                                  Command Bus
                                                           GTJ Company, Inc.      Company, Inc.
                                                         -------------------- --------------------
<S>                                                       <C>                  <C>
        Total operating revenues and subsidies            $            9,805   $                 -
                                                         ==================== ====================
        Income from continuing operations                 $              152   $                -
        (Loss) income from operations of discontinued
        operation                                                         (2)                   2
                                                         -------------------- --------------------
        Net income                                        $              150   $                2
                                                         ==================== ====================

Year Ended December 31, 2006:
                                                                                  Command Bus
                                                           GTJ Company, Inc.      Company, Inc.
                                                         -------------------- --------------------
        Total operating revenues and subsidies            $           35,011   $              129 (1)
                                                         ==================== ====================
        Loss from continuing operations                   $           (1,850)  $                -
        (Loss) income from operations of discontinued
        operation                                                        (60)                 657
                                                         -------------------- --------------------
        Net (loss) income                                 $           (1,910)  $              657
                                                         ==================== ====================
        Total Assets                                      $           28,957   $            1,375
                                                         ==================== ====================
        Total Liabilities                                 $           24,433   $              749
                                                         ==================== ====================

Year Ended December 31, 2005:
                                                                                  Command Bus
                                                           GTJ Company, Inc.      Company, Inc.
                                                         -------------------- --------------------
        Total operating revenues and subsidies (1)        $          29,496    $           25,174
                                                         ==================== ====================
        Income from continuing operations                 $           2,428    $                -
        Income (loss) from operations of discontinued
        operation                                                       160                (1,647)
        Gain on sale of discontinued operations, net
        of taxes                                                          -                 2,533
                                                         -------------------- --------------------
        Net income                                        $           2,588    $              886
                                                         ==================== ====================
Total Assets                                              $          30,477    $            5,023
                                                         ==================== ====================
Total Liabilities                                         $          24,048    $            9,246
                                                         ==================== ====================
</TABLE>

     (1)  Revenues from discontinued operations.

6. UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES:

     The liability for losses and loss adjustment  expenses at December 31, 2007
has been reflected in connection with the merger transaction (see Note 1) and is
summarized as follows (in thousands):


                                   Years Ended December 31,
                               ----------------------------------
                                      2007              2006
                               ---------------    ---------------
Reported claims                $        2,370     $            -
Provision for incurred but
not reported claims                       589                  -
                               ---------------    ---------------
                               $        2,959     $            -
                               ===============    ===============


                                       F-26
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

6. UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES (Continued):

     Management is responsible  for  estimating  the provisions for  outstanding
losses.  The directors have  recognized in the financial  statements a provision
for  outstanding  losses of $2,959,000 at December 31, 2007. An actuarial  study
was independently completed which estimated that at December 31, 2007, the total
outstanding  losses at an expected level, are between $2,650,623 and $3,267,961.
In their analysis,  the actuaries have used industry based data which may or may
not be representative of the Company's ultimate liabilities.

     In  the  opinion  of  the   directors,   the   provision   for  losses  and
loss-adjustment  expenses is adequate to cover the expected  ultimate  liability
under the insurance  policies written.  However,  consistent with most companies
with  similar  operations,  the  Company's  estimated  liability  for  claims is
ultimately based on management's expectations of future events. It is reasonably
possible that the expectations associated with these amounts could change in the
near term (that is,  within one year) and that the effect of such changes  could
be material to the consolidated financial statements.

7. OTHER LIABILITIES, NET:

     Other liabilities consist of the following (in thousands):

<TABLE>
<CAPTION>

                                                            Years Ended December 31,
                                                      --------------------------------
                                                          2007               2006
                                                      ---------------- ---------------
<S>                                                   <C>              <C>
          Accrued dividends                           $         1,415  $            -
          Accrued earnings and profits distribution               906               -
          Accrued professional fees                               221             163
          Discontinued operations                                 948               -
          Accrued wages                                           464               -
          Deposit liability                                       272               -
          Accrued environmental costs                           1,033             436
          Accrued vacation                                         96               -
          Amount due to City of New York                            -             308
                                                      ---------------- ---------------
                                                      $         5,355  $          907
                                                      ================ ===============
</TABLE>

8. NOTE PAYABLE TO BANK AND CREDIT FACILITY:

     On December 30, 2003, the Green Bus Lines, Inc. and Subsidiary,  along with
the Triboro Coach Corporation and Subsidiaries,  Jamaica Central Railways,  Inc.
and  Subsidiaries,  Command Bus  Company,  Inc.,  and G.T.J.  Company,  Inc. and
Subsidiaries  (the  "Affiliated  Group"),   replaced  its  then-existing  credit
facility  with a new facility  consisting of mortgages and lines of credit which
had an expiration date of June 30, 2004. The facility had been renegotiated over
several  renewals  and was  extended  to June 30,  2007.  In July of  2007,  the
Affiliated  Group  terminated  its  relationship  with the  lender  and paid all
amounts  outstanding  under  the  revolving  credit.  Under  the  terms  of  the
agreement,  the entire  group had a $6.5  million  facility  consisting  of a $4
million  revolving  credit,  which was secured by approximately  $4.5 million of
cash and bonds held by the Affiliated  Group and a $2.5 million second  mortgage
secured by a mortgage on property  owned by G.T.J.  Company,  Inc.,  in New York
City. The facility of $6.5 million was being used to finance the working capital
needs of the Affiliated  Group. The facility bore interest at the prime rate and
was adjusted from time to time.  The loans were  collateralized  by all tangible
assets of the Affiliated Group.


                                       F-27
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

8.  NOTE PAYABLE TO BANK AND CREDIT FACILITY (Continued):

     The outstanding debt under this revolving credit was paid in June 2007.

ING Financing Agreement:

     On July 2, 2007,  the Company  entered into a Loan  Agreement,  dated as of
June 30,  2007  (the  "Loan  Agreement"),  among  certain  direct  and  indirect
subsidiaries  of  the  Company,   namely,   Green  Acquisition,   Inc.,  Triboro
Acquisition,  Inc., Jamaica  Acquisition,  Inc., 165-25 147th Avenue, LLC, 49-19
Rockaway  Beach  Boulevard,  LLC,  85-01  24th  Avenue,  LLC,  114-15 Guy Brewer
Boulevard,  LLC, (collectively,  the "Borrowers");  and ING USA Annuity and Life
Insurance  Company;  ING Life  Insurance  and Annuity  Company;  Reliastar  Life
Insurance Company; and Security Life Of Denver Insurance Company  (collectively,
the "Initial  Lenders"  and,  together  with any other Lenders from time to time
party hereto, the "Lenders").  Pursuant to the terms of the Loan Agreement,  the
Lenders will provide  multiple  loan  facilities in the amounts and on the terms
and  conditions  set forth in such Loan  Agreement.  The  aggregate  of all loan
facilities  under the Loan Agreement  shall not exceed  $72,500,000.  On July 2,
2007,  the Initial  Lenders made an initial draw down of $17,000,000 on the term
loan and in October 2007 made another draw down of  $2,000,000  for a total term
loan of $19,000,000. In addition to the term loan, the Lenders collectively made
a mortgage loan of $1,000,000 to the  Borrowers.  Interest on the loans shall be
paid monthly.  The interest on each loan is 6.59% per annum. In addition,  there
is a  one-tenth  of one percent  non-use  fee on the unused  portion of the loan
facility. The principal shall be paid on the maturity date pursuant to the terms
set forth in the Loan Agreement,  namely July 1, 2010, unless otherwise extended
or renewed.

     The loan facilities are  collateralized by: (1) an Assignment of Leases and
Rents on four bus  depot  properties  (the  "Depots")  owned by  certain  of the
Borrowers and leased to the City of New York,  namely (a) 49-19  Rockaway  Beach
Boulevard;  (b) 165-25  147th  Avenue;  (c) 85-01 24th Avenue and (d) 114-15 Guy
Brewer  Boulevard;  (2) Pledge  Agreements  under which (i) GTJ REIT pledged its
100% stock ownership in each of: (a) Green Acquisition; (b) Triboro Acquisition,
and (c) Jamaica Acquisition,  (ii) Green Acquisition pledged its 100% membership
interest in each of (a) 49-19 Rockaway Beach Boulevard, LLC and (b) 165-25 147th
Avenue,  LLC, (iii) Triboro  Acquisition pledged its 100% membership interest in
85-01 24th Avenue,  LLC, and (d) Jamaica Acquisition pledged its 100% membership
interest  in 114-15  Guy Brewer  Boulevard,  LLC,  and (3) a LIBOR Cap  Security
Agreement  under  which  GTJ Rate Cap LLC,  a  wholly  owned  subsidiary  of the
Company,  pledged its interest in an interest rate cap transaction  evidenced by
the Confirmation and ISDA Master Agreement,  dated as of December 13, 2006, with
SMBC Derivative  Products Limited.  The Company had assigned its interest in the
interest  rate cap  transaction  to GTJ Rate Cap LLC prior to entering  into the
Loan Agreement. $1,000,000 of the loan is secured by a mortgage in the amount of
$1,000,000 on the Depots collectively ($250,000 for each Depot).


                                       F-28
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

8.   NOTE PAYABLE TO BANK AND CREDIT FACILITY (Continued):

     SFAS  No.  133,   "Accounting   for  Derivative   Instruments  and  Hedging
Activities" requires the Company to measure derivative instruments at fair value
and to record them in the  consolidated  balance sheet as an asset or liability,
depending on the Company's rights or obligations under the applicable derivative
contract.  The Company's  derivative  instruments are primarily cash flow hedges
that  limit the base rate of  variable  rate  debt.  For cash flow  hedges,  the
ineffective  portion  of a  derivative's  change  in fair  value is  immediately
recognized in operations,  if applicable,  and the effective portion of the fair
value  difference  of the  derivative is reflected  separately in  stockholders'
equity as accumulated other  comprehensive  income.  For the year ended December
31, 2007, the amount was deemed to be immaterial.

     The credit facility is used to fund acquisitions,  dividend  distributions,
working capital and other general corporate purposes.

     In  addition  to  customary  non-financial  covenants,  the  Borrowers  are
obligated to comply with the  following  financial  covenants  (1) the Borrowers
will not  permit  the ratio of (a)  Consolidated  Net  Operating  Income for any
period of four consecutive  Fiscal Quarters to (b) Consolidated Debt Service for
such period,  to be less than 1.3 to 1.0; (2) the Borrowers  will not permit the
ratio of (a) Consolidated Net Operating Income from Unencumbered  Assets for any
period of four consecutive  Fiscal Quarters to (b)  Consolidated  Unsecured Debt
Service for such period,  to be less than 1.3 to 1.0; (3) the Borrowers will not
permit the ratio of (a) Consolidated  Debt at any time to (b) Total Assets Value
at such time,  to be greater  than 0.6 to 1.0;  and (4) the  Borrowers  will not
permit  the  ratio  of a)  Total  Unencumbered  Assets  Value at any time to (b)
Consolidated Unsecured Debt at such time, to be less than 1.5 to 1.0.

     Interest  expense for the years ended December 31, 2007, 2006, and 2005 was
approximately $718,895, $0 and $0, respectively.

     As of March 31, 2008,  $43,214,528  was  outstanding  under this  revolving
credit (see Note 19).

9. STOCKHOLDERS' EQUITY:

Common Stock

     The Company is  authorized  to issue  100,000,000  shares of common  stock,
$.0001 par value per share,  available for issuance.  The Company has authorized
the  issuance  of up to  15,564,454  shares  of the  Company's  common  stock in
connection with the  Reorganization  and the earnings and profits  distribution.
The common stock is not convertible or subject to redemption.


                                       F-29
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

9.   STOCKHOLDERS' EQUITY (Continued):

Dividend Distributions

     During the  quarter  ended  March 31,  2007,  Green paid  dividends  to its
stockholders totaling $150,000. During the quarter ended September 30, 2007, the
Company paid dividends to its  stockholders  totaling  $485,000 and  $1,066,651,
respectively.  On  December  20,  2007,  the Board of  Directors  of the Company
declared a dividend of $1,414,591 that was paid in January 2008.

Preferred Stock

     The Company is authorized  to issue  10,000,000  shares of preferred  stock
with such  designations,  voting  and other  rights  and  preferences  as may be
determined from time to time by the Board of Directors.

Stock Option Plan

     On June 11,  2007,  the Board of  Directors  approved  the  Company's  2007
Incentive  Award Plan (the "Plan").  The effective date of the Plan was June 11,
2007, subject to stockholder approval.  The stockholders of the Company approved
the Plan on February 7, 2008.

     The Plan will cover directors,  officers,  key employees and consultants of
the Company. The purposes of the Plan are to further the growth, development and
financial  success of the Company  and to obtain and retain the  services of the
above individuals considered essential to the long term success of the Company.

     The Plan may provide for awards in the form of restricted shares, incentive
stock options,  non-qualified  stock options and stock appreciation  rights. The
aggregate  number of shares of common stock which may be awarded  under the Plan
is 1,000,000 shares. The total number of options granted on February 7, 2008 was
255,000.

Special Distribution of Earnings and Profits

     On August  20,  2007,  the Board of  Directors  of the  Company  declared a
special distribution of accumulated earnings and profits on the Company's common
stock of $6.40 per Company  share,  payable in $20,000,000 of cash and 3,775,400
of the Company's common stock. For the purposes of the special distribution, the
Company's  common  stock  was  valued  at  $11.14,  as  indicated  in the  proxy
statement/prospectus  dated  February  9, 2007  filed  with the  Securities  and
Exchange Commission and disseminated to the stockholders of the Bus Companies in
connection with the March 26, 2007 special joint meeting of the  stockholders of
the Bus Companies at which meeting such  stockholders  voted on a reorganization
of  those  companies  with  and  into  the  Company.  The  special  distribution
aggregated approximately,  $62,060,000. The holders of the Company's shares, and
the  holders  of shares of the Bus  Companies,  as of the close of  business  on
August 20, 2007, the record date for the special  distribution  (the "Holders"),


                                       F-30
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

9.   STOCKHOLDERS' EQUITY (Continued):


were eligible for the special distribution. The Holders were required to make an
election as to the amount of the Company's shares and/or cash the Holders wished
to receive as their  respective  portions of the special  distribution.  Holders
were advised,  due to the  limitation of the aggregate  amount of cash available
for the special distribution, that their actual distribution might not be in the
proportion of cash and the Company's shares they elected,  but could be based on
a proration of the  available  cash after all  elections  (i.e.:  not on a first
come-first served basis).  The Company calculated the proportion of cash and the
Company's  shares that were  distributed  to the Holders based upon the Holder's
election and the amount of cash available for the special distribution.

     In October 2007, cash of $19,093,564 and 3,775,400  shares of the Company's
common stock were distributed to the Holders.  The remaining  payable balance of
$906,436 is  included  in other  liabilities  in the  accompanying  consolidated
balance sheet at December 31, 2007. Such cash was borrowed against the revolving
credit from the Lenders.

     Prior to the Reorganization,  approximately 88% of the Green's common stock
was held under a Voting Trust  Agreement  which was to expire in November  2007.
The stock held under the agreement was voted at any meeting of the  shareholders
of Green by the trustee as may be in the judgment of the  trustee,  for the best
interest  of the  shareholder/officer  of  Green.  Green  had the right of first
refusal to  purchase  shares from any  shareholder  desiring to sell shares at a
price  established by the Board of Directors.  In the normal course of business,
Green under a stock repurchase program bought back common shares.

10. PENSION PLAN AND OTHER RETIREMENT BENEFITS:

Non-Union:

     Prior to the  reorganization,  Green  maintained a defined  benefit pension
plan which covered  substantially  all of its non-union  employees.  Participant
benefits  were  based on years of  service  and the  participant's  compensation
during the last three years of service. Green's funding policy was to contribute
annually an amount that did not exceed the maximum amount that could be deducted
for federal income tax purposes. Contributions were intended to provide not only
for benefits  attributed to service to date,  but also for those  expected to be
earned in the future.  As part of the  agreement  with the City of New York (the
"City"),  the pension plan was merged into the Metropolitan  Transit Authority's
DB Pension Plan ("MTA DB Plan").  Plan assets primarily consisted of convertible
equity securities,  guaranteed  deposit accounts,  corporate debt securities and
fixed income contracts.


                                       F-31
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

10. PENSION PLAN AND OTHER RETIREMENT BENEFITS (Continued):

     The following  tables present  certain  financial  information  for Green's
non-union defined benefit pension plan as of December 31, 2006 and for the years
ended December 31, 2006 and 2005 (in thousands):


                                                               Year Ended
                                                           December 31, 2006
                                                         ---------------------

        Change in projected benefit obligation:

        Projected benefit obligation at beginning of year            $ 8,603

        Service cost                                                       5

        Interest cost                                                     83

        Actuarial loss                                                   111

        Benefits paid                                                   (144)

        Curtailment gain                                                (831)

        Settlement gain                                               (7,827)
                                                         ---------------------


        Project benefit obligation at end of year                   $     -
                                                         =====================



                                                               Year Ended
                                                           December 31, 2006
                                                         ---------------------

        Change in plan assets:

        Fair asset plan value at beginning of the year               $ 8,659

        Actual return on plan assets                                     157

        Benefits paid                                                   (144)

        Expenses paid                                                    (60)

        Transfer MTA DB Plan                                          (8,612)
                                                         ---------------------

        Fair value of plan assets at end of year                     $      -
                                                         =====================

     No net amount was  recognized  for the year ended December 31, 2006 related
to the Plan's funded status,  unrecognized  prior service costs or  unrecognized
net  actuarial  gain or loss.  In  addition,  no amount  was  recognized  in the
consolidated  balance  sheet at  December  31, 2006  related to prepaid  benefit
costs.

<TABLE>
<CAPTION>

                                                                            Years Ended December 31,
                                                                  ---------------------------------------
        Components of net periodic benefit cost:                          2006                   2005
                                                                  -------------------  ------------------
<S>                                                               <C>                  <C>
        Service cost                                              $                5   $             276
        Expense cost                                                              15                  79
        Interest cost                                                             83                 474
        Expected return on plan assets                                          (116)               (672)
        Amortization of prior service cost                                         2                  11
                                                                  -------------------  ------------------
        Net periodic benefit cost                                                (11)                168
        Curtailment loss                                                          83                   -
        Settlement loss                                                          715                   -
                                                                  -------------------  ------------------
        Net periodic benefit cost                                 $              787   $             168
                                                                  ===================  ==================
</TABLE>


                                      F-32
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

10. PENSION PLAN AND OTHER RETIREMENT BENEFITS (Continued):

     The following  weighted-average  assumptions were used to determine Green's
postretirement benefit obligations shown above at December 31, 2006:


                                                        2006
                                                  -------------------

                Discount rate                           5.75%

                Compensation increase                   4.00%

     The  following  weighted-average  assumptions  were used to  determine  the
Green's  postretirement benefit expense shown above for the years ended December
31, 2006 and 2005:

<TABLE>
<CAPTION>

                                                                   Years Ended December 31,
                                                            ---------------------------------------
                                                                 2006                 2005
                                                            -----------------    ------------------

<S>                                                              <C>                   <C>
        Weighted average discount rate                           5.75%                 6.00%

        Weighted average rate of compensation  increase          4.00%                 4.00%

        Expected  long-term rate of return on plan assets        8.00%                 8.00%

</TABLE>

     The Agreement with the City provided that all eligible  members of the plan
would join the City plan and would be credited  for all  service  with Green for
the purposes of vesting and benefit  accruals and that benefits for all eligible
members of the plan would be on  substantially  the same terms and conditions as
the current non-union plan.

     Included in the agreement  with the City,  the pension plan was merged into
the  MTA DB  Plan.  This  resulted  in a plan  curtailment  under  SFAS  No.  88
"Employers'  Accounting  for  Settlement  and  Curtailments  of Defined  Benefit
Pension Plans and for  Termination  Benefits"  ("SFAS 88"). The  curtailment was
caused by the fact that the non-union  employees  ceased future benefit accruals
under the pension plan.

     SFAS 88 requires  accelerated  amortization  or  immediate  recognition  of
unrecognized  prior  service  costs which  resulted  in a loss of  approximately
$83,000 which was recorded in the second quarter of 2006.

     The  transfer of plan  assets to the MTA DB Pension  Plan on March 3, 2006,
resulted in the settlement of the Company's  obligation  with regard to the plan
assets and liabilities.

     SFAS 88 requires accelerated  amortization or immediate  recognition of the
plan's  experience  gain/(loss)  as of the date of settlement or asset  transfer
date. As a result,  Green's recognition of a loss of approximately  $777,000 due
to the transfer of assets in excess of the benefit  liability plus the immediate
recognition  of the  existing  gain of  approximately  $62,000  as of the  asset
transfer done on March 3, 2006, which resulted in an overall  settlement loss of
approximately $715,000. This charge was recorded in the second quarter of 2006.


                                       F-33
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

10. PENSION PLAN AND OTHER RETIREMENT BENEFITS (Continued):

Union:

     In addition,  Green maintained a defined benefit pension plan which covered
substantially all of its union employees. Participant benefits were based on the
employee's  monthly  pay as of  December  31,  1997 plus a flat  dollar  monthly
benefit  for  service  after  1997.  Green's  funding  policy was to  contribute
annually an amount  that did not exceed the maximum  amount that can be deducted
for federal income tax purposes,  in accordance with guidelines contained in the
union  contract.  Contributions  were  intended to provide not only for benefits
attributed to service to date,  but also for those  expected to be earned in the
future. Plan assets consisted primarily of money market funds,  corporate bonds,
common and preferred equity securities,  government  securities and fixed income
contracts.

     The Agreement with the City provided that all eligible  members of the plan
join the City plan and would be credited  for all  service  with the Company for
the purposes of vesting and benefit  accruals and that benefits for all eligible
members of the plan would be on  substantially  the same terms and conditions as
the current non-union plan.

     The following  tables present  certain  financial  information  for Green's
union  defined  benefit  pension plan as of and for the year ended  December 31,
2006 (in thousands):


                                                                Year Ended
                                                            December 31, 2006
                                                            ------------------

        Change in projected benefit obligation:

           Projected benefit obligation at beginning of year          $88,393

           Service cost                                                    61

           Interest cost                                                3,945

           Actuarial loss                                                 128

           Benefits paid                                               (3,761)

           Settlement gain                                            (88,766)
                                                                  ------------
           Projected benefit obligation at end of year               $       -
                                                                  ============



                                       F-34
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

10. PENSION PLAN AND OTHER RETIREMENT BENEFITS (Continued):

                                                                Year Ended
                                                            December 31, 2006
                                                            ------------------

        Change in plan assets:

           Fair value of asset plan value at beginning of            $ 79,235
           year

           Actual return on plan assets                                 3,706

           Employer contributions                                         220

           Benefits paid                                               (3,761)

           Expenses paid                                                 (878)

           Transfer to MTA                                            (78,522)
                                                            ------------------
           Fair value of plan assets at end of year                 $       -
                                                            ===================

     No net  amount was  recognized  during the year  ended  December  31,  2006
related  to  the  Plan's  funded  status,   unrecognized  prior  service  costs,
unrecognized  transaction  amount of unrecognized net actuarial gain or loss. In
addition, no amount was recognized in the consolidated balance sheet at December
31, 2006 related to accrued  benefits,  intangible  assets or accumulated  other
comprehensive loss.

     The following  weighted-average  assumptions were used to determine Green's
postretirement benefit obligations shown above at December 31, 2006:

                                         2006
                                 ----------------------
         Discount rate                   5.75%


<TABLE>
<CAPTION>

                                                                                Years Ended December 31,
                                                                            --------------------------------
                                                                                  2006                2005
                                                                            ------------      --------------

Components of net periodic benefit cost:

<S>                                                                               <C>               <C>
Service cost                                                                      $  61             $ 2,217

Interest cost                                                                     3,944               4,863

Expected  return on plan assets                                                  (4,830)             (6,100)

Amortization of transition amount                                                   771                 964

Recognized actuarial loss                                                             -                 349

Amortization of prior service costs                                                   -                 (16)
                                                               -------------------------      --------------

Net periodic benefit cost                                                           (54)              2,277

Curtailment loss                                                                    578                   -

Settlement loss                                                                   8,494                   -
                                                               -------------------------      --------------

Total pension expense                                                           $ 9,018              $2,277
                                                               =========================      ==============
</TABLE>


                                       F-35
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

10. PENSION PLAN AND OTHER RETIREMENT BENEFITS (Continued):

     A weighted  average  discount  rate of 5.75% was used to determine  Green's
post-retirement   benefit  obligations  at  December  31,  2006.  The  following
weighted-average  assumptions  were  used to  determine  Green's  postretirement
benefit obligations shown above at December 31, 2006 and 2005:

                                                         Years Ended:
                                             ----------------------------------
                                                   2006                2005
                                             ------------------ ---------------

        Discount rate                                5.75%              6.00%

        Expected long-term rate of return
        on plan assets                               8.00%              8.00%

        Compensation increase                           -               4.00%


Other Retirement Benefits:

     Green entered into an agreement  with the Union which  stipulated  that the
Union would  provide  health  benefits  directly to its members  based on a plan
developed by it for its members. Green had agreed to fund the health benefits of
such plan,  subject  to  certain  limitations  and the  condition  that the City
provided the funds necessary therefore under the provisions of the OAA.

     Green  sponsored  a  defined  contribution  401(k)  plan for its  non-union
employees which covered all employees who, at the plan's  anniversary  date, had
completed  one year of  service  and are at least 21 years of age.  The plan was
funded by employee  salary  deferral  contributions  and employee  discretionary
contributions.  There were no  discretionary  contributions  made by the Company
during 2006 and 2005. This plan was terminated in 2006.

     Green  sponsors  retirement  benefits to its  non-union  employees  under a
defined  contribution  401(k) plan (the "Plan") which covered all employees who,
at the Plan's  anniversary  date,  had  completed one year of service and are at
least 21 years of age.

     Green  participated  in a  multiemployer  plan that  provided  health  care
benefits, including defined postretirement health care benefits to substantially
all  non-union  employees.  The amount  contributed  to the plan and  charged to
benefit  cost  was  $0,  $51,322,   and  $527,725  for  2007,  2006,  and  2005,
respectively.

     The Agreement with the City provided that all eligible members of the Plans
join the City  Plan and will be  credited  for all  service  with  Green for the
purposes of vesting and benefit  accruals  and those  benefits  for all eligible
members of the plan will be on  substantially  the same terms and  conditions as
the current non-union plan.


                                       F-36
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

11. RELATED PARTY TRANSACTIONS:

     Douglas A. Cooper, an officer and director of the Company and the nephew of
Jerome Cooper (Chairman of the Board) is Co-Managing partner of Ruskin,  Moscou,
Faltischek,  P.C.  ("RMF"),  which  has  acted as  counsel  to the  Company  for
approximately nine years. Fees paid by Green to RMF for the years ended December
31, 2007, 2006, and 2005 were $584,605, $43,743, and $96,671, respectively.

     Paul A. Cooper is a director  and officer of the Company.  In April,  2005,
Lighthouse 444 Limited Partnership ("Lighthouse"),  the owner of the building at
444  Merrick  Road,  Lynbrook,  NY,  and of which  Paul A.  Cooper  is a general
partner,  leased  5,667  square  feet of  office  and  storage  space to the Bus
Companies for a term of five years at an annual rent of  approximately  $160,000
for the first year,  increasing  to  approximately  $177,000 for the fifth year.
This space is currently occupied by the Company.  In connection with this lease,
there was a $231,000  expenditure  (allowance)  by the  landlord  for  leasehold
improvements. This lease will expire in April 2010. In February 2008, Lighthouse
leased an adjoining  3,545 square feet of space to the Company at an annual rent
of approximately $106,000,  which replaced 2,500 square feet of space covered by
the prior lease having annual rent of $37,000.

     Lighthouse Real Estate  Advisors,  LLC ("LREA") an affiliate of Lighthouse,
of which Paul A. Cooper is a member,  received a leasing commission between 2003
and 2006 for the leasing of 23-85 87th Street, East Elmhurst, New York on behalf
of a subsidiary of the Company to Avis Rent-A-Car System,  Inc. in the aggregate
sum of  $1,100,000  (3.056%  of  gross  rent).  LREA  also  received  a  leasing
commission in 2006 for the leasing of 85-01 24th Avenue, East Elmhurst, New York
on behalf of Triboro Coach Holding Corp. (a  subsidiary) to New York City in the
aggregate sum of $840,540 (1.318% of gross rent).

     In addition,  Lighthouse Real Estate Management, LLC ("LREM"), an affiliate
of LREA and Lighthouse, received a leasing commission in 2006 for the leasing of
114-15 Guy Brewer Boulevard,  Jamaica, New York on behalf of Jamaica Bus Holding
Corp. (a subsidiary)  to New York City in the aggregate sum of $615,000  (1.645%
of gross rent). LREM also received a leasing  commission in 2006 for the leasing
of (i) 165-25 147th  Avenue,  Jamaica,  New York and (ii) 49-19  Rockaway  Beach
Boulevard,  Edgemere,  New York on behalf of Green Bus Holding Corp. to New York
City in the aggregate sum of $1,281,579 (1.528% of gross rent).

     The Avis fee was for finding the tenant and negotiating the lease.  The New
York City fees were for negotiating the leases. Paul A. Cooper is one of several
partners or members of Lighthouse, LREA and LREM.

     Green  had  an  agreement  with  Varsity  Transit,  Inc.  ("Transit"),   an
affiliate,  under which Transit provided the Company with certain administrative
and data processing  services.  Total service fees incurred under this agreement
and included in other  nonoperating  expenses were $0,  $930,019 and $420,684 in
2007, 2006 and 2005, respectively.


                                       F-37
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

11. RELATED PARTY TRANSACTIONS (Continued):

     Net advances due from Transit  aggregated $- and $1,144,703 at December 31,
2007 and 2006,  respectively.  Additionally,  advances due from GTJ (an investee
company)   aggregated  $0  and   $3,039,000  at  December  31,  2007  and  2006,
respectively.

12. INCOME TAXES:

     Effective July 1, 2007, the Company has elected to be taxed as a REIT under
Section  856(c) of the Internal  Revenue Code of 1986,  as amended.  A REIT will
generally  not be subject  to federal  income  taxation  on that  portion of its
income that qualifies as REIT taxable income,  to the extent that it distributes
at least 90% of its taxable income to its shareholders and complies with certain
other requirements. It is management's intention to adhere to these requirements
and maintain the Company's REIT status.  As a REIT,  the Company  generally will
not be subject to corporate federal income tax,  provided that  distributions to
it stockholders  equal at least the amount at its REIT taxable income as defined
under the Code.  If the Company  fails to qualify as a REIT in any taxable year,
it will be subject to federal income taxes at regular corporate rates (including
any  applicable  minimum  tax  and may not be  able  to  qualify  as a REIT  for
subsequent  taxable years. Even if the Company qualifies for taxation as a REIT,
the  Company  is  subject  to  certain  state and local  taxes on its income and
federal  income  and  excise  taxes  on its  undistributed  taxable  income.  In
addition,  taxable income from non-REIT  activities managed through taxable REIT
subsidiaries are subject to federal, state, and local income taxes.

Reconciliation between GAAP Net Income and Federal Taxable Income:

         The following table reconciles GAAP net income to taxable income for
the period from January 1, 2007 through December 31, 2007 (in thousands):

                                                                   2007
                                                                (unaudited)
                                                              ----------------

        Income (Loss) from continuing operations before
        income taxes and equity in earnings of affiliated
        companies                                                 $ 6,854
        Less: GAAP net income of taxable subsidiaries              (3,300)
                                                              ----------------
        GAAP net income from REIT operations                        3,554
        Remediation costs deductible for tax purposes                (220)
        Deferred rent                                                (655)
                                                              ----------------
        Adjustable taxable income subject to 90% dividend
        requirements                                              $ 2,679
                                                              ================

     Dividend   distributions   for  the  year  ended  December  31,  2007  were
characterized for federal income tax purposes as 100% ordinary income.

Taxable REIT Subsidiaries

     The Company is subject to federal,  state,  and local  income  taxes on the
income from its Taxable REIT  subsidiaries  ("TRS")  activities,  which  include
Shelter Express, Inc. and subsidiaries.

                                       F-38
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

12. INCOME TAXES (Continued):

     Income taxes have been provided for through the asset and liability  method
as required by SFAS No. 109,  "Accounting for Income Taxes." Under the asset and
liability  method,  deferred  income  taxes  are  recognized  for the  temporary
differences  between the financial  reporting basis and the tax basis of the TRS
assets and liabilities.

     As a result of the  election  of the REIT  status,  the  Company  wrote-off
approximately  $268,000 of deferred tax assets net of deferred  tax  liabilities
which  resulted  in a  charge  of  $268,000  to  the  accompanying  consolidated
statement of income.

     The  provisions for income taxes from  continuing  operations for the years
ended December 31, 2007, 2006 and 2005 are as follows:
<TABLE>
<CAPTION>

                                                         Years Ended December 31,
                                        ----------------------------------------------------
                                             2007                2006              2005

Current:                                                        (Restated)

<S>                                            <C>           <C>                   <C>
Federal                                        $    539      $         451         $    320

State and local                                     409                582              161

Deferred                                            242              (117)              203
                                        ----------------     --------------    -------------

Provision for income taxes                     $  1,190              $ 916           $  684
                                        ================     ==============    =============


     The provisions for (benefit from) income taxes from discontinued operations
for the years ended December 31, 2007, 2006 and 2005 are as follows:


                                                  Years Ended December 31,
                                      -------------------------------------------------
                                         2007             2006               2005
                                      ------------    --------------    ---------------

 Current:

 Federal                                    $ 232            $2,840           $      -

 State and local                             (133)              823               (34)

 Deferred                                      16            (3,529)             (148)
                                      ------------    --------------    ---------------

 Total tax provision                        $ 115             $ 134          $   (182)
                                      ============    ==============    ===============
</TABLE>

                                       F-39
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

12.  INCOME TAXES (Continued):

     Prior to the year ended  December  31,  2007,  taxable  income  (loss) from
continuing   operations  has  been  determined   prior  to  the  elimination  of
intercompany transactions.

     The provision for income taxes differs from the amount computed by applying
the federal statutory income tax rate to income before income taxes as follows:
<TABLE>
<CAPTION>
                                                                         Years Ended December 31,
                                                          --------------------------------------------------------
                                                                    2007                2006                2005
                                                          ----------------   -----------------    ----------------

                                                                                (Restated)
Income tax (benefit) at the United States Federal
<S>               <C>                                             <C>                  <C>                <C>
statutory rate of 34%                                             $ 2,330              $1,009             $  (108)

State and local taxes, net of federal benefit                         822                   -                 (38)

Write-off of deferred tax assets and liabilities in
connection with the election of REIT status                          (268)                  -                   -

Tax effect of REIT related income included in net
income.                                                            (1,208)                  -                   -

Tax effect of REIT related income for state and local
taxes, net of federal tax benefit                                    (426)                  -                   -

Intercompany rent                                                       -                   -                 627

Depreciation, rent and other adjustments                              (60)                (93)                203
                                                          ----------------   -----------------    ----------------
Provision for income taxes                                        $ 1,190               $ 916                $684
                                                          ================   =================    ================
</TABLE>

     Deferred taxes reflect the net tax effects of temporary differences between
the carrying amounts of assets and liabilities for financial  reporting purposes
and the amounts  used for income tax  purposes.  Significant  components  of the
Company's  deferred  tax assets  (liabilities)  from  continuing  operations  at
December 31, 2007 and 2006 are as follows:

Deferred tax assets (liabilities):
<TABLE>
<CAPTION>
                                                                     December 31,
                                                          -----------------------------------
                                                               2007               2006
                                                          ----------------   ----------------
Deferred tax assets:

<S>                                                           <C>               <C>
        State and local taxes, net                            $     -           $    133

        Book over tax depreciation                                  -                431

        Discounted unpaid losses                                  338                  -

        Environmental investigation and feasibility study           -                157

        Other                                                       3                  -
                                                          ----------------   ----------------
                Total deferred tax assets                     $   341       $        721
                                                          ----------------   ----------------

        Deferred tax liabilities:

        Deferred rental income                                $     -           $    198

        Vacation accrual                                           19                  -

        Installment sale                                           23                  -

        Other                                                      36                  3
                                                          ----------------   ----------------
                Total deferred tax liabilities                 $   78            $   201
                                                          ----------------   ----------------
        Net deferred tax assets                               $   263           $    520
                                                          ================   ================
</TABLE>

                                       F-40
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

12.  INCOME TAXES (Continued):

     Prior to the Reorganization, Green and two affiliates (who were merged into
the  Company)  owned all of the common stock of Command Bus Company and GTJ Co.,
Inc. which were accounted for under the equity method.  Green and its affiliates
exercised  significant  influence  over the  affiliates and intended to maintain
permanent investments in these affiliates.  Accordingly, taxes were not provided
on the  undistributed  earnings  of these  affiliates  prior to January 31, 1993
(SFAS  No.  109  adoption).   Accumulated   undistributed  earning  (losses)  of
affiliates  for which no provision  (benefit) for income taxes has been made was
approximately   $(561,000)  and  $(682,000)  at  December  31,  2007  and  2006,
respectively.

     The  Company  elected  a fiscal  year  ended  June  30th for tax  reporting
purposes.  For the period July 1, 2006 to June 30, 2007, the Company filed a tax
return in the U.S.  federal  tax  jurisdiction  and the states of New York,  New
Jersey,  California,  Arizona and New York City.  The tax returns  included  the
results of GTJ REIT,  Inc. for the period July 1, 2006 through June 30, 2007 and
the  results of the  Companies  acquired in the  Reorganization  from the period
April 1, 2007 through June 30, 2007. During January 2008, the Company elected to
change its year end from June 30th to December 31st for tax reporting  purposes.
As a result,  the  Company  will file a tax return  for the period  July 1, 2007
through  December  31,  2007  which  includes  the  results  of  operations  for
subsidiaries that qualify for REIT status. The tax period did not change for the
TRS's.

     Effective  January  1,  2007,  the  Company  adopted  Financial  Accounting
Standards  Board  Interpretation  No. 48,  "Accounting for Uncertainty in Income
Taxes" ("FIN 48") -- an  interpretation  of FASB Statement No. 109,  "Accounting
for Income  Taxes." FIN 48 addresses the  determination  of whether tax benefits
claimed or  expected  to be claimed on a tax return  should be  recorded  in the
financial  statements.  Under FIN 48, the Company may  recognize the tax benefit
from an uncertain  tax position  only if it is more likely than not that the tax
position will be sustained on  examination by the taxing  authorities,  based on
the  technical  merits  of the  position.  The tax  benefits  recognized  in the
financial  statements  from  such a  position  should be  measured  based on the
largest  benefit  that has a greater  than  fifty  percent  likelihood  of being
realized  upon   ultimate   settlement.   FIN  48  also  provides   guidance  on
de-recognition,   classification,   interest  and  penalties  on  income  taxes,
accounting in interim periods and requires increased disclosures. At the date of
adoption, and as of December 31, 2007, the Company does not have a liability for
unrecognized tax benefits.


                                       F-41
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

12.  INCOME TAXES (Continued):

     Green  filed its final tax return for the  period  January 1, 2007  through
March 29, 2007.  Green is subject to U.S.  federal or state and local income tax
examinations by tax authorities for years after 2004.  Since these net operating
losses and tax credit  carry  forwards may be utilized in future  periods,  they
remain subject to  examination.  The Company's  policy is to record interest and
penalties on uncertain tax provisions as income tax expense.  As of December 31,
2007, the Company has no accrued interest or penalties  related to uncertain tax
positions.  The  Company  believes  that  it has not  taken  any  uncertain  tax
positions that would impact its consolidated financial statements as of December
31, 2007.

     Green Bus Lines,  Inc. and Subsidiary is currently under examination by the
Internal  Revenue Service for its U.S.  Corporate  Income Tax Return for the tax
year ended  December  31,  2005.  There  have been no  adjustments  proposed  in
connection with the examination.

     The Company restated the accompanying consolidated financial statements for
the year ended  December 31, 2006 to reflect the  correction of an error made in
2006  related to  recording a federal and state  income tax expense  entry.  The
error had no effect on net income for the year ended  December 31, 2007. Had the
error not been made,  net income for Green  would  have  increased  by  $600,000
($159.29 per share) for the year ended December 31, 2006 (see Note 16).

13. COMMITMENTS AND CONTINGENCIES:

Legal Matters:

Appraisal Proceedings

     On March 26, 2007, there was a joint special meeting of the stockholders of
the Bus  Companies.  The business  considered  at the meeting was the merger of:
Green  with  and  into  Green   Acquisition;   Triboro  with  and  into  Triboro
Acquisition;  and Jamaica with and into Jamaica  Acquisition.  Appraisal  rights
were  perfected by  stockholders  of the Bus  Companies  who would have received
approximately  366,133  shares  of  the  Company's  common  stock  to be  issued
following  the  mergers.  The  mergers  were  carried  out on  March  29,  2007.
Consequently,  the Bus  Companies  made good faith  offers to such  stockholders
based on the value of the  Company's  common  stock of $7.00 per  share,  eighty
percent (80%) of which was advanced to them. On May 25, 2007, Green Acquisition,
Triboro Acquisition and Jamaica Acquisition,  commenced appraisal proceedings in
Nassau County  Supreme Court,  as required by the New York Business  Corporation
Law. Eight of the  shareholders  (the  "Claimants")  who sought appraisal rights
(the others had either  settled or withdrawn  their  demands)  have answered the
petition  filed in  connection  with the  appraisal  proceeding  and  moved  for
pre-trial  discovery.  In March 2008, certain pre-trial discovery was ordered by
the court and provided by the Company.  In addition,  at that time a hearing was
set for  early  September  2008.  Collectively,  the  Claimants  have  been paid
$1,351,120  pursuant to the Company's good faith offer. The Claimants would have
received  approximately  241,272 shares of the Company's  common stock following


                                       F-42
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

13.  COMMITMENTS AND CONTINGENCIES (Continued):

the  mergers of the Bus  Companies.  The  Company's  ultimate  liability  cannot
presently  be  determined.  In  addition,  two  stockholders  have  been paid an
aggregate  of  $435,457  pursuant  to the  Company's  good  faith  offer.  These
stockholders would have received approximately 62,208 shares.

     The Company is involved in several  lawsuits and other disputes which arose
in the ordinary  course of business;  however,  management  believes  that these
matters  will  not  have  a  material  adverse  effect,  individually  or in the
aggregate, on the Company's financial position or results of operations.

Environmental Matters

     The  Company's  real  property  has  had  activity  regarding  removal  and
replacement of underground  storage  tanks.  Upon removal of the old tanks,  any
soil  found  to be  unacceptable  was  thermally  treated  off  site to burn off
contaminants. Fresh soil was brought in to replace earth which had been removed.
There are still  some  levels of  contamination  at the sites,  and  groundwater
monitoring programs have been put into place at certain locations. In July 2006,
the  Company  entered  into  an  informal  agreement  with  the New  York  State
Department  of  Environmental  Conservation  ("NYSDEC")  whereby the Company has
committed to a three-year  remedial  investigation  and  feasibility  study (the
"Study") for all site locations.  In conjunction  with this informal  agreement,
the Company has retained the services of an  environmental  engineering  firm to
assess the cost of the Study. The Company's  engineering report has an estimated
cost range in which the low-end of the range, of approximately  $5.2 million (of
which  the  Company's  portion  is $1.4  million)  was  only for the  Study.  In
addition,  a high-end range estimate,  of approximately  $10.4 million (of which
the  Company's  portion was $2.8 million) was included  which  provided a "worst
case" scenario whereby the Company would be required to perform full remediation
on all site locations.  While  management  believes that the amount of the Study
and related  remediation is likely to fall within the estimated  cost range,  no
amount within that range can be determined to be the better estimate. Therefore,
management  believes that recognition of the low-range  estimate is appropriate.
While additional costs associated with environmental  remediation and monitoring
are probable,  it is not possible at this time to reasonably estimate the amount
of any future obligation until the Study has been completed.  As of December 31,
2007, the Company has recorded a liability of $1,033,000  related to its portion
of the Study as disclosed in the engineering report.  Presently,  the Company is
not aware of any claims or  remediation  requirements  from any local,  state or
federal government agencies.  Each of the properties is a commercial zone and is
still used as transit depots,  including  maintenance of vehicles.


                                       F-43
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

13.  COMMITMENTS AND CONTINGENCIES (Continued):

Leases:

     The  Company's  principal  office is  located in 6,912  square  feet at 444
Merrick Road, Lynbrook,  NY (including 3,545 square feet effective March, 2008),
which it leases from a partnership  owned in part by Paul A. Cooper,  a Director
and Officer of the Company.  Future minimum rents payable under the terms of the
leases, as amended, amount to $169,540,  $174,626, and $118,723 during the years
2008 through 2010.

     The Company  recorded lease payments  through the straight line method and,
for leases with step rent provisions  whereby the rental payments  increase over
the life of the lease,  the Company  recognizes the total minimum lease payments
on a  straight-line  basis over the lease term.  The Company is obligated  under
operating  leases  for  warehouse,  office  facilities  and  certain  office and
transportation  equipment,  which amounted to $547,362, $0, and $0 for the years
ended December 31, 2007, 2006 and 2005, respectively.

     At December 31, future minimum lease payments in the aggregate and for each
of the five succeeding years are as follows (in thousands):

                2008                       $ 689

                2009                         665

                2010                         515

                2011                         344

                2012                         266

                Thereafter                   330
                                        --------------

                Total                     $2,809
                                        ==============

14. SIGNIFICANT TENANT:

     Two tenants, included in the consolidated statement of income,  constituted
100% of rental  revenue  for the year  ended  December  31,  2007 and one tenant
constituted 100% of the rental income for the year ended December 31, 2006.



                                       F-44
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007


15. FUTURE MINIMUM RENT SCHEDULE:

     Future  minimum lease payments to be received by the Company as of December
31,  2007  under  noncancelable  operating  leases  for the next five  years and
thereafter are as follows (in thousands):


                2008                             $ 9,433

                2009                               9,499

                2010                               9,387

                2011                               9,914

                2012                               9,914

                Thereafter                       150,313
                                           -------------------

                                               $ 198,460
                                           ===================

     The lease agreements generally contain provisions for reimbursement of real
estate taxes and operating  expenses  over base year  amounts,  as well as fixed
increases in rent.

16. PRIOR YEAR RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS:

     The  accompanying  consolidated  financial  statements  for the year  ended
December  31,  2006 have been  restated to reflect  the  correction  of an error
related to recording a federal and state income tax expense entry. The effect of
the restatement  was to increase  Green's net income for the year ended December
31,  2006 by  approximately  $600,000  and $159.29  per share.  The  restatement
resulted in the following changes to the Company's  consolidated  balance sheet,
statement of operations and cash flows for the year ended December 31, 2006:

                                                 As Reported       As Restated
                                                --------------------------------
                                                        (in thousands)
Consolidated balance sheet:
Income taxes payable                          $         4,840   $         4,240
                                             ================= =================

Consolidated statement of operations:
Provision for income taxes                    $         1,516   $           916
                                             ================= =================

Consolidated statement of cash: flows:
Income taxes payable                          $         4,512   $         3,912
                                             ================= =================


                                       F-45
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

17. SEGMENTS:

Segment Information:

     The operating segments reported below are segments of the Company for which
separate  financial  information is available and for which operating results as
measured  by  income  from  operations  are  evaluated  regularly  by  executive
management in deciding how to allocate  resources and in assessing  performance.
The accounting policies of the business segments are the same as those described
in the Summary of Significant Accounting Policies (see Note 1).

     The Company operates in four reportable  segments:  Real Estate Operations,
Outside Maintenance and Shelter Cleaning Operations,  Insurance Operations,  and
Paratransit Operations, all of which are conducted throughout the U.S., with the
exception of the Insurance Operations which are conducted in the Cayman Islands.

     Real Estate Operations rents Company owned real estate located primarily in
New York.

     Outside  Maintenance  and  Shelter  Cleaning  Operations  provides  outside
maintenance and cleaning services to outdoor advertising  companies in New York,
New Jersey, Arizona and California.

     Insurance Operations assumes reinsurance of worker's compensation,  vehicle
liability  and covenant  liability of the Company and its  affiliated  Companies
from an unrelated insurance company based in the United States of America.

     Paratransit   Operations  provide  paratransit  service  in  New  York  for
physically and mentally challenged persons who are unable to use standard public
transportation (see Note 19).


                                       F-46
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

17. SEGMENTS (Continued):

     The summarized segment information (excluding discontinued operations),  as
of and for the years ended  December 31, 2007,  2006 and 2005 are as follows (in
thousands):


<TABLE>
<CAPTION>
Year Ended December 31, 2007
                               -------------------------------------------------------------------------------------------------
                                Real Estate       Outside      Insurance        Paratransit
                                Operations      Maintenance    Operations       Operations        Eliminations        Total
                               -------------------------------------------------------------------------------------------------
<S>                             <C>            <C>             <C>            <C>               <C>              <C>
Operating revenue and subsidies $      9,451   $        26,059 $           -  $         9,537   $        (1,975) $        43,072
Operating expenses                     4,245            23,120           100           10,505            (1,550)          36,420
                               -------------- ----------------- ------------- ----------------  ---------------- ----------------
Operating income                       5,206             2,939          (100)            (968)             (425)           6,652
Other income (expense):
   Interest income                       771                74            37                5                 -              887
   Interest and debt expense            (780)              (21)            -              (11)                -             (812)
   Change in insurance reserves            -                 -           254                -                 -              254
     Other                               (70)             (475)            -               (7)              425             (127)
                               -------------- ----------------- ------------- ----------------  ---------------- ----------------
        Total other income               (79)             (422)          291              (13)              425              202
(expense)

Income (loss) from continuing
operations before income
taxes  and equity in earnings
of affiliated companies                5,127             2,517           191             (981)                -            6,854
Equity in earnings of
affiliated companies, net
of tax                                    60                 -             -                -                 -               60

Provision for income taxes            (1,162)             (28)             -                -                 -           (1,190)
                               -------------- ----------------- ------------- ----------------  ---------------- ----------------
Income (loss) from continuing
operations                     $       4,025   $         2,489 $         191   $         (981)  $             - $          5,724
                               ============== ================ ============== ================ ================ =================
Capital expenditures           $           -   $           637 $           -   $            -   $             - $            637
                               ============== ================ ============== ================ ================ =================
Depreciation and amortization  $         344   $           219 $           -   $            3   $             - $            566
                               ============== ================ ============== ================ ================ =================
Total assets                   $     136,249   $        14,817 $       4,119   $        3,398   $      (33,886) $        124,697
                               ============== =============================== ================ ================ =================
</TABLE>



                                       F-47
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007


17. SEGMENTS (Continued):

<TABLE>
<CAPTION>

Year Ended December  31,
2006
                           ---------------------------------------------------------------------------------------
                             Real Estate   Outside         Insurance    Paratransit
(Restated)                   Operations    Maintenance     Operations   Operations   Eliminations      Total
                           ---------------------------------------------------------------------------------------
Operating revenue
<S>                        <C>           <C>           <C>            <C>           <C>            <C>
                           $       3,908 $           - $            - $           - $            - $       3,908
                           ------------- ------------- -------------- ------------- -------------- ---------------
Operating expenses                   940             -              -             -              -           940
Operating income                   2,968             -              -             -              -         2,968
Income from continuing
operations before income
taxes and equity in
earnings (loss) of
affiliated companies               2,968             -              -             -              -         2,968
Provision for income taxes          (916)            -              -             -              -          (916)
Equity in earnings  (loss)
of affiliated companies,
net of tax                          (501)            -              -             -              -          (501)
                           ------------- ------------- -------------- ------------- -------------- ---------------
Income from continuing
operations                 $       1,551 $           - $            - $           - $            - $       1,551
                           ============= ============= ============== ============= ============== ===============
Total assets               $      23,942 $           - $            - $           - $            - $      23,942
                           ============= ============= ============== ============= ============== ===============
Capital expenditures       $           - $           - $            - $           - $            - $           -
                           ============= ============= ============== ============= ============== ===============
Depreciation and
amortization               $         281 $           - $            - $           - $            - $         281
                           ============= ============= ============== ============= ============== ===============
Investment in equity
method investees           $       1,971 $           - $            - $           - $            - $       1,971
                           ============= ============= ============== ============= ============== ===============

Year Ended December 31, 2005
                           ---------------------------------------------------------------------------------------
                            Real Estate     Outside       Insurance    Paratransit
                             Operations   Maintenance    Operations     Operations   Eliminations      Total
                           ---------------------------------------------------------------------------------------
Operating revenue          $           -  $          - $            - $           - $            - $           -

Operating expenses                   317             -              -             -              -           317
                           ------------- ------------- -------------- ------------- -------------- ---------------
Income from continuing
operations before income
taxes and equity in
earnings (loss) of
affiliated companies                (317)            -              -             -              -          (317)
Provision for income taxes          (684)            -              -             -              -          (684)
Equity in earnings of
affiliated companies, net
of tax                             1,390             -              -             -              -         1,390
                           ------------- ------------- -------------- ------------- -------------- ---------------
Income from continuing
operations                 $         389 $           - $            - $           - $            - $         389
                           ============= ============= ============== ============= ============== ===============
Total assets               $      27,082 $           - $            - $           - $            - $      27,082
                           ============= ============= ============== ============= ============== ===============
Capital expenditures       $           3 $           - $            - $           - $            - $           3
                           ============= ============= ============== ============= ============== ===============
Depreciation and
amortization               $         317 $           - $            - $           1 $            - $         317
                           ============= ============= ============== ============= ============== ===============
Investment in equity
method investees           $         795 $           - $            - $           - $            - $         795
                           =======================================================================================
</TABLE>


                                       F-48
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007


18. SELECTED QUARTERLY DATA (Unaudited):

     The  summarized  selected  quarterly  data for the years ended December 31,
2007, 2006 and 2005 are as follows (in thousands except per share data).

<TABLE>
<CAPTION>

                  Year                       March 31            June 30          September 30      December 31
-------------------------------------------------------------------------------------------------------------------
2007
<S>                                        <C>              <C>                 <C>              <C>
   Revenues                                $           999  $           14,630  $         14,055 $          13,388
   Net income                              $           573  $            1,777  $          1,407 $           1,643
   Per common share (basic and
    diluted) (a)                           $          2.58  $             0.18  $           0.15 $           $0.13
2006 (Restated)
   Revenues                                $           913  $              999  $            999 $             997
   Net income (loss)                       $         7,042  $             (847) $         (5,584)$             614
   Per common share (basic and
    diluted) (a)                           $      1,869.58  $          (224.88) $      (1,452.54)$          163.02
2005
   Revenues                                $             -  $                -  $              - $               -
   Net income                              $           374  $              416  $             93 $             844
   Per common share (basic and
    diluted) (a)                           $         99.31  $           110.49  $          24.56 $          224.17

</TABLE>

(a) Differences  between the sum of the four quarterly per share amounts and the
annual per share amount are  attributable to the effect of the weighted  average
outstanding share calculations for the respective periods.

19. SUBSEQUENT EVENTS:

Real Estate Acquisition

     On February 1, 2008,  the Company  entered  into an agreement to purchase a
property  located in the Hartford,  Connecticut  area.  In connection  with this
agreement, the Company made an initial deposit in the amount of $2,300,000.  The
purchase price of the property is approximately  $23,300,000.The closing of this
transaction  occurred on March 3, 2008. The acquisition cost was funded from the
Company's secured revolving credit facility.

Paratransit Operations (unaudited)

     In February  2008,  the Company was  notified by the New York City  Transit
Agency of the Metropolitan  Transit  Authority (the "Agency") that a Request for
Proposal to renew the Company's  existing  paratransit  service  contract  after
September  30,  2008  would not be  considered  by the  Agency.  The  Company is
determining  what action it should take in  response to such  notification.  The
Paratransit Operations were acquired as part of the Reorganization that occurred
on March 29, 2007.


                                      F-49
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

19.  SUBSEQUENT EVENTS (Continued):

     The  Paratransit  Operations'  revenues  and net  losses for the year ended
December 31, 2007 and 2006 were as follows (in thousands):

                                    Years Ended December 31,
                           --------------------------------------------
                                   2007                   2006
                             ------------------   ---------------------
            Revenues        $           12,454   $              10,176
                             ==================   =====================
            Net loss        $           (1,078)  $                (696)
                             ==================   =====================



                                       F-50
<PAGE>
                         GTJ REIT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2007

20.  REAL ESTATE AND ACCUMULATED DEPRECIATION:

     Information  relating to real  estate and  accumulated  depreciation  as of
December 31, 2007 are as follows (in thousands):

<TABLE>
<CAPTION>

                                                      Cost
                                                   Capitalized   Total                        Total Cost
                             Initial   Initial     Subsequent    Costs at                       Net of
                    Encum-   Costs     Costs           to        December    Accumulated     Accumulated   Year     Depreciable
  Description (B)   branc    Land      Buildings   Acquisition   31, 2007    Depreciation    Depreciation  Acquired    Lives
--------------------------------------------------------------------------------------------------------------------------------
<S>                 <C>    <C>         <C>       <C>           <C>           <C>             <C>                   <C>
165-25 147th
Avenue              $  250 $     360   $  3,821  $  1,314      $    5,495    $  4,745        $      750     (A)    10-25 years
49-19 Rockaway
Blvd.               $  250 $      74   $    783  $    673      $    1,530    $    972        $      558     (A)    10-25 years

85-01 24th Avenue   $  250 $  38,210   $    937  $      -      $   39,147    $     64        $   39,083     (A)    10-25 years
114-15 Guy Brewer
Blvd.               $  250 $  23,100   $      6  $      -      $   23,106    $      -        $   23,106     (A)    10-25 years
612 Wortman Avenue  $    - $  14,400   $    323  $      -      $   14,723    $    255        $   14,468     (A)    10-25 years
23-85 87th Street   $    - $   8,907   $    117  $      -      $    9,024    $      -        $    9,024     (A)    10-25 years
                    ------------------------------------------------------------------------------------------------------------
                    $1,000 $  85,051   $  5,987  $   1,987     $   93,025    $  6,036        $   86,989
                    ===================================================================================
</TABLE>

(A) Acquired by the Company in March 2007 upon the reorganization. See Note 1 to
financial statements.  The Bus Companies acquired these properties from 10 to 70
years ago.

(B) All properties located in New York, New York

     The changes in real estate for the three years ended  December 31, 2007 are
as follows:
<TABLE>
<CAPTION>

                                                   2007                      2006                      2005
                                           ---------------------    ------------------------   ---------------------
<S>                                         <C>                      <C>                        <C>
Balance at beginning of year                $          7,025         $            7,025         $          7,025
Property acquisitions                                 86,000                          -                        -
Improvements                                               -                          -                        -
Retirements / disposals                                    -                          -                        -
                                           ---------------------    ------------------------   ---------------------
Balance at end of year                      $         93,025         $            7,025         $          7,025
                                           =====================    ========================   =====================
</TABLE>

     The   aggregate   cost  of  land,   buildings  and   improvements,   before
depreciation,  for  Federal  income  tax  purposes  at  December  31,  2007  was
approximately $21,653.

     The changes in accumulated  depreciation,  exclusive of amounts relating to
equipment, transportation equipment, and furniture and fixtures, for three years
ending December 31, 2007 are as follows:
<TABLE>
<CAPTION>

                                                   2007                      2006                      2005
                                           ---------------------    ------------------------   ---------------------
<S>                                         <C>                      <C>                        <C>
Balance at beginning of year                $          5,476         $            5,195         $          4,878
Depreciation for year                                    560                        281                      317
Retirements / disposals                                    -                          -                        -
                                           ---------------------    ------------------------   ---------------------
Balance at end of year                      $          6,036         $            5,476         $          5,195
                                           =====================    ========================   =====================
</TABLE>


                                      F-51
<PAGE>

ITEM  9.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
          FINANCIAL DISCLOSURE

None.

ITEM 9A.  CONTROLS AND PROCEDURES

     This annual  report on Form 10-K does not include a report of  management's
assessment regarding internal control over financial reporting or an attestation
report  of  the  our  registered  public  accounting  firm  thereon,  due to the
transition  period  established  by the  rules of the  Securities  and  Exchange
Commission for newly public companies.

     The  Registrant's  management,  with the  participation of the Registrant's
Chief  Executive  Officer  and  Chief  Accounting  Officer,  has  evaluated  the
effectiveness  of the Registrant's  disclosure  controls and procedures (as such
term is defined in Rules 13a-15(e) and 15(d)-15(e) under the Securities Exchange
Act of 1934,  as  amended  (the  "Exchange  Act"))  as of the end of the  period
covered  by this  report.  Based  on such  evaluation,  the  Registrant's  Chief
Executive  Officer and Chief  Accounting  Officer have concluded that, as of the
end of such period, the Registrant's disclosure controls and procedures were not
fully effective. The Registrant has recently begun reporting as a public company
and has,  since December 31, 2007,  obtained the  assistance  needed to generate
financial  statements  and reports to be filed with the  Securities and Exchange
Commission which fully comply as to required  contents and which can be provided
on a timely basis.

     There have not been any changes in the  Registrant's  internal control over
financial  reporting (as such term is defined in Rules  13a-15(f) and 15-d-15(f)
under  the  Exchange  Act)  during  the most  recent  fiscal  quarter  that have
materially  affected,  or  are  reasonably  likely  to  materially  affect,  the
Registrant's internal control over financial reporting,  other than the addition
of assistance  needed to generate  financial  statements and reports to be filed
with the  Securities and Exchange  Commission  which fully comply as to required
contents and which can be provided on a timely basis.

ITEM 9B.  OTHER INFORMATION

None.


                                       53
<PAGE>


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Our Board of Directors  consists of seven members,  four of whom are deemed
independent  as  defined  in  the  North  American   Securities   Administration
Association ("NASAA")  guidelines.  A director is deemed to be independent if in
the last two years he or she is not associated,  directly or indirectly, with us
or the Bus Companies.  Serving as a director of an affiliated  company does not,
by itself, preclude a director from being considered an independent director, in
accordance  with  the  guidelines  of NASAA  applicable  to  REIT.  The  primary
responsibilities  of our Board of Directors are to provide oversight,  strategic
guidance,  counseling  and direction to our  management.  Our Board of Directors
meets on a regular  basis and  additionally  as required.  Written or electronic
materials are distributed in advance of meetings as a general rule and our Board
of Directors  schedules  meetings with, and presentations  from,  members of our
senior management on a regular basis and as required.

     Directors  are elected at the Annual  Meetings of  stockholders.  We have a
staggered  Board of  Directors.  Class I directors  have a term  expiring at the
Annual  Meeting in 2010 and until their  successors  are elected and  qualified.
Class II directors  have a term expiring at the Annual Meeting in 2008 and until
their  successors  are elected and  qualified.  Class III directors  have a term
expiring at the Annual  Meeting in 2009 and until their  successors  are elected
and  qualified.  Directors  elected  at such time shall be elected to three year
terms.  Officers  are  appointed  by the  Board of  Directors  and  serve at the
pleasure of the Board of Directors.

     The Board of Directors held seven meetings during the 2007 fiscal year. All
of the Directors attended at least 75% of the meetings of the Board of Directors
and of the  committees  on which they served.  We  encourage  all members of the
Board of Directors to attend annual  meetings of  stockholders,  but there is no
formal  policy  as  to  their   attendance.   At  the  2007  Annual  Meeting  of
stockholders, five members of the Board of Directors attended.



                                       54
<PAGE>


         The following table sets forth the names and ages of our directors and
executive officers and the positions they held with
us as of March 1, 2008:
<TABLE>
<CAPTION>

Name                                               Age                              Position
----------------------------------------           ---     ---------------------------------------------------------
<S>                                                 <C>
Jerome Cooper                                       79     President and Chief Executive Officer and Chairman of the
                                                           Board of Directors and Class III Director

Paul Cooper                                         47     Vice President and Class II Director


Douglas Cooper                                      61     Vice President, Treasurer and Secretary and Class I
                                                           Director

Michael Kessman                                     56     Chief Accounting Officer


David Jang                                          47     Class II Director


John J. Leahy                                       65     Class III Director

Donald M. Schaeffer                                 57     Class III Director


Harvey I. Schneider                                 74     Class I Director
</TABLE>

     The principal  occupation and business  experience of each of the directors
and executive officers are as follows:

     Jerome  Cooper  has been a  director  and Chief  Executive  Officer  of the
Company  since June 2006.  Jerome  Cooper has been  principally  employed as the
Chief Executive Officer of the Company and its subsidiaries  since March,  2007.
Prior to that Jerome Cooper was principally  employed as Chief Executive Officer
of the Bus Companies and their subsidiaries for the past 10 years. Jerome Cooper
received a Bachelors degree in Political  Science from Ohio State University and
a Bachelor of Laws  degree from  Fordham  School of Law.  Jerome  Cooper is Paul
Cooper's father and Douglas Cooper's uncle.

     Paul A. Cooper has been a director and Vice  President of the Company since
June,  2006. For more than five years,  Paul Cooper's  principal  occupation has
been as  principal of  Lighthouse  Real Estate  Ventures  and of its  affiliates
(collectively  "Lighthouse").  Lighthouse  owns,  manages and leases  commercial
office buildings in the Greater New York  metropolitan  area for its own account
and the account of its  investors.  Paul  Cooper  received a Bachelor of Science
degree  from the  University  of  Pennsylvania  and a Juris  Doctor  degree from
Fordham  University.  Paul Cooper is the son of Jerome  Cooper and the cousin of
Douglas A. Cooper.



                                       55
<PAGE>

     Douglas A.  Cooper has been a director of the  Company  since  June,  2006.
Douglas Cooper has been a member of Ruskin Moscou  Faltischek,  P.C., counsel to
the  Company,  since 1998,  and  another law firm for many years prior  thereto,
which  have been  counsel to the Bus  Companies  and then the  Company.  Douglas
Cooper  graduated  from Hamilton  College,  and received his Juris Doctor degree
from  Fordham  Law  School.  Douglas  Cooper  also  earned a  masters  degree in
Corporate Law from NYU Law School. Douglas Cooper is the nephew of Jerome Cooper
and the cousin of Paul A. Cooper.

     Michael Kessman has been employed by the Company and its subsidiaries,  and
before March 2007,  by the Bus  Companies,  as the senior  controller  and Chief
Accounting  Officer since November  1985.  Mr.  Kessman  graduated from Syracuse
University with a bachelors degree in accounting.

     David M. Jang has been a director  for the Company  since June,  2006.  Mr.
Jang has been a Vice President at Multi-Bank  Securities,  an investment-banking
firm  since  August  of 2005.  Prior to  joining  Multi-Bank,  Mr.  Jang was the
Director  of  Institutional  Sales at  Sovereign  Securities  from March 2003 to
August 2005 and President of CPE  Management  from September 1999 to March 2003.
Mr. Jang  graduated  from Wharton  School,  University  of  Pennsylvania  with a
Bachelors of Science in economics. Mr. Jang is deemed an independent director.

     John J. Leahy has been a director of the  Company  since  June,  2006.  Mr.
Leahy is presently President of JJL Consulting. From 1998 to 2006, Mr. Leahy was
Managing  Director of Citibank Private Bank operations in Long Island.  Prior to
that, Mr. Leahy was a Senior Vice President of Chase  Manhattan  Bank,  N.A. Mr.
Leahy holds a Bachelors degree in Mechanical  Engineering from the University of
Dayton,  and a  Masters  degree in  Business  Administration  from  Long  Island
University. Mr. Leahy is deemed an independent director.

     Donald M.  Schaeffer has been a director of the Company  since June,  2006.
Mr.  Schaeffer has extensive  accounting and legal experience in real estate and
tax. In 1982,  he joined the  accounting  firm,  Kandel  Schaeffer,  in which he
eventually became an officer and owner.  Through successor  accounting firms, he
became  co-owner and President of Schaeffer & Sam, P.C.,  which he has practiced
with for the past seven and a half years.  He graduated from the Wharton School,
University of  Pennsylvania,  in 1972 and Columbia  University  School of Law in
1975. He is a licensed certified public accountant in the State of New York. Mr.
Schaeffer is deemed an independent director.

     Harvey I. Schneider has been a director of the Company since June 2007. Mr.
Schneider  is  currently  a partner at the law firm of Putney,  Twombly,  Hall &
Hirson LLP. Mr.  Schneider is admitted to practice in New York and Florida.  For
over  forty-five  years he has  practiced in the field of trusts and estates for
individuals,   and  employee  benefits  and  succession  planning  for  business
entities.  Mr. Schneider is a 1955 graduate of the Pennsylvania State University
with a B.S.  in  business  administration  and a 1958  graduate  of the New York
University School of Law. Mr. Schneider is deemed an independent director.



                                       56
<PAGE>

Committees of our Board of Directors

     Audit Committee

     We have an audit committee comprised of three directors Messrs. Jang, Leahy
and Schaeffer,  all of whom are deemed independent  directors.  Mr. Schaeffer is
designated as Chairman. Our Board of Directors has determined that Mr. Schaeffer
is a financial  expert and meets the criteria for  independence  as described in
the Securities and Exchange Act of 1934, as amended. The audit committee:

     o    makes  recommendations  to  our  Board  of  Directors  concerning  the
          engagement of independent public accountants;

     o    reviews  the  plans  and  results  of the  audit  engagement  with the
          independent public accountants;

     o    approves  professional  services provided by, and the independence of,
          the independent public accountants;

     o    considers the range of audit and non-audit fees; and

     o    consults  with  our  independent  public  accountants   regarding  the
          adequacy of our internal accounting controls.

     During the fiscal year ended  December 31, 2007,  the Audit  Committee held
three meetings and each member attended all of the meetings.

     Executive Compensation Committee

     We have an executive compensation committee comprised of Messrs. Schneider,
Jang,  and Leahy,  all of whom are deemed  independent  directors,  to establish
compensation  policies and programs for our directors  and  executive  officers.
During the fiscal year ended  December  31,  2007,  the  Executive  Compensation
Committee  held three  meetings and each member  attended  all of the  meetings,
except for one member who attended 66% of the meetings.

     No Nominating Committee

     The Board of Directors does not have a nominating  committee.  Instead, the
full Board of Directors  carries out the duties of a nominating  committee.  The
Board of Directors has not adopted  written  guidelines  regarding  nominees for
director.


                                      57
<PAGE>

Directors' compensation

     We pay each of our non-officer  directors an annual retainer of $10,000 and
annually  grant a 5,000 share stock  option at fair market  value on the date of
grant.  In addition,  we pay  non-officer  directors  $500.00 for attending each
board and committee meeting.

Code of Business Conduct and Ethics

     Our Board of  Directors  has not  adopted a code of  business  conduct  and
ethics as of this time, but expects to do so within the near future.


ITEM 11.                            EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

The following discussion and analysis of compensation  arrangements of our named
executive officers for 2007 should be read together with the compensation tables
and related disclosures set forth below.

     Overview of Objectives

     The   Compensation   Committee  of  the  Board  of  Directors   establishes
compensation policies, plans and programs to accomplish three objectives:

     o    to keep,  incentivize  and reward  highly  capable and  well-qualified
          executives;

     o    to focus  executives'  efforts  on  increasing  long-term  shareholder
          value; and

     o    to  reward  executives  at  levels  which  are  competitive  with  the
          marketplace for similar  positions and consistent with the performance
          of each executive and of our company.

     Our executive  compensation  program is designed to reward an  individual's
success in meeting and exceeding  performance in various  leadership  functions,
coupled with the ability to enhance long-term shareholder value. Some of the key
elements in considering an executive's level of success are the executive's:

     o    effectiveness as it relates to our overall financial, operational, and
          strategic goals;

     o    the individual's  level of responsibility  and the nature and scope of
          these responsibilities;

     o    contribution to our financial results;

     o    effectiveness  in leading  initiatives to increase  customer value and
          overall productivity; and


                                      58
<PAGE>

     o    contribution  to our commitment to corporate  responsibility,  as well
          as,  compliance with  applicable  laws,  regulations,  and the highest
          ethical standards.

     Elements of Compensation

     Our executive compensation program includes the following elements:

     o    annual compensation which is comprised of base salary, cash bonus, and
          other annual types of compensation; and

     o    long-term  compensation  which may include the award of stock options,
          and similar long-term compensation.

     The Compensation  Committee from time to time,  evaluates and discusses the
performance of certain  executives.  This evaluation and discussion may include,
among  other  things,  a review  of the  contribution  and  performance  of such
executive to the  Company's  overall  performance,  strengths,  weaknesses,  and
development plans.  Following this evaluation and discussion,  input, as needed,
is  obtained  from  other  senior  officers.   A  discussion  is  held  and  the
Compensation  Committee makes its own assessment and determines the compensation
of each  executive.  The  committee  continually  strives to balance  annual and
long-term  compensation  by examining  the entire  compensation  package of each
executive.

     Annual Compensation

     Each compensation  element is specifically  designed to meet the objectives
outlined above. As such, in determining the annual  compensation  budget for the
current year and in fixing levels of executive  compensation,  the  Compensation
Committee considered:

     o    our performance relative to our growth and profitability goals and its
          peers'  performance,   both  in  the  local  geographic  area  and  in
          institutions with similar lending portfolios;

     o    the relative individual performance of each executive; and

     o    our cash needs.

     Base Salary

     In  establishing a base salary for executives,  the following  factors were
considered: (i) the duties, complexities,  specialization,  and responsibilities
of the position;  (ii) the level of experience and/or training  required;  (iii)
the  impact  of  the  executive's   decision-making   authority;  and  (iv)  the
compensation  for positions having similar scope and  accountability  within and
outside the Company.

     The Compensation  Committee,  where it deems appropriate,  reviews publicly
available local, regional, and national compensation data to benchmark executive
compensation.  We  believe  that  executive  talent  extends  beyond  our direct
competitors  and industry;  therefore,  the data may include a broad  comparison
group.  While  benchmarking  provides  a  very  useful  tool,  the  Compensation
Committee understands that an effective  compensation program is based primarily
on  performance;  therefore,  adjustments  to base salary  benchmarks are driven
primarily   by   individual   performance   and  our   projected   cash   needs.


                                      59
<PAGE>

     Other Compensation

     Jerome Cooper has been granted the use of a company-owned  vehicle. The use
of the  company-owned  vehicle provides an expense-saving  opportunity,  as this
vehicle  is  used  for  business-related   travel  as  needed,  helping  to  cut
out-of-pocket travel expenses. In addition,  Stanley  Brettschneider and Michael
Kessman are reimbursed for costs  associated for gas and tolls as their personal
vehicles  are  used  for  business-related  travel  as  needed,  helping  to cut
out-of-pocket travel expenses.

     Long-Term Compensation

     The Compensation Committee continually strives to achieve a balance between
promoting strong annual growth and ensuring long-term  viability and success. To
reinforce the  importance of balancing  these views,  executives may be provided
long-term incentives.

     Stock Options

     Our Compensation  Committee  believes that stockholder value of our Company
can be  further  increased  by  aligning  the  financial  interests  of our  key
executives and certain other employees with those of our stockholders. Awards of
stock options  pursuant to our 2007  Incentive  Award Plan (the "2007 Plan") are
intended to meet this objective and constitute the long-term  incentive  portion
of  executive  compensation.  Participation  in the  2007  Plan is  specifically
approved by the Board of Directors and consists of our directors and employees.

     2007 Incentive Award

     Our  Board of  Directors  adopted  the  2007  Plan on June  11,  2007.  The
stockholders  approved the 2007 Plan at the annual meeting of stockholders  held
on February 7, 2008. The following is a summary of the principal features of the
2007 Plan. This summary highlights information from the 2007 Plan. Because it is
a summary,  it may not contain all the information  that is important to you. To
fully  understand the 2007 Plan, you should carefully read the entire 2007 Plan,
which is included as an exhibit to the this Annual Report on Form 10-K.

                Securities subject to the 2007 Plan

     The shares of stock  subject to the 2007 Plan are our Common  Stock.  Under
the terms of the 2007 Plan,  the aggregate  number of shares of our common stock
subject to options,  restricted  stock  awards,  stock  purchase  rights,  stock
appreciation  rights,  or SARs,  and other awards will be no more than 1,000,000
shares, subject to adjustment under specified circumstances.

                Awards under the 2007 Plan

     The Compensation  Committee is the administrator of the 2007 Plan. The 2007
Plan provides that the  administrator  may grant or issue stock  options,  SARs,
restricted stock, deferred stock,  dividend equivalents,  performance awards and
stock payments,  or any combination  thereof.  Each award will be set forth in a
separate  agreement  with the person  receiving  the award and will indicate the
type, terms and conditions of the award.


                                      60
<PAGE>

     Our officers, employees, consultants and non-officer Directors are eligible
to receive awards under the 2007 Plan. The administrator determines which of our
officers,  employees,  consultants,  and  non-officer  Directors will be granted
awards.

     Nonqualified stock options, or NQSOs, provide for the right to purchase our
Common Stock at a specified  price which,  except with respect to NQSOs intended
to  qualify  as  performance-based  compensation  under  Section  162(m)  of the
Internal  Revenue Code of 1986,  as amended (the  "Code"),  may not be less than
fair market value on the date of grant, and usually will become exercisable,  in
the discretion of the administrator, in one or more installments after the grant
date. The  exercisability  of the  installments  of a NQSO may be subject to the
satisfaction of individual or company  performance  criteria  established by the
administrator. NQSOs may be granted for any term specified by the administrator.

     Incentive  stock  options,  or  ISOs,  are  designed  to  comply  with  the
provisions  of Section 422 of the Code and are  subject to certain  restrictions
contained in the Code.  Among such  restrictions,  ISOs  generally  must have an
exercise  price of not less than the fair market  value of a share of our common
stock on the date of grant,  may only be granted to officers and  employees  and
must  expire  within  ten years  from the date of  grant.  In the case of an ISO
granted  to an  individual  who owns,  or is deemed to own,  at least 10% of the
total  combined  voting  power of all of our  classes  of  stock,  the 2007 Plan
provides that the exercise  price must be at least 110% of the fair market value
of a share of our  common  stock on the  date of grant  and the ISO must  expire
within five years from the date of grant.

     Restricted  stock may be sold to  participants at various prices or granted
with no purchase price,  and may be made subject to such  restrictions as may be
determined by the administrator. Restricted stock, typically, may be repurchased
by us at the original  purchase price if the vesting  conditions are not met. In
general,  restricted  stock  may  not  be  sold  or  otherwise  hypothecated  or
transferred until  restrictions are removed or expire.  Purchasers of restricted
stock,  unlike  recipients  of options,  will have voting rights and may receive
distributions prior to the time the restrictions  lapse. Also,  distributions on
restricted stock may be subject to vesting conditions and restrictions.

     Deferred stock may be awarded to participants, typically without payment of
consideration,  but subject to vesting conditions based on performance  criteria
established by the administrator.  Like restricted stock, deferred stock may not
be sold or otherwise  hypothecated or transferred  until vesting  conditions are
removed or expire.  Unlike restricted  stock,  deferred stock will not be issued
until the deferred  stock award has vested,  and  recipients  of deferred  stock
generally will have no voting or distribution  rights prior to the time when the
vesting conditions are satisfied.

     Stock  appreciation  rights may be granted in connection with stock options
or  separately.  SARs  granted by the  administrator  in  connection  with stock
options  typically  will provide for payments to the holder based upon increases
in the price of our common stock over the exercise price of the related  option,
but  alternatively  may be  based  upon  an  exercise  price  determined  by the
administrator.  Except as required by Section 162(m) of the Code with respect to
any SAR  intended  to qualify as  performance-based  compensation,  there are no
restrictions specified in the 2007 Plan on the exercise prices of SARs, although
restrictions  may be imposed by the  administrator  in the SAR  agreements.  The
administrator may elect to pay SARs in cash or our common stock or a combination
of both.


                                      61
<PAGE>

     Distribution equivalents represent the value of the distributions per share
paid by us,  calculated  with  reference to the number of shares  covered by the
stock options, SARs or other awards held by the participant.

     Performance  awards  may be  granted  by  the  administrator  to  officers,
employees or  consultants  based upon,  among other things,  the  achievement of
performance  goals.  Generally,   these  awards  will  be  based  upon  specific
performance  criteria  and  may be  paid  in  cash  or  our  common  stock  or a
combination.  Performance awards to officers, employees and consultants may also
include  bonuses granted by the  administrator,  which may be payable in cash or
our common stock or a combination of both.

     Stock payments may be authorized by the administrator in the form of shares
of our common  stock or an option or other right to purchase our common stock as
part of a deferred  compensation  arrangement in lieu of all or any part of cash
compensation, including bonuses, that would otherwise be payable to the officer,
employee  or  consultant.  Stock  payments  may be based on the  achievement  of
performance goals.

     The  administrator  may designate  officers and employees as Section 162(m)
participants,  whose  compensation for a given fiscal year may be subject to the
limit on  deductible  compensation  imposed by Section  162(m) of the Code.  The
administrator  may grant to  Section  162(m)  participants  options,  restricted
stock,  deferred stock, SARs,  dividend  equivalents,  performance  awards, cash
bonuses and stock payments that are paid,  vest or become  exercisable  upon the
achievement of performance goals for our company, or any subsidiary, division or
operating  unit  of  our  company  related  to  one or  more  of  the  following
performance  criteria net income;  pre-tax income;  operating income; cash flow;
earnings  per  share;  earnings  before  interest,  taxes,  depreciation  and/or
amortization;  return on equity;  return on  invested  capital  or assets;  cost
reductions  or savings;  or  appreciation  in the market value of a share of our
common stock.

                Option grants to non-officer Directors

     Each of our  non-officer  Directors will receive an option for 5,000 shares
of our common stock as of the date of their  appointment and a similar option at
each annual meeting of our stockholders  thereafter ("Director  Options").  Each
person who  thereafter  is elected or appointed as a  non-officer  director will
receive  a  Director  Option  on the date  such  person  is first  elected  as a
non-officer director and at each annual meeting of our stockholders  thereafter.
The Director Options will vest on grant.

                Amendment and Termination of the 2007 Plan

     The Board of Directors may not,  without  stockholder  approval,  amend the
2007 Plan to increase the number of shares of our stock that may be issued under
the 2007 Plan.

     The Board of Directors may  terminate  the 2007 Plan at any time.  The 2007
Plan will be in effect until terminated by the Board of Directors.  However,  in
no event may any award be granted under the 2007 Plan after ten years  following
the 2007  Plan's  effective  date.  Except  as  indicated  above,  the  Board of
Directors may modify the 2007 Plan from time to time.


                                      62
<PAGE>

     Other Long-Term Compensation

     We  offer  a  variety  of  health  and  welfare  programs  to all  eligible
employees.  The executives  generally are eligible for the same benefit programs
on the same  basis as other  employees.  The  health and  welfare  programs  are
intended to protect employees against  catastrophic loss and encourage a healthy
lifestyle. Our health and welfare programs include medical, prescription, dental
and  vision.  We  provide  short-term  disability  coverage  to every  full time
employee in New York, at no cost to the employee.

     We offer a 401(k) plan to all eligible employees, including executives. The
401(k) plan is funded by  contributions of  participating  employees.  We do not
offer any matching contributions to the participants in this plan.

     Summary Compensation Table

The following table sets forth the compensation of each executive officer of the
Company and/or their subsidiaries for the three years ended December 31, 2007:

<TABLE>
<CAPTION>
                                                                                  Changes in
                                                                                  Pension
                                                                     Non-         Value
                                                                    Equity        and Non-
                                                                    Incentive     Qualified
                                                                    Plan          Deferred      All Other
                                                 Stock    Option    Compen-       Compensation  Compen-
Name and Position  Year   Salary        Bonus    Awards   Awards    sation        Earnings      sation              Total
-----------------  -----  --------   --------   -------  --------  ---------    --------------  ---------       ---------------

Stanley
Brettschneider,
<S>               <C>  <C>                                                                         <C>     <C>    <C>
Officer of        2007 $  528,328          --      --      --            --            --          $ 7,186 (3)(5) $  535,514
Subsidiaries
                  2006 $  496,443          --      --      --            --            --                --       $  496,443
                  2005 $  500,353          --      --      --            --            --          $49,258(2)     $  549,611

Jerome Cooper,
President,
Chief Executive
Officer and
Director
                  2007 $  464,623          --      --      --            --            --          $ 5,839(3)(5)   $  470,462
                  2006 $  420,257          --      --      --            --            --          $   436(5)      $  420,693
                  2005 $  436,699          --      --      --            --            --          $41,169(2)(5)   $  477,868



                                      63
<PAGE>


Michael I
Kessman, Chief
Accounting
Officer
                   2007 $ 228,134           --       --      --            --            --       $ 7,186(3)(5)    $  235,320
                   2006 $ 211,241      $10,000       --      --            --            --       $ 4,422(2)(5)    $  225,663
                   2005 $ 232,110           --       --      --            --            --       $12,393(2)(5)    $  244,503


Paul Cooper,
Vice President
and Director       2007 $  92,308            --       --      --            --            --           --          $   92,308
                   2006         --           --       --      --            --            --           --                  --
                   2005         --           --       --      --            --            --           --                  --


Douglas Cooper,
Vice President,
Treasurer,
Secretary and
Director
                   2007 $  92,308            --       --      --            --            --            --         $   92,308
                   2006         --           --       --      --            --            --      $16,050(4)       $   16,050
                   2005         --           --       --      --            --            --      $16,050(4)       $   16,050
------------------
</TABLE>

(1) The pension plans were terminated in January 2006 and no contributions  were
made by the Bus Companies for 2006.
(2) Consists of unpaid vacation pay.
(3) Consists of 401(K) contributions.
(4) Consists of pension contributions.
(5) Includes $436.00 paid for life insurance premiums


Compensation Committee Interlocks and Insider Participation

     There  are  no  interlocks  or  insider  participation  as to  compensation
decisions required to be disclosed pursuant to SEC regulations.

Compensation Committee Report

     The following report of the  Compensation  Committee shall not be deemed to
be  "soliciting  material"  or to  be  "filed"  with  the  SEC  nor  shall  this
information  be  incorporated  by  reference  into any future  filing  under the
Securities Act of 1933 or the Securities  Exchange Act of 1934, each as amended,
except to the extent that the Company specifically  incorporates it by reference
into a filing.

     The  Compensation  Committee has reviewed and  discussed  the  Compensation
Discussion and Analysis  contained in this Annual Report with management.  Based
on our review and  discussions,  we have  recommended  to the Board of Directors
that the Compensation Discussion and Analysis be included in this Annual Report.



                                      64
<PAGE>

                           THE COMPENSATION COMMITTEE
                                   David Jang
                                  John J. Leahy
                               Harvey I. Schneider

     Grants of Plan Based Awards

     All  options  granted  to  our  named   executive   officers  in  2007  are
non-qualified stock options. The exercise price per share of each option granted
to our named  executive  officers was  determined  in good faith by our Board of
Directors  on the date of the  grant.  All of the stock  options  granted to our
named executive officers in 2007 were granted under our 2007 Plan.

     The following  table sets forth  certain  information  regarding  grants of
plan-based  awards to our named  executive  officers  for the fiscal  year ended
December 31, 2007:


                                      65
<PAGE>

<TABLE>
<CAPTION>

                                     Grants of Plan-Based Awards
                                                                  Estimated Future        All Other    All Other
                               Estimated Future Payouts Under     Payouts Under Equity    Stock        Option
                               Non-Equity Incentive Plan Awards   Incentive Plan Awards   Awards(1):   Awards:
----------------------------------------------------------------------------------------------------------------------------------
            Date on                                                                                                      Grant Date
            Which the                                                                Number     Number of   Exercise of  Fair Value
            Board or                                                                 of Shares  Securities  Base Price   of Stock
            Directors   Grant                                                        of Stock   Underlying  of Option    and Options
Name        Took Action Date(1) Threshold  Target  Maximum Threshold Target Maximum  or Units   Options     Awards(2)    Awards(3)
-----------------------------------------------------------------------------------------------------------------------------------


Jerome
<S>          <C>  <C>                                                                            <C>
Cooper       6/11/07     -        -         -         -           -          -            -      100,000

Paul A.
Cooper       6/11/07     -        -         -         -           -          -            -       50,000        -               -

Douglas A.
Cooper       6/11/07     -        -         -         -           -          -            -       50,000

Michael
Kessman         -        -        -         -         -           -          -            -          -          -               -
</TABLE>

------
(1)  The  Board  of  Directors  approved  options  to  certain  named  executive
     officers.  The  stockholders  approved  the 2007  Stock  Incentive  Plan on
     February 7, 2008.
(2)  The exercise  price of the options will be  determined  based upon the fair
     value of the shares as determined by independent  appraisals as of February
     7, 2008.
(3)  The  options  will be  accounted  for at their fair value at the grant date
     which will also be the service  inception  date and will be amortized  over
     the period of service.




                                      66
<PAGE>


Outstanding Equity Awards At 2007 Fiscal Year-End

     The following table sets forth certain information  regarding equity awards
granted to our named executive officers outstanding as of December 31, 2007:


<TABLE>
<CAPTION>
                                                                                                    Stock Awards
                                         Option Awards                                               Equity       Incentive
                                                                                                     Incentive      Plan
                                                                                            Market    Plan        Awards:
                                                                                            Value    Awards:      Market
                                                                                              of     Number       or Payout
                                                 Equity                          Numbers    Shares     of         Value of
                                               Incentive                          of          or     Unearned     Unearned
                                                  Plan                           Shares     Units    Shares,      Shares,
                 Number of      Number of       Awards:                          or Units     of     Units, or    Units or
                Securities     Securities      Number of                         of Stock   Stock     Other        Other
                Underlying     Underlying      Securities                         That       That    Rights       Rights
Name and        Unexercised    Unexercised     Underlying  Option   Option        Have       Have     That         That
Principal         Options -     Options -      Unearned   Exercise Expiration     Not        Not    Have Not     Have Not
Position        Exercisable   Unexercisable     Options    Price(1)  Date(2)      Vested     Vested  Vested       Vested
----------------------------------------------------------------------------------------------------------------------------


<S>                               <C>                        <C>         <C>     <C>      <C>
Jerome               ---          100,000          ---       $11.14      07.17   100,000  $1,111,400         ---         ---
Cooper,
President,
Chief
Executive
Officer and
Director

Paul                 ---           50,000          ---       $11.14      07.17    50,000   $ 555,700         ---         ---
Cooper,
Vice
President
and Director

Douglas              ---           50,000          ---       $11.14      07.17    50,000   $ 555,700         ---         ---
Cooper,
Vice
President,
Treasurer,
Secretary
and Director

Michael              ---              ---          ---          ---        ---       ---         ---         ---         ---
Kessman,
Chief
Accounting
Officer

</TABLE>

(1)  Fair market value of shares on the date of grant.
(2)  10 years from the date of grant.


                                      67
<PAGE>


     Option Exercises and Stock Vested

     No options were exercised by our named executive officers in 2007.

     Pension Benefits

     We do not currently  maintain  qualified or  non-qualified  defined benefit
plans.

     Non-qualified Deferred Compensation

     We do not currently maintain  non-qualified  defined  contribution plans or
other deferred compensation plans.

     Employee  Agreements and Potential  Payments Upon  Termination or Change in
Control

     None.

     Non-Officer Director Compensation

     The following table sets forth a summary of the compensation we paid to our
non-officer directors in 2007:

<TABLE>
<CAPTION>

                                                                                   Change in Pension
                                                                                       Value and
                              Fees                                                    Nonqualified
                            Earned or                               Non-Stock           Deferred             All
                              Paid        Stock       Option      Incentive Plan      Compensation          other
          Name                Cash        Awards      Awards       Compensation         Earnings         Compensation      Total
          ----                ----        ------      ------       ------------         --------         ------------      -----
<S>                         <C>                       <C>                                                                 <C>
David Jang                  $12,459         -         10,000            -                  -                  -           $12,459
John J. Leahy                11,500         -         10,000            -                  -               $4,200*         15,700
Donald M. Schaeffer          11,500         -         10,000            -                  -                  -            11,500
Harvey I. Schneider          10,500         -          5,000            -                  -                  -            10,500
</TABLE>

     Our non-officer Directors receive the following forms of compensation:

     o    Annual Retainer.  Our independent Directors receive an annual retainer
          of $10,000.

     o    Meeting Fees. Our  independent  Directors  receive $500 for each Board
          meeting, each committee meeting attended in person or by telephone.

     o    Equity  Compensation.  Upon their initial election and annually on the
          date  of the  Annual  Meeting  of  the  Company's  stockholders,  each
          independent  director receives 5,000 share stock option at fair market
          value on the date of grant.

     o    Other   Compensation.   We  reimburse  our  Directors  for  reasonable
          out-of-pocket  expenses  incurred in  connection  with  attendance  at
          meetings,  including  committee  meetings,  of the Board of Directors.
          Independent Directors do not receive other benefits from us.

*Consulting fee

                                      68
<PAGE>

Limitation of liability and indemnification of our Directors and Officers

     We have  included in our charter a provision  limiting the liability of our
Directors and officers to us and our stockholders  for money damages,  except as
may be required by Maryland law.

     We will  indemnify our present and former  Directors  and  officers,  among
others, against judgments, penalties, fines, settlements and reasonable expenses
actually incurred by them in connection with any proceeding to which they may be
made a party by reason of their service in those or other  capacities.  However,
we shall not indemnify  for an adverse  judgment in a suit by or in the right of
the  corporation  or for a judgment  of  liability  on the basis  that  personal
benefit  was  improperly  received,   unless  in  either  case  a  court  orders
indemnification and then only for expenses.

     Our charter  provides that none of our Directors or officers will be liable
to our company or our  stockholders for money damages and that we will indemnify
and pay or reimburse  reasonable expenses in advance of the final disposition of
a proceeding to our Directors, our officers, their affiliates and any individual
who,  while our  director  or  officer  at our  request,  served as a  director,
trustee, partner or officer of another corporation,  partnership, joint venture,
trust,  employee  benefit plan or other  enterprise for losses they may incur by
reason of their  service in those  capacities;  provided,  however,  we will not
indemnify  or  hold  harmless  our  Directors  and  officers  unless  all of the
following conditions are met:

     o    the party was acting on behalf of or  performing  services on the part
          of our company;

     o    our Directors and officers have  determined,  in good faith,  that the
          course of conduct  which caused the loss or liability  was in the best
          interests of our company;

     o    such  indemnification  or agreement to be held harmless is recoverable
          only out of our net assets and not from our stockholders; and

     o    such liability or loss was not the result of:

          negligence or misconduct by our officers or Directors  (other than the
          independent Directors); or

          gross negligence or willful misconduct by the independent Directors.

     The SEC takes the position that indemnification against liabilities arising
under  the  Securities   Act  is  against   public  policy  and   unenforceable.
Furthermore,  our charter  prohibits  us from  indemnifying  our  Directors  for
liabilities  arising from or out of a violation  of state or federal  securities
laws, unless one or more of the following conditions are met:

     o    there has been a successful  determination on the merits of each count
          involving  alleged  securities  law violations as to the party seeking
          indemnification;

     o    such  claims have been  dismissed  with  prejudice  on the merits by a
          court   of   competent   jurisdiction   as  to   the   party   seeking
          indemnification; or



                                      69
<PAGE>

     o    a court of competent  jurisdiction approves a settlement of the claims
          against   the   party   seeking   indemnification   and   finds   that
          indemnification of the settlement and related costs should be made and
          the court  considering the request has been advised of the position of
          the Securities and Exchange  Commission and of the published  opinions
          of any state  securities  regulatory  authority in which shares of our
          stock were offered and sold as to  indemnification  for securities law
          violations.

     We  may  advance  amounts  to  persons  entitled  to  indemnification   for
reasonable  expenses and costs  incurred as a result of any proceeding for which
indemnification  is  being  sought  in  advance  of a final  disposition  of the
proceeding only if all of the following conditions are satisfied:

     o    the legal  action  relates to acts or  omissions  with  respect to the
          performance of duties or services by the  indemnified  party for or on
          behalf of our company;

     o    the  legal  action  is  initiated  by a  third  party  who  is  not  a
          stockholder  of our  company  or the legal  action is  initiated  by a
          stockholder of our company acting in his or her capacity as such and a
          court   of   competent   jurisdiction   specifically   approves   such
          advancement;

     o    the party receiving such advances furnishes our company with a written
          statement  of his or her good faith  belief that he or she has met the
          standard of conduct described above; and

     o    the indemnified party receiving such advances furnishes to our company
          a written  undertaking,  personally  executed on his or her behalf, to
          repay the advanced funds to our company,  together with the applicable
          legal rate of interest thereon, if it is ultimately determined that he
          or she did not meet the standard of conduct described above.

     Authorizations  of payments  will be made by a majority vote of a quorum of
disinterested Directors.

     Also, our Board of Directors may cause our company to indemnify or contract
to indemnify any person not  specified  above who was, is, or may become a party
to any proceeding, by reason of the fact that he or she is or was an employee or
agent of our  company,  or is or was  serving at the request of our company as a
director, officer, employee or agent of another corporation,  partnership, joint
venture, trust, employee benefit plan or other enterprise, to the same extent as
if such  person  were  specified  as one  whom  indemnification  is  granted  as
described above. Any determination to indemnify or contract to indemnify will be
made by a majority vote of a quorum consisting of disinterested Directors.

     We intend to purchase  and maintain  insurance  to  indemnify  such parties
against the liability assumed by them in accordance with our charter in a sum of
at least $5 million.

     The  indemnification  provided in our charter is not exclusive to any other
right to which any person may be entitled, including any right under policies of
insurance  that may be purchased and  maintained by our company or others,  with
respect to claims,  issues or matters in relation to which our company would not
have  obligation or right to indemnify  such person under the  provisions of our
charter.


                                      70
<PAGE>

ITEM 12.        SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


     The following table sets forth, as of March 31, 2008, information regarding
the beneficial ownership of the Company's common stock by (1) each person who is
known to the  Company  to be the owner of more than  five  (5%)  percent  of the
Company's  Common  Stock,  (2) each of the  Company's  directors  and  executive
officers and (3) all directors and executive  officers as a group.  For purposes
of this  table,  a person  or group of  persons  is  deemed  to have  beneficial
ownership of any shares that such person has the right to acquire within 60 days
of March 31, 2008.

<TABLE>
<CAPTION>
                                                                            Amounts and Nature of     Percentage of
Name and Address of Beneficial Owner                                              Beneficial             Class(5)
---------------------------------------------------------------------       ----------------------    ----------------
<S>                                                                                        <C>                    <C>
Jerome Cooper                                                                              151,068                1.1%
Paul A. Cooper                                                                                 -0-                   *
Douglas A. Cooper                                                                              -0-                   *
Michael Kessman                                                                                -0-                   *
David Jang(1)                                                                               15,000                   *
John J. Leahy(2)                                                                            15,000                   *
Donald M. Schaeffer(3)                                                                      15,000                   *
Harvey I. Schneider(4)                                                                      10,000


All Executive Officers and Directors as a Group                                            206,068                1.5%
</TABLE>

*        Represents less than 1.0% of our outstanding common stock.

(1)  Includes options to purchase 15,000 shares which may be purchased under the
     2007 Plan.
(2)  Includes options to purchase 15,000 shares which may be purchased under the
     2007 Plan.
(3)  Includes options to purchase 15,000 shares which may be purchased under the
     2007 Plan.
(4)  Includes options to purchase 10,000 shares which may be purchased under the
     2007 Plan.
(5)  Based on 13,472,281 shares outstanding as of March 31, 2008.


     As of March 31, 2008, we have  approximately  384  stockholders  of record.
There is no trading  market for our common stock and none is expected to develop
in the foreseeable future.

Change In Control Or Other Arrangements

     Except for the foregoing,  there are no other arrangements for compensation
of directors and there are no employment  contracts  between the Company and the
Board of Directors or any change in control arrangements.


ITEM 13.        CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Since January 1, 2005, the Directors and executive officers of the company,
and their  affiliates and associates have engaged in the following  transactions
with the Company,  (excluding  customary  salary payments as employees of one or
more of the Bus Companies).



                                      71
<PAGE>

Paul A. Cooper

     Paul A. Cooper is a director  and officer of the Company.  In April,  2005,
Lighthouse 444 Limited Partnership ("Lighthouse"),  the owner of the building at
444 Merrick Road,  Lynbrook,  NY, and of which Paul Cooper is a general partner,
leased 5,667 square feet of office and storage  space to the Bus Companies for a
term of five years at an annual  rent of  approximately  $160,000  for the first
year,  increasing to  approximately  $177,000 for the fifth year.  This space is
currently  occupied by the Company.  In connection with this lease,  there was a
$231,000  expenditure  (allowance)  by the landlord for leasehold  improvements.
This lease will expire in April 2010.  In February  2008,  Lighthouse  leased an
adjoining  3,545 square feet of office space to the Company at an annual rent of
approximately  $106,000,  which  replaced  2,300  square feet of basement  space
covered by the prior lease having annual rent of approximately $37,000.

     Lighthouse Real Estate  Advisors,  LLC ("LREA"),  of which Paul Cooper is a
member,  received a leasing  commission between 2003 and 2006 for the leasing of
23-85 87th Street,  East  Elmhurst,  New York on behalf of a  subsidiary  of the
Company to Avis  Rent-A-Car  System,  Inc. in the  aggregate  sum of  $1,100,000
(3.056% of gross rent). LREA also received a leasing  commission in 2006 for the
leasing of 85-01 24th Avenue, East Elmhurst, New York on behalf of Triboro Coach
Holding Corp. to New York City in the aggregate sum of $840,540 (1.318% of gross
rent).

     In addition,  LREM received a leasing commission in 2006 for the leasing of
114-15 Guy Brewer Boulevard,  Jamaica, New York on behalf of Jamaica Bus Holding
Corp. to New York City in the aggregate sum of $615,000  (1.645% of gross rent).
LREM also  received a leasing  commission  in 2006 for the leasing of (i) 165-25
147th  Avenue,  Jamaica,  New York  and (ii)  49-19  Rockaway  Beach  Boulevard,
Edgemere,  New York on behalf of Green Bus Holding Corp. to New York City in the
aggregate sum of $1,281,579 (1.528% of gross rent).

     The Avis fee was for finding the tenant and negotiating the lease.  The New
York City fees were for  negotiating  the leases.  Paul Cooper is one of several
partners or members of Lighthouse, LREA and LREM.

Douglas A. Cooper

     Douglas  Cooper is a director  and  officer of the Company and a partner of
Ruskin Moscou  Faltischek,  P.C. ("RMF"),  which has acted as counsel to the Bus
Companies and now acts as counsel to the Company. Fees paid to RMF for the three
years ended December 31, 2007 were $706,126, $662,429 and $505,126, respectively
representing fees and expenses for litigation with New York City and others, the
sale of the  Bus  Companies'  bus  assets  to New  York  City  or its  agencies,
preparation  of all  documentation  related to the  Reorganization  and  general
corporate matters.

Stanley Brettschneider

     Stanley Brettschneider is a key employee of outdoor maintenance businesses.
Prior to September 1, 2003,  the Bus  Companies  owned and operated a school bus
operation,  Varsity Transit, Inc. and Varsity Coach Corp.  ("Varsity").  For the
years ended December 31, 2002 and 2003,  Varsity incurred losses from its school
bus contract services of $3,485,620 and $3,971,856 respectively, due to the high



                                      72
<PAGE>
costs  associated  with  labor,  benefits,  and  maintenance.  Terminating  this
business  would have resulted in  approximately  $6,000,000 of penalties,  and a
negative  performance  report  available to other  municipalities.  Accordingly,
starting in February 2003, the Bus Companies  determined to dispose of Varsity's
buses and routes.  In doing so, they met and negotiated with existing  operators
in the school bus  industry,  as well as  entities  ("Buyers")  associated  with
Stanley  Brettschneider,  and owned by his wife and children,  including Varsity
Bus. Mr.  Brettschneider was then a key employee of the Bus Companies,  a member
of their  boards of  directors  and is  related  by  marriage  to certain of our
directors and officers.

     Initially  282 of Varsity's  buses were sold to the Buyers for  $3,101,708.
Approximately  255 of  Varsity's  routes  were sold to the Buyers for an initial
payment of $3,000 per route,  equaling  $765,000,  and  additional  payments  of
$1,000  per year per  route  for  three  years  based on the  recent  five  year
operating  extension  offered to the New York City School Bus Contractors by the
Department of Education which will equal $765,000, a total of $1,530,000.

     The total sale price of  $4,631,708  was payable as follows:  $2,666,708 in
cash,  which  was  paid,  and a four  year  promissory  note  in the  amount  of
$1,200,000  with  interest  payable at six  percent,  which is being  paid.  The
promissory note was reduced by means of a $250,000 lump sum payment made in 2003
and there are current monthly  installments of $22,211.  The $765,000 balance of
the route  purchase  price was  negotiated  without a specific  time of payment,
because it  depended  on route  renewals.  $255,000 of such amount has been paid
through September 30, 2006.

     In  connection  with such sale,  the Bus  Companies  leased to the Buyers a
portion of the Wortman  Property.  Such  leasing  was on an oral basis,  and the
lease was  reduced  to  writing  in 2006.  The  lease,  which  began in 2003 and
terminates  in 2010,  is subject to  extension as described in Item 1 - Business
Description of REIT Business - Portfolio of Real Properties.

     In 2003,  the Bus  Companies  estimated  that the lease to the Buyers would
represent  an  underpayment  of  estimated  and  projected  market  rent for the
premises so leased of  approximately  $3,350,000  through 2010, but nevertheless
believed the transaction  was in the best interest of the Bus Companies  because
it curtailed the Bus Companies' losses of approximately $4 million per year, led
to transactions  with the Buyers and others for buses and routes  aggregating an
excess of $7 million and led to the vacancy of the 87th  Street  Property,  then
used for  Varsity,  so that the same  could  be  leased  to Avis  Rent A Car for
approximately  $1.8 million a year. The underpayment of market rent appears,  as
of the  current  time,  to be  substantially  in  excess of such  estimated  and
projected  amount due to unforeseen  increases in commercial  rents in excess of
the Consumer Price Index in the New York City  metropolitan area and also due to
significant  increases in New York City real property  taxes.  In addition,  the
Buyers pay us a monthly fee for support services and purchase certain  materials
from us at book value. Varsity has four 5 year options to extend the term of the
lease, starting in 2010, in each case at a rent equal to 90% of market rental of
the leasehold at the time of the extension.

     The Company believes that the terms of the above described transactions are
at least as favorable to the Company and its  subsidiaries  as those which could
have been obtained from non-related third parties.

     The  Board of  Directors  has not,  as of this  time,  adopted  any  formal
policies or procedures for the review and approval of related party transactions
that may come  before it. It is  anticipated  that the Board of  Directors  will
adopt formal policies and procedures for such review and approval in the future,
pending  which such review and  approval  will be based upon the judgment of the
Board of Directors on a case by case basis.


                                      73
<PAGE>

ITEM 14.        PRINCIPAL ACCOUNTANT'S FEES AND SERVICES

     Weiser LLP is our independent accountants and has reported on the financial
statements in this 2007 Annual Report.

     The following  table  presents  aggregate fees billed for each of the years
ended December 31, 2007 and 2006 for  professional  services  rendered by Weiser
LLP in the following categories:

                                              Year Ended December 31,
                                              2007              2006
                                              ----              ----

         Audit fees                         $538,048         $  898,740
         Audit-Related Fees                 $      -         $  101,830
         Tax Fees                           $ 53,200         $  147,000
         Other Fees                         $      -         $        -
                                            --------         ----------
                  Total                     $591,248         $1,147,570

     Audit fees.  These are fees for  professional  services  performed  for the
audit of our annual  financial  statements and the required  review of quarterly
financial  statements and other procedures  performed by Weiser LLP in order for
them to be able to form an opinion  on our  consolidated  financial  statements.
These  fees also  cover  services  that are  normally  provided  by  independent
auditors in connection with statutory and regulatory filings or engagements.

     Audit-related  fees. These are fees for assurance and related services that
traditionally are performed by independent  auditors that are reasonably related
to the performance of the audit or review of the financial  statements,  such as
due diligence  related to acquisitions and  dispositions,  attestation  services
that are not required by statute or  regulation,  internal  control  reviews and
consultation concerning financial accounting and reporting standards.

     Tax  fees.  These  are  fees for all  professional  services  performed  by
professional  staff in our  independent  auditor's  tax  division,  except those
services  related to the audit of our financial  statements.  These include fees
for tax compliance,  tax planning and tax advice,  including federal,  state and
local issues.  Services may also include  assistance with tax audits and appeals
before the IRS and similar state and local agencies,  as well as federal,  state
and local tax issues related to due diligence.

     All  other  fees.  These  are fees for any  services  not  included  in the
above-described  categories,  including assistance with internal audit plans and
risk assessments.

     In accordance with Section 10A(i) of the Exchange Act, before Weiser LLP is
engaged by us to render audit or non-audit services,  the engagement is approved
by our Audit Committee.


                                      74
<PAGE>

                                     PART IV

ITEM 15.        EXHIBITS AND FINANCIAL STATEMENT SCHEDULES


Exhibit
Number     Exhibit
-------    --------------------------------------------------------------------

2.1  Merger  Agreement  and  Plan  of  Merger   (Incorporated  by  reference  to
     Registration Statement No. 333-136110)
3.1  Articles of Incorporation  of the Registrant  (Incorporated by reference to
     Registration Statement No. 333-136110)
3.1(a) Form of Amended and Restated  Articles of Incorporation of the Registrant
     (Incorporated by reference to Amendment No. 1 to Registration Statement No.
     333-136110)
3.2(a) Bylaws of the  Registrant  (Incorporated  by  reference  to  Registration
     Statement No. 333-136110)
3.2(b) Amendment to Bylaws of the Registrant (filed herewith)
4.1  Specimen   Common   Stock   Certificate   (Incorporated   by  reference  to
     Registration Statement No. 333-136110)
10.1 Form of 2007 Incentive Award Plan (filed herewith)
10.2 Form  of  Stockholder  Rights  Agreement   (Incorporated  by  reference  to
     Amendment No. 1 to Registration Statement No. 333-136110)
10.3 Asset Purchase  Agreement by and among Green Bus lines,  Inc.,  Command Bus
     Company,  Inc.,  Triboro Coach Corp.,  Jamaica Buses, Inc. Varsity Transit,
     Inc.,  GTJ Co.,  Inc.  and the City of New York dated  November  29,  2005.
     (Incorporated by reference to Registration Statement No. 333-136110)
10.4 Agreement of Lease between Green Bus Holding  Corp.,  Landlord and the City
     of New York, Tenant: Premises 49-19 Rockaway Beach Boulevard,  Arverne, New
     York.  .   (Incorporated   by  reference  to  Registration   Statement  No.
     333-136110)
10.5 Agreement of Lease between Green Bus Holding  Corp.,  Landlord and the City
     of New York,  Tenant:  Premises 165-25 147th Avenue,  Jamaica,  New York. .
     (Incorporated by reference to Registration Statement No. 333-136110)
10.6 Agreement of Lease between Jamaica Bus Holding Corp., Landlord and the City
     of New York,  Tenant:  Premises 114-15 Guy Brewer Boulevard,  Jamaica,  New
     York.  (Incorporated   by  reference  to  Registration   Statement  No.
     333-136110)
10.7 Agreement of Lease between  Triboro Coach Holding  Corp.,  Landlord and the
     City of New York,  Tenant:  Premises 85-01 24th Avenue East  Elmhurst,  New
     York.  (Incorporated   by  reference  to  Registration   Statement  No.
     333-136110)
10.8 Agreement  of Lease  between GTJ Co.,  Inc.,  Landlord  and Avis Rent A Car
     System, Inc., Tenant:  Premises 23-85 87th Street, East Elmhurst, New York.
     (Incorporated by reference to Registration Statement No. 333-136110)
10.9 Lease by and between GTJ Co.,  Inc.,  Landlord  and Varsity Bus Co.,  Inc.,
     Tenant: Premises 626 Wortman Avenue,  Brooklyn, New York and Cozine Avenue,
     Brooklyn, New York dated September 1, 2003. . (Incorporated by reference to
     Registration Statement No. 333-136110)
10.10 Agreement between Transit Facility Management  Corporation and NYC Transit
     dated August 7, 2001.  (Incorporated  by  reference  to Amendment  No. 1 to
     Registration Statement No. 333-136110)
10.11 Agreement between  ShelterClean,  Inc. and the City of Phoenix dated April
     15, 2006.  (Incorporated  by reference to Amendment  No. 1 to  Registration
     Statement No. 333-136110)
10.12 Agreement  between CEMUSA,  Inc. and Shelter Express Corp.  dated June 26,
     2006.  (Incorporated  by  reference  to  Amendment  No.  1 to  Registration
     Statement No. 333-136110)
10.13 ING Loan Agreement  (Incorporated by reference to the Registrant's  report
     on Form 8-K filed on July 10, 2007)
10.14 ING  Form  of  Pledge   Agreement   (Incorporated   by  reference  to  the
     Registrant's report on Form 8-K filed on July 10, 2007)
10.15 ING Confirmation and ISDA Master Agreement, dated as of December 13, 2006,
     with SMBC Derivative  Products  Limited  (Incorporated  by reference to the
     Registrant's report on Form 8-K filed on July 10, 2007)

                                      75
<PAGE>

10.16 ING  Libor  Cap  Security  Agreement  (Incorporated  by  reference  to the
     Registrant's report on Form 8-K filed on July 10, 2007)
10.17 ING Mortgage Notes  (Incorporated by reference to the Registrant's  report
     on Form 8-K filed on July 10, 2007)
10.18 ING Mortgages  (Incorporated  by reference to the  Registrant's  report on
     Form 8-K filed on July 10, 2007)
10.19 ING  Assignment  of Leases and Rents  (Incorporated  by  reference  to the
     Registrant's report on Form 8-K filed on July 10, 2007)
10.20 Real Estate Purchase and Sale Agreement by and between Eight Farms Springs
     Road Associates,  LLC and Farm Springs Road LLC. (Incorporated by reference
     to the Registrant's report on Form 8-K filed February 5, 2008)
10.21 Lease by and  between  Eight Farm  Springs  Road  Associates,  L.L.C.  and
     Hartford Fire Insurance Company, including First Lease Amendment. (filed
     herewith)
10.22 Agreement  of Lease dated April __, 2005  between  Lighthouse  444 Limited
     Partnership and GTJ Co., Inc. (filed herewith)
10.23 Space  Substitution  Agreement dated November __, 2007 between  Lighthouse
     444 Limited Partnership and Shelter Express Corp. (filed herewith)
21.1 Subsidiaries of GTJ REIT, Inc. (filed herewith)
31.1 Certification of Chief Executive Officer (filed herewith)
31.2 Certification of Chief Accounting Officer (filed herewith)
32.1 Certification of Chief Executive Officer (filed herewith)
32.2 Certification of Chief Accounting Officer (filed herewith)




                                      76
<PAGE>



                                   SIGNATURES

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

                                          GTJ REIT, INC.


Dated: April 30, 2008                     By:  /s/ Jerome Cooper
                                             ---------------------------
                                                Jerome Cooper
                                                Chief Executive Officer

                                          By:  /s/ Michael Kessman
                                             ---------------------------
                                                 Michael Kessman
                                                 Chief Accounting Officer


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following  persons on behalf of the registrant and in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>

Signature                                 Title                                                  Date

<S>                                                                                                         <C>
/s/ Jerome Cooper                         Chief Executive Officer and Director                   April 30, 2008
-------------------------------------
Jerome Cooper


/s/ Paul A. Cooper                        Vice President and Director                            April 30, 2008
-------------------------------------
Paul A. Cooper

/s/ Douglas A. Cooper                     Vice President and Director                            April 30, 2008
-------------------------------------
Douglas A. Cooper

/s/ David Jang                             Director                                              April 30, 2008
-------------------------------------
David Jang

/s/ John J. Leahy                          Director                                              April 30, 2008
-------------------------------------
John J. Leahy

/s/ Donald M. Schaeffer                    Director                                              April 30, 2008
-------------------------------------
Donald M. Schaeffer

/s/ Harvey I. Schneider                    Director                                              April 30, 2008
-------------------------------------
Harvey I. Schneider

</TABLE>


                                      77
<PAGE>



                                  EXHIBIT LIST


Exhibit
Number     Exhibit
-------    --------------------------------------------------------------------
2.1  Merger  Agreement  and  Plan  of  Merger   (Incorporated  by  reference  to
     Registration Statement No. 333-136110)
3.1  Articles of Incorporation  of the Registrant  (Incorporated by reference to
     Registration Statement No. 333-136110)
3.1(a) Form of Amended and Restated  Articles of Incorporation of the Registrant
     (Incorporated by reference to Amendment No. 1 to Registration Statement No.
     333-136110)
3.2(a) Bylaws of the  Registrant  (Incorporated  by  reference  to  Registration
     Statement No. 333-136110)
3.2(b) Amendment to Bylaws of the Registrant (filed herewith)
4.1  Specimen   Common   Stock   Certificate   (Incorporated   by  reference  to
     Registration Statement No. 333-136110)
10.1 Form of 2007 Incentive Award Plan (filed herewith)
10.2 Form  of  Stockholder  Rights  Agreement   (Incorporated  by  reference  to
     Amendment No. 1 to Registration Statement No. 333-136110)
10.3 Asset Purchase  Agreement by and among Green Bus lines,  Inc.,  Command Bus
     Company,  Inc.,  Triboro Coach Corp.,  Jamaica Buses, Inc. Varsity Transit,
     Inc.,  GTJ Co.,  Inc.  and the City of New York dated  November  29,  2005.
     (Incorporated by reference to Registration Statement No. 333-136110)
10.4 Agreement of Lease between Green Bus Holding  Corp.,  Landlord and the City
     of New York, Tenant: Premises 49-19 Rockaway Beach Boulevard,  Arverne, New
     York.  .   (Incorporated   by  reference  to  Registration   Statement  No.
     333-136110)
10.5 Agreement of Lease between Green Bus Holding  Corp.,  Landlord and the City
     of New York,  Tenant:  Premises 165-25 147th Avenue,  Jamaica,  New York. .
     (Incorporated by reference to Registration Statement No. 333-136110)
10.6 Agreement of Lease between Jamaica Bus Holding Corp., Landlord and the City
     of New York,  Tenant:  Premises 114-15 Guy Brewer Boulevard,  Jamaica,  New
     York.  (Incorporated   by  reference  to  Registration   Statement  No.
     333-136110)
10.7 Agreement of Lease between  Triboro Coach Holding  Corp.,  Landlord and the
     City of New York,  Tenant:  Premises 85-01 24th Avenue East  Elmhurst,  New
     York.  (Incorporated   by  reference  to  Registration   Statement  No.
     333-136110)
10.8 Agreement  of Lease  between GTJ Co.,  Inc.,  Landlord  and Avis Rent A Car
     System, Inc., Tenant:  Premises 23-85 87th Street, East Elmhurst, New York.
     (Incorporated by reference to Registration Statement No. 333-136110)
10.9 Lease by and between GTJ Co.,  Inc.,  Landlord  and Varsity Bus Co.,  Inc.,
     Tenant: Premises 626 Wortman Avenue,  Brooklyn, New York and Cozine Avenue,
     Brooklyn, New York dated September 1, 2003. . (Incorporated by reference to
     Registration Statement No. 333-136110)
10.10 Agreement between Transit Facility Management  Corporation and NYC Transit
     dated August 7, 2001.  (Incorporated  by  reference  to Amendment  No. 1 to
     Registration Statement No. 333-136110)
10.11 Agreement between  ShelterClean,  Inc. and the City of Phoenix dated April
     15, 2006.  (Incorporated  by reference to Amendment  No. 1 to  Registration
     Statement No. 333-136110)
10.12 Agreement  between CEMUSA,  Inc. and Shelter Express Corp.  dated June 26,
     2006.  (Incorporated  by  reference  to  Amendment  No.  1 to  Registration
     Statement No. 333-136110)
10.13 ING Loan Agreement  (Incorporated by reference to the Registrant's  report
     on Form 8-K filed on July 10, 2007)
10.14 ING  Form  of  Pledge   Agreement   (Incorporated   by  reference  to  the
     Registrant's report on Form 8-K filed on July 10, 2007)
10.15 ING Confirmation and ISDA Master Agreement, dated as of December 13, 2006,
     with SMBC Derivative  Products  Limited  (Incorporated  by reference to the
     Registrant's report on Form 8-K filed on July 10, 2007)



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<PAGE>

10.16 ING  Libor  Cap  Security  Agreement  (Incorporated  by  reference  to the
     Registrant's report on Form 8-K filed on July 10, 2007)
10.17 ING Mortgage Notes  (Incorporated by reference to the Registrant's  report
     on Form 8-K filed on July 10, 2007)
10.18 ING Mortgages  (Incorporated  by reference to the  Registrant's  report on
     Form 8-K filed on July 10, 2007)
10.19 ING  Assignment  of Leases and Rents  (Incorporated  by  reference  to the
     Registrant's report on Form 8-K filed on July 10, 2007)
10.20 Real Estate Purchase and Sale Agreement by and between Eight Farms Springs
     Road Associates,  LLC and Farm Springs Road LLC. (Incorporated by reference
     to the Registrant's report on Form 8-K filed February 5, 2008)
10.21 Lease by and  between  Eight Farm  Springs  Road  Associates,  L.L.C.  and
     Hartford Fire Insurance Company, including First Lease Amendment. (filed
     herewith)
10.22 Agreement  of Lease dated April __, 2005  between  Lighthouse  444 Limited
     Partnership and GTJ Co., Inc. (filed herewith)
10.23 Space  Substitution  Agreement dated November __, 2007 between  Lighthouse
     444 Limited Partnership and Shelter Express Corp. (filed herewith)
21.1 Subsidiaries of GTJ REIT, Inc. (filed herewith)
31.1 Certification of Chief Executive Officer (filed herewith)
31.2 Certification of Chief Accounting Officer (filed herewith)
32.1 Certification of Chief Executive Officer (filed herewith)
32.2 Certification of Chief Accounting Officer (filed herewith)


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