UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





Form
10-Q





X
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934 FOR THE QUARTERLY PERIOD ENDED August 30, 2008TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934 FOR THE TRANSITION PERIOD FROM ______ TO
  _____





Commission
File No. 1-12879





GRIFFIN
LAND & NURSERIES, INC.


(Exact
name of registrant as specified in its charter)





Delaware
            06-0868496(state
      or other jurisdiction of incorporation or organization)
            (IRS
      Employer Identification Number)One
      Rockefeller Plaza, New York, New York
            10020(Address
      of principal executive offices)
            (Zip
      Code)Registrant’s
      Telephone Number including Area Code
            (212)
      218-7910











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 whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer or a smaller reporting company.  See definitions
of  “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.





Large
      accelerated filer   ̈
            
            Non-accelerated
      filer   ̈Accelerated
      filer   x
            
            Smaller
      reporting company   ̈








Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).


Yes      ̈
            No    x








­­­


Number of
shares of Common Stock outstanding at September 26, 2008:
5,059,206





Griffin
Land & Nurseries, Inc.


Form
10-Q


Index








PART
      I  -
            
            FINANCIAL
      INFORMATIONITEM
      1
            Financial
      StatementsConsolidated
      Statements of Operations (unaudited)13
      and 39 Weeks Ended August 30, 2008 and September 1, 2007
            3Consolidated
      Balance Sheets (unaudited)August
      30, 2008 and December 1, 2007
            4Consolidated
      Statements of Changes in Stockholders’ Equity (unaudited)39
      Weeks Ended August 30, 2008 and September 1, 2007
            5Consolidated
      Statements of Cash Flows (unaudited)39
      Weeks Ended August 30, 2008 and September 1, 2007
            6Notes
      to Consolidated Financial Statements (unaudited)
            7-19ITEM
      2
            Management’s
      Discussion and Analysis ofFinancial
      Condition and Results of Operations
            20-32ITEM
      3
            Quantitative
      and Qualitative Disclosures About Market Risk
            32-33ITEM
      4
            Controls
      and Procedures
            33PART
      II  -
            
            OTHER
      INFORMATIONITEM
      1
            Legal
      Proceedings
            34ITEM
      1A
            Risk
      Factors
            34ITEM
      2
            Unregistered
      Sales of Equity Securities and Use of Proceeds
            35ITEMS
      3-5
            Not
      ApplicableITEM
      6
            Exhibits
            35-37SIGNATURES
            38




















PART
      I
            FINANCIAL
      INFORMATIONITEM
      1.
            FINANCIAL
      STATEMENTS





Griffin
Land & Nurseries, Inc.


Consolidated
Statements of Operations


(dollars
in thousands, except per share data)


(unaudited)





For
      the 13 Weeks Ended,
            
            
            For
      the 39 Weeks Ended,August
      30, 2008
            
            
            September
      1, 2007
            
            
            August
      30, 2008
            
            
            September
      1, 2007Landscape
      nursery net sales
            
            $
            3,824
            
            
            $
            4,861
            
            
            $
            21,301
            
            
            $
            24,294Rental
      revenue and property sales
            
            
            4,040
            
            
            
            7,287
            
            
            
            12,108
            
            
            
            24,336Total
      revenue
            
            
            7,864
            
            
            
            12,148
            
            
            
            33,409
            
            
            
            48,630Costs
      of landscape nursery sales
            
            
            3,797
            
            
            
            4,387
            
            
            
            18,716
            
            
            
            21,174Costs
      related to rental revenue and property sales
            
            
            2,625
            
            
            
            3,483
            
            
            
            8,926
            
            
            
            10,590Total
      costs of goods sold and costs related to rental revenue and property
      sales
            
            
            6,422
            
            
            
            7,870
            
            
            
            27,642
            
            
            
            31,764Gross
      profit
            
            
            1,442
            
            
            
            4,278
            
            
            
            5,767
            
            
            
            16,866Selling,
      general and administrative expenses
            
            
            2,924
            
            
            
            2,592
            
            
            
            9,345
            
            
            
            9,457Operating
      (loss) profit
            
            
            (1,482
            )
            
            
            1,686
            
            
            
            (3,578
            )
            
            
            7,409Gain
      on sale of Centaur Media common stock
            
            
            -
            
            
            
            476
            
            
            
            -
            
            
            
            2,873Interest
      expense
            
            
            (762
            )
            
            
            (793
            )
            
            
            (2,423
            )
            
            
            (2,339
            )Investment
      income
            
            
            106
            
            
            
            2,105
            
            
            
            675
            
            
            
            3,018(Loss)
      income before income tax (benefit) provision
            
            
            (2,138
            )
            
            
            3,474
            
            
            
            (5,326
            )
            
            
            10,961Income
      tax (benefit) provision
            
            
            (869
            )
            
            
            1,191
            
            
            
            (2,071
            )
            
            
            3,993Net
      (loss) income
            
            $
            (1,269
            )
            
            $
            2,283
            
            
            $
            (3,255
            )
            
            $
            6,968Basic
      net (loss) income per common share
            
            $
            (0.25
            )
            
            $
            0.44
            
            
            $
            (0.64
            )
            
            $
            1.35Diluted
      net (loss) income per common share
            
            $
            (0.25
            )
            
            $
            0.43
            
            
            $
            (0.64
            )
            
            $
            1.32




.





3





Griffin
Land & Nurseries, Inc.


Consolidated
Balance Sheets


(dollars in thousands, except
per share data)


(unaudited)


August
      30, 2008
            
            
            December
      1, 2007ASSETSCurrent
      Assets:Cash
      and cash equivalents
            
            $
            5,153
            
            
            $
            11,120Short-term
      investments, net
            
            
            10,623
            
            
            
            22,875Accounts
      receivable, less allowance of $154 and $124
            
            
            3,835
            
            
            
            2,222Inventories,
      net
            
            
            30,853
            
            
            
            30,374Deferred
      income taxes
            
            
            1,329
            
            
            
            1,384Other
      current assets
            
            
            5,768
            
            
            
            3,640Total
      current assets
            
            
            57,561
            
            
            
            71,615Real
      estate held for sale or lease, net
            
            
            115,273
            
            
            
            109,644Property
      and equipment, net
            
            
            7,717
            
            
            
            8,270Investment
      in Centaur Media, plc
            
            
            6,911
            
            
            
            10,308Other
      assets
            
            
            6,967
            
            
            
            6,966Total
      assets
            
            $
            194,429
            
            
            $
            206,803LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      Liabilities:Current
      portion of long-term debt
            
            $
            8,675
            
            
            $
            1,239Accounts
      payable and accrued liabilities
            
            
            6,348
            
            
            
            5,694Deferred
      revenue
            
            
            2,514
            
            
            
            3,141Total
      current liabilities
            
            
            17,537
            
            
            
            10,074Long-term
      debt
            
            
            40,154
            
            
            
            48,456Deferred
      income taxes
            
            
            3,444
            
            
            
            4,987Other
      noncurrent liabilities
            
            
            4,756
            
            
            
            4,383Total
      liabilities
            
            
            65,891
            
            
            
            67,900Commitments
      and contingencies (Note 8)Stockholders'
      Equity:Common
      stock, par value $0.01 per share, 10,000,000 sharesauthorized,
      5,437,162 and 5,321,232 shares issued, respectively,and
      5,059,206 and 5,092,649 shares outstanding, respectively
            
            
            54
            
            
            
            53Additional
      paid-in capital
            
            
            103,392
            
            
            
            101,703Retained
      earnings
            
            
            35,425
            
            
            
            40,199Accumulated
      other comprehensive income, net of tax
            
            
            2,794
            
            
            
            5,002Treasury
      stock, at cost, 377,956 and 228,583 shares, respectively
            
            
            (13,127
            )
            
            
            (8,054
            )Total
      stockholders' equity
            
            
            128,538
            
            
            
            138,903Total
      liabilities and stockholders' equity
            
            $
            194,429
            
            
            $
            206,803




See Notes
to Consolidated Financial Statements.





4





Griffin
Land & Nurseries, Inc.


Consolidated
Statements of Changes in Stockholders’ Equity


For the
Thirty-Nine Weeks Ended August 30, 2008 and September 1, 2007


(dollars
in thousands)


(unaudited)




Shares
      of Common Stock Issued
              
              Common
      Stock
              
              Additional Paid-in Capital
              
              Retained
      Earnings
              
              Accumulated
      Other Comprehensive Income
              
              Treasury
      Stock
              
              Total
              
              Total Comprehensive
      Income (Loss)Balance
      at December 2, 2006
              
              5,177,709
              
              $
              52
              
              $
              98,549
              
              $
              32,377
              
              $
              9,942
              
              $
              (1,306
              )
              $
              139,614Exercise
      of stock options,including
      tax benefit of $949,and
      shares tendered related tostock
      options exercised
              
              131,523
              
              
              1
              
              
              2,771
              
              
              -
              
              
              -
              
              
              (2,568
              )
              
              204Stock-based
      compensationexpense
              
              -
              
              
              -
              
              
              95
              
              
              -
              
              
              -
              
              
              -
              
              
              95Repurchase
      of common stock
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,555
              )
              
              (1,555
              )Net
      income
              
              -
              
              
              -
              
              
              -
              
              
              6,968
              
              
              -
              
              
              -
              
              
              6,968
              
              $
              6,968Reclassification
      adjustment forgains
      on the sale of CentaurMedia,
      plc included in net income
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,868
              )
              
              -
              
              
              (1,868
              )
              
              (1,868
              )Other
      comprehensive loss,from
      Centaur Media, plc,net
      of tax
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (878
              )
              
              -
              
              
              (878
              )
              
              (878
              )Balance
      at September 1, 2007
              
              5,309,232
              
              $
              53
              
              $
              101,415
              
              $
              39,345
              
              $
              7,196
              
              $
              (5,429
              )
              $
              142,580
              
              $
              4,222Balance
      at December 1, 2007
              
              5,321,232
              
              $
              53
              
              $
              101,703
              
              $
              40,199
              
              $
              5,002
              
              $
              (8,054
              )
              $
              138,903Exercise
      of stock options,including
      shares tenderedrelated
      to stock optionsexercised
              
              115,930
              
              
              1
              
              
              1,556
              
              
              -
              
              
              -
              
              
              (2,193
              )
              
              (636
              )Stock-based
      compensationexpense
              
              -
              
              
              -
              
              
              133
              
              
              -
              
              
              -
              
              
              -
              
              
              133Repurchase
      of common stock
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (2,880
              )
              
              (2,880
              )Dividends
      declared
              
              -
              
              
              -
              
              
              -
              
              
              (1,519
              )
              
              -
              
              
              -
              
              
              (1,519
              )Net
      loss
              
              -
              
              
              -
              
              
              -
              
              
              (3,255
              )
              
              -
              
              
              -
              
              
              (3,255
              )
              $
              (3,255
              )Other
      comprehensive loss,from
      Centaur Media, plc,net
      of tax
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (2,208
              )
              
              -
              
              
              (2,208
              )
              
              (2,208
              )Balance
      at August 30, 2008
              
              5,437,162
              
              $
              54
              
              $
              103,392
              
              $
              35,425
              
              $
              2,794
              
              $
              (13,127
              )
              $
              128,538
              
              $
              (5,463
              )See
      Notes to Consolidated Financial Statements.
  5


Griffin
Land & Nurseries, Inc.


Consolidated
Statements of Cash Flows


(dollars
in thousands)


(unaudited)





For
      the 39 Weeks Ended,August
      30, 2008
              
              
              September
      1, 2007Operating
      activities:Net
      (loss) income
              
              $
              (3,255
              )
              
              $
              6,968Adjustments
      to reconcile net (loss) income to net cashprovided
      by operating activities:Depreciation
      and amortization
              
              
              4,695
              
              
              
              4,308Gain
      on sales of properties
              
              
              (903
              )
              
              
              (11,307
              )Payment
      of employee withholding taxes on stock options exercised
              
              
              (769
              )
              
              
              (994
              )Provision
      for inventory losses
              
              
              550
              
              
              
              655Deferred
      income taxes
              
              
              (299
              )
              
              
              205Stock-based
      compensation expense
              
              
              133
              
              
              
              95Amortization
      of debt issuance costs
              
              
              75
              
              
              
              75Provision
      for bad debts
              
              
              35
              
              
              
              14Change
      in unrealized gains on trading securities
              
              
              14
              
              
              
              393Equity
      income from equity investment
              
              
              (6
              )
              
              
              (7
              )Gain
      on sale of common stock in Centaur Media, plc
              
              
              -
              
              
              
              (2,873
              )Current
      taxes in other comprehensive income reclassified into netincome
              
              
              -
              
              
              
              197Changes
      in assets and liabilities which increased (decreased)
cash:Short-term
      investments
              
              
              12,238
              
              
              
              8,738Accounts
      receivable
              
              
              (1,648
              )
              
              
              (1,820
              )Inventories
              
              
              (1,029
              )
              
              
              1,295Other
      current assets
              
              
              (2,128
              )
              
              
              653Accounts
      payable and accrued liabilities
              
              
              178
              
              
              
              (1,625
              )Deferred
      revenue
              
              
              718
              
              
              
              608Other
      noncurrent assets and noncurrent liabilities, net
              
              
              (290
              )
              
              
              (891
              )Net
      cash provided by operating activities
              
              
              8,309
              
              
              
              4,687Investing
      activities:Additions
      to real estate held for sale or lease
              
              
              (8,664
              )
              
              
              (8,895
              )Additions
      to property and equipment
              
              
              (407
              )
              
              
              (398
              )Proceeds
      from sales of properties, net of expenses
              
              
              -
              
              
              
              11,361Increase
      in cash held in escrow by a third party
              
              
              -
              
              
              
              (6,400
              )Proceeds
      from sale of common stock in Centaur Media, plc
              
              
              -
              
              
              
              3,467Proceeds
      from distribution from Shemin Nurseries Holding Corp.
              
              
              -
              
              
              
              189Net
      cash used in investing activities
              
              
              (9,071
              )
              
              
              (676
              )Financing
      activities:Repurchase
      of common stock
              
              
              (2,880
              )
              
              
              (1,555
              )Dividends
      paid to stockholders
              
              
              (1,522
              )
              
              
              -Payments
      of debt
              
              
              (936
              )
              
              
              (908
              )Tax
      benefit of stock options exercised
              
              
              -
              
              
              
              949Exercise
      of stock options
              
              
              133
              
              
              
              249Net
      cash used in financing activities
              
              
              (5,205
              )
              
              
              (1,265
              )Net
      (decrease) increase in cash and cash equivalents
              
              
              (5,967
              )
              
              
              2,746Cash
      and cash equivalents at beginning of period
              
              
              11,120
              
              
              
              2,265Cash
      and cash equivalents at end of period
              
              $
              5,153
              
              
              $
              5,011


See Notes
to Consolidated Financial Statements.


6


Griffin
Land & Nurseries, Inc.


Notes to
Consolidated Financial Statements


(dollars
in thousands unless otherwise noted, except per share data)


(unaudited)







1.      Basis
of Presentation







The
accompanying unaudited consolidated financial statements of Griffin Land &
Nurseries, Inc. (“Griffin”) include the accounts of Griffin’s real estate
division (“Griffin Land”) and Griffin’s wholly-owned subsidiary in the landscape
nursery business, Imperial Nurseries, Inc. (“Imperial”), and have been prepared
in conformity with the standards of accounting measurement set forth in
Accounting Principles Board Opinion No. 28 and amendments thereto adopted by the
Financial Accounting Standards Board (“FASB”). The accompanying financial
statements have also been prepared in accordance with the accounting policies
stated in Griffin’s audited financial statements for the fiscal year ended
December 1, 2007 included in Griffin’s Annual Report on Form 10-K as filed with
the Securities and Exchange Commission, and should be read in conjunction with
the Notes to Financial Statements appearing in that report. All adjustments,
comprising only normal recurring adjustments, which are, in the opinion of
management, necessary for a fair presentation of results for the interim
periods, have been reflected and all intercompany transactions have been
eliminated.  The consolidated balance sheet data as of December 1,
2007 was derived from Griffin’s audited financial statements but does not
include all disclosures required by accounting principles generally accepted in
the United States of America.





The
results of operations for the thirteen weeks ended August 30, 2008 (the “2008
third quarter”) and the thirty-nine weeks ended August 30, 2008 (the “2008 nine
month period”) are not necessarily indicative of the results to be expected for
the full year. The thirteen weeks ended September 1, 2007 is referred to herein
as the “2007 third quarter” and the thirty-nine weeks ended September 1, 2007 is
referred to herein as the “2007 nine month period.”





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








2.   Recent
Accounting Pronouncements








Effective December 2, 2007, Griffin
adopted FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes”
(“FIN No. 48”). This interpretation clarifies the accounting for uncertainty in
income taxes recognized in a company's financial statements in accordance with
Statement of Financial Accounting Standards No. 109, “Accounting for Income
Taxes.”  Specifically, FIN No. 48 prescribes a recognition threshold
and a measurement attribute for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax
return.  FIN No. 48 also provides enhanced guidance on the related
derecognition, classification, interest and penalties, accounting for interim
periods, disclosure and transition of uncertain tax positions. In connection
with the adoption of FIN No. 48, Griffin has analyzed its federal and
significant state filing positions.  Griffin’s federal income tax
returns for fiscal 2004 through fiscal 2006 are currently under examination by
the Internal Revenue Service.  The periods subject to examination for
Griffin’s significant state return, which is Connecticut, are fiscal 2005
through fiscal 2007.  Griffin believes that its income tax filing
positions will be sustained on examination and does not anticipate any
adjustments that will result in a material change on its financial
statements.  As a result, no accrual for uncertain income tax
positions has been recorded pursuant to FIN No. 48 nor was there a cumulative
effect related to adopting FIN No. 48.




Griffin’s policy for recording interest
and penalties, related to uncertain tax positions, is to record such items as
part of its provision for federal and state income taxes.


7





Effective December 2, 2007,
Griffin adopted SFAS No. 157, “Fair Value Measurements.”  This new
standard defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles and expands disclosures about fair
value measurements.  This statement does not require any new fair
value measurements but provides guidance in determining fair value measurements
presently used in the preparation of financial statements.  The
amounts included on Griffin’s consolidated balance sheet for cash and cash
equivalents, accounts receivable, accounts payable and accrued liabilities
approximate their fair values because of the short-term maturity of these
instruments.  Griffin’s short-term investments and its
available-for-sale securities are reported at fair value on Griffin’s
consolidated balance sheet.  The fair value of Griffin’s short-term
investments and available-for-sale securities are based on quoted prices in
active markets for identical assets (Level 1).  Griffin was not
required to use significant other observable inputs (Level 2) or significant
unobservable inputs (Level 3) in determining the fair value of its short-term
investments and available-for-sale securities.





Effective December 2, 2007, Griffin
adopted SFAS No. 159, “The Fair Value Option for Financial Assets and Financial
Liabilities.”  This new standard allows an entity the irrevocable
option to elect fair value for the initial and subsequent measurement for
certain financial assets and liabilities under an instrument-by-instrument
election.  Subsequent measurements for the financial assets and
liabilities an entity elects to fair value will be recognized in
earnings.  SFAS No. 159 does not affect any existing pronouncements
that require assets and liabilities to be carried at fair value, nor does it
eliminate disclosure requirements included under existing
pronouncements.  Griffin did not elect to report any additional assets
or liabilities at fair value that were not already being reported at fair
value.








3.    Subsequent
Events








Subsequent to the end of the 2008 third
quarter, Griffin’s Board of Directors determined that Imperial will
significantly reduce production at its Quincy, Florida farm.  Imperial
expects to continue to operate its farm in Granby, Connecticut at its current
level of production.  The significant reduction in product to be grown
in Florida reflects the difficulties the Quincy facility has encountered as a
result of the increase in costs to deliver Florida product to most of Imperial’s
major markets, which are located in the mid-Atlantic area and northeastern
United States.  Imperial has been unable to develop sufficient volume
in more southern markets to reduce its dependence on shipping Florida product
substantial distances.  This change will enable Imperial to focus more
as a regional grower with most of its major markets within close proximity of
its Connecticut farm. As of August 30, 2008, inventory and property and
equipment at Imperial’s Florida farm comprised 35% of Imperial’s total assets.
Imperial will record a significant charge to its operating results in the 2008
fourth quarter as a result of this decision.





Subsequent to the end of the 2008 third
quarter, Griffin Land completed a lease for its entire approximate 308,000
square foot warehouse in Manchester, Connecticut, which had been
vacant.  The new lease is for seven years, and, in addition to other
customary terms, includes an option, with certain conditions, exercisable by
Griffin Land to sell the property to the lessee, and another option, exercisable
by the lessee to purchase the property from Griffin Land during different three
year periods at an agreed upon price.  The new lease became effective
in the 2008 fourth quarter.








8


4.           Industry
Segment Information








Griffin
defines its reportable segments by their products and services, which are
comprised of the landscape nursery and real estate
segments.  Management operates and receives reporting based upon these
segments.  Griffin has no operations outside the United
States.  Griffin’s export sales and transactions between segments are
not material.


For
      the 13 Weeks Ended,
              
              
              For
      the 39 Weeks Ended,August
      30, 2008
              
              
              September
      1, 2007
              
              
              August
      30, 2008
              
              
              September
      1, 2007Total
      revenue:Landscape
      nursery net sales
              
              $
              3,824
              
              
              $
              4,861
              
              
              $
              21,301
              
              
              $
              24,294Rental
      revenue and property sales
              
              
              4,040
              
              
              
              7,287
              
              
              
              12,108
              
              
              
              24,336$
              7,864
              
              
              $
              12,148
              
              
              $
              33,409
              
              
              $
              48,630Operating
      (loss) profit:Landscape
      nursery segment
              
              $
              (1,096
              )
              
              $
              (679
              )
              
              $
              (1,250
              )
              
              $
              (884
              )Real
      estate segment
              
              
              606
              
              
              
              3,192
              
              
              
              992
              
              
              
              11,701Industry
      segment totals
              
              
              (490
              )
              
              
              2,513
              
              
              
              (258
              )
              
              
              10,817General
      corporate expense
              
              
              (992
              )
              
              
              (827
              )
              
              
              (3,320
              )
              
              
              (3,408
              )Operating
      (loss) profit
              
              
              (1,482
              )
              
              
              1,686
              
              
              
              (3,578
              )
              
              
              7,409Gain
      on sale of Centaur Media common stock
              
              
              -
              
              
              
              476
              
              
              
              -
              
              
              
              2,873Interest
      expense
              
              
              (762
              )
              
              
              (793
              )
              
              
              (2,423
              )
              
              
              (2,339
              )Investment
      income
              
              
              106
              
              
              
              2,105
              
              
              
              675
              
              
              
              3,018(Loss)
      income before income tax (benefit) provision
              
              $
              (2,138
              )
              
              $
              3,474
              
              
              $
              (5,326
              )
              
              $
              10,961
   Identifiable
      assets:
              
              August
      30, 2008
              
              
              December
      1, 2007Landscape
      nursery segment
              
              $
              42,132
              
              
              $
              42,107Real
      estate segment
              
              
              124,960
              
              
              
              118,121Industry
      segment totals
              
              
              167,092
              
              
              
              160,228General
      corporate (consists primarily of investments)
              
              
              27,337
              
              
              
              46,575Total
      assets
              
              $
              194,429
              
              
              $
              206,803





Revenue of the real estate segment in
the 2008 third quarter and 2008 nine month period includes property sales
revenue of $255 and $1,081, respectively.  Revenue of the real estate
segment in the 2007 third quarter and 2007 nine month period includes property
sales revenue of $3,798 and $13,895, respectively.  Included in
property sales revenue for all periods presented is the recognition of
previously deferred revenue on a sale of undeveloped land that was completed in
2006 (see Note 7).


9


5.      Long-Term
Debt





Long-term debt
includes:


August
      30, 2008
              
              
              December
      1, 2007Nonrecourse
      mortgages:8.54%,
      due July 1, 2009
              
              $
              7,508
              
              
              $
              7,5856.08%,
      due January 1, 2013
              
              
              7,684
              
              
              
              7,8346.30%,
      due May 1, 2014
              
              
              975
              
              
              
              1,0785.73%,
      due July 1, 2015
              
              
              20,495
              
              
              
              20,7218.13%,
      due April 1, 2016
              
              
              5,119
              
              
              
              5,2877.0%,
      due October 1, 2017
              
              
              6,859
              
              
              
              6,983Total
      nonrecourse mortgages
              
              
              48,640
              
              
              
              49,488Capital
      leases
              
              
              189
              
              
              
              207Total
              
              
              48,829
              
              
              
              49,695Less:
      current portion
              
              
              (8,675
              )
              
              
              (1,239
              )Total
      long-term debt
              
              $
              40,154
              
              
              $
              48,456





The entire balance of the nonrecourse
mortgage due July 1, 2009 is classified as a current liability because that
mortgage is due within the next twelve months.








6.    Stockholder’s
Equity





Earnings
Per Share





Basic and
diluted per share results were based on the following:





For
      the 13 Weeks Ended,
              
              
              For
      the 39 Weeks Ended,August
      30, 2008
              
              
              September
      1, 2007
              
              
              August
      30, 2008
              
              
              September
      1, 2007Net
      (loss) income as reported for computationof basic and diluted per share results
              
              $
              (1,269
              )
              
              $
              2,283
              
              
              $
              (3,255
              )
              
              $
              6,968Weighted
      average shares outstanding forcomputation
      of basic per share results
              
              
              5,044,000
              
              
              
              5,151,000
              
              
              
              5,060,000
              
              
              
              5,145,000Incremental
      shares from assumed exerciseof
      Griffin stock options (a)
              
              
              -
              
              
              
              103,000
              
              
              
              -
              
              
              
              129,000Weighted
      average shares outstanding forcomputation
      of diluted per share results
              
              
              5,044,000
              
              
              
              5,254,000
              
              
              
              5,060,000
              
              
              
              5,274,000


(a)
            Incremental
      shares from the assumed exercise of Griffin stock options are not included
      in periods where the inclusion of such shares would be
      anti-dilutive.  The incremental shares from the assumed exercise
      of stock options for the thirteen and thirty-nine weeks ended August 30,
      2008 would have been 72,000 and 87,000,
  respectively.


10


Stock Options





The
Griffin Land & Nurseries, Inc. 1997 Stock Option Plan (the
"Griffin Stock Option Plan"), adopted in 1997 and subsequently amended, makes
available a total of 1,250,000 options to purchase shares of Griffin common
stock. The Griffin Stock Option Plan is administered by the Compensation
Committee of the Board of Directors of Griffin. Options granted under the
Griffin Stock Option Plan may be either incentive stock options or non-qualified
stock options issued at market value on the date approved by the Board of
Directors of Griffin. Vesting of all of Griffin's previously issued stock
options is solely based upon service requirements and does not contain market or
performance conditions.





Stock options issued will expire ten
years from the grant date.  Stock options issued to independent
directors upon their initial election to the board of directors are fully
exercisable immediately upon the date of the option grant. Stock options issued
to independent directors upon their reelection to the board of directors vest on
the second anniversary from the date of grant. Stock options issued to employees
vest in equal installments on the third, fourth and fifth anniversaries from the
date of grant. None of the stock options outstanding at August 30, 2008 may be
exercised as stock appreciation rights.





There were 29,704 stock options and
4,208 stock options granted during the 2008 and 2007 nine month periods,
respectively.  The fair value of the stock options granted during the
2008 and 2007 nine month periods were estimated as of the grant dates using the
Black-Scholes option-pricing model.  Assumptions used in determining
the fair value of the stock options granted were as follows:





For
      the 39 Weeks Ended,August
      30, 2008
            
            September
      1, 2007Expected
      volatility
            38.6%
      to 41.1%
            
            43.4%Risk
      free interest rate
            3.5%
            
            4.7%Expected
      option term
            7
      to 8 years
            
            8.8
      yearsAnnual
      dividend yield
            $0.40
            
            none







All of Griffin’s stock-based
compensation expense in the 2008 third quarter and 2008 nine month period
related to the unvested portion of options granted subsequent to Griffin’s
adoption of SFAS No. 123(R).  Included in Griffin's stock-based
compensation expense in the 2007 nine month period are the costs related to the
unvested portion of certain stock option grants made prior to Griffin’s adoption
of SFAS No. 123(R) effective at the beginning of fiscal 2006.





Activity
under the Griffin Stock Option Plan is summarized as follows:





For
      the 39 Weeks Ended,August
      30, 2008
            
            
            September
      1, 2007Vested
      Options
            
            Number
      of Shares
            
            Weighted
      Avg. Exercise Price
            
            Number
      of Shares
            
            Weighted
      Avg. Exercise PriceOutstanding
      at beginning of period
            
            
            218,378
            
            
            $
            14.13
            
            
            
            347,300
            
            
            $
            13.84Exercised
            
            
            (115,930
            )
            
            $
            13.43
            
            
            
            (131,523
            )
            
            $
            13.86Vested
            
            
            5,140
            
            
            $
            31.13
            
            
            
            14,601
            
            
            $
            19.71Outstanding
      at end of period
            
            
            107,588
            
            
            $
            15.70
            
            
            
            230,378
            
            
            $
            14.21





11





Range
      of Exercise Prices for Vested Options
              
              Outstanding
      at August 30, 2008
              
              
              Weighted
      Avg. Exercise Price
              
              
              Weighted
      Avg. Remaining Contractual Life (in years)
              
              
              Total
      Fair Value$9.00-$18.00
              
              
              88,962
              
              
              $
              13.37
              
              
              
              2.3
              
              
              $
              476Over
      $24.00
              
              
              18,626
              
              
              $
              26.84
              
              
              
              6.6
              
              
              
              248107,588
              
              
              $
              15.70
              
              
              
              3.0
              
              
              $
              724


For
      the 39 Weeks Ended,August
      30, 2008
            
            
            September
      1, 2007Unvested
      Options
            
            Number
      of Shares
            
            
            Weighted
      Avg. Exercise Price
            
            
            Number
      of Shares
            
            
            Weighted
      Avg. Exercise PriceOutstanding
      at beginning of period
            
            
            18,348
            
            
            $
            32.62
            
            
            
            28,741
            
            
            $
            25.27Granted
            
            
            29,704
            
            
            $
            34.03
            
            
            
            4,208
            
            
            $
            38.00Vested
            
            
            (5,140
            )
            
            $
            31.13
            
            
            
            (14,601
            )
            
            $
            19.71Forfeited
            
            
            (2,228
            )
            
            $
            35.89
            
            
            
            -
            
            
            $
            -Outstanding
      at end of period
            
            
            40,684
            
            
            $
            33.66
            
            
            
            18,348
            
            
            $
            32.62





Range
      of Exercise Prices for Unvested Options
            
            Outstanding
      at August 30, 2008
            
            Weighted
      Avg. Exercise Price
            
            Weighted
      Avg. Remaining Contractual Life (in years)
            
            Total
      Fair ValueOver
      $24.00
            
            
            40,684
            
            
            $
            33.66
            
            
            
            9.0
            
            
            $
            637




Number
      of option holders at August 30, 2008
              17


Compensation expense for unvested stock
options recognized in the 2008 third quarter and the 2008 nine month period was
$33 and $133, respectively, with related tax benefits of $9 and $39,
respectively.  Compensation expense for unvested stock options
recognized in the 2007 third quarter and 2007 nine month period was $30 and $95,
respectively, with related tax benefits of $8 and $25,
respectively.  As of August 30, 2008, the unrecognized compensation
expense related to unvested stock options that will be recognized during future
periods is as follows:





Remainder
      of Fiscal 2008
            
            $
      46Fiscal
      2009
            
            $
      161Fiscal
      2010
            
            $
      120Fiscal
      2011
            
            $
      64Fiscal
      2012
            
            $
      27Fiscal
      2013
            
            $
      2








12





Treasury Stock




In fiscal 2007, Griffin’s Board of
Directors authorized a program to repurchase, from time to time, up to 250,000
shares of its outstanding common stock through private
transactions.  The program does not obligate Griffin to repurchase any
specific number of shares, may be suspended at any time at management’s
discretion and expires on December 31, 2008.  During the 2008 nine
month period, Griffin repurchased 85,200 of its outstanding shares for
approximately $2.9 million.  During the 2007 nine month period,
Griffin repurchased 42,000 shares of its outstanding common stock for
approximately $1.6 million.  As of August 30, 2008, there remain
51,900 shares authorized to be repurchased by Griffin.




In the 2008 and 2007 nine month
periods, Griffin received 64,173 shares and 70,637 shares, respectively, of its
common stock in connection with the exercise of stock options and for
reimbursement of income tax withholdings related to those stock option
exercises.  The shares received were recorded as treasury stock, which
resulted in increases of treasury stock of approximately $2.2 million and $2.6
million, respectively.






Accumulated Other Comprehensive
Income





As of August 30, 2008, Griffin owns
5,277,150 shares in Centaur Media, plc (“Centaur Media”).  Griffin’s
investment in Centaur Media is accounted for as an available-for-sale security
under SFAS No. 115, “Accounting for Certain Investments in Debt and Equity
Securities.”  Accordingly, the investment in Centaur Media is carried
at its fair value on Griffin’s consolidated balance sheet, with increases or
decreases recorded, net of tax, as a component of other comprehensive
income.  Upon Griffin’s sale of shares in Centaur Media, the change,
net of tax, in the value of the shares of Centaur Media that are sold during the
time Griffin held those shares, is reclassified from accumulated other
comprehensive income and included in Griffin’s consolidated statement of
operations.  Griffin did not sell any of its holdings in Centaur Media
in the 2008 nine month period.  In the 2007 third quarter and nine
month period, Griffin sold 200,000 and 1,200,000 shares in Centaur Media,
respectively, for total proceeds of $0.6 million and $3.5 million,
respectively.





Changes
in accumulated other comprehensive incomein the 2008 and 2007 nine
month periods consist of the following:





For
      the 39 Weeks Ended,August
      30, 2008
              
              
              September
      1, 2007Balance
      at beginning of period
              
              $
              5,002
              
              
              $
              9,942Reclassification
      adjustment for gains on Centaur Media, plcincluded
      in net income, net of tax provision of $1,022
              
              
              -
              
              
              
              (1,868
              )Decrease
      in fair value of Centaur Media, net of taxes of($874)
      and ($551), respectively
              
              
              (1,622
              )
              
              
              (1,024
              )(Decrease)
      increase in fair value of Centaur Media, due to exchange(loss)
      gain, net of taxes of ($315) and $78, respectively
              
              
              (586
              )
              
              
              146Balance
      at end of period
              
              $
              2,794
              
              
              $
              7,196


13







7.    Supplemental
Financial Statement Information




Cash
Dividends




In the
2008 nine month period, Griffin declared three cash dividends of $0.10 per
common share each. There were no dividends declared in the 2007 nine month
period.





Short-Term
Investments





Griffin's short-term investments are
comprised principally of debt securities and are accounted for as trading
securities under SFAS No. 115.  Accordingly, the securities are
carried at their fair values based upon the quoted market prices of those
investments at the balance sheet dates, and net realized and unrealized gains
and losses on those investments are included in Griffin’s pretax
loss.  At August 30, 2008 and December 1, 2007, $0.2 million and $0.4
million, respectively, of Griffin’s short-term investments were being used as
security for letters of credit of Griffin Land.  The composition of
short-term investments at August 30, 2008 and December 1, 2007 is as
follows:




August
      30, 2008
              
              
              December
      1, 2007Cost
              
              
              Fair
      Value
              
              
              Cost
              
              
              Fair
      ValueU.S.
      Treasury securities
              
              $
              10,362
              
              
              $
              10,389
              
              
              $
              10,930
              
              
              $
              10,970Certificates
      of deposit
              
              
              234
              
              
              
              234
              
              
              
              454
              
              
              
              454Federal
      agency coupon notes
              
              
              -
              
              
              
              -
              
              
              
              11,450
              
              
              
              11,451Total
      short-term investments
              
              $
              10,596
              
              
              $
              10,623
              
              
              $
              22,834
              
              
              $
              22,875


Investment income in the 2008 and 2007
third quarters and 2008 and 2007 nine month periods consists of:





For
      the 13 Weeks Ended,
              
              
              For
      the 39 Weeks Ended,August
      30, 2008
              
              
              September
      1, 2007
              
              
              August
      30, 2008
              
              
              September
      1, 2007Net
      realized gains on the sales of short-term investments
              
              $
              41
              
              
              $
              411
              
              
              $
              461
              
              
              $
              1,407Interest
      and dividend income
              
              
              32
              
              
              
              158
              
              
              
              222
              
              
              
              369Change
      in unrealized gains on short-term investments
              
              
              33
              
              
              
              (92
              )
              
              
              (14
              )
              
              
              (393
              )Dividend
      income from Shemin Nurseries Holding Corp.
              
              
              -
              
              
              
              1,628
              
              
              
              -
              
              
              
              1,628Other
      investment income
              
              
              -
              
              
              
              -
              
              
              
              6
              
              
              
              7$
              106
              
              
              $
              2,105
              
              
              $
              675
              
              
              $
              3,018


Included
in investment income in the thirteen and thirty-nine weeks ended September 1,
2007 is $1.6 million of a total of $1.8 million in cash received from Shemin
Nurseries Holding Corp. (“SNHC”).  The amount reported as dividend
income is based on the amount of cumulative earnings of SNHC, with the balance
of the amount received from SNHC reported as a return of
investment.  After this transaction, and as of August 30, 2008,
Griffin’s remaining investment in SNHC is $0.3 million and is included in other
assets on Griffin’s consolidated balance sheet.  Griffin, which holds
approximately 14% of the outstanding common stock of SNHC, accounts for its
investment in SNHC under the cost method of accounting for
investments.





14




Deferred
Revenue on Prior Year Land Sale





In fiscal
2006, Griffin sold 130 acres of undeveloped land in New England Tradeport
(“Tradeport”), Griffin’s industrial park located in Windsor and East Granby,
Connecticut, for cash proceeds of $13.0 million.  As provided under
the contract for the sale of that land and under the State Traffic Commission
Certificate covering the area in Tradeport located in Windsor, certain
improvements to existing roads were required.  The cost of these
improvements is the responsibility of Griffin, however, a portion of the costs
are either being reimbursed from the purchaser of the land or performed by the
town.  As a result of Griffin’s continuing involvement with the
required improvements to the existing roads, this land sale was accounted for
under the percentage of completion method.  Accordingly, the revenue
and the pretax gain on the sale are being recognized on a pro rata basis in a
ratio equal to the percentage of the total costs incurred to the total
anticipated costs of the sale, including the allocated costs of the required
improvements to existing roads. Costs included in determining the percentage of
completion are the cost of the land sold, allocated master planning costs of
Tradeport, selling and transaction costs and estimated future costs related to
the land sold.





As of
August 30, 2008, approximately 92% of the projected total costs related to this
transaction have been incurred; therefore, from the date of the transaction
through August 30, 2008, approximately 92% of the total revenue and pretax gain
on the sale have been recognized in Griffin’s consolidated statements of
operations.  Griffin’s consolidated statements of operations for the
2008 third quarter and 2008 nine month period include revenue of approximately
$0.1 million and $1.0 million, respectively, and a pretax gain of $0.1 million
and $0.7 million, respectively, from this land sale.  Griffin’s
consolidated statements of operations for the 2007 third quarter and 2007 nine
month period included revenue of $1.7 million and $1.8 million, respectively,
and a pretax gain of $1.6 million and $1.7 million, respectively, from this land
sale.  The balance of the revenue and the pretax gain on the sale is
expected to be recognized during fiscal 2008 because the required roadwork
improvements are expected to be completed this year.  Included on
Griffin’s consolidated balance sheet as of August 30, 2008 is deferred revenue
of approximately $1.0 million applicable to this
transaction.  Including the approximately $9.4 million pretax gain on
the sale recognized from the time the land sale closed in fiscal 2006 through
August 30, 2008, the total pretax gain on this transaction is expected to be
approximately $10.2 million after all revenue is recognized and all costs
incurred.  While management has used its best estimates, based on
industry knowledge and experience, in projecting the total costs of the required
road improvements, increases or decreases in future costs over current estimated
amounts would reduce or increase the gain recognized in future
periods.





Supplemental
Cash Flow Information





Decreases of $3.4 million and
$1.4 million, respectively, in the 2008 nine month period and 2007 nine month
period, respectively, in Griffin’s Investment in Centaur Media reflect the mark
to market adjustment of this investment and did not affect Griffin’s
cash.





Included in accounts payable and
accrued liabilities at August 30, 2008 and December 1, 2007 were $1.8 million
and $1.3 million, respectively, for additions to real estate held for sale or
lease.  Accounts payable and accrued liabilities related to additions
to real estate held for sale or lease increased $0.5 million in the 2008 nine
month period and decreased by $0.6 million in the 2007 nine month
period.





As of August 30, 2008, included in
Griffin’s accrued liabilities is a dividend payable of $506 reflecting
a dividend on Griffin’s common stock declared prior to the end of the 2008 third
quarter that was paid subsequent to the end of Griffin’s 2008 third
quarter.  As of December 1, 2007, Griffin’s accrued liabilities
included $509 for a dividend on Griffin’s common stock that was declared prior
to the end of fiscal 2007 and paid in the 2008 first quarter.





15


Deferred revenue related to the
Walgreen land sale that closed in fiscal 2006 decreased by approximately $0.1
million and $1.0 million in the 2008 third quarter and 2008 nine month period,
respectively, and decreased by $1.7 million and $1.8 million in the 2007 third
quarter and 2007 nine month period, respectively.  That transaction is
being accounted for using the percentage of completion
method.  Griffin received the cash proceeds from that transaction in
fiscal 2006.





Deferred revenue related to the value
of an option to purchase residential lots in Stratton Farms, a residential
development in Suffield, Connecticut, was recognized in the 2008 third quarter
because the holder of that option did not exercise its right to purchase
additional residential lots before that right expired.  There was no
cash received in the 2008 third quarter related to this transaction as the cash
for the option was received in fiscal 2006.





Interest payments, net of capitalized
interest, were $2.4 million and $2.3 million in the 2008 and 2007 nine month
periods, respectively.  There were no income tax payments made in the
2008 nine month period.  Income tax payments of $2.1 million were made
in the 2007 nine month period.  Griffin capitalized interest of $0.1
million and $0.3 million in the 2008 and 2007 nine month periods,
respectively.





Inventories





Inventories consist of:





August
      30, 2008
              
              
              December
      1, 2007Nursery
      stock
              
              $
              30,282
              
              
              $
              29,228Materials
      and supplies
              
              
              1,484
              
              
              
              1,91331,766
              
              
              
              31,141Reserves
              
              
              (913
              )
              
              
              (767
              )$
              30,853
              
              
              $
              30,374


Property and Equipment





Property and equipment consist
of:


Estimated Useful
      Lives
              
              August
      30, 2008
              
              
              December
      1, 2007Land
              
              
              $
              715
              
              
              $
              674Land
      improvements
              10
      to 20 years
              
              
              5,582
              
              
              
              5,550Buildings
      and improvements
              10
      to 40 years
              
              
              3,060
              
              
              
              3,060Machinery
      and equipment
              3
      to 20 years
              
              
              17,712
              
              
              
              17,38127,069
              
              
              
              26,665Accumulated
      depreciation
              
              
              
              (19,352
              )
              
              
              (18,395
              )$
              7,717
              
              
              $
              8,270
  16







Griffin
incurred new capital lease obligations of $70 and $79, respectively, in the 2008
nine month period and 2007 nine month period.





Real Estate Held for Sale or
Lease





Real estate held for sale or lease
consists of:


August
      30, 2008Estimated Useful
      Lives
              
              Held
      for Sale
              
              
              Held
      for Lease
              
              
              TotalLand
              
              
              $
              1,696
              
              
              $
              7,770
              
              
              $
              9,466Land
      improvements
              10
      to 30 years
              
              
              691
              
              
              
              6,781
              
              
              
              7,472Buildings
      and improvements
              10
      to 40 years
              
              
              -
              
              
              
              97,515
              
              
              
              97,515Tenant
      improvements
              Shorter
      of useful life or term of related lease
              
              
              -
              
              
              
              10,855
              
              
              
              10,855Development
      costs
              
              
              
              7,214
              
              
              
              12,010
              
              
              
              19,2249,601
              
              
              
              134,931
              
              
              
              144,532Accumulated
      depreciation
              
              
              
              -
              
              
              
              (29,259
              )
              
              
              (29,259
              )$
              9,601
              
              
              $
              105,672
              
              
              $
              115,273
   December
      1, 2007Estimated Useful
      Lives
              
              Held
      for Sale
              
              
              Held
      for Lease
              
              
              TotalLand
              
              
              $
              1,696
              
              
              $
              7,732
              
              
              $
              9,428Land
      improvements
              10
      to 30 years
              
              
              691
              
              
              
              6,757
              
              
              
              7,448Buildings
      and improvements
              10
      to 40 years
              
              
              -
              
              
              
              97,167
              
              
              
              97,167Tenant
      improvements
              Shorter
      of useful life or term of related lease
              
              
              -
              
              
              
              10,127
              
              
              
              10,127Development
      costs
              
              
              
              6,803
              
              
              
              4,717
              
              
              
              11,5209,190
              
              
              
              126,500
              
              
              
              135,690Accumulated
      depreciation
              
              
              
              -
              
              
              
              (26,046
              )
              
              
              (26,046
              )$
              9,190
              
              
              $
              100,454
              
              
              $
              109,644


Income Taxes





Griffin’s effective income tax benefit
rate was 38.9 % in the 2008 nine month period as compared to 36.4% in the 2007
nine month period.  Included in the income tax benefit for the 2008
nine month period is approximately $0.1 million of tax benefit resulting from
the adjustment of amounts estimated when preparing the 2007 income tax provision
to the amounts included on Griffin’s 2007 income tax returns.  The
effective income tax benefit rate used in the 2008 nine month period is based on
management’s projections for the balance of the year.  To the extent
that actual results differ from current projections, the effective income tax
rate may change.




17


The 2008 and 2007 nine month periods
include decreases of $1,189 and $473, respectively, to deferred income tax
liabilities related to the mark to market adjustments on Griffin’s investment in
Centaur Media.  The decrease to deferred income tax liabilities for
the mark to market adjustment of Centaur Media is included as a credit in
Griffin’s other comprehensive income (loss) for the 2008 and 2007 nine month
periods.





Postretirement
Benefits





Griffin maintains a postretirement
benefits program which provides principally health and life insurance benefits
to certain of its retirees. The liability for postretirement benefits is
included in other noncurrent liabilities on Griffin’s consolidated balance
sheets. Griffin's postretirement benefits are unfunded, with benefits to be paid
from Griffin's general assets.  Griffin's contributions to its
postretirement benefits program in the 2008 nine month period and 2007 nine
month period were $4 and $7, respectively, with an expected contribution of $6
for the fiscal 2008 full year.  The components of Griffin's
postretirement benefits expense are immaterial for all periods
presented.





8.    Commitments
and Contingencies





As of
August 30, 2008, Griffin had committed purchase obligations of $1.9
million, principally for Griffin Land’s construction of the shell of a new
industrial building in Tradeport, site work for additional industrial buildings
in Tradeport and required infrastructure improvements at
Tradeport.  The infrastructure improvements are required by the
Connecticut State Traffic Commission in connection with an increase in the
permitted square feet of construction in the portion of Tradeport located in
Windsor, Connecticut.





As of August 30, 2008, there were two
collateralized letters of credit outstanding, aggregating approximately $0.2
million, issued by Griffin Land in favor of the towns of Suffield and Windsor,
Connecticut, that ensures Griffin Land’s performance in completing certain
infrastructure for Griffin Land’s residential development, Stratton Farms and
certain road improvements at New England Tradeport.  The letters of
credit are collateralized by short-term investments of $0.2
million.





As of August 30, 2008, Griffin is
authorized by its Board of Directors to repurchase, from time to time, up to
51,900 shares of its outstanding common stock through private
transactions.  The program to repurchase common stock expires on
December 31, 2008, does not obligate Griffin to repurchase any specific number
of shares and may be suspended at any time at management’s
discretion.  Based on the market price of its common stock as of
August 30, 2008, if the total authorized number of shares are repurchased,
Griffin would expend approximately $1.8 million.





Griffin
is involved, as a defendant, in various litigation matters arising in the
ordinary course of business.  In the opinion of management, based on
the advice of counsel, the ultimate liability, if any, with respect to these
matters will not be material, individually or in the aggregate, to Griffin’s
consolidated financial position, results of operations or cash
flows.





9.  Litigation
Settlement





In the 2008 second quarter, Griffin
Land and the Town of Simsbury, Connecticut, executed settlement agreements for
litigation related to Meadowood, Griffin Land’s proposed residential
development.  The terms of the settlement agreements, previously
approved by Simsbury’s land use commissions, allow up to 299 homes to be built,
require Griffin Land to perform certain remediation measures on the land and
enable the Town to acquire, subject to certain approvals, a portion of the
Meadowood land for town open space.  The settlement agreements were
approved by the Connecticut




18




Superior
Court on April 18, 2008 and April 28, 2008, thus concluding the litigation on
this matter with no further appeals possible.  Subsequent to the
execution of the settlement agreements, the Town approved the purchase of the
agreed upon portion of the Meadowood land for town open
space.  Development of Meadowood remains subject to receiving certain
environmental approvals from government agencies, which Griffin Land will be
seeking to obtain this year.


19


ITEM
      2.
            MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIALCONDITION
      AND RESULTS OF OPERATIONS





Overview





The consolidated financial statements
of Griffin include the accounts of Griffin’s subsidiary in the landscape nursery
business, Imperial Nurseries, Inc. (“Imperial”), and Griffin’s Connecticut and
Massachusetts based real estate business (“Griffin Land”).





The significant accounting policies and
methods used in the preparation of Griffin’s consolidated financial statements
included in Item 1 are consistent with those used in the preparation of
Griffin’s audited financial statements for the fiscal year ended December 1,
2007 included in Griffin’s Annual Report on Form 10-K as filed with the
Securities and Exchange Commission.  Effective December 2, 2007,
Griffin adopted FASB Interpretation No. 48, “Accounting for Uncertainty in
Income Taxes,” SFAS No. 157, “Fair Value Measurements,” and SFAS No. 159, “The
Fair Value Option for Financial Assets and Financial
Liabilities.”  The adoption of these new pronouncements did not have a
material effect on Griffin’s financial statements.





The
preparation of Griffin’s financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make certain estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the dates of the financial statements and revenue and expenses
during the periods reported.  Actual results could differ from those
estimates.  The significant accounting estimates used by Griffin in
preparation of its financial statements for the thirteen and thirty-nine weeks
ended August 30, 2008 are consistent with those used by Griffin in preparation
of its fiscal 2007 financial statements.





Summary





Griffin incurred a net loss for the
thirteen weeks ended August 30, 2008 (the “2008 third quarter”) of $1.3 million
as compared to net income of $2.3 million for the thirteen weeks ended September
1, 2007 (the “2007 third quarter”).  The lower 2008 third quarter
results principally reflect: (a) lower operating results at Griffin Land and
Imperial; (b) lower investment income; and (c) the inclusion in the 2007 third
quarter of a $0.5 million gain on the sale of a portion of Griffin’s common
stock in Centaur Media, plc (“Centaur Media”).  Griffin did not sell
any of its Centaur Media common stock in the 2008 third quarter.  The
lower operating results principally reflect a significant decrease in gain on
property sales at Griffin Land and lower net sales and lower gross profit
margins at Imperial.  The lower investment income principally reflects
the inclusion in the 2007 third quarter of $1.6 million of dividend income from
Griffin’s investment in Shemin Nurseries Holding Corp. (“SNHC”), a private
company of which Griffin holds approximately 14%.  General corporate
expense increased in the 2008 third quarter as compared to the 2007 third
quarter due principally to an increase in payroll and incentive compensation
expense, due to higher headcount in the current year.





Griffin incurred a net loss for the
thirty-nine weeks ended August 30, 2008 (the “2008 nine month period”) of $3.3
million as compared to net income of $7.0 million for the thirty-nine weeks
ended September 1, 2007 (the “2007 nine month period”).  The lower
results for the 2008 nine month period principally reflect: (a) lower operating
profit at Griffin Land, due principally to a decrease in gain on property sales;
(b) an increase in Imperial’s operating loss, due principally to lower net sales
and lower gross margins on sales; (c) lower investment income; and (d) the
inclusion in the 2007 nine month period of a $2.9 million gain on the sale of a
portion of Griffin’s common stock in Centaur Media.  Griffin did not
sell any of its Centaur Media common stock in the 2008 nine month
period.  Partially offsetting these




20


items was
a reduction in Griffin’s general corporate expense of approximately $0.1 million
in the 2008 nine month period as compared to the 2007 nine month
period.





Subsequent to the end of the 2008 third
quarter, Griffin’s Board of Directors determined that Imperial will
significantly reduce production at its Quincy, Florida farm.  Imperial
expects to continue to operate its farm in Granby, Connecticut at its current
level of production.  The significant reduction in product to be grown
in Florida reflects the difficulties the Quincy facility has encountered as a
result of the increase in costs to deliver Florida product to most of Imperial’s
major markets, which are located in the mid-Atlantic area and northeastern
United States.  Imperial has been unable to develop sufficient volume
in more southern markets to reduce its dependence on shipping Florida product
substantial distances.  This change will enable Imperial to focus more
as a regional grower with most of its major markets within close proximity of
its Connecticut farm. As of August 30, 2008, inventory and property and
equipment at Imperial’s Florida farm comprised 35% of Imperial’s total assets.
Imperial will record a significant charge to its operating results in the 2008
fourth quarter as a result of this decision.





Results
of Operations





Thirteen
Weeks Ended August 30, 2008 Compared to the Thirteen Weeks Ended September 1,
2007





Griffin’s consolidated total revenue
decreased from approximately $12.1 million in the 2007 third quarter to
approximately $7.9 million in the 2008 third quarter.  The decrease in
total revenue of approximately $4.2 million reflects decreases of approximately
$3.2 million and approximately $1.0 million at Griffin Land and Imperial,
respectively.





Total revenue at Griffin Land decreased
from approximately $7.3 million in the 2007 third quarter to approximately $4.0
million in the 2008 third quarter.  The decrease of approximately $3.3
million reflects a decrease of approximately $3.6 million from property sales,
partially offset by an increase of approximately $0.3 million in rental revenue.
The increase in rental revenue principally reflects: (a) $0.1 million from
leasing space in an industrial building in New England Tradeport (“Tradeport”)
that was completed and placed in service in the 2007 fourth quarter and rental
revenue from a warehouse building that was purchased in the 2007 fourth quarter;
(b) $0.3 million from leasing previously vacant space and increased billings for
maintenance costs; partially offset by (c) a $0.1 million decrease in rental
revenue as a result of a lease that ended last year and was not
renewed.





A summary
of the square footage of Griffin Land’s real estate portfolio is as
follows:





Total
              Square
              Footage
            
            Square
              Footage
              Leased
            
            Percentage
              LeasedAs
      of August 30, 2008
            
            2,016,000
            
            1,342,000
            
            67%As
      of December 1, 2007
            
            2,016,000
            
            1,322,000
            
            66%As
      of September 1, 2007
            
            1,837,000
            
            1,275,000
            
            69%





The
increase in total square footage from 1,837,000 square feet at the end of the
2007 third quarter to 2,016,000 square feet at the end of the 2008 third quarter
principally reflects the approximate 148,000 square foot industrial building in
Tradeport that was completed and placed in service in the 2007 fourth quarter
and the approximate 31,000 square foot warehouse building in Bloomfield,
Connecticut, that was acquired near the end of fiscal 2007.  In the
first nine months of fiscal 2008, the amount of leased square footage has
remained essentially flat.





21


Subsequent
to the end of the 2008 third quarter, Griffin Land completed a lease for its
entire approximate 308,000 square foot warehouse in Manchester, Connecticut,
which had been vacant.  The new lease is for seven years, and, in
addition to other customary terms, includes an option, with certain conditions,
exercisable by Griffin Land to sell the property to the lessee, and another
option, exercisable by the lessee to purchase the property from Griffin Land
during different three year periods at an agreed upon price.  The new
lease became effective in the 2008 fourth quarter.  Had the lease of
the Manchester, Connecticut, warehouse been effective at the end of the 2008
third quarter, Griffin Land’s square footage leased would have been
approximately 82% of its total square footage.





During
the first half of fiscal 2008, Griffin Land entered into a new lease for
approximately 58,000 square feet with a tenant that previously leased
approximately 22,000 square feet in one of Griffin Land’s Tradeport industrial
buildings, resulting in a net increase of approximately 36,000 square feet being
leased.  This new lease is for space in a new approximate 100,000
square foot industrial building in Tradeport that was completed just after the
end of the 2008 third quarter.  The new lease became effective in the
2008 fourth quarter at the same time the lease in the older Tradeport building
was terminated.





Market
activity for office space was weak in fiscal 2007 and has remained soft in the
current year, although there has been a moderate increase in showings for small
to mid-sized office space requirements recently.  Market activity for
industrial and warehouse space weakened last year and has continued to be soft
this year.  There is no assurance that a recent moderate increase in
showings of office space and activity in industrial and warehouse space will
result in the leasing of any of Griffin Land’s currently vacant
space.





Revenue
from property sales by Griffin Land decreased by approximately $3.6 million in
the 2008 third quarter as compared to the 2007 third quarter.  The
decrease reflects the 2008 third quarter including only $0.1 million of revenue
recognized on the sale of undeveloped Tradeport land to Walgreen that closed in
2006 and is being accounted for under the percentage of completion method (as
discussed in Note 7 to the financial statements under the heading “Deferred
Revenue on Prior Year Land Sale”), and $0.1 million of previously deferred
revenue related to a residential development that was recognized in the current
quarter because the homebuilder that purchased the first twenty-five residential
lots at Stratton Farms did not exercise its option, which has since expired,
under the contract with Griffin Land to purchase the remaining Stratton Farms
lots.  Property sales occur periodically and changes in revenue from
year to year from these transactions may not be indicative of any trends in the
real estate business.





Net sales and other revenue at Imperial
decreased from $4.9 million in the 2007 third quarter to $3.8 million in the
2008 third quarter, as unit sales volume decreased approximately 19% in the 2008
third quarter as compared to the 2007 third quarter.  We believe that
the lower sales at Imperial were a result of the weakened economy this year and
the reduction in new home construction.  In the third quarter,
Imperial’s sales to its rewholesale customer segment generally increase as a
percentage of Imperial’s total sales.  We believe that sales to this
customer segment have been hampered by the slowdown in new home
construction.





Griffin incurred a consolidated
operating loss in the 2008 third quarter, including general corporate expense,
of $1.5 million as compared to a consolidated operating profit, including
general corporate expense, of $1.7 million in the 2007 third
quarter.  The lower operating results in the 2008 third quarter
reflect a decrease of approximately $2.6 million in operating profit at Griffin
Land, an increase of approximately $0.4 million in Imperial’s operating loss and
an increase of approximately $0.2 million in general corporate
expense.





Operating
results at Griffin Land in the 2008 and 2007 third quarters were as
follows:


22
  2008
              
              
              2007Third
      Qtr.
              
              
              Third
      Qtr.(amounts
      in thousands)Rental
      revenue
              
              $
              3,785
              
              
              $
              3,489Costs
      related to rental revenue excludingdepreciation
      and amortization expense (a)
              
              
              (1,399
              )
              
              
              (1,472
              )Profit
      from leasing activities before general andadministrative
      expenses and before depreciationand
      amortization expense (a)
              
              
              2,386
              
              
              
              2,017Revenue
      from property sales
              
              
              255
              
              
              
              3,798Costs
      related to property sales
              
              
              1
              
              
              
              (900
              )Gain
      from property sales
              
              
              256
              
              
              
              2,898Profit
      from leasing activities and gain from property salesbefore
      general and administrative expenses and beforedepreciation
      and amortization expense (a)
              
              
              2,642
              
              
              
              4,915General
      and administrative expenses excluding depreciationand amortization expense (a)
              
              
              (800
              )
              
              
              (604
              )Profit
      before depreciation and amortization expense
              
              
              1,842
              
              
              
              4,311Depreciation
      and amortization expense related to costs ofrental revenue
              
              
              (1,227
              )
              
              
              (1,111
              )Depreciation
      and amortization expense - other
              
              
              (9
              )
              
              
              (8
              )Operating
      profit
              
              $
              606
              
              
              $
              3,192





(a)
            The costs related to
      rental revenue excluding depreciation and amortization expense, profit
      from leasing activities before generaland administrative expenses
      and before depreciation and amortization expense, general and
      administrative expenses excluding depreciation and amortization expense
      and profit before depreciation and amortization expense are disclosures
      not in conformity with accounting principles generally accepted in the
      United State of America.  They are presented because Griffin
      believes they are useful financial indicators for measuring the results in
      its real estate business segment.  However, they should not be
      considered as an alternative to operating profit as a measure of operating
      results in accordance with accounting principles generally accepted in the
      United States of America.  The aggregate of (i) costs related to
      rental revenue excluding depreciation and amortization expense; (ii) costs
      related to property sales; and (iii) depreciation and amortization expense
      related to costs of rental revenue equals the costs related to rental
      revenue and property sales as reported on Griffin’s consolidated
      statements of operations.





Profit from leasing activities before
general and administrative expenses and before depreciation and amortization
expense increased by approximately $0.4 million in the 2008 third quarter as
compared to the 2007 third quarter.  The increase principally reflects
the higher rental revenue as a result of more space under lease in the 2008
third quarter as compared to the 2007 third quarter and a slight decrease in
costs related to rental revenue excluding depreciation and amortization
expense.  The slight decrease in costs principally reflects lower
repair and maintenance costs in the current quarter which more than offset the
costs in the 2008 third quarter related to buildings that were not on line in
the 2007 third quarter or acquired after the 2007 third quarter.





23


The gain
from property sales in the 2008 third quarter includes the recognition of a
portion of the previously deferred gain from the land sale to Walgreen that
closed in 2006 and the recognition of the remaining deferred gain related to
Stratton Farms.  Costs related to property sales reflect the costs
incurred in the 2008 third quarter for the required road improvements related to
the Walgreen transaction offset by the effect of a reversal of a small accrual
for costs that were expected to be incurred to complete work at Stratton
Farms.  There were no property sales closed in the 2008 third
quarter.  The gain on property sales in the 2007 third quarter
principally reflected a gain on the sale of the second phase of residential lots
in Stratton Farms and the recognition of a portion of the previously deferred
gain on the 2006 land sale to Walgreen.





Griffin
Land’s general and administrative expenses increased approximately $0.2 million
in the 2008 third quarter as compared to the 2007 third quarter.  The
increase principally reflects an increase in accrued incentive compensation
expense, based on projected payment for the full year and the inclusion in the
2007 third quarter of the recovery of a receivable that had been written off in
a previous period.  Depreciation and amortization expense at Griffin
Land increased from approximately $1.1 million in the 2007 third quarter to
approximately $1.2 million in the 2008 third quarter.  The increase
principally reflects depreciation expense related to the Tradeport building
completed and placed in service in the 2007 fourth quarter and the building
purchased in the 2007 fourth quarter. There was no depreciation expense on these
facilities in the 2007 third quarter.





Operating results at Imperial in the
2008 and 2007 third quarters were as follows:





2008
              
              
              2007Third
      Qtr.
              
              
              Third
      Qtr.(amounts
      in thousands)Net
      sales and other revenue
              
              $
              3,824
              
              
              $
              4,861Cost
      of goods sold
              
              
              3,797
              
              
              
              4,387Gross
      profit
              
              
              27
              
              
              
              474Selling,
      general and administrative expenses
              
              
              (1,123
              )
              
              
              (1,153
              )Operating
      loss
              
              $
              (1,096
              )
              
              $
              (679
              )


Imperial’s operating loss in the 2008
third quarter increased over its operating loss in the 2007 third quarter due to
a decrease in gross profit.  The decrease in gross profit reflects the
lower 2008 third quarter sales volume and lower gross margins on
sales.  The lower gross margins were due to reduced pricing in the
current quarter to move product that did not sell during the spring and
increased delivery costs.  Cost of goods sold in both the 2008 and
2007 third quarters included a $0.4 million charge for unsalable
inventories.  Imperial’s gross margin on sales, excluding the effect
of the charges for unsalable inventories in the 2008 and 2007 third quarters,
decreased from 17.6% in the 2007 third quarter to 9.9% in the 2008 third
quarter, reflecting the lower pricing in the current quarter.  Due to
the perishable nature of Imperial’s inventory, continued sales shortfalls could
result in additional charges for unsalable inventories.





Imperial’s 2008 third quarter selling,
general and administrative expenses were essentially unchanged from the 2007
third quarter.  A decrease of approximately $0.1 million of selling
expense, due principally to lower commission expense as a result of the lower
sales volume, was offset by higher general and administrative expenses, due to
an increase in headcount.  As a percentage of net sales and other
revenue, Imperial’s selling, general and administrative expenses increased from
23.7% in the 2007 third quarter to 29.4% in the 2008 third
quarter.


24





Griffin’s general corporate expense was
higher in the 2008 third quarter as compared to the 2007 third quarter due
principally to higher headcount and higher state franchise taxes, partially
offset by lower costs related to Griffin’s deferred compensation
plan.




In the 2007 third quarter, Griffin sold
200,000 shares of its approximately 6.5 million shares of Centaur Media common
stock and recorded a pretax gain of $0.5 million on those
sales.  Griffin has not sold any of its Centaur Media common stock
thus far in fiscal 2008.





Griffin’s
consolidated interest expense was approximately $0.8 million in both the 2008
and 2007 third quarters.  Griffin’s average outstanding debt was $48.9
million in the 2008 third quarter as compared to $51.1 million in the 2007 third
quarter, reflecting principal payments made on Griffin Land’s nonrecourse
mortgages.





Griffin
reported investment income of $0.1 million in the 2008 third quarter as compared
to $2.1 million in the 2007 third quarter.  The lower investment
income in the current year principally reflects the 2007 third quarter including
$1.6 million of dividend income from SHNC.  Additionally, the average
amount of short-term investments in the 2008 third quarter was approximately
$12.0 million lower than the average amount of short-term investments in the
2007 third quarter, and the short-term investments had lower returns in the 2008
third quarter as compared to the 2007 third quarter, attributed to a decline in
interest rates this year.





Griffin’s effective income tax benefit
rate is 40.6% in the 2008 third quarter as compared to an effective tax rate of
34.3% in the 2007 third quarter.  The effective income tax benefit
rate reflects the statutory federal tax rate adjusted for state income
taxes.  Included in the 2008 third quarter income tax benefit is
approximately $0.1 million of tax benefit resulting from the adjustment of
estimated amounts used in preparing the income tax provision for fiscal 2007 to
the amounts included on the 2007 income tax returns.  The effective
income tax benefit rate used in the 2008 third quarter is based on management’s
projections of operating results for the full year.  To the extent
that actual results differ from current projections, the effective rate may
change.





Thirty-Nine
Weeks Ended August 30, 2008 Compared to the Thirty-Nine Weeks Ended September 1,
2007





Griffin’s consolidated total revenue
decreased from $48.6 million in the 2007 nine month period to $33.4 million in
the 2008 nine month period.   The decrease in total revenue of
approximately $15.2 million reflects decreases in revenue of approximately $12.2
million and approximately $3.0 million at Griffin Land and Imperial,
respectively.





Total revenue at Griffin Land decreased
from approximately $24.3 million in the 2007 nine month period to approximately
$12.1 million in the 2008 nine month period.  The decrease of
approximately $12.2 million reflects a decrease of approximately $12.8 million
of revenue from property sales, partially offset by an increase of approximately
$0.6 million of rental revenue.  The increase in Griffin Land's rental
revenue in the 2008 nine month period, as compared to the 2007 nine month
period, principally reflects: (a) $0.6 million from leasing an industrial
building in Tradeport that was completed and placed in service in the 2007
fourth quarter and from an industrial building acquired in the 2007 fourth
quarter; (b) $0.3 million from leasing space that was vacant during all or a
significant portion of the 2007 nine month period but was leased in the 2008
nine month period; partially offset by (c) a decrease of $0.3 million from space
being vacant this year that was leased during the 2007 nine month period. The
approximate $12.8 million decrease in revenue from property sales reflects the
2007 nine month period including several significant land sale transactions
while the 2008 nine month period included only approximately $1.1 million of
revenue from property sales, principally comprised of the recognition of
previously deferred revenue from the sale of undeveloped Tradeport land to
Walgreen that




25


closed in
2006 and is being accounted for under the percentage of completion
method.  Property sales occur periodically and changes in revenue from
year to year from these transactions may not be indicative of any trends in the
real estate business.





Net sales and other revenue at Imperial
decreased from $24.3 million in the 2007 nine month period to $21.3 million in
the 2008 nine month period, as unit sales volume decreased 19% in the 2008 nine
month period as compared to the 2007 nine month period.  The decrease
in net sales in the 2008 nine month period as compared to the 2007 nine month
period reflects the factors discussed above in the 2008 third quarter
results.





Griffin incurred a consolidated
operating loss, after general corporate expense, of $3.6 million in the 2008
nine month period as compared to consolidated operating profit, after general
corporate expense, of $7.4 million in the 2007 nine month period.  The
lower operating results in the 2008 nine month period reflect a decrease of
approximately $10.7 million in operating profit at Griffin Land and an increase
of approximately $0.4 million in the operating loss incurred by Imperial,
partially offset by a reduction in general corporate expense of $0.1
million.





Operating results at Griffin Land in
the 2008 and 2007 nine month periods were as follows:





2008
              
              
              2007Nine
      Month Period
              
              
              Nine
      Month Period(amounts
      in thousands)Rental
      revenue
              
              $
              11,027
              
              
              $
              10,441Costs
      related to rental revenue excludingdepreciation
      and amortization expense (a)
              
              
              (5,044
              )
              
              
              (4,715
              )Profit
      from leasing activities before general andadministrative
      expenses and before depreciationand
      amortization expense (a)
              
              
              5,983
              
              
              
              5,726Revenue
      from property sales
              
              
              1,081
              
              
              
              13,895Costs
      related to property sales
              
              
              (178
              )
              
              
              (2,588
              )Gain
      from property sales
              
              
              903
              
              
              
              11,307Profit
      from leasing activities and gain from property salesbefore general and administrative expenses and beforedepreciation and amortization expense (a)
              
              
              6,886
              
              
              
              17,033General
      and administrative expenses excluding depreciationand amortization expense (a)
              
              
              (2,164
              )
              
              
              (2,018
              )Profit
      before depreciation and amortization expense (a)
              
              
              4,722
              
              
              
              15,015Depreciation
      and amortization expense related to costs ofrental revenue
              
              
              (3,704
              )
              
              
              (3,287
              )Depreciation
      and amortization expense - other
              
              
              (26
              )
              
              
              (27
              )Operating
      profit
              
              $
              992
              
              
              $
              11,701


(a)
            The
      costs related to rental revenue excluding depreciation and amortization
      expense, profit from leasing activities before general and administrative
      expenses and before




26
 depreciation
      and amortization expense, general and administrative expenses excluding
      depreciation and amortization expense, and profit before depreciation and
      amortization expense are disclosures not in conformity with accounting
      principles generally accepted in the United States of
      America.  They are presented because Griffin believes they are
      useful financial indicators for measuring the results in its real estate
      business segment.  However, they should not be considered as an
      alternative to operating profit as a measure of operating results in
      accordance with accounting principles generally accepted in the United
      States of America.  The aggregate of (i) costs related to rental
      revenue excluding depreciation and amortization expense; (ii) costs
      related to property sales; and (iii) depreciation and amortization expense
      related to costs of rental revenue equals the costs related to rental
      revenue and property sales on Griffin’s consolidated statement of
      operations.


The increase of $0.3 million in Griffin
Land’s profit from leasing activities before general and administrative expenses
and before depreciation and amortization expense principally reflects the $0.6
million increase in rental revenue, partially offset by a $0.3 million increase
in costs related to rental revenue excluding depreciation and amortization
expenses.  The higher costs principally reflect $0.2 million of
building operating expenses for buildings that were on line for the entire 2008
nine month period but were either not in operation in the 2007 nine month period
or in operation for only a portion of the 2007 nine month period.





The gain from property sales in the
2008 nine month period principally reflects the recognition of a portion of the
previously deferred gain from the land sale to Walgreen that closed in 2006, as
there were no property sales closed in the 2008 nine month period.  In
the 2007 nine month period, Griffin Land’s gain from property sales included
gains on several sales of undeveloped land, including two significant sales of
undeveloped land parcels that were completed in the 2007 second quarter, the
sale of the second phase of residential lots in Stratton Farms in the 2007 third
quarter and approximately $1.7 million of previously deferred gain recognized on
the land sale to Walgreen.





Griffin
Land’s general and administrative expenses increased by approximately $0.1
million in the 2008 nine month period as compared to the 2007 nine month
period.  The increase principally reflects higher compensation expense
in the current period.  Depreciation and amortization expense at
Griffin Land increased from approximately $3.3 million in the 2007 nine month
period to approximately $3.7 million in the 2008 nine month
period.  The increase principally reflects approximately $0.3 million
of depreciation expense related to buildings that were on line for the entire
2008 nine month period but were either not in operation in the 2007 nine month
period or in operation for only a portion of the 2007 nine month
period.





Imperial’s operating results for the
2008 and the 2007 nine month periods are as follows:





2008
              
              
              2007Nine
      Month Period
              
              
              Nine
      Month Period(amounts
      in thousands)Net
      sales and other revenue
              
              $
              21,301
              
              
              $
              24,294Cost
      of goods sold
              
              
              18,716
              
              
              
              21,174Gross
      profit
              
              
              2,585
              
              
              
              3,120Selling,
      general and administrative expenses
              
              
              (3,835
              )
              
              
              (4,004
              )Operating
      loss
              
              $
              (1,250
              )
              
              $
              (884
              )


27





Imperial’s operating loss in the 2008
nine month period increased by approximately $0.4 million over the operating
loss in the 2007 nine month period, reflecting an approximate $0.5 million
decrease in gross profit partially offset by an approximate $0.1 million
decrease in selling, general and administrative expenses.  The
decrease in gross profit reflects the decline in sales and lower pricing in the
2008 nine month period.  Cost of goods sold includes charges for
unsalable inventories of $0.6 million and $0.7 million in the 2008 and 2007 nine
month periods, respectively.  Imperial’s gross margin on sales,
excluding the charges for unsalable inventories, decreased from 15.8% in the
2007 nine month period to 14.7% in the 2008 nine month period.  The
lower margins principally reflect the lower pricing in the current year and
increased delivery costs this year, which were not entirely offset by increased
charges to customers.  Due to the perishable nature of Imperial’s
inventory, continued sales shortfalls could result in additional charges for
unsalable inventories.





Imperial’s selling, general and
administrative expenses decreased from approximately $4.0 million in the 2007
nine month period to approximately $3.8 million in the 2008 nine month
period.  The lower selling, general and administrative expenses in the
current nine month period reflect a decrease of $0.1 million in selling expense,
due to lower commission expense as a result of the lower sales, and the 2007
nine month period including $0.2 million of costs related to litigation that was
settled last year.  Partially offsetting these items was a $0.1
million increase in general and administrative payroll expense due to an
increase in headcount.  As a percentage of net sales, Imperial’s
selling, general and administrative expenses increased from 16.5% in the 2007
nine month period to 18.0% in the 2008 nine month period.





Griffin’s general corporate expense
decreased from $3.4 million in the 2007 nine month period to $3.3 million in the
2008 nine month period.  The decrease principally reflects the 2007
nine month period including $0.3 million of costs related to litigation against
the Company, and a decrease of $0.2 million in expense related to Griffin’s non
qualified deferred compensation plan, partially offset by increases of $0.2
million in payroll expense and $0.1 million in state franchise taxes and a net
increase of $0.1 million in all other expenses.





In the 2007 nine month period, Griffin
sold 1.2 million of its approximately 6.5 million shares of Centaur Media common
stock and recorded a pretax gain of $2.9 million on those
sales.  Griffin has not sold any of its Centaur Media common stock
thus far in fiscal 2008.





Griffin’s consolidated interest expense
increased from $2.3 million in the 2007 nine month period to $2.4 million in the
2008 nine month period.  The increase was due to less interest
capitalized in the 2008 nine month period than the 2007 nine month
period.  Griffin’s average outstanding debt in the 2008 nine month
period was $49.3 million as compared to $51.4 million in the 2007 nine month
period.





Griffin’s investment income decreased
from $3.0 million in the 2007 nine month period to $0.7 million in the 2008 nine
month period.  The decrease principally reflects the 2007 third
quarter including $1.6 million of dividend income received from
SNHC.  There was no dividend income from SNHC in the 2008 nine month
period.  Additionally, the average amount of short-term investments in
the 2008 nine month period was $9.2 million lower than the average amount of
short-term investments in the 2007 nine month period, and the short-term
investments had lower returns in the current nine month period, attributed to
lower short-term interest rates this year.





Griffin’s effective income tax benefit
rate was 38.9% for the 2008 nine month period, as compared to 36.4% for the 2007
nine month period.  The effective tax rate for the 2008 and 2007 nine
month periods reflect the statutory federal income tax rate adjusted for state
income taxes.  Included in the income tax benefit in the 2008 nine
month period is approximately $0.1 million of tax benefit resulting from the
adjustment of the amounts estimated in the 2007 income tax provision to the
amounts reflected




28


on the
2007 income tax returns.  Griffin’s effective tax benefit rate is
based on management’s projections for the balance of the year.  To the
extent that actual results differ from current projections, the effective tax
rate may change.








Off
Balance Sheet Arrangements





Griffin does not have any material off
balance sheet arrangements.





Liquidity
and Capital Resources





Net cash provided by operating
activities was $8.3 million in the 2008 nine month period as compared to $4.7
million in the 2007 nine month period.  Net cash provided by operating
activities in the 2008 nine month period includes $12.2 million of cash
generated from a reduction of short-term investments as compared to $8.7 million
of cash generated from a reduction of short-term investments in the 2007 nine
month period.  Excluding the cash generated by the reductions of
short-term investments in each period, Griffin had net cash used in operating
activities of $3.9 million in the 2008 nine month period as compared to $4.1
million in the 2007 nine month period.  Although Griffin incurred a
net loss in the 2008 nine month period as compared to net income in the 2007
nine month period, the 2007 results included significant gains from the sale of
properties and the sale of Centaur Media common stock, which are not included in
operating activities.  Changes in assets and liabilities that affected
cash provided by operating activities in the 2008 nine month period include
increases in accounts receivables, inventories and other current
assets.  The increase in accounts receivable in the 2008 nine month
period was slightly less than the increase in accounts receivable in the 2007
nine month period due principally to the decrease in sales at Imperial this
year.  Inventories increased in the 2008 nine month period, as
compared to a decrease of inventories in the 2007 nine month period, as less
inventory was liquidated by Imperial as a result of lower sales in the 2008 nine
month period.  The increase in other current assets in the 2008 nine
month period as compared to the decrease in the 2007 nine month period reflects
the income tax benefit recorded in the current year.  Accounts payable
and accrued liabilities increased by $0.2 million in the 2008 nine month period,
as compared to a reduction of $1.6 million in the 2007 nine month period, which
is attributed to the timing of payments.





In the 2008 nine month period, Griffin
had net cash of $9.1 million used in investing activities as compared to net
cash of $0.7 million used in investing activities in the 2007 nine month
period.  The net cash used in investing activities in the 2008 nine
month period includes additions to Griffin Land’s real estate assets of $8.7
million, principally reflecting construction of a new approximate 100,000 square
foot industrial building in Tradeport and tenant improvements related to new
leases.  A lease for 58,000 square feet in this new building was
signed prior to the start of construction with a tenant
that previously leased approximately 22,000 square feet in one of Griffin Land’s
other Tradeport industrial buildings.  As a result of an increase in
material costs, the per square foot construction cost of this new building was
higher than the per square foot cost of construction on the Tradeport buildings
previously developed by Griffin Land.  An increase in the cost of
construction of new facilities results in higher depreciation expense in future
periods and requires increased investment in Griffin Land’s real estate assets,
which may lower the return on investment in new facilities in the real estate
business.  Additions to property and equipment in the 2008 nine month
period were $0.4 million principally to replace equipment used in Imperial’s
farming operations.




Investing
activities in the 2007 nine month period included $11.4 million of cash
generated from property sales, partially offset by $6.4 million of those cash
proceeds being held in escrow, and $3.5 million of cash proceeds from the sale
of a portion of Griffin’s common stock in Centaur Media.  The cash
proceeds from one of the property sales completed in the 2007 nine month period
were held in




29
 
  escrow in
connection with the use of a portion of those proceeds to acquire property in a
Section 1031 exchange for income tax purposes.  That acquisition was completed
in the 2007 fourth quarter.





Net cash used in financing activities
was $5.2 million in the 2008 nine month period as compared to $1.3 million in
the 2007 nine month period.  The net cash used in financing activities
in the 2008 nine month period reflects $2.9 million for the repurchase of 85,200
shares of Griffin’s common stock (see below), $1.5 million for the payment of
quarterly dividends on Griffin’s common stock and $0.9 million for payments of
principal on Griffin Land’s nonrecourse mortgages and capital lease
obligations.  There were no dividend payments in the 2007 nine month
period as the payment of quarterly dividends did not begin until the first
quarter of fiscal 2008.





In fiscal 2007, Griffin’s Board of
Directors authorized a program to repurchase, from time to time, up to 250,000
outstanding shares of Griffin common stock.  The program does not
obligate Griffin to repurchase any specific number of shares, may be suspended
at any time at management’s discretion and expires on December 31,
2008.  Griffin repurchased 85,200 shares of its common stock in the
2008 nine month period for approximately $2.9 million, and as of August 30,
2008, Griffin was authorized to repurchase an additional 51,900 shares of its
common stock.  Based on the market price of its common stock as of
August 30, 2008, if the total authorized number of shares are repurchased,
Griffin would expend approximately $1.8 million.





Griffin’s
payments (including principal and interest) under contractual obligations as of
August 30, 2008 are as follows:




Total
              
              
              Due
      Within One Year
              
              
              Due
      From 1-3 Years
              
              
              Due
      From 3-5 Years
              
              
              Due
      in More Than 5 Years(in
      millions)Mortgages
              
              $
              65.3
              
              
              $
              11.8
              
              
              $
              7.3
              
              
              $
              13.6
              
              
              $
              32.6Capital
      Lease Obligations
              
              
              0.2
              
              
              
              0.1
              
              
              
              0.1
              
              
              
              -
              
              
              
              -Operating
      Lease Obligations
              
              
              1.2
              
              
              
              0.2
              
              
              
              0.5
              
              
              
              0.5
              
              
              
              -Purchase
      Obligations (1)
              
              
              1.9
              
              
              
              1.9
              
              
              
              -
              
              
              
              -
              
              
              
              -Other
      (2)
              
              
              2.3
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              2.3$
              70.9
              
              
              $
              14.0
              
              
              $
              7.9
              
              
              $
              14.1
              
              
              $
              34.9


(1)
            Includes
      obligations for the completion of construction of a new industrial
      building by Griffin Land, completion of tenant improvements,
      infrastructure improvements in Tradeport and for the purchase of plants
      and raw materials by Imperial.


(2)
            Includes
      Griffin’s deferred compensation plan and other postretirement benefit
      liabilities.







In the
2008 nine month period, Griffin Land and the Town of Simsbury, Connecticut,
executed agreements settling litigation related to Meadowood, Griffin Land’s
proposed residential development.  The settlement agreements grant
Griffin Land town approvals for Meadowood.  As part of the agreements
with the town, Griffin Land will be required to perform certain remediation
measures.  Development of Meadowood remains subject to receiving
certain environmental approvals from government agencies, which Griffin Land
will be seeking to obtain this year.





An
agreement executed in fiscal 2007 to sell, for approximately $4.5 million,
approximately 45 acres of land in Bloomfield, Connecticut that is part of
Griffin Center to a developer of residential housing will not move
forward.  The developer who would have purchased the land was not able
to secure financing for this project.





30


Subsequent
to the end of the 2008 third quarter, Griffin Land signed a letter of intent
with a private company for that company to lease an approximate 300,000 square
foot warehouse facility that Griffin Land would build in
Tradeport.  The lease would be for ten years, and would include
options for building expansion and lease renewal.  If this transaction
proceeds, construction of the building is expected to be in 2009.  The
completion of this build-to-suit transaction is subject to several
contingencies, including completion of a definitive lease agreement, obtaining
all necessary government approvals for the proposed facility and
financing.  There can be no assurance that this transaction will be
completed under its current terms, or at all.





In the
near-term, Griffin plans to continue to invest in its real estate business
through development of its current land holdings and expansion into new areas
through acquisitions of undeveloped land, existing buildings or
both.  Real estate acquisitions may or may not occur based on many
factors, including real estate pricing.  During the remainder of this
year, Griffin Land expects to incur expenditures for tenant improvements as
leases for currently vacant space are executed.  Griffin Land will
also continue to invest in infrastructure improvements required for present and
future development in its office and industrial parks.





As of
August 30, 2008, Griffin had cash and short-term investments of approximately
$15.8 million.  Management believes that the cash and short-term
investments held by Griffin as of August 30, 2008 will be sufficient to finance
the working capital requirements of its businesses, the continued investment in
Griffin’s real estate assets, the payment of quarterly dividends on its common
stock and the repurchase of its common stock as authorized by the Board of
Directors for the balance of this year.  Management believes a credit
facility may be required to supplement its cash and short-term investments to
meet its expected seasonal cash and potential real estate capital expenditure
requirements in fiscal 2009.  In addition, Griffin may require
construction loan financing for the potential built-to-suit project in
Tradeport.  Griffin will seek to refinance its existing mortgage that
is due in the 2009 third quarter and may also continue to seek nonrecourse
mortgage placements on selected properties.




Recent
Accounting Pronouncements





Effective December 2, 2007, Griffin
adopted FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes”
(“FIN No. 48”). The interpretation clarifies the accounting for uncertainty in
income taxes recognized in a company's financial statements in accordance with
Statement of Financial Accounting Standards No. 109, “Accounting for Income
Taxes.”  Specifically, FIN No. 48 prescribes a recognition threshold
and a measurement attribute for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax
return.  FIN No. 48 also provides guidance on the related
derecognition, classification, interest and penalties, accounting for interim
periods, disclosure and transition of uncertain tax positions. In connection
with the adoption of FIN No. 48, Griffin has analyzed its federal and
significant state filing positions.  Griffin’s federal income tax
returns for fiscal 2004 through fiscal 2006 are currently under examination by
the Internal Revenue Service.  The periods subject to examination for
Griffin’s significant state return, which is Connecticut, are fiscal 2005
through fiscal 2007.  Griffin believes that its income tax filing
positions will be sustained on examination and does not anticipate any
adjustments that will result in a material change on its financial
statements.  As a result, no accrual for uncertain income tax
positions has been recorded pursuant to FIN No. 48 nor was there a cumulative
effect related to adopting FIN No. 48.  Griffin’s policy for recording
interest and penalties, related to uncertain tax positions, is to record such
items as part of its provision for federal and state income taxes.





Effective
December 2, 2007, Griffin adopted SFAS No. 157, “Fair Value
Measurements.”  This new standard defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles
and expands disclosures about fair value measurements.  This statement
does not




31
 
  require
any new fair value measurements but provides enhanced guidance in determining
fair value measurements presently used in the preparation of financial
statements.  The amounts included on Griffin’s consolidated balance
sheet for cash and cash equivalents, accounts receivable, accounts payable and
accrued liabilities approximate their fair values because of the short-term
maturity of these instruments.  Griffin’s short-term investments and
its available-for-sale securities are reported at fair value on Griffin’s
consolidated balance sheet.  The fair value of Griffin’s short-term
investments and available-for-sale securities are based on quoted prices in
active markets for identical assets (Level 1).  Griffin was not
required to use significant other observable inputs (Level 2) or significant
unobservable inputs (Level 3) in determining the fair value of its short-term
investments and available-for-sale securities.





Effective December 2, 2007, Griffin
adopted SFAS No. 159, “The Fair Value Option for Financial Assets and Financial
Liabilities.”  This new standard allows an entity the irrevocable
option to elect fair value for the initial and subsequent measurement for
certain financial assets and liabilities under an instrument-by-instrument
election.  Subsequent measurements for the financial assets and
liabilities an entity elects to fair value will be recognized in
earnings.  SFAS No. 159 does not affect any existing pronouncements
that require assets and liabilities to be carried at fair value, nor does it
eliminate disclosure requirements included under existing
pronouncements.  Griffin did not elect to report any additional assets
or liabilities at fair value that were not already being reported at fair
value.





Forward-Looking
Information





The above information in Management’s
Discussion and Analysis of Financial Condition and Results of Operations
includes “forward-looking statements” within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act.  Although Griffin
believes that its plans, intentions and expectations reflected in such
forward-looking statements are reasonable, it can give no assurance that such
plans, intentions or expectations will be achieved, particularly with respect to
improvement in the operating results of Imperial, leasing of currently vacant
space, construction of additional facilities in the real estate business, the
acquisition of real estate assets, the refinancing of a nonrecourse mortgage
that is due in the 2009 third quarter, the sufficiency of Griffin’s cash and
short-term investments to finance its working capital requirements and payment
of quarterly dividends on its common stock or the repurchase by Griffin of the
number of shares of its outstanding common stock currently authorized by its
Board of Directors.  The projected information disclosed herein is
based on assumptions and estimates that, while considered reasonable by Griffin
as of the date hereof, are inherently subject to significant business, economic,
competitive and regulatory uncertainties and contingencies, many of which are
beyond the control of Griffin.








ITEM
      3.
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK





Market risk represents the risk of
changes in the value of a financial instrument, derivative or non-derivative,
caused by fluctuations in interest rates, foreign exchange rates and equity
prices.  Changes in these factors could cause fluctuations in earnings
and cash flows.





For fixed rate mortgage debt, changes
in interest rates generally affect the fair market value of the debt instrument,
but not earnings or cash flows.  Griffin does not have an obligation
to prepay any fixed rate debt prior to maturity, and therefore, interest rate
risk and changes in the fair market value of fixed rate debt should not have a
significant impact on earnings or cash flows until such debt is refinanced, if
necessary.  Griffin’s mortgage interest rates are described in Note 5
to the unaudited consolidated financial statements included in Item
1.  For variable rate debt, changes in interest rates generally do not
impact the fair market value of the debt instrument, but do affect future
earnings and cash flows.  Griffin did not have any variable rate debt
outstanding during the 2008 nine month period.


32





Griffin is potentially exposed to
market risks from fluctuations in interest rates and the effects of those
fluctuations on market values of Griffin’s cash equivalents.  These
investments generally consist of overnight investments that are not
significantly exposed to interest rate risk.  Griffin’s short-term
investments generally consist of debt instruments with maturities ranging from
one to twenty-three months, with a weighted average maturity of approximately
eight months as of August 30, 2008.  These investments are not
significantly exposed to interest rate risk except to the extent that changes in
interest rates will ultimately affect the amount of interest income earned and
cash flow from these investments.





Griffin does not currently have any
derivative financial instruments in place to manage interest costs, but that
does not mean that Griffin will not use them as a means to manage interest rate
risk in the future.





Griffin does not have foreign currency
exposure related to its operations.  Griffin does have an investment
in a public company, Centaur Media, plc, based in the United
Kingdom.  The ultimate liquidation of that investment and conversion
of proceeds into United States currency is subject to future foreign currency
exchange rates.





ITEM
      4.
            CONTROLS
      AND PROCEDURES





Evaluation
of Disclosure Controls and Procedures





Griffin maintains disclosure controls
and procedures that are designed to ensure that information


required
to be disclosed in its Exchange Act reports is recorded, processed, summarized
and reported


within
the time periods specified in the Securities and Exchange Commission’s rules and
forms, and that


such
information is accumulated and communicated to Griffin’s management, including
its Chief Executive Officer and Chief Financial Officer, as appropriate, to
allow timely decisions regarding required disclosure.  In designing
and evaluating the disclosure controls and procedures, management recognizes
that any controls and procedures, no matter how well designed and operated, can
provide only reasonable assurance of achieving the desired control objectives,
and management necessarily is required to apply its judgment in evaluating the
cost-benefit relationship of possible controls and procedures.





As required by SEC Rule 13a-15(b),
Griffin carried out an evaluation, under the supervision and with the
participation of Griffin’s management, including Griffin’s Chief Executive
Officer and Griffin’s Chief Financial Officer, of the effectiveness of the
design and operation of Griffin’s disclosure controls and procedures as of the
end of the fiscal period covered by this report.  Based on the
foregoing, Griffin’s Chief Executive Officer and Chief Financial Officer
concluded that disclosure controls and procedures were effective at the
reasonable assurance level.





Changes
in Internal Control over Financial Reporting





There has been no change in Griffin’s
internal control over financial reporting during Griffin’s most recent fiscal
quarter that has materially affected, or is reasonably likely to materially
affect, Griffin’s internal control over financial reporting.





33







PART
      II
            OTHER
      INFORMATION





ITEM
      1.
            LEGAL
      PROCEEDINGS





In 1999, Griffin Land filed land use
applications with the land use commissions of Simsbury, Connecticut for
Meadowood, a proposed residential development on approximately 363 acres of
land.  In 2000, Simsbury’s land use commissions issued denials of
Griffin Land’s Meadowood application.  As a result of those denials,
Griffin brought several separate, but related, suits appealing those
decisions.  In 2002, the trial court upheld two of Griffin Land’s
appeals and ordered the town’s Planning and Zoning Commissions to approve the
Meadowood application.  The Town appealed those
decisions.  In 2004, the Connecticut Supreme Court ordered the Zoning
Commission to approve the zoning regulations proposed by Griffin Land for
Meadowood.  The Connecticut Supreme Court also ruled that the denial
of the Meadowood application by the Planning Commission can be upheld because
Griffin Land had not obtained the required sewer usage permits at the time the
application was made to the Planning Commission.  The required sewer
usage permits for Meadowood were subsequently obtained.  Also in 2004,
the Connecticut Supreme Court reversed a lower court decision that had denied
Griffin Land a wetlands permit, and remanded the case to Superior Court for
further proceedings to determine if a wetlands permit must be
issued.  In 2005, the Superior Court ruled that Griffin Land must
again apply to the Town’s Conservation and Inland Wetlands Commission for a
wetlands permit for its proposed Meadowood development.





In early
2007, Griffin Land and the Town of Simsbury jointly filed a motion in the
Appellate Court to have the appeal remanded to the Superior Court in
anticipation of the parties potentially presenting a settlement proposal to the
court for its review and approval.  Also in 2007, the Town’s Planning,
Zoning and Inland Wetlands Commissions approved resolutions for settlement
agreements.  The settlement terms include, among other things,
approval for up to 299 homes, certain remediation measures to be performed by
Griffin Land and the purchase by the Town, subject to approvals, of a portion of
the Meadowood land for Town open space.  In February 2008, the
Simsbury Planning Commission approved a resolution recommending that the Town
acquire the portion of the Meadowood land as outlined in the settlement
agreements if such land is substantially clean and suitable for use as municipal
open space.  In March 2008, Griffin Land and Simsbury executed
settlement agreements under the terms described above.  The settlement
agreements were approved by the Connecticut Superior Court on April 18, 2008 and
April 28, 2008, thus concluding the litigation on this matter with no further
appeals possible.  In May 2008, the Town of Simsbury approved the
purchase of a portion of the Meadowood land for town open
space.  Development of Meadowood remains subject to receiving certain
environmental approvals from government agencies, which Griffin Land will be
seeking to obtain this year.





Griffin is involved, as a defendant, in
various litigation matters arising in the ordinary course of
business.  In the opinion of management, based on the advice of legal
counsel, the ultimate liability, if any, with respect to these matters will not
be material individually or in the aggregate to Griffin’s consolidated financial
position, results of operations or cash flows.








ITEM
      1A.
            RISK
      FACTORS





There have been no material changes
from the risk factors as previously disclosed in Item 1A of the Company’s Annual
Report on Form 10-K for the year ended December 1, 2007.








34








ITEM
      2.
            UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS(c)
      Issuer Purchases of Equity
Securities





(a)
            (b)
            (c)
            (d)Date
            Total
      Number of Shares Purchased
            Average
      Price Paid per Share
            Total
      Number of Shares Purchased as Part of Publicly Announced Plans or
      Programs
            Maximum
      Number of Shares that May Yet Be Purchased Under the Plans or
      ProgramsMarch
      7, 2008
            56,100
            $34.02
            169,000
            81,000May
      30, 2008
            12,900
            $33.19
            181,900
            68,100July
      25, 2008
            10,200
            $33.84
            192,100
            57,900August
      21, 2008
            6,000
            $32.97
            198,100
            51,900








On January 31, 2007, Griffin announced
that its Board of Directors had authorized the repurchase of 150,000 shares of
its common stock.  On November 13, 2007, Griffin’s Board authorized an
increase of 100,000 shares to the repurchase program.  The program to
repurchase does not obligate Griffin to repurchase any specific number of
shares, may be suspended at any time at management’s discretion and expires on
December 31, 2008.





ITEM
      6.
            EXHIBITSExhibit
      No.
            Description3.1
            Form
      of Amended and Restated Certificate of Incorporation of Griffin Land &
      Nurseries, Inc. (incorporated by reference to the Form 10 of Griffin Land
      & Nurseries, Inc., filed April 8, 1997, as amended)3.2
            Form
      of Bylaws of Griffin Land & Nurseries, Inc. (incorporated by reference
      to the Form 10 of Griffin Land & Nurseries, Inc., filed April 8,
      1997, as amended)10.4
            Form
      of Agricultural Lease between Griffin Land & Nurseries, Inc. and
      General Cigar Holdings, Inc. (incorporated by reference to the
      Registration Statement on Form S-1 of General Cigar Holdings, Inc., filed
      December 24, 1996, as amended)10.6
            Form
      of 1997 Stock Option Plan of Griffin Land & Nurseries, Inc.
      (incorporated by reference to the Form 10 of Griffin Land & Nurseries,
      Inc., filed April 8, 1997, as amended)10.7
            Form
      of 401(k) Plan of Griffin Land & Nurseries, Inc. (incorporated by
      reference to the Form 10 of Griffin Land & Nurseries, Inc., filed
      April 8, 1997, as amended)10.17
            Loan
      Agreement dated June 24, 1999 (incorporated by reference to Form 10-Q
      dated August 28, 1999, filed October 8, 1999)




35




10.21
            Mortgage
      Deed, Security Agreement, Financing Statement and Fixture Filing with
      Absolute Assignment of Rents and Leases dated September 17, 2002 between
      Tradeport Development I, LLC and Farm Bureau Life Insurance Company
      (incorporated by reference to Form 10-Q dated August 31, 2002, filed
      October 11, 2002)10.22
            Letter
      of Agreement between Griffin Land & Nurseries, Inc. and USAA Real
      Estate Company (incorporated by reference to Form 10-Q dated August 31,
      2002, filed October 11, 2002)10.23
            Agreement
      of Purchase and Sale of Partnership Interest between Griffin Land &
      Nurseries, Inc. and USAA Real Estate Company dated December 3, 2002
      (incorporated by reference to Form 10-K dated November 30, 2002, filed
      February 28, 2003)10.24
            Mortgage
      Deed and Security Agreement dated December 17, 2002 between Griffin Center
      Development IV, LLC and Webster Bank (incorporated by reference to Form
      10-K dated November 30, 2002, filed February 28, 2003)10.28
            Secured
      Installment Note and First Amendment of Mortgage and Loan Documents dated
      April 16, 2004 among Tradeport Development I, LLC, and Griffin Land &
      Nurseries, Inc. and Farm Bureau Life Insurance Company (incorporated by
      reference to Form 10-Q dated May 29, 2004, filed July 13,
      2004)10.29
            Mortgage
      Deed Security Agreement, Fixture Filing, Financing Statement and
      Assignment of Leases and Rents dated July 6, 2005 by Tradeport Development
      II, LLC in favor of First Sunamerica Life Insurance Company (incorporated
      by reference to Form 10-Q dated May 28, 2005, filed on November 2,
      2005)10.30
            Promissory
      Note dated July 6, 2005 (incorporated by reference to Form 10-Q dated May
      28, 2005, filed on November 2, 2005)10.31
            Guaranty
      Agreement as of July 6, 2005 by Griffin Land & Nurseries, Inc. in
      favor of Sunamerica Life Insurance Company (incorporated by reference to
      Form 10-Q dated May 28, 2005, filed on November 2,
2005)10.32
            Amended
      and Restated Mortgage Deed Security Agreement, Fixture Filing, Financing
      Statement and Assignment of Leases and Rents dated November 16, 2006 by
      Tradeport Development II, LLC in favor of First Sunamerica Life Insurance
      Company (incorporated by reference to Form 10-K dated December 2, 2006,
      filed February 15, 2007)10.33
            Amended
      and Restated Promissory Note dated November 16, 2006 (incorporated by
      reference to Form 10-K dated December 2, 2006, filed February 15,
      2007)10.34
            Guaranty
      Agreement as of November 16, 2006 by Griffin Land & Nurseries, Inc. in
      favor of Sunamerica Life Insurance Company (incorporated by reference to
      Form 10-K dated December 2, 2006, filed February 15,
  2007)




36


10.35
            Employment
      Agreement by and between Imperial Nurseries, Inc. and Gregory Schaan dated
      January 1, 2001, as amended April 9, 2008 (incorporated by reference to
      Form 10-Q dated March 1, 2008, filed April 10, 2008)14.1
            Griffin
      Land & Nurseries, Inc. Code of Ethics (incorporated by reference to
      Form 10-K dated November 29, 2003, filed February 25,
      2004)16.1
            Letter
      from PricewaterhouseCoopers LLP dated March 26, 2008 (incorporated by
      reference to Form 8-K dated March 25, 2008, filed March 27,
      2008)21
            Subsidiaries
      of Griffin Land & Nurseries, Inc. (incorporated by reference to the
      Form 10 of Griffin Land & Nurseries, Inc., filed April 8, 1997, as
      amended)31.1
      *
            Certification
      of Chief Executive Officer Pursuant to Rule 13a-14(a), as Adopted Pursuant
      to Section 302 of the Sarbanes-Oxley Act of 200231.2
      *
            Certification
      of Chief Financial Officer Pursuant to Rule 13a-14(a), as Adopted Pursuant
      to Section 302 of the Sarbanes-Oxley Act of 200232.1
      *
            Certification
      of Chief Executive Officer Pursuant to 18 U.S.CSection
      1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
      200232.2
      *
            Certification
      of Chief Financial Officer Pursuant to 18 U.S.CSection
      1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002








*        Filed
herewith.





37


SIGNATURES





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





GRIFFIN
      LAND & NURSERIES, INC./s/ FREDERICK M.
      DANZIGERDate:  October 8,
      2008
            
            Frederick
      M. DanzigerPresident
      and Chief Executive Officer/s/
      ANTHONY J. GALICIDate:  October 8,
      2008
            
            Anthony
      J. GaliciVice
      President, Chief Financial Officer and Secretary





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