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 March 4, 2006TRANSITION
                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





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





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




Yesx
              No ̈




Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.





Large
                  accelerated filer ̈
              Accelerated
                  filer ̈
              Non-accelerated
                  filerx







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





Yes ̈
              Nox







Number
      of
      shares of Common Stock outstanding at April 3, 2006:  5,096,943





Griffin
      Land & Nurseries, Inc.


Form
      10-Q


Index








*PART
                I -*
            
            FINANCIAL
                INFORMATION*ITEM
                1 -*Financial
                StatementsConsolidated
                Statements of Operations13
                Weeks Ended March 4, 2006 and February 26, 2005
            3Consolidated
                Balance SheetsMarch
                4, 2006 and December 3, 2005
            4Consolidated
                Statements of Changes in Stockholders’ Equity13
                Weeks Ended March 4, 2006 and February 26, 2005
            5Consolidated
                Statements of Cash Flows13
                Weeks Ended March 4, 2006 and February 26, 2005
            6Notes
                to Consolidated Financial Statements
            7-16*ITEM
                2 -*
            Management’s
                Discussion and Analysis ofFinancial
                Condition and Results of Operations
            17-23*ITEM
                3*
            Quantitative
                and Qualitative Disclosures About Market Risk
            24*ITEM
                4 -*
            Controls
                and Procedures
            25*PART
                II -*
            
            OTHER
                INFORMATION*ITEM
                6 -*
            Exhibits
            26SIGNATURES
            27














**PART
                I**
            **FINANCIAL
                INFORMATION**ITEM
                1.
            FINANCIAL
                STATEMENTS








Griffin
      Land & Nurseries, Inc.


Consolidated
      Statements of Operations


(dollars
      in thousands, except per share data)


(unaudited)





*For
                  the 13 Weeks Ended,*Mar.
                  4, 2006
              
              Feb.
                  26, 2005Landscape
                  nursery net sales
              
              $
              675
              
              $
              464Rental
                  revenue and property sales
              
              
              3,014
              
              
              2,865Total
                  revenue
              
              
              3,689
              
              
              3,329Costs
                  of landscape nursery sales
              
              
              682
              
              
              597Costs
                  related to rental revenue and property sales
              
              
              2,553
              
              
              2,258Total
                  costs of goods sold
              
              
              3,235
              
              
              2,855Gross
                  profit
              
              
              454
              
              
              474Selling,
                  general and administrative expenses
              
              
              2,496
              
              
              2,318Operating
                  loss
              
              
              (2,042
              )
              
              (1,844
              )Interest
                  expense
              
              
              (765
              )
              
              (536
              )Interest
                  income, dividend income and gainson
                  short-term investments
              
              
              398
              
              
              186Loss
                  before income tax benefit
              
              
              (2,409
              )
              
              (2,194
              )Income
                  tax benefit
              
              
              (907
              )
              
              (753
              )Net
                  loss
              
              $
              (1,502
              )
              $
              (1,441
              )Basic
                  net loss per common share
              
              $
              (0.30
              )
              $
              (0.29
              )Diluted
                  net loss per common share
              
              $
              (0.30
              )
              $
              (0.29
              )





See
      Notes
      to Consolidated Financial Statements *.*




3


Griffin
        Land & Nurseries, Inc.
 Consolidated
        Balance Sheets
 (dollars
        in thousands, except
        per share data)
 (unaudited)
 
 Mar.
                    4, 2006
                
                Dec.
                    3, 2005ASSETSCurrent
                    Assets:Cash
                    and cash equivalents
                
                $
                1,110
                
                $
                1,207Short-term
                    investments, net
                
                
                33,360
                
                
                40,985Accounts
                    receivable, less allowance of$156and
                    $311
                
                
                1,556
                
                
                2,696Inventories,
                    net
                
                
                37,965
                
                
                33,184Deferred
                    income taxes
                
                
                2,043
                
                
                1,770Other
                    current assets
                
                
                4,903
                
                
                3,228Total
                    current assets
                
                
                80,937
                
                
                83,070Real
                    estate held for sale or lease, net
                
                
                79,179
                
                
                78,401Property
                    and equipment, net
                
                
                10,538
                
                
                10,686Investment
                    in Centaur Holdings, plc
                
                
                11,225
                
                
                10,440Other
                    assets
                
                
                5,769
                
                
                6,053Total
                    assets
                
                $
                187,648
                
                $
                188,650LIABILITIES
                    AND STOCKHOLDERS' EQUITYCurrent
                    Liabilities:Current
                    portion of long-term debt
                
                $
                1,069
                
                $
                1,060Accounts
                    payable and accrued liabilities
                
                
                5,300
                
                
                7,089Total
                    current liabilities
                
                
                6,369
                
                
                8,149Long-term
                    debt
                
                
                42,887
                
                
                43,159Deferred
                    income taxes
                
                
                1,271
                
                
                780Other
                    noncurrent liabilities
                
                
                3,700
                
                
                3,705Total
                    liabilities
                
                
                54,227
                
                
                55,793Commitments
                    and contingencies (Note 8)Stockholders'
                    Equity:Common
                    stock, par value $0.01 per share, 10,000,000 sharesauthorized,
                    5,095,776
                    and 4,999,604 shares issued andoutstanding,
                    respectively
                
                
                51
                
                
                50Additional
                    paid-in capital
                
                
                96,894
                
                
                95,339Retained
                    earnings
                
                
                31,307
                
                
                32,809Accumulated
                    other comprehensive income, net of tax
                
                
                5,169
                
                
                4,659Total
                    stockholders' equity
                
                
                133,421
                
                
                132,857Total
                    liabilities and stockholders' equity
                
                $
                187,648
                
                $
                188,650
 See
        Notes
        to Consolidated Financial Statements **.**
  4
  Griffin
        Land & Nurseries, Inc.
 Consolidated
        Statements of Changes in Stockholders’ Equity
 For
        the
        Thirteen Weeks Ended March 4, 2006 and February 26, 2005
 (dollars
        in thousands)
 (unaudited)
 
 
 **Shares
                    of Common Stock**
                
                **Common
                    Stock**
                
                **Additional
                    Paid-in Capital**
                
                **Retained
                    Earnings**
                
                **Accumulated
                    Other Comprehensive Income**
                
                **Total**
                
                **Total
                    Comprehensive Income (Loss)**Balance
                    at Nov. 27, 2004
                
                
                4,959,162
                
                $
                50
                
                $
                94,699
                
                $
                34,177
                
                $
                5,204
                
                $
                134,130Exercise
                    of stock optionsincluding
                    tax benefit of $10
                
                
                4,276
                
                
                -
                
                
                42
                
                
                -
                
                
                -
                
                
                42Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (1,441
                )
                
                -
                
                
                (1,441
                )
                $
                (1,441
                )Other
                    comprehensive income
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                981
                
                
                981
                
                
                981Balance
                    at Feb. 26, 2005
                
                
                4,963,438
                
                $
                50
                
                $
                94,741
                
                $
                32,736
                
                $
                6,185
                
                $
                133,712
                
                $
                (460
                )Balance
                    at Dec. 3, 2005
                
                
                4,999,604
                
                $
                50
                
                $
                95,339
                
                $
                32,809
                
                $
                4,659
                
                $
                132,857Exercise
                    of stock optionsincluding
                    tax benefit of $793
                
                
                96,172
                
                
                1
                
                
                1,530
                
                
                -
                
                
                -
                
                
                1,531Stock-based
                    compensationexpense
                
                
                -
                
                
                -
                
                
                25
                
                
                -
                
                
                -
                
                
                25Net
                    loss
                
                
                -
                
                
                -
                
                
                -
                
                
                (1,502
                )
                
                -
                
                
                (1,502
                )
                $
                (1,502
                )Other
                    comprehensive income
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                510
                
                
                510
                
                
                510Balance
                    at Mar. 4, 2006
                
                
                5,095,776
                
                $
                51
                
                $
                96,894
                
                $
                31,307
                
                $
                5,169
                
                $
                133,421
                
                $
                (992
                )See
                    Notes to Consolidated Financial Statements.
  5
  Griffin
        Land & Nurseries, Inc.
 Consolidated
        Statements of Cash Flows
 (dollars
        in thousands)
 (unaudited)
 *For
                    the 13 Weeks Ended,*Mar.
                    4, 2006
                
                Feb.
                    26, 2005**Operating
                    activities:**Net
                    loss
                
                $
                (1,502
                )
                $
                (1,441
                )Adjustments
                    to reconcile net loss to net cashprovided
                    by (used in) operating activities:Depreciation
                    and amortization
                
                
                1,439
                
                
                1,124Real
                    estate asset write-offs
                
                
                -
                
                
                169Provision
                    for inventory losses
                
                
                6
                
                
                146Deferred
                    income taxes
                
                
                (57
                )
                
                (93
                )Provision
                    for bad debts
                
                
                23
                
                
                67Unrealized
                    (gain) loss on trading securities
                
                
                (242
                )
                
                1Amortization
                    of debt issuance costs
                
                
                21
                
                
                14Other
                
                
                -
                
                
                (17
                )Changes
                    in assets and liabilities:Investment
                    in trading securities
                
                
                7,867
                
                
                (164
                )Accounts
                    receivable
                
                
                1,157
                
                
                1,283Inventories
                
                
                (4,787
                )
                
                (5,518
                )Other
                    current assets
                
                
                (1,715
                )
                
                (568
                )Accounts
                    payable and accrued liabilities
                
                
                (99
                )
                
                191Other
                    noncurrent assets and noncurrent liabilities, net
                
                
                69
                
                
                (62
                )Net
                    cash provided by (used in) operating activities
                
                
                2,180
                
                
                (4,868
                )**Investing
                    activities:**Additions
                    to real estate held for sale or lease
                
                
                (3,342
                )
                
                (3,141
                )Additions
                    to property and equipment
                
                
                (203
                )
                
                (213
                )Proceeds
                    from sale of properties, net of expenses
                
                
                -
                
                
                91Net
                    cash used in investing activities
                
                
                (3,545
                )
                
                (3,263
                )**Financing
                    activities:**Payments
                    of debt
                
                
                (263
                )
                
                (220
                )Exercise
                    of stock options
                
                
                738
                
                
                32Tax
                    effect of stock options exercised
                
                
                793
                
                
                -Net
                    cash provided by (used in) financing activities
                
                
                1,268
                
                
                (188
                )Net
                    decrease in cash and cash equivalents
                
                
                (97
                )
                
                (8,319
                )Cash
                    and cash equivalents at beginning of period
                
                
                1,207
                
                
                8,827Cash
                    and cash equivalents at end of period
                
                $
                1,110
                
                $
                508
 
 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
        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, 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”). Also, the accompanying financial statements have been prepared in
        accordance with the accounting policies stated in Griffin’s audited financial
        statements for the year ended December 3, 2005 included in our 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. The consolidated balance
        sheet data as of December 3, 2005 was derived from 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 March 4, 2006 are not
        necessarily indicative of the results to be expected for the full year. Certain
        amounts from the prior year have been reclassified to conform to the current
        presentation.
 
 In
        the
        thirteen weeks ended March 4, 2006, Griffin adopted the fair value recognition
        provisions of SFAS No. 123(R) “Accounting for Stock-Based Compensation” (“SFAS
        No. 123R”) using the modified prospective method of adoption. Accordingly,
        compensation cost recognized in the thirteen weeks ended March 4, 2006 is
        the
        same as that which would have been recognized had the recognition provisions
        of
        SFAS No.123R been applied from its original effective date. Results for prior
        periods have not been restated. See Note 5. Prior to the thirteen weeks ended
        March 4, 2006, Griffin accounted for stock options under the recognition
        and
        measurement principles of Accounting Principles Board Opinion No. 25,
“Accounting for Stock Issued to Employees.” No stock-based compensation cost was
        reflected in prior years because all options granted under Griffin’s stock
        option plan had an exercise price equal to the market price of the underlying
        common stock on the date of grant.
 
 
 2.  Recent
        Accounting Pronouncements
  
  In
        November 2004, the FASB issued SFAS No. 151, “Inventory Costs (an amendment of
        ARB No. 43, Chapter 4).” This new standard requires the recognition of abnormal
        inventory costs related to idle facility expenses, freight, handling costs
        and
        spoilage as period costs. SFAS No. 151 is effective for Griffin in fiscal
        2006
        and did not have a material impact on Griffin’s consolidated financial
        statements for the thirteen weeks ended March 4, 2006.
 
 In
        March
        2005, the FASB issued FASB Interpretation No. 47, “Accounting for Conditional
        Asset Retirement Obligations (an interpretation of FASB Statement No. 143),”
(“Fin No. 47”). Fin No. 47 clarified the timing of liability recognition for
        legal obligations associated with the retirement of tangible long-lived assets.
        Fin No. 47 will be effective for Griffin in the fourth quarter of fiscal
        2006.
        Griffin is evaluating the impact of this new pronouncement on its consolidated
        financial statements.
   7
 
 In
        May 2005,
        the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections-a
        replacement of APB Opinion No. 20 and FASB Statement No. 3” (“SFAS No. 154”).
        This new standard requires retrospective application to prior periods’ financial
        statements of voluntary changes in accounting principles, unless it is
        impracticable to do so. SFAS No. 154 also provides that a correction of errors
        in previously issued financial statements should be termed a “restatement”. The
        new standard is effective for accounting changes and correction of errors
        in
        fiscal years beginning after December 15, 2005.
 
  3.  Industry
        Segment Information
    Griffin’s
        reportable segments are defined by their products and services, and 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,*March
                    4, 2006
                
                February
                    26, 2005Total
                    revenueLandscape
                    nursery net sales
                
                $
                675
                
                $
                464Rental
                    revenue and property sales
                
                
                3,014
                
                
                2,865$
                3,689
                
                $
                3,329Operating
                    loss:Landscape
                    nursery
                
                $
                (965
                )
                $
                (1,013
                )Real
                    estate
                
                
                (261
                )
                
                (48
                )Industry
                    segment totals
                
                
                (1,226
                )
                
                (1,061
                )General
                    corporate expense
                
                
                (816
                )
                
                (783
                )Operating
                    loss
                
                
                (2,042
                )
                
                (1,844
                )Interest
                    expense
                
                
                (765
                )
                
                (536
                )Interest
                    income, dividend income and gains onshort-term
                    investments
                
                
                398
                
                
                186Loss
                    before income tax benefit
                
                $
                (2,409
                )
                $
                (2,194
                )
 Identifiable
                      assets:
                  
                  Mar.
                      4, 2006
                  
                  Dec.
                      3, 2005Landscape
                      nursery
                  
                  $
                  50,018
                  
                  $
                  46,109Real
                      estate
                  
                  
                  87,000
                  
                  
                  86,699Industry
                      segment totals
                  
                  
                  137,018
                  
                  
                  132,808General
                      corporate (consists primarily of investments)
                  
                  
                  50,630
                  
                  
                  55,842Total
                      assets
                  
                  $
                  187,648
                  
                  $
                  188,650
   8
 There
        were no property sales by Griffin’s real estate segment in the thirteen weeks
        ended March 4, 2006. Revenue of the real estate segment in the thirteen weeks
        ended February 26, 2005 includes property sales revenue of $107.





4.  Long-Term
        Debt
 
 Long-term
        debt includes:
 Mar.
                    4, 2006
                
                Dec.
                    3, 2005Nonrecourse
                    mortgages:8.54%
                    due July 1, 2009
                
                $
                7,737
                
                $
                7,7616.08%
                    due January 1, 2013
                
                
                9,196
                
                
                9,2446.30%
                    due May 1, 2014
                
                
                1,290
                
                
                1,3205.46%
                    due July 1, 2015
                
                
                12,601
                
                
                12,6448.13%
                    due April 1, 2016
                
                
                5,627
                
                
                5,6747.0%
                    due October 1, 2017
                
                
                7,237
                
                
                7,273Total
                    nonrecourse mortgages
                
                
                43,688
                
                
                43,916Capital
                    leases
                
                
                268
                
                
                303Total
                
                
                43,956
                
                
                44,219Less:
                    current portion
                
                
                (1,069
                )
                
                (1,060
                )Total
                    long-term debt
                
                $
                42,887
                
                $
                43,159
 At
        March
        4, 2006 and December 3, 2005, the fair values of Griffin's mortgages were $45.7 million
        and $46.1 million, respectively. Fair value is based on the present value
        of
        future cash flows discounted at estimated borrowing rates for comparable
        risks,
        maturities and collateral.
 
 
 5.  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. Subsequent
        options issued to independent directors upon their reelection to the board
        of
        directors vest on the second anniversary from the date of grant. Options
        issued
        to employees vest in equal installments on the third, fourth and fifth
        anniversaries from the date of grant. None of the options outstanding at
        March
        4, 2006 may be exercised as stock appreciation rights.
 
 In
        the
        thirteen weeks ended March 4, 2006, Griffin adopted the fair value recognition
        provisions of SFAS No. 123(R) “Accounting for Stock-Based Compensation” (“SFAS
        No. 123R”) using the modified prospective method of adoption. Compensation cost
        is based on the estimated fair values of stock options as determined on their
        grant dates and is recorded over their vesting periods. Compensation cost
        recognized in the thirteen weeks ended March 4, 2006 was $25, with a related
        tax
        benefit of $8, and is the same as that which would have been recognized had
        the
        recognition provisions of SFAS No.123R been applied from its original effective
        date. Results for prior periods have not been restated. The following table
        reflects the effect on net loss and net loss per share if the fair value
        based
        method had been applied to all outstanding and unvested stock options in
        each
        period:
  9
 *For
                    the 13 Weeks Ended,*Mar.
                    4, 2006
                
                Feb.
                    26, 2005Net
                    loss, as reported
                
                $
                (1,502
                )
                $
                (1,441
                )Stock-based
                    employee compensation expense includedin
                    reported net loss, net of related tax effect
                
                
                17
                
                
                -Stock
                    based employee compensationexpense
                    determined under fair value basedmethod
                    for all awards, net of tax effects
                
                
                (17
                )
                
                (3
                )Net
                    loss, pro forma
                
                $
                (1,502
                )
                $
                (1,444
                )Basic
                    net loss per common share, as reported
                
                $
                (0.30
                )
                $
                (0.29
                )Basic
                    net loss per common share, pro forma
                
                $
                (0.30
                )
                $
                (0.29
                )Diluted
                    net loss per common share, as reported
                
                $
                (0.30
                )
                $
                (0.29
                )Diluted
                    net loss per common share, pro forma
                
                $
                (0.30
                )
                $
                (0.29
                )
 
 Included
        in
        Griffin's stock-based compensation in the 2006 first quarter is the cost
        related
        to the unvested portion of certain stock option grants made in fiscal 2002
        through fiscal 2005. The stock options granted prior to fiscal 2002 and certain
        other grants in fiscal 2003 and fiscal 2002 were fully vested as of the
        beginning of the 2006 first quarter. The fair value of the stock options
        granted
        in fiscal 2005 was estimated at $11.15 on the date of grant using the
        Black-Scholes option pricing model. The assumptions used in the option pricing
        model were an expected volatility of 44.1%; a risk free interest rate of
        3.8%;
        an expected option term of five years and no dividend yield. A forfeiture
        rate
        of 0% was used based on the limited number of holders of unvested stock options
        in the 2006 first quarter.
 
 Activity
        under the Griffin Land & Nurseries, Inc. 1997 Stock Option Plan (the
“Griffin Stock Option Plan”) is summarized as follows:
 
 
 *For
                  the 13 Weeks Ended,*Mar.
                  4, 2006
              
              Feb.
                  26, 2005**Vested
                  Options**
              
              Number
                  of Shares
              
              Weighted
                  Avg. Exercise Price
              
              Number
                  of Shares
              
              Weighted
                  Avg. Exercise PriceOutstanding
                  at beginning of period
              
              
              503,857
              
              $
              12.65
              
              
              511,074
              
              $
              12.55Exercised
              
              
              (96,172
              )
              
              7.68
              
              
              (4,276
              )
              
              7.53Vested
              
              
              8,402
              
              
              13.05
              
              
              14,728
              
              
              12.19Outstanding
                  at end of period
              
              
              416,087
              
              $
              13.80
              
              
              521,526
              
              $
              12.58




10


Range
                  of Exercise Prices for Vested Options
              
              Outstanding
                  at
                Mar.
                  4, 2006
              
              Weighted
                  Avg. Exercise Price
              
              Weighted
                  Avg. Remaining Contractual Life
                (in
                  years)
              
              Total
                  Intrinsic ValueUnder
                  $9.00
              
              
              2,000
              
              $
              6.78
              
              
              0.1
              
              $
              -$9.00-$18.00
              
              
              411,681
              
              
              13.77
              
              
              2.9
              
              
              2,277Over
                  $24.00
              
              
              2,406
              
              
              24.94
              
              
              8.3
              
              
              28416,087
              
              $
              13.80
              
              
              2.9
              
              $
              2,305
 
 *For
                    the 13 Weeks Ended,*Mar.
                    4, 2006
                
                Feb.
                    26, 2005**Nonvested
                    Options**
                
                Number
                    of Shares
                
                Weighted
                    Avg. Exercise Price
                
                Number
                    of Shares
                
                Weighted
                    Avg. Exercise PriceNonvested
                    at beginning of period
                
                
                36,816
                
                $
                17.78
                
                
                73,440
                
                $
                14.36Vested
                
                
                (8,402
                )
                
                13.05
                
                
                (14,728
                )
                
                12.19Forfeited
                
                
                -
                
                
                -
                
                
                (9,667
                )
                
                13.70Nonvested
                    at end of period
                
                
                28,414
                
                $
                19.18
                
                
                49,045
                
                $
                15.14
 Range
                    of Exercise Prices for Nonvested Options
                
                Outstanding
                    at
                  Mar.
                    4, 2006
                
                Weighted
                    Avg. Exercise Price
                
                Weighted
                    Avg. Remaining Contractual Life
                  (in
                    years)
                
                Total
                    Intrinsic Value$9.00-$18.00
                
                
                17,334
                
                $
                15.29
                
                
                6.1
                
                $
                124Over
                    $24.00
                
                
                11,080
                
                
                25.27
                
                
                8.8
                
                
                12628,414
                
                $
                19.18
                
                
                7.2
                
                $
                250
 Number
                    of option holders at March 4, 2006
                20
 
 
 There
        were no stock options granted during the thirteen weeks ended March 4, 2006
        and
        the thirteen weeks ended February 26, 2005. As of March 4, 2006, there was
        $63
        of unrecognized compensation cost related to nonvested stock options that
        will
        be recognized during the remainder of fiscal 2006 and $25 of unrecognized
        compensation cost related to nonvested stock options that will be recognized
        in
        fiscal 2007. The total fair value of shares vested during the thirteen weeks
        ended March 4, 2006 and February 25, 2005 was $38 and $70, respectively.
 
 
 11
  6.  Per
        Share
        Results
   Basic
        and
        diluted per share results were based on the following:
 *For
                    the 13 Weeks Ended,*Mar.
                    4, 2006
                
                Feb.
                    26, 2005Net
                    loss as reported for computationof
                    basic and diluted per share results
                
                $
                (1,502
                )
                $
                (1,441
                )Weighted
                    average shares outstanding forcomputation
                    of basic and diluted per share results (a)
                
                
                5,019,000
                
                
                4,961,000
 
 (a)
              Incremental
                  shares from the exercise of Griffin stock options were not included
                  in
                  periods where the inclusion of such shares would be anti-dilutive.
                  For the
                  thirteen weeks ended March 4, 2006 and February 26, 2005, the incremental
                  shares from the assumed exercise of stock options would have been
                  211,000
                  and 205,000, respectively.
   7.  Supplemental
        Financial Statement Information
  
 *Short-Term
        Investments*
 
 Griffin's
        short-term investments are comprised of debt securities and are accounted
        for as
        trading securities under SFAS No. 115, "Accounting for Certain Investments
        in
        Debt and Equity Securities.” Accordingly, the securities are carried at their
        fair values based upon the quoted market prices of those investments at the
        balance sheet date, and net realized and unrealized gains and losses on those
        investments are included in pretax income (loss). At March 4, 2006 and December
        3, 2005, $1.3 million of Griffin’s short-term investments were being used as
        security for a $1.3 million letter of credit of Griffin Land. The composition
        of
        short-term investments at March 4, 2006 and December 3, 2005 is as
        follows:
 *As
                    of Mar. 4, 2006*
                
                *As
                    of Dec. 3, 2005*Cost
                
                Fair
                    Value
                
                Cost
                
                Fair
                    ValueCommercial
                    Paper
                
                $
                6,677
                
                $
                6,749
                
                $
                14,728
                
                $
                14,739Certificates
                    of Deposit
                
                
                19,085
                
                
                19,407
                
                
                20,224
                
                
                20,368Federal
                    Agency Coupon Notes
                
                
                7,157
                
                
                7,204
                
                
                5,834
                
                
                5,878Total
                    short-term investments
                
                $
                32,919
                
                $
                33,360
                
                $
                40,786
                
                $
                40,985
 
 12
 Income
        from cash equivalents and short-term investments for the thirteen weeks ended
        March 4, 2006 and February 25, 2005 consists of:


*For
                    the 13 Weeks Ended,*Mar.
                    4, 2006
                
                Feb.
                    26, 2005Interest
                    and dividend income
                
                $
                36
                
                $
                33Net
                    realized gains on the sales of short-term investments
                
                
                120
                
                
                154Net
                    unrealized gain (loss) on short-term investments
                
                
                242
                
                
                (1
                )$
                398
                
                $
                186
 
 *Accumulated
        Other Comprehensive Income*
 
 Changes
        in accumulated other comprehensive income  for
        the
        thirteen weeks ended March 4, 2006 and February 25, 2005 consist of the
        following:
 
 *For
                    the 13 Weeks Ended,*Mar.
                    4, 2006
                
                Feb.
                    26, 2005Balance
                    at beginning of period
                
                $
                4,659
                
                $
                5,204Increase
                    in fair value at end of period of Centaur Holdings, plc,net
                    of taxes of $226 and $473, respectively
                
                
                419
                
                
                877Increase
                    in value of Centaur Holdings, plc, due to foreign currency
                    exchangerate
                    changes, net of taxes of $49 and $56, respectively
                
                
                91
                
                
                104Balance
                    at end of period
                
                $
                5,169
                
                $
                6,185
 **
  *Supplemental
          Cash Flow
          Information*
 Included
        in accounts payable and accrued liabilities at March 4, 2006 and December
        3,
        2005 were $693 and $2,383, respectively, for additions to real estate held
        for
        sale or lease.
 
 *Inventories*
 
 Inventories
        consist of:
 Mar.
                    4, 2006
                
                Dec.
                    3, 2005Nursery
                    stock
                
                $
                36,409
                
                $
                32,993Materials
                    and supplies
                
                
                3,549
                
                
                2,35239,958
                
                
                35,345Reserves
                
                
                (1,993
                )
                
                (2,161
                )$
                37,965
                
                $
                33,184
 
 13
 *Property
        and Equipment*
 
 Property
        and equipment consist of:
 
 Estimated
                    Useful Lives
                
                Mar.
                    4, 2006
                
                Dec.
                    3, 2005Land
                
                
                
                
                $
                1,289
                
                $
                1,289Land
                    improvements
                
                
                10
                    to 20 years
                
                
                5,475
                
                
                5,456Buildings
                    and improvements
                
                
                10
                    to 40 years
                
                
                3,057
                
                
                3,057Machinery
                    and equipment
                
                
                3
                    to 20 years
                
                
                17,463
                
                
                17,00427,284
                
                
                26,806Accumulated
                    depreciation
                
                
                
                
                
                (16,746
                )
                
                (16,120
                )$
                10,538
                
                $
                10,686
  Griffin
        did not incur any new capital lease obligations in the thirteen weeks ended
        March 4, 2006 and February 26, 2005.
 
 *Real
        Estate Held for Sale or Lease*
 
 Real
        estate held for sale or lease consists of:
 
 March
                  4, 2006Estimated
                  Useful Lives
              
              Held
                  for Sale
              
              Held
                  for Lease
              
              TotalLand
              
              
              
              
              $
              1,231
              
              $
              4,534
              
              $
              5,765Land
                  improvements
              
              
              15
                  years
              
              
              -
              
              
              5,060
              
              
              5,060Buildings
                  and improvements
              
              
              10
                  to 40 years
              
              
              -
              
              
              69,031
              
              
              69,031Tenant
                  improvements
              
              
              Shorter
                  of useful life or terms of related lease
              
              
              -
              
              
              9,146
              
              
              9,146Development
                  costs
              
              
              
              
              
              7,269
              
              
              3,439
              
              
              10,7088,500
              
              
              91,210
              
              
              99,710Accumulated
                  depreciation
              
              
              
              
              
              -
              
              
              (20,531
              )
              
              (20,531
              )$
              8,500
              
              $
              70,679
              
              $
              79,179




14
 December
                  3, 2005Estimated
                  Useful Lives
              
              Held
                  for Sale
              
              Held
                  for Lease
              
              TotalLand
              
              
              
              
              $
              1,034
              
              $
              4,731
              
              $
              5,765Land
                  improvements
              
              
              15
                  years
              
              
              -
              
              
              5,060
              
              
              5,060Buildings
                  and improvements
              
              
              10
                  to 40 years
              
              
              -
              
              
              62,438
              
              
              62,438Tenant
                  improvements
              
              
              Shorter
                  of useful life or terms of related lease
              
              
              -
              
              
              9,044
              
              
              9,044Development
                  costs
              
              
              
              
              
              5,356
              
              
              10,728
              
              
              16,0846,390
              
              
              92,001
              
              
              98,391Accumulated
                  depreciation
              
              
              
              
              
              -
              
              
              (19,990
              )
              
              (19,990
              )$
              6,390
              
              $
              72,011
              
              $
              78,401
  *Deferred
        Income Taxes*
 
 Deferred
        income tax liabilities of $275 and $529 were included as charges to other
        comprehensive income in the thirteen weeks ended March 4, 2006 and February
        26,
        2005, respectively, related to the mark to market adjustments on Griffin’s
        investment in Centaur Holdings.
 
 *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. Because Griffin's obligation for retiree medical
        benefits is fixed under the terms of its postretirement benefits program,
        any
        increase in the medical cost trend would have no effect on the accumulated
        postretirement benefit obligation, service cost or interest cost. Griffin's
        postretirement benefits are unfunded, with benefits to be paid from Griffin's
        general assets. Griffin's contributions to the program for the thirteen weeks
        ended March 4, 2006 and February 26, 2005 were $2 in each period, with an
        expected contribution of $15 for the fiscal 2006 full year. The components
        of
        Griffin's postretirement benefits expense are as follows:
 
 *For
                    the 13 Weeks Ended,*Mar.
                    4, 2006
                
                Feb.
                    26, 2005Service
                    cost
                
                $
                8
                
                $
                9Interest
                
                
                11
                
                
                13Amortization
                    of unrecognized loss
                
                
                1
                
                
                2$
                20
                
                $
                24
 
 
 15
 
 8.  Commitments
        and Contingencies
 
 As
        of
        March 4, 2006, Griffin had committed purchase obligations of  $2.4 million,
        principally for construction of the shell of a new industrial building at
        Griffin Land and for the purchase of raw materials by Imperial.
 
 As
        of
        March 4, 2006, there is a $1.3 million collateralized letter of credit
        outstanding, issued by Griffin Land in favor of the town of Suffield,
        Connecticut that ensures Griffin Land’s performance in completing certain
        infrastructure for Griffin Land’s residential development, Stratton Farms. The
        letter of credit is collateralized by short-term investments of $1.3
        million.
 
 On
        February 3, 2006 Griffin Land executed a purchase and sale agreement for
        the
        sale of approximately 130 acres of undeveloped land in the New England Tradeport
        (“Tradeport”) to Walgreen Co. (“Walgreen”). The purchase price is $13 million,
        before transaction expenses, to be paid in cash at closing. Completion of
        this
        transaction is contingent on several factors, including; (i) obtaining all
        required approvals from governmental authorities for Walgreen’s proposed
        construction of a distribution facility on the land to be sold; (ii) obtaining
        a
        certificate from the Connecticut State Traffic Commission (the “STC
        Certificate”) approving both the construction of Walgreen’s proposed facility
        and the construction of additional buildings by Griffin Land having more
        than an
        additional one million square feet of light industrial and warehouse space;
        and
        (iii) Griffin Land receiving satisfactory site plan approval for the additional
        square footage to be built under the STC Certificate. Griffin Land’s buildings,
        if built, would be built over time, based on anticipated demand, on other
        Tradeport land currently held by Griffin Land. Griffin has no presently
        identified tenants for this additional space. The completion of this transaction
        is also subject to Walgreen’s satisfactory completion of due diligence on the
        land to be sold. Obtaining the required approvals and due diligence on this
        transaction are expected to require a number of months with a closing expected
        to take place in mid 2006 if all conditions are satisfied. If completed under
        its present terms, Griffin Land expects to record a significant pretax gain
        from
        this proposed transaction. There is no assurance that this proposed transaction
        will be completed under its present terms, or at all.
 
 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 to Griffin’s consolidated financial position, results of
        operations or cash flows.






16


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 year
        ended December 3, 2005 included in Griffin’s Report on Form 10-K as filed with
        the Securities and Exchange Commission. 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 weeks
        ended
        March 4, 2006 are consistent with those used by Griffin in preparation of
        its
        fiscal 2005 financial statements.
 
 Summary
 
 Griffin’s
        net loss for the thirteen weeks ended March 4, 2006 (the “2006 first quarter”)
        increased over the net loss for the thirteen weeks ended February 26, 2005
        (the
“2005 first quarter”). The increase in Griffin’s net loss principally reflects
        an increase in the operating loss incurred by Griffin Land in the 2006 first
        quarter as compared to the 2005 first quarter. The increased operating loss
        at
        Griffin Land was principally due to higher depreciation and amortization
        expense. The 2006 first quarter operating loss at Imperial and general corporate
        expense were substantially unchanged from 2005 first quarter results. Imperial
        historically incurs a first quarter operating loss due to the highly seasonal
        nature of the landscape nursery business. An increase in interest expense
        in the
        2006 first quarter over the 2005 first quarter was substantially offset by
        higher interest income, dividend income and gains on short-term investments.
 
 In
        the
        2006 first quarter, Griffin adopted the fair value recognition provisions
        of
        SFAS No. 123(R) “Accounting for Stock-Based Compensation” (“SFAS No. 123R”)
        using the modified prospective method of adoption. Results for prior periods
        have not been restated. The effect of the adoption of SFAS No. 123R on the
        2006
        first quarter results of operations was not material. See Notes 1 and 5 to
        the
        consolidated financial statements included in Item 1.
 
 **Results
        of Operations**
 
 **Thirteen
        Weeks Ended March 4, 2006 Compared to the Thirteen Weeks Ended February 26,
        2005**
 
 Griffin’s
        consolidated total revenue increased from $3.3 million in the 2005 first
        quarter
        to $3.7 million in the 2006 first quarter. The increase of approximately
        $0.4
        million reflects increases in revenue of approximately $0.2 million each
        at
        Griffin Land and Imperial.
 
 17
 The
        increase in revenue of approximately $0.2 million at Griffin Land reflects
        an
        increase of approximately $0.3 million in revenue from its leasing operations
        partially offset by a decrease of $0.1 million in property sale revenue.
        There
        were no property sales in the 2006 first quarter as compared to one property
        sale in the 2005 first quarter. At March 4, 2006, Griffin Land owned 1,403,000
        square feet of industrial, flex and office space, with 1,059,000 square feet
        (76%) leased. The recent bankruptcy filing by a tenant that leased a total
        of
        33,501 square feet in two of Griffin Land’s office buildings at the end of the
        2006 first quarter is expected to result in the early termination of those
        leases in the 2006 second quarter. At the end of the 2005 first quarter,
        Griffin
        Land had 1,130,000 square feet of industrial, flex and office space, with
        934,000 square feet (83%) leased. The increase in total space in Griffin
        Land’s
        portfolio as of March 4, 2006 as compared to the end of the 2005 first quarter
        reflects the completion of two industrial buildings in the New England Tradeport
        (“Tradeport”), one of which came on line in mid 2005 and the other in the 2006
        first quarter. The increase in space leased at the end of the 2006 first
        quarter
        versus the comparable time last year principally reflects leases in the new
        industrial buildings in Tradeport, which are each approximately 50% leased,
        partially offset by leases that terminated subsequent to the 2005 first quarter.
        The increase in revenue from leasing operations principally reflects $0.3
        million from the new industrial buildings placed in service subsequent to
        the
        2005 first quarter, $0.1 million from the settlement of the early termination
        of
        a lease due to last year’s bankruptcy filing by a former tenant, partially
        offset by a reduction of $0.1 million reflecting the net effect of leases
        terminating subsequent to the 2005 first quarter. Overall, real estate market
        activity in the area where Griffin’s properties are located was moderate in the
        2006 first quarter, with tenant interest particularly in Griffin Land’s flex and
        industrial space. There have also been expressions of interest from certain
        tenants in the new Tradeport industrial buildings to increase their space
        leased
        and to extend their lease terms. In addition, there have been inquiries for
        potential sales of undeveloped land.
 
 Net
        sales
        and other revenue at Imperial increased from $0.5 million in the 2005 first
        quarter to $0.7 million in the 2006 first quarter. The increase is attributed
        to
        the relatively mild winter weather in the 2006 first quarter as compared
        to the
        2005 first quarter. Imperial’s landscape nursery business is highly seasonal,
        with sales peaking in the spring. Sales in the winter months that comprise
        the
        first quarter (December through February) are not significant when compared
        to
        the full year’s net sales. Over the past three years, Imperial’s first quarter
        net sales accounted for less than 3% of the full year net sales in each of
        those
        years.
 
 Griffin
        incurred a consolidated operating loss of $2.0 million in the 2006 first
        quarter
        as compared to a consolidated operating loss of $1.8 million in the 2005
        first
        quarter. The higher operating loss in the 2006 first quarter principally
        reflects an increase of approximately $0.2 million in the operating loss
        at
        Griffin Land. The operating loss at Imperial and general corporate expense
        were
        substantially unchanged in the 2006 first quarter as compared to the 2005
        first
        quarter.
 
 Operating
        results at Griffin Land in the 2006 and 2005 first quarters were as
        follows:
 
 18
 2006
                
                2005First
                    Qtr.
                
                First
                    Qtr.(amounts
                    in thousands)Rental
                    revenue
                
                $
                3,014
                
                $
                2,758Revenue
                    from property sale
                
                
                -
                
                
                107Total
                    revenue
                
                
                3,014
                
                
                2,865Costs
                    related to rental revenue excludingdepreciation
                    and amortization (a)
                
                
                1,454
                
                
                1,360Costs
                    related to property sale
                
                
                -
                
                
                118Total
                    costs excluding depreciation and amortization
                
                
                1,454
                
                
                1,478Profit
                    from leasing activities before general andadministrative
                    expenses and before depreciationand
                    amortization expense (a)
                
                
                1,560
                
                
                1,398Loss
                    from property sale
                
                
                -
                
                
                (11
                )General
                    and administrative expenses excluding depreciation and amortization
                    expense (a)
                
                
                (716
                )
                
                (649
                )Profit
                    before depreciation and amortization expense
                
                
                844
                
                
                738Depreciation
                    and amortization expense related to costs of rental
                    revenue
                
                
                (1,099
                )
                
                (780
                )Depreciation
                    and amortization expense - other
                
                
                (6
                )
                
                (6
                )Operating
                    loss
                
                $
                (261
                )
                $
                (48
                )
 
 (a)
              The
                  costs related to rental revenue excluding depreciation and amortization
                  expense, profit from leasing activities before general and administrative
                  expenses and before depreciation and amortization expense and general
                  and
                  administrative expenses excluding depreciation and amortization
                  expense
                  are disclosures not in conformity with generally accepted accounting
                  principles. 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
                  generally accepted accounting
                  principles.
 
 Profit
        from leasing activities before general and administrative expenses and before
        depreciation and amortization expense increased by approximately $0.2 million
        in
        the 2006 first quarter as compared to the 2005 first quarter. The increase
        reflects the increased rental revenue partially offset by an increase in
        costs
        related to rental revenue excluding depreciation and amortization expense.
        Although costs related to rental revenue excluding depreciation and amortization
        expense increased by approximately $0.1 million in the 2006 first quarter
        as
        compared to the 2005 first quarter, the 2005 first quarter included a charge
        of
        $0.2 million related to an early termination of a lease. The early termination
        of that lease was related to a new longer-term lease with a new tenant for
        the
        same building. Excluding the $0.2 million charge in the 2005 first quarter,
        costs related to rental revenue excluding depreciation and amortization expense
        reflected an increase in building operating expenses of $0.3 million in the
        2006
        first quarter as compared to the 2005 first quarter. The increase in building
        operating expenses reflected $0.2 million related to the new Tradeport
        industrial buildings that were on line in the 2006 first quarter, but not
        in the
        2005 first quarter, and an increase of $0.1 million for utility expenses
        in the
        2006 first quarter versus the 2005 first quarter. The increase in utility
        expenses principally reflects rate increases that went into effect in the
        2006
        first quarter.
 
 19
  The
        sale
        of a residential lot in the 2005 first quarter generated proceeds of $0.1
        million but was essentially at the break-even profit level. Griffin Land’s
        general and administrative expenses were higher in the 2006 first quarter
        than
        the 2005 first quarter due principally to higher salaries and related benefit
        expenses.
 
 Depreciation
        and amortization expense at Griffin Land increased approximately $0.3 million
        in
        the 2006 first quarter as compared to the 2005 first quarter. The increase
        reflects depreciation expense of $0.2 million related to the two new industrial
        buildings that came on line subsequent to the 2005 first quarter and
        depreciation on tenant improvements related to new leases that became effective
        after the 2005 first quarter. In addition, the 2006 first quarter includes
        $0.1
        million for the acceleration of depreciation and amortization expense related
        to
        the tenant that filed for bankruptcy in the 2006 first quarter and the
        acceleration of amortization expense of a tenant relationship intangible
        asset
        as a result of a tenant not renewing its lease that expired in the 2006 first
        quarter. The tenant relationship intangible asset was recorded in connection
        with the fiscal 2003 acquisition of a controlling interest in a joint venture
        that owned two multi-story office buildings.
 
 Imperial’s
        operating loss was substantially unchanged in the 2006 first quarter as compared
        to the 2005 first quarter, as follows:
 
 2006
                
                2005First
                    Qtr.
                
                First
                    Qtr.(amounts
                    in thousands)Net
                    sales and other revenue
                
                $
                675
                
                $
                464Cost
                    of goods sold
                
                
                682
                
                
                597Gross
                    loss
                
                
                (7
                )
                
                (133
                )Selling,
                    general and administrative expenses
                
                
                (958
                )
                
                (880
                )Operating
                    loss
                
                $
                (965
                )
                $
                (1,013
                )
  Due
        to
        the seasonality of the landscape nursery business, Imperial historically
        incurs
        a first quarter operating loss. Imperial incurred a loss at the gross profit
        line of $0.1 million in the 2005 first quarter as compared to substantially
        break-even in the 2006 first quarter. The 2005 first quarter cost of goods
        sold
        included a charge of $0.1 million for unsaleable inventories due to one plant
        variety that became diseased over the previous winter at Imperial’s northern
        Florida operation. That plant variety is no longer in production. There were
        no
        such charges in the 2006 first quarter. The improved results at the gross
        profit
        line in the 2006 first quarter were substantially offset by higher selling,
        general and administrative expenses, which increased approximately $0.1 million
        in the 2006 first quarter as compared to the 2005 first quarter. The higher
        expenses principally reflect increased selling expense, including commissions,
        due to the increased net sales in the 2006 first quarter.
 
 Griffin’s
        general corporate expense was $0.8 million in both the 2006 and the 2005
        first
        quarters. There were no significant changes to the components of general
        corporate expense in the 2006 first quarter as compared to the 2005 first
        quarter. Based on the current market price of its common stock, Griffin expects
        that the market capitalization of its public float, when measured on the
        last
        day of its fiscal second quarter, will result in Griffin becoming an accelerated
        filer in fiscal 2006. As a result, Griffin would be required to complete
        its
        adoption of the Section 404 provisions of the Sarbanes-Oxley Act, which is
        expected to result in significant general corporate expense during the balance
        of fiscal 2006.
  Griffin’s
        consolidated interest expense increased approximately $0.2 million in the
        2006
        first quarter as compared to the 2005 first quarter. The higher interest
        expense
        principally reflects interest on a $12.7 million nonrecourse mortgage on
        two
        industrial buildings in Tradeport that was entered into by a subsidiary of
        Griffin Land in the 2005 third quarter. Griffin’s average outstanding debt
        increased to $44.1 million in the 2006 first quarter from $32.2 million in
        the
        2005 first quarter, reflecting the new mortgage.
  20
 Griffin
        reported interest income, dividend income and gains on short-term investments
        of
        $0.4 million in the 2006 first quarter as compared to $0.2 million in the
        2005
        first quarter. The increase in the 2006 first quarter as compared to the
        2005
        first quarter reflects an increase in the average amount of short-term
        investments in the 2006 first quarter as compared to the 2005 first quarter
        and
        generally higher interest rates in the current year.
 
 Griffin’s
        effective income tax benefit rate was 37.7% in the 2006 first quarter as
        compared to 34.3% in the 2005 first quarter. The higher effective income
        tax
        benefit rate in the 2006 first quarter principally reflects a higher projected
        effective tax rate for fiscal 2006 as compared to fiscal 2005 due to higher
        state income taxes in the current year. The effective tax rate used in the
        2006
        first quarter 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.
  
 **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 $2.2 million in the 2006 first quarter
        as
        compared to net cash used in operating activities of $4.9 million in the
        2005
        first quarter. The 2006 first quarter net cash provided by operating activities
        includes $7.9 million of cash generated from a reduction of short-term
        investments. Excluding that item, Griffin had net cash used in operations
        of
        $5.7 million in the 2006 first quarter as compared to $4.7 million in the
        2005
        first quarter, excluding the effect of a $0.2 million increase in short-term
        investments in the 2005 first quarter. Due to the seasonality of its landscape
        nursery business, Griffin historically uses cash in operating activities
        in the
        first quarter due to the increase in inventories of the landscape nursery
        business, which increased by $4.8 million in the 2006 first quarter.
 
 Net
        cash
        used in investing activities increased from $3.3 million in the 2005 first
        quarter to $3.5 million in the 2006 first quarter. Additions to real estate
        held
        for sale or lease increased from $3.1 million in the 2005 first quarter to
        $3.3
        million in the 2006 first quarter. Cash used for additions to Griffin Land’s
        real estate assets in the current period principally reflects infrastructure
        work on a residential subdivision in Suffield, Connecticut, payments
        related to the completion of the new industrial building that came on line
        in
        the 2006 first quarter and recently completed tenant improvements related
        to new
        leases. Additions to property and equipment, principally for Imperial, were
        $0.2
        million in both the 2006 and 2005 first quarters.
 
 Net
        cash
        provided by financing activities was $1.3 million in the 2006 first quarter
        as
        compared to net cash of $0.2 million used in financing activities in the
        2005
        first quarter. The net cash provided by financing activities in the 2006
        first
        quarter reflect cash proceeds from stock options exercised in the 2006 first
        quarter partially offset by payments of mortgage principal. Also reflected
        in
        the 2006 first quarter is a $0.8 million tax benefit from the exercise of
        stock
        options. In accordance with SFAS No. 123R, for the three months ended March
        4,
        2006, the presentation in our statement of cash flows has changed from prior
        periods to report the tax benefits from the exercise of stock options as
        financing cash flows. Prior to the adoption of SFAS No. 123R, these tax benefits
        were reported as operating cash flows. The net cash used in financing activities
        in the 2005 first quarter reflected payments of principal on Griffin Land’s
        mortgages.
  21
 In
        the
        near-term, Griffin plans to continue to invest in its real estate business.
        In
        the 2006 second quarter, Griffin Land expects to start construction, on
        speculation, on the shell of a new 127,000 square foot industrial building
        in
        the Tradeport. The cost of site work in the portion of Tradeport where this
        new
        building, and several other future Tradeport buildings, will be located is
        expected to be higher than site costs for previous buildings recently built
        by
        Griffin Land at Tradeport. Griffin Land also expects to incur expenditures
        to
        build out the interiors of its new buildings as leases are completed, and
        to
        continue to invest in infrastructure improvements required for present and
        future development in its office and industrial parks. In the latter part
        of
        fiscal 2005, Griffin Land started infrastructure work on Stratton Farms,
        a
        residential development in Suffield, Connecticut. Griffin Land is continuing
        with the infrastructure work on Stratton Farms in fiscal 2006 and expects
        to
        begin offerings for the sale of residential lots of this planned 50 unit
        residential subdivision this year. Griffin Land is also continuing development
        activities to obtain approvals for Meadowood, its proposed residential
        development in Simsbury, Connecticut. There have been some preliminary
        discussions with town officials regarding potential settlement options for
        Meadowood. Griffin Land intends to proceed with these and other residential
        development plans on its land holdings that are appropriate for that use.
 
 On
        February 3, 2006, Griffin Land executed a purchase and sale agreement for
        the
        sale of approximately 130 acres of undeveloped land in the Tradeport to Walgreen
        Co. (“Walgreen”). The purchase price is $13 million, before transaction
        expenses, to be paid in cash at closing. Completion of this transaction is
        contingent on several factors, including; (i) obtaining all required approvals
        from governmental authorities for Walgreen’s proposed construction of a
        distribution facility on the land to be sold; (ii) obtaining a certificate
        from
        the Connecticut State Traffic Commission (the “STC Certificate”) approving both
        the construction of Walgreen’s proposed facility and additional buildings by
        Griffin Land having more than an additional one million square feet of light
        industrial and warehouse space; and (iii) Griffin Land receiving satisfactory
        site plan approval for the additional square footage to be built under the
        STC
        Certificate. Griffin Land’s buildings, if built, would be built over time, based
        on anticipated demand, on other Tradeport land currently held by Griffin
        Land.
        Griffin Land has no presently identified tenants for this additional space.
        The
        completion of this transaction is subject to Walgreen’s satisfactory completion
        of due diligence on the land to be sold. Obtaining the required approvals
        and
        due diligence on this transaction are expected to require a number of months
        with a closing expected to take place in mid 2006 if all conditions are
        satisfied. If completed under its present terms, Griffin Land expects to
        record
        a significant pretax gain from this proposed transaction. There is no assurance
        that this proposed transaction will be completed under its present terms,
        or at
        all.
 
 On
        January 20, 2006, Griffin Land entered into a letter of intent with a
        prospective buyer to sell approximately 105 acres of undeveloped land in
        South
        Windsor, Connecticut. Based on the terms of the letter of intent, Griffin
        Land,
        which holds a 75% interest in that property through a joint venture, would
        receive proceeds of approximately $2.7 million, before expenses. Completion
        of
        this transaction is subject to several contingencies, including completion
        of a
        definitive agreement and the buyer receiving governmental approvals for its
        proposed development on this site. In addition, on January 30, 2006, Griffin
        Land entered into a letter of intent with a prospective buyer for the sale
        of 8
        acres of undeveloped land in Windsor, Connecticut. Based on the terms of
        the
        letter of intent, Griffin Land’s proceeds from this proposed transaction would
        be approximately $0.5 million. Completion of this transaction is dependent
        on
        several factors, including completion of a definitive agreement. There is
        no
        assurance that these transactions will be completed under their current terms,
        or at all.
 
 Griffin’s
        payments (including principal and interest) under contractual obligations
        as of
        March 4, 2006 are as follows:


22





Total
                
                Due
                    Within One Year
                
                Due
                    From 1-3 Years
                
                Due
                    From 3-5 Years
                
                Due
                    in More Than 5 Years(in
                    millions)Mortgages
                
                $
                64.4
                
                $
                3.9
                
                $
                7.8
                
                $
                13.9
                
                $
                38.8Capital
                    Lease Obligations
                
                
                0.2
                
                
                0.1
                
                
                0.1
                
                
                -
                
                
                -Operating
                    Lease Obligations
                
                
                0.5
                
                
                0.2
                
                
                0.3
                
                
                -
                
                
                -Purchase
                    Obligations (1)
                
                
                2.4
                
                
                2.4
                
                
                -
                
                
                -
                
                
                -Other
                    (2)
                
                
                1.7
                
                
                -
                
                
                -
                
                
                -
                
                
                1.7$
                69.2
                
                $
                6.6
                
                $
                8.2
                
                $
                13.9
                
                $
                40.5
 (1)
              Includes
                  obligations for the construction of the shell of a new industrial
                  building
                  at Griffin Land and for the purchase of raw materials by
                  Imperial.
 (2)
              Includes
                  Griffin’s deferred compensation plan and other postretirement benefit
                  liabilities.
 
 As
        of
        March 4, 2006, Griffin had cash and short-term investments of approximately
        $34.5 million. Management believes that the significant amount of cash and
        short-term investments held by Griffin will be sufficient to finance the
        working
        capital requirements of its businesses and fund continued investment in
        Griffin’s real estate assets for the foreseeable future. Griffin Land may also
        continue to seek nonrecourse mortgage placements on selected properties.
        Griffin
        also anticipates seeking to purchase either or both land and buildings with
        a
        substantial portion of its cash and short-term investment balances. There
        are no
        real estate acquisitions under contract at this time, however, Griffin Land
        has
        submitted a bid to acquire a warehouse facility. Other real estate acquisitions
        may or may not occur based on many factors, including real estate pricing.
 
 
 Recent
        Accounting Pronouncements
 
 In
        November 2004, the FASB issued SFAS No. 151, “Inventory Costs (an amendment of
        ARB No. 43, Chapter 4).” This new standard requires the recognition of abnormal
        inventory costs related to idle facility expenses, freight, handling costs
        and
        spoilage as period costs. SFAS No. 151 is effective for Griffin in fiscal
        2006
        and did not have a material impact on Griffin’s consolidated financial
        statements for the thirteen weeks ended March 4, 2006.
 
 In
        March
        2005, the FASB issued FASB Interpretation No. 47, “Accounting for Conditional
        Asset Retirement Obligations (an interpretation of FASB Statement No. 143),”
(“Fin No. 47”). Fin No. 47 clarifies the timing of liability recognition for
        legal obligations associated with the retirement of tangible long-lived assets.
        Fin No. 47 will be effective for Griffin in the fourth quarter of fiscal
        2006.
        Griffin is evaluating the impact of this new pronouncement on its consolidated
        financial statements.
 
 In
        May
        2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections-a
        replacement of APB Opinion No. 20 and FASB Statement No. 3” (“SFAS No. 154”).
        This new standard requires retrospective application to prior periods’ financial
        statements of voluntary changes in accounting principles, unless it is
        impracticable to do so. SFAS No. 154 also provides that a correction of errors
        in previously issued financial statements should be termed a “restatement”. The
        new standard is effective for accounting changes and correction of errors
        in
        fiscal years beginning after December 15, 2005.
 
 
 23
 
 
 **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 operating results of Imperial, leasing currently
        vacant space, construction of additional facilities in the real estate business,
        completion of land sales that are currently under contract and approval of
        currently proposed residential subdivisions. 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 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 and related
        principal payment requirements are described in Note 4 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 thirteen weeks ended March
        4,
        2006.
  Griffin
        is 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
        thirteen months, with a weighted average maturity of approximately four months
        as of March 4, 2006. 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 in operations. Griffin does have
        an
        investment in a public company, Centaur Holdings, 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.
 
 
 24
 
 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 was 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 that 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.
 
 
 
 25
  
 **PART
                  II**
              **OTHER
                  INFORMATION**
 
 ITEMS
                  1 - 5.
              Not
                  ApplicableITEM
                  6.
              ExhibitsExhibit
                  No.
              Description31.1
              Certifications
                  of Chief Executive Officer Pursuant to Rule 13a-14(a),as
                  Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of
                  200231.2
              Certifications
                  of Chief Financial Officer Pursuant to Rule 13a-14(a),as
                  Adopted Pursuant to Section 302 of the Sarbanes Oxley Act of
                  200232.1
              Certifications
                  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
              Certifications
                  of Chief Financial Officer Pursuant to 18 U.S.CSection
                  1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                  Act of
                  2002
 
 26
 
 
 
 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:
                    April 18, 2006
                
                Frederick
                    M. DanzigerPresident
                    and Chief Executive Officer/s/
                    ANTHONY J. GALICIDate:
                    April 18, 2006
                
                Anthony
                    J. GaliciVice
                    President, Chief Financial Officer and Secretary
 
 27