<PAGE>



                          SECURITIES AND EXCHANGE COMMISSION

                               WASHINGTON, D.C.  20549


                                      FORM 10-Q


                    QUARTERLY REPORT UNDER SECTIONS 13 OR 15(D) OF
                         THE SECURITIES EXCHANGE ACT OF 1934


     For the Quarter Ended:                             Commission File Number:
         APRIL 30, 1998                                         0-23503        
   ------------------------                             -----------------------


                               EXCEL LEGACY CORPORATION
   ----------------------------------------------------------------------------
               (Exact name of registrant as specified in its charter)

               DELAWARE                                      33-0781747
   --------------------------------                    ------------------------
   (State or other jurisdiction of                          (IRS Employer
      incorporation or organization)                    Identification Number)


       16955 VIA DEL CAMPO, SUITE 110          SAN DIEGO, CALIFORNIA 92127
   ----------------------------------------------------------------------------
              (Address of principal executive offices and zip code)

     Registrant's telephone number, including area code:  (619) 485-9400
                                                          --------------
     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.

                     (1)  Yes    X         No        
                              ------           ------
                     (2)  Yes              No    X   
                              ------          -------

     Indicate the number of shares outstanding of each of the issuer's classes 
     of common stock, as of the latest practicable date.

             Class                                 Outstanding at June 11, 1998
   -----------------------------                   ----------------------------
     Common stock, $.01 par value                           33,457,804



<PAGE>


                               EXCEL LEGACY CORPORATION

                                        INDEX

                                      FORM 10-Q 
                                      __________

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
PART I.  FINANCIAL INFORMATION:

     Item 1.  Financial Statements:

        Balance Sheet
           April 30, 1998 (Unaudited) . . . . . . . . . . . . . . . . . . . . 3

        Statements of Income
           Three Months Ended April 30, 1998 (Unaudited)
           Period from Inception (November 17, 1997) 
             to April 30, 1998 (Unaudited). . . . . . . . . . . . . . . . . . 4

        Statement of Changes in Stockholders' Equity
           Period from Inception (November 17, 1997) 
             to April 30, 1998 (Unaudited)  . . . . . . . . . . . . . . . . . 5

        Statement of Cash Flows
           Period from Inception (November 17, 1997) to 
             April 30, 1998 (Unaudited) . . . . . . . . . . . . . . . . . . . 6

        Notes to Financial Statements (Unaudited) . . . . . . . . . . . . . . 7

     Item 2.  Management's Discussion and Analysis of Financial
              Condition and Results of Operations. . . . . . . . . . . . . . 16

     Item 3.  Quantitative and Qualitative Disclosures About Market Risk . . 19

PART II.  OTHER INFORMATION 

     Item 2.  Changes in Securities and Use of Proceeds. . . . . . . . . . . 20

     Item 6.  Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . 20

</TABLE>
                                          2


<PAGE>

                            EXCEL LEGACY CORPORATION

                                  BALANCE SHEET
                       (IN THOUSANDS, EXCEPT SHARE AMOUNTS)
                                    __________
<TABLE>
<CAPTION>
                                                                   APRIL 30, 
                                                                     1998
                                                                  (UNAUDITED)
                                                                  -----------
<S>                                                               <C>
                                     ASSETS
Real estate:
   Land                                                           $  40,529
   Buildings                                                         88,144
   Leasehold interests                                                1,790
   Accumulated depreciation                                            (252)
                                                                  ---------
      Net real estate                                               130,211

Cash                                                                 40,018
Notes receivable                                                     23,281
Investment in partnerships                                            9,240
Interest receivable                                                   2,999
Pre-development costs                                                 1,751
Other assets                                                            874
Deferred tax asset                                                    6,636
                                                                  ---------
                                                                  $ 215,010
                                                                  ---------
                                                                  ---------

                       LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
   Mortgages payable                                              $  36,283
   Accounts payable and accrued liabilities                           2,615
   Other liabilities                                                 14,891
   Income taxes payable                                                 227
                                                                  ---------
         Total liabilities                                           54,016
                                                                  ---------
Commitments and contingencies                                             -

Stockholders' equity:
   Series A Preferred stock, $.01 par value, 50,000,000 shares 
      authorized, 21,281,000 shares issued and outstanding              213
   Common stock, $.01 par value, 150,000,000 shares authorized,
      32,607,804 shares issued and outstanding                          326
   Additional paid-in capital                                       170,964
   Retained earnings                                                    363
   Notes receivable from officers for common shares                 (10,872)
                                                                  ---------
         Total stockholders' equity                                 160,994
                                                                  ---------
                                                                  $ 215,010
                                                                  ---------
                                                                  ---------
</TABLE>
                    The accompanying notes are an integral part
                          of the financial statements.

                                       3



<PAGE>

                            EXCEL LEGACY CORPORATION

                        STATEMENTS OF INCOME - UNAUDITED
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                   __________
<TABLE>
<CAPTION>
                                                                   PERIOD FROM
                                                      THREE         INCEPTION
                                                     MONTHS      (NOV. 17, 1997)
                                                      ENDED            TO
                                                    APRIL 30,       APRIL 30,
                                                      1998            1998
                                                    --------        --------
<S>                                                  <C>             <C>
Revenues:
   Rental                                           $  1,034        $ 1,034
   Interest income and other revenues                    309            309
                                                    --------        -------
      Total revenue                                    1,343          1,343
                                                    --------        -------
Expenses:
   Interest                                              311            311
   Depreciation                                          262            262
   Property operating expenses                           108            108
   General and administrative                             58             58
                                                    --------        -------
      Total operating expenses                           739            739
                                                    --------        -------
Income before income taxes                               604            604
    
Provision for income taxes                               241            241
                                                    --------        -------
   Net income                                       $    363        $   363
                                                    --------        -------
                                                    --------        -------
Basic net income per share                            $ 0.03          $0.06
                                                    --------        -------
                                                    --------        -------
Diluted net income per share                          $ 0.02          $0.04
                                                    --------        -------
                                                    --------        -------
</TABLE>
                    The accompanying notes are an integral part
                          of the financial statements.

                                       4

<PAGE>

                              EXCEL LEGACY CORPORATION

               STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - UNAUDITED
                       (IN THOUSANDS, EXCEPT NUMBER OF SHARES)
                                      __________
<TABLE>
<CAPTION>
                                   SERIES A
                                PREFERRED STOCK          COMMON STOCK         ADDITIONAL     OFFICER                   TOTAL     
                            ----------------------  -----------------------    PAID-IN        NOTES      RETAINED  STOCKHOLDERS'
                              NUMBER        AMOUNT    NUMBER        AMOUNT     CAPITAL      RECEIVABLE   EARNINGS      EQUITY    
                            ----------     -------  ---------       -------    --------     ----------   --------   -----------
<S>                         <C>            <C>       <C>            <C>        <C>          <C>          <C>        <C>

PERIOD FROM INCEPTION (NOVEMBER 17, 1997) TO APRIL 30, 1998:

Balance at inception                 -     $    -            -       $   -    $       -    $      -      $      -     $      -
Issuance of preferred 
  stock                     21,281,000        213            -           -      106,192           -             -      106,405
Issuance of common 
  stock                              -          -   32,607,804         326       67,469                         -       67,795
Notes receivable from 
  officers for common 
  shares                             -          -            -           -            -     (10,872)            -      (10,872)
Issuance costs                       -          -            -           -       (2,697)          -             -       (2,697)
Net income                                      -            -           -            -           -           363          363
                            ----------     ------   ----------       -----    ---------    --------      --------     --------
Balance at
  April 30, 1998            21,281,000     $  213   32,607,804       $ 326    $ 170,964    $(10,872)     $    363     $160,994
                            ----------     ------   ----------       -----    ---------    --------      --------     --------
                            ----------     ------   ----------       -----    ---------    --------      --------     --------
</TABLE>

                                The accompanying notes are an integral part
                                       of the financial statements.


                                                       5
<PAGE>


                              EXCEL LEGACY CORPORATION

                         STATEMENT OF CASH FLOWS - UNAUDITED
                                    (IN THOUSANDS)
                                      __________
<TABLE>
<CAPTION>
                                                                    PERIOD FROM
                                                                     INCEPTION
                                                                  (NOV. 17, 1997)
                                                                         TO
                                                                      APRIL 30,
                                                                        1998
                                                                   --------------
<S>                                                                   <C>
Cash flows from operating activities:
   Net income                                                         $    363
   Adjustments to reconcile net income to net cash
      provided by operations:
      Depreciation and amortization                                        263
      Changes in other assets                                              123
      Changes in accounts payable                                        2,615
      Changes in other liabilities                                         159
                                                                      --------
         Net cash provided by operating activities                       3,523
                                                                      --------
Cash flows from investing activities:
   Real estate acquisitions and construction costs paid                 (5,124)
   Investment in partnerships                                           (9,240)
   Pre-development costs paid                                           (1,751)
   Advances for notes receivable                                          (111)
                                                                      --------
         Net cash used in investing activities                         (16,226) 
                                                                      --------
Cash flows from financing activities:
   Issuance of preferred stock                                         106,405
   Principal payments of mortgages and notes payable                   (62,091)
   Issuance of common stock                                             11,104
   Issuance costs                                                       (2,697)
                                                                      --------
         Net cash provided by financing activities                      52,721
                                                                      --------
         Net increase in cash                                           40,018

Cash at inception                                                            -
                                                                      --------
Cash at April 30                                                      $ 40,018
                                                                      --------
                                                                      --------
</TABLE>


                        The accompanying notes are an integral part
                               of the financial statements.


                                           6


<PAGE>

                              EXCEL LEGACY CORPORATION

                      NOTES TO FINANCIAL STATEMENTS - UNAUDITED

                                      __________


 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

     The financial statements reflect all adjustments of a recurring nature 
     which are, in the opinion of management, necessary for a fair presentation
     of the financial statements.  No adjustments were necessary which were not
     of a normal recurring nature. 

     ORGANIZATION

     Excel Legacy Corporation (the "Company"), a Delaware Corporation was formed
     on November 17, 1997.  The Company was originally a wholly-owned subsidiary
     of Excel Realty Trust, Inc. ("Excel"), a Maryland corporation and a self-
     administered, self-managed real estate investment rust ("REIT").  On March
     31, 1998, Excel effected a spin-off of the Company through a special 
     dividend to the holders of common stock of Excel of all of the outstanding
     common stock of the Company held by Excel (the "Spin-off").

     The Company was formed to pursue opportunities available to those investors
     that are not restricted by the Federal income tax laws governing REITs or
     influenced by Excel's objectives of increasing cash flows and maintaining
     certain leverage ratios.  In connection with the Spin-off, certain real
     properties, notes receivable and related assets and liabilities were
     transferred to the Company from Excel (Note 2).  Upon completion of the 
     Spin-off, the Company ceased to be a wholly-owned subsidiary of Excel and 
     began operating as an independent public company. 
     
     REAL ESTATE

     Certain real estate assets were transferred to the Company from Excel and
     recorded at  Excel's cost.  Other real estate assets acquired subsequent to
     the Spin-off were recorded at the Company's cost.  Depreciation is computed
     using the straight-line method over estimated useful lives of 40 years for
     buildings.  Expenditures for maintenance and repairs are charged to expense
     as incurred and significant renovations are capitalized.

     The Company assesses whether there has been a permanent impairment in the
     value of its real estate by considering factors such as expected future
     operating income, trends and prospects, as well as the effects of demand,
     competition and other economic factors.  Such factors include a lessee's
     ability to pay rent under the terms of the lease.  If a property is leased
     at significantly lower rent, the Company may recognize a permanent 
     impairment loss if the income stream is not sufficient to recover its 
     investment. 

     INVESTMENT IN PARTNERSHIPS

     The equity method of accounting is used for the Company's investment in
     partnerships at April 30, 1998.  In May 1998, the Company acquired a 
     majority interest in a partnership whose accounts will be consolidated 
     with the Company's accounts (Note 3).
               
     INCOME TAXES

     The Company uses the asset and liability method to account for income 
     taxes. Deferred income tax assets have been recorded to reflect the 
     future tax benefit of assets acquired from Excel that were recorded at 
     cost for book purposes and fair market value for tax purposes.  

Continued

                                       7

<PAGE>

                              EXCEL LEGACY CORPORATION

                      NOTES TO FINANCIAL STATEMENTS - UNAUDITED

                                      __________


 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:

     PRE-DEVELOPMENT COSTS

     Pre-development costs that are directly related to specific construction
     projects are capitalized as incurred.  The Company expenses these costs to
     the extent they are unrecoverable or it is determined that the related
     project will not be pursued. 

     DEFERRED LEASING AND LOAN ACQUISITION COSTS

     Costs incurred in obtaining tenant leases and long-term financing are
     amortized to other property  expense and interest expense, respectively, on
     the straight-line method over the terms of the related leases or debt
     agreements.
     
     REVENUE RECOGNITION

     Base rental revenue is recognized on  the straight-line basis, which 
     averages annual minimum rents over the terms of the leases.  Certain of 
     the leases provide for additional rental revenue by way of percentage rents
     to be paid based upon the level of sales achieved by the lessee.  Certain
     of the leases also provide for tenant reimbursement of common area 
     maintenance and other operating expenses.  All the above revenue is 
     included in the accompanying Statements of Income as rental revenue.

     NET INCOME PER COMMON SHARE

     The Company has adopted the provisions of Statement of Financial Accounting
     Standards ("SFAS") No. 128, Earnings Per Share effective December 31, 1997.
     SFAS No. 128 requires the presentation of basic and diluted earnings per
     share (Note 9). 

     USE OF ESTIMATES

     The preparation of financial statements in conformity with generally 
     accepted accounting principles requires management to make estimates and
     assumptions that affect the reported amounts of assets and liabilities at
     the date of the financial statements and the reported amounts of revenues
     and expenses during the period.  Actual results could differ from those
     estimates. 
           
2.   SPIN-OFF:

     Prior to the Spin-off (Note 1) on March 31, 1998, ERT Development 
     Corporation ("EDV"), a Delaware Corporation and an affiliate of Excel
     transferred four notes receivable, a land parcel, a leasehold interest
     in a parcel of land, an office building, a single tenant building, and
     certain other assets to Excel for a total consideration of approximately
     $38,112,000.  Excel contributed to the Company, the above assets from EDV,
     together with ten single tenant properties owned by Excel with a book value
     of approximately $45,747,000, certain other net assets of approximately 
     $1,158,000, and a property held for sale with a book value of $14,525,000,
     in exchange for 23,412,580 common shares of the Company, assumption of debt
     by the Company on the ten single tenant properties of approximately 
     $33,878,000, and issuance of a note payable to Excel from the Company in 
     the amount of $26,402,000.  This note was repaid in April 1998.

Continued

                                       8


<PAGE>


                              EXCEL LEGACY CORPORATION

                      NOTES TO FINANCIAL STATEMENTS - UNAUDITED

                                      __________

2.   SPIN-OFF, CONTINUED:

     The Spin-off took place through a dividend distribution to Excel's common
     stockholders, of all the Company's common stock (23,412,580 shares) held by
     Excel.  The distribution consisted of one share of the Company's common 
     stock for each share of Excel's common stock held on the record date of 
     March 2, 1998.  The fair market value of the distribution was approximately
     $55,956,000 or $2.39 per share.  While the Company has recorded the
     acquisition of assets and liabilities at fair market value for tax 
     purposes, the Company has recorded for book purposes, the assets and 
     liabilities at Excel's and EDV's original book value.  The tax effect of 
     the difference between fair market value and book value was $6,650,000 
     and was recorded as a deferred tax asset.

 3.  REAL ESTATE:

     HIGHLANDS RANCH AND WESTMINSTER, COLORADO

     In January 1998, the Company acquired two properties under construction
     situated on approximately 43.6 acres in Highlands Ranch and Westminster,
     Colorado.  The acquired properties consist of two 110,000 square foot 24
     screen movie theaters that are occupied by AMC Multi-Cinema, Inc. ("AMC") 
     and were completed on March 20, 1998 and April 3, 1998, respectively.  The
     Company provided to AMC letters of credit which covered the construction of
     the buildings.  As of April 30, 1998, there were no outstanding amounts on
     the letters of credit.  In May 1998, $7,017,000 was drawn on the letters of
     credit and an additional $7,588,000 of draws are expected.  The $14,605,000
     of estimated remaining draws is included in the accompanying Balance Sheet
     in other liabilities (Note 6 and 8).  The total cost of these properties 
     is expected to total approximately $50,000,000. 

     SINGLE TENANT BUILDINGS

     The Company acquired ten single tenant buildings from Excel in connection
     with the Spin-off.  Eight of the buildings are leased to Wal-Mart Stores,
     Inc. and are located in Colorado, Illinois, Indiana (2), Michigan,
     Pennsylvania, Texas, and Wisconsin.  The other two properties are leased to
     Lowe's Home Centers, Inc. and are located in Indiana and Ohio.  The ten
     properties have a total Gross Leasable Area ("GLA") of 981,266 square feet.
     The Company acquired these properties for $45,747,000 and assumed 
     $33,988,000 of mortgage debt (Note 6) and other net liabilities.

     SCOTTSDALE GALLERIA

     The Company acquired the Scottsdale Galleria ("Galleria") from Excel in
     connection with the Spin-off.  The Scottsdale Galleria is situated on
     approximately 6.3 acres and consists of (i) an enclosed shopping mall
     contained in two separate buildings, and (ii) a multi-level parking garage.
     The main building is a four level building with a transparent glass roof 
     and the smaller building contains the "5th Avenue Shops".  The Company 
     acquired this property for $14,525,000.  This property substantially vacant
     and is under consideration for a mixed use entertainment redevelopment
     project.

     SCOTTSDALE TOWERS
     
     The Company acquired approximately 3.6 acres of vacant land located in
     Scottsdale, Arizona which was originally owned by EDV in connection with 
     the Spin-off.  The land was acquired for approximately $3,724,000 and was
     acquired along with other properties located in the Scottsdale area as part
     of the Galleria redevelopment plan.

Continued

                                           9

<PAGE>

                              EXCEL LEGACY CORPORATION

                      NOTES TO FINANCIAL STATEMENTS - UNAUDITED

                                      __________


3.   REAL ESTATE, CONTINUED:

     SCOTTSDALE CITY CENTRE

     The Company acquired the Scottsdale City Centre, a 64,262 square foot 
     office building situated on approximately two  acres in Scottsdale Arizona
     (the "City Centre").  The City Centre was originally owned by EDV and 
     transferred to Excel and to the Company in connection with the Spin-off.
     The City Centre was acquired for $7,885,000 and was encumbered by mortgage
     debt of $2,571,000.  This property was acquired as a strategic expansion 
     site for the Galleria redevelopment project.

     BRIO LAND

     The Company acquired approximately 0.5 acres of land located in Scottsdale,
     Arizona which was originally owned by EDV in connection with the Spin-off. 
     The land currently contains a 3,700 square foot building which is leased to
     Brio Restaurant and was acquired for approximately $1,602,000.  The 
     property is expected to be part of the Galleria redevelopment plan along 
     with the other above properties located in Scottsdale.

     RANCHO BERNARDO LAND

     In March 1998, the Company acquired approximately 11.1 acres of land 
     located in the community of Rancho Bernardo in San Diego, California 
     for approximately $4,072,000.  The land was acquired for office or 
     industrial development. 

     GRAND CANYON LEASEHOLD

     The Company acquired a leasehold interest in approximately 6.5 acres of 
     land located in Tusayan, Arizona at the entrance to Grand Canyon National
     Park. This leasehold interest was originally owned by EDV and acquired in
     connection with the Spin-off.  The leasehold interest was acquired for
     $1,790,000 and is subject to a lease with a term of 50 years and two 
     ten year renewal options.  A development project is currently under 
     development on the land (Note 5).

     TELLURIDE LAND

     In January 1998, the Company acquired a parcel of land located at the base
     of Telluride mountain in Telluride Mountain Village Ski Resort in 
     Telluride, Colorado for approximately $763,000.  The land was acquired 
     for future development.

     DESERT FASHION PLAZA

     In May 1998, the Company acquired a majority interest in Desert Fashion
     Plaza, L.L.C., a Delaware limited liability company which owns an urban 
     mall located in Palm Springs, California (the "Desert Fashion Plaza") for
     approximately $13,668,000.  Desert Fashion Plaza contains approximately
     290,000 square feet of GLA. Presently the mall is anchored by Saks Fifth
     Avenue and is adjacent to the Hyatt Regency Hotel.  The Company has 
     acquired this property for redevelopment.

Continued

                                       10


<PAGE>

                              EXCEL LEGACY CORPORATION

                      NOTES TO FINANCIAL STATEMENTS - UNAUDITED

                                      __________


4.   NOTES RECEIVABLE:

     LOS ARCOS

     In connection with the Spin-off, the Company acquired a $16,225,000
     promissory note payable by Los Arcos Development, LLC, the owner of a 
     700,000 square foot indoor regional mall located in Scottsdale, Arizona. 
     The Company also received $2,397,000 of accrued interest in connection 
     with the Spin-off. Interest on the note accrues at the rate of 12% per 
     annum. The note matures on the earlier of (i) the sale of the property or
     (ii) December 2003. Accrued interest on the Los Arcos loan becomes payable 
     out of the property's net cash flow once the borrower's development of the 
     property is completed. The note is secured by a first mortgage on the 
     property and includes a profit  participation upon the property's sale.

     FIRST STREET

     The Company acquired a $5,518,000 promissory note in connection with the
     Spin-off payable by First Street Investments Limited Partnership, the owner
     of a 120,000 square foot, eight story building located in downtown Phoenix,
     Arizona.   The Company also assumed $137,000 of accrued interest in
     connection with the Spin-off.   The note matures on the earlier of (i) the
     sale of the property or (ii) May 2004 and is secured by a subordinated
     mortgage on the property  and includes a profit participation upon sale of
     the property.  Until the maturity date, the borrower is to pay interest 
     only at the rate of 11% per annum.  Interest not paid currently accrues at
     the rate of 12% per annum.

     GRAND CANYON

     In connection with the Spin-off, the Company acquired from Excel a 
     $1,050,000 promissory note payable by Fain Properties Limited Partnership,
     the owner of approximately 17 acres of undeveloped land located in Tusayan,
     Arizona near the Grand Canyon National Park.  The note accrues interest at
     10% and is secured by a first mortgage on the property.  The note matures
     in September 1998.
 
     OTHER

     The Company has outstanding two additional notes receivable it obtained in
     connection with the Spin-off.  These notes total $488,000 at April 30, 1998
     and bear interest at 12% per annum.
     
     OFFICERS

     In connection with the sale of common stock to certain of the Company's
     officers and employees (Note 9), the Company issued $10,872,000 of notes
     receivable due from certain of the Company's officers.  The notes bear
     interest at 7%, are recourse obligations of the note holders, and are due
     in March 2003.  The notes have been offset against stockholders' equity 
     on the Company's accompanying Balance Sheet.

Continued

                                       11

<PAGE>
                             EXCEL LEGACY CORPORATION

                      NOTES TO FINANCIAL STATEMENTS - UNAUDITED

                                      __________

 5.  INVESTMENTS:

     ENTERCITEMENT

     In April 1998, the Company invested $6,000,000 in EnterCitement, LLC 
     ("EnterCitement"), a theme park development company.  EnterCitement owns 
     approximately 510 acres of land in Indianapolis, Indiana, on which it 
     plans to develop a theme park.  The Company currently holds a 23.7% 
     ownership interest in EnterCitement and an option to acquire an 
     additional ownership interest of up to 55%.

     THE GRAND HOTEL AND CANYON STAR

     The Company has invested $3,240,000 in a joint venture arrangement with 
     Canyon Ventures, LLC for the development of a hotel and dinner theater 
     and retail shop situated near the south rim entrance to the Grand Canyon 
     National Park in Tusayan.  An additional $3,708,000 has been invested 
     subsequent to April 30, 1998. 

     TENANTFIRST

     In May 1998, the Company acquired TenantFirst Real Estate Services, Inc. 
     ("TenantFirst").  In connection with the acquisition, the Company paid 
     $138,000 in cash and issued 850,000 shares of the Company's common 
     stock. TenantFirst performs property management and development services 
     for various commercial properties located in San Diego, California. 

6.   MORTGAGES PAYABLE:

     The Company had $36,283,000 in mortgages payable outstanding at April 
     30, 1998 at 7.625% to 8.528%.  The mortgages are due on various dates 
     through 2014 and monthly payments approximate $405,000.  The mortgages 
     are collateralized by real estate and an assignment of rents.
           
     The principal payments required to be made on mortgages payable over the 
     next five years are as follows (in thousands):

<TABLE>
<CAPTION>

            YEAR ENDED JULY 31,
            -------------------
             <S>                                              <C>
             1998, remaining three months                      $ 1,418
             1999                                                2,185
             2000                                                2,357
             2001                                                2,543
             2002                                                2,752
             Thereafter                                         25,028
                                                               -------
                                                               $36,283
                                                               -------
                                                               -------
</TABLE>

     Mortgages of $29,982,000 are fully amortizing with the final monthly 
     payments to be made between the years 2004 and 2018. 

     In May 1998, the Company borrowed approximately $18,100,000 from a bank 
     with a fixed interest rate of 7.52%.  The note is non-recourse to the 
     Company and secured by one of the properties leased to AMC (Note 3).  
     The note is fully amortizing over 20 years and expires in 2018.

Continued

                                       12
<PAGE>

                             EXCEL LEGACY CORPORATION

                      NOTES TO FINANCIAL STATEMENTS - UNAUDITED

                                      __________


7.   INCOME TAXES:

     At April 30, 1998, the Company had a deferred tax asset of $6,636,000.  
     The deferred tax asset is non-current and relates to the difference 
     between fair market value and book value of the assets acquired from 
     Excel in connection with the Spin-off.  No valuation allowance has been 
     provided against the asset as the Company believes the asset will be 
     realized upon eventual disposition of the related properties. The 
     provision for income taxes consists of federal expense of $188,000 and 
     state expense of $53,000 both of which is current.                       
                 

8.   COMMITMENTS AND CONTINGENCIES:
     
     The Company has provided letters of credit to AMC to complete 
     construction on two properties (Note 3).  At April 30, 1998, the total 
     estimated amounts remaining to be drawn on the letters of credit was 
     $14,605,000 of which $7,017,000 was drawn in May 1998.  The draw was 
     converted to a bank term loan at LIBOR plus 1.2% due on June 30, 1998.  
     The total estimated liability of $14,605,000 is included in the 
     accompanying Balance Sheet in other liabilities.

     The Company expects to fund the initial $19,000,000 of capital required 
     to fund a joint venture, Millennia Car Wash, LLC, which was formed to 
     acquire car wash properties. 

9.   CAPITAL STOCK:

     COMMON SHARES

     In connection with the Spin-off, 23,412,580 shares of common stock were 
     issued by the Company to  its then parent company, Excel, who then 
     distributed the shares on a one for one basis.  The shares had a book 
     value and estimated fair market value of $1.68 and $2.39 per share, 
     respectively. 

     On March 31, 1998, the Company sold 9,195,224 shares of common stock to 
     certain officers and employees of the Company for $2.39 per share.  The 
     Company received cash of $11,104,000 and issued notes receivable of 
     $10,872,000 in connection with the sale.  The shares issued in exchange 
     for the notes receivable have been offset against stockholders' equity 
     on the accompanying balance sheet.

     SERIES A PREFERRED SHARES

     On March 31, 1998,  the Company issued 21,281,000 shares of Series A 
     Preferred Stock at $5.00 per share (the "Preferred A Shares").  Holders 
     of the Preferred A Shares are entitled to receive, when and if declared 
     by the Board of Directors, cumulative cash dividends payable in an 
     amount per share equal to the cash dividends, if any, on the shares of 
     common stock, on a one for one basis, subject to certain circumstances.  
     The Preferred A Shares are also entitled to a liquidation preference of 
     $5.00 per share plus a premium of 7% per annum in the event of any 
     liquidation, dissolution or other winding up of the affairs of the 
     Company.  The Preferred A Shares are also convertible into common stock 
     by the Company if certain circumstances regarding the price of the 
     common stock are met.  Such circumstances were met in May 1998, and on 
     May 18, 1998, the Company exercised its right to convert all of the 
     outstanding shares of the Preferred A Shares into common stock, which 
     conversion is expected to take place on August 18, 1998 with a July 28, 
     1998 record date.

Continued

                                       13
<PAGE>
                           EXCEL LEGACY CORPORRATION

                     NOTES TO FINANCIAL STATEMENTS - UNAUDITED

                                  __________
                                          

9.   CAPITAL STOCK - CONTINUED:

     EARNINGS PER SHARE (EPS)

     In accordance with the disclosure requirements of SFAS No. 128 (Note 1), 
     a reconciliation of the numerator and denominator of basic and diluted 
     EPS is provided as follows (in thousands, except per share amounts).

<TABLE>
<CAPTION>
                                                                                   INCEPTION
                                                              THREE MONTHS      (NOV. 17, 1997)
                                                                  ENDED               TO
                                                                 APRIL 30,         APRIL 30,
                                                                   1998               1998
                                                                ------------     -------------
<S>                                                             <C>              <C>
     BASIC EPS

     NUMERATOR:
         Net income                                                 $  363            $  363
                                                                    ------            ------
                                                                    ------            ------
       DENOMINATOR:
         Weighted average of common shares outstanding              10,991             5,964
                                                                    ------            ------
                                                                    ------            ------
       EARNINGS PER SHARE:                                          $ 0.03            $ 0.06
                                                                    ------            ------
                                                                    ------            ------
     DILUTED EPS

       NUMERATOR:
         Net income                                                 $  363            $  363
                                                                    ------            ------
                                                                    ------            ------

       DENOMINATOR:                                                           
         Weighted average of common shares outstanding              10,991             5,964
         Effect of diluted securities:
           Preferred A Shares                                        7,173             3,893
           Options                                                     124               124
                                                                    ------            ------
                                                                    18,288             9,981
                                                                    ------            ------
                                                                    ------            ------

       EARNINGS PER SHARE:                                          $ 0.02            $ 0.04
                                                                    ------            ------
                                                                    ------            ------

</TABLE>

10.  STATEMENT OF CASH FLOWS - SUPPLEMENTAL DISCLOSURE:

     The amount paid for interest during the three months ended April 30, 
     1998 was approximately $339,000 of which approximately $267,000 was 
     capitalized as construction costs.

     On March 31, 1998, Excel spun-off certain assets to the Company in the 
     form of a dividend and note payable (Notes 1 and 2).  Also on March 31, 
     1998, common shares were issued to certain officers of the Company in 
     exchange for cash and $10,872,000 in notes receivable (Note 4).  During 
     the three months ended April 30, 1998, the Company borrowed $35,523,000 
     in notes payable in connection with the construction of the AMC 
     theaters.  The estimated additional amount of construction costs 
     incurred of $14,605,000 has been accrued for as a non-cash item. 

Continued

                                       14
<PAGE>

                             EXCEL LEGACY CORPORATION

                    NOTES TO FINANCIAL STATEMENTS - UNAUDITED

                                  __________
                                          

11.  MINIMUM FUTURE RENTALS:

     The Company leases its operating properties under noncancelable 
     operating leases generally requiring the tenant to pay a minimum rent.  
     The leases generally either (i) require the tenant to pay all expenses 
     of operating the property such as insurance, property taxes, and 
     structural repairs and maintenance, or (ii) require the tenant to 
     reimburse the Company for the tenant's share of real estate taxes and 
     other common area maintenance expenses or for the tenant's share of any 
     increase in expenses over a base year.

     Minimum future rental revenue for the next five years for the commercial 
     real estate owned at April 30, 1998 and subject to noncancelable 
     operating leases is as follows (in thousands):

<TABLE>
<CAPTION>
               YEAR 
               -----
               <S>                              <C>
               1998, remaining three months      $  2,710
               1999                                10,628
               2000                                10,418
               2001                                10,320
               2002                                10,100
               Thereafter                         119,752

</TABLE>

                                       15
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
         RESULTS OF OPERATIONS

NATURE OF BUSINESS

Excel Legacy Corporation (the "Company"), a Delaware Corporation, was formed 
on November 17, 1997.  The Company was organized to create and realize value 
by identifying and making opportunistic real estate and other investments 
through the direct acquisition, rehabilitation, development, financing and 
management of real properties and/or participation in these activities 
through the purchase of debt instruments or equity interests of entities 
engaged in such businesses. 

RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Financial 
Statements and the Notes thereto. As the Company was not formed until 
November 17, 1997, comparison results with 1997 are not provided.  The 
results of operations for the period from inception to April 30, 1998 are the 
same as the results of operations for the three months ended April 30, 1998 
as there were no operational results prior to January 31, 1998. 

THREE MONTHS ENDED APRIL 30, 1998.

RENTAL REVENUE was $1.0 million during the period.  Ten single tenant 
properties owned by the Company accounted for $0.4 million of rental revenue. 
Additionally, construction on two properties leased to AMC Multi-Cinema, Inc. 
("AMC") were completed on March 20, 1998 and April , 3, 1998 and accounted 
for $0.5 million of revenue.  The remaining $0.1 million of rental revenue 
was attributable to three properties located in Scottsdale, Arizona.  The ten 
single tenant properties and three properties located in Scottsdale, Arizona 
were acquired on March 31, 1998 and reflect one month of operations.

INTEREST INCOME was $0.3 million and primarily related to interest earned on 
the Company's outstanding notes receivable which were acquired on March 31, 
1998. 

INTEREST EXPENSE was $0.3 million and  primarily related to the $36.3 million 
of mortgage debt outstanding at April 30, 1998 in addition to certain 
advances made by Excel which were repaid in April 1998.  The mortgage debt 
was all assumed on March 31, 1998.

DEPRECIATION EXPENSE totaled $0.3 million and related to the $88.1 million of 
buildings and the $1.8 million of leasehold interests held by the Company at 
April 30, 1998. 

PROPERTY OPERATING EXPENSES were $0.1 million and primarily related to the 
three properties located in Scottsdale, Arizona.  

GENERAL AND ADMINISTRATIVE EXPENSES were $0.1 million in the three months 
ended April 30, 1998.  The general and administrative expenses include 
certain costs charged to the Company in April 1998 by Excel pursuant to 
certain agreements providing for the sharing of certain facilities and 
services. 
                                             
PROVISION FOR INCOME TAXES was $0.2 million, all of which is current expense. 

LIQUIDITY AND CAPITAL RESOURCES

In connection with the formation and capitalization of the Company, the 
Company received approximately $11.1 million in cash and approximately $10.9 
million in notes receivable from the sale of common stock to certain officers 
and employees of the Company.  In addition, the Company sold 21,281,000 share 
of Series A Preferred Stock for total net proceeds (after a placement fee of 
$2.4 million) of approximately $104.0 million.  At April 30, 1998, the 
Company had $40.0 million of cash remaining after the cash requirements of 
the Spin-off, and real estate and other investments made prior to April 30, 
1998. 

At April 30, 1998, the total debt of the Company consisted of the following: 
(i) $26.0 million in mortgages on eight properties leased to Wal-Mart Stores, 
Inc ("Wal-Mart").  These mortgages are self-amortizing with the 

                                       16
<PAGE>

rent being paid by Wal-Mart directly to the mortgage holders.  The mortgages 
will be entirely repaid when the initial terms of the leases with Wal-Mart 
expire. (ii) $7.7 million in mortgages on two properties leased to Lowe's 
Home Centers, Inc. ("Lowe's").  These mortgages are also self-amortizing over 
the term of the leases with Lowe's and will be repaid when the leases expire. 
 (iii) A $2.6 million mortgage securing an office building in Scottsdale, 
Arizona, monthly payments on which are approximately $25,000 with a balloon 
payment in the year 2006. 

The Company has provided to AMC letters of credit on the construction of the 
properties leased to AMC of which $14.6 was outstanding at April 30, 1998.  
In May 1998, $7.0 was borrowed by the Company in connection with the letters 
of credit which is due June 30, 1998.  Also in May 1998, the Company borrowed 
an additional $18.1 million secured by one of the properties leased to AMC.  
This mortgage is due in the year 2018 with a fixed interest rate of 7.52% and 
is fully amortizing over the lease term of 20 years.

The Company anticipates that cash flow from operations will be adequate to 
meet the current cash requirements of its operating properties.  The Company 
expects to meet its long-term liquidity requirements, such as property 
acquisitions and development, mortgage debt maturities, and other investment 
opportunities, through the most advantageous sources of capital available to 
the Company at the time, which may include the sale of common stock, 
preferred stock or debt securities through public offerings or private 
placements, entering into joint venture arrangements with financial partners, 
the incurrence of indebtedness through secured or unsecured borrowings and 
the reinvestment of proceeds from the disposition of assets.

The Company expects to fund the initial $19.0 million of capital required to 
fund a joint venture, Millennia Car Wash, LLC which was formed to acquire car 
wash properties.  The Company may also purchase additional assets and make 
such capital expenditures from time to time in the future.  Any such 
expenditures will be contingent upon securing adequate funding on terms 
acceptable to the Company.  The Company is not aware of any material 
unfavorable trends in either capital resources or the outlook for long-term 
cash generation.  

CERTAIN CAUTIONARY STATEMENTS

Certain statements in this Form 10-Q may be deemed to be  "forward-looking 
statements" within the meaning of Section 27A of the Securities Act of 1933, 
as amended, and Section 21E of the Securities Exchange Act of 1934, as 
amended.  Such forward-looking statements involve known and unknown risks, 
uncertainties and other factors which may cause the actual results of the 
Company to be materially different from historical results or from any 
results expressed or implied by such forward-looking statements.  Such risks, 
uncertainties and other factors include, but are not limited to, the 
following risks:

RECENTLY FORMED ENTITY; LACK OF INDEPENDENT OPERATING HISTORY.  The Company 
is a recently-formed entity with no prior operating history.  There can be no 
assurance that the Company will not encounter financial, managerial or other 
difficulties as a result of its lack of operating history or inability to 
rely on the financial and other resources of Excel.  Currently, the Company 
has no external source of financing.  Although the Company expects to be able 
to access capital markets or to seek other financing, there can be no 
assurance that it will be able to do so at all or in amounts or on terms 
acceptable to the Company.

RELIANCE ON MAJOR TENANTS.  As of April 30, 1998, the Company's largest 
tenants were AMC, Wal-Mart, and Lowe's which accounted for approximately 
45.2%, 34.2% and 11.1% of the Company's annualized scheduled base revenues as 
of such date.  The financial position of the Company may be adversely 
affected by financial difficulties experienced by any  of such tenants, or 
any other major tenant of the Company, including a bankruptcy, insolvency or 
general downturn in business of any such tenant, or in the event any such 
tenant does not renew its leases as they expire.

CONTROL BY DIRECTORS AND EXECUTIVE OFFICERS.  As of June 11, 1998, executive 
officers and directors of the Company beneficially owned approximately 32.9% 
of the Company's outstanding common stock.  Accordingly, such persons should 
continue to have substantial influence over the Company and on the outcome of 
matters submitted to the Company's stockholders for approval.  In addition, 
such ownership could discourage acquisition of the common stock by potential 
investors, and could have an anti-takeover effect, possibly depressing the 
trading price of the common stock.

                                       17
<PAGE>

DIFFICULTY OF LOCATING SUITABLE INVESTMENTS; COMPETITION.  Identifying, 
completing and realizing on real estate investments has from time to time 
been highly competitive, and involves a high degree of uncertainty.  The 
Company competes for investments with many public and private real estate 
investment vehicles, including financial institutions (such as mortgage 
banks, pension funds and REITs) and other institutional investors, as well as 
individuals.  There can be no assurance that the Company will be able to 
locate and complete investments which will be profitable or that it will be 
able to fully invest its available capital.  Many of those with whom the 
Company competes for investments are far larger than the Company, may have 
greater financial resources than the Company and may have management 
personnel with more experience than the officers of the Company.

ACQUIRED PROPERTIES MAY FAIL TO PERFORM AS EXPECTED AND CAPITAL EXPENDITURES 
MAY EXCEED ESTIMATES.  The Company intends to acquire existing properties to 
the extent they can be acquired on advantageous terms and meet the Company's 
investment criteria.  Acquisitions of properties entail general investment 
risks associated with any real estate investment, including the risk that 
investments will fail to perform as expected, that estimates of the costs of 
improvements to bring an acquired property up to standards established for 
the intended market position may prove inaccurate and the occupancy rates and 
rents achieved may be less than anticipated.

UNCERTAINTY OF CASH FLOW FROM DEVELOPMENT, CONSTRUCTION AND RENOVATION 
ACTIVITIES. The Company also intends to pursue the selective development, 
construction and renovation of properties for its own account or the account 
of, or through, entities in which it owns an equity interest as opportunities 
arise, including without limitation long-term, higher-risk, mixed-use retail 
entertainment projects and hospitality projects.  Risks associated with the 
Company's development, construction and renovation activities include risks 
that: the Company may abandon development opportunities after expending 
resources to determine feasibility; construction and renovation costs of a 
project may exceed original estimates; occupancy rates and rents at a newly 
completed property may not be sufficient to make the property profitable; and 
development, construction, renovation and lease-up may not be completed on 
schedule (including risks beyond the control of the Company, such as weather 
or labor conditions or material shortages) resulting in increased debt 
service expense and construction costs.  Development, construction and 
renovation activities also are subject to risks relating to the inability to 
obtain, or delays in obtaining, all necessary zoning, land-use, building, 
occupancy and other required governmental permits and authorizations.  These 
risks could result in substantial unanticipated delays or expenses and, under 
certain circumstances, could prevent completion of the project which could 
adversely affect the financial condition and results of operations of the 
Company.

OPERATING RISKS.  If the properties of the Company, the properties of those 
entities in which it invests or the properties of those entities to which it 
will lend do not generate revenue sufficient to meet operating expenses, the 
financial condition and results of operations of the Company may be adversely 
affected.  The Company's financial condition and results of operations also 
may be adversely affected by a number other factors including downturns in 
the international or domestic general economic climate or local real estate 
conditions.

DEPENDENCE ON RENTAL INCOME FROM REAL PROPERTY.  The Company's cash flow, 
results of operations and value of its assets would be adversely affected if 
a significant number of tenants were unable to meet their lease obligations 
or if the Company or the owner of a property were unable to lease a 
significant amount of space in its properties on economically favorable lease 
terms.  There can be no assurance that any tenant whose lease expires in the 
future will renew such lease or that the Company will be able to re-lease 
space on economically advantageous terms.

ILLIQUIDITY OF REAL ESTATE INVESTMENTS.  Equity real estate investments are 
relatively illiquid and therefore tend to limit the ability of the Company to 
vary its portfolio promptly in response to changes in economic or other 
conditions.  In addition, mortgage payments and, to the extent the properties 
are not subject to triple net leases, certain significant expenditures such 
as real estate taxes and maintenance costs, are generally not reduced when 
circumstances cause a reduction in income from the investment.  Should such 
events occur, the Company's income and funds for distribution would be 
adversely affected.  A portion of the Company's properties are mortgaged to 
secure payment of indebtedness, and if the Company were unable to meet its 
mortgage payments, a loss could be sustained as a result of foreclosure on 
such properties by the mortgagee.

RISK OF BANKRUPTCY OF MAJOR TENANTS.  The bankruptcy or insolvency of a major 
tenant or a number of smaller 

                                       18
<PAGE>

tenants may have an adverse impact on the properties affected and on the 
income produced by such properties.  Under bankruptcy law, a tenant has the 
option of assuming (continuing) or rejecting (terminating) any unexpired 
lease.  If the tenant assumes its lease with the Company, the tenant must 
cure all defaults under the lease and provide the Company with adequate 
assurance of its future performance under the lease.  If the tenant rejects 
the lease, the Company's claim for breach of the lease would (absent 
collateral securing the claim) be treated as a general unsecured claim.  The 
amount of the claim would be capped at the amount owed for unpaid 
pre-petition lease payments unrelated to the rejection, plus the greater of 
one years' lease payments or 15% of the remaining lease payments payable 
under the lease (but not to exceed the amount of three years' lease payments).

POTENTIAL ENVIRONMENTAL LIABILITY RELATED TO THE PROPERTIES.  Under various 
federal, state and local laws, ordinances and regulations, the Company may be 
considered an owner or operator of real property or may have arranged for the 
disposal or treatment of hazardous or toxic substances and, therefore, may 
become liable for the costs of removal or remediation of certain hazardous 
substances released on or in its property or disposed of by it, as well as 
certain other potential costs which could relate to hazardous or toxic 
substances (including governmental fines and injuries to persons and 
property).  Such liability may be imposed whether or not the Company knew of, 
or was responsible for, the presence of such hazardous or toxic substances. 

POSSIBLE CONFLICTS WITH EXCEL.  Many of the Company's executive officers and 
directors also serve as executive officers and directors with Excel.  Other 
than Kelly D. Burt, who was recently hired as a director and officer of the 
Company, none of the members of senior management of the Company is committed 
to spending a particular amount of time on the Company's affairs, nor do any 
of them devote his full time to the Company.  As a result of dual roles, 
there is the potential lack of management attention to the Company which 
could have an adverse effect on the Company.

The Company and Excel have entered into certain agreements providing for (i) 
the orderly separation of the Company and Excel, (ii) the sharing of certain 
facilities and services, and (iii) the allocation of certain tax and other 
liabilities. Because of management of both the Company and Excel are largely 
the same, conflicts may arise with respect to the operation and effect of 
these agreements and relationships which could have an adverse effect on the 
Company if not properly resolved. 

YEAR 2000.  The Company currently uses Management Reports Inc. ("MRI") 
software on a Novell local area network.  The MRI software will require an 
upgrade to make it year 2000 compliant, which the Company intends to install 
prior to December 31, 1999.  The Company does not believe that additional 
costs associated with the software upgrade and additional implementation and 
training costs will be material to the Company's financial position or 
results of operations.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.


                                       19
<PAGE>


PART II.  OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

          In March 1998, upon consummation of the Spin-off, the Company sold 
          (i) 9,195,224 shares of its common stock in a private placement to 
          certain of the Company's officers at a price per share of $2.39 for 
          an aggregate purchase price of approximately $22.0 million, and 
          (ii) 21,281,000 Preferred A Shares in a private placement to 
          certain "qualified institutional buyers" as defined in Rule 144A 
          under the Securities Act of 1933, as amended (the "Securities 
          Act"), at a price per share of $5.00, for an aggregate purchase 
          price of approximately $106.4 million. The Company relied upon an 
          exemption from registration under Rule 506 of Regulation D under 
          the Securities Act in connection with these private placements.

          Holders of the Preferred A Shares have the right, exercisable at 
          any time and from time to time, to convert all or any of the 
          Preferred A Shares into shares of the Company's common stock, on a 
          one-for-one basis, subject to adjustment in certain circumstances.  
          The Preferred A Shares also are convertible into common stock by 
          the Company if the closing price of the common stock on the OTC 
          Bulletin Board is equal to or greater than certain milestones for 
          30 consecutive trading days. Such price milestones were met in May 
          1998 and on May 18, 1998, the Company exercised its right to 
          convert all of the outstanding Preferred A Shares into common 
          stock, which conversion is expected to take place automatically on 
          August 18, 1998.  The Company has fixed July 28, 1998 as the record 
          date for such mandatory conversion.

          The Company loaned to certain of its officers, in connection with 
          their purchase of common stock described above, approximately 50% 
          of the purchase price therefor (an aggregate amount of 
          approximately $10.9 million).  Such loans bear interest at the rate 
          of 7.0% per annum, mature in March 2003 and are recourse 
          obligations of such officers.

          In May 1998, the Company acquired TenantFirst, which was formed and 
          operated by Kelly D. Burt.  As consideration, the Company issued to 
          Mr. Burt 850,000 shares of its common stock and approximately 
          $138,000 in cash.  In connection with the acquisition of 
          TenantFirst, the Company hired Mr. Burt as a director and officer 
          of the Company.  The Company relied upon an exemption from 
          registration under Section 4(2) of the Securities Act in connection 
          with this private placement. 

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a) Exhibits
               
             27.1 Financial Data Schedule

         (b) Reports on Form 8-K
          
             A Current Report on Form 8-K, dated March 24, 1998, was filed with
             the Commission regarding the Spin-off of the Company from Excel.

             A Current Report on Form 8-K, dated March 31, 1998, was filed with
             the Commission regarding the distribution of the Company's stock to
             Excel's stockholders and the issuance of Series A Preferred Stock.
          

                                       20
<PAGE>





                               SIGNATURES


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

Dated: June 11, 1998                    EXCEL LEGACY CORPORATION 
                                        (Registrant)

                                  
                                        By:  /s/ Gary B. Sabin
                                           ---------------------------
                                           Gary B. Sabin
                                           President
                                       

                                        By:  /s/ David A. Lund  
                                           ---------------------------
                                           David A. Lund
                                           Principal Financial Officer



                                      21