J. W. MAYS, INC.

















                                  Annual Report
                                      1998

                            Year Ended July 31, 1998
<PAGE>

J.W. MAYS, INC.

CONTENTS                                                 PAGE NO.
================================================================================
Summary of Selected Financial Data                           2
The Company                                                  2
Message to Shareholders                                      3
Consolidated Balance Sheets                                4-5
Consolidated Statements of Operations
and Retained Earnings                                        6
Consolidated Statements of Cash Flows                        7
Notes to Consolidated Financial Statements                8-15
Report of Independent Auditor                               15
Five Year Summary of
Consolidated Operations                                     16
Management's Discussion and
Analysis of Financial Condition
and Results of Operations                                17-19
Quarterly Financial Information (Unaudited)                 20
Common Stock Prices and Dividends                           20
Officers and Directors                                      21


EXECUTIVE OFFICES
9 Bond Street, Brooklyn, N.Y. 11201

TRANSFER AGENT AND REGISTRAR
American Stock Transfer & Trust Company
40 Wall Street
New York, N.Y. 10005

SPECIAL COUNSEL
Cullen and Dykman
177 Montague Street
Brooklyn, N.Y. 11201

INDEPENDENT ACCOUNTANTS
D'Arcangelo & Co., LLP
3010 Westchester Avenue
Purchase, N.Y. 10577

COMMON STOCK
The Company's common stock trades on the Nasdaq National Market tier of The
Nasdaq Stock Market under the Symbol: "Mays".



ANNUAL MEETING

The Annual Meeting of Shareholders will be
held on Tuesday, November 24, 1998, at
10:00 A.M., New York time, at J. W. MAYS, INC.,
9 Bond Street, Brooklyn, New York.


<PAGE>


<TABLE>
<CAPTION>

J.W. MAYS, INC.

SUMMARY OF SELECTED FINANCIAL DATA
(dollars in thousands except per share data)
========================================================================================================
                                                   1998        1997       1996       1995        1994
-------------------------------------------------------------------------------------------------------
<S>                                              <C>        <C>        <C>         <C>         <C> 
Rental Income ................................   $ 10,249   $  9,666   $  8,855    $  7,944    $  9,075
Rental Income--Affiliated Company ............        414        414        414         386         416
Recovery of Real Estate Taxes ................      1,219       --         --          --            32
--------------------------------------------------------------------------------------------------------
Total Revenues ...............................     11,882     10,080      9,269       8,330       9,523
--------------------------------------------------------------------------------------------------------
Income (Loss) Before Cumulative Effect of
 Changes in Accounting Principles ............      1,838        811       (141)       (394)        (32)
  Accounting for Certain Investments in Debt
   and Equity Securities .....................       --         --         --            22        --
  Accounting for Income Taxes ................       --         --         --          --          (275)
--------------------------------------------------------------------------------------------------------
Net Income (Loss) ............................      1,838        811       (141)       (372)       (307)
--------------------------------------------------------------------------------------------------------
Real Estate--Net .............................     28,024     27,953     25,895      25,077      24,912
--------------------------------------------------------------------------------------------------------
Total Assets .................................     41,375     40,406     37,771      36,144      37,290
--------------------------------------------------------------------------------------------------------
Long-Term Debt:
  Mortgages Payable ..........................      7,814      8,642      6,965       5,954       6,359
  Other ......................................        582        641        734         678         672
                                                 --------   --------   --------    --------    --------
    Total ....................................      8,396      9,283      7,699       6,632       7,031
--------------------------------------------------------------------------------------------------------
Shareholders' Equity .........................     30,059     28,030     27,141      27,293      27,637
--------------------------------------------------------------------------------------------------------
Income (Loss) Per Common Share:
  Income (Loss) Before Cumulative Effect of
   Changes in Accounting Principles ..........        .86        .38       (.07)       (.18)       (.02)
    Accounting for Certain Investments in Debt
     and Equity Securities ...................       --         --         --           .01        --
    Accounting for Income Taxes ..............       --         --         --          --          (.13)
                                                 --------   --------   --------    --------    --------
    Net Income (Loss) Per Common Share .......   $    .86   $    .38   $   (.07)   $   (.17)   $   (.15)
--------------------------------------------------------------------------------------------------------
Cash Dividends Declared Per Share ............       --         --         --          --          --
--------------------------------------------------------------------------------------------------------
</TABLE>

Average common shares outstanding for 1998, 2,135,780; 1997, 2,136,175; 1996,
2,136,397; 1995, 2,136,397; and 1994, 2,137,440.

THE COMPANY
--------------------------------------------------------------------------------

     J.W. Mays, Inc. was founded in 1924 and incorporated under the laws of the
State of New York on July 6, 1927.

     The Company operates a number of commercial real estate properties located
in Brooklyn and Jamaica in New York City, in Levittown, Long Island, New York,
in Fishkill, Dutchess County, New York and in Circleville, Ohio. The major
portion of these properties is owned and the balance is leased. A substantial
percentage of these properties is leased to tenants while the remainder is
available for lease.

     More comprehensive information concerning the Company appears in its Annual
Report on Form 10-K for the fiscal year ended July 31, 1998.


2
<PAGE>


J.W. MAYS, INC.

TO OUR SHAREHOLDERS:
--------------------------------------------------------------------------------
     I am pleased to report that the current fiscal year has shown an
improvement over the 1997 fiscal year's results. Revenues for the current fiscal
year increased to $11,881,859 from $10,080,382 in the 1997 fiscal year.

     In fiscal 1998, our Company's net income amounted to $1,837,733, or $.86
per share, compared to net income of $810,925, or $.38 per share, in the
comparable 1997 fiscal year. 

     The  current  year's net  income is after a pre-tax  bad debt  recovery  of
$52,749, compared to $418,789 in the 1997 year, from tenants which had filed for
bankruptcy  protection under Chapter 11 prior to fiscal 1997. The 1998 year also
includes a pre-tax recovery of prior years' real estate taxes of $1,218,600, net
of legal  expense and credits to tenants in  accordance  with the terms of their
leases, from the City of New York and the Town of Fishkill, New York.

     Max L. Shulman, a director and former Chairman of the Board, advised that,
after more than 50 years of service to the Company, regretfully, he will not
stand for re-election to the Board. This annual report would not be complete
without acknowledging his contributions and dedicated service to our Company. He
leaves the Company with our deep respect and gratitude.

     The Company appreciates your support and our gratitude extends, as well, to
our employees and directors for their dedication and hard work.

     I look forward to reporting on our continued improvement through fiscal
1999 and beyond.

Sincerely,


/s/ LLOYD J. SHULMAN
-------------------------------
Lloyd J. Shulman
Chairman/President

October 7, 1998


                                                                              3
<PAGE>


J.W. MAYS, INC.

CONSOLIDATED BALANCE SHEETS

July 31, 1998 and 1997

ASSETS
<TABLE>
<CAPTION>
                                                         1998               1997
====================================================================================
<S>                                                   <C>               <C>  
Property and Equipment--at cost (Notes 1 and 3):   
  Buildings and improvements .......................  $35,622,806       $34,944,039
  Improvements to leased property ..................    9,143,369         9,143,369
  Fixtures and equipment ...........................      539,422           510,108
  Land .............................................    4,008,835         4,008,835
  Other ............................................      209,293           180,382
  Construction in progress .........................      345,796               --
                                                    ------------       ------------
                                                       49,869,521        48,786,733
  Less accumulated depreciation and amortization ...   21,628,465        20,660,899
                                                     ------------      ------------
      Property and equipment--net ..................   28,241,056        28,125,834
                                                     ------------      ------------
Current Assets:
  Cash and cash equivalents (Notes 10 and 11) .......   1,047,979           234,288
  Marketable securities (Notes 1, 2 and 11) .........     137,721            28,288
  Receivables (Note 7) ..............................     461,770           563,410
  Deferred income taxes (Notes 1 and 5) .............     100,000            67,000
  Security deposits .................................       8,540                --
  Prepaid expenses ..................................     953,728         1,150,916
                                                      -----------       -----------
      Total current assets ..........................   2,709,738         2,043,902
                                                      -----------      -----------
Other Assets:
  Deferred charges (Note 1) ..........................  2,793,022         2,745,524
  Less accumulated amortization ......................  1,186,957         1,030,351
                                                      -----------       -----------
      Net ............................................  1,606,065         1,715,173
  Security deposits (Note 11) ........................    615,107           589,492
  Unbilled receivables (Notes 1 and 7) ...............  4,017,915         3,651,795
  Unbilled receivable--affiliated company (Note 7) ...    727,750           909,688
  Receivables ........................................    180,311           384,088
  Receivable--affiliated company (Note 7) ............     87,943           194,453
  Marketable securities (Notes 1, 2 and 11) ..........  3,189,039         2,791,555
                                                      -----------       -----------
      Total other assets ............................. 10,424,130        10,236,244
                                                      -----------       -----------
      TOTAL ASSETS                                    $41,374,924       $40,405,980
                                                      ===========       ===========

</TABLE>

See Notes to Consolidated Financial Statements.


4
<PAGE>

<TABLE>
<CAPTION>

LIABILITIES AND SHAREHOLDERS' EQUITY
                                                                             1998            1997
=====================================================================================================
<S>                                                                       <C>           <C>
Long-Term Debt:
  Mortgages payable (Notes 3 and 11) ..................................   $ 7,814,161   $ 8,641,833
  Other (Note 4) ......................................................       581,673       640,868
                                                                          -----------   -----------
      Total long-term debt ............................................     8,395,834     9,282,701
                                                                          -----------   -----------
Deferred Income Taxes (Notes 1 and 5) .................................     1,293,000       326,000
                                                                          -----------   -----------

Current Liabilities:
  Payable to securities broker ........................................          --       1,270,053
  Accounts payable ....................................................        42,782        46,256
  Payroll and other accrued liabilities (Note 8) ......................       559,344       553,215
  Income taxes payable (Notes 1 and 5) ................................        82,348        11,436
  Other taxes payable .................................................         1,907         1,918
  Current portion of long-term debt--other (Note 4) ...................       112,540       104,000
  Current portion of long-term debt--mortgages payable (Notes 3 and 11)       827,672       780,365
                                                                          -----------   -----------
      Total current liabilities .......................................     1,626,593     2,767,243
                                                                          -----------   -----------
      Total liabilities ...............................................    11,315,427    12,375,944
                                                                          -----------   -----------
Shareholders' Equity:
  Common stock, par value $1 each share (shares--5,000,000
   authorized; 2,178,297 issued) ......................................     2,178,297     2,178,297
  Additional paid in capital ..........................................     3,346,245     3,346,245
  Unrealized gain on available for sale securities (Notes 1 and 2) ....       292,879       101,151
  Retained earnings ...................................................    24,532,178    22,694,445
                                                                          -----------   -----------
                                                                           30,349,599    28,320,138
  Less common stock held in treasury, at cost--
   42,517 shares at 1998 and 1997 .....................................       290,102       290,102
                                                                          -----------   -----------
      Total shareholders' equity ......................................    30,059,497    28,030,036
                                                                          -----------   -----------
Commitments (Notes 6 and 7) and Contingencies (Note 12)

      TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ......................   $41,374,924   $40,405,980
                                                                          ===========   ===========


                                                                                                  5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

J.W. MAYS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
                                                                    Years Ended July 31,
                                                          ------------------------------------------
                                                             1998          1997           1996
====================================================================================================
<S>                                                       <C>            <C>            <C>
Revenues
 Rental income (Notes 1 and 7) ........................   $10,249,650    $ 9,666,773    $ 8,855,159
 Rental income--affiliated company ....................       413,609        413,609        413,609
 Recovery of real estate taxes ........................     1,218,600           --             --
                                                          -----------    -----------    -----------
       Total revenues .................................    11,881,859     10,080,382      9,268,768
                                                          -----------    -----------    -----------
Expenses
 Real estate operating expenses (Note 6) ..............     5,416,292      5,873,719      5,678,653
 Administrative and general expenses ..................     2,076,614      1,939,303      2,007,987
 Bad debts (recovery) (Note 12) .......................       (52,749)      (418,789)       424,011
 Depreciation and amortization ........................     1,011,318        966,628        888,932
                                                          -----------    -----------    -----------
       Total expenses .................................     8,451,475      8,360,861      8,999,583
                                                          -----------    -----------    -----------
Income (loss) from operations before investment income,
 interest expense and income taxes ....................     3,430,384      1,719,521        269,185
                                                          -----------    -----------    -----------
Investment income and interest expense
 Investment income (Notes 1 and 2) ....................       269,646        267,876        249,479
 Interest expense (Notes 3 and 10) ....................       812,297        696,472        681,950
                                                          -----------    -----------    -----------
                                                            (542,651)      (428,596)      (432,471)
                                                          -----------    -----------    -----------
Income (loss) before income taxes .....................     2,887,733      1,290,925       (163,286)
Income taxes provided (benefit) (Notes 1 and 5) .......     1,050,000        480,000        (22,000)
                                                          -----------    -----------    -----------
Net income (loss) .....................................     1,837,733        810,925       (141,286)
Retained earnings, beginning of year ..................    22,694,445     21,883,520     22,024,806
                                                          -----------    -----------    -----------
Retained earnings, end of year ........................   $24,532,178    $22,694,445    $21,883,520
                                                          ===========    ===========    ===========
Income (loss) per common share (Note 1) ...............   $       .86    $       .38    $      (.07)
                                                          ===========    ===========    ===========
 Dividends per share ..................................          --             --             --
Average common shares outstanding .....................     2,135,780      2,136,175      2,136,397
                                                          ===========    ===========    ===========
</TABLE>

See Notes to Consolidated Financial Statements.

6
<PAGE>
<TABLE>
<CAPTION>

J.W. MAYS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                       Years Ended July 31,
                                                              -----------------------------------------
                                                                   1998          1997          1996
========================================================================================================
<S>                                                           <C>            <C>            <C>
Cash Flows From Operating Activities
 Net income (loss) ........................................   $ 1,837,733    $   810,925    $  (141,286)
 Adjustments to reconcile net income (loss) to net cash
  provided (used) by operating activities:
  Deferred income taxes ...................................       854,000        359,000       (124,000)
  Amortization of premium on marketable debt
   securities .............................................          (661)          (417)           723
  Realized loss on marketable securities ..................        14,997          2,618          6,642
  Depreciation and amortization ...........................     1,011,318        966,628        888,932
  Amortization of deferred expenses .......................       248,601        229,344        238,134
  Other assets--deferred expenses .........................      (139,493)      (413,552)      (353,270)
                  --security deposits .....................       (34,155)       297,629       (428,480)
                  --unbilled receivables ..................      (366,120)      (479,875)      (144,829)
                  --unbilled receivable--affiliated company       181,938         44,828         44,828
                  --receivables ...........................       203,777       (384,088)          --
                  --receivable--affiliated company ........       106,510           --          (84,766)
 Changes in:
  Receivables .............................................       101,640       (248,231)       (70,187)
  Prepaid expenses ........................................       197,188         20,980        (50,202)
  Real estate taxes refundable ............................          --           13,409        (13,409)
  Income taxes refundable .................................          --            4,496         (4,496)
  Accounts payable ........................................        (3,474)        13,796        (32,284)
  Payroll and other accrued liabilities ...................         6,129          6,845         58,414
  Income taxes payable ....................................        70,912         11,436        (18,588)
  Other taxes payable .....................................           (11)        (3,276)         1,113
                                                              -----------    -----------    -----------
     Net cash provided (used) by operating activities .....     4,290,829      1,252,495       (227,011)
                                                              -----------    -----------    -----------
Cash Flows From Investing Activities
 Acquisition of property and equipment ....................    (1,126,540)    (3,011,956)    (1,683,503)
 Marketable securities:
  Receipts from sales or maturities .......................       486,524        246,994        476,497
  Payments for purchases ..................................      (736,049)       (51,292)      (427,692)
                                                              -----------    -----------    -----------
      Net cash (used) by investing activities .............    (1,376,065)    (2,816,254)    (1,634,698)
                                                              -----------    -----------    -----------
Cash Flows From Financing Activities
 Borrowings--securities broker ............................     1,708,595        655,020      1,348,262
 Payments--securities broker ..............................    (2,978,648)      (882,287)    (1,076,042)
 Borrowings--mortgages and other notes payable ............          --        2,500,000      1,500,000
 Increase--other debt .....................................        54,513        340,248        445,041
 Payments--mortgage and other debt ........................      (885,533)    (1,221,725)      (433,214)
 Purchase of treasury stock ...............................          --           (5,862)          --
                                                              -----------    -----------    -----------
     Net cash provided (used) by financing activities .....    (2,101,073)     1,385,394      1,784,047
                                                              -----------    -----------    -----------
 Net increases (decrease) in cash and cash equivalents ....       813,691       (178,365)       (77,662)
 Cash and cash equivalents at beginning of year ...........       234,288        412,653        490,315
                                                              -----------    -----------    -----------
 Cash and cash equivalents at end of year .................   $ 1,047,979    $   234,288    $   412,653
                                                              ===========    ===========    ===========

See Notes to Consolidated Financial Statements.
                                                                                                      7

</TABLE>
<PAGE>

J.W. MAYS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


================================================================================
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

     CONSOLIDATION: The consolidated financial statements include the accounts
of the Company, a New York corporation, and its subsidiaries, which are
wholly-owned. Material intercompany items have been eliminated in consolidation.

     ACCOUNTING RECORDS AND USE OF ESTIMATES: The accounting records are
maintained in accordance with generally accepted accounting principles (GAAP).
The preparation of the Company's financial statements in conformity with GAAP
requires management to make estimates that affect the reported consolidated
statements of operations and the consolidated balance sheets and related
disclosures. Actual results could differ from those estimates.

     RENTAL INCOME: All of the real estate owned by the Company is held for
leasing to tenants except for a small portion used for Company offices. Rent is
recognized from tenants under executed leases no later than on an established
date or on an earlier date if the tenant should commence conducting business.
Unbilled receivables represent the excess of scheduled rental income recognized
on a straight-line basis over rental income as it becomes receivable according
to the provisions of the lease.

     MARKETABLE SECURITIES: The Company categorizes marketable securities as
either trading, available for sale or held to maturity. Trading securities are
carried at fair value with unrealized gains and losses included in income.
Available for sale securities are carried at fair value with unrealized gains
and losses recorded as a separate component of shareholders' equity. Held to
maturity securities are carried at amortized cost. Dividends and interest income
are accrued as earned.

     PROPERTY AND EQUIPMENT: Property and equipment are stated at cost.
Depreciation is calculated using the straight-line method and the declining
balance method. Amortization of improvements to leased property is calculated
over the shorter of the life of the lease or the estimated useful life of the
improvements. Lives used to determine depreciation and amortization are
generally as follows:

      Building and improvements ........................   18-40 years
      Improvements to leased property ..................    3-40 years
      Fixtures and equipment ...........................    7-12 years
      Other ............................................    3-5  years 

Maintenance, repairs, renewals and improvements of a non-permanent nature are
charged to expense when incurred. Expenditures for additions and major renewals
or improvements are capitalized. The cost of assets sold or retired and the
accumulated depreciation or amortization thereon are eliminated from the
respective accounts in the year of disposal, and the resulting gain or loss is
credited or charged to income. Interest is capitalized in connection with the
construction/renovations of real property. The capitalized interest is recorded
as part of the asset to which it relates and will be amortized over the asset's
estimated useful life.

     LONG-LIVED ASSETS: The Financial Accounting Standards Board issued
Statement of Financial Standards No. 121 ("SFAS 121"), "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of",
effective for fiscal years beginning after December 15, 1995. SFAS 121 requires
the recognition of an impairment loss related to long-lived assets and certain
identifiable intangibles whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. The adoption of the
new accounting standard has not had an effect on the consolidated financial
statements.

         RECENT ACCOUNTING PRONOUNCEMENTS: In June 1997, SFAS No. 130,
"Reporting Comprehensive Income", ("SFAS 130") was issued. SFAS 130 establishes
standards for the reporting of comprehensive income and its components. It
requires all items that are required to be recognized as components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other income statement information. SFAS 130 is effective
for financial statements for periods beginning after December 15, 1997.
Reclassification of financial statements for earlier periods presented for
comparative purposes is required upon adoption.

     In June 1997, SFAS No. 131, "Disclosures About Segments of an Enterprise
and Related Information", ("SFAS 131") was issued. SFAS 131 establishes
standards for the way that public business enterprises report information about
operating segments in annual financial statements and requires that those
enterprises report selected information about operating segments in annual
financial statements and in interim financial reports issued to shareholders.
SFAS 131 is effective for financial statements for periods beginning after
December 15, 1997.

     In February 1998, the Financial Accounting Standards Board issued Statement
of Financial Standards No. 132 "Employers' Disclosure about Pensions and Other
Post-Retirement Benefits", ("SFAS 132"), effective for fiscal years beginning
after December 15, 1997. The Company's Retirement Plan is 100% funded, with
Company contributions made quarterly, and there will be no additional liability
recognized by the Company.


8
<PAGE>


================================================================================

     The Company anticipates that the adoption of SFAS 130, SFAS 131 and SFAS
132 will not have an effect on its 1998 financial statements.

     DEFERRED CHARGES: Deferred charges consist principally of costs incurred in
connection with the leasing of property to tenants. Such costs are amortized
over the related lease periods using the straight-line method.

     INCOME TAXES: Deferred income taxes are provided for the temporary
differences between the financial reporting basis and the tax basis of the
Company's assets and liabilities. Deferred tax assets result principally from
the recording of certain accruals and reserves which currently are not
deductible for tax purposes. Deferred tax liabilities result principally from
temporary differences in the recognition of gains and losses from certain
investments and from the use, for tax purposes, of accelerated depreciation.

     INCOME (LOSS) PER SHARE OF COMMON STOCK: Income (loss) per share has been
computed by dividing net income or loss for the year by the weighted average
number of shares of common stock outstanding during the year, adjusted for the
purchase of treasury stock. Shares used in computing income or (loss) per share
were 2,135,780 in fiscal 1998, 2,136,175 in fiscal 1997 and 2,136,397 in fiscal
1996. The Company's adoption of FASB 128 "Earnings per Share" has had no effect
on the computation of previously reported earnings per share.

     RECLASSIFICATIONS: Certain accounts for the years ended July 31, 1997 and
1996 have been reclassified to reflect comparability with account
classifications adopted for the year ended July 31, 1998 with no effect on
previously reported net income.

2. MARKETABLE SECURITIES:

     As of July 31, 1998 and 1997, the Company's marketable securities were
classified as follows:
<TABLE>
<CAPTION>
                                                     1998                                        1997
                                --------------------------------------------  ------------------------------------------------
                                               GROSS      GROSS                               Gross      Gross
                                            UNREALIZED UNREALIZED     FAIR                 Unrealized Unrealized     Fair
                                   COST        GAINS     LOSSES       VALUE       Cost        Gains     Losses       Value
                                --------------------------------------------  ------------------------------------------------
<S>                            <C>           <C>         <C>        <C>         <C>           <C>         <C>      <C>
Current:                                                                                                          
 Certificate of deposit .....  $   38,344    $    --     $--        $   38,344  $   28,288    $    --     $ --     $   28,288
 Held to maturity:                                                                                                
  Corporate debt securities                                                                                       
   due within one year ......      99,377       1,840     --           101,217         --          --       --            --
                               ----------    --------    ---        ----------  ----------    --------    ----     ----------
    Total current ...........  $  137,721    $  1,840    $--        $  139,561  $   28,288    $    --     $ --     $   28,288
                               ==========    ========    ===        ==========  ==========    ========    ====     ==========
Non-current:                                                                                                      
 Available for sale:                                                                                              
   Equity securities ........  $2,765,160    $423,879    $--        $3,189,039  $2,540,688    $152,151    $ --     $2,692,839
Held to maturity:                                                                                                 
 Corporate debt securities ..         --          --      --               --       98,716       3,971      --        102,687
                               ----------    --------    ---        ----------  ----------    --------    ----     ----------
    Total non-current .......  $2,765,160    $423,879    $--        $3,189,039  $2,639,404    $156,122    $ --     $2,795,526
                               ==========    ========    ===        ==========  ==========    ========    ====     ==========
</TABLE> 

Investment income consists of the following:

                                             1998          1997           1996
                                             ----          ----           ----
 Interest income .......................  $ 81,746       $ 48,642      $ 43,294
 Dividend income .......................   202,897        221,852       212,827
 (Loss) on sale of securities ..........   (14,997)        (2,618)       (6,642)
                                          --------       --------      --------
   Total ...............................  $269,646       $267,876      $249,479
                                          ========       ========      ========

                                                                               9
<PAGE>
<TABLE>
<CAPTION>

================================================================================================================
3.   LONG-TERM DEBT:
                                                                       JULY 31, 1998           July 31, 1997
                                                                    --------------------    ---------------------
                                             Current
                                              Annual      Final        DUE          DUE        Due         Due
                                             Interest    Payment     WITHIN        AFTER     Within       After
                                              Rate        Date      ONE YEAR     ONE YEAR   One Year    One Year
                                             --------    -------    --------     --------   --------    --------
<S>                                <C>        <C>        <C>        <C>        <C>          <C>        <C>
Mortgages:
 Jamaica, New York Property ....   (a)        8 1/2%     4/01/07    $266,666   $3,400,000   $266,667   $3,666,666
 Jowein Building, Brooklyn, N.Y    (b)        9    %     3/31/00      83,545      675,050     76,431      758,595
 Fishkill, New York Property ...   (c)        9    %     11/01/99    129,992    2,312,592    118,844    2,442,584
 Circleville, Ohio Property ....   (d)        7    %      9/30/02    338,555    1,242,159    310,233    1,580,714
 Other .........................              8 1/2%      5/01/01      8,914      184,360      8,190      193,274
                                                                    --------   ----------   --------   ----------
    Total ......................                                    $827,672   $7,814,161   $780,365   $8,641,833
                                                                    ========   ==========   ========   ==========
</TABLE>

     (a) The Company, on September 11, 1996, closed a loan with a bank in the
amount of $4,000,000. The loan is secured by a first mortgage lien covering the
entire leasehold interest of the Company, as tenant, in a certain ground lease
and building in the Jamaica property. The loan proceeds were utilized by the
Company toward (i) payment in full of the outstanding term loan by the Company
in favor of the same bank in the amount of $1,500,000 plus interest and (ii) its
costs for the renovations to the portions of the premises in connection with the
Company's sublease of a significant portion of the building. Although the loan
was closed on September 11, 1996 the entire $4,000,000 was not drawn down until
March 31, 1997. The interest rate on the loan is 81 @2% for a period of five (5)
years and six (6) months, with such rate to change on the first day of the
sixty-seventh (67th) month of the term to a rate equal to the then prime rate
plus 1 @4%, fixed for the balance of the term. The loan is to become due and
payable on the first day of the month following the expiration of ten (10) years
and six (6) months from the closing date. During the first six (6) months of the
term, the Company had the option to secure advances against the loan amount with
the loan to convert to a ten (10) year term at the expiration of the initial six
(6) month period thereof.

     (b) Mortgage is held by an affiliated corporation owned by members,
including certain directors of the Company, of the family of the late Joe
Weinstein, former Chairman of the Board of Directors. Interest and amortization
of principal are paid quarterly. Effective April 1, 1997, the maturity date of
the mortgage which was scheduled to be on March 31, 1998, was extended to March
31, 2000. The interest rate was increased from 73 @8% to 9% commencing April 1,
1997. During the extended period there will be no change in the constant
quarterly payments of interest and principal in the amount of $37,263.

     (c) The mortgage loan matures November 1, 1999. The annual interest rate is
9% and the principal and interest payments are to be made in constant monthly
amounts based upon a fifteen (15) year payout period.

     (d) The mortgage loan, which is self-amortizing, matures September 30,
2002. The loan is payable at an annual interest rate of 7%. Under the terms of
the loan, constant monthly payments, including interest and principal, commenced
April 1, 1994 in the amount of $33,767, until October 1, 1997, at which time the
monthly payments of interest and principal was increased to $36,540.

     Maturities of long-term debt--mortgages payable, outstanding at July 31,
1998, are as follows: Years ending July 31, 1999 (included in current
liabilities), $827,672; 2000, $3,627,040; 2001, $830,597; 2002, $684,080; 2003,
$339,112, and thereafter, $2,333,332. 

4. LONG-TERM DEBT--OTHER:

     Long-Term debt--Other (net of current portion):

                                             1998                1997
                                             ----                ----
     Deferred compensation .............   $251,333*           $355,333*
     Lease security deposits ...........    330,340**           285,535**
                                           --------            --------
         Total .........................   $581,673            $640,868
                                           ========            ========

     Maturities of long-term debt--other, outstanding at July 31, 1998, are as
follows: Years ending July 31, 1999 (included in current liabilities), $112,540;
2000, $210,339; 2001, $181,121; 2002, $43,333; 2003, $912, and thereafter,
$145,968.

-------------------

 *   The Company entered into a deferred compensation agreement with Max L.
     Shulman, its then Chairman of the Board. This agreement, as amended,
     provides for $520,000 to be paid in monthly installments of $8,666.67 for a
     period of 60 months, payable upon the expiration of his employment,
     retirement or permanent disability as defined in the agreement, or death.
     Mr. Shulman retired December 31, 1996 and the monthly payments commenced
     January, 1997.

**   Does not include three irrevocable letters of credit totaling $275,000 at
     July 31, 1998, and at July 31, 1997, provided by three tenants.


10
<PAGE>


================================================================================

5. INCOME TAXES:

     Significant components of the Company's deferred tax assets and liabilities
as of July 31, 1998 and 1997, are a result of temporary differences related to
the items described as follows:

<TABLE>
<CAPTION>
                                                                      1998                               1997
                                                            ------------------------------     -----------------------------
                                                             DEFERRED         DEFERRED          Deferred        Deferred
                                                            TAX ASSETS     TAX LIABILITIES     Tax Assets    Tax Liabilities
                                                            ----------     ---------------     ----------    ---------------
<S>                                                         <C>               <C>              <C>              <C>
Net operating loss carryforward ..........................  $1,056,762        $      --        $1,915,163       $       --
Alternative minimum tax credit carryforward ..............     305,814               --           252,633               --
Investment tax credit carryforward .......................      24,991               --            26,952               --
Deferred compensation not currently deductible ...........     120,813               --           156,173               --
Rental income received in advance ........................      31,248               --             7,713               --
Unbilled receivables .....................................         --          1,613,526              --          1,550,904
Property and equipment ...................................         --            981,750              --          1,010,288
Unrealized gain on available for sale securities .........         --            144,119              --             51,731
Other                                                           31,758               --            22,241               --
                                                            ----------        ----------       ----------        ----------
                                                             1,571,386         2,739,395        2,380,875         2,612,923
Valuation allowance ......................................      24,991               --            26,952               --
                                                            ----------        ----------       ----------        ----------
                                                            $1,546,395        $2,739,395       $2,353,923        $2,612,923
                                                            ==========        ==========       ==========        ==========
</TABLE>

     The Company has determined, based on its history of operating earnings and
expectations for the future, that it is more likely than not that future taxable
income will be sufficient to fully utilize the deferred tax assets at July 31,
1998, except for investment tax credit carryforwards, for which a 100% valuation
allowance has been provided. The valuation allowance was reduced by $1,961 in
1998 and $14,645 in 1997, due to the expiration of investment tax credit
carryforwards.

     Income taxes provided (benefit) in fiscal 1998, 1997 and 1996 consisted of:

                                     1998              1997               1996
                                     ----              ----               ----
Current:
 Federal .......................  $   54,000          $  6,000        $  (7,000)
 State and City ................     142,000           115,000          109,000
Deferred taxes .................     854,000           359,000         (124,000)
                                  ----------          --------        ---------
   Total provision (benefit) ...  $1,050,000          $480,000        $ (22,000)
                                  ==========          ========        ==========

     Components of the deferred tax provision (benefit) for the years ended July
31, 1998, 1997 and 1996 are as follows:

<TABLE>
<CAPTION>
                                                                  1998              1997               1996
                                                                  ----              ----               ----
<S>                                                             <C>               <C>              <C>
Excess of book depreciation over tax depreciation ..........    $ (29,000)        $ (58,000)       $ (25,000)
Reduction (increase) of rental income received in
 advance ...................................................      (24,000)            9,000            2,000
Increase in unbilled receivables ...........................       63,000           148,000           34,000
Deferred compensation ......................................       35,000            21,000              --
Net operating loss carryforwards ...........................      869,000           193,000         (114,000)
Bad debts ..................................................          --             44,000              --
Alternative minimum tax ....................................      (53,000)           (6,000)             --
Other ......................................................       (7,000)            8,000          (21,000)
                                                                ---------         ---------        ---------
                                                                $ 854,000         $ 359,000        $(124,000)
                                                                =========         =========        =========
</TABLE>

                                                                              11
<PAGE>


================================================================================

     Taxes provided (benefit) for the years ended July 31, 1998, 1997 and 1996
differ from amounts which would result from applying the federal statutory tax
rate to pre-tax income (loss), as follows:

<TABLE>
<CAPTION>
                                                                  1998              1997               1996
                                                                  ----              ----               ----
<S>                                                            <C>               <C>               <C> 
Income (loss) before income taxes ..........................   $2,887,733        $1,290,925        $(163,286)
Dividends received deduction ...............................      (98,530)         (117,959)        (110,259)
Other-net ..................................................       22,663            13,777           (1,600)
                                                               ----------        ----------        ---------
Adjusted pre-tax income (loss) .............................    2,811,866         1,186,743         (275,145)
Statutory rate .............................................           34%               34%              34%
Income tax provision (benefit) at statutory rate ...........      956,300           403,500          (93,500)
State and City income taxes, net of federal
 income tax benefit ........................................       93,700            76,500           71,500
                                                               ----------        ----------        ---------
Income taxes provided (benefit) ............................   $1,050,000        $  480,000        $ (22,000)
                                                               ==========        ==========        ==========
</TABLE>

     The Company's 1998 and 1997 federal income tax liability of $54,000 and
$6,000, respectively, were determined using the Alternative Minimum Tax ("AMT"),
a separate parallel tax system. The excess of the AMT over the regular tax is a
credit which can be carried forward indefinitely to reduce future regular tax
liabilities. The Company has additional AMT credits from prior years totaling
$250,000 resulting in total AMT credits of $304,000 at July 31, 1998.

     At July 31, 1998, the Company had net operating tax loss carryforwards of
$2,992,000 available to offset future regular taxable income. Of this amount
$58,000 is available until the year 2005, $1,028,000 until 2006, $175,000 until
2009, $1,395,000 until 2010, and $336,000 until 2011.

     Although the Tax Reform Act of 1986 eliminated investment tax credits for
non-transitional property placed in service after December 31, 1985, the Company
has investment tax credit carryforwards of $25,000 that expire as follows:
$16,000 in 1999 and $9,000 in 2000.

6. LEASES:

     The Company's real estate operations encompass both owned and leased
properties. The current leases on leased property, most of which have options to
extend the term, range from 2 years to 29 years. Certain of the leases provide
for additional rentals under certain circumstances and obligate the Company for
payments of real estate taxes and other expenses.

     Rental expense for leased real property for each of the three fiscal years
ended July 31, 1998 was exceeded by sublease rental income, as follows:

<TABLE>
<CAPTION>

                                                 1998             1997            1996
                                                 ----             ----            ----
<S>                                            <C>             <C>             <C>  
Minimum rental expense ......................  $1,156,168      $1,155,644      $1,155,120
Contingent rental expense ...................   1,051,884       1,266,880       1,252,684
                                               ----------      ----------      --------
                                                2,208,052       2,422,524       2,407,804
Sublease rental income ......................   5,399,129       4,798,895       4,108,307
                                               ----------      ----------      ----------
     Excess of rental income over expense ...  $3,191,077      $2,376,371      $1,700,503
                                               ==========      ==========      ==========
</TABLE>

     Rent expense paid to an affiliated company totaled $160,800 for each of the
fiscal years.

     Future minimum non-cancellable rental commitments for operating leases with
initial or remaining terms of one year or more are payable as follows:

           Fiscal                                         OPERATING
            Year                                           LEASES
           ------                                          -------
            1999 ....................................    $ 1,143,340
            2000 ....................................      1,143,340
            2001 ....................................      1,087,174
            2002 ....................................      1,031,007
            2003 ....................................      1,031,007
            After 2003 ..............................      7,899,159
                                                         -----------
                Total required*                          $13,335,027
                                                         ===========

*    Minimum payments have not been reduced by minimum sublease rentals of
     $36,427,875 under operating leases due in the future under non-cancellable
     leases.


12
<PAGE>


================================================================================

7. RENTAL INCOME:

     Rental income from an affiliated company totaled $413,609 for each of the
fiscal years.

     Amounts due from the affiliated company are as follows:

                                                  July 31,
                                  --------------------------------------------
                                    1998               1997             1996
                                    ----               ----             ----
Unbilled receivables ............ $727,750         $  909,688       $  954,516
Receivables-noncurrent ..........   87,943            194,453          194,453
                                  --------         ----------       ----------
    Total ....................... $815,693         $1,104,141       $1,148,969
                                  ========         ==========       ==========

     Rental income for each of the fiscal years 1998, 1997 and 1996 is as
follows:


                                                  July 31,
                                 -----------------------------------------------
                                    1998               1997             1996
                                    ----               ----             ----
Minimum rentals
  Company owned property ......  $ 4,800,127        $ 4,713,783       $4,584,959
  Operating leases ............    4,686,130          4,036,156        3,443,822
                                 -----------        -----------       ----------
                                   9,486,257          8,749,939        8,028,781
                                 -----------        -----------       ----------
Contingent rentals
  Company owned property .......     464,003            567,704          575,502
  Operating leases .............     712,999            762,739          664,485
                                 -----------        -----------       ----------
                                   1,177,002          1,330,443        1,239,987
                                 -----------        -----------       ----------
    Total ...................... $10,663,259        $10,080,382       $9,268,768
                                 ===========        ===========       ==========

     Future minimum non-cancellable rental income for leases with initial or
remaining terms of one year or more is as follows:

Fiscal                                            COMPANY          OPERATING
 Year                     OWNED PROPERTY           LEASES            TOTAL
 ------                   --------------           ------         -----------
 1999 ...................  $ 4,780,254          $ 4,724,765      $ 9,505,019
 2000 ...................    4,418,032            4,331,870        8,749,902
 2001 ...................    3,876,546            3,874,334        7,750,880
 2002 ...................    3,722,991            3,696,125        7,419,116
 2003 ...................    2,926,880            3,672,267        6,599,147
 After 2003 .............   18,871,436           16,128,514       34,999,950
                           -----------          -----------      -----------
     Total ..............  $38,596,139          $36,427,875      $75,024,014
                           ===========          ===========      ===========
                   
8. PAYROLL AND OTHER ACCRUED LIABILITIES:

     Payroll and other accrued liabilities consist of the following:

                                              1998             1997
                                             --------         --------
           Payroll ........................  $ 89,428         $ 83,891
           Interest .......................    61,068           69,348
           Professional fees ..............    50,659           58,525
           Rents received in advance ......    91,907           22,685
           Utilities ......................    67,907           45,378
           Construction costs .............       --            21,000
           Brokers commissions ............   145,997          208,571
           Other ..........................    52,378           43,817
                                             --------         --------
                Total .....................  $559,344         $553,215
                                             ========         ========


                                                                             13
<PAGE>


================================================================================

9. EMPLOYEES' RETIREMENT PLAN:

     The Company sponsors a noncontributory Money Purchase Plan covering
substantially all of its employees. Operations were charged $202,432, $132,273
and $132,234 as contributions to the Plan for fiscal years 1998, 1997 and 1996,
respectively.

10. CASH FLOW INFORMATION:

     For purpose of reporting cash flows, the Company considers cash equivalents
to consist of short-term highly liquid investments with maturities of three
months or less, which are readily convertible into cash.

     Supplemental disclosure:
<TABLE>
<CAPTION>
                                                                      Years Ended July 31,
                                                              ---------------------------------------
                                                               1998               1997          1996
                                                              -------             ----        -------
 <S>                                                          <C>              <C>            <C> 
 Interest paid, net of capitalized interest
  of $45,845 in fiscal 1997 .............................     $820,577         $720,461       $686,644
 Income taxes paid ......................................     $125,088         $105,068       $125,084

</TABLE>

11. FINANCIAL INSTRUMENTS AND CREDIT RISK CONCENTRATIONS:

     The following disclosure of estimated fair value was determined by the
Company, using available market information and appropriate valuation methods.
Considerable judgment is necessary to develop estimates of fair value. The
estimates presented herein are not necessarily indicative of the amounts that
could be realized upon disposition of the financial instruments.

     The Company estimates the fair value of its financial instruments using the
following methods and assumptions: (i) quoted market prices, when available, are
used to estimate the fair value of investments in marketable debt and equity
securities; (ii) discounted cash flow analyses are used to estimate the fair
value of long-term debt, using the Company's estimate of current interest rates
for similar debt; and (iii) carrying amounts in the balance sheet approximate
fair value for cash and cash equivalents and tenant security deposits due to
their high liquidity.

                                                   JULY 31, 1998
                                             ---------------------------
                                              CARRYING            FAIR
                                                VALUE             VALUE
                                             ----------       ----------
Cash and cash equivalents ...............    $1,047,979       $1,047,979
Marketable securities ...................     3,326,760        3,328,600
Tenant security deposits ................       338,879          338,879
Long-term debt-mortgages payable ........    (8,641,833)      (9,270,709)

     Financial instruments that are potentially subject to concentrations of
credit risk consist principally of marketable securities, cash and cash
equivalents and receivables. Marketable securities and cash and cash equivalents
are placed with high credit quality financial institutions and instruments to
minimize risk.

     The Company derives rental income from thirty-six tenants, of which two
tenants each accounted for more than 10% of rental income during the year ended
July 31, 1998; one tenant accounted for 14.55% and the second tenant accounted
for 11.60%.

12. CONTINGENCIES:

     McCrory Stores Corporation ("McCrory"), which occupied space in the
Company's Jowein Building in the Fulton Mall in downtown Brooklyn, New York, and
whose lease, as amended, extended to April 29, 2010, filed for relief under
Chapter 11 of the Bankruptcy Code in February 1992. McCrory rejected its lease,
as amended, with the Company with the approval of the Bankruptcy Court,
effective January 31, 1994. The Company has filed an unsecured proof of claim
with the United States Bankruptcy Court, Southern District of New York for the
lease rejection damages in the amount of $7,753,732 ("Lease Rejection Claim"),
and an administrative claim in the amount of approximately $296,000, reduced by
agreement to $170,000 ("Administrative Claim") for damages resulting from
McCrory's failure to repair and maintain the premises as required by the lease.
McCrory objected to the Company's Lease Rejection Claim, but has acknowledged
the administrative claim in the amount of $170,000. The Company has not included
the Lease Rejection Claims against McCrory in its financial statements due to
(i) the fact that McCrory has disclosed that it has sold substantially all of
its assets and that the proceeds of sale are insufficient to make any
distributions to unsecured creditors, and (ii) the uncertainty of the amount
that may ultimately be allowed and collected. The Company has leased
approximately 69,000 square feet of the approximate 99,000 square feet of space
surrendered by McCrory. The remainder of the space of approximately 30,000
square feet is not leaseable due to the renovations required to accommodate six
tenants where formerly there was one. The rental income to be derived from the
six tenants over the terms of their leases will be approximately $5,040,000 less
than the total rental income that would have been due from McCrory for the
period February 1, 1994 through April 29, 2010, the termination date of the
McCrory lease.


14
<PAGE>


================================================================================

     Jamesway Corporation ("Jamesway"), which occupied retail space in the
Fishkill, New York property and whose lease extended to January 31, 2005, filed
for relief under Chapter 11 of the Bankruptcy Code on October 18, 1995. Jamesway
rejected its lease for the Fishkill location with the approval of the Bankruptcy
Court, effective February 29, 1996, but continued occupancy until March 22,
1996. The Company filed an amended unsecured claim in the amount of $883,635 for
damages resulting from the breach and rejection of the lease and an
administrative priority claim in the amount of approximately $189,000 for
certain amounts due under the lease after the filing of Jamesway's Chapter 11
petition and for the costs of repairs resulting from Jamesway's failure to
fulfill its repair and maintenance obligations under the lease. Pursuant to a
settlement that was approved by the Bankruptcy Court, the Company has an allowed
unsecured claim in the amount of $950,635 and an allowed administrative claim in
the amount of $54,887.

     The amount of $52,749 recorded in Bad Debt Recovery represents the amount
realized from Jamesway of $47,532 less legal expenses of $6,158 and from McCrory
of $19,304 less legal expenses of $7,929. The Company has made no provision in
its financial statements for the balance of its unsecured claims filed against
Jamesway and McCrory due to the uncertainty of the amounts that may ultimately
be collected. The Company has realized to date from Jamesway $465,811 or 49% on
account of its unsecured claim and 100% of its allowed administrative claim for
a total of $520,698. The Company has also realized to date from McCrory $19,304
or 11.36% on account of its Administrative Claim in the amount of $170,000.
McCrory has advised creditors that holders of allowed Administrative Claims may
receive an additional distribution of approximately 9% of the allowed amount of
one Administrative Claim.

     The Company reports scheduled rental income recognized on a straight-line
basis rather than rental income as it becomes a receivable according to the
provisions of the lease in compliance with the provisions of Statement of
Financial Accounting Standards No. 13, "Accounting for Leases." The excess of
the scheduled rental income of McCrory, recognized on a straight-line basis over
rental income receivable according to the lease through January 31, 1994, the
effective date of McCrory's rejection of its lease, amounts to $708,673 and such
amount was written off and classified as a bad debt during the twelve month
period ended July 31, 1994. The excess of the scheduled rental income of
Jamesway recognized on a straight-line basis over rental income receivable
according to the lease through January 31, 1996, amounted to $424,011 and such
amount was written off and classified as a bad debt during the twelve month
period ended July 31, 1996.

     There are various lawsuits and claims pending against the Company. It is
the opinion of management that the resolution of these matters will not have a
material adverse effect on the Company's consolidated Financial Statements.

================================================================================

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Shareholders
J.W. Mays, Inc. and Subsidiaries

     We have audited the accompanying consolidated balance sheets of J.W. Mays,
Inc. and subsidiaries as ofJuly 31, 1998 and 1997, and the related consolidated
statements of operations and retained earnings and cashflows for the three years
ended July 31, 1998. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

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

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of J.W. Mays,
Inc. and its subsidiaries as of July 31, 1998 and 1997, and the results of their
operations and their cash flows for the three years ended July 31, 1998 in
conformity with generally accepted accounting principles.

D'ARCANGELO & CO., LLP
Purchase, New York
October 7, 1998


                                                                              15
<PAGE>

<TABLE>
<CAPTION>

J.W. MAYS, INC.

FIVE YEAR SUMMARY OF CONSOLIDATED OPERATIONS
(dollars in thousands except per share data)

                                                                          Years Ended July 31,
                                                    ---------------------------------------------------------------------
                                                       1998          1997           1996            1995          1994
=========================================================================================================================
<S>                                                 <C>           <C>           <C>             <C>           <C>  
Revenues
 Rental income ..................................   $   10,249    $     9,666    $     8,855    $    7,944    $    9,075
 Rental income--affiliated company ..............          414            414            414           386           416
 Recovery of real estate taxes ..................        1,219           --             --            --              32
                                                    ----------    -----------    -----------    ----------    ----------
   Total revenues ...............................       11,882         10,080          9,269         8,330         9,523
                                                    ----------    -----------    -----------    ----------    ----------
Expenses
 Real estate operating expenses .................        5,416          5,874          5,679         5,580         5,612
 Administrative and general expenses ............        2,077          1,939          2,008         2,101         2,131
 Bad debts (recovery) ...........................          (53)          (419)           424            57           709
 Depreciation and amortization ..................        1,011            967            889           838           823
                                                    ----------    -----------    -----------    ----------    ----------
   Total expenses ...............................        8,451          8,361          9,000         8,576         9,275
                                                    ----------    -----------    -----------    ----------    ----------
Income (loss) from operations before
 investment income, interest expense and
 income taxes ...................................        3,431          1,719            269          (246)          248
                                                    ----------    -----------    -----------    ----------    ----------
Investment income and interest expense
 Investment income ..............................          269            268            250           367           385
 Interest expense ...............................          812            696            682           641           597
                                                    ----------    -----------    -----------    ----------    ----------
                                                          (543)          (428)          (432)         (274)         (212)
                                                    ----------    -----------    -----------    ----------    ----------
Income (loss) before income taxes ...............        2,888          1,291           (163)         (520)           36
Income taxes provided (benefit) .................        1,050            480            (22)         (126)           68
                                                    ----------    -----------    -----------    ----------    ----------
Income (loss) before cumulative effect of changes
 in accounting principles .......................        1,838            811           (141)         (394)          (32)
  Accounting for certain investments in debt
   and equity securities ........................         --             --             --              22          --
  Accounting for income taxes ...................         --             --             --            --            (275)
                                                    ----------    -----------    -----------    ----------    ----------
Net Income (loss) ...............................   $    1,838    $       811    $      (141)   $     (372)   $     (307)
                                                    ==========    ===========    ===========    ==========    ==========
Income (loss) per common share
 Income (loss) before cumulative effect of
 changes in accounting principles ...............   $      .86    $       .38    $      (.07)   $     (.18)   $     (.02)
 Accounting for certain investments in debt
  and equity securities .........................         --             --             --             .01          --
 Accounting for income taxes ....................         --             --             --            --            (.13)
                                                    ----------    -----------    -----------    ----------    ----------
   Net income (loss) per common share ...........   $      .86    $       .38    $      (.07)   $     (.17)   $     (.15)
                                                    ==========    ===========    ===========    ==========    ==========
Dividends per share .............................         --             --             --            --            --
                                                    ==========    ===========    ===========    ==========    ==========
Average common shares outstanding ...............    2,135,780      2,136,175      2,136,397     2,136,397     2,137,440
                                                    ==========    ===========    ===========    ==========    ==========
</TABLE>

16
<PAGE>


J.W. MAYS, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
================================================================================
FISCAL 1998 COMPARED TO FISCAL 1997

     Net income for the year ended July 31, 1998 amounted to $1,837,733, or $.86
per share. The figures include a pre-tax net recovery of real estate taxes of
$1,218,600 (see below). There was no comparable item in the 1997 year. The 1998
year also includes a bad debt recovery amounting to $52,749. In the comparable
1997 year, net income amounted to $810,925, or $.38 per share, after a pre-tax
bad debt recovery of $418,789.

     Revenues in the current year increased to $11,881,859 from $10,080,382 in
the comparable 1997 fiscal year, primarily due to the addition of new tenants
and the pre-tax net recovery of prior years' real estate taxes in the amount of
$1,218,600.

     The recovery of real estate taxes in the current fiscal year in the amount
of $1,218,600, net of legal expenses and credits to tenants in accordance with
the terms of their leases, represents prior years' real estate taxes from the
City of New York and the Town of Fishkill, New York. (See Liquidity and Capital
Resources, Page 18.)

     Real estate operating expenses in the current year decreased to $5,416,292
from $5,873,719 in the comparable 1997 year principally due to a decrease in
real estate taxes and fuel costs, partially offset by an increase in payroll,
maintenance costs and leasing commissions.

     Administrative and general expenses in the current year increased to
$2,076,614 from $1,939,303 in the comparable 1997 year principally due to an
increase in payroll, legal and professional costs and retirement plan costs;
partially offset by a decrease in insurance expense.

     The bad debt recovery in the amount of $52,749 in the 1998 year and
$418,789 in the 1997 year relates to prior years' bad debt write-off from
McCrory and Jamesway. See Note 12 to the Consolidated Financial Statements.

     Depreciation and amortization expense in the current year increased to
$1,011,318 from $966,628 in the 1997 year because of additional improvements to
property.

     Interest expense in the current year exceeded investment income by $542,651
and by $428,596 in the comparable 1997 year. The increase of $114,055 was
primarily due to the interest on the Jamaica Building loan discussed in Note
3(a) to the Consolidated Financial Statements.

FISCAL 1997 COMPARED TO FISCAL 1996

     Net income for the year ended July 31, 1997 amounted to $810,925, or $.38
per share, after a pre-tax bad debt recovery of $418,789, compared to a net loss
for the year ended July 31, 1996 in the amount of $141,286, or $.07 per share,
after a pre-tax bad debt write-off amounting to $424,011 relating to the
rejection by a tenant of its lease, discussed below. The above recovery relates
to the same rejected lease.

     Rental income in the 1997 year increased to $10,080,382 from $9,268,768 in
the 1996 year principally due to the addition of new tenants.

     Real estate operating expenses in the 1997 year increased to $5,873,719
from $5,678,653 in the 1996 comparable year principally due to increased real
estate taxes, maintenance and fuel costs, an allowed credit for utility costs in
the 1996 fiscal year.

     Administrative and general expenses decreased to $1,939,303 from $2,007,987
in the 1996 year principally due to a decrease in insurance and legal and
professional expenses.

     The bad debt recovery in the amount of $418,789 in fiscal 1997 relates to
the bad debt write-off of $424,011 in the 1996 year. See Note 12 to the
Consolidated Financial Statements (Jamesway).

     The Company reports scheduled rental income recognized on a straight-line
basis rather than rental income as it becomes receivable according to the
provisions of the lease, in compliance with the provisions of Statement of
Financial Accounting Standards No. 13, "Accounting for Leases". The excess of
the scheduled rental income of Jamesway recognized on a straight-line basis over
rental income amounts to $424,011 and such amount has been written off in 1996
and classified as a bad debt.


                                                                              17
<PAGE>


================================================================================

     Depreciation and amortization expense in the 1997 fiscal year increased to
$966,628 from $888,932 in the 1996 year because of additional improvements to
property.

     Interest expense exceeded investment income in the amount of $428,596 in
the 1997 year and by $432,471 in the 1996 year.

LIQUIDITY AND CAPITAL RESOURCES

     The Company has been operating as a real estate enterprise since the
discontinuance of the retail department store segment of its operations on
January 3, 1989.

     As of July 31, 1998, the Company received total real estate tax refunds of
$3,324,354. The real estate tax refunds were due to reductions in assessed
valuations on (i) the Jowein building in Brooklyn, New York for the years
1991/92 through 1997/98 in the amount of $3,053,220, and (ii) the Fishkill, New
York building for the years 1995/96 through 1997/98 in the amount of $271,134.
The refund of real estate taxes for the Jowein building produced a reduction in
the current year's Real Estate Operating Expenses of $152,906 (net of attorney
fees of $95,698), offset by a reduction in tenants' rental income of $112,743.
The recovery of real estate taxes increased by $1,117,120 after deductions of
attorney and appraisal fees of $582,069 and amounts due tenants for their pro
rata share of real estate taxes in prior years of $1,105,427. The refund of real
estate taxes for the Fishkill building produced a reduction in the current
year's Real Estate Operating Expenses of $55,096 (net of attorney fees of
$29,924), offset by a reduction in a tenants rental income of $6,887. The
recovery of real estate taxes increased by $101,480 after deductions of attorney
fees of $58,282 and amounts due a tenant for its pro rata share of real estate
taxes in prior years of $12,146. As of July 31, 1998, the above real estate
taxes refunds have been received, and all payments have been made for attorneys
fees, appraisal fees and to tenants for their pro rata share of the refunds.

     The Company had working capital of $1,083,145, with a ratio of current
assets to current liabilities of 1.67 to 1 at July 31, 1998. Management
considers current working capital and borrowing capabilities adequate to cover
the Company's planned operating and capital requirements.

CASH FLOWS FROM OPERATING ACTIVITIES

     Deferred Expenses: The Company had an expenditure of approximately $61,372
for brokerage leasing commissions relating to two new tenants at the Jamaica,
New York building and one new tenant which is replacing an existing tenant at
the Brooklyn, New York building, during the year ended July 31, 1998.

     Prepaid Expenses: The decrease was due to a reduction in prepaid real
estate taxes on the Jowein building property in Brooklyn, New York in the amount
of $201,913.

CASH FLOWS FROM INVESTING ACTIVITIES

     Capital Expenditures: The Company had expenditures of approximately
$427,000 for renovations at its Jamaica, New York building to accommodate two
new tenants and approximately $339,000 for additional renovations to the
Jamaica, New York building, during the year ended July 31, 1998.

     Marketable Securities: The Company, on March 17, 1998, purchased 54,537
shares of an initial public offering of common stock of a bank in which the
Company maintains accounts, at $10 per share, for a total of $545,370. The
closing market price of the stock at July 31, 1998 was $14.50 per share, for a
total of $790,787.


18
<PAGE>


================================================================================

CASH FLOWS FROM FINANCING ACTIVITIES

     Lease Security: The Company received approximately $46,000 in additional
lease security due to the leasing of space to three new tenants at its Jamaica,
New York building, one new tenant which is replacing an existing tenant at its
Brooklyn, New York building and from an existing tenant at its Jowein building
in Brooklyn, New York, during the year ended July 31, 1998.

     The leasing of 25,000 square feet to the U.S. Post Office in Fishkill, New
York and the leasing to the State of New York of approximately 46,000 square
feet of office space for two tenants and 8,000 square feet of office space to
two additional tenants in the Company's former store in Jamaica, New York, will
provide additional working capital for the Company. The Jamaica leases commenced
May 1, 1997. To defray the costs of renovations for the State occupancy, the
Company borrowed the principal amount of $2,500,000 from a bank (see Note 5(a)
to the Consolidated Financial Statements).

YEAR 2000 COMPLIANCE

     The Company uses a computerized accounting system purchased from a vendor.
The vendor has released a Year 2000 compliant version of the accounting system
which the Company is in the process of implementing. No material expenditures
will be required to resolve the Year 2000 issue. Much of the Company's internal
software programs have been purchased from third parties. Failure of the third
parties' computer systems would not have a material impact on the Company's
ability to conduct business. Furthermore, the Company is not dependant on third
party computer systems and applications. The Company has no suppliers or
significant customers that "link" up to its computer systems. The Company does
not anticipate any problems with its hardware or its software.


                                                                              19
<PAGE>


J.W. MAYS, INC.

================================================================================
<TABLE>
<CAPTION>

QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
(dollars in thousands except per share data)

                                                  Three months ended
                                  ---------------------------------------------------------
                                  Oct. 31, 1997  Jan. 31, 1998  Apr. 30, 1998 July 31, 1998
                                  -------------  -------------  ------------- -------------
<S>                                   <C>           <C>             <C>           <C> 

Revenues .........................    $2,801         $2,805         $3,589        $2,687
Revenues less expenses ...........       535            523          1,299           531
 Net income ......................       345            327            847           319
 Net income per common share .....    $  .16         $  .15         $  .40        $  .15

<CAPTION>

                                                  Three months ended
                                  ---------------------------------------------------------
                                  Oct. 31, 1996  Jan. 31, 1997  Apr. 30, 1997 July 31, 1997
                                  -------------  -------------  ------------- -------------
 <S>                                  <C>            <C>            <C>           <C> 
 Revenues ........................    $2,442         $2,473         $2,429        $2,736
 Revenues less expenses ..........       163            123             93           912
 Net income ......................       100            100             18           593
 Net income per common share .....    $  .05         $  .05         $  .01        $  .27

</TABLE>

Income per share is computed independently for each of the quarters presented,
on the basis described inNote 1 to the Consolidated Financial Statements.

COMMON STOCK PRICES AND DIVIDENDS

     The Company's common stock trades on the Nasdaq National Market tier of The
Nasdaq Stock Market under the Symbol: "Mays".

     Following is the sales price range per share of J.W. Mays, Inc. common
stock during the fiscal years ended July 31, 1998 and 1997:

                                                             Sales Price
                                                           -----------------
Three months ended                                          High       Low
------------------                                         ------      -----
October 31, 1997 .......................................   10 1/8       8
January 31, 1998 .......................................   15 1/2       9 1/2
April 30, 1998 .........................................   16          12 1/2
July 31, 1998 ..........................................   14 1/4      12
October 31, 1996 .......................................   12 1/2       7 3/4
January 31, 1997 .......................................   10 3/4       7 7/8
April 30, 1997 .........................................    9 1/2       8 1/2
July 31, 1997 ..........................................   10 1/2       8 1/4
                                       

     The quotations were obtained for the respective periods from the National
Association of Securities Dealers, Inc. There were no dividends declared in
either of the two fiscal years.

     On September 25, 1998, the Company had approximately 3,700 shareholders of
record.


20
<PAGE>


J.W. MAYS, INC.

================================================================================
<TABLE>
<CAPTION>
<S>                                   <C>   
OFFICERS

Lloyd J. Shulman                      Chairman of the Board, Chief Executive Officer and
                                       President and Chief Operating Officer

Alex Slobodin                         Executive Vice President and Treasurer
Ward N. Lyke, Jr.                     Vice President--Management Information Services
George Silva                          Vice President--Operations
Salvatore Cappuzzo                    Secretary
Mark Greenblatt                       Controller and Assistant Treasurer

BOARD OF DIRECTORS

Frank J. Angell 1,2,3,4               President, University Applied Management Consultants Corp. (consultants
                                       on portfolio management and estate planning); Professor Emeritus, New
                                       York University Leonard N. Stern School of Business

Lance D. Myers 2,3,4                  Partner in the law firm of Cullen and Dykman
Jack Schwartz 1,2,3,4                 Private Consultant
Lloyd J. Shulman 1,3,4                Chairman of the Board, Chief Executive Officer and
                                       President and Chief Operating Officer, J.W. Mays, Inc.

Max L. Shulman                        Retired Chairman of the Board, J.W. Mays, Inc.
Sylvia W. Shulman                     Retired Fashion Director and Merchandiser of Boutique Shops,
                                       J.W. Mays, Inc.

Lewis D. Siegel 2,3,4                 First Vice President--Investments, Salomon Smith Barney
Alex Slobodin 1,3                     Executive Vice President and Treasurer, J.W. Mays, Inc.

COMMITTEE ASSIGNMENTS KEY:
1 Member of Executive Committee
2 Member of Audit Committee
3 Member of Investment Advisory Committee
4 Member of Executive Compensation Committee

</TABLE>

FORM 10-K ANNUAL REPORT

Copies of the Company's Form 10-K Annual Report to the Securities and Exchange
Commission for the fiscal year ended July 31, 1998, will be furnished without
charge to shareholders upon written request to: Secretary, J.W. Mays, Inc., 9
Bond Street, Brooklyn, New York 11201.