<PAGE>

                                   FORM 10-Q

                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C. 20549



   ( X )  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
                              Exchange Act of 1934

                 For the quarterly period ended June 30, 2001

                                      OR

      Transition Report Pursuant to Section 13 or 15(d) of the Securities
                             Exchange Act of 1934

      For the transition period from _______________ to _________________

                            Commission file number
                                   333-77229

                                 T REIT, Inc.
                                 ------------
            (Exact name of registrant as specified in its charter)




Virginia                                    52-2140299
--------                                    ----------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

1551 N. Tustin Avenue, Suite 650            (877) 888-7348
--------------------------------            --------------
Santa Ana, California  92705                (Registrant's telephone number,
--------------------------------            including area code)
(Address of principal executive offices)


                                      N/A
                                      ---
                                 (Former name)


     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [ ] No [ X ]

     As of July 31, 2001, there were 1,473,870 shares of common stock of T REIT,
Inc. outstanding.
<PAGE>

                                 T REIT, Inc.

                                   Form 10-Q
                 For the quarterly period ended June 30, 2001

                                     INDEX
                                                                            Page
                                                                            ----

Part I    Financial Information
     Item 1. Financial Statements..............................................3
          Condensed Consolidated Balance Sheets as of June 30, 2001 and
              December 31, 2000................................................4
          Condensed Consolidated Statements of Operations for the three
             and six month Periods ended June 30, 2001 and 2000................5
          Condensed Consolidated Statement of Shareholders' Equity for the
              six months ended June 30, 2001...................................6
          Condensed Consolidated Statements of Cash Flows for the six month
               Periods ended June 30, 2001 and 2000............................7
          Notes to Condensed Consolidated Financial Statements.................8
     Item 2. Management's Discussion and Analysis of Financial Condition and
          Results of Operations...............................................13
     Item 3. Qualitative and Quantitative Disclosure about Market Risks.......17
Part II      Other Information
     Item 1. Legal Proceedings................................................19
     Item 2. Changes in Securities and Use of Proceeds........................19
     Item 3. Defaults upon Senior Securities..................................19
     Item 4. Submission of Matters to a Vote of Security Holders..............19
     Item 5. Other Information................................................19
     Item 6. Exhibits and Reports on Form 8-K.................................19
     Signatures...............................................................20

                                       2
<PAGE>

Part I - Financial Information

Item 1.  Financial Statements.

The June 30, 2001 and 2000 Condensed Consolidated Financial Statements of the
Company required to be filed with this Form 10-Q Quarterly Report were prepared
by management without audit and commence on the following page, together with
the related Notes. In the opinion of management, these Condensed Consolidated
Financial Statements present fairly the financial condition of the Company, but
should be read in conjunction with the Consolidated Financial Statements of the
Company for the year ended December 31, 2000 previously filed with the
Securities and Exchange Commission.

                                       3
<PAGE>

                          T REIT INC. AND SUBSIDIARY
                     CONDENSED CONSOLIDATED BALANCE SHEETS

                                                   June 30, 2001  December 31,
                                                    (Unaudited)       2000
                                                   -------------- ------------

                                    ASSETS

Real estate operating properties, net               $ 36,696,559  $ 19,735,819
Cash and cash equivalents                                854,967       248,077
Restricted cash                                               --       211,000
Real estate deposits                                     310,000       323,240
Accounts receivable                                      352,937       103,469
Other assets                                             197,380            --
Note receivable from related party                     1,380,000       950,000
                                                   -------------- ------------
                                                    $ 39,791,843  $ 21,571,605
                                                   ============== ============

                     LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts payable and accrued expenses               $    877,197  $  1,093,228
Security deposits and deferred revenue                   136,392        95,393
Common stock subscription deposit                             --       211,000
Notes payable                                         28,462,811    15,078,808
                                                   -------------- ------------
                                                      29,476,400    16,478,429

Shareholders' equity:
  Common stock, $.01 par value; 10,000,000
   shares authorized; 1,311,783 and 664,271
   shares issued and outstanding at June 30,
   2001 and December 31, 2000, respectively               13,118         6,643
  Additional paid-in capital, net of
   offering costs                                     10,435,474     5,187,315
  Accumulated deficit                                   (133,149)     (100,782)
                                                   -------------- ------------
                                                      10,315,443     5,093,176
                                                   -------------- ------------
                                                    $ 39,791,843  $ 21,571,605
                                                   ============== ============

             The accompanying notes are an integral part of these
                 condensed consolidated financial statements.

                                       4
<PAGE>

                          T REIT, INC. AND SUBSIDIARY
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)

                                  Six Months Ended        Three Months Ended
                                      June 30,                 June 30,
                                ---------------------    ---------------------
                                 2001           2000       2001         2000
                                ---------------------    ---------------------

Revenues
 Rental Income                $  1,678,617  $      --    $1,056,277  $      --
 Interest Income                    91,926      5,663        51,782      4,943
                              ------------  ---------    ----------  ---------
                                 1,770,543      5,663     1,108,059      4,943
                              ------------  ---------    ----------  ---------
Expenses
 Rental expenses                   564,622         --       375,497         --
 General and administrative        144,981      1,000       125,488      1,000
 Organizational                         --     29,888            --     29,888
 Depreciation and amortization     248,152         --       151,503         --
 Interest                          845,155      3,170       470,899      1,070
                              ------------  ---------    ----------  ---------
                                 1,802,910     34,058     1,123,387     31,958

Net loss                      $    (32,367) $ (28,395)   $  (15,328) $ (27,015)
                              ============  =========    ==========  =========

Basic and diluted
loss per common share         $      (0.03) $   (0.74)   $    (0.01) $   (0.56)
                              ============  =========    ==========  =========

Weighted average number of
common shares outstanding,
basic and diluted                  933,579     38,080     1,085,042     48,091
                              ============  =========    ==========  =========
Dividends declared per
common share                  $       0.40  $      --    $     0.21  $      --
                              ============  =========    ==========  =========

             The accompanying notes are an integral part of these
                 condensed consolidated financial statements.

                                       5
<PAGE>

                          T REIT, INC. AND SUBSIDIARY
           CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                   For the Six Months Ended June 30, 2001
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                       Additional
                                                            Number of                   Paid-in      Accumulated
                                                             shares       Par Value     Capital        Deficit        Total
                                                           -----------   -----------   -----------   -----------   ------------
<S>                                                        <C>           <C>           <C>           <C>           <C>
BALANCE - December 31, 2000                                    664,271   $     6,643   $ 5,187,315   $  (100,782)  $ 5,093,176
Issuance of common stock, net                                  647,512         6,475     5,625,659            --     5,632,134
Distributions                                                       --            --      (377,500)           --      (377,500)
Net loss                                                            --            --            --       (32,367)      (32,367)
                                                           -----------   -----------   -----------   -----------   ------------
BALANCE - June 30, 2001                                      1,311,783   $    13,118   $10,435,474   $  (133,149)  $ 10,315,443
                                                           ===========   ===========   ===========   ===========   ============
</TABLE>



             The accompanying notes are an integral part of these
                  condensed consolidatd financial statements.

                                       6
<PAGE>

                           T REIT, INC. AND SUBSIDIARY
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)

                                                    Six Months     Six Months
                                                      Ended          Ended
                                                     June 30,       June 30,
                                                       2001           2000
                                                   ------------   ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                           $    (32,367)  $   (28,395)
Adjustments to reconcile net loss
 to net cash provided by (used in) operating
 activities
     Depreciation and amortization                      248,152             --
     Change in operating assets and liabilities:
       Accounts receivable                             (249,468)            --
       Other assets                                    (197,380)            --
       Accounts payable and accrued expenses           (216,031)            --
       Security deposits & deferred revenue              40,999             --
       Increase in amounts due Advisor                       --         74,391
       Increase in amounts due Affliate of Advisor           --         96,489
                                                   ------------   ------------

Net cash provided by (used in) operating
 activities                                            (406,095)       142,485

CASH FLOWS FROM INVESTING ACTIVITIES
      Purchase of Real Estate Properties             (4,774,274)            --
      Issuance of Notes Receivable from
      related parties                                  (430,000)            --
      Real estate deposits                               13,240             --
                                                   ------------   ------------

Net cash used in investing activities                (5,191,034)            --

CASH FLOWS FROM FINANCING ACTIVITIES
      Proceeds from issuance of common stock, net     5,632,134      1,060,757
      Principal payments on notes payable              (550,615)            --
      Distributions to shareholders                    (377,500)            --
      Proceeds of Notes Payable                       1,500,000             --
      Redemption of Common Stock                             --          (100)
                                                   ------------   ------------
Net cash provided by financing activities             6,204,019      1,060,657
                                                   ------------   ------------

NET INCREASE IN CASH AND CASH EQUIVALENTS               606,890      1,203,142

CASH AND CASH EQUIVALENTS - beginning of period         248,077            100
                                                   ------------   ------------

CASH AND CASH EQUIVALENTS - end of period          $    854,967   $  1,203,242
                                                   ============   ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid during the period for:
  Interest                                         $    944,206   $         --
                                                   ============   ============
NON-CASH INVESTING AND FINANCING ACTIVITIES:

Purchase of real estate properties with debt       $ 12,434,618   $         --
                                                   ============   ============

             The accompanying notes are an integral part of these
                 condensed consolidated financial statements.

                                       7
<PAGE>

                          T REIT, INC. AND SUBSIDIARY
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                            JUNE 30, 2001 AND 2000

1. ORGANIZATION

T REIT, Inc. (the "Company") was formed in December 1998 in the Commonwealth of
Virginia and operates as a real estate investment trust ("REIT") under the
Internal Revenue Code of 1986, as amended. The Company is in the business of
acquiring existing office, industrial, retail and service properties located in
several states. As of June 30, 2001, the Company has acquired four properties
and two tenancy-in-common interests (see Note 3), and has entered into an
agreement to purchase an additional property (see Note 8). The Company acquires
properties through its operating partnership, T REIT, L.P., which is wholly
owned by the Company.

The Company is externally advised by Triple Net Properties, L.L.C. (the
"Advisor"), which is primarily responsible for managing the day-to-day
operations and assets of the Company. The Advisory Agreement between the Company
and the Advisor, amended effective February 22, 2001 for a one-year term, is
subject to successive renewals (see Note 7).

Pursuant to a registration statement on Form S-11 (the "Registration Statement")
under the Securities Act of 1933, as amended, the Company is offering for sale
up to 10,000,000 shares of its common stock (the "Shares", and collectively the
"Offering") at a price of $10 per Share. The Registration Statement was declared
effective on February 22, 2000. The Offering will terminate on the earlier of
February 22, 2002 or the date on which the maximum number of shares have been
sold.

The accompanying financial statements have been prepared assuming that the
Company will continue in its present form. As of December 31, 1999, the Company
operated as a development stage enterprise. In September 2000, the Company
completed its first property acquisition and thus commenced its planned
principal operations. As of June 30, 2001, the Company has not generated
sufficient cash flow to support its operations, has an accumulated deficit of
approximately $(133,149), does not have a cash reserve dedicated to fund capital
expenditures, and historically has been supported by Offering proceeds. As such,
all dividends distributed through June 30, 2001 are effectively a return of
capital to the investor because the Company has not generated any profits to
support such dividends. Effective April 1, 2001, the Company increased its
annual dividend rate from 8% to 8.25%, and has committed to paying monthly
dividends at an annual rate of 8.25% to the extent of lawfully available funds.

The Company has debt associated with property acquisitions in the amount of
approximately $14.2 million becoming due and payable in 2001 (see Note 5). In
the opinion of management, the Company will be successful in refinancing into
long-term mortgages all property debt maturing during 2001. Management believes
that, inclusive of proposed future acquisitions, the Company will generate
sufficient cash flow in the year ending December 31, 2001 to fund operations and
any declared dividends. Management also believes that, to the extent (if any)
that the Company is not successful in generating sufficient cash flow to meet
its operating requirements, the Company can secure a line of credit to finance
any cash flow deficits. Accordingly, the Company's continuation in

                                       8
<PAGE>

                          T REIT, INC. AND SUBSIDIARY
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                            JUNE 30, 2001 AND 2000

1. ORGANIZATION (continued)

its present form is dependent upon the ability to generate positive cash flow
from operations and secure permanent financing of its real estate properties. In
the event that management's plans are not achieved, the Company's financial
condition could be adversely affected to a material extent.

During July 2001, the Company received approximately $1,745,858 of additional
gross Offering proceeds.

2. INTERIM FINANCIAL STATEMENTS

The accompanying condensed consolidated financial statements include the
accounts of the Company and T REIT, L.P.; all material intercompany account
balances have been eliminated in consolidation. The information furnished has
been prepared in accordance with generally accepted accounting principles for
interim financial reporting, the instructions to Form 10-Q, and Rule 10-01 of
Regulation S-X. Accordingly, certain information and disclosures normally
included in financial statements prepared in accordance with accounting
principles generally accepted in the United States have been condensed or
omitted. In the opinion of management, all adjustments considered necessary for
the fair presentation of the Company's financial position, results of operations
and cash flows have been included and are only of a normal recurring nature. The
results of operations for the quarter and the six months ended June 30, 2001 are
not necessarily indicative of the results of operations for the year ending
December 31, 2001.

These financial statements should be read in conjunction with the Company's
Registration Statement and its audited December 31, 2000 consolidated financial
statements included in Form 10-K.

3. REAL ESTATE OPERATING PROPERTIES

The Company's real estate operating properties at June 30, 2001 consist of the
following:

                                               Buildings and
                                  Land         Improvements         Total
                               ----------      -------------     -----------
Christie Street, TX            $  125,193        $ 1,129,944     $ 1,255,137
Northstar, TX                     982,768          2,962,780       3,945,548
Plaza Del Rey, TX                 209,783            599,403         809,186
Seguin Corner, TX                 160,855            472,714         633,569
Thousand Oaks, TX               3,285,138          9,868,414      13,153,552
Pahrump Valley, NV              4,287,500         12,898,230      17,185,730
                               ----------        -----------     -----------
                                9,051,237         27,931,485      36,982,722

Accumulated depreciation
 and amortization                      --           (286,163)       (286,163)
                               ----------        -----------     -----------
                               $9,051,237        $27,645,322     $36,696,559
                               ==========        ===========     ===========

On May 11, 2001, the Company acquired the Pahrump Valley Junction Center
("Pahrump") located in Pahrump, Nevada and containing 105,721 rentable square
feet. The total purchase price of $17,150,000 consists of cash and a note
payable in the amounts of approximately $4,750,000 and $12,400,000, respectively
(See Note 5).The Seller is not affiliated with the Company or the Advisor and
the building was 99% occupied at June 30, 2001

                                       9
<PAGE>

                          T REIT, INC. AND SUBSIDIARY
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                            JUNE 30, 2001 AND 2000

4. NOTE RECEIVABLE FROM RELATED PARTY

As of June 30, 2001, the Company had loaned a total of $1,330,000 to W REIT,
L.P., an affiliated entity, and Brookings Mall-Mandel, LLC, an unaffiliated
third-party, (hereinafter, collectively "WREIT") in two advances in December
2000 and March 2001 for $900,00 and $430,000, respectively. These loans are
memorialized by two notes payable with interest at 12% per annum. The $900,000
advance is secured by a first mortgage on an outparcel property lot at Brookings
Mall in Brookings County, South Dakota. The $430,000 advance is also secured for
both notes, interest at the rate of 10% is payable monthly, commencing January
12, 2001, with the additional 2% accruing to the principal. The original
maturity for both notes was June 12, 2001. An extension was granted for both
notes to September 30, 2001. WREIT used the proceeds from the loans to retire
outstanding debt on the collateral property, and is in the process of
refinancing the property. Management believes such refinancing will result in
the loans being repaid in full on or before September 30, 2001.

Anthony W. Thompson, the CEO of the Company, is a director of Western REIT,
Inc., the parent of W REIT, L.P., and the president and beneficial owner of
approximately 25% of Triple Net Properties, L.L.C., the advisor to both Western
REIT, Inc. and the Company. The Company's directors and officers own
approximately 2% of Western REIT, Inc. In addition, Triple net Properties,
L.L.C. is the general partner of W REIT, L.P.

5. NOTES PAYABLE

The note in connection to the Pahrump acquisition is payable to a financial
institution and secured by a first deed of trust. Interest rate is fixed at
7.25% per annum. Principal and interest are due in January 2009. In addition,
the Company borrowed $1,500,000 to be able to pay the cash portion of the
purchase price. Of this amount, $505,000 was borrowed from the Advisor pursuant
to a promissory note at a fixed interest rate of 12% and a maturity date of
August 10, 2001. The entire balance of this note was paid off on June 20, 2001.
The remaining $995,000 was borrowed from NNN 2004 Notes Program, LLC, an
affiliate of the Advisor, and guaranteed by the Advisor pursuant to a promissory
note that has a fixed interest rate of 11% and a maturity date of October 31,
2004. The entire balance of this note was paid off on July 27, 2001.

The Company is in the process of refinancing the notes payable relating to the
Northstar and Thousand Oaks properties in the amount of $2,695,000 and
$10,837,500, respectively.

Variable-rate debt secured by the Company's properties bears interest at rates
ranging from 6.2% to 8.1% as of June 30, 2001 and averaged approximately 8.1%
during the quarter then ended.

6. STOCK OFFERING COSTS

As of June 30, 2001, the Company had sold 1,311,783 shares of common stock,
including 22,100 shares issued to the Advisor at $9.05 per share. Aggregate
gross proceeds before Offering costs and selling commissions approximate
$13,088,000.

Pursuant to the Registration Statement discussed in Note 1, the Company is
offering the Shares to the residents of forty states. In connection with the
Offering, the Company incurred approximately $551,000 of costs related to the
issuance and distribution of the Shares during the quarter ended June 30, 2001.
Such amount includes a total of approximately $307,000 paid to the dealer
manager (NNN Capital Corporation, which is wholly owned by the Company's CEO),
and is principally comprised of sales commissions, underwriting discounts, and
certain fees. As described in Note 7, an additional $34,000 was paid to the
Advisor.

                                       10
<PAGE>

                          T REIT, INC. AND SUBSIDIARY
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                            JUNE 30, 2001 AND 2000

The Shares can be offered to brokers and the Company's officers and directors at
a discounted price of $9.05 per share.

7.ADVISORY FEES

The Company compensates the Advisor for its services through a series of fees
pursuant to the Advisory Agreement. In addition to fee compensation, the Advisor
is reimbursed organizational and offering costs it incurs on behalf of the
Company. During the quarter ended June 30, 2001, fees and cost reimbursements of
approximately $34,000 were paid by the Company to the Advisor from Offering
proceeds, and no amounts are currently due the Advisor.

8.PROPOSED ACQUISITION

As of June 30, 2001, the Company had real estate deposits of approximately
$310,000 pertaining to the proposed acquisition of a single tenant retail
building (the "Property") in the city of Reno, Nevada for a purchase price of
approximately $7,490,000. Under certain circumstances, such deposits may be
nonrefundable.

The Property contains 75,275 rentable square feet and Raab Karcher Electronics
is the only tenant with an annual rental income of approximately $748,000.

9.DIVIDEND REINVESTMENT PROGRAM

Effective with the Offering, the Company adopted a Dividend Reinvestment Program
(the "DRIP") that allows Company shareholders to purchase common stock through
reinvestment of dividends, subject to certain conditions. The Company has
registered and reserved 700,000 shares for distribution pursuant to the DRIP. As
of June 30, 2001, the Company has sold 12,499 shares of common stock under the
DRIP for a total of approximately $113,116.

10.STOCK OPTION PLANS

Effective with the Offering, the Company authorized and reserved a total of
100,000 shares of common stock for issuance under the Independent Director Stock
Option Plan. Also effective with the Offering, the Company authorized and
reserved a total of 700,000 shares of common stock for issuance under the
Officer

                                       11
<PAGE>

                          T REIT, INC. AND SUBSIDIARY
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                            JUNE 30, 2001 AND 2000

and Employee Stock Option Plan. As of June 30, 2001, none of the options granted
under either of these stock option plans have been exercised.

No options were granted or forfeited under either of the above stock option
plans during the quarter ended June 30, 2001.

11. RECENT ACCOUNTING PRONOUNCEMENT

In July 2001, the Financial Accounting Standards Board issued Statements No.
141, "Business Combinations" ("SFAS 141") and No. 142 "Goodwill and Other
Intangible Assets" ("SFAS 142"). SFAS 141 supersedes APB Opinion No. 16,
"Business Combinations" and FASB Statement No. 38, "Accounting for
Pre-acquisition Contingencies of Purchased Enterprises". SFAS 141 is effective
for fiscal years beginning after June 30, 2001 and requires that all business
combinations be accounted for by a single method, the purchase method. SFAS 142
supersedes APB Opinion No. 17, "Intangible Assets". SFAS 142 is effective for
fiscal years beginning after December 15, 2001 and provides that all existing
and newly acquired goodwill and intangible assets will no longer be amortized
but will be tested for impairment annually and written down only when impaired.
Management has not determined whether the requirements of such pronouncements
will have a significant impact on the Company's future financial statements.

                                       12
<PAGE>

                          T REIT, INC. AND SUBSIDIARY
                      MANAGEMENT DISCUSSION AND ANALYSIS

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

Overview

The following discussion should be read in conjunction with the condensed
consolidated financial statements and notes thereto of the Company appearing
elsewhere in this report. Such financial statements have been prepared to
reflect the Company's financial position as of June 30, 2001 and 2000, together
with the results of operations and cash flows for the quarters then ended.

Historical results and trends are not necessarily indicative of future
operations. Management's statements contained in this report that are not
historical facts are 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. Actual results may differ materially from
those included in the forward-looking statements. The Company intends such
forward-looking statements to be covered by the safe-harbor provisions for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995, and is including this statement for purposes of complying with such
provisions. Forward-looking statements, which are based on certain assumptions
and describe future plans, strategies and expectations of management, are
generally identifiable by use of the words "believe," "expect," "intend,"
"anticipate," "estimate," "project," "prospects," or similar expressions. The
Company's ability to predict results or the actual effect of future plans or
strategies is inherently uncertain. Factors which could have a material adverse
affect on the operations and future prospects of the Company include, but are
not limited to: changes in general economic conditions and in the real estate
market specifically (including those in the local economy of the regions where
the Company's properties are located), legislative/regulatory changes (including
changes in Federal and/or state laws governing the taxation of REITs),
availability of capital, interest rates, competition, supply and demand for
operating properties in the Company's current and proposed market areas, and
generally accepted accounting principles applicable to REITs. These risks and
uncertainties should be considered in evaluating forward-looking statements, and
undue reliance should not be placed on any such statements. Further information
concerning the Company and its business, including additional factors that could
materially affect the Company's financial results, is included herein and in the
Company's other filings with the Securities and Exchange Commission.

Public Offering of Equity Securities/Use of Proceeds

Pursuant to a registration statement on Form S-11 (the "Registration Statement")
under the Securities Act of 1933, as amended, the Company is offering for sale
up to 10,000,000 shares of its common stock (the "Shares," and collectively the
"Offering") at a price of $10 per Share. The Registration Statement was declared
effective on February 22, 2000. The Offering will terminate on the earlier of
February 22, 2002 or the date on which the maximum number of shares have been
sold.

                                       13
<PAGE>

                          T REIT, INC. AND SUBSIDIARY
                      MANAGEMENT DISCUSSION AND ANALYSIS

As of June 30, 2001, the Company had sold 1,311,783 shares of common stock,
including 22,100 shares issued to the Advisor at $9.05 per share. Aggregate
gross proceeds before Offering costs and selling commissions approximate
$13,088,000. As discussed below, the Company has principally used the net
Offering proceeds from the sale of Shares to purchase real estate properties. As
of June 30, 2001, the Company has approximately $854,967 available to invest in
such properties after deduction of selling commissions, marketing support and
due diligence reimbursement fees, other Offering expenses and miscellaneous
acquisition expenses. In addition, the Company intends to borrow money to
finance some property acquisitions and pay certain related fees.

The comparability of the financial information discussed below is materially
impacted by the acquisition during the year ended December 31, 2000 of one
office building with 17,141 square feet and two shopping centers totaling
230,364 square feet. Additionally, in calendar 2000 the Company purchased a
16.5% and a 26% tenancy in common interest in two shopping centers having
126,322 and 21,000 square feet, respectively. In calendar year 2001, the Company
purchased Pahrump Valley Junction Center with 105,721 square feet. At June 30,
2000, the Company did not own any real estate properties and was then
establishing a corporate infrastructure to support its planned principal
operations.

Results of Operations

Rental income, rental expenses, mortgage interest, and depreciation/amortization
expense incurred during the quarter ended June 30, 2001 are a result of the
operations from the six properties described in the preceding paragraph. None of
the sellers of the properties discussed below are affiliated with the Company or
the Advisor.

On September 26, 2000, the Company acquired the Christie Street Office Building,
a 17,141 square foot Class C building in Lufkin, Texas. The total purchase price
of $1,250,000 consists of cash and a note payable to the seller in the amounts
of $500,000 and $750,000, respectively.

On October 26, 2000, the Company purchased the Northstar Crossing Shopping
Center located in Garland, Texas and containing 67,500 rentable square feet. The
total purchase price of $3,930,000 consists of cash and a note payable to an
affiliate of the seller in the amounts of $1,235,000 and $2,695,000,
respectively.

On December 6, 2000, the Company acquired the Thousand Oaks Shopping Center
located in San Antonio, Texas and containing 162,864 rentable square feet. The
total purchase price of $13,000,000 consists of cash and a note payable to an
affiliate of the seller in the amounts of $2,162,500 and $10,837,500,
respectively.

The Company also acquired tenancy-in-common interests in Plaza del Rey Shopping
Center and Seguin Corners Shopping Center (both of which are located in Seguin,
Texas) on November 17, 2000 and November 22, 2000, respectively. Plaza del Rey's
total purchase price of $5,050,000 consists of cash and a note payable to an
affiliate of the seller in the amounts of $1,055,000 and $3,995,000,
respectively.

                                       14
<PAGE>

                          T REIT, INC. AND SUBSIDIARY
                      MANAGEMENT DISCUSSION AND ANALYSIS


Seguin's total purchase price of $2,450,000 consists of cash and a note payable
in the amounts of $1,905,000 and $545,000, respectively. The Company's
percentage ownership in Plaza del Rey and Seguin is 16.5% and 26%, respectively.

In addition, the Company acquired the Pahrump Valley Junction Center located in
Pahrump, Nevada on May 11, 2001 which contains 105,721 rentable square feet. The
total purchase price of $17,150,000 consists of cash and a note payable in the
amounts of approximately $4,750,000 and $12,400,000 respectively.

As of June 30, 2001, the Company had real estate deposits of approximately
$310,000 pertaining to the proposed acquisitions of a single tenant retail
building (the "Property") in the city of Reno, Nevada for a purchase price of
approximately $7,490,000. Under certain circumstances, such deposits may be
nonrefundable.

The Property contains 75,275 rentable square feet and Memec LLC, a Delaware
limited liability corporation, is the only tenant with an annual rental income
of approximately $748,000.

The number of other properties to be acquired depends upon the amount of net
Offering proceeds and loan funds available to the Company. Management is
currently considering other potential property acquisitions. The decision to
acquire one or more of these properties will generally depend upon (i) receipt
of a satisfactory environmental survey and property appraisal, (ii) an absence
of any material adverse change relating to the property, its tenants, or local
economic conditions, and (iii) adequate financing, either through net Offering
proceeds and/or satisfactory debt financing. There is no assurance that any of
these conditions will be satisfied or, if satisfied, that the Company will
purchase any additional properties.

Liquidity and Capital Resources

At June 30, 2001, the Company had $854,967 of cash to meet its immediate
short-term liquidity requirements. Management expects that future short-term
liquidity requirements will be financed by net cash flow from operations,
existing working capital and, if necessary, securing a line of credit. Cash and
cash equivalents increased since December 31, 2000 principally as the result of
the sale of Shares and proceeds from notes payable.

The Company anticipates that adequate cash will be generated from operations to
fund its operating and administrative expenses, continuing debt service
obligations, and the payment of dividends in accordance with REIT requirements
in the foreseeable future.

Aggregate cash distributions of $255,446 were made to shareholders for the
quarter ended June 30, 2001. Effective April 1, 2001, the Company increased its
annual dividend rate from 8% to 8.25%, and has committed to paying monthly
dividends at an annual rate of 8.25% to the extent of lawfully available funds.

Cash used in operating activities amounted to $406,095 for the six months ended
June 30, 2001. The primary reason for the decrease is the payment of accounts
payable and accrued expenses related to tenant improvements in progress
when real estate properties were acquired. The Company expects to finance such
commitment from Offering proceeds.

Cash used in investing activities was $5,191,034 for the six months ended June
30, 2001. Such amount is principally the result of the purchase of Pahrump
Valley Junction Center

                                       15
<PAGE>

                          T REIT, INC. AND SUBSIDIARY
                      MANAGEMENT DISCUSSION AND ANALYSIS

and issuance of a note receivable to W. REIT Inc. in the amount of $430,000.
Except as described above, the Company does not have any material planned
capital expenditures resulting from any known demand based on existing trends.
However, management may conclude that expenditures to improve properties
purchased after June 30, 2001 are necessary and/or desirable. Management has not
determined whether any significant capital improvements may be necessary for the
proposed acquisition of the shopping center in Nevada described above.

Cash provided by financing activities was $6,204,019 for the six months ended
June 30, 2001. This amount principally resulted from net Offering proceeds of
approximately $5.6 million and proceeds of a note payable of approximately
$1,500,000 to purchase Pahrump Valley Junction Center. For the six months ended
June 30, 2001, the Company incurred Offering costs of approximately $858,613.

The weighted average annual interest rate on variable-rate mortgages payable at
June 30, 2001 approximated 8.1% at that date, and averaged 8.1% for the quarter
then ended. Interest expense related to fixed-rate mortgages payable is not
material to total operating expenses for the quarter ended June 30, 2001.

In order to qualify as a REIT for federal income tax purposes, the Company is
required by the Internal Revenue Code of 1986, as amended, to make distributions
to its shareholders of at least 90% of REIT taxable income. Such percentage
declined from 95% to 90% in January 2001. The Company expects to use its cash
flow from operating activities for distributions to shareholders and the payment
of expenses. The Company intends to invest amounts accumulated for distribution
in short-term investments. Distributions declared for the quarter ended June 30,
2001 represent a return of capital for federal income tax purposes.
Distributions are determined by the Board of Directors and are dependent on a
number of factors, including those discussed in the Company's December 31, 2000
Form 10-K.

                                       16
<PAGE>

                          T REIT, INC. AND SUBSIDIARY
                      MANAGEMENT DISCUSSION AND ANALYSIS

Management monitors the various qualification tests the Company must meet to
maintain its status as a REIT. Large ownership of the Company's stock is
reviewed upon purchase to determine that no more than 50% in value of the
outstanding stock is owned directly or indirectly by five or fewer persons or
entities at any one time. Management also determines, on a quarterly basis, that
the Gross Income, Asset and Distribution Tests imposed by the REIT requirements
are met. On an ongoing basis, as due diligence is performed by the Advisor on
potential real estate purchases or the temporary investment of excess funds,
management determines whether the income from the new asset will qualify for
REIT purposes.

Funds From Operations

Due to the unique operating characteristics of certain real estate companies,
the National Association of Real Estate Investments Trusts ("NAREIT"), an
industry trade group, has promulgated a standard known as funds from operations
("FFO") which it believes more accurately reflects the operating performance of
a REIT. As defined by NAREIT, FFO equals net income or loss determined in
accordance with accounting principles generally accepted in the United States
("GAAP") less extraordinary, unusual and non-recurring items, excluding
gains/losses from debt restructuring and sales of property, plus depreciation
and amortization after adjustments for unconsolidated partnerships and joint
ventures in which the REIT holds an interest.

The Company computes FFO in accordance with the March 1995 "White Paper" and the
November 1999 "National Policy Bulletin" published by NAREIT. The Company
generally considers FFO to be a relevant and meaningful supplemental measure of
the performance of an equity REIT because it is predicated on a cash flow
analysis, as contrasted with net income/loss determined on a GAAP basis that
gives effect to non-cash items such as depreciation. However, FFO is not
intended to be an alternative to net income or loss as an indicator of the
Company's performance, nor to cash flow provided by/used in operating activities
(based on GAAP) as a measure of liquidity. In addition, FFO is not necessarily
indicative of cash available to pay distributions or finance other operating
requirements. Since the aforementioned NAREIT publications only provide general
guidelines for computing FFO, the computation thereof may vary from one REIT to
another because capitalization accounting policies may differ from entity to
entity.

Because the Company did not commence its planned principal operations until
September 2000, the concept of FFO is not pertinent to the quarter ended June
30, 2000.

As set forth in its December 31, 2000 Form 10-K, the Company's FFO for the year
then ended was $(62,409). FFO for the quarter ended June 30, 2001 was $136,175
which represents an increase of approximately $57,000 over FFO for the quarter
ended March 31, 2001. FFO for the six months ended June 30, 2001 represents an
increase of approximately $215,785 over FFO for the year ended December 31,
2000. Such increase is principally attributable to the fact that the Company's
real estate properties were in operation during the entire quarter ended June
30, 2001.

Recent Accounting Pronouncements

In July 2001, the Financial Accounting Standards Board issued Statements No.
141, "Business Combinations" ("SFAS 141") and No. 142 "Goodwill and Other
Intangible Assets" ("SFAS 142"). SFAS 141 supersedes APB Opinion No. 16,
"Business Combinations" and FASB Statement No. 38, "Accounting for
Pre-acquisition Contingencies of Purchased Enterprises". SFAS 141 is effective
for fiscal years beginning after June 30, 2001 and requires that all business
combinations be accounted for by a single method, the purchase method. SFAS 142
supersedes APB Opinion No. 17, "Intangible Assets". SFAS 142 is effective for
fiscal years beginning after December 15, 2001 and provides that all existing
and newly acquired goodwill and intangible assets will no longer be amortized
but will be tested for impairment annually and written down only when impaired.
Management has not determined whether the requirements of such pronouncements
will have a significant impact on the Company's future financial statements.

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

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to interest rate changes primarily as a result of its
long-term debt used to maintain liquidity, fund capital expenditures, and
finance expansion of the Company's operations and real estate portfolio. In
managing the Company's interest rate risk, management's objectives are to limit
the impact of interest rate changes on operations and cash flows, and to lower
its overall borrowing costs. To achieve these objectives, the Company borrows
primarily at interest rates with the lowest margins available and, in some
cases, with the ability to convert variable interest rates to fixed rates. In
the future, the Company may enter into derivative financial instruments such as
interest rate swaps, caps and treasury locks in order to mitigate its interest
rate risk on a given financial instrument. The Company does not enter into
derivative or interest rate transactions for speculative purposes.

The table below presents the principal amounts and weighted average interest
rates of variable-interest-rate debt by year of scheduled maturity to evaluate
the expected cash flows and sensitivity to interest rate changes.

                                       17
<PAGE>

                          T REIT, INC. AND SUBSIDIARY
                      MANAGEMENT DISCUSSION AND ANALYSIS

                             (Amounts in thousands)

                                 2001     2002    2003    2004   2005
                              ---------   ----    -----   ----   ----

Variable rate debt...........   $14,192    --     $ 142    --     --
Average interest rate on
 maturing debt...............      8.1%    --      6.2%    --     --

The estimated fair value of the Company's variable-rate debt approximates its
June 30, 2001 carrying amount. Approximately $14,333,000 (or 50%) of the
Company's mortgages payable at June 30, 2001 have variable interest rates
ranging from 6.2% to 8.1% at that date. An increase in the variable interest
rate on certain mortgages payable constitutes a market risk.

                                       18
<PAGE>

                                    Part II

                               Other Information

Item 1. Legal Proceedings.
        None.

Item 2. Changes in Securities and Use of Proceeds.
        (a) None.
        (b) None.
        (c) None.
        (d) Incorporated by reference to Part I, Item 2 of this Report,
            "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS."

Item 3. Defaults Upon Senior Securities.
        None.

Item 4. Submission of Matters to a Vote of Security Holders.

        On May 8, 2001, the Company held its Annual Meeting of Shareholders at
        the Company's offices in Santa Ana, California. At the meeting
        shareholders voted on the election of directors to the Company's Board
        of Directors and on the ratification of Company's auditors. The
        shareholders voted to elect the following persons as directors for one
        year terms: Anthony W. Thompson, Warren H. James, and James R. Nance,
        and to ratify the appointment of Squar, Milner, Reehl & Williamson, LLP
        as the Company's independent auditors for 2001.

        The Company received proxies representing 54.3% of the Company's
        822,744.9259 shares of common stock outstanding as of February 27, 2001,
        the record date. The number of votes for, against, abstaining, and
        withheld were as follows.

                               For       Against     Abstain      Withheld
                               ---       -------     -------      --------

Directors:
----------
   Anthony W. Thompson      415,784.42        0     36,974.97         0
   Warren H. James          415,784.42        0     36,974.97         0
   James R. Nance           415,784.42        0     36,974.97         0

   Ratification of
   Squar, Milner, Reehl
   & Williamson, LLP
   as auditors              406,010.71   2,273.71   44,474.97         0


Item 5. Other Information.
        None.

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

        (a) The following documents are filed as part of this report:

            Item No.                  Description
            --------                  -----------
               3.1        Articles of Incorporation of the Company (included as
                          Exhibit 3.1 to the Company's Registration Statement
                          on Form S-11 filed on April 28, 1999 (File No. 333-
                          77229) and incorporated herein by reference.

               3.2        Amended and Restated Articles of Incorporation of the
                          Company (included as Exhibit 3.2 to Amendment No. 3
                          to the Company's Registration Statement on Form S-11
                          filed on November 22, 1999 (File No. 333-77229) and
                          incorporated herein by reference.

               3.3        Bylaws of the Company (included as Exhibit 3.3 to the
                          Company's Registration Statement on Form S-11 filed on
                          April 28, 1999 (File No. 333-77229) and incorporated
                          herein by reference.

               3.4        Amended Bylaws of the Company (included as Exhibit
                          3.4 to Post-Effective Amendment No. 2 to the
                          Company's Registration Statement on Form S-11 filed
                          on July 17, 2001 (File No. 333-77229) and
                          incorporated herein by reference).

               4.1        Form of Share Certificate (included as Exhibit 4.1 to
                          Amendment No. 4 to the Company's Registration
                          Statement on Form S-11 filed on February 3, 2000 (File
                          No. 333-77229) and incorporated herein by reference.

              10.1        Agreement of Limited Partnership of T REIT, L.P.
                          (included as Exhibit 10.1 to Amendment No. 2 to the
                          Company's Registration Statement on Form S-11 filed on
                          October 13, 1999 (File No. 333-77229) and incorporated
                          herein by reference.

              10.2        Dividend Reinvestment Plan (included as Exhibit C to
                          the Company's Prospectus filed as part of the
                          Company's Registration Statement on Form S-11 on April
                          28, 1999 (File No. 333-77229) and incorporated herein
                          by reference.

              10.3        Independent Director Stock Option Plan (included as
                          Exhibit 10.3 to Amendment No. 4 to the Company's
                          Registration Statement on Form S-11 filed on February
                          3, 2000 (File No. 333-77229) and incorporated herein
                          by reference.

              10.4        Employee and Officer Stock Option Plan (included as
                          Exhibit 10.4 to Amendment No. 4 to the Company's
                          Registration Statement on Form S-11 filed on February
                          3, 2000 (File No. 333-77229) and incorporated herein
                          by reference.

              10.5        Advisory Agreement between the Company and Triple Net
                          Properties, L.L.C. (included as Exhibit 10.5 to
                          Amendment No. 2 to the Company's Registration
                          Statement on Form S-11 filed on October 13, 1999 (File
                          No. 333-77229) and incorporated herein by reference.

              10.6        Purchase and Sale Agreement, dated June 5, 2000, by
                          and between Robert C. Parker and Carolyn De La Fuente
                          Parker and Triple Net Properties, L.L.C. (included as
                          Exhibit 10.1 to Form 10-Q filed by the Company on
                          November 14, 2000 and incorporated herein by
                          reference).

              10.7        Purchase and Sale Agreement, dated October 25, 2000,
                          by and between CMF Capital Company, L.L.C. and T
                          REIT, L.P. (included as Exhibit 10.1 to Form 8-K
                          filed by the Company on November 13, 2000 and
                          incorporated herein by reference).

              10.8        Purchase and Sale Agreement, dated October 26,2000,
                          by and between CMF Capital Company, L.L.C. and T
                          REIT, L.P. (included as Exhibit 10.1 to Form 8-K
                          filed by the Company on December 20, 2000 and
                          incorporated herein by reference).

              10.9        Purchase and Sale Agreement, dated August 24, 2000,
                          as amended, by and between Drummer Boy Holdings, LLC
                          and Triple Net Properties, L.L.C. (included as
                          Exhibit 10.9 to Post-Effective Amendment No. 2 to the
                          Company's Registration Statement on Form S-11 filed
                          on July 17, 2001 (File No. 333-77229) and
                          incorporated herein by reference).

              10.10       First Amendment to Adivsory Agreement between the
                          Company and Triple Net Properties, L.L.C. (included
                          as Exhibit 10.10 to Post-Effective Amendment No. 2 to
                          the Company's Registration Statement on Form S-11
                          filed on July 17, 2001 (File No. 333-77229) and
                          incorporated herein by reference).

              10.11       Purchase and Sale Agreement, dated April 16, 2001, by
                          and between Kilroy Realty, L.P. and Triple Net
                          Properties, L.L.C. (Filed herewith.)

        (b) On May 25, 2001, the Company filed a Current Report on Form 8-K
            dated May 11, 2001 describing the Company's purchase of Pahrump
            Valley Junction Shopping Center in Pahrump, Nevada. This report
            contained the following financial statements:

               (i)    Pahrump Valley Junction Shopping Center Historical
                      Statement of Revenues and Direct Operating Expenses
                      For the Year Ended December 31, 2000 And For The
                      Unaudited Three-Month Periods Ended March 31, 2001
                      and 2000; and

               (ii)   T REIT, Inc. Unaudited Pro Forma Condensed Combined
                      Consolidated Balance Sheet Dated December 31, 2000
                      and Unaudited Pro Forma Condensed Combined Statement
                      of Operations For The Three Months Ended March 31,
                      2001 and For The Year Ended December 31, 2000.

                                      19
<PAGE>

                                   SIGNATURES

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


DATE: August 9, 2001.

                                               T REIT, INC.
                                               (Registrant)


                                          By: /s/ Anthony W. Thompson
                                              ---------------------------
                                              Anthony W. Thompson
                                              President and
                                              Chief Executive Officer



                                          By: /s/ Jack Maurer
                                              ---------------------------
                                              Jack Maurer
                                              Secretary and Treasurer
                                              Chief Accounting Officer

                                      20
<PAGE>

                                    EXHIBIT INDEX

            Item No.                  Description
            --------                  -----------
               3.1        Articles of Incorporation of the Company (included as
                          Exhibit 3.1 to the Company's Registration Statement
                          on Form S-11 filed on April 28, 1999 (File No. 333-
                          77229) and incorporated herein by reference.

               3.2        Amended and Restated Articles of Incorporation of the
                          Company (included as Exhibit 3.2 to Amendment No. 3
                          to the Company's Registration Statement on Form S-11
                          filed on November 22, 1999 (File No. 333-77229) and
                          incorporated herein by reference.

               3.3        Bylaws of the Company (included as Exhibit 3.3 to the
                          Company's Registration Statement on Form S-11 filed on
                          April 28, 1999 (File No. 333-77229) and incorporated
                          herein by reference.

               3.5        Amended Bylaws of the Company (included as Exhibit
                          3.4 to Post-Effective Amendment No. 2 to the
                          Company's Registration Statement on Form S-11 filed
                          on July 17, 2001 (File No. 333-77229) and
                          incorporated herein by reference).

               4.1        Form of Share Certificate (included as Exhibit 4.1 to
                          Amendment No. 4 to the Company's Registration
                          Statement on Form S-11 filed on February 3, 2000 (File
                          No. 333-77229) and incorporated herein by reference.

              10.1        Agreement of Limited Partnership of T REIT, L.P.
                          (included as Exhibit 10.1 to Amendment No. 2 to the
                          Company's Registration Statement on Form S-11 filed on
                          October 13, 1999 (File No. 333-77229) and incorporated
                          herein by reference.

              10.2        Dividend Reinvestment Plan (included as Exhibit C to
                          the Company's Prospectus filed as part of the
                          Company's Registration Statement on Form S-11 on April
                          28, 1999 (File No. 333-77229) and incorporated herein
                          by reference.

              10.3        Independent Director Stock Option Plan (included as
                          Exhibit 10.3 to Amendment No. 4 to the Company's
                          Registration Statement on Form S-11 filed on February
                          3, 2000 (File No. 333-77229) and incorporated herein
                          by reference.

              10.4        Employee and Officer Stock Option Plan (included as
                          Exhibit 10.4 to Amendment No. 4 to the Company's
                          Registration Statement on Form S-11 filed on February
                          3, 2000 (File No. 333-77229) and incorporated herein
                          by reference.

              10.5        Advisory Agreement between the Company and Triple Net
                          Properties, L.L.C. (included as Exhibit 10.5 to
                          Amendment No. 2 to the Company's Registration
                          Statement on Form S-11 filed on October 13, 1999 (File
                          No. 333-77229) and incorporated herein by reference.


              10.6        Purchase and Sale Agreement, dated June 5, 2000, by
                          and between Robert C. Parker and Carolyn De La Fuente
                          Parker and Triple Net Properties, L.L.C. (included as
                          Exhibit 10.1 to Form 10-Q filed by the Company on
                          November 14, 2000 and incorporated herein by
                          reference).

              10.7        Purchase and Sale Agreement, dated October 25, 2000,
                          by and between CMF Capital Company, L.L.C. and T
                          REIT, L.P. (included as Exhibit 10.1 to Form 8-K
                          filed by the Company on November 13, 2000 and
                          incorporated herein by reference).

              10.8        Purchase and Sale Agreement, dated October 26,2000,
                          by and between CMF Capital Company, L.L.C. and T
                          REIT, L.P. (included as Exhibit 10.1 to Form 8-K
                          filed by the Company on December 20, 2000 and
                          incorporated herein by reference).

              10.9        Purchase and Sale Agreement, dated August 24, 2000,
                          as amended, by and between Drummer Boy Holdings, LLC
                          and Triple Net Properties, L.L.C. (included as
                          Exhibit 10.9 to Post-Effective Amendment No. 2 to the
                          Company's Registration Statement on Form S-11 filed
                          on July 17, 2001 (File No. 333-77229) and
                          incorporated herein by reference).

              10.10       First Amendment to Adivsory Agreement between the
                          Company and Triple Net Properties, L.L.C. (included
                          as Exhibit 10.10 to Post-Effective Amendment No. 2 to
                          the Company's Registration Statement on Form S-11
                          filed on July 17, 2001 (File No. 333-77229) and
                          incorporated herein by reference).

              10.11       Purchase and Sale Agreement, dated April 16, 2001, by
                          and between Kilroy Realty, L.P. and Triple Net
                          Properties, L.L.C. (Filed herewith.)

                                      21