UNITED STATES
SECURITIES AND EXCHANGE COMMISSION  
Washington, D.C. 20549

FORM
  10-Q

þ
     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
  OF THE SECURITIES EXCHANGE ACT OF 1934

For the
quarterly period ended March 31, 2006

OR

o
     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 1-6249

WINTHROP
  REALTY TRUST(Exact name of Registrant as specified in its certificate of incorporation)

|Ohio                                                                       |  | 34-6513657                                    
|-------------------------------------------------------------------------- |  | ----------------------------------------------
|(State or other jurisdiction
      of
      incorporation or organization) |  | (I.R.S. Employer 
      Identification Number)
|                                                                           |  |                                               
|7 Bulfinch Place, Suite 500, Boston, Massachusetts                         |  | 02114                                         
|(Address of principal
      executive offices)                             |  | (Zip Code)                                    

(617) 570-4614 
  (Registrant's telephone number, including area code)

Indicate by
check mark whether the registrant: (1) has filed all reports  required to be filed by
Section 13 or 15(d) of the Securities and 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 at least the past 90
days. Yes þ No o

Indicate
  by check mark whether the registrant is a large accelerated filer, an accelerated
  filer, or a non-accelerated filer (as defined in Exchange Act Rule 12b-2).

Large
accelerated filer o Accelerated filer þ Non-accelerated filer o

Indicate
  by check mark whether the registrant is a shell company (as defined in Exchange
  Act Rule12b-2).Yes o
  No þ

As of May 1,
2006 there were 40,473,787 Common Shares of beneficial interest  outstanding.

---



---

INDEX


|                                      |                                                                                                                                                   | Page
|------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|                                     
|Part
        I. FINANCIAL INFORMATION
|                                      |                                                                                                                                                   |     
|                                      | Item
      1. Financial Statements (Unaudited):                                                                                                   |     
|                                      |                                                                                                                                                   |     
|                                      |                                                                                                                                                   |     
|                                      | Unaudited Consolidated Balance Sheets as of March 31, 2006 and Consolidated Balance Sheet at             December 31, 2005                        |     
|                                      |                                                                                                                                                   |     
|                                      | Unaudited Consolidated Statements of Operations and Comprehensive Income             for the Three Months Ended March 31, 2006 and March 31, 2005 |     
|                                      |                                                                                                                                                   |     
|                                      | Unaudited Consolidated Statement of Shareholders Equity for the             Three Months Ended March 31, 2006                                    |     
|                                      |                                                                                                                                                   |     
|                                      | Unaudited Consolidated Statements of Cash Flows for the Three Months             Ended March 31, 2006 and March 31, 2005                          |     
|                                     
|                                      | Notes to Unaudited Consolidated Financial Statements                                                                                              |     
|                                      |                                                                                                                                                   |     
|                                      | Item
      2. Managements Discussion and Analysis of Financial Condition and
      Results of Operations                                         |     
|                                      |                                                                                                                                                   |     
|                                      | Item
      3. Quantitative and Qualitative Disclosures about Market Risk                                                                          |     
|                                      |                                                                                                                                                   |     
|                                      | Item
      4. Controls and Procedures                                                                                                             |     
|                                      |                                                                                                                                                   |     
|Part
        II. OTHER INFORMATION   
|                                      |                                                                                                                                                   |     
|                                      | Item
      6. Exhibits                                                                                                                            |     
|                                      |                                                                                                                                                   |     
|                                      | Signatures                                                                                                                                        |     
|                                      |                                                                                                                                                   |     
|                                      | Exhibit
      Index                                                                                                                               |     

2



---

WINTHROP
REALTY TRUST  FORM 10-Q - MARCH 31, 2006

CONSOLIDATED
BALANCE SHEETS

(In
thousands, except share and per share data)

|                                                                           |  |  | March
        31, 2006
        (Unaudited) |          | December
        31, 2005 |  
|-------------------------------------------------------------------------- |  |  | ------------------------------------------ | -------- | ------------------------- | -
|                                                                           |  |  |                                            |          |                           |  
|ASSETS                                                                     |  |  |                                            |          |                           |  
|Investments
      in real estate, at cost                                  |  |  |                                            |          |                           |  
|Land                                                                       |  |  | $                                          | 19,546   |                           | $
|Buildings
      and improvements                                           |  |  |                                            | 229,255  |                           |  
|                                                                           |  |  |                                            |          |                           |  
|                                                                           |  |  |                                            | 248,801  |                           |  
|Less
      - Accumulated depreciation                                      |  |  |                                            | (10,654  | )                         |  
|                                                                           |  |  |                                            |          |                           |  
|Investments
      in real estate, net                                      |  |  |                                            | 238,147  |                           |  
|Cash
      and cash equivalents                                            |  |  |                                            | 22,895   |                           |  
|Restricted
      cash                                                      |  |  |                                            | 2,615    |                           |  
|Mortgage-backed
      securities available for sale pledged                |  |  |                                            |          |                           |  
|under
      repurchase agreements                                          |  |  |                                            | 120,391  |                           |  
|Loans
      receivable                                                     |  |  |                                            | 82,611   |                           |  
|Accounts
      receivable and prepayments, net of allowance                |  |  |                                            |          |                           |  
|of
      $10 and $23, respectively                                         |  |  |                                            | 7,169    |                           |  
|Real
      estate securities available for sale                            |  |  |                                            | 14,629   |                           |  
|Preferred
      equity investment                                          |  |  |                                            | 79,919   |                           |  
|Equity
      investment                                                    |  |  |                                            | 70,725   |                           |  
|Equity
      investment in joint venture                                   |  |  |                                            | 11,374   |                           |  
|Lease
      intangibles, net                                               |  |  |                                            | 38,795   |                           |  
|Deferred
      financing costs, net                                        |  |  |                                            | 1,635    |                           |  
|Assets
      of discontinued operations                                    |  |  |                                            | 1,382    |                           |  
|Other
      assets                                                         |  |  |                                            | 2,644    |                           |  
|                                                                           |  |  |                                            |          |                           |  
|TOTAL
      ASSETS                                                         |  |  | $                                          | 694,931  |                           | $
|                                                                           |  |  |                                            |          |                           |  
|                                                                           |  |  |                                            |          |                           |  
|LIABILITIES                                                                |  |  |                                            |          |                           |  
|                                                                           |  |  |                                            |          |                           |  
|Repurchase
      agreements                                                |  |  | $                                          | 116,237  |                           | $
|Mortgage
      loans payable                                               |  |  |                                            | 214,862  |                           |  
|Loan
      payable                                                         |  |  |                                            | 30,020   |                           |  
|Revolving
      line of credit                                             |  |  |                                            | 18,625   |                           |  
|Accounts
      payable and accrued liabilities                             |  |  |                                            | 7,443    |                           |  
|Dividends
      payable                                                    |  |  |                                            | 1,098    |                           |  
|Below
      market lease intangibles, net                                  |  |  |                                            | 4,978    |                           |  
|Deferred
      income                                                      |  |  |                                            | 8,667    |                           |  
|Liabilities
      of discontinued operations                               |  |  |                                            | 1,624    |                           |  
|                                                                           |  |  |                                            |          |                           |  
|TOTAL
      LIABILITIES                                                    |  |  |                                            | 403,554  |                           |  
|                                                                           |  |  |                                            |          |                           |  
|COMMITMENTS
      AND CONTINGENCIES                                        |  |  |                                            |          |                           |  
|MINORITY
      INTEREST                                                    |  |  |                                            | 29,998   |                           |  
|                                                                           |  |  |                                            |          |                           |  
|                                                                           |  |  |                                            |          |                           |  
|SHAREHOLDERS'
      EQUITY                                                 |  | 
|                                                                           |  |  |                                            |          |                           |  
|Series
      A Cumulative Convertible Redeemable Preferred Shares of       |  |  |                                            |          |                           |  
|Beneficial
      Interest, $25 per share liquidating preference, 2,300,000 |  |  |                                            |          |                           |  
|shares
      authorized, 0 and 983,082 outstanding at March 31, 2006 and   |  |  |                                            |          |                           |  
|December
      31, 2005, respectively                                      |  |  |                                            |         |                           |  
|Series
      B-1 Cumulative Convertible Redeemable Preferred Shares of     |  |  |                                            |          |                           |  
|Beneficial
      Interest, $25 per share liquidating preference, 4,000,000 |  |  |                                            |          |                           |  
|shares
      authorized, 3,990,000 and 4,000,000 outstanding at            |  |  |                                            |          |                           |  
|March
      31, 2006 and December 31, 2005, respectively                   |  |  |                                            | 93,928   |                           |  
|Common
      Shares of Beneficial Interest, $1 par, unlimited authorized,  |  |  |                                            |          |                           |  
|40,473,787
      and 35,581,479 outstanding at March 31, 2006 and          |  |  |                                            |          |                           |  
|December
      31, 2005, respectively                                      |  |  |                                            | 40,474   |                           |  
|Additional
      paid-in capital                                           |  |  |                                            | 239,860  |                           |  
|Accumulated
      other comprehensive income                               |  |  |                                            | 3,483    |                           |  
|Accumulated
      distributions in excess of net income                    |  |  |                                            | (116,366 | )                         |  
|                                                                           |  |  |                                            |          |                           |  
|Total
      Shareholders' Equity                                           |  |  |                                            | 261,379  |                           |  
|                                                                           |  |  |                                            |          |                           |  
|TOTAL
      LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS' EQUITY        |  |  | $                                          | 694,931  |                           | $
|                                                                           |  |  |                                            |          |                           |  

See Notes to
Consolidated Financial Statements.

3



---

WINTHROP
REALTY TRUST  FORM 10-Q - MARCH 31, 2006

CONSOLIDATED
STATEMENTS OF OPERATIONS AND  COMPREHENSIVE INCOME(Unaudited)

(In
thousands, except per share data)

|                                                                             |  |  | For
        the Three Months Ended
        March 31, |       
|---------------------------------------------------------------------------- |  |  | ---------------------------------------------------- | ------
|                                                                             |  |  |                                                      |       
|                                                                             |  |  | 2006                                                 |       
|                                                                             |  |  |                                                      |       
|Revenues                                                                     |  |  |                                                      |       
|Rents                                                                        |  |  | $                                                    | 8,577 
|Interest
      and dividends                                                 |  |  |                                                      | 3,454 
|                                                                             |  |  |                                                      |       
|                                                                             |  |  |                                                      | 12,031
|                                                                             |  |  |                                                      |       
|Expenses                                                                     |  |  |                                                      |       
|Property
      operating                                                     |  |  |                                                      | 954   
|Real
      estate taxes                                                      |  |  |                                                      | 158   
|Depreciation
      and amortization                                          |  |  |                                                      | 2,551 
|Interest                                                                     |  |  |                                                      | 5,636 
|General
      and administrative                                             |  |  |                                                      | 1,519 
|State
      and local taxes                                                  |  |  |                                                      | 4     
|                                                                             |  |  |                                                      |       
|                                                                             |  |  |                                                      | 10,822
|                                                                             |  |  |                                                      |       
|Other
      income                                                           |  |  |                                                      |       
|Assignment
      of exclusivity agreement                                    |  |  |                                                      | 833   
|Equity
      in earnings of preferred equity investment                      |  |  |                                                      | 1,479 
|Equity
      in earnings (loss) of equity investment                         |  |  |                                                      | 1,602 
|Gain
      on sale of real estate securities available for sale              |  |  |                                                      | 7,319 
|Gain
      on sale of real estate held for syndication                       |  |  |                                                      |      
|Gain
      on early extinguishment of debt                                   |  |  |                                                      | 165   
|                                                                             |  |  |                                                      |       
|                                                                             |  |  |                                                      | 11,398
|                                                                             |  |  |                                                      |       
|Income
      from continuing operations before minority interest             |  |  |                                                      | 12,607
|Minority
      interest                                                      |  |  |                                                      | 632   
|                                                                             |  |  |                                                      |       
|Income
      from continuing operations                                      |  |  |                                                      | 11,975
|                                                                             |  |  |                                                      |       
|Discontinued
      operations:                                               |  |  |                                                      |       
|Income
      from discontinued operations                                    |  |  |                                                      | 36    
|                                                                             |  |  |                                                      |       
|Net
      income                                                             |  |  |                                                      | 12,011
|Preferred
      dividend                                                     |  |  |                                                      | (1,624
|                                                                             |  |  |                                                      |       
|Net
      income applicable to Common Shares of Beneficial Interest          |  |  | $                                                    | 10,387
|                                                                             |  |  |                                                      |       
|Comprehensive
      income                                                   |  |  |                                                      |       
|Net income                                                                   |  |  | $                                                    | 12,011
|Change
      in unrealized gain on real estate securities available for sale |  |  |                                                      | (4,139
|Change
      in unrealized loss on mortgage-backed securities held for sale  |  |  |                                                      | 1     
|Change
      in unrealized gain on interest rate derivative                  |  |  |                                                      | 706   
|                                                                             |  |  |                                                      |       
|                                                                             |  |  |                                                      |       
|Comprehensive
      income                                                   |  |  | $                                                    | 8,579 
|                                                                             |  |  |                                                      |       
|Per
      common share data - Basic:                                         |  | 
|Income
      from continuing operations                                      |  |  | $                                                    | 0.27  
|Income
      from discontinued operations                                    |  |  |                                                      | 0.00  
|                                                                             |  |  |                                                      |       
|Net income                                                                   |  |  | $                                                    | 0.27  
|                                                                             |  |  |                                                      |       
|Per
      common share data - Diluted:                                       |  |  |                                                      |       
|Income
      from continuing operations                                      |  |  | $                                                    | 0.19  
|Income
      from discontinued operations                                    |  |  |                                                      | 0.00  
|                                                                             |  |  |                                                      |       
|Net income                                                                   |  |  | $                                                    | 0.19  
|                                                                             |  |  |                                                      |       
|Basic
      Weighted-Average Common Shares                                   |  |  |                                                      | 38,458
|                                                                             |  |  |                                                      |       
|Diluted
      Weighted-Average Common Shares                                 |  |  |                                                      | 62,699
|                                                                             |  |  |                                                      |       

See Notes to
Consolidated Financial Statements.

4



---

WINTHROP
REALTY TRUSTFORM 10Q - MARCH 31, 2006

CONSOLIDATED
STATEMENTS OF SHAREHOLDERS EQUITY(Unaudited)

(In
thousands, except per share amounts)

|                                                                  |                                                                     |                                                       |        |      |        |        |         |        |  |       |   |   |        |   | Additional
        Paid-In
        Capital |        | Accumulated
        
        Other 
        Comprehensive
        Income |   | Accumulated
        
        Distributions
        in Excess of 
        Net Income |  | Total |        
|----------------------------------------------------------------- | ------------------------------------------------------------------- | ----------------------------------------------------- | ------ | ---- | ------ | ------ | ------- | ------ |  | ----- | - | - | ------ | - | ------------------------------------------ | ------ | ------------------------------------------------------------------------ | - | ----------------------------------------------------------------------------------- |  | ----- | -------
|Series A 
        Preferred Shares of
        Beneficial Interest | Series B-1 
        Preferred Shares of
        Beneficial Interest | Common 
        Shares of Beneficial
        Interest
|Shares                                                            |                                                                     | Amount                                                | Shares |      | Amount | Shares |         | Amount
|                                                                  |                                                                     |                                                       |        |      |        |        |         |        |  |       |   |   |        |   |                                            |        |                                                                          |   |                                                                                     |  |       |        
|Balance,
      December 31, 2005                                  |                                                                     |                                                       |        | 983  |        | $      | 23,131  |        |  | 4,000 |   | $ | 94,164 |   |                                            | 35,581 |                                                                          | $ | 35,581                                                                              |  | $     | 221,386
|Net
      income                                                  |                                                                     |                                                       |        |     |        |        |        |        |  |      |   |   |       |   |                                            |       |                                                                          |   |                                                                                    |  |       |       
|Dividends
      paid or accrued on Series B-1                     |                                                                     |                                                       |        |      |        |        |         |        |  |       |   |   |        |   |                                            |        |                                                                          |   |                                                                                     |  |       |        
|preferred
      shares ($1.625 per share)                         |                                                                     |                                                       |        |     |        |        |        |        |  |      |   |   |       |   |                                            |       |                                                                          |   |                                                                                    |  |       |       
|Change
      in unrealized gain on real estate                    |                                                                     |                                                       |        |      |        |        |         |        |  |       |   |   |        |   |                                            |        |                                                                          |   |                                                                                     |  |       |        
|securities
      available for sale, net of                       |                                                                     |                                                       |        |      |        |        |         |        |  |       |   |   |        |   |                                            |        |                                                                          |   |                                                                                     |  |       |        
|reclassification
      adjustment for                             |                                                                     |                                                       |        |      |        |        |         |        |  |       |   |   |        |   |                                            |        |                                                                          |   |                                                                                     |  |       |        
|amounts
      included in net income                              |                                                                     |                                                       |        |     |        |        |        |        |  |      |   |   |       |   |                                            |       |                                                                          |   |                                                                                    |  |       |       
|Change
      in unrealized gain on mortgage-                      |                                                                     |                                                       |        |      |        |        |         |        |  |       |   |   |        |   |                                            |        |                                                                          |   |                                                                                     |  |       |        
|backed
      securities held for sale                             |                                                                     |                                                       |        |     |        |        |        |        |  |      |   |   |       |   |                                            |       |                                                                          |   |                                                                                    |  |       |       
|Change
      in unrealized gain on interest                       |                                                                     |                                                       |        |      |        |        |         |        |  |       |   |   |        |   |                                            |        |                                                                          |   |                                                                                     |  |       |        
|rate
      derivatives                                            |                                                                     |                                                       |        |     |        |        |        |        |  |      |   |   |       |   |                                            |       |                                                                          |   |                                                                                    |  |       |       
|Redemption
      of Series A-1 preferred                          |                                                                     |                                                       |        |      |        |        |         |        |  |       |   |   |        |   |                                            |        |                                                                          |   |                                                                                     |  |       |        
|shares
      for common shares                                    |                                                                     |                                                       |        | (983 | )      |        | (23,131 | )      |  |      |   |   |       |   |                                            | 4,837  |                                                                          |   | 4,837                                                                               |  |       | 18,294 
|Conversion
      of Series B-1 preferred                          |                                                                     |                                                       |        |      |        |        |         |        |  |       |   |   |        |   |                                            |        |                                                                          |   |                                                                                     |  |       |        
|shares
      to common shares                                     |                                                                     |                                                       |        |     |        |        |        |        |  | (10   | ) |   | (236   | ) |                                            | 56     |                                                                          |   | 56                                                                                  |  |       | 180    
|                                                                  |                                                                     |                                                       |        |      |        |        |         |        |  |       |   |   |        |   |                                            |        |                                                                          |   |                                                                                     |  |       |        
|Balance,
      March 31, 2006                                     |                                                                     |                                                       |        |     |        | $      |        |        |  | 3,990 |   | $ | 93,928 |   |                                            | 40,474 |                                                                          | $ | 40,474                                                                              |  | $     | 239,860
|                                                                  |                                                                     |                                                       |        |      |        |        |         |        |  |       |   |   |        |   |                                            |        |                                                                          |   |                                                                                     |  |       |        

See Notes to
Consolidated Financial Statements

5



---

WINTHROP
REALTY TRUSTFORM 10-Q - MARCH 31, 2006

CONSOLIDATED
  STATEMENTS OF CASH FLOWS 
  (Unaudited)
  (In thousands)

|                                                                        |  |  | For
        the Three Months Ended
        March 31, |        
|----------------------------------------------------------------------- |  |  | ---------------------------------------------------- | -------
|                                                                        |  |  |                                                      |        
|                                                                        |  |  | 2006                                                 |        
|                                                                        |  |  |                                                      |        
|Cash
      flows from operating activities                              |  |  |                                                      |        
|Net
      income                                                        |  |  | $                                                    | 12,011 
|Adjustments
      to reconcile net income                               |  |  |                                                      |        
|to
      net cash provided by (used in) operating activities            |  |  |                                                      |        
|Depreciation
      and amortization (including amortization of deferred |  |  |                                                      |        
|financing
      costs)                                                  |  |  |                                                      | 1,583  
|Amortization
      of lease intangibles                                 |  |  |                                                      | 1,215  
|Straight-lining
      of rental income                                  |  |  |                                                      | 890    
|Equity
      in undistributed earnings of preferred equity investment   |  |  |                                                      |        
|in
      excess of of distributions from earnings                       |  |  |                                                      | (332   
|Equity
      in undistributed earnings of equity investment             |  |  |                                                      |        
|in
      excess of distributions from earnings                          |  |  |                                                      | (421   
|Minority
      interest                                                 |  |  |                                                      | 632    
|Gain
      on sale of real estate held for syndication                  |  |  |                                                      |       
|Gain
      on sale of real estate securities available for sale         |  |  |                                                      | (7,319 
|Gain
      on early extinguishment of debt                              |  |  |                                                      | (165   
|Decrease
      in deferred income                                       |  |  |                                                      | (833   
|Bad
      debt recovery                                                 |  |  |                                                      | (13    
|Net
      changes in other operating assets and liabilities             |  |  |                                                      | 1,334  
|                                                                        |  |  |                                                      |        
|Net
      cash provided by (used in) operating activities               |  |  |                                                      | 8,582  
|                                                                        |  |  |                                                      |        
|Cash
      flows from investing activities                              |  |  |                                                      |        
|Investments
      in real estate                                        |  |  |                                                      | (35,749
|Proceeds
      from disposition of real estate held for syndication     |  |  |                                                      |       
|Contributions
      of minority interests                               |  |  |                                                      | 3,074  
|Distributions
      to minority interest                                |  |  |                                                      | (1,235 
|Proceeds
      from mortgage-backed securities available for sale       |  |  |                                                      | 5,718  
|Investment
      in equity investment in joint venture                  |  |  |                                                      | (11,374
|Investment
      in preferred equity investment                         |  |  |                                                      | (1,160 
|Purchase
      of real estate securities available for sale             |  |  |                                                      | (1,211 
|Proceeds
      from sale of real estate securities available for sale   |  |  |                                                      | 24,062 
|Increase
      in restricted cash                                       |  |  |                                                      | (1,989 
|Issuance
      and acquisition of loans receivable                      |  |  |                                                      | (19,088
|Collection
      of loans receivable                                    |  |  |                                                      | 3,513  
|                                                                        |  |  |                                                      |        
|Net
      cash by (used in) provided  by investing activities           |  |  |                                                      | (35,439
|                                                                        |  |  |                                                      |        

(Continued)

See Notes to
Consolidated Financial Statements.

6



---

WINTHROP
REALTY TRUSTFORM 10-Q - MARCH 31, 2006

CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited)(In thousands)

(Continued)

|                                                                                |  |  | For
        the Three Months Ended
        March 31, |        
|------------------------------------------------------------------------------- |  |  | ---------------------------------------------------- | -------
|                                                                                |  |  |                                                      |        
|                                                                                |  |  | 2006                                                 |        
|                                                                                |  |  |                                                      |        
|Cash
      flows from financing activities                                      |  |  |                                                      |        
|Repayment
      of borrowings under repurchase agreements                       |  |  | $                                                    | (5,479 
|Proceeds
      from mortgage loans payable                                      |  |  |                                                      | 45,929 
|Payments
      of loans payable                                                 |  |  |                                                      | (5     
|Proceeds
      from revolving line of credit                                    |  |  |                                                      | 45,000 
|Payment
      of revolving line of credit                                       |  |  |                                                      | (42,375
|Deferred
      financing costs                                                  |  |  |                                                      | (260   
|Principal
      payments of mortgage loans payable                              |  |  |                                                      | (6,020 
|Issuance
      of Common Shares                                                 |  |  |                                                      |       
|Issuance
      of Series B-1 Cumulative Convertible Redeemable Preferred Shares |  |  |                                                      |       
|Dividends
      paid on Preferred Shares                                        |  |  |                                                      | (2,142 
|Dividends
      paid on Common Shares                                           |  |  |                                                      | (3,914 
|                                                                                |  |  |                                                      |        
|Net
      cash provided by financing activities                                 |  |  |                                                      | 30,734 
|                                                                                |  |  |                                                      |        
|Net
      increase in cash and cash equivalents                                 |  |  |                                                      | 3,877  
|Cash
      and cash equivalents at beginning of period                          |  |  |                                                      | 19,018 
|                                                                                |  |  |                                                      |        
|Cash
      and cash equivalents at end of period                                |  |  | $                                                    | 22,895 
|                                                                                |  |  |                                                      |        
|                                                                                |  |  |                                                      |        
|Supplemental
      Disclosure of Cash Flow Information                          |  | 
|                                                                                |  |  |                                                      |        
|Interest
      paid                                                             |  |  | $                                                    | 5,645  
|                                                                                |  |  |                                                      |        
|State
      and local income taxes paid                                         |  |  | $                                                    | 190    
|                                                                                |  |  |                                                      |        
|                                                                                |  |  |                                                      |        
|Supplemental
      Disclosure of Non-Cash Investing and Financing Activities    |  |  |                                                      |        
|                                                                                |  |  |                                                      |        
|Dividends
      accrued on Preferred Shares                                     |  |  | $                                                    | 1,624  
|Loans
      to Limited Partners of 5400 Westheimer                              |  |  |                                                      |       
|Liabilities
      of real estate held for syndication assumed in acquisition    |  |  |                                                      |       

See Notes to
Consolidated Financial Statements.

7



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

NOTES
  TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

|1. | Organization
|-- | ------------

| | Winthrop
Realty Trust is an unincorporated association in the form of a business  trust organized
in Ohio under a Declaration of Trust dated August 1, 1961, as  amended and restated on
December 31, 2005 (the "Declaration of Trust"), which  has as its stated
principal business activity the ownership and management of,  and lending to, real estate
and related investments. The Trust conducts its  business through WRT Realty L.P., a
Delaware limited partnership (the "Operating  Partnership"). The Trust is the
sole general partner of, and owns directly and  indirectly, 100% of the limited
partnership interest in the Operating  Partnership. All references to the
"Trust" refer to Winthrop Realty Trust and  its consolidated subsidiaries,
including the Operating Partnership.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. | Summary
        of Significant Accounting Policies
|-- | --------------------------------------------------

| | Basis
of Presentation
| | ---------------------

| | The
accompanying unaudited consolidated interim financial statements have been  prepared in
accordance with accounting principles generally accepted in the  United States
("GAAP") for interim financial statements and with the  instructions to Form
10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do  not include all of the
information and footnotes required by GAAP for complete  financial statements, although
management believes that the disclosures  presented herein are adequate to make the
accompanying unaudited consolidated  interim financial statements presented not
misleading. The accompanying  unaudited consolidated interim financial statements should
be read in  conjunction with the audited consolidated annual financial statements and the
related Management's Discussion and Analysis of Financial Condition and Results  of
Operations included in the Trust's Annual Report on Form 10-K/A for the year  ended
December 31, 2005 filed with the Securities and Exchange Commission. In  the opinion of
management, all adjustments (which include normal recurring  adjustments) considered
necessary for a fair presentation have been included.  The results of operations for the
three months ended March 31, 2006 are not  necessarily indicative of the operating
results for the full year.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
accompanying unaudited consolidated financial statements represent the  consolidated
results of Winthrop Realty Trust, its wholly-owned taxable REIT  subsidiary, WRT TRS
Management Corp. ("FUMI"), the Operating Partnership,  wholly-owned
subsidiaries and certain partially-owned entities, in which the  Trust owns either (i)
more than 50% and has a controlling interest or (ii) 50%  or less and the Trust is the
controlling partner. All significant intercompany  amounts have been eliminated. The
Trust accounts for its investments in  companies in which it has the ability to
significantly influence but does not  have a controlling interest, by using the equity
method of accounting.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Certain
prior year balances reflected in Note 18 "Business Segments" have been
reclassified in order to conform to the current year presentation.
| | -------------------------------------------------------------------------------------------------------------------------------------------------

8



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

NOTES
  TOUNAUDITEDCONSOLIDATED FINANCIAL STATEMENTS

|2. | Summary of Significant Accounting Policies (Continued)
|-- | ------------------------------------------------------

| | Use
of Estimates
| | ----------------

| | The
preparation of financial statements in conformity with GAAP requires  management to make
estimates and assumptions in determining the reported amounts  of assets and liabilities
and disclosure of contingent assets and liabilities at  the date of the consolidated
interim financial statements and the reported  amounts of revenue and expenses during the
reporting period. Some of the  critical estimates made by the Trust include, but are not
limited to, estimates  of useful lives for long-lived assets, reserves for collection on
accounts and  loans receivable and provisions for impairment of real estate. As a result
of  the nature of estimates made by the Trust, actual results could differ.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Earnings
Per Share
| | ------------------

| | The
Trust has calculated earnings per share in accordance with SFAS No.128,  "Earnings
Per Share." SFAS No.128 requires that common share equivalents be  excluded from the
weighted-average shares outstanding for the calculation of  basic earnings per share. The
reconciliation of shares outstanding for the basic  and diluted earnings per share
calculation is as follows (in thousands, except  per share data):
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                   |  |  | Three
        Months Ended
        March 31, |       
|------------------------------------------------------------------ |  |  | -------------------------------------------- | ------
|                                                                   |  |  |                                              |       
|                                                                   |  |  | 2006                                         |       
|                                                                   |  |  |                                              |       
|Basic                                                              |  |  |                                              |       
|Income
      from continuing operations                            |  |  | $                                            | 11,975
|Preferred
      dividend                                           |  |  |                                              | (1,624
|                                                                   |  |  |                                              |       
|Income
      from continuing operations, net of preferred dividend |  |  |                                              | 10,351
|Income
      from discontinued operations                          |  |  |                                              | 36    
|                                                                   |  |  |                                              |       
|Net income
      applicable to Common Shares                       |  |  | $                                            | 10,387
|                                                                   |  |  |                                              |       
|Basic
      weighted-average Common Shares                         |  |  |                                              | 38,458
|                                                                   |  |  |                                              |       
|Income
      from continuing operations, net of preferred dividend |  |  | $                                            | 0.27  
|Income
      from discontinued operations                          |  |  |                                              | 0.00  
|                                                                   |  |  |                                              |       
|Net income
      per Common Share - Basic                          |  |  | $                                            | 0.27  
|                                                                   |  |  |                                              |       

9



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

NOTES
  TOUNAUDITEDCONSOLIDATED FINANCIAL STATEMENTS

|2. | Summary of Significant Accounting Policies (Continued)
|-- | ------------------------------------------------------

| | Earnings
Per Share (Continued)
| | ------------------------------

|                                             |  |  | Three
        Months Ended
        March 31, |       
|-------------------------------------------- |  |  | -------------------------------------------- | ------
|                                             |  |  |                                              |       
|                                             |  |  | 2006                                         |       
|                                             |  |  |                                              |       
|Diluted                                      |  |  |                                              |       
|Income
      from continuing operations      |  |  | $                                            | 11,975
|Preferred
      dividend                     |  |  |                                              |      
|                                             |  |  |                                              |       
|Income
      from continuing operations      |  |  |                                              | 11,975
|Income
      from discontinued operations    |  |  |                                              | 36    
|                                             |  |  |                                              |       
|Net income
      applicable to Common Shares |  |  | $                                            | 12,011
|                                             |  |  |                                              |       
|Basic
      weighted-average Common Shares   |  |  |                                              | 38,458
|Convertible
      Preferred Shares           |  |  |                                              | 24,182
|Stock
      options                          |  |  |                                              | 59    
|                                             |  |  |                                              |       
|Diluted
      weighted-average Common Shares |  |  |                                              | 62,699
|                                             |  |  |                                              |       
|Income
      from continuing operations      |  |  | $                                            | 0.19  
|Income
      from discontinued operations    |  |  |                                              | 0.00  
|                                             |  |  |                                              |       
|Net income
      per Common Share            |  |  | $                                            | 0.19  
|                                             |  |  |                                              |       

| | The
Trust's Series A Cumulative Convertible Redeemable Preferred Shares of  Beneficial
Interest ("Series A Shares") and Series B-1 Cumulative Convertible  Redeemable
Preferred Shares of Beneficial Interest ("Series B-1 Shares") are  antidilutive
for the three months ended March 31, 2005 and, accordingly, are not  included in the
weighted average shares outstanding for the diluted earnings per  share. The Series A
Shares, which were redeemed for the Trust's common shares of  beneficial interest
("Common Shares") on February 7, 2006, and Series B-1 Shares  were dilutive for
the three months ended March 31, 2006.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Variable
Interest Entities
| | --------------------------

| | Financial
Accounting Standards Board ("FASB") Interpretation No. 46 (Revised) -
Consolidation of Variable Interest Entities ("FIN 46R") requires a variable
interest entity ("VIE") to be consolidated by its primary beneficiary. The
primary beneficiary is the party that absorbs a majority of the VIE's  anticipated losses
and/or a majority of the expected returns.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Trust has evaluated its loans and investments to determine whether they are  variable
interests in a VIE. This evaluation resulted in the Trust determining  that certain of
its loans, preferred equity investments and other investments  were potential variable
interests. For each of these investments, the Trust has  evaluated (1) the sufficiency of
the applicable entity's equity investments at  fair value at risk to absorb losses, (2)
whether as a group the holders of the  equity investments at risk have (a) the direct or
indirect ability through  voting rights to make decisions
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

NOTES
  TOUNAUDITEDCONSOLIDATED FINANCIAL STATEMENTS

|2. | Summary of Significant Accounting Policies (Continued)
|-- | ------------------------------------------------------

| | Variable
Interest Entities (Continued)
| | --------------------------------------

| | about
the entity's significant activities, (b) the obligation to absorb the  expected losses of
the entity and whether their obligations are protected  directly or indirectly, (c) the
right to receive the expected residual return of  the entity without a cap on the return,
(3) whether the voting rights of these  investors are not proportional to their
obligations to absorb the expected  losses of the entity, their rights to receive the
expected returns of the  equity, or both, and (4) whether substantially all of the
entity's activities do  involve or are conducted on behalf of an investor that has
disproportionately  few voting rights. As of March 31, 2006, the Trust has identified one
loan which  was made to an entity determined to be a VIE, the loan acquired by WRT Marc
RC  LLC (see Note 5). The Trust has determined that it is not the primary  beneficiary,
therefore the Trust accounts for this investment as a loan  receivable.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Recently
Issued Accounting Standards
| | ------------------------------------

| | There
have been no new  accounting  standards  or  interpretations  that have been issued  that
the Trust has not yet adopted  that the  Trust believes will have a material impact on
our consolidated financial statements upon adoption.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. | Real Estate Acquisitions, Dispositions and Financings
|-- | -----------------------------------------------------

| | Acquisitions
| | ------------

| | On
February 16, 2006, the Trust acquired from an unaffiliated third party three  office
buildings located at 550-650, 701 and 1050 Warrenville Road, Lisle,  Illinois, a Chicago
suburb. The gross purchase price for the 550-650 and 701  properties (the
"Wholly-Owned Properties") was $31,750,000 and the purchase  price for the 1050
property was $3,500,000, which was acquired in a joint  venture owned 60% by the Trust
and 40% by an entity, the owners of which (the  "Marc Principals") are also
owners of the entities to which the Trust has made  mezzanine and second mortgage loans.
The three properties contain an aggregate  of approximately 290,000 square feet of office
space. The Wholly-Owned  Properties, which contain approximately 236,000 square feet, are
97% occupied  and the 1050 property is vacant. The Trust incurred approximately $120,000
in  closing costs with respect to the Wholly-Owned Properties and its allocable  share of
approximately $31,600 with respect to the joint venture property.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Dispositions
| | ------------

| | There
were no dispositions of real estate during the three months ended March  31, 2006.
| | ----------------------------------------------------------------------------------------

11



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

NOTES
  TOUNAUDITEDCONSOLIDATED FINANCIAL STATEMENTS

|3. | Real Estate Acquisitions, Dispositions and Financings (Continued)
|-- | -----------------------------------------------------------------

| | Financings
| | ----------

| | On
February 10, 2006, FT-Ontario Holdings LLC, a joint venture in which the  Trust holds an
80% interest and an entity owned by the Marc Principals holds a  20% interest, obtained a
$21,600,000 loan from an unaffiliated third party  lender, which is secured by
FT-Ontario's property and parking spaces located at  One Erie, Chicago, Illinois. The
loan bears interest at 5.75%. The loan requires  monthly payments of interest only during
the first two years of the loan term  and thereafter principal (based on a 30-year
amortization schedule) and interest  for the balance of the term. The loan is scheduled
to mature on March 1, 2016,  at which time the outstanding principal balance is expected
to be approximately  $18,859,000.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
February 17, 2006, the Trust obtained a $9,550,000 loan from an unaffiliated  third party
lender, which is secured by the Trust's wholly-owned properties  located in Andover,
Massachusetts and South Burlington, Vermont. The loan bears  interest at 6.6%, requires
monthly payments of principal and interest of  approximately $65,000 (based on a 30-year
amortization schedule) and is  scheduled to mature on February 16, 2011 at which time the
outstanding principal  balance is expected to be approximately $8,733,000.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. | Mortgage-Backed Securities Pledged Under Repurchase Agreements
|-- | --------------------------------------------------------------

| | At
March 31, 2006, all of the  Trust's mortgage-backed securities which consisted of Federal
National Mortgage  Association ("Fannie Mae") whole pool certificates were
classified as  available-for-sale and, as such, were carried at their estimated fair
value  based on prices obtained from a third party.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Although
        not rated, whole pool agency mortgage-backed securities carry an implied
        AAA rating and are guaranteed as to principal and interest by Fannie Mae.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
following table presents the amortized cost and fair value of the  Trust's
mortgage-backed securities at March 31, 2006 and December 31, 2005 (in  thousands):
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                          |  |  | March
        31, 2006 |         | December
        31, 2005 |  
|----------------------------------------- |  |  | ---------------------- | ------- | ------------------------- | -
|                                          |  |  |                        |         |                           |  
|Cost                                      |  |  | $                      | 120,535 |                           | $
|Unrealized
      loss                     |  |  |                        | (1,392  | )                         |  
|Interest
      payment receivable         |  |  |                        | 438     |                           |  
|Unamortized
      premium                 |  |  |                        | 810     |                           |  
|                                          |  |  |                        |         |                           |  
|Carrying
      value/estimated fair value |  |  | $                      | 120,391 |                           | $
|                                          |  |  |                        |         |                           |  

12



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

NOTES
  TOUNAUDITEDCONSOLIDATED FINANCIAL STATEMENTS

|4. | Mortgage-Backed Securities Pledged Under Repurchase Agreements (Continued)
|-- | --------------------------------------------------------------------------

| | The
unrealized losses are a result of changes in interest rates subsequent to  the
acquisition of the securities. All the securities are performing according  to their
terms. Furthermore, the Trust intends to, and has the ability to, hold  these securities
to maturity or at least until interest rates change such that  the fair value is no
longer less than the book value. Accordingly, the Trust has  determined that these
impairments are temporary. The period of continuous  unrealized loss position is less
than twelve months.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
mortgage-backed securities bear interest at a weighted average interest rate  of 4.23%
based on balances at March 31, 2006. The Trust did not own any  mortgage-backed
securities at March 31, 2005.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
FASB has placed an item on its  agenda relating to the treatment of transactions where
mortgage-backed  securities purchased from a particular counterparty are financed via a
repurchase agreement with the same counterparty. Currently, the Trust records  such
assets and the related financing gross on its balance sheet, and the  corresponding
interest income and interest expense gross on its income  statement. Any change in fair
value of the security is reported through other  comprehensive income under SFAS No.115,
because the security is classified as  "available for sale".
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | However,
in a transaction where the mortgage-backed securities are acquired from and financed
under a repurchase agreement with the same counterparty, the acquisition may not qualify
as a sale from the seller's perspective under the provisions of SFAS No.140, Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. In
such cases, the seller of the mortgage-backed securities may be required to continue to
consolidate the assets sold to the Trust, based on their continuing involvement with
such investments. Depending on the ultimate outcome of the FASB deliberations, the Trust
may be precluded from presenting the assets and liabilities gross on its balance sheet
and should instead be treating its net investment in such assets as a derivative.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | If
it is determined that these transactions should be treated as investments in
derivatives, the interest rate swaps entered into by the Trust to hedge its  interest
rate exposure with respect to the borrowings under the associated  repurchase agreements
would no longer qualify for hedge accounting, but would,  as with the underlying asset
transactions, also be marked to market through the  income statement.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | This
potential change in accounting treatment does not affect the economics of  the
transactions but does affect how the transactions would be reported in the  Trust's
financial statements. The Trust's cash flows, its liquidity and its  ability to pay a
dividend would be unchanged, and the Trust does not believe its  taxable income or REIT
status would be affected. The Trust's net equity would  not be materially affected. If
the Trust were to change its current accounting  treatment for these transactions as of
March 31, 2006, total assets and total  liabilities would each be reduced by
approximately $116,237,000.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

13



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

NOTES
  TOUNAUDITEDCONSOLIDATED FINANCIAL STATEMENTS

|5. | Loans Receivable
|-- | ----------------

| | On
March 29, 2006, the Trust, through two consolidated joint ventures in which  the Trust
holds a 60% interest and an entity owned by the Marc Principals owns  the remaining 40%
interest, acquired (i) a loan with a current principal balance  of $11,750,000 which is
secured by a first leasehold mortgage on approximately  241,000 square feet of commercial
space and a 133 space indoor parking garage  located at 800 South Wells, Chicago,
Illinois and commonly referred to as River  City (the "Commercial Loan"), and
(ii) a loan with a current principal balance  of $5,915,000 which is secured by a first
priority mortgage on the land  underlying the River City property and unsold residential
condominium units at  the River City property (the "Land Loan"). The Commercial
Loan is currently in  default and WRT-Marc RC LLC ("WRT-Marc RC"), the entity
that acquired the  Commercial Loan, has commenced foreclosure proceedings on the
Commercial Loan.  In connection with the acquisition and modification of the Commercial
Loan,  WRT-Marc RC entered into an option agreement with an unaffiliated third party
pursuant to which the third-party has an option to acquire the indoor parking  structure
at such time, if at all, as WRT-Marc RC acquires title to the  commercial space and the
indoor parking secured by the Commercial Loan. As  consideration for entering into the
option agreement, WRT-Marc RC received a  deed for the land underlying the River City
property, which deed is to be held  in escrow until such time, if at all, as WRT-Marc RC
acquires title to the  commercial space. If exercised, the option price will be equal to
$1,900,000  plus 10% interest thereon plus any additional expenses incurred by WRT-Marc
RC  in connection with acquiring and the operating of the commercial space less any
payments of interest made on account of the Commercial Loan.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Trust has determined that the Commercial Loan was made to a VIE under FIN  46R. The Trust
has determined that it is not the primary beneficiary, and  therefore, the Trust accounts
for this investment as a loan receivable.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
maturity date for the Land Loan was April 16, 2005. The entity from which  the Land Loan
was acquired had previously agreed to forbear from exercising any  remedies on the Land
Loan until April 16, 2006.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | WRT-Marc
RC Land LLC ("WRT-Marc RC Land"), the entity that acquired the Land  Loan,
entered into a modification agreement with the borrowers thereunder to  extend the
forbearance period to December 31, 2007 and reduced the interest rate  to 10% per annum.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
March 29, 2006, WRT-Marc RC and WRT-Marc RC Land obtained financing from an  unaffiliated
third party lender with a principal amount of $9,500,000 and  $5,280,000, respectively.
Both loans bear interest at a floating rate of Prime  plus .50% (8.25% at March 31, 2006)
and mature on March 29, 2007, subject to  one-year extensions. The loan made to WRT-Marc
RC is secured by the Commercial  Loan and the loan made to WRT-Marc RC Land is secured by
the Land Loan.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

14



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

NOTES
  TOUNAUDITEDCONSOLIDATED FINANCIAL STATEMENTS

|5. | Loans Receivable (Continued)
|-- | ----------------------------

| | The
following table summarizes the Trust's loans receivable at March 31, 2006  and December
31, 2005 (in thousands):
| | --------------------------------------------------------------------------------------------------------------------

|                                      |  |                    |  |                                          |  |                                                       |  | Carrying
        Amount
|------------------------------------- |  | ------------------ |  | ---------------------------------------- |  | ----------------------------------------------------- |  | -----------------------
|                                      |  |                    |  |                                          |  |                                                       |  |                        
|Property/Collateral                   |  | Location           |  | Interest
        Rate                    |  | Maturity                                              |  | March
        31, 2006 
|                                      |  |                    |  |                                          |  |                                                       |  |                        
|Toy Building
      (1)                |  | New York,
      NY |  | LIBOR
        plus 
        5.6% (9.72%) |  | April
        2008                                    |  | $                      
|                                      |  |                    |  |                                          |  |                                                       |  |                        
|Ridgebrooke Office
      Plaza (2)(5) |  | Northbrook, IL     |  | Prime
        (7%)                       |  | April
        2006                                    |  |                        
|                                      |  |                    |  |                                          |  |                                                       |  |                        
|Wingate Inn (2)                       |  | Clearwater, FL     |  | 10%                                      |  | February
        2007                                 |  |                        
|                                      |  |                    |  |                                          |  |                                                       |  |                        
|Various
      (3) (4)                 |  | Chicago,
      IL  |  | 8.5%                                     |  | Various;
        7 years from
        date of funding |  |                        
|                                      |  |                    |  |                                          |  |                                                       |  |                        
|River City (2)                        |  | Chicago, IL        |  | 9.75%                                    |  | February
        2006                                 |  |                        
|                                      |  |                    |  |                                          |  |                                                       |  |                        
|River City (2)                        |  | Chicago, IL        |  | 10%                                      |  | December
        2007                                 |  |                        
|                                      |  |                    |  |                                          |  |                                                       |  |                        
|                                      |  |                    |  |                                          |  |                                                       |  | $                      
|                                      |  |                    |  |                                          |  |                                                       |  |                        

| | The
carrying amount includes accrued interest of $846,000 and $877,000 at March  31, 2006 and
December 31, 2005, respectively. All the loans, except for the two  River City loans, are
performing according to their terms.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (1) |  | Secured
by the ownership interests in the property owner. The  Trust owns a one-third interest in
a joint venture which owns  a 99% participating interest in the loan. The joint venture
is  consolidated with the Trust's financial statements.
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) |  | Secured
by a first mortgage.
| | --- |  | ----------------------------

| | (3) |  | Tenant
improvement and capital expenditure loans at various  properties.
| | --- |  | ------------------------------------------------------------------------

| | (4) |  | Secured
by a subordinate mortgage or the  ownership interests in the property owner.
| | --- |  | ------------------------------------------------------------------------------------

| | (5) |  | Loan
repaid in  full on February 21, 2006.
| | --- |  | ------------------------------------------

| | Activity
related to mortgage loans is as follows (in thousands):
| | ----------------------------------------------------------------

|                                  |  |  | 2006 |        | 2005 |  
|--------------------------------- |  |  | ---- | ------ | ---- | -
|                                  |  |  |      |        |      |  
|Balance
      at January 1        |  |  | $    | 67,504 |      | $
|Purchases
      and advances made |  |  |      | 19,088 |      |  
|Interest
      accrued, net       |  |  |      | (468   | )    |  
|Repayments                        |  |  |      | (3,513 | )    |  
|                                  |  |  |      |        |      |  
|Balance
      at March 31         |  |  | $    | 82,611 |      | $
|                                  |  |  |      |        |      |  

15



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

NOTES
  TOUNAUDITEDCONSOLIDATED FINANCIAL STATEMENTS

|6. | Real Estate Securities Available for Sale
|-- | -----------------------------------------

| | On
March 12, 2006,  the Trust sold a total of 1,385,000  shares of common stock of Sizeler
Property  Investors,  Inc.  ("Sizeler")  to  three  unaffiliated  third
parties in privately  negotiated  transactions.  The shares were sold for $14.35 per
share for an aggregate  sale price of approximately  $19,875,000.  The sale resulted in a
gain of approximately  $6,790,000  exclusive of dividends received on  such shares.
Also, the Trust sold an additional  82,100 shares in market  transactions  at various
prices and recognized an additional  gain of  approximately  $245,000.  After giving
effect to the sales,  the Trust held 288,500 shares of common stock in Sizeler at March
31, 2006 representing approximately 1.4% of the outstanding common shares of Sizeler.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
accordance with the terms of the agreement with Sizeler  pursuant to which Michael
Ashner,  the Trust's chairman and chief executive  officer, was elected to Sizeler's
board in 2005, Mr. Ashner resigned as a director of Sizeler effective March 13, 2006.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
the quarter ended March 31, 2006,  the Trust sold  additional  real estate  securities
for an aggregate  price of  approximately  $2,989,000, resulting in a gain of
approximately $285,000 exclusive of dividends received.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
following is a summary of Real Estate Securities Available for Sale at March 31, 2006 (in
thousands):
| | ---------------------------------------------------------------------------------------------------------

|Name                                  |  |  |  | Date
        Purchased |  | Cost at
        March 31, 2006 |        | Gain at
        March 31, 2006 |   | Unrealized
        Balance at
        March 31, 2006 | 
|------------------------------------- |  |  |  | ---------------------- |  | ------------------------------ | ------ | ------------------------------ | - | ---------------------------------------------------- | 
|                                      |  |  |  |                        |  |                                |        |                                |   |                                                      | 
|America
      First Apartment         |  |  |  |                        |  |                                |        |                                |   |                                                      | 
|Investors,
      Inc.                 |  |  |  | Various                |  | $                              | 8,698  |                                | $ | 1,449                                                | 
|                                      |  |  |  |                        |  |                                |        |                                |   |                                                      | 
|Sizeler
      Property Investor, Inc. |  |  |  | Various                |  |                                | 3,481  |                                |   | 777                                                  | 
|                                      |  |  |  |                        |  |                                |        |                                |   |                                                      | 
|Other
      real estate securities    |  |  |  | Various                |  |                                | 223    |                                |   | 1                                                    | 
|                                      |  |  |  |                        |  |                                |        |                                |   |                                                      | 
|                                      |  |  |  |                        |  | $                              | 12,402 |                                | $ | 2,227                                                | 
|                                      |  |  |  |                        |  |                                |        |                                |   |                                                      | 

16



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

NOTES
  TOUNAUDITEDCONSOLIDATED FINANCIAL STATEMENTS

|6. | Real Estate Securities Available for Sale (Continued)
|-- | -----------------------------------------------------

| | The
following is a summary of Real Estate Securities Available for Sale at December 31, 2005
(in thousands):
| | ------------------------------------------------------------------------------------------------------------

|Name                                  |  |  |  | Date
        Purchased |  | Cost
        at 
        December 31,
        2005 |        | Unrealized 
        Gain at 
        December 31, 2005 |   | Balance
        at 
        December 31, 2005 | 
|------------------------------------- |  |  |  | ---------------------- |  | -------------------------------------------------- | ------ | ------------------------------------------------------ | - | --------------------------------------------- | 
|                                      |  |  |  |                        |  |                                                    |        |                                                        |   |                                               | 
|America
      First Apartment         |  |  |  |                        |  |                                                    |        |                                                        |   |                                               | 
|Investors,
      Inc.                 |  |  |  | Various                |  | $                                                  | 7,576  |                                                        | $ | 1,150                                         | 
|Sizeler
      Property Investor, Inc. |  |  |  | Various                |  |                                                    | 17,520 |                                                        |   | 5,039                                         | 
|Other
      real estate securities    |  |  |  | Various                |  |                                                    | 2,834  |                                                        |   | 181                                           | 
|                                      |  |  |  |                        |  |                                                    |        |                                                        |   |                                               | 
|                                      |  |  |  |                        |  | $                                                  | 27,930 |                                                        | $ | 6,370                                         | 
|                                      |  |  |  |                        |  |                                                    |        |                                                        |   |                                               | 

|7. | Preferred Equity Investment
|-- | ---------------------------

| | The
Trust holds 25 separate  convertible  mezzanine loans, one subordinate mortgage loan and
equity investments in 26 separate entities  in the aggregate  amount of  approximately
$78,220,000.  Each of the borrowers is owned  primarily by the Marc  Principals who are
not  affiliates of the Trust. Each loan is secured by the applicable  borrower's
ownership  interest in a limited liability company (each a  Property  Owner)
that in turn owns an office  building or complex.  Each loan bears interest at 7.65%,
matures on April 18, 2012 and  requires monthly payments of interest only.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
equity  interest  in each of the  borrowers  entitles  the Trust to  participate  in
capital  proceeds  derived  from the sale or  refinancing of the  applicable  property to
the extent such proceeds  generate  amounts in excess of that required to fully satisfy
all  of the debt  encumbering  that property,  including its  respective  loan and a
return to the borrower of its deemed equity (the agreed  value of the applicable
property at the loan origination  date less all debt encumbering that property  including
the loan made by the  Trust) plus a 7.65% cumulative return thereon.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Trust has committed to advance  approximately  $7,350,000 to cover the costs of tenant
improvements and capital expenditures at the  foregoing 26 properties, of which
$3,066,000 had been advanced at March 31, 2006.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

17



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

NOTES
  TOUNAUDITEDCONSOLIDATED FINANCIAL STATEMENTS

|7. | Preferred Equity Investment (Continued)
|-- | ---------------------------------------

| | Summary
financial information for the Property Owner entities on a combined basis is as follows
(in thousands):
| | ---------------------------------------------------------------------------------------------------------------

|                                          |  |  | As of 
        March 31, 2006
        (unaudited) |          | As of 
        December 31, 2005 |  
|----------------------------------------- |  |  | ------------------------------------------------- | -------- | -------------------------------- | -
|                                          |  |  |                                                   |          |                                  |  
|Condensed
      Balance Sheet             |  |  |                                                   |          |                                  |  
|Investment
      in real estate, net      |  |  | $                                                 | 151,134  |                                  | $
|Prepaid
      expenses and deposits in    |  |  |                                                   |          |                                  |  
|escrow                                    |  |  |                                                   | 4,883    |                                  |  
|Cash
      and cash equivalents           |  |  |                                                   | 272      |                                  |  
|Receivables
      and other assets        |  |  |                                                   | 29,489   |                                  |  
|                                          |  |  |                                                   |          |                                  |  
|Total
      Assets                        |  |  | $                                                 | 185,778  |                                  | $
|                                          |  |  |                                                   |          |                                  |  
|Nonrecourse
      mortgage debt           |  |  | $                                                 | 269,885  |                                  | $
|Other
      liabilities                   |  |  |                                                   | 18,945   |                                  |  
|                                          |  |  |                                                   |          |                                  |  
|Total
      Liabilities                   |  |  |                                                   | 288,830  |                                  |  
|                                          |  |  |                                                   |          |                                  |  
|Partners
      Capital Deficit           |  |  |                                                   | (103,052 | )                                |  
|                                          |  |  |                                                   |          |                                  |  
|Total
      Liabilities and Partners     |  |  |                                                   |          |                                  |  
|Capital
      Deficit                     |  |  | $                                                 | 185,778  |                                  | $
|                                          |  |  |                                                   |          |                                  |  
|On
      the Trusts Consolidated Balance |  |  |                                                   |          |                                  |  
|Sheet:                                    |  |  |                                                   |          |                                  |  
|Preferred
      Equity Investment         |  |  | $                                                 | 79,919   | (1)                              | $
|                                          |  |  |                                                   |          |                                  |  

| | (1) |  | Includes
loan costs of $1,192 capitalized at time of loan origination.
| | --- |  | ----------------------------------------------------------------------

|                                               |  |  | For
        the Three Months
        Ended March 31, 2006 |       
|---------------------------------------------- |  |  | --------------------------------------------------------- | ------
|                                               |  |  |                                                           |       
|Condensed
      Statements of Operations       |  |  |                                                           |       
|Revenues                                       |  |  | $                                                         | 17,124
|Operating
      expenses                       |  |  |                                                           | (7,134
|Interest
      expense                         |  |  |                                                           | (4,558
|Real
      estate taxes                        |  |  |                                                           | (2,787
|Depreciation
      and amortization            |  |  |                                                           | (2,311
|Other
      expenses                           |  |  |                                                           | (1,301
|                                               |  |  |                                                           |       
|Net
      loss                                 |  |  | $                                                         | (967  
|                                               |  |  |                                                           |       
|On
      the Trusts Consolidated Statement of |  |  |                                                           |       
|Operations
      and Comprehensive Income      |  |  |                                                           |       
|Equity
      in earnings of preferred equity   |  |  |                                                           |       
|investment                                     |  |  | $                                                         | 1,479 
|                                               |  |  |                                                           |       

18



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

NOTES
  TOUNAUDITEDCONSOLIDATED FINANCIAL STATEMENTS

|8. | Newkirk Equity Investment
|-- | -------------------------

| | On
November 7, 2005, the Trust acquired 3,125,000 shares of common stock in  Newkirk Realty
Trust, Inc. ("Newkirk") at a per share purchase price of $16.00,  for a total
purchase price of $50,000,000. The executive officers of Newkirk are  also the Trust's
executive officers and NKT Advisors LLC ("NKT"), the external  advisor of
Newkirk, is an entity owned in part and controlled by Michael Ashner  and other executive
officers of the Trust and of FUR Advisors LLC, the Trust's  external advisor.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
addition, the Trust assigned to Newkirk all rights it held under an  Exclusivity Services
Agreement with Michael Ashner, its Chief Executive Officer,  relating to business
opportunities generated by or offered to Mr. Ashner  relating to net lease assets, as
defined.  In consideration for the assignment of these rights, Newkirk issued to the
Trust an additional 1,250,000 shares of Newkirk's common stock (the "Exclusivity
Shares") valued at $16.00 per share for a total consideration of $20,000,000.  Both
transactions were consummated in connection with the closing of Newkirk's  initial public
offering, resulting in the Trust owning approximately 22.5% of  Newkirk. During the first
quarter of 2006, Newkirk declared a quarterly cash  dividend of $0.40 per share of common
stock which the Trust received $1,750,000  in April, 2006.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | With
respect to the Exclusivity Shares, 625,000 shares of the 1,250,000 shares  were initially
subject to forfeiture. With respect to the shares subject to  forfeiture, this amount
reduces by 17,361 shares each month, commencing December  2005 through November 2008. At
March 31, 2006, 555,556 shares are subject to  forfeiture. The shares are forfeited if:
(i) the advisory agreement between  Newkirk and NKT is terminated by Newkirk for cause;
(ii) Michael Ashner dies or  becomes disabled, unless the other members of NKT's senior
management then in  place remain in their positions; or (iii) Michael Ashner resigns as
an officer  and director of both Newkirk and NKT. Conversely, all of the forfeiture
restrictions will terminate and the Exclusivity Shares subject to forfeiture  will fully
vest if: (i) Newkirk terminates the advisory agreement with NKT other  than for cause;
(ii) NKT terminates the advisory agreement following a breach of  a material term of the
advisory agreement by Newkirk that is not timely cured;  or (iii) the advisory agreement
between Newkirk and NKT is not renewed for any  reason. The Trust has full voting and
dividend rights with respect to the  restricted shares, which rights will terminate only
upon forfeiture with respect  to those shares that had not then vested. The shares not
subject to forfeiture  were valued at $10,000,000 and were recognized in other income
when received and  the remaining $10,000,000 is recognized ratably over the three year
period. At  March 31, 2006, $8,667,000 was included in deferred income and $833,000 was
recognized in other income for the three months ending March 31, 2006.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Trust's investment in Newkirk is accounted for on the equity method.
| | ------------------------------------------------------------------------

19



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

NOTES
  TOUNAUDITEDCONSOLIDATED FINANCIAL STATEMENTS

|8. | Newkirk Equity Investment (Continued)
|-- | -------------------------------------

| | The
investment in Newkirk consists of the following:
| | ----------------------------------------------------

|                                  |  |  | 2006 |       
|--------------------------------- |  |  | ---- | ------
|                                  |  |  |      |       
|Balance,
      beginning of year  |  |  | $    | 70,304
|Equity
      in income of Newkirk |  |  |      | 1,602 
|Distributions
      from Newkirk  |  |  |      | (1,181
|                                  |  |  |      |       
|Balance,
      March 31, 2006     |  |  | $    | 70,725
|                                  |  |  |      |       

| | Summary
financial information of Newkirk is as follows (in thousands):
| | ----------------------------------------------------------------------

|                                                                      |  |  | As of 
        March 31, 
        2006 |           | As of 
        December 31, 
        2005 |  
|--------------------------------------------------------------------- |  |  | -------------------------------------- | --------- | ----------------------------------------- | -
|                                                                      |  |  |                                        |           |                                           |  
|Condensed
      Balance Sheet                                         |  |  |                                        |           |                                           |  
|Real
      estate investments, net                                    |  |  | $                                      | 1,053,478 |                                           | $
|Cash
      and cash equivalents                                       |  |  |                                        | 131,056   |                                           |  
|Other
      assets                                                    |  |  |                                        | 206,467   |                                           |  
|                                                                      |  |  |                                        |           |                                           |  
|Total
      Assets                                                    |  |  | $                                      | 1,391,001 |                                           | $
|                                                                      |  |  |                                        |           |                                           |  
|Note
      payable                                                    |  |  | $                                      | 580,294   |                                           | $
|Other
      liabilities                                               |  |  |                                        | 288,190   |                                           |  
|                                                                      |  |  |                                        |           |                                           |  
|Total
      Liabilities                                               |  |  |                                        | 868,484   |                                           |  
|                                                                      |  |  |                                        |           |                                           |  
|Minority
      Interests                                              |  |  |                                        | 345,828   |                                           |  
|Shareholders'
      Equity                                            |  |  |                                        | 176,689   |                                           |  
|                                                                      |  |  |                                        |           |                                           |  
|Total
      Liabilities, Minority Interests, and Shareholders' Equity |  |  | $                                      | 1,391,001 |                                           | $
|                                                                      |  |  |                                        |           |                                           |  
|On
      the Trust's Consolidated Balance                             |  |  |                                        |           |                                           |  
|Sheet:                                                                |  |  |                                        |           |                                           |  
|Equity
      Investment                                               |  |  | $                                      | 70,725    |                                           | $
|                                                                      |  |  |                                        |           |                                           |  

20



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

NOTES
  TOUNAUDITEDCONSOLIDATED FINANCIAL STATEMENTS

|8. | Newkirk Equity Investment (Continued)
|-- | -------------------------------------

|                                                 |  |  | For
        the Three Months
        Ended March 31, 2006 |        
|------------------------------------------------ |  |  | --------------------------------------------------------- | -------
|                                                 |  |  |                                                           |        
|Condensed
      Statements of Operations         |  |  |                                                           |        
|Revenues                                         |  |  | $                                                         | 63,576 
|Equity
      in earnings of limited partnerships |  |  |                                                           | 464    
|Interest
      expense                           |  |  |                                                           | (13,033
|General
      and administrative                 |  |  |                                                           | (2,540 
|Compensation
      expense                       |  |  |                                                           | (833   
|Depreciation
      and amortization              |  |  |                                                           | (13,254
|Other
      expenses                             |  |  |                                                           | (8,501 
|Minority
      interest                          |  |  |                                                           | (18,739
|                                                 |  |  |                                                           |        
|Net
      income                                 |  |  | $                                                         | 7,140  
|                                                 |  |  |                                                           |        
|On
      the Trust's Consolidated Statement of   |  |  |                                                           |        
|Operations
      and Comprehensive Income        |  |  |                                                           |        
|Equity
      in earnings of equity investment    |  |  | $                                                         | 1,602  
|                                                 |  |  |                                                           |        

|9. | Investment in Joint Venture
|-- | ---------------------------

| | On
March 31, 2006, Newkirk and the Trust entered into a joint venture to acquire  and
originate loans secured, directly and indirectly, by real estate assets  through 111 Debt
Holdings LLC. The joint venture is owned equally by Newkirk and  the Trust. The Trust and
Newkirk have committed to invest up to $50,000,000 each  in the joint venture. In
connection with the formation of the joint venture,  Newkirk contributed existing loan
assets which had been acquired in anticipation  of the formation of the joint venture and
the Trust contributed $11,374,000,  which amount was equal to 50% of the net equity cost
in the contributed assets  determined by reducing the purchase price for such assets by
any principal  payments and debt encumbering such loan assets. All individual investments
by  the joint venture in excess of $20,000,000 as well as all other material actions  or
expenditures to be taken by the joint venture require the consent of either  (i) the
investment committee of the joint venture which consists of an equal  number of members
appointed by each of Newkirk and the Trust with one additional  member being appointed by
the common management of Newkirk and the Trust or (ii)  both Newkirk and the Trust. All
decisions of the investment committee require  the affirmative vote by three of the four
members appointed by Newkirk and the  Trust.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
addition, the joint venture has entered into a $300,000,000 repurchase  agreement with
Column Financial Inc., a subsidiary of Credit Suisse First  Boston, pursuant to which the
joint venture expects to leverage up to 75% of the  assets held in the joint venture. It
is further anticipated that the joint  venture will enter into a second repurchase
agreement enabling the joint venture  to obtain an additional $200,000,000 in leverage.
Accordingly, it is presently  contemplated that the joint venture will acquire and
originate an aggregate of  up to approximately $600,000,000 in
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

21



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

NOTES
  TOUNAUDITEDCONSOLIDATED FINANCIAL STATEMENTS

|9. | Investment in Joint Venture (Continued)
|-- | ---------------------------------------

| | loan
obligations secured by real estate assets. Upon acquisition and origination  of a
sufficient level of loan obligations, the joint venture may form one or  more collateral
debt obligation pools.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Trust accounts for this investment using the equity method.
| | ---------------------------------------------------------------

| | The
investment in joint venture consists of the following (in thousands):
| | -------------------------------------------------------------------------

|                                  |  |  | 2006 |       
|--------------------------------- |  |  | ---- | ------
|                                  |  |  |      |       
|Balance,
      beginning of year  |  |  | $    |      
|Investment
      in joint venture |  |  |      | 11,374
|                                  |  |  |      |       
|Balance,
      March 31, 2006     |  |  | $    | 11,374
|                                  |  |  |      |       

| | The
joint venture's condensed balance sheet as of March 31, 2006 was as follows:
| | --------------------------------------------------------------------------------

|                                             |  |  | March
        31, 2006 
        (Unaudited) |       
|-------------------------------------------- |  |  | ------------------------------------------- | ------
|                                             |  |  |                                             |       
|Cash
      and restricted cash               |  |  | $                                           | 1,139 
|Investment
      in debt securities          |  |  |                                             | 53,626
|Other
      assets                           |  |  |                                             | 514   
|                                             |  |  |                                             |       
|Total
      assets                           |  |  | $                                           | 55,279
|                                             |  |  |                                             |       
|Accounts
      payable and other liabilities |  |  | $                                           | 156   
|Line
      of credit payable                 |  |  |                                             | 32,025
|Members'
      equity                        |  |  |                                             | 23,098
|                                             |  |  |                                             |       
|Total
      liabilities and members' equity  |  |  | $                                           | 55,279
|                                             |  |  |                                             |       

| | The
joint venture commenced operations on March 31, 2006.
| | ---------------------------------------------------------

22



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

NOTES
  TOUNAUDITEDCONSOLIDATED FINANCIAL STATEMENTS

|10. | Repurchase Agreements
|--- | ---------------------

| | Information
pertaining to the repurchase agreements entered into in connection  with the
mortgage-backed securities (see Note 4) as of March 31, 2006 is as  follows (dollars in
thousands):
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                |  |  |                       |  |  |                                   |  |  |                                                    |      | March
        31, 2006               |  
|------------------------------- |  |  | --------------------- |  |  | --------------------------------- |  |  | -------------------------------------------------- | ---- | ------------------------------------ | -
|                                |  |  |                       |  |  |                                   |  |  |                                                    |      |                                      |  
|                                |  |  | Expiration            |  |  | Spread
        over
        LIBOR |  |  | Interest
        Rate as of
        March 31, 2006 |      | Debt 
        Carrying
        Value |  
|                                |  |  |                       |  |  |                                   |  |  |                                                    |      |                                      |  
|Repurchase
      agreement with |  |  | April
      25, 2006, |  |  | LIBOR-.003                        |  |  | 4.788                                              | %(1) |                                      | $
|Bear
      Stearns & Co., Inc.  |  |  | renewable             |  |  |                                   |  |  |                                                    |      |                                      |  
|as counter-party                |  |  | monthly               |  |  |                                   |  |  |                                                    |      |                                      |  
|Repurchase
      agreement with |  |  | April
      25, 2006, |  |  | LIBOR-.003                        |  |  |                                                    |      |                                      |  
|Bear
      Stearns & Co., Inc.  |  |  | renewable             |  |  |                                   |  |  |                                                    |      |                                      |  
|as counter-party                |  |  | monthly               |  |  |                                   |  |  | 4.792                                              | %    |                                      |  
|                                |  |  |                       |  |  |                                   |  |  |                                                    |      |                                      |  
|                                |  |  |                       |  |  |                                   |  |  |                                                    |      |                                      | $
|                                |  |  |                       |  |  |                                   |  |  |                                                    |      |                                      |  

| | (1) |  | As
a result of the Trust entering into an interest rate swap agreement with  a notional
amount guaranteed to equal the balance on this portion of the  repurchase agreement, it
has effectively fixed the rate at 4.045% through  January 2008.
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | From
        the date of entering the repurchase agreement through March 31, 2006,
        the Trust has paid $1,298,000 on its repurchase agreements in connection
        with margin calls.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

23



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

NOTES
  TOUNAUDITEDCONSOLIDATED FINANCIAL STATEMENTS

|11. | Debt
|--- | ----

| | The
Trust's debt is summarized as follows (in thousands):
| | ---------------------------------------------------------

|                                 |  |  | Maturity             |  |  | Spread
        Over
        LIBOR/ 
        Prime |  |  |  | Interest
        Rate as of
        March 31, 2006 |   | Balance
        as of March
        31, 2006 |         | Balance as of 
        December 31, 2005 |  
|-------------------------------- |  |  | -------------------- |  |  | ------------------------------------------------- |  |  |  | -------------------------------------------------- | - | -------------------------------------------- | ------- | ---------------------------------------- | -
|                                 |  |  |                      |  |  |                                                   |  |  |  |                                                    |   |                                              |         |                                          |  
|Mortgage
      Loans Payable:    |  |  |                      |  |  |                                                   |  |  |  |                                                    |   |                                              |         |                                          |  
|                                 |  |  |                      |  |  |                                                   |  |  |  |                                                    |   |                                              |         |                                          |  
|Fixed
      Interest Rate:       |  |  |                      |  |  |                                                   |  |  |  |                                                    |   |                                              |         |                                          |  
|                                 |  |  |                      |  |  |                                                   |  |  |  |                                                    |   |                                              |         |                                          |  
|Plantation,
      FL             |  |  | March
      2010     |  |  |                                                  |  |  |  | 6.45                                               | % | $                                            | 9,606   |                                          | $
|Kroger
      Properties          |  |  | November
      2010  |  |  |                                                  |  |  |  | 6.71                                               | % |                                              | 9,204   |                                          |  
|Jacksonville,
      FL           |  |  | July
      2011      |  |  |                                                  |  |  |  | 7.5                                                | % |                                              | 2,749   |                                          |  
|Amherst,
      NY                |  |  | October
      2013   |  |  |                                                  |  |  |  | 5.65                                               | % |                                              | 17,864  |                                          |  
|Indianapolis,
      IN           |  |  | April
      11, 2015 |  |  |                                                  |  |  |  | 5.82                                               | % |                                              | 4,550   |                                          |  
|Houston,
      TX                |  |  | April
      2016     |  |  |                                                  |  |  |  | 6.66                                               | % |                                              | 73,937  |                                          |  
|Andover,
      MA                |  |  | February
      2011  |  |  |                                                  |  |  |  | 6.60                                               | % |                                              | 6,685   |                                          |  
|S. Burlington,
      VT          |  |  | February
      2011  |  |  |                                                  |  |  |  | 6.60                                               | % |                                              | 2,865   |                                          |  
|Chicago,
      IL                |  |  | March
      2016     |  |  |                                                  |  |  |  | 5.75                                               | % |                                              | 21,600  |                                          |  
|                                 |  |  |                      |  |  |                                                   |  |  |  |                                                    |   |                                              |         |                                          |  
|Variable
      Interest Rate:    |  |  |                      |  |  |                                                   |  |  |  |                                                    |   |                                              |         |                                          |  
|                                 |  |  |                      |  |  |                                                   |  |  |  |                                                    |   |                                              |         |                                          |  
|Various                          |  |  | November
      2007  |  |  | LIBOR
        +                                   |  |  |  | 9.1875                                             | % |                                              | 51,022  |                                          |  
|                                 |  |  |                      |  |  | 4.50% (1)                                         |  |  |  |                                                    |   |                                              |         |                                          |  
|Chicago,
      IL                |  |  | March
      2007     |  |  | Prime
        + 0.5%                              |  |  |  | 8.25                                               | % |                                              | 9,500   |                                          |  
|Chicago,
      IL                |  |  | March
      2007     |  |  | Prime
        + 0.5%                              |  |  |  | 8.25                                               | % |                                              | 5,280   |                                          |  
|                                 |  |  |                      |  |  |                                                   |  |  |  |                                                    |   |                                              |         |                                          |  
|Total
      Mortgage Debt        |  |  |                      |  |  |                                                   |  |  |  |                                                    |   | $                                            | 214,862 |                                          | $
|                                 |  |  |                      |  |  |                                                   |  |  |  |                                                    |   |                                              |         |                                          |  
|Loans
      Payable:             |  |  |                      |  |  |                                                   |  |  |  |                                                    |   |                                              |         |                                          |  
|                                 |  |  |                      |  |  |                                                   |  |  |  |                                                    |   |                                              |         |                                          |  
|Secured
      by joint venture   |  |  |                      |  |  |                                                   |  |  |  |                                                    |   |                                              |         |                                          |  
|participation
      in the Toy   |  |  |                      |  |  | LIBOR
        +                                   |  |  |  |                                                    |   |                                              |         |                                          |  
|Building
      Loan              |  |  | April
      2008     |  |  | 3.0                                               |  |  |  | 7.749                                              | % | $                                            | 30,000  |                                          | $
|Miscellaneous                    |  |  | February
      2007  |  |  |                                                  |  |  |  | 7.5                                                | % |                                              | 20      |                                          |  
|                                 |  |  |                      |  |  |                                                   |  |  |  |                                                    |   |                                              |         |                                          |  
|                                 |  |  |                      |  |  |                                                   |  |  |  |                                                    |   | $                                            | 30,020  |                                          | $
|                                 |  |  |                      |  |  |                                                   |  |  |  |                                                    |   |                                              |         |                                          |  
|Revolving
      Line of Credit:  |  |  |                      |  |  |                                                   |  |  |  |                                                    |   |                                              |         |                                          |  
|                                 |  |  |                      |  |  |                                                   |  |  |  |                                                    |   |                                              |         |                                          |  
|$50 Million
      Revolving Line |  |  |                      |  |  | LIBOR
        +                                   |  |  |  |                                                    |   |                                              |         |                                          |  
|of Credit                        |  |  | December
      2008  |  |  | 2.25                                              |  |  |  | (2                                                 | ) | $                                            | 18,625  |                                          | $
|                                 |  |  |                      |  |  |                                                   |  |  |  |                                                    |   |                                              |         |                                          |  

24



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

NOTES
  TOUNAUDITEDCONSOLIDATED FINANCIAL STATEMENTS

|11. | Debt (Continued)
|--- | ----------------

| | (1) |  | As
a result of the Trust entering into an interest rate swap agreement  in the notional
amount of $40,000,000, the Trust has effectively  converted the interest rate from a
floating rate to a fixed rate of  8.55% through maturity in November, 2007. The remaining
principal  amount of $11,022,000 remains variable at LIBOR plus 4.5% (which  equated to
9.1875% at March 31, 2006).
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) |  | The
line of credit  bears  interest  at LIBOR  plus  2.25%.  At March 31,  2006,  $8,125,000
bore  interest  at  6.4375%  and  $10,500,000 bore interest at 6.625%.
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
March 2006, the Trust effectively satisfied first mortgage notes secured  by the Trust's
Jacksonville, Florida property by acquiring from two lenders a  100% interest in the
notes evidencing such loan. The Trust acquired the notes  for an aggregate purchase price
of approximately $3,414,000 and recognized a  $165,000 gain on the early extinguishment
of debt.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
April 2006, the Trust satisfied the remaining first mortgage notes on the  Jacksonville,
Florida property for an aggregate purchase price of approximately  $2,500,000 and
recognized a gain on the early extinguishment of debt of  $249,000.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|12. | Hedge Instruments
|--- | -----------------

| | The
table below presents information about the Trust's interest rate swaps at  March 31, 2006
(dollars in thousands):
| | ---------------------------------------------------------------------------------------------------------------------

|Active
        Period Through |  |  | Swap
        Rate |       | Notional
        
        Amount of
        Hedged 
        Liability |   | Cost
        of
        Hedge |  | Estimated
        Fair
        Value/Carrying
        Value |   | Gross
        Unrealized
        Gain For the 
        Three Months 
        Ended 
        March 31, 2006 |  
|----------------------------- |  |  | ----------------- | ----- | --------------------------------------------------------------------- | - | ----------------------------- |  | ----------------------------------------------------------- | - | ---------------------------------------------------------------------------------------------------------- | -
|                              |  |  |                   |       |                                                                       |   |                               |  |                                                             |   |                                                                                                            |  
|November
      2007           |  |  |                   | 8.55  | %                                                                     | $ | 40,000                        |  | $                                                           |  |                                                                                                            | $
|January
      2008            |  |  |                   | 4.045 | %                                                                     | $ | 91,382                        |  | $                                                           |  |                                                                                                            | $

| | No
hedge ineffectiveness as defined by FAS No. 133 on cash flow hedges was  recognized for
the three months ended March 31, 2006.
| | ---------------------------------------------------------------------------------------------------------------------------------

|13. | Convertible Preferred Shares of Beneficial Interest
|--- | ---------------------------------------------------

| | Series
A Preferred Shares
| | -------------------------

| | On
February 7, 2006, the Trust, in accordance with its rights under the  Certificate of
Designations for the Series A Shares converted all of its  outstanding Series A Shares
into 4,836,763 Common Shares. The conversion was  effected in accordance with the
Certificate of Designations for the Series A  Shares at a ratio of 4.92 Common Shares per
Series A Share.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

25



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

NOTES
  TOUNAUDITEDCONSOLIDATED FINANCIAL STATEMENTS

|13. | Convertible Preferred Shares of Beneficial Interest (Continued)
|--- | ---------------------------------------------------------------

| | Series
B-1 Preferred Shares
| | ---------------------------

| | In
February 2005 and June 2005, the Trust sold an aggregate of 4,000,000 of its  Series B-1
Shares to a number of institutional buyers for $100,000,000 in gross  proceeds.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Series B-1 Shares entitle the holders to cumulative dividends at a  minimum rate of 6.5%
and can be convertible into Common Shares at a conversion  price of $4.50, subject to
anti-dilution adjustments. In addition, the holders  of the Series B-1 Shares have the
right to elect one Trustee to the Board of  Trustees of the Trust as long as 910,000
Series B-1 Shares are outstanding.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
February 2, 2006, a holder of the Series B-1 Shares exercised its right to  convert
10,000 of its Series B-1 Shares into Common Shares. In accordance with  the terms of the
Certificate of Designations for the Series B-1 Shares, on  February 14, 2006 the Trust
issued 55,556 Common Shares (5.56 Common Shares per  Series B-1 Share).
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|14. | Discontinued Operations
|--- | -----------------------

| | The
tenant at the Trust's Sherman, Texas property has exercised its purchase  option under
the lease pursuant to which it was to acquire the property  effective May 1, 2005 for a
gross price of approximately $2,018,000. However,  due to negotiations between the tenant
and the ground owner, the tenant has not  consummated the purchase and the Trust is
unable to anticipate when the sale  will occur. The tenant continues to be obligated to
make its scheduled rental  payments until the sale has closed.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Trust has classified as discontinued operations the income and expenses for  the Sherman,
Texas property in its consolidated statement of operations and  comprehensive income. In
addition, the Trust has classified the assets and  liabilities related to such property
as assets of discontinued operations and  liabilities of discontinued operations.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Liabilities
of discontinued operations at March 31, 2006 and December 31, 2005  are summarized as
follows (in thousands):
| | -------------------------------------------------------------------------------------------------------------------------

|                                            |  |  | 2006 |       | 2005 |  
|------------------------------------------- |  |  | ---- | ----- | ---- | -
|                                            |  |  |      |       |      |  
|Mortgage
      loan payable                 |  |  | $    | 787   |      | $
|Accounts
      payable and accrued expenses |  |  |      | 837   |      |  
|                                            |  |  |      |       |      |  
|                                            |  |  | $    | 1,624 |      | $
|                                            |  |  |      |       |      |  

26



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

NOTES
  TOUNAUDITEDCONSOLIDATED FINANCIAL STATEMENTS

|14. | Discontinued Operations (Continued)
|--- | -----------------------------------

| | The
combined results related to discontinued operations for the three months  ended March 31,
2006 and March 31, 2005 are as follows (in thousands):
| | ----------------------------------------------------------------------------------------------------------------------------------------------------

|                                          |  |  | 2006 |    | 2005 |  
|----------------------------------------- |  |  | ---- | -- | ---- | -
|                                          |  |  |      |    |      |  
|Total
      revenues                      |  |  | $    | 51 |      | $
|Total
      expenses                      |  |  |      | 15 |      |  
|                                          |  |  |      |    |      |  
|Income
      from discontinued operations |  |  | $    | 36 |      | $
|                                          |  |  |      |    |      |  

|15. | Contingencies
|--- | -------------

| | Indemnity
to Former Trustee
| | ---------------------------

| | William
Ackman, a former Trustee of the Trust, has made demand on the Trust for  indemnification
for approximately $1.5 million of expenses incurred by him in  his capacity as a Trustee
in connection with the litigation matters relating to  the aborted merger of the Trust
with Gotham Golf Corp., an entity controlled by  Mr. Ackman.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Trust has forwarded this demand to its insurance carrier. Both the Trust's  insurance
carrier and the Trust have denied Mr. Ackman's demand based on the  lack of adequate
documentation submitted to date and the absence of a release  from Mr. Ackman. No reserve
for any liability attributable to this matter has  been accrued in the financial
statements as of March 31, 2006.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Indemnity
to Imperial Parking Limited
| | -------------------------------------

| | Revenue
Canada has made inquiries of Imperial Parking relating to deductions  taken by Imperial
Parking at the time it was owned by FUMI. If these deductions  are ultimately disallowed,
Imperial Parking may make a claim for indemnification  for amounts owed to Revenue
Canada. Although FUMI is required to indemnify  Imperial Parking for certain damages,
FUMI might not be required to indemnify  Imperial Parking for these particular damages.
However, the Trust has reserved  certain amounts for possible costs related to this
matter.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|16. | Related-Party Transactions
|--- | --------------------------

| | The
affairs of the Trust and its subsidiaries are administered by FUR Advisors  LLC pursuant
to the terms of the Advisory Agreement between the Trust and FUR  Advisors. FUR Advisors
is controlled by and partially owned by the executive  officers of the Trust. Pursuant to
the terms of the Advisory Agreement, FUR  Advisors is responsible for providing asset
management services to the Trust and  coordinating with the Trust's shareholder transfer
agent and property managers.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

27



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

NOTES
  TOUNAUDITEDCONSOLIDATED FINANCIAL STATEMENTS

|16. | Related-Party Transactions (Continued)
|--- | --------------------------------------

| | For
providing such services, FUR Advisors is entitled to a base management fee  calculated
based on either an asset based calculation or an equity based  calculation, whichever
results in a lesser amount on a quarterly basis.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | FUR
Advisors is also entitled to receive (i) property and construction  management fees at
commercially reasonable rates as determined by the  independent Trustees of the Board,
and (ii) an incentive fee. At March 31, 2006,  Winthrop Management L.P., an affiliate of
FUR Advisors provides property  management services at the Trust's Indianapolis, Indiana
property and receives a  fee for such services equal to 3% of gross revenues at the
property.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
incentive fee entitles FUR Advisors to receive (a) an amount equal to 20% of  all
distributions paid to beneficiaries of Common Shares after December 31, 2003  in excess
of the Threshold Amount, hereinafter defined, and, (b) upon the  termination of the
Advisory Agreement, an amount equal to 20% of the  "liquidation value" of the
Trust in excess of the Threshold Amount at the  termination date. As defined in the
Advisory Agreement, the Threshold Amount is  equal to (x) $71,300,000, increased by the
net issuance price of all Common  Shares, with an adjustment for Preferred Shares
converted, issued after December  31, 2003, and decreased by the redemption price of all
shares redeemed after  December 31, 2003 plus (y) a return on the amount, as adjusted,
set forth in (x)  equal to 7% per annum compounded annually. The incentive fee is reduced
by any  direct damages to the Trust if the Advisory Agreement is terminated by the Trust
for cause. At March 31, 2006, the threshold amount was $110,527,000.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
following table sets forth the fees and reimbursements paid by the Trust for  the three
months ended March 31, 2006 and 2005, respectively to FUR Advisors and  Winthrop
Management L.P. (in thousands):
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                              |  |  | 2006 |     |     | 2005 |    
|----------------------------- |  |  | ---- | --- | --- | ---- | ---
|                              |  |  |      |     |     |      |    
|Asset
      Management (1)    |  |  | $    | 776 | (3) |      | 487
|Loan
      Servicing Fee (1)  |  |  |      |    |     |      | 1  
|Property
      Management (2) |  |  |      | 12  |     |      | 10 
|Incentive
      Fee           |  |  |      |    |     |      |   

| | (1) |  | Payable
to FUR Advisors
| | --- |  | -----------------------

| | (2) |  | Payable
to Winthrop Management L.P.
| | --- |  | -----------------------------------

| | (3) |  | Determined
using the equity based method
| | --- |  | ----------------------------------------

28



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

NOTES
  TOUNAUDITEDCONSOLIDATED FINANCIAL STATEMENTS

|17. | Rights Offering
|--- | ---------------

| | On
March 29, 2006 the Trust distributed non-transferable subscription rights to  subscribe
for and purchase up to an aggregate of 5,220,038 of its Common Shares  to holders of
record at the close of business on March 22, 2006. Each holder of  Common Shares received
one basic subscription right for every 12 Common Shares  owned, or in the case of Series
B-1 Shares, one basic subscription right for  every 12 Common Shares issuable upon
conversion of such Series B-1 Shares, as of  the record date. Each basic subscription
right entitles the holder to purchase  one Common Share for a subscription price of $5.25
per share. Holders who  exercise their rights in full are also entitled to purchase
additional Common  Shares, subject to availability.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
connection with this offering, certain existing shareholders of the Trust  agreed,
subject to certain conditions, to purchase all unsubscribed Common  Shares at the
subscription price. At the April 27, 2006 expiration of this  offering, the Trust
received basic and oversubscriptions for all 5,220,038  Common Shares. Upon issuance of
the shares subscribed for, anticipated to occur  during May 2006, the Trust (i) will
receive gross proceeds of $27,405,000 and  (ii) will have outstanding 45,693,825 Common
Shares.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
net proceeds from the rights offering will be used for general corporate  purposes which
may include the acquisition of additional investments and/or the  repayment of
outstanding indebtedness.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|18. | Business Segments
|--- | -----------------

| | The
following tables present a summary of revenues and expenses from the  Operating
Properties, Loans and Real Estate Securities incurred by each segment  for the three
months ended March 31, 2006 and March 31, 2005. We include in  Corporate Income interest
on cash reserves, general and administrative expenses  and other non-segment specific
income and expense items.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

29



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

NOTES
  TOUNAUDITEDCONSOLIDATED FINANCIAL STATEMENTS

|Business
      Segments (In thousands)                 |  |  |                        |         |                        |  
|------------------------------------------------------ |  |  | ---------------------- | ------- | ---------------------- | -
|                                                       |  |  | March
        31, 2006 |         | March
        31, 2005 |  
|                                                       |  |  |                        |         |                        |  
|Operating
      Properties                             |  |  |                        |         |                        |  
|Rents
      and other                                  |  |  | $                      | 8,577   |                        | $
|Gain
      on extinguishment of debt                   |  |  |                        | 165     |                        |  
|Operating
      expenses                               |  |  |                        | (954    | )                      |  
|Real
      estate taxes                                |  |  |                        | (158    | )                      |  
|                                                       |  |  |                        |         |                        |  
|                                                       |  |  |                        | 7,630   |                        |  
|                                                       |  |  |                        |         |                        |  
|Loans                                                  |  |  |                        |         |                        |  
|Interest                                               |  |  |                        | 3,033   |                        |  
|Equity
      earnings in preferred investment          |  |  |                        | 1,479   |                        |  
|                                                       |  |  |                        |         |                        |  
|                                                       |  |  |                        | 4,512   |                        |  
|                                                       |  |  |                        |         |                        |  
|Real
      Estate Securities                           |  |  |                        |         |                        |  
|Dividends                                              |  |  |                        | 188     |                        |  
|Gain
      on sale of real estate securities           |  |  |                        | 7,319   |                        |  
|Assignment
      of exclusivity agreement              |  |  |                        | 833     |                        |  
|Equity
      in earnings (loss) in equity              |  |  |                        |         |                        |  
|investment                                             |  |  |                        | 1,602   |                        |  
|                                                       |  |  |                        |         |                        |  
|                                                       |  |  |                        | 9,942   |                        |  
|                                                       |  |  |                        |         |                        |  
|Less
      - Depreciation and Amortization             |  |  |                        | 2,551   |                        |  
|                                                       |  |  |                        |         |                        |  
|Less
      - Interest Expense                          |  |  |                        |         |                        |  
|Operating
      properties                             |  |  |                        | 3,396   |                        |  
|Loans                                                  |  |  |                        | 1,902   |                        |  
|Corporate
      Income (Expense)                       |  |  |                        |         |                        |  
|Interest
      income                                  |  |  |                        | 233     |                        |  
|General
      and administrative                       |  |  |                        | (1,519  | )                      |  
|Interest
      expense                                 |  |  |                        | (338    | )                      |  
|Gain
      on sale of real estate held for syndication |  |  |                        |        |                        |  
|State
      and local taxes                            |  |  |                        | (4      | )                      |  
|                                                       |  |  |                        |         |                        |  
|Income
      from continuing operations                |  |  |                        |         |                        |  
|before
      minority interest                         |  |  |                        | 12,607  |                        |  
|Minority
      Interest                                |  |  |                        | (632    | )                      |  
|                                                       |  |  |                        |         |                        |  
|Income
      from continuing operations                |  |  |                        | 11,975  |                        |  
|Income
      from discontinued operations              |  |  |                        | 36      |                        |  
|                                                       |  |  |                        |         |                        |  
|Net
      Income                                       |  |  | $                      | 12,011  |                        | $
|                                                       |  |  |                        |         |                        |  
|Capital
      Expenditures                             |  |  |                        |         |                        |  
|Operating
      Properties                             |  |  | $                      | 335     |                        | $
|                                                       |  |  |                        |         |                        |  
|                                                       |  |  | $                      | 335     |                        | $
|                                                       |  |  |                        |         |                        |  
|Identifiable
      Assets                              |  | 
|Operating
      Properties                             |  |  | $                      | 278,577 |                        | $
|Loans                                                  |  |  |                        | 296,939 |                        |  
|Real
      Estate Securities                           |  |  |                        | 85,354  |                        |  
|Other                                                  |  |  |                        | 34,061  |                        |  
|                                                       |  |  |                        |         |                        |  
|Total
      Assets                                     |  |  | $                      | 694,931 |                        | $
|                                                       |  |  |                        |         |                        |  

|(1) |  | The
results of the Sherman, Texas property have been classified as discontinued operations.
|--- |  | -------------------------------------------------------------------------------------------

30



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

NOTES
  TOUNAUDITEDCONSOLIDATED FINANCIAL STATEMENTS

|19. | Subsequent Events
|--- | -----------------

| | On
April 6, 2006, the Trust contributed $13,332,562 in exchange for a 30%  interest in a
joint venture which in turn indirectly holds a 33.14% interest in  a partnership that
owns an approximately 1,019,000 square foot office building  in Chicago, Illinois. It is
expected that 25% of the Trust's interest in the  joint venture will be acquired by
certain holders of the Series B-1 Shares in  accordance with the co-investment rights
granted to the holders of the Series  B-1 Shares.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On
May 5, 2006, the Trust obtained a $24,600,000 loan from an unaffiliated third  party
lender, which is secured by the Trust's properties located at 550-650  Warrenville Road
and 701 Warrenville, Road, Lisle, Illinois. The loan bears  interest at 6.26%, requires
monthly payments of interest only during the first  two years of the loan term and
thereafter principal (based on a 30-year  amortization schedule) and interest for the
balance of the term. The loan is  scheduled to mature on June 1, 2016, at which time the
outstanding principal  balance is expected to be approximately $22,187,962.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

31



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

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

Certain
statements contained herein constitute forward-looking statements as  such term is
defined in Section 27A of the Securities Act of 1933, as amended,  and Section 21E of the
Securities Exchange Act of 1934, as amended.  Forward-looking statements are not
guarantees of performance. They involve  risks, uncertainties and assumptions. Our future
results, financial condition  and business may differ materially from those expressed in
these forward-looking  statements. You can find many of these statements by looking for
words such as  "approximates," "believes," "expects,"
"anticipates," "intends," "plans,"  "would,"
"may" or similar expressions in this quarterly report on Form 10-Q.  These
forward-looking statements are subject to numerous assumptions, risks and  uncertainties.
Many of the factors that will determine these items are beyond  our ability to control or
predict. Factors that may cause actual results to  differ materially from those
contemplated by the forward-looking statements  include, but are not limited to, those
set forth in the Trust's Annual Report on  Form 10-K/A for the year ended December 31,
2005 under "Forward Looking  Statements" and "Item 1. Business - Risk
Factors." For these statements, the  Trust claims the protection of the safe harbor
for forward-looking statements  contained in the Private Securities Litigation Reform Act
of 1995. We expressly  disclaim any responsibility to update forward-looking statements,
whether as a  result of new information, future events or otherwise. Accordingly,
investors  should use caution in relying on forward-looking statements, which are based
on  results and trends at the time they are made, to anticipate future results or  trends.

Management's
Discussion and Analysis of Financial Condition and Results of  Operations includes a
discussion of the Trust's consolidated financial  statements for the three months ended
March 31, 2006. The preparation of  financial statements in conformity with accounting
principles generally accepted  in the United States of America requires management to
make estimates and  assumptions that affect the reported amounts of assets and
liabilities and  disclosure of contingent assets and liabilities at the date of the
financial  statements and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from those estimates.

This item
should be read in conjunction with the financial statements, footnotes  thereto and other
items contained elsewhere in the report.

Overview

We are a real
estate investment trust ("REIT") engaged in the business of owning  real
property and real estate related assets. We operate in three strategic  business
segments: (i) Operating Properties, (ii) Loans and (iii) Real Estate  Securities.

Our
business objective is to maximize long-term shareholder value  through superior total
returns on our investments. We measure our success in  meeting this objective by a number
of factors, including increases in diluted  per share net income, cash returns generated
by our investments, increases in  shareholder equity and total return to our shareholders.

31



---

WINTHROP
  REALTY TRUST
  FORM 10-Q MARCH 31, 2006

|ITEM |  | 2.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (Continued)
|---- |  | ----------------------------------------------------------------------------------------------------

Overview
(Continued)

During the
three months ended March 31, 2006 and 2005 our operating results were as follow:

|                                                               |  |  | For
        the three Months Ended |           
|-------------------------------------------------------------- |  |  | ---------------------------------- | ----------
|                                                               |  |  | March
        31, 2006             |           
|                                                               |  |  |                                    |           
|Net income
      applicable to common shares                   |  |  | $                                  | 10,387,000
|                                                               |  |  |                                    |           
|Net income
      per common share, basic                       |  |  | $                                  | 0.27      
|                                                               |  |  |                                    |           
|Net income
      per common share, diluted                     |  |  | $                                  | 0.19      
|                                                               |  |  |                                    |           
|Net cash
      flow provided by (used in) operating activities |  |  | $                                  | 8,582,000 
|                                                               |  |  |                                    |           

At March 31,
2006 and December 31, 2005, total assets and total shareholders equity were as
follows:

|                                 |  |  | March
        31, 2006 |             | December
        31, 2005 |  
|-------------------------------- |  |  | ---------------------- | ----------- | ------------------------- | -
|                                 |  |  |                        |             |                           |  
|Total
      assets               |  |  | $                      | 694,931,000 |                           | $
|                                 |  |  |                        |             |                           |  
|Total
      shareholders equity |  |  | $                      | 261,379,000 |                           | $
|                                 |  |  |                        |             |                           |  

In addition,
our total return to shareholders  calculated based upon dividends  received plus
increases or decreases in the per Common  Share  trading price for the three months ended
March 31, 2006 was 96.13%  compared to the Morgan  Stanley REIT Index return of 109.50%
for the same period.  Since FUR Advisors LLC became our advisor on January 1, 2004,  our
total return to  shareholders  for the two and  one quarter years was 257.8% compared to
the Morgan Stanley REIT Index return of 161.45%.

We intend to
continue to pursue our business  objective by basing our  investments  on our  assessment
that a potential  investment is  significantly  undervalued on a risk adjusted basis or
presents an opportunity  to outperform the  marketplace.  Additionally,  we will  make
investments  in assets  believed  to be  underperforming  and in which we believe,
through an  infusion of capital and  improved  management,  an appropriate return on
investment can be realized.  Consequently,  with certain limitations,  we will seek
opportunities  to invest in or acquire most types of real estate  assets or  securities.
In connection  with the recent  initial  public  offering of  Newkirk Realty Trust,  Inc.
(Newkirk) as described below, it is unlikely that we will invest directly in
single-tenant  properties.  However, we will have a significant investment in
single-tenant assets through

32



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

|ITEM 2. |  | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
|------- |  | -------------------------------------------------------------------------------------------------

Overview
(Continued)

our ownership
of shares in Newkirk. Moreover, except as limited by the  restrictions placed on us in
order to meet our requirements to maintain REIT  status, our investment decisions will
not be materially affected by the nature  of an investment or where that investment falls
in an entity's capital  structure. We will acquire entities that own real estate, invest
directly in the  equity of a real estate asset exclusively or through a venture, acquire
preferred equity, mezzanine debt or first mortgage debt of a real estate asset  to the
extent we believe the ownership of the underlying real estate would be  consistent with
our investment goals. In general, it is not expected that we  will invest in an entity in
which we do not own 100% of the equity unless we  control or have significant influence
on management of the entity or have the  means to acquire control of the investment or
have a mechanism in place to exit  the investment for a price consistent with fair value
at a time of our election.

In view of the
foregoing, our near-term investment strategy will be to identify  and invest in discrete
real estate investments consistent with the stated  criteria. As appropriate investment
opportunities arise, we will aggressively  pursue such opportunities independently or
through the formation of joint  ventures. We intend to fund these investments through one
or more of the  following: cash reserves, borrowings under our credit facility, property
loans  or the issuance of debt and/or equity. For the long-term, as investments mature
in value to the point where we are unlikely to achieve better than a market  return on
their then enhanced value, it is likely we will exit the investment  and seek to redeploy
the capital to higher yielding opportunities. Accordingly,  our Consolidated Statements
of Operations and Comprehensive Income include both  income from continuing operations
and discontinued operations.

Significant
investments, dispositions and financing transactions during the  three months ended March
31, 2006 included:

| | o |  | acquiring
three office properties containing approximately 290,000 square feet;
| | - |  | -------------------------------------------------------------------------------

| | o |  | forming
a joint venture with Newkirk to acquire and originate loans and create  collateral debt
obligation pools;
| | - |  | -----------------------------------------------------------------------------------------------------------------

| | o |  | obtaining
$45,929,000 in first mortgage  indebtedness;
| | - |  | ------------------------------------------------------

| | o |  | selling
1,467,100 shares in Sizeler for an aggregate sale price  of approximately $21,074,000;
and
| | - |  | --------------------------------------------------------------------------------------------------

| | o |  | acquiring
in a joint venture, two loans  secured by first priority liens on 241,000 square feet of
commercial space, an  indoor parking structure, the underlying land and unsold
condominiums  at a property commonly referred to as River City in Chicago, Illinois
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Other
significant milestones for the three month ended March 31, 2006 included:

| | o |  | redeeming
our Series A Preferred Shares and
| | - |  | -------------------------------------------

| | o |  | issuing
rights to our common and  preferred  shareholders  to  subscribe  for and purchase up to
an aggregate of 5,220,038 of  newly-issued Common Shares for a price of $5.25 per
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Common
Share, which was fully subscribed, raising gross proceeds in the  second quarter of 2006
of approximately $27,405,000.
| | -----------------------------------------------------------------------------------------------------------------------------

33



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

|ITEM 2. |  | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
|------- |  | -------------------------------------------------------------------------------------------------

Overview
(Continued)

Critical
Accounting Policies and Estimates

A summary of
the Trust's critical accounting policies is included in the Trust's  Annual Report on
Form 10-K/A for the year ended December 31, 2005. There have  been no significant changes
to those policies during 2006.

Recently Issued
Accounting Standards

There have been
no new accounting standards or interpretations that have been  issued that we have not
yet adopted that we believe will have a material impact  on our consolidated financial
statements upon adoption.

Results of
Operations

As discussed
earlier, one of the factors used to measure management's  performance is net income. We
report our operations by each of our three  strategic business segments to provide a
measure of our performance in these  segments. In addition to our three business
segments, we have our Corporate  Activities. (See Business Segments - Note 18 to the
financial statements in Item  1.)

Net Earnings

Net
  income increased by $10,539,000 to $12,011,000 for the three months ended March
  31, 2006 from $1,472,000 for the three months ended March 31, 2005. The increase
  was due primarily to an increase in other income of $11,111,000, which included
  $7,319,000 in gain from the sale of real estate securities and an increase in
  revenues of $7,132,000 as a result of our acquisition activity. These increases
  were partially offset by an increase in expense of $7,074,000 and an increase
  in minority interest expense of $632,000.

Results of
Operations - March 31, 2006 Versus March 31, 2005

Operating
Properties

Rental
  income increased by $4,715,000 or approximately 122.1% to $8,577,000 for the
  three months ended March 31, 2006 from $3,862,000 for the three months ended
  March 31, 2005. The increase was primarily due to the acquisition of properties
  following the first quarter of 2005 and in the first quarter of 2006.

34



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

|ITEM 2. |  | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
|------- |  | -------------------------------------------------------------------------------------------------

Results of
Operations - March 31, 2006 Versus March 31, 2005 (Continued)

Operating
Properties (Continued)

Operating
  expenses from our properties increased by $769,000 or approximately 415.7% to
  $954,000 for the three months ended March 31, 2006 from $185,000 for the three
  months ended March 31, 2005. The increase was due to operating expenses at four
  properties acquired subsequent to March 31, 2005 as well as expenses incurred
  at our Jacksonville property that had been previously net leased to Winn Dixie.

The
  $137,000 increase in real estate tax expense resulted from real estate taxes
  paid by us at our Jacksonville property that were previously paid by Winn Dixie
  as well as real estate taxes on four properties acquired subsequent to March
  31, 2005.

Interest
expense related to our operating properties was $3,396,000 for the  three months ended
March 31, 2006 compared to $1,700,000 for the three months  ended March 31, 2005 due
primarily to the new financings which were put in place  in late 2005 and the first
quarter 2006.

Depreciation
and amortization expense increased by $1,709,000 or approximately  202.9% to $2,551,000
for the three months ended March 31, 2006 compared to  $842,000 for the three months
ended March 31, 2005. The increase was due to the  newly acquired properties.

Loans

Interest income
from our loan investments was $3,033,000 for the three months  ended March 31, 2006
compared to $199,000 for the three months ended March 31,  2005. The increase was due
primarily to our investment in whole pool agency  mortgage-backed securities, which
generated interest income in 2006 of  $1,340,000. Equity in earnings in preferred equity
increased to $1,479,000 in  2006. The increase was due to our April 2005 origination of
25 second mortgage  and mezzanine loans.

Real Estate
Securities

During 2005 we
significantly increased our investment in real estate securities,  most notably by our
investment in Newkirk. This investment generated equity  earnings of $1,602,000 during
the three months ended March 31, 2006. In  addition, as a result of our assignment of
certain rights with respect to net  lease assets under an Exclusivity Services Agreement
with Michael Ashner, we  recognized other income of $833,000. Dividends recognized on
other real estate  securities were $188,000 during the three months ended March 31, 2006
compared  to $130,000 for the three months ended March 31, 2005. Also during the three
months ended March 31, 2006, we recognized gains aggregating $7,319,000 on the  sale of
our shares of certain real estate securities, primarily Sizeler stock.

35



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

|ITEM 2. |  | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
|------- |  | -------------------------------------------------------------------------------------------------

Corporate
Activities

Interest income
earned on our cash and cash equivalents during the three months  ended March 31, 2006 was
$233,000 compared to $708,000 for the same period  during 2005. The decrease was due
primarily to less cash invested during the  same period in 2006.

General and
administrative expenses increased by $519,000 or approximately 51.9%  to $1,519,000 for
the three months ended March 31, 2006 from $1,000,000 for the  three months ended March
31, 2005. The primary cause of this increase was an  increase in the advisory fee paid to
FUR Advisors of $289,000 and increased  auditing and tax preparation fees accrued of
$168,000.

Discontinued
Operations

The 2005 and
2006 discontinued operations represent rent from the Sherman, Texas  property as a result
of the exercise of its purchase option by the tenant of the  Sherman, Texas property who
has not yet consummated the purchase.

Comprehensive
Income

Comprehensive
  income for the three months ended March 31, 2006 was comprised of unrealized
  gain of $3,180,000 on our real estate securities available for sale, primarily
  related to our investment in Sizeler and unrealized gain on our interest rate
  swap and cap agreements of $706,000. However, other comprehensive income was
  reduced by $7,319,000 of gain recognized during the three months ended March
  31, 2006 due to the sale of real estate securities available for sale and consequently
  included in net income. Comprehensive income reported for the three months ended
  March 31, 2005 was comprised of an unrealized loss of $25,000 on our real estate
  securities available for sale. This was partially offset by an unrealized gain
  on our interest rate swap and cap agreements of $1,006,000.

Liquidity and
Capital Resources

General

Liquidity is a
measurement of our ability to meet potential cash requirements,  including ongoing
commitments to repay borrowings, fund and maintain investments  and other general
business needs. We believe that cash flow from operations will  continue to provide
adequate capital to fund our operating and administrative  expenses, regular debt service
obligations and all dividend payments in  accordance with REIT requirements in both the
short-term and long-term.  Contractual commitments have not significantly changed from
year end. In  addition, we anticipate that cash on hand, borrowings under our credit
facility  and issuance of equity and debt, as well as other alternatives, will provide
the  necessary capital required for our investment activities. Moreover, to maintain  our
status as a REIT under the Internal Revenue Code, we must distribute  annually at least
90% of our REIT taxable income.

36



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

|ITEM 2. |  | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
|------- |  | -------------------------------------------------------------------------------------------------

Liquidity and
Capital Resources (Continued)

General
(Continued)

Our primary
sources of funds for liquidity consist of:

| | o |  | cash
and cash equivalents;
| | - |  | --------------------------

| | o |  | operating
cash flow derived primarily from rental income received from our  Operating Properties;
| | - |  | -------------------------------------------------------------------------------------------------

| | o |  | debt
service received from Loans held;
| | - |  | --------------------------------------

| | o |  | dividends
received from our ownership of Real Estate Securities; and
| | - |  | --------------------------------------------------------------------

| | o |  | borrowings
under  our credit facility.
| | - |  | --------------------------------------

We had cash and
cash equivalents of $22,895,000 at March 31, 2006, which  consisted of $19,834,000 in
cash and $3,061,000 in cash equivalents with  maturities of less than 90 days. In
addition, we had $31,375,000 available under  our KeyBank facility. In the future, we may
raise additional funds through other  debt financing and/or equity offerings. In this
regard, on March 29, 2006, we  distributed non-transferable subscription rights to
subscribe for and purchase  up to an aggregate of 5,220,038 of our Common Shares. The
offering expired on  April 27, 2006 with the offering being fully subscribed. We expect
to receive  gross proceeds of approximately $27,405,000 during the second quarter of 2006
from this offering.

At March 31,
2006, there was an effective registration statement under which the  Trust can offer an
aggregate of approximately $330,000,000 equity or debt  securities. In addition, our
UPREIT structure also enables us to acquire  properties by issuing to sellers, as a form
of consideration, limited  partnership interests in our operating partnership. Although
to date we have not  issued limited partnership interests in a transaction, we believe
that this  structure will facilitate our ability to acquire individual properties and
portfolios of properties by enabling us to structure transactions which will  defer taxes
payable by a seller while preserving our available cash for other  purposes, including
the possible payment of dividends and distributions.

Cash Flows

Our
  level of liquidity based upon cash and cash equivalents increased by approximately
  $3,877,000 during the three months ended March 31, 2006. The increase resulted
  from $8,582,000 of cash provided by operating activities and $30,734,000 of
  cash generated by our financing activities, which was partially offset by $35,439,000
  of cash used in our investing activities.

37



---

WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

|ITEM 2. |  | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
|------- |  | -------------------------------------------------------------------------------------------------

Liquidity and
Capital Resources (Continued)

Cash Flows
(Continued)

The
  significant components of the cash we used for our investing activities during
  the first quarter of 2006 were as follows: (i) $11,374,000 for our investment
  in our joint venture with Newkirk; (ii) the acquisition and origination of loans
  totaling $19,088,000; (iii) $35,749,000 of building acquisitions and capital
  improvements to our existing operating properties; (iv) $1,211,000 of purchases
  of various real estate securities; (v) distributions to minority interests of
  $1,235,000; (vi) increase in restricted cash of $1,989,000 and (vii) investment
  in preferred equity of $1,160,000.

Cash provided
by investing activities consisted primarily of $5,718,000 of  proceeds received from
prepayment on our whole pool mortgage-backed securities  available for sale and
$24,062,000 of proceeds from the sale of real estate  securities. The balance of the
increase in cash from investing activities  related to the collection of loans receivable
of $3,513,000 and contributions  from minority partners of $3,074,000.

Cash provided
by financing activities was the result of several transactions  including (i) $45,929,000
of mortgage loan proceeds and (ii) $45,000,000 of  proceeds from our revolving line of
credit with KeyBank.

During the
first  quarter of 2006, we primarily used cash for financing activities as follows: (i) $517,000
of dividend payments on our Series A Shares; (ii) $1,625,000 of dividend  payments on our
Series B-1 Shares; (iii) $3,914,000 of dividend payments on our  Common Shares; (iv)
$5,479,000 of repayment of borrowings under repurchase  agreements; (v) $6,020,000 of
mortgage loan repayments; and (vi) repayments of  borrowings under our revolving line of
credit of $42,375,000.

Cash
  provided by operating activities of $8,582,000 was comprised of (i) net income
  of $12,011,000; (ii) net decrease due to adjustments for non-cash items of $4,763,000
  and (iii) a net increase due to changes in operating assets and liabilities
  of $1,334,000. The adjustments for non-cash items were primarily comprised of
  (i) depreciation and amortization of $2,798,000; (ii) equity in earnings in
  excess of distributions of preferred equity investment and equity investment
  of $332,000 and $421,000, respectively; (iii) minority interest expense of $632,000;
  (iv) the effect of straight-lining of rental income of $890,000; (v) net gains
  on sale of securities available for sale of $7,319,000; (vi) decrease in deferred
  income of $833,000; (vii) bad debt recovery of $13,000; and (viii) gain on the
  early extinguishment of debt of $165,000. See our discussion of our results
  of operations above for additional details on our operations.

Dividends and
Distributions

In December
2005, we declared a special dividend of $3,914,000 ($0.11 per share)  on our Common
Shares which was paid on January 17, 2006 to the holders of record  as of December 30,
2005.

38



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WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

|ITEM 2. |  | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
|------- |  | -------------------------------------------------------------------------------------------------

Liquidity and
Capital Resources (Continued)

Dividends and
Distributions (Continued)

In December
2005, we declared a dividend of $517,000 ($0.525 per share) on our  Series A Shares which
was paid on January 31, 2006.

In December
  2005, we declared a dividend of $1,625,000 ($0.40625 per share) on our Series
  B-1 Shares which was paid on January 31, 2006. In March 2006 we declared a dividend
  $1,621,000 ($0.40625 per share) on our Series B-1 Shares which was paid on April
  28, 2006.

39



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WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

|ITEM 3. |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------- |  | ----------------------------------------------------------

Interest Rate
Risk

We have
exposure to fluctuations in market interest rates. Market interest rates  are highly
sensitive to many factors beyond our control. Various financial  vehicles exist which
would allow management to mitigate the impact of interest  rate fluctuations on our cash
flow and earnings. Among our liabilities are both  fixed and variable rate debt. In an
attempt to mitigate the effects of  fluctuations in interest rates on the variable rate
portion of this debt, we  entered into the following agreements: (i) an interest rate
swap with a  $40,000,000 notional amount that effectively converted the interest rate on
that  portion of principal of our note payable to KeyBank, with an outstanding balance
at March 31, 2006 of $51,022,000, from a floating rate equal to LIBOR plus 4.5%  to a
fixed rate of 8.55% and (ii) an interest rate swap with a balance guaranty  on our
Repurchase Agreement, which bears interest at LIBOR minus 0.003%,  effectively fixing our
rate at 4.045% on that financing. The notional amount of  the balance guaranty swap was
$91,382,000 at March 31, 2006.

The fair value
of the Trust's fixed rate debt approximates its carrying value at  March 31, 2006.

The following
table shows what the annual effect of an increase in the LIBOR  rate would have on
interest expense based upon the unhedged balances in variable  rate loans at March 31,
2006.

|                                  |  |  | Change
        in LIBOR |        
|--------------------------------- |  |  | ----------------------- | -------
|                                  |  |  |                         |        
|                                  |  |  | 1%                      |        
|                                  |  |  |                         |        
|Additional
      interest expense |  |  | $                       | 993,000

Market Value
Risk

Our whole pool
agency mortgage-backed securities are reflected at their  estimated fair value of
$120,391,000 at March 31, 2006 with unrealized gains and  losses excluded from earnings
and reported in other comprehensive income  pursuant to SFAS No. 115 Accounting for
Certain Investments in Debt and Equity  Securities. The estimated fair value of these
securities fluctuates primarily  due to changes in interest rates and other factors;
however, given that these  securities are guaranteed as to principal and/or interest by
an agency of the  U.S. Government, such fluctuations are generally not based on the
creditworthiness of the mortgages securing these securities.  Generally, in a rising
interest rate environment, the estimated fair value of  these securities would be
expected to decrease; conversely, in a decreasing  interest rate environment, the
estimated fair value of these securities would be  expected to increase.

Prepayment Risk

As we receive
prepayments of principal on the whole pool agency mortgage-backed  securities, premiums
paid on such securities are amortized against interest  income using the effective yield
method through the expected maturity dates of  the securities. In general, an increase in
prepayment rates will accelerate the  amortization of purchase premiums, thereby reducing
the interest income earned  on the securities. Our unamortized premium at March 31, 2006
was $810,000.

40



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WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

|ITEM 4. |  | CONTROLS AND PROCEDURES
|------- |  | -----------------------

The Company
maintains disclosure controls and procedures that are designed to  ensure that
information required to be disclosed in the Company's reports filed  with the Securities
and Exchange Commission (SEC) is recorded, processed,  summarized and reported within the
time periods specified in the SEC's rules and  forms, and that such information is
accumulated and communicated to the  Company's management, including its Chief Executive
Officer (CEO) and Chief  Financial Officer (CFO), as appropriate, to allow timely
decisions regarding  required disclosure.

As of March 31,
2006, an evaluation was performed under the supervision and with  the participation of
the Company's management, including the CEO and CFO, of the  effectiveness of the design
and operation of the Company's disclosure controls  and procedures (as defined in Rules
13a-15(e) under the U.S. Securities Exchange  Act of 1934). Based on that evaluation, the
Company's management, including the  CEO and CFO, concluded that the Company's disclosure
controls and procedures  were effective as of March 31, 2006.

Other Matters

There have been
no changes in the Company's internal controls over financial  reporting during the most
recent quarter that have materially affected, or are  reasonably likely to materially
affect, the Company's internal control over  financial reporting.

41



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WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

PART II.
OTHER INFORMATION

|ITEM 6. |  | EXHIBITS
|------- |  | --------

Exhibits
required by Item 601 of Regulation S-K are filed herewith or  incorporated herein by
reference and are listed in the attached Exhibit Index.

42



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WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

SIGNATURES

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

|                   | Winthrop
      Realty Trust
|------------------ | ---------------------------
|                   |                            
|                   |                            
|Date: May 10, 2006 | By:                        
|                   |                            
|                   |                            
|                   |                            
|                   |                            
|Date: May 10, 2006 | By:                        
|                   |                            
|                   |                            
|                   |                            

43



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WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

EXHIBIT INDEX

|Exhibit |  | Description                                                                                                                                                                                                                                                                              |  | Page
        Number
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------
|        |  |                                                                                                                                                                                                                                                                                          |  |                    
|3.1     |  | Bylaws of the Trust
      as restated on November 8, 2005                                                                                                                                                                                                                                |  | (m)                
|        |  |                                                                                                                                                                                                                                                                                          |  |                    
|3.2     |  | Amended and Restated
      Declaration of Trust as of December 15, 2005                                                                                                                                                                                                                  |  | (p)                
|        |  |                                                                                                                                                                                                                                                                                          |  |                    
|4.1     |  | Form of certificate
      for Shares of Beneficial Interest                                                                                                                                                                                                                              |  | (b)                
|        |  |                                                                                                                                                                                                                                                                                          |  |                    
|4.2     |  | Warrant to purchase
      500,000 shares of Beneficial Interest of Trust                                                                                                                                                                                                                 |  | (a)                
|        |  |                                                                                                                                                                                                                                                                                          |  |                    
|4.3     |  | Agreement of Limited
      Partnership of First Union REIT L.P., dated as of January 1, 2005                                                                                                                                                                                             |  | (g)                
|        |  |                                                                                                                                                                                                                                                                                          |  |                    
|4.4     |  | Amended and Restated
      Certificate of Designations for Series B-1 Cumulative Convertible Redeemable
      Preferred Shares of Beneficial Interest                                                                                                                                    |  | (l)                
|        |  |                                                                                                                                                                                                                                                                                          |  |                    
|10.1    |  | 1999 Trustee Share
      Option Plan                                                                                                                                                                                                                                                     |  | (c)                
|        |  |                                                                                                                                                                                                                                                                                          |  |                    
|10.2    |  | 1999 Long Term Incentive
      Performance Plan                                                                                                                                                                                                                                          |  | (c)                
|        |  |                                                                                                                                                                                                                                                                                          |  |                    
|10.3    |  | Indemnification Agreement
      with Neil Koenig, dated as of April 29, 2002                                                                                                                                                                                                             |  | (d)                
|        |  |                                                                                                                                                                                                                                                                                          |  |                    
|10.4    |  | Stock Purchase Agreement
      between the Trust and FUR Investors, LLC, dated as of November 26, 2003
      ("Stock Purchase Agreement"), including Annex A thereto, being the list
      of Conditions to the Offer.                                                                   |  | (e)                
|        |  |                                                                                                                                                                                                                                                                                          |  |                    
|10.5    |  | Guaranty of Michael
      L. Ashner, Guarantor, dated November 26, 2003, in favor of the Trust, in
      the form provided as Annex F to the Stock Purchase Agreement.                                                                                                                   |  | (e)                
|        |  |                                                                                                                                                                                                                                                                                          |  |                    
|10.6    |  | Amended and Restated
      Advisory Agreement dated November 7, 2005, between the Trust, First Union
      REIT, L.P., and FUR Advisors LLC.                                                                                                                                             |  | (m)                
|        |  |                                                                                                                                                                                                                                                                                          |  |                    
|10.7    |  | Exclusivity Services
      Agreement between the Trust and Michael L. Ashner.                                                                                                                                                                                                            |  | (e)                
|        |  |                                                                                                                                                                                                                                                                                          |  |                    
|10.8    |  | Amendment No. 1 to
      Exclusivity Agreement, dated November 7, 2005                                                                                                                                                                                                                   |  | (m)                
|        |  |                                                                                                                                                                                                                                                                                          |  |                    
|10.9    |  | Covenant Agreement
      between the Trust and FUR Investors, LLC.                                                                                                                                                                                                                       |  | (e)                
|        |  |                                                                                                                                                                                                                                                                                          |  |                    
|10.10   |  | Loan Agreement, dated
      November 18, 2004, among FT-Fin Acquisition LLC, Keybank National Association,
      Newstar CP Funding LLC, Keybank National Association, as agent for itself
      and such other lending institutions, and Keybanc Capital Markets, as the
      Arranger |  | (f)                
|        |  |                                                                                                                                                                                                                                                                                          |  |                    
|10.11   |  | Form of Mortgage,
      dated November 18, 2004, in favor of Keybank National Association                                                                                                                                                                                                |  | (f)                
|        |  |                                                                                                                                                                                                                                                                                          |  |                    
|10.12   |  | Ownership Interest
      Pledge Agreement, dated November 18, 2004, from FT-Fin Acquisition LLC to
      Keybank National Association                                                                                                                                                    |  | (f)                
|        |  |                                                                                                                                                                                                                                                                                          |  |                    
|10.13   |  | Guaranty, dated as
      of November 18, 2004, by First Union Real Estate Equity and (f) Mortgage
      Investments in favor of Keybank National Association, as the agent.                                                                                                              |  | (f)                

44



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WINTHROP
REALTY TRUST  FORM 10-Q MARCH 31, 2006

|10.14 |  | Indemnity Regarding
      Hazardous Materials, dated as of November 18, 2004, by First Union Real
      Estate Equity and Mortgage Investments in favor of Keybank National Association,
      as the agent.       |  | (f)
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---
|      |  |                                                                                                                                                                                                                    |  |    
|10.15 |  | Amended and Restated
      Omnibus Agreement, dated March 16, 2005, among Gerald Nudo, Laurence Weiner
      and First Union REIT L.P.                                                                             |  | (h)
|      |  |                                                                                                                                                                                                                    |  |    
|10.16 |  | Securities Purchase
      Agreement, dated February 16, 2005, between First Union Real Estate Equity
      and Mortgage Investments and Kimco Realty Corporation                                                   |  | (i)
|      |  |                                                                                                                                                                                                                    |  |    
|10.17 |  | Securities Purchase
      Agreement, dated February 25, 2005, between First Union Real Estate Equity
      and Mortgage Investments, Perrin Holden & Davenport Capital Corp.
      and the Investors named therein |  | (j)
|      |  |                                                                                                                                                                                                                    |  |    
|10.18 |  | Securities Purchase
      Agreement, dated June 15, 2005, between First Union Real Estate Equity and
      Mortgage Investments, Perrin Holden & Davenport Capital Corp. and
      the Investors named therein.    |  | (l)
|      |  |                                                                                                                                                                                                                    |  |    
|10.19 |  | Amended and Restated
      Registration Rights Agreement, dated June 20, 2005, between First Union
      Real Estate Equity and Mortgage Investments and the Investors named therein.                              |  | (l)
|      |  |                                                                                                                                                                                                                    |  |    
|10.20 |  | Amended and Restated
      Investor Rights Agreement, dated June 20, 2005, between First Union Real
      Estate Equity and Mortgage Investments and the Investors named therein.                                  |  | (l)
|      |  |                                                                                                                                                                                                                    |  |    
|10.21 |  | Loan Agreement, dated
      May 25, 2005, between FT-Amherst Property LLC, as borrower, and Greenwich
      Capital Financial Products, Inc., as lender                                                            |  | (k)
|      |  |                                                                                                                                                                                                                    |  |    
|10.22 |  | Promissory Note,
      dated May 25, 2005, in the original principal amount of $18,000,000 (k)
      from FT-Amherst Property LLC to Greenwich Capital Financial Products, Inc.                                    |  | (k)
|      |  |                                                                                                                                                                                                                    |  |    
|10.23 |  | Securities Purchase
      Agreement, dated November 7, 2005, between the Trust and Vornado Investments
      L.L.C. ("Vornado").                                                                                   |  | (m)
|      |  |                                                                                                                                                                                                                    |  |    
|10.24 |  | Registration Rights
      Agreement, dated November 7, 2005, between the Trust and Vornado                                                                                                                         |  | (m)
|      |  |                                                                                                                                                                                                                    |  |    
|10.25 |  | Securities Purchase
      Agreement, dated November 7, 2005, between Newkirk Realty Trust, Inc. and
      the Trust                                                                                                |  | (m)
|      |  |                                                                                                                                                                                                                    |  |    
|10.26 |  | Acquisition Agreement,
      dated November 7, 2005, between Newkirk Realty Trust, Inc. and the Trust                                                                                                              |  | (m)
|      |  |                                                                                                                                                                                                                    |  |    
|10.27 |  | Registration Rights
      Agreement, dated November 7, 2005, between Newkirk Realty Trust, Inc.                                                                                                                    |  | (m)
|      |  |                                                                                                                                                                                                                    |  |    
|10.28 |  | Lock-Up Agreement,
      dated November 7, 2005, executed by the Trust                                                                                                                                             |  | (m)
|      |  |                                                                                                                                                                                                                    |  |    
|10.29 |  | Ownership Limit Waiver
      Agreement dated November 7, 2005, between the Trust and
      Newkirk Realty Trust, Inc.                                                                                              |  | (m)
|      |  |                                                                                                                                                                                                                    |  |    
|10.30 |  | Joinder Agreement
      with respect to the Securities Purchase Agreement, dated November
      7, 2005, by and among the Trust, Newkirk Realty Trust, Inc. and The Newkirk
      Master
      Limited Partnership |  | (m)

45



---

WINTHROP
REALTY TRUST
  FORM 10-Q MARCH 31, 2006

|10.31 |  | Undertaking, dated
      November 7, 2005, by FUR Holdings LLC and FUR Advisors LLC for the benefit
      of the Trust.                                                                   |  | (m)
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---
|      |  |                                                                                                                                                                                           |  |    
|10.32 |  | Participation and
      Servicing Agreement, dated December 8, 2005, between Arbor Realty Funding
      LLC and FT-Toy LLC.                                                               |  | (n)
|      |  |                                                                                                                                                                                           |  |    
|10.35 |  | Loan Agreement, dated
      December 7, 2005, between the Arbor Realty Funding LLC and FT-Toy LLC.                                                                                        |  | (n)
|      |  |                                                                                                                                                                                           |  |    
|10.36 |  | Promissory Note, dated
      December 7, 2005, between the Arbor Realty Funding LLC and FT-Toy LLC                                                                                        |  | (n)
|      |  |                                                                                                                                                                                           |  |    
|10.37 |  | Pledge Agreement,
      dated December 7, 2005, from FT-Toy LLC to the Arbor Realty Funding LLC.                                                                                          |  | (n)
|      |  |                                                                                                                                                                                           |  |    
|10.38 |  | Guaranty from Winthrop
      Realty Trust in favor of the Arbor Realty Funding LLC.                                                                                                       |  | (n)
|      |  |                                                                                                                                                                                           |  |    
|10.39 |  | Loan Agreement, dated
      as of December 16, 2005, between WRT Realty L.P. and KeyBank, National Association                                                                            |  | (o)
|      |  |                                                                                                                                                                                           |  |    
|10.40 |  | Guaranty from Winthrop
      Realty Trust in favor of KeyBank, National Association.                                                                                                      |  | (o)
|      |  |                                                                                                                                                                                           |  |    
|10.41 |  | Limited Liability
      Company Agreement of 111 Debt Holdings LLC, dated March 31, 2006, among
      The Newkirk Master Limited Partnership, WRT Realty, L.P. and FUR Holdings
      LLC |  | (q)
|      |  |                                                                                                                                                                                           |  |    
|10.42 |  | Master Repurchase
      Agreement, dated March 30, 2006, among Column Financial Inc., 111 Debt Acquisition
      LLC, 111 Debt Acquisition Mezz LLC and Newkirk Realty Trust, Inc.        |  | (q)
|      |  |                                                                                                                                                                                           |  |    
|31    |  | Certifications Pursuant
      to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                            |  | *  
|      |  |                                                                                                                                                                                           |  |    
|32    |  | Certification Pursuant
      to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                             |  | *  

* filed herewith

| | (a) |  | Incorporated
by reference to the Trust's 1998 Form 10-K
| | --- |  | -------------------------------------------------------

| | (b) |  | Incorporated
by reference to the Trust's Registration Statement on Form S-3  No. 33-2818
| | --- |  | ----------------------------------------------------------------------------------------

| | (c) |  | Incorporated
by reference to the Trust's 1999 Proxy Statement for Special Meeting held May 17, 1999 in
lieu of Annual Meeting
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------

| | (d) |  | Incorporated
by reference to the Trust's 2002 Form 10-K
| | --- |  | -------------------------------------------------------

| | (e) |  | Incorporated
by reference to the Trust's Form 8-K dated November 26, 2003
| | --- |  | -------------------------------------------------------------------------

| | (f) |  | Incorporated
by reference to the Trust's Form 8-K dated November 18, 2004
| | --- |  | -------------------------------------------------------------------------

| | (g) |  | Incorporated
by reference to the Trust's Form 8-K dated January 1, 2004
| | --- |  | -----------------------------------------------------------------------

| | (h) |  | Incorporated
by reference to the Trust's Form 8-K dated March 18, 2005
| | --- |  | ----------------------------------------------------------------------

| | (i) |  | Incorporated
by reference to the Trust's Form 8-K dated February 17, 2005
| | --- |  | -------------------------------------------------------------------------

| | (j) |  | Incorporated
by reference to the Trust's Form 8-K dated March 2, 2005
| | --- |  | ---------------------------------------------------------------------

| | (k) |  | Incorporated
by reference to the Trust's Form 8-K dated May 27, 2005
| | --- |  | --------------------------------------------------------------------

| | (l) |  | Incorporated
by reference to the Trust's Form 8-K dated June 21, 2005
| | --- |  | ---------------------------------------------------------------------

| | (m) |  | Incorporated
by reference to the Trust's Form 8-K dated November 10, 2005.
| | --- |  | --------------------------------------------------------------------------

| | (n) |  | Incorporated
by reference to the Trust's Form 8-K dated December 12, 2005.
| | --- |  | --------------------------------------------------------------------------

| | (o) |  | Incorporated
by reference to the Trust's Form 8-K dated December 21, 2005.
| | --- |  | --------------------------------------------------------------------------

| | (p) |  | Incorporated
by reference to the Trust's 2005 Form 10-K (q) Incorporated by  reference to the Trust's
Form 8-K dated April 4, 2005
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------

46

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