Exhibit 10.1
                              EMPLOYMENT AGREEMENT

                  This Employment Agreement ("Agreement") is made and entered
into as of June 11, 1998 by and between ATLANTIC REALTY TRUST, a Maryland real
estate investment trust (the "Company"), whose principal place of business is
747 Third Avenue, New York, New York 10017 and EDWIN R. FRANKEL ("Employee"),
who resides at 49 Demopolis Avenue, Staten Island, New York 10308.

                              W I T N E S S E T H:

                  WHEREAS, the Company desires to employ Employee to devote full
time to the business of the Company, and Employee desires to be so employed
hereunder effective as of the date hereof;

                  NOW, THEREFORE, in consideration of the mutual agreements
herein made, the Company and Employee do hereby agree as follows:

1.                Employment. The Company agrees to employ Employee, and 
         Employee accepts such employment, as Executive Vice President, Chief
         Financial Officer and Secretary, on the terms and conditions
         hereinafter set forth.

2.                Powers and Duties; Location. As Executive Vice President, 
         Chief Financial Officer and Secretary of the Company, Employee shall
         have such powers and duties as are consistent with the offices of
         Executive Vice President, Chief Financial Officer and Secretary.
         Employee will report directly to the Board of Trustees of the Company.
         Employee shall be based in New York, New York.

3.                Term. The term of employment under this Agreement shall 
         commence on the date hereof, and shall terminate on the date of the
         Change in Control (as defined below) of the Company unless earlier
         terminated by either party hereto upon written notice to the other (the
         "Employment Term"). Excluding periods of vacation and sick leave to
         which Employee is entitled, Employee agrees during the Employment Term
         to devote his full business time to the business and affairs of the
         Company and to the duties and responsibilities assigned to Employee
         hereunder.

                  For purposes of this Agreement, a "Change in Control" means 
the occurrence of any one of the following events: (i) when the Company acquires
actual knowledge that any person (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), other than an employee benefit plan established or maintained by the
Company or any of its affiliates, is or becomes the beneficial owner (as defined
in Rule 13d-3 of the Exchange Act) directly or indirectly, of securities of the
Company representing 50% or more of the combined voting power of the

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Company's then-outstanding securities; (ii) upon the final purchase of the
Company's common stock pursuant to a tender or exchange offer (other than a
tender or exchange offer made by the Company or an employee benefit plan
established or maintained by the Company or any of its affiliates); or (iii)
upon the consummation of (A) a merger or consolidation of the Company with or
into another corporation (other than a merger or consolidation in which the
Company is the surviving corporation and which does not result in any capital
reorganization or reclassification or other change in the Company's
then-outstanding shares of common stock, (B) a sale or disposition of all or
substantially all of the Company's assets, or (C) a plan of liquidation or
dissolution of the Company.

4.                Compensation.  (a) As compensation for the services to be 
         rendered by Employee hereunder, the Company will pay or cause to be
         paid to Employee during the Employment Term an annual base salary (the
         "Base Salary") of $158,000, to be increased each year as provided
         below. The Base Salary for each calendar year shall be increased over
         the Base Salary for the preceding calendar year by a cost of living
         adjustment determined by the Company's Board of Trustees, which shall
         be no more than three (3%) percent. The Base Salary will be payable to
         Employee in equal monthly or more frequent installments, as the Company
         shall determine. Increases in salary, once granted, shall not be
         subject to revocation or decrease thereafter, and "Base Salary" for all
         purposes herein shall be deemed to be a reference to such higher
         amount.

                        (b) As soon as practicable after the execution of this
Agreement, the Company will lend Employee the sum of $37,500 (the "Loan"). The
Loan will be payable on demand, and will be evidenced by a promissory note to be
executed by Employee in favor of the Company, in the form attached hereto as
Exhibit A. The Loan will be forgiven upon the occurrence of any of the
following: (i) a Change in Control of the Company; (ii) the death of Employee;
or (iii) Employee shall have received notice of termination from the Company
prior to the termination of the Employment Term pursuant to Section 6(a) hereof.
If any of (i), (ii) or (iii) above occurs, the Loan will be forgiven as of the
date of such occurrence, and Employee shall be deemed to have received
compensation in an amount equal to the principal amount of the Loan (plus
imputed interest thereon as provided in Section 7872 of the Internal Revenue
Code of 1986) as of the date thereof. If at any time prior to the Change in
Control of the Company (i) Employee gives notice to terminate this Agreement or
(ii) Employee is terminated for Cause (as defined herein),then the Loan will
become immediately due and payable.

5.                Benefits. During the Employment Term, Employee shall be 
         entitled to: (i) receive all benefits and participate in all benefit
         plans generally made available to employees of the Company; (ii)
         vacation time of 4 weeks per year which, to the extent not taken, shall
         be non-cumulative and non-compensatory, and increasing in accordance
         with the Company's vacation policy; and (iii) reimbursement for
         expenses reasonably incurred by Employee in connection with his
         employment hereunder, in accordance

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         with the Company's policies, as in effect from time to time during the
         Employment Term.

6.                Termination.

                        (a) Termination Prior to Change in Control. If 
Employee's employment is terminated for any reason other than Cause (as defined
below) prior to the Change in Control of the Company, the Employee shall only be
entitled to receive accrued but unpaid Base Salary, unpaid bonus, if any, and
benefits through the date of termination.

                        (b) Termination on or after Change in Control. If
Employee's employment is terminated for any reason other than Cause (as defined
below) coincident with or after the Change in Control of the Company, the
Employee shall be entitled to receive (i) accrued but unpaid Base Salary, unpaid
bonus, if any, and benefits through the date of termination and (ii) a lump-sum
payment equal to 150 percent of Employee's Base Salary as in effect on the date
of termination.

                        (c) Termination for Cause. Notwithstanding Section 3 
hereof, Employee's employment shall terminate immediately for Cause. For
purposes of this Agreement, "Cause" shall mean either (i) a material breach by
Employee of any material provision of this Agreement; provided, that the Company
gives Employee written notice of such breach and Employee fails to cure the
breach within thirty (30) days after receipt of such notice, or (ii) any action
by Employee constituting willful malfeasance, and having a material adverse
effect on the Company, or (iii) an act of fraud, misappropriation of funds or
embezzlement by Employee in connection with his employment. If Employee is
terminated for Cause under clause (i) or (ii) hereof, Employee's right to
further compensation shall be limited to the payment of any accrued but unpaid
Base Salary, unpaid bonus, if any, and benefits through the date of termination.
If Employee is terminated for Cause under clause (iii) hereof, Employee shall
have no right to further compensation.

                        (d) No Further Notice or Compensation. Employee 
understands and agrees that he shall not be entitled to any further notice or
compensation upon termination of his employment with the Company, other than
amounts specified in Section 3 or Section 6 hereof. Employee shall not have any
obligation to seek comparable employment following such termination, nor shall
any compensation received from any subsequent employment reduce the Company's
obligations hereunder.

7.                Confidentiality. While employed by the Company, and at any 
          time thereafter, Employee shall not, without the prior written consent
          of the Company, use, divulge, disclose or make accessible to any other
          person, firm, partnership, corporation or other entity any
          Confidential Information pertaining to the business of the Company or
          any of its affiliates, except (i) while employed by the Company, in
          the business of and for the benefit of the Company or (ii) when
          required to do so by applicable law, by a court, by

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         any governmental agency, or by any administrative body or legislative
         body (including a committee thereof); provided, however, that Employee
         shall give reasonable notice under the circumstances to the Company
         that he has been notified that he will be required to so disclose as
         soon as possible after receipt of such notice, in order to permit the
         Company to take whatever action it reasonably deems necessary to
         prevent such disclosure and Employee shall cooperate with the Company
         to the extent it reasonably requests him to do so. For purpose of this
         Section 7, "Confidential Information" shall mean non-public information
         concerning the financial data, strategic business plan or other
         non-public, proprietary and confidential information of the Company,
         its affiliates or customers that, in any case, is not otherwise
         available to the public (other than by Employee's breach of the terms
         hereof).

8.                Completeness and Modification.  This Agreement supersedes in 
         its entirety all other agreements and understandings, both written and
         oral, regarding Employee's employment with the Company and contains the
         entire understanding and agreement between the parties with respect to
         the subject matter hereof. Any representations, promises or conditions
         in connection therewith not incorporated herein shall not be binding
         upon either party. No modification, waiver or agreement of termination
         of this Agreement shall be binding upon either party unless made in
         writing and signed for or on behalf of both parties.

9.                Withholding. The Company shall be entitled to withhold from
          payment any amount of withholding required by law.

10.               Severability. In the event that any one or more of the 
          provisions of this Agreement shall be or become invalid, illegal or
          unenforceable in any respect, the validity, legality and
          enforceability of the remaining provisions contained herein shall not
          be affected thereby.

11.               Governing Law.  This Agreement shall be governed by and 
          construed in accordance with the laws of the State of New York,
          without regard to conflict of law principles.

12.               Arbitration.  Any controversy or claim arising out of or 
          relating to this Agreement or the breach thereof shall be settled by
          binding arbitration in New York City by a single neutral arbitrator in
          accordance with the Commercial Arbitration Rules of the American
          Arbitration Association. Judgment upon any award rendered may be
          entered in any court having jurisdiction thereof, except in the event
          of a controversy related to any alleged violation of Section 7 hereof,
          in which case the Company shall be entitled to seek injunctive relief
          from a court of competent jurisdiction without the requirement to seek
          arbitration.


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13.               Indemnification.  To the fullest extent permitted by 
          applicable law, Employee shall be indemnified and held harmless for
          any action or failure to act in his capacity as an officer or employee
          of the Company. In furtherance of the foregoing and not by way of
          limitation, if Employee is a party or is threatened to be made a party
          to any suit because he is an officer or employee of the Company, he
          shall be indemnified against expenses, including reasonable attorney's
          fees, judgments, fines and amounts paid in settlement if he acted in
          good faith and in a manner reasonably believed to be in or not opposed
          to the best interest of the Company, and with respect to any criminal
          action or proceeding, he had no reasonable cause to believe his
          conduct was unlawful. Indemnification under this Section 13 shall be
          in addition to any other indemnification by the Company of its
          officers and directors. Expenses incurred by Employee in defending an
          action, suit or proceeding for which he claims the right to be
          indemnified pursuant to this Section 13 shall be paid by the Company
          in advance of the final disposition of such action, suit or proceeding
          upon receipt of an undertaking by or on behalf of Employee to repay
          such amount in the event that it shall ultimately be determined that
          he is not entitled to indemnification by the Company. Such undertaking
          shall be accepted without reference to the financial ability of
          Employee to make repayment. In addition, the Company shall use its
          best efforts to obtain and maintain a directors' and officers'
          liability insurance policy at a reasonable cost providing insurance
          coverage with respect to claims made against officers and directors as
          to which they are entitled to be indemnified by the Company.

14.               Notices. Unless otherwise hereinafter designated by either 
          party, any notice required or desired to be given under this Agreement
          shall be deemed to be given if in writing and sent by certified mail
          to his residence in the case of Employee, or to its principal office
          in the case of the Company, or to such other address or such other
          person as Employee or the Company shall designate in writing in
          accordance with this Section 14.

15.               Successors and Assigns. This Agreement shall inure to and be 
          binding on the heirs and representatives of the Employee and the
          successors and assigns of the Company. This Agreement contemplates
          personal services and shall not be assignable by Employee.

16.               Counterparts.  This Agreement may be executed in two or more 
          counterparts, each of which shall be deemed an original, but all of
          which shall constitute but one agreement.

17.               Further Assurances. The parties hereto shall execute and 
          deliver such other instruments and do such other acts as may be
          necessary to carry out the intent and purposes of this Agreement.


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18.               Headings.  The headings of the sections are for convenience 
          only and shall not control or affect the meaning or construction or
          limit the scope or intent of any of the provisions of this Agreement.


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                  IN WITNESS WHEREOF, the Company and Employee have caused this
Agreement to be executed as of the day and year first above written.

                        COMPANY:

                        ATLANTIC REALTY TRUST


                        By:      /s/  Joel M. Pashcow
                                 --------------------
                                 Name:  Joel M. Pashcow
                                 Title:  President and Chairman of the Board


                        EMPLOYEE:


                        /s/  Edwin R. Frankel
                        ---------------------



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