<PAGE>   1
                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-K
(Mark One)
                    [X] ANNUAL REPORT PURSUANT TO SECTION 13
                 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2000

                                       OR

[ ]                 TRANSITION REPORT PURSUANT TO SECTION
               13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

       For the transition period from ______________ to __________________


                         Commission file number 0-27562


                            ATLANTIC REALTY TRUST
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)


         Maryland                                              13-3849655
--------------------------                             -------------------------
State or other jurisdiction of                               (IRS Employer
Incorporation or organization                              Identification No.)




747 Third Avenue, New York, NY                                  10017
------------------------------------------             -------------------------
(Address of principal executive offices)                      (Zip Code)


Registrant's telephone number, including area code   212-702-8561
                                                     ---------------------------

Securities registered pursuant to Section 12(b) of the Act:



Title of each class                    Name of each exchange on which registered

Common Shares of Beneficial Interest,             NASDAQ SmallCap Market
-------------------------------------- -----------------------------------------
      $0.01 Par Value Per Share
--------------------------------------------------------------------------------

           Securities registered pursuant to Section 12(g) of the Act:

                                      None
            -------------------------------------------------------
                                (Title of class)


<PAGE>   2


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

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best  of  the  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [X]

     Aggregate  market  value  of the  Shares  of  Beneficial  Interest  held by
non-affiliates   of  the   registrant  as  of  March  14,  2001:   approximately
$26,242,818.

     Approximately  3,561,553  Shares of Beneficial  Interest of the  Registrant
were outstanding as of March 14, 2001.


<PAGE>   3

                                TABLE OF CONTENTS


                                                                           Page
                                                                           ----
PART I   ...................................................................1
         Item 1.  Business..................................................1
         Item 2.  Properties................................................5
         Item 3.  Legal Proceedings.........................................5
         Item 4.  Submission of Matters to a Vote of Security Holders.......5

PART II  ...................................................................6
         Item 5.  Market for Registrant's Common Equity and Related
                    Stockholder Matters.....................................6
         Item 6.  Selected Financial Data...................................7
         Item 7.  Management's Discussion and Analysis of Financial
                    Condition and Liquidation Activities....................7
         Item 7A. Quantitative and Qualitative Disclosures About
                    Market Risk.............................................8
         Item 8.  Financial Statements and Supplementary Data...............8
         Item 9.  Changes in and Disagreements with Accountants
                    on Accounting and Financial Disclosure..................8

PART III ...................................................................9
         Item 10.  Directors and Executive Officers of the Registrant.......9
         Item 11.  Executive Compensation...................................12
         Item 12.  Security Ownership of Certain Beneficial Owners and
                     Management.............................................14
         Item 13.  Certain Relationships and Related Transactions...........15

PART IV  ...................................................................16
         Item 14.  Exhibits, Financial Statement Schedules, and
                     Reports on Form 8-K....................................16


<PAGE>   4

                      CAUTIONARY STATEMENT FOR PURPOSES OF
                         THE "SAFE HARBOR" PROVISIONS OF
              THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

WHEN  USED  IN  THIS  ANNUAL  REPORT  ON  FORM  10-K,   THE  WORDS   "BELIEVES,"
"ANTICIPATES,"  "EXPECTS"  AND  SIMILAR  EXPRESSIONS  ARE  INTENDED  TO IDENTIFY
FORWARD-LOOKING  STATEMENTS.  STATEMENTS LOOKING FORWARD IN TIME ARE INCLUDED IN
THIS ANNUAL REPORT ON FORM 10-K  PURSUANT TO THE "SAFE HARBOR"  PROVISION OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH STATEMENTS ARE SUBJECT TO
CERTAIN  RISKS AND  UNCERTAINTIES  WHICH  COULD CAUSE  ACTUAL  RESULTS TO DIFFER
MATERIALLY, INCLUDING, WITHOUT LIMITATION, THOSE STATEMENTS RELATING TO THE "RPS
TAX ISSUES"  DISCUSSED IN ITEM 1 OF THIS ANNUAL REPORT ON FORM 10-K,  STATEMENTS
SET FORTH IN THE SECTION  CAPTIONED  "RISK FACTORS" IN THE TRUST'S  REGISTRATION
STATEMENT ON FORM 10 FILED WITH THE SECURITIES AND EXCHANGE  COMMISSION ON MARCH
28, 1996 (FILE NO. 0-27562) AND STATEMENTS IN THE  "MANAGEMENT'S  DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" OF THIS ANNUAL REPORT
ON FORM  10-K.  READERS  ARE  CAUTIONED  NOT TO PLACE  UNDUE  RELIANCE  ON THESE
FORWARD-LOOKING  STATEMENTS,  WHICH SPEAK ONLY AS OF THE DATE HEREOF.  THE TRUST
UNDERTAKES NO OBLIGATION TO PUBLICLY REVISE THESE FORWARD-LOOKING  STATEMENTS TO
REFLECT EVENTS OR  CIRCUMSTANCES  OCCURRING  AFTER THE DATE HEREOF OR TO REFLECT
THE OCCURRENCE OF UNANTICIPATED EVENTS.


<PAGE>   5

                                     PART I

Item 1.  Business.

     Atlantic  Realty Trust, a Maryland real estate  investment  trust (together
with its subsidiary,  the "Trust"),  was organized  pursuant to a Declaration of
Trust  dated  July 27,  1995 (as  amended,  the  "Declaration  of  Trust").  The
principal office of the Trust is located at 747 Third Avenue, New York, New York
10017.

     The Trust  commenced  operations  on May 10,  1996 as a result of a spinoff
(the  "Spin-Off  Transaction")  from RPS  Realty  Trust  ("RPS").  The  Spin-Off
Transaction  was  consummated  in order to permit RPS to complete an acquisition
(the  "Ramco  Acquisition")  of  assets  from  Ramco  Gershenson,  Inc.  and its
affiliates  ("Ramco"),  which  permitted RPS to become an equity shopping center
real estate investment trust (a "REIT").  RPS undertook the Spin-Off Transaction
because Ramco was unwilling to consummate  the Ramco  Acquisition  if the assets
that were contributed by RPS to the Trust (the "Trust Assets")  remained in RPS.
Pursuant to the  Spin-Off  Transaction,  the board of trustees of RPS approved a
distribution  of one common share of beneficial  interest (the  "Shares") of the
Trust for every eight shares of beneficial interest of RPS (the "Distribution").

     Under the provisions of its Declaration of Trust, the Trust was to continue
for a period of 18 months from May 10, 1996,  during which time it was to reduce
to cash or cash  equivalents  the Trust Assets and either (i) make a liquidating
distribution to its  shareholders  or (ii) agree to merge or combine  operations
with  another  real  estate  entity,  in  either  case,  as soon as  practicable
following the Distribution and within such 18-month period. Such 18-month period
was subject to extension if (i) the Trust had not achieved its objective and the
holders of at least two-thirds of the outstanding  Shares approved the extension
of such date or (ii) a contingent  tax  liability  relating to RPS that has been
assumed by the Trust had not been satisfactorily  resolved.  Because the RPS Tax
Issues (as defined below) have not yet been satisfactorily  resolved,  the Trust
has continued its business past such 18-month period. The Trust cannot currently
estimate the timing of the future satisfactory resolution of the RPS Tax Issues.
Accordingly,  the Trust will continue  until there is a final  determination  of
these issues. Upon obtaining a satisfactory resolution to the RPS Tax Issues and
liquidating the Trust's remaining assets, any liquidating  distribution effected
by the Trust would be subject to the satisfaction of the Trust's  liabilities to
its creditors.  In the event that at the end of this period, the Trust is unable
to achieve its business objectives,  the members (the "Trustees") of the Trust's
board of trustees (the "Board of Trustees")  will appoint an  independent  third
party to liquidate the Trust's remaining assets.

     As a result  of the  Spin-Off  Transaction,  the Trust  acquired  the Trust
Assets.  The  Trust  Assets  which  have not been  disposed  of by the Trust are
described  below under "--  Description of Trust Assets." The Trust's  principal
investment  objective is to maximize shareholder value from the reduction of the
Trust Assets to cash or cash  equivalents.  As part of its plan to liquidate the
Trust Assets to cash or cash equivalents, the Trust intends, among other things,
and subject to the Internal Revenue Service's  ("IRS")  continuing review of its
audit of RPS (as more  fully  described  below  under "-- Tax  Contingency")  to
continue to: (i) contact  strategic  buyers of the Trust's  remaining asset (the
Hylan Plaza  Shopping  Center,  located in Staten  Island,  New York (the "Hylan
Center"))  regarding  possible sales transactions and (ii) list the Hylan Center
for sale with qualified real estate brokers. No assurance can be given, however,
that such  objective  will be achieved.  The Trust expects to continue to invest
the net  proceeds  from sales of the Trust  Assets in  short-term  or  temporary
investments,  such as  certificates  of  deposit,  pass-through  mortgage-backed
certificates,   mortgage   participation   certificates   and   mortgaged-backed
securities (or similar  investment  products),  all or some of which investments
may be guaranteed  by Ginnie Mae,  Fannie Mae or Freddie Mac.  Unless  otherwise
approved  by the  shareholders,  the Trust does not expect that it will make new
permanent

                                       1
<PAGE>   6

investments  or  raise  additional  capital.  In addition,  the  Trust  does not
expect to acquire additional mortgage loans or properties.

     In addition,  the Trust may explore the  possibility of merging or entering
into a business  combination with another real estate entity.  The Trust expects
that it will pursue  such a  transaction  only if it  represents  an  attractive
alternative to the  distribution  to  shareholders  of the net proceeds from the
orderly  liquidation  of the  Trust  Assets,  as  described  above.  The  merger
candidates  that may be available to the Trust may be limited as a result of the
amount  of cash  and the  nature  of the  assets  which  the  Trust  will  hold.
Accordingly, there can be no assurance that the Trust will successfully merge or
combine  operations  with  another  real  estate  entity.  Because the Trust has
adopted a policy not to re-invest sales proceeds in additional mortgage loans on
real  estate  (except  to  the  extent  necessary  to  satisfy  applicable  REIT
requirements),  a merger or other business  combination  involving the Trust and
another  real  estate  entity  may  constitute  a  "roll-up  transaction"  under
applicable  securities laws. In such case, the Trust would be required to comply
with the  heightened  disclosure  rules as well as special rules relating to the
proxy  solicitation  process and the listing of the  securities of the surviving
company on any exchange or the inclusion for quotation of such securities on the
Nasdaq Small Cap Market. Application of the roll-up rules to a company merger or
business  combination  could  delay,  defer or prevent such a  transaction  from
occurring.

     The Trust was  organized  for the  purpose  of  qualifying  as a REIT under
sections  856-860 of the Internal Revenue Code of 1986, as amended (the "Code").
The Trust will elect to qualify as a REIT for the year ended  December  31, 2000
and intends to operate so as to continue to qualify as a REIT.

     As of December 31, 2000, the Trust had six employees.

Description of Trust Assets

     As of December  31, 2000,  the Trust owned and operated one real  property,
the Hylan Center and held  short-term  investments  in the  principal  amount of
approximately $22,500,000, consisting primarily of a certificate of deposit at a
major New York bank.

Real Property Investment

     The Hylan Plaza Shopping  Center.  At December 31,  2000, the Trust held an
equity  investment  in one  property,  the Hylan  Center . The Hylan Center is a
one-story community shopping center located in Staten Island, New York which was
acquired by the Trust in April,  1996. The Hylan Center  contains  approximately
349,000 square feet of leasable space  approximately 99% of which was leased and
occupied as of December 31, 2000. Major tenants (i.e., tenants who accounted for
10% or more of the leasable space as of December 31, 2000) include K-Mart Corp.,
a department store chain ("K-Mart"),  Supermarkets General Corp. d/b/a Pathmark,
a supermarket chain  ("Pathmark"),  and the Toys "R" Us -- Nytex, Inc., a retail
toy store  chain  ("Toys "R"  Us").  These  three  tenants  lease  approximately
105,000, 55,000 and 42,000 square feet, respectively, which constitutes 30%, 16%
and 12%, respectively, of the total leasable space. The K- Mart lease expires in
January  2002 and  provides  for annual  base rental  payments of  approximately
$235,000;  the  Pathmark  lease  expires in January 2002 and provides for annual
base  rental  payments  of  approximately  $339,000;  and the  Toys "R" Us lease
expires  in October  2005 and  provides  for  annual  base  rental  payments  of
approximately  $90,000.  The K-Mart lease  contains  three 5-year tenant renewal
options;  the Pathmark lease contains seven 5-year tenant renewal  options;  and
the Toys "R" Us lease  contains one 10-year tenant  renewal  option.  Leases for
approximately  8,887  square feet are due to expire on or prior to December  31,
2001.  The  approximate  base  rental  revenue  as  of  December  31,  2000  was
approximately $3,631,338. The average base rental revenue per leased square foot
as of December 31, 2000 was $10.59, excluding


                                       2
<PAGE>   7

percentage  rent and similar  provisions.  The Trust  believes  the  property is
adequately  covered by  insurance.  As of December 31, 2000,  the  estimated net
realizable value of the Hylan Center was  approximately  $38,490,000,  including
estimated cash flows using a disposition period of 9 months. Realized values may
differ depending on actual disposition results and time periods.

     Under various federal,  state, and local environmental laws, ordinances and
regulations,  a current or previous  owner or operator of real  property  may be
liable for the costs of removal or remediation of hazardous or toxic  substances
on, under or in such property.  Such laws often impose liability  whether or not
the owner or operator  knew of, or was  responsible  for,  the  presence of such
hazardous or toxic substances.  In connection with the ownership,  operation and
management of the Hylan Center,  the Trust may be potentially liable for removal
or  remediation  costs,  as well  as  certain  other  related  costs,  including
governmental fines and injuries to persons and property.  Certain  environmental
laws and  common  law  principles  could  also be used to impose  liability  for
release of an exposure to hazardous  substances,  including  asbestos-containing
materials ("ACMs") into the air, and third parties may seek recovery from owners
or  operators  of  real  properties  for  personal  injury  or  property  damage
associated with exposure to released  hazardous  substances,  including ACMs. As
the owner of the Hylan Center,  the Trust may be potentially liable for any such
costs.

Qualification as a REIT

     The Trust intends to qualify as a REIT for federal income tax purposes.  If
the  Trust so  qualifies,  amounts  paid by the  Trust as  distributions  to its
shareholders  will not be subject to  corporate  income  taxes.  For any year in
which the Trust does not meet the  requirements  for  electing  to be taxed as a
REIT, it will be taxed as a corporation.

     The  requirements  for  qualification  as a REIT are  contained in Sections
856-860 of the Code and the regulations  promulgated  thereunder.  The following
discussion is a brief summary of some of those  requirements.  Such requirements
include  certain  provisions  relating  to the  nature of a REIT's  assets,  the
sources of its income,  the ownership of its stock,  and the distribution of its
income.  Among other things, at the end of each fiscal quarter,  at least 75% of
the value of the total assets of the Company must consist of real estate  assets
(including interests in mortgage loans secured by real property and interests in
other REITs,  as well as cash, cash items and government  securities)  (the "75%
Asset Test"). There are also certain limitations on the amount of other types of
securities which can be held by a REIT. Additionally,  at least 75% of the gross
income of the Company for the taxable year must be derived from certain sources,
which include "rents from real  property," and interest  secured by mortgages on
real  property.  An  additional  20% of the gross  income of the Company must be
derived from these same sources or from dividends,  interest from any source, or
gains  from  the  sale or  other  disposition  of  stock  or  securities  or any
combination of the foregoing.


     The  Trust  may  invest  the  proceeds  derived  from  the  sale  or  other
disposition of the Trust Assets in pass-through,  mortgage-backed  certificates,
mortgage participation certificates and mortgage-backed  securities, all or some
of which instruments may be guaranteed by Ginnie Mae, Fannie Mae or Freddie Mac.
Such instruments  produce qualifying income for REIT qualification  purposes and
also satisfy the  requirements of the 75% Asset Test. A REIT is also required to
distribute  at least 95% (90% for taxable  years  beginning  after  December 31,
2000) of its REIT Taxable Income (as defined in the Code) to its shareholders.

                                       3
<PAGE>   8

Tax Contingency

     During the third  quarter  of 1994,  RPS held more than 25% of the value of
its gross assets in overnight  Treasury  Bill  reverse  repurchase  transactions
which the IRS may view as  non-qualifying  assets for the purposes of satisfying
an asset  qualification  test  applicable  to REITs,  based on a Revenue  Ruling
published in 1977 (the "Asset  Issue").  RPS requested that the IRS enter into a
closing  agreement with RPS that the Asset Issue would not impact RPS' status as
a REIT.  The IRS declined such request.  In February  1995, the IRS initiated an
examination  of the  1991-1995  income tax  returns of RPS (the "RPS Audit" and,
together with the Asset Issue,  the "RPS Tax Issues").  Based on developments in
the law which occurred since 1977, RPS' tax counsel at that time,  Battle Fowler
LLP,  rendered  an opinion  that RPS'  investment  in Treasury  Bill  repurchase
obligations would not adversely affect its REIT status. However, such opinion is
not binding upon the IRS.

     In  connection  with the Spin-Off  Transaction,  the Trust  assumed all tax
liability  arising out of the RPS Tax Issues (other than  liability that relates
to events  occurring or actions  taken by RPS following the date of the Spin-Off
Transaction) pursuant to a tax agreement, dated May 10, 1996, by and between RPS
and the Trust.  Such  agreement  provides  that RPS (now named  Ramco-Gershenson
Properties Trust), under the direction of four trustees,  three of whom are also
trustees  of the Trust  (the  "Continuing  Trustees")  and not the  Trust,  will
control,  conduct  and  effect the  settlement  of any tax  claims  against  RPS
relating to the RPS Tax Issues. Accordingly, the Trust does not have any control
as to the timing of the  resolution  or  disposition  of any such  claims and no
assurance  can be given that the  resolution or  disposition  of any such claims
will be on  terms or  conditions  as  favorable  to the  Trust  as if they  were
resolved or disposed of by the Trust.

     RPS and the Trust also have  received an opinion from Wolf,  Block,  Schorr
and  Solis-Cohen  LLP (the "Special Tax Counsel") that, to the extent there is a
deficiency in RPS distributions arising out of the IRS examination, and provided
RPS timely makes a deficiency  dividend  (i.e.  declares and pays a distribution
which is  permitted  to relate  back to the year for which each  deficiency  was
determined to satisfy the requirement that a REIT distribute ninety-five percent
(95%)  of its  taxable  income),  the  classification  of RPS as a REIT  for the
taxable years under examination would not be affected.

     As of December  31,  2000,  the Trust has not been  required to perform its
indemnity  obligation with respect to the RPS Tax Issues other than with respect
to the payment of legal fees and expenses  incurred in connection  with the IRS'
ongoing  examination.  On March 1, 1999,  the IRS revenue agent  conducting  the
examination  issued his examination  report (the "Revenue  Agent's Report") with
respect to the tax issues in the RPS Tax Audit,  including  the RPS Tax  Issues.
The  Revenue  Agent's  Report  sets  forth a number of  positions  which the IRS
examining  agent has taken with respect to the RPS Tax Issues for the years that
are  subject to the RPS  Audit,  which  Special  Tax  Counsel to the  Continuing
Trustees  believes are not consistent with applicable law and regulations of the
IRS. One of the positions, the acquisition of assets by RPS that could be viewed
as  non-qualifying  assets for REIT purposes,  has been addressed in the opinion
letter of counsel  referred to above.  In  addition,  the IRS revenue  agent has
proposed  to  disallow  the  deductions  for bad debts and  certain  other items
claimed by RPS in the years under  examination.  In reaching his conclusion with
respect to the  deduction for bad debts,  the IRS revenue agent has  disregarded
the fact that the values  actually  obtained for the assets  corresponded to the
values  used  by RPS in  determining  its  bad  debt  deductions.  If all of the
positions  taken in the Revenue  Agent's Report were to be sustained,  RPS, with
funds supplied by the Trust, would have to distribute up to approximately  $16.5
million to its  shareholders,  in accordance  with the procedures for deficiency
dividends,  in order to preserve its status as a REIT and could, in addition, be
subject to taxes,  interest and  penalties  up to  approximately  $31.8  million
through March 31, 2001. The issuance of the Revenue  Agent's Report  constitutes
only the first step in the IRS  administrative  process for determining  whether
there is any deficiency in RPS' tax liability for the years at


                                       4
<PAGE>   9


issue and any  adverse  determination  by the IRS  revenue  agent is  subject to
administrative appeal with the IRS and, thereafter, to judicial review. As noted
above, the Revenue Agent's Report sets forth a number of positions which Special
Tax Counsel to RPS and the Trust believe are not consistent  with applicable law
and  regulations  of the IRS.  The Trust  filed an  administrative  appeal  (the
"Protest") challenging the findings contained in the Revenue Agent's Report. The
appellate conferee to whom the  administrative  appeal was assigned reviewed the
Revenue Agent's Report and the Protest and,  rather than  considering the appeal
further,  has  returned  the  case to the  revenue  agent  for  further  factual
development.  During a meeting  with the Special  Tax Counsel to the  Continuing
Trustees, the appellate conferee indicated that, even assuming the assertions in
the Revenue  Agent's  Report  justified  the  disallowances,  he was required to
return the case to the revenue agent because the facts  necessary to sustain the
assertions  in the Report had not been  established  to the degree  necessary to
permit the consideration of the case on appeal.  The revenue agent has requested
information  in accordance  with the  directions of the appellate  conferee and,
although much of the information was examined by the agent previously, the Trust
has responded to the new request.

Segment Information

     The  Trust  considers  its  business  to  include  one  industry   segment,
investment in real estate.

Item 2.  Properties.

     The Trust  leases  approximately  4,800  square feet of office space at 747
Third  Avenue,  New  York,  New York at an  annual  base  rent of  approximately
$293,000.  This lease will expire on October 31, 2002.  In  addition,  the Trust
owns and operates the Hylan Center property described under Item 1.

Item 3.  Legal Proceedings.

     There are no material pending legal proceedings other than ordinary routine
litigation incidental to the business (including without limitation, foreclosure
proceedings), against or involving the Trust or its properties.

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

     The Trust did not submit any  matter to a vote of its  shareholders  during
the fourth quarter of 2000.


                                       5

<PAGE>   10

                                     PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters.

(a) Market Information

     The  Shares of the Trust have been  included  for  quotation  on the Nasdaq
SmallCap Market under the symbol ATLRS. Set forth below is the range of high and
low bid prices for the shares for each of the  quarters  during the years  ended
December 31, 2000 and 1999.


                                                         High           Low
                                                         ----           ---
First Quarter 2000                                      $7.750        $6.500

Second Quarter 2000                                     $8.250        $6.812

Third Quarter 2000                                      $8.560        $5.531

Fourth Quarter 2000                                     $8.625        $7.750

First Quarter 1999                                      $8.500        $6.250

Second Quarter 1999                                     $8.125        $6.750

Third Quarter 1999                                      $8.125        $6.250

Fourth Quarter 1999                                     $7.750        $7.250


(b) Approximate Number of Equity Security Holders


                                                           Approximate Number
                                                            of Record Holders
Title of Class                                            (As of March 14, 2001)
--------------                                            ----------------------

Shares of beneficial interest, $.01 par value                     2,970

(c) Dividend Information

     Under  the  Code,  a REIT  must meet  certain  qualifications  including  a
requirement that it distribute  annually to its shareholders at least 95% of its
REIT Taxable Income (90% for taxable years  beginning  after December 31, 2000).
The Trust has continued the cash distribution policy of the predecessor programs
by making  quarterly  distributions  to its  shareholders  in amounts  such that
annual  distributions equal 100% of REIT Taxable Income,  thereby complying with
the  distribution  requirements  of the federal  income tax laws  applicable  to
REITs. See "Qualification as a REIT" in Item 1 above.

     The Trust paid distributions of $.86 and $.28 per share for the years ended
December 31,  2000 and 1999 respectively.  Such distributions represent ordinary
income.

     The Trust did not pay a distribution for the year ended December 31, 1998.


                                        6
<PAGE>   11

Item 6.  Selected Financial Data.

     The following tables set forth certain selected historical  information for
the Trust.  The financial  information  should be read in  conjunction  with the
financial statements and notes thereto included herein.

<TABLE>
<CAPTION>
<S>                                  <C>            <C>          <C>           <C>             <C>

ATLANTIC REALTY TRUST              12/31/00       12/31/99     12/31/98      12/31/97       12/31/96
                                   --------       --------     --------      --------       --------
Statement of Net Assets
In Liquidation:
         Total Assets             $62,691,522   $61,826,132   $60,376,057   $56,962,910    $51,175,032
         Total Liabilities          4,545,181     4,394,443     4,164,168     2,914,206      3,559,268
         Net Assets in
           Liquidation            58,146,371     57,431,689    56,211,889    54,048,704     47,615,764

Statement of Changes in
Net Assets in Liquidation:
Increase (Decrease)

         Distributions Paid       (3,062,936)      (997,235)        -             -         (1,389,006)

Adjustments to Reflect
   Liquidation
Basis of Accounting                3,777,618      2,217,035     2,163,185     6,432,940       4,140,555
Net Change in net assets in
  Liquidation                        714,682      1,219,800     2,163,185     6,432,940       2,751,549

</TABLE>

Item 7.  Management's Discussion and Analysis of
         Financial Condition and Liquidation Activities.

Capital Resources and Liquidity - Atlantic Realty Trust

     The  Trust's  primary  objective  has been to  liquidate  its  assets in an
eighteen-month  period from the date of the Spin-Off Transaction while realizing
the maximum values for such assets;  however because the RPS Tax Issues have not
been satisfactorily  resolved,  the Trust has continued its business beyond such
period.  Although the Trust  considers its  assumptions  and estimates as to the
values and timing of such  liquidations to be reasonable,  the period of time to
liquidate  the assets and  distribute  the proceeds of such assets is subject to
significant business,  economic and competitive uncertainties and contingencies,
many of which are beyond the Trust's control. There can be no assurance that the
net values ultimately  realized and costs actually incurred for such assets will
not materially  differ from the Trust's  estimate.  The Trust does not intend to
make new loans or actively engage in either the mortgage lending or the property
acquisition business.

     The  Trust  believes  that  cash and  cash  equivalents  on hand,  proceeds
generated  by the real  estate  property  that it owns and  operates  (the Hylan
Center) and proceeds  from the eventual sale of such property will be sufficient
to support the Trust and meet its  obligations.  As of December  31,  2000,  the
Trust had approximately $23,000,000 in cash and short-term investments.

     During the first  quarter  of 1998,  the Trust  received  net  proceeds  of
approximately $3,242,000 from the sale of the Norgate Shopping Center. Following
such sale, the Trust's sole remaining property was the Hylan Center. At December
31,  1998,  1999 and 2000,  the Trust's only real  property  asset was the Hylan
Center.

     The Trust will liquify its  investment in the Hylan Center upon  resolution
of the RPS Tax Issues.

                                        7

<PAGE>   12

     Statement of Financial  Accounting Standards (SFAS) No. 133, Accounting for
Derivative Instruments and Hedging Activities, is effective for all fiscal years
beginning after June 15, 2000. SFAS 133, as amended,  establishes accounting and
reporting  standards for derivative  instruments,  including certain  derivative
instruments  embedded in other contracts and for hedging  activities.  The Trust
has adopted SFAS 133 effective January 1, 2001.  Management  does not expect the
adoption of SFAS 133 to have any impact on the Trust.

Results of Operations

Period from January 1, 1998 to December  31,  1998,  January 1, 1999 to December
31, 1999 and January 1, 2000 to December 31, 2000.

     As a  result  of the  spin-off  transaction,  the  Trust  has  adopted  the
liquidation  basis  of  accounting.  The  liquidation  basis  of  accounting  is
appropriate when liquidation  appears imminent and the Trust is no longer viewed
as a going concern. The Trust's income or loss is included in the adjustments to
reflect liquidation basis of accounting. Net income for the years ended December
31, 2000, 1999 and 1998 was approximately $3,045,000,  $2,600,000 and $1,400,000
respectively.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk.

         Not applicable.

Item 8.  Financial Statements and Supplementary Data.

         See pages F-1 through F-8, which are included herein.

Item 9.  Changes in and Disagreements with Accountants on Accounting
         and Financial Disclosure.

         None.


                                        8

<PAGE>   13


                                    PART III

Item 10.  Directors and Executive Officers of the Registrant.

     The Board of Trustees is composed of six Trustees,  each of whom will serve
until the respective successors are elected and qualified.

     The Trustees and executive officers of the Trust are as follows:


Name                    Age             Offices and Positions
----                    ---             ---------------------

Joel M. Pashcow*        58              Chairman  and  President  of  the  Trust
                                        effective as of February  29,  1996.  He
                                        has  been a  member  of  the  Bar of the
                                        State of New York since  1968.  Chairman
                                        of RPS from  inception  (December  1988)
                                        through  May 1996.  He is a graduate  of
                                        Cornell  University  and the Harvard Law
                                        School. Mr. Pashcow is also a trustee of
                                        Ramco-Gershenson  Properties  Trust  and
                                        Chairman  of  its  Executive   Committee
                                        (formerly named RPS Realty Trust) and is
                                        a director of Hi-Rise Recycling Systems,
                                        Inc.

Edwin J. Glickman      68               Executive   Vice  President  of  Capital
                                        Lease Funding Corp.,  a company  engaged
                                        in commercial real estate lending, since
                                        January   1995.   Prior  to  that,   Mr.
                                        Glickman  was  President of the Glickman
                                        Organization,   Inc.  ("Glickman")  from
                                        January 1992 to December 1994.  Glickman
                                        conducted    real   estate    investment
                                        consulting   services  and  real  estate
                                        financial  services,  including mortgage
                                        brokerage,  arranging joint ventures and
                                        equity  financing.  Prior to  that,  Mr.
                                        Glickman was  Chairman of the  Executive
                                        Committee of Schoenfeld  Glickman  Maloy
                                        Inc.  from May 1989,  which is a company
                                        that  conducted  real  estate  financial
                                        services,  including mortgage brokerage,
                                        arranging   joint  ventures  and  equity
                                        financing.  Also served  successively as
                                        Executive Vice President,  President and
                                        Vice  Chairman  of  Sybedon  Corporation
                                        from  1977 to 1993,  which is a  company
                                        that  conducted  real  estate  financial
                                        services,  including mortgage brokerage,
                                        arranging   joint  ventures  and  equity
                                        financing.   In   all   positions,   Mr.
                                        Glickman has been engaged in real estate
                                        financial  services,  including mortgage
                                        brokerage,  arranging joint ventures and
                                        equity financing.


                                       9
<PAGE>   14


Name                   Age              Offices and Positions
----                   ---              ---------------------

Stephen R. Blank*      55               Senior Fellow, Finance of the Urban Land
                                        Institute  ("ULI").  Mr. Blank is also a
                                        director   of  West  Coast   Hospitality
                                        Corporation,    a   New    York    Stock
                                        Exchange-listed   corporation   and  BNP
                                        Residential    Properties,    Inc.,   an
                                        American  Stock   Exchange-listed  REIT.
                                        Prior to joining  the ULI in December of
                                        1998, Mr. Blank was a Managing Director,
                                        Real Estate  Investment  Banking of CIBC
                                        Oppenheimer Corp.  ("Oppenheimer") since
                                        November  1,  1993.   Prior  to  joining
                                        Oppenheimer,  Mr.  Blank was a  Managing
                                        Director, Real Estate Corporate Finance,
                                        of Cushman &  Wakefield,  Inc.  for four
                                        years.  Prior to  that,  Mr.  Blank  was
                                        associated  for ten years  with  Kidder,
                                        Peabody & Co. Incorporated as a Managing
                                        Director   of  the  firm's  Real  Estate
                                        Group. Mr. Blank graduated from Syracuse
                                        University  in 1967  and was  awarded  a
                                        Masters      Degree     in      Business
                                        Administration  (Finance  Concentration)
                                        by Adelphi  University  in 1971. He is a
                                        member of the Urban Land  Institute  and
                                        the  American  Society  of  Real  Estate
                                        Counselors.  Since  September  1998, Mr.
                                        Blank has been an adjunct  professor  in
                                        the Real Estate Executive MBA Program at
                                        Columbia  University  Graduate School of
                                        Business.  He has  lectured  before  the
                                        Practising Law  Institute,  the New York
                                        University  Real Estate  Institute,  the
                                        Urban    Land    Institute    and    the
                                        International    Council   of   Shopping
                                        Centers.  Mr. Blank is also a trustee of
                                        Ramco-Gershenson     Properties    Trust
                                        (formerly   named  RPS  Realty   Trust).

Edward Blumenfeld      60               A principal  of  Blumenfeld  Development
                                        Group,  Ltd., a real estate  development
                                        firm   principally    engaged   in   the
                                        development  of  commercial   properties
                                        since  1978.

Arthur H. Goldberg*    58               President of Manhattan Associates,  LLC,
                                        a merchant and  investment  banking firm
                                        since February 1994.  Prior to that, Mr.
                                        Goldberg   was   Chairman   of  Reich  &
                                        Company,    Inc.,    (formerly   Vantage
                                        Services,  Inc.), a securities brokerage
                                        and  investment   brokerage  firm,  from
                                        January  1990  to  December   1993.  Mr.
                                        Goldberg  was  employed  by   Integrated
                                        Resources,  Inc.  from its  inception in
                                        December  1968,  as President  and Chief
                                        Operating  Officer  from May 1973 and as
                                        Chief  Executive  Officer from  February
                                        1989 until January 1990. On February 13,
                                        1990, Integrated Resources, Inc. filed a
                                        voluntary  petition  for  reorganization
                                        under  Chapter 11 of the  United  States
                                        Bankruptcy Code. Mr. Goldberg has been a
                                        member  of the Bar of the  State  of New
                                        York since 1967. He is a graduate of New
                                        York  University  School of Commerce and
                                        its School of Law.  Trustee of RPS since
                                        1988. Mr.  Goldberg is also a trustee of
                                        Ramco-Gershenson     Properties    Trust
                                        (formerly named RPS Realty Trust).


                                       10
<PAGE>   15

Name                   Age              Offices and Positions
----                   ---              ---------------------

William A. Rosoff      57               Vice-Chairman  of the Board of Directors
                                        of  Advanta  Corporation,   a  financial
                                        services company, since January 1996 and
                                        President of Advanta  Corporation  since
                                        October 1999. Prior thereto,  Mr. Rosoff
                                        was  associated  with  the  law  firm of
                                        Wolf,  Block,   Schorr  and  Solis-Cohen
                                        since 1969,  a partner  since 1975.  Mr.
                                        Rosoff is a past chairman of that firm's
                                        Executive   Committee   and  is  a  past
                                        chairman  of  its  tax  department.  Mr.
                                        Rosoff  serves on the  Legal  Activities
                                        Policy  Board  of  Tax   Analysts,   the
                                        Advisory  Board for  Warren,  Gorham and
                                        Lamont's    Journal    of    Partnership
                                        Taxation,  and  has  served  on the  Tax
                                        Advisory  Boards  of  Commerce  Clearing
                                        House and Little, Brown and Company. Mr.
                                        Rosoff also serves on the Advisory Group
                                        for the American Law Institute's ("ALI")
                                        ongoing Federal Income Tax Project; as a
                                        consultant  for the ALI's  current study
                                        of   the   Taxation   of    Pass-Through
                                        Entities. He is a fellow of the American
                                        College  of  Tax  Counsel.

                                        Mr.  Rosoff  serves  as a member  of the
                                        Board of Directors  of the  Philadelphia
                                        Chapter of the American  Jewish Congress
                                        and is a member of the Board of  Regents
                                        of  the  Philadelphia   chapter  of  the
                                        American  Technion  Society.  Mr. Rosoff
                                        earned a B.S.  degree  with  honors from
                                        Temple University in 1964, and earned an
                                        L.L.B.   magna   cum   laude   from  the
                                        University of Pennsylvania Law School in
                                        1967.

Edwin R. Frankel       55               Since the  inception of the Trust in May
                                        1996,  Mr.  Frankel  has  served  as its
                                        Executive    Vice    President,    Chief
                                        Financial    Officer,    Secretary   and
                                        Principal   Financial   and   Accounting
                                        Officer.  From 1988 to 1992, Mr. Frankel
                                        served  as  Vice   President  and  Chief
                                        Financial  Officer  of RPS and from 1992
                                        to 1996 as Senior Vice President,  Chief
                                        Financial Officer and Treasurer of RPS.

---------------------------
*  Designates status as a Continuing Trustee.

Committees of the Board of Trustees

     The Audit  Committee  of the Board of  Trustees  (the  "Audit  Committee"),
established on October 22, 1997,  consists of three  Trustees,  Messrs.  Blank ,
Goldberg and Glickman. The Audit Committee meets with management and the Trust's
independent accountants to determine the adequacy of internal controls and other
financial reporting matters. On February 10, 2000, Mr. Glickman was appointed as
a third member of the Audit Committee in order for the Trust to be in compliance
with new regulations  promulgated by the Securities and Exchange  Commission and
the NASDAQ Stock Market regarding the size, duties and responsibilities of audit
committees of public companies.


                                       11

<PAGE>   16

     The  Disposition  Committee  of the  Board of  Trustees  (the  "Disposition
Committee"),  established  in July 1996,  consists  of three  Trustees,  Messrs.
Blumenfeld,  Glickman and Blank. The Disposition Committee works with management
in connection with the orderly disposition of the Trust's assets.

Item 11.  Executive Compensation.

Executive Officers

     Mr.  Pashcow  receives no cash  compensation  for  serving as an  executive
officer  of the  Trust.  Mr.  Frankel  receives  compensation  of  approximately
$168,000 per annum pursuant to an employment  contract  entered into between the
Trust and Mr. Frankel on June 11, 1998, as more fully described below.

<TABLE>
                                                    SUMMARY COMPENSATION TABLE


                                                                      Annual Compensation             Long Term Compensation
                                                                      -------------------             ----------------------

<S>                     <C>       <C>          <C>          <C>                <C>                       <C>                 <C>
                                                                           Restricted
Name and Principal                                       Other Annual         Stock             Securities Underlying    Payout LTIP
Position               Year     Salary($)    Bonus($)    Compensation       Awards($)              Options/SARs($)       Payouts($)
------------------     ----     ---------    --------    ------------      ----------           ---------------------    -----------

Edwin R. Frankel*
Executive Vice         1998      146,634        -           3,762**             -                        -                     -
President, Chief       1999      160,735                    4,837**
Financial Officer      2000      165,557                    5,142**
  and Secretary

________________
*        No other executive officer received compensation in excess of $100,000.
**       Includes approximately $1,000 in imputed interest under the Frankel Note (as defined below).

</TABLE>

     The  Trust  had no  compensation  committee,  however  all of the  Trustees
participated  in  deliberations  of the Trustees  concerning  executive  officer
compensation.

     On June 11, 1998,  the Trust entered into an employment  agreement with Mr.
Frankel (the "Frankel Employment Agreement"),  which provided Mr. Frankel with a
base salary of $158,000 (as adjusted from time to time,  the "Base  Salary") per
annum. The term of the Frankel Employment  Agreement is from June 11, 1998 until
the date of a  "change  of  control"  of the Trust (as  defined  in the  Frankel
Employment  Agreement)  unless  earlier  terminated by either Mr. Frankel or the
Trust upon written notice. The Frankel  Employment  Agreement also provides that
Mr. Frankel will be entitled to a one-time  payment upon the  liquidation of the
Trust or a change in control of 150% of Mr.  Frankel's  Base Salary as in effect
at such time. In addition,  the Frankel Employment Agreement provides for a loan
from the Trust to Mr. Frankel in the principal amount of $37,500,  which loan is
evidenced by a promissory  note,  dated June 11,  1998,  made by Mr.  Frankel in
favor of the Trust (the "Frankel Note").  The Frankel Note will be canceled upon
the  occurrence  of  certain  conditions,  including  a  Change  of  Control  or
liquidation of the Trust. In January, 2000, the Frankel Employment Agreement was
amended  to  additionally  provide  that  Mr.  Frankel's  estate  or  designated
beneficiary  will be entitled to receive a one time  payment of 150% of his Base
Salary as in effect at the time of his demise.


                                       12
<PAGE>   17


Trustees

     The  Trustees do not receive any  compensation  for serving as trustees and
likewise will not receive any compensation for attending meetings or for serving
on any  committees  of the Board of  Trustees;  however,  Trustees  will receive
reimbursement of travel and other expenses and other out-of-pocket disbursements
incurred in connection with attending any meetings.

     During 2000, Messrs.  Edwin Glickman and Edward Blumenfeld each earned fees
of $25,000 in connection  with services they provided to the Trust as Members of
the Disposition Committee.

     During 1999, Messrs.  Edwin Glickman and Edward Blumenfeld each earned fees
of $60,000 in connection  with services they provided to the Trust as Members of
the Disposition Committee.

     During 1998, Messrs.  Edwin Glickman and Edward Blumenfeld each earned fees
of $64,000 in connection  with services they provided to the Trust as members of
the Disposition Committee.


                                       13

<PAGE>   18

Item 12.  Security Ownership of Certain Beneficial Owners and Management.

     As of March 14, 2001, each of the following persons were known by the Trust
to be the  beneficial  owners  of more than five  percent  of the  Shares of the
Trust.

<TABLE>

          <S>                              <C>                                   <C>                     <C>

                                                                             AMOUNT AND
                                                                              NATURE OF
                                     NAME AND ADDRESS OF                     BENEFICIAL               PERCENT OF
      TITLE OF CLASS                    BENEFICIAL OWNER                      OWNERSHIP                 CLASS
-----------------------     --------------------------------------         --------------             ----------

Shares of beneficial        Private Management Group, Inc.,                  681,891(1)                 19.15%
interest                    an investment advisor in a fiduciary
$.01 par value              capacity
                            20 Corporate Park, Suite 400
                            Irvine, CA 92606

Shares of beneficial        Kimco Realty Corporation                         345,498(2)                  9.7%
interest                    3333 New Hyde Park Rd.
$.01 par value              New Hyde Park, NY 11042

Shares of beneficial        Milton Cooper                                    688,479(3)                 19.3%
interest                    c/o Kimco Realty Corporation
$.01 par value              3333 New Hyde Park Rd.
                            New Hyde Park, NY 11042

Shares of beneficial        Magten Asset Management Corp.                    193,750(4)                  5.4%
interest                    35 East 21st Street
$.01 par value              New York, NY  10010
__________________

(1)      Based upon Schedule 13G/A filing with the Securities and Exchange Commission, filed on
         February 6, 2001.
(2)      Based upon Schedule 13D filing with the Securities and Exchange Commission, filed on
         August 23, 2000.
(3)      Based upon a Schedule 13D filing with the Securities and Exchange Commission, filed on
         August 23, 2000, and information provided to the Trust by Kimco Realty Corporation.  Includes
         (i) 32,951 shares owned by Mr. Cooper, which are beneficially owned with sole voting and
         disposition power and (ii) 655,528 shares owned by Kimco Realty Services, Inc., 60% of whose
         voting common stock is owned by Mr. Cooper.
(4)      Based upon Schedule 13G/A filing with the Securities and Exchange Commission, filed on
         February 13, 2001.  Of the 193,750 shares beneficially owned, 45,350 shares are owned with shared
         power to vote or direct the vote of such shares and all 193,750 shares are owned with shared power
         to dispose or direct the disposition of such shares.
</TABLE>

                                                                14

<PAGE>   19

Item 13.  Certain Relationships and Related Transactions.

     Set forth below is  information as to the Shares  beneficially  owned as of
March 14, 2001 by each of the Trustees,  each of the executive officers included
in the  Summary  Compensation  Table set forth in Item 11 and all  Trustees  and
executive  officers as a group,  based on information  furnished by each Trustee
and executive officer.


Name of Trustee/                        Shares Owned
Executive Officer                      Beneficially(1)          Percent of Class
-----------------                      ---------------          ----------------

Joel M. Pashcow                            94,154(2)                 2.64%
Arthur H. Goldberg                         24,487(3)                   *
William A. Rosoff                             125(4)                   *
Stephen R. Blank                              981(5)                   *
Edward Blumenfeld                                125                   *
Edwin J. Glickman                                  0                   *
Edwin R. Frankel                                   0                   *
All Trustees and  Executive Officers
   as a group (7 persons)                    119,872                 3.37%
_____________________
*         Less than 1% of class.
(1)       All  amounts are  directly  owned  unless  stated  otherwise.
(2)       Includes  25,890  shares held in an IRA account for the benefit of Mr.
          Pashcow,  a  retirement  savings  plan,  a pension and profit  sharing
          account  and  a  money  purchase  plan,  47,662  shares  owned  by  an
          irrevocable  trust of which Mr.  Pashcow is a trustee,  an irrevocable
          trust  for his  daughter  and a  foundation  of which Mr.  Pashcow  is
          trustee  (for all of which  trusts Mr.  Pashcow has shared  voting and
          investment powers).  Mr. Pashcow disclaims beneficial ownership of the
          Shares owned by the  foundation  and each of the trusts.
(3)       Includes  19,563  shares  owned  by Mr.  Goldberg's wife, 1,875 shares
          owned by trusts for his  daughters and 3,050 shares owned by a pension
          trust. Mr. Goldberg disclaims beneficial ownership of the shares owned
          by his wife and the trusts for his daughters.
(4)       Includes  125 shares  held by Mr.  Rosoff as a trustee for his sister,
          Barbara Rosoff, pursuant to a trust indenture dated December 30, 1991.
(5)       Includes 706 shares owned by trusts for Mr. Blank's  daughters and 275
          shares held in an IRA account for the benefit of Mr. Blank.  Mr. Blank
          disclaims  beneficial  ownership of the shares owned by the trusts for
          his  daughters.

                                       15

<PAGE>   20

                                     PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K..

Financial Statements, Schedules and Exhibits

(a)(1)    Financial Statements
          See pages F-1 through F-8, which are included herein.

(a)(2)    Financial Statement Schedules
          All schedules  have been omitted  because they are  inapplicable,  not
          required,  or the information is included in the financial  statements
          or notes thereto.

(a)(3)    Exhibits
          The exhibits  listed in the Exhibit  Index  immediately  preceding the
          exhibits are filed as a part of this Annual Report on Form 10-K.

(b)       No Current  Reports on Form 8-K were filed by the  Company  during the
          last quarter of the period covered by this report.


                                       16

<PAGE>   21

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                            Page
                                                                            ----

Consolidated Financial Statements - Atlantic Realty Trust and
     Subsidiary (Liquidation Basis)

Independent Auditors' Report................................................F-2
Consolidated Statements of Net Assets in Liquidation at
      December 31, 2000 and 1999............................................F-3
Consolidated Statements of Changes in Net Assets in Liquidation
     for the Years Ended December 31, 2000, 1999 and 1998...................F-4
Notes to Consolidated Financial Statements................................F-5-9



                                       F-1
<PAGE>   22

                          INDEPENDENT AUDITORS' REPORT


To the Board of Trustees of
  Atlantic Realty Trust


We have  audited  the  accompanying  consolidated  statements  of net  assets in
liquidation of Atlantic  Realty Trust and  subsidiary  (the "Trust") at December
31, 2000 and 1999,  and the related  consolidated  statements  of changes in net
assets in  liquidation  for each of the three years in the period ended December
31, 2000.  These  financial  statements  are the  responsibility  of the Trust's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

As discussed in Note 1 to the consolidated  financial statements,  the Trust was
formed for the purpose of  liquidating  the mortgage loan  portfolio and certain
other assets and liabilities which were transferred to the Trust from RPS Realty
Trust on May 10, 1996 and  liquidating and  distributing  capital to the Trust's
shareholders.   As  a  result,  the  Trust  adopted  the  liquidation  basis  of
accounting, effective May 10, 1996.

In our opinion,  such consolidated  financial  statements present fairly, in all
material  respects,  the net assets in liquidation of Atlantic  Realty Trust and
subsidiary  at December 31, 2000 and 1999 and the changes in their net assets in
liquidation for each of the three years in the period ended December 31, 2000 in
conformity with accounting principles generally accepted in the United States of
America on the basis described in the preceding paragraph.

As discussed in Notes 1 and 6 to the consolidated financial statements,  because
of the inherent  uncertainty of valuation when an entity is in liquidation,  the
amounts  ultimately  realized from assets  disposed and costs incurred to settle
liabilities  may differ  materially from amounts  presented in the  accompanying
consolidated financial statements.

/s/ DELOITTE & TOUCHE LLP


New York, New York
March 12, 2001






                                       F-2

<PAGE>   23


                      ATLANTIC REALTY TRUST AND SUBSIDIARY
              CONSOLIDATED STATEMENTS OF NET ASSETS IN LIQUIDATION
                        (Liquidation Basis of Accounting)


                                         December 31, 2000    December 31, 1999
                                         -----------------    ------------------
ASSETS:

Investment in real estate..........          $38,490,625          $37,775,000
Cash and short-term investments....           23,188,427           23,039,132
Other Assets                                   1,012,500            1,012,000
                                             -----------          -----------
         Total assets..............           62,691,552           61,826,132
                                             -----------          -----------

LIABILITIES:

Estimated costs of liquidation......           4,545,181            4,394,443
                                             -----------           ----------
         Total liabilities..........           4,545,181            4,394,443
                                             -----------           ----------
Net assets in liquidation...........         $58,146,371          $57,431,689
                                             -----------          -----------
                                             -----------          -----------






                 See notes to consolidated financial statements.


                                       F-3

<PAGE>   24

<TABLE>

                                               ATLANTIC REALTY TRUST AND SUBSIDIARY
                                  CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS IN LIQUIDATION
                                                 (Liquidation Basis of Accounting)

<S>                                                     <C>                         <C>                        <C>

                                                 For the Year Ended          For the Year Ended         For the Year Ended
                                                 December 31, 2000           December 31, 1999          December 31, 1998
                                                 ------------------          ------------------         ------------------

Net assets in liquidation, beginning
    of period..............................         $57,431,689                 $56,211,889                 $54,048,704
Distributions paid.........................          (3,062,936)                    (997,235)                      -
Adjustments to reflect liquidation
    basis of accounting....................           3,777,618                   2,217,035                   2,163,185
                                             -----------------------         -------------------        ------------------
Net assets in liquidation, end of                   $58,146,371                 $57,431,689                 $56,211,889
    period.................................  -----------------------         -------------------        ------------------
                                             -----------------------         -------------------        ------------------

</TABLE>




                 See notes to consolidated financial statements.

                                      F-4
<PAGE>   25


                      ATLANTIC REALTY TRUST AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       (Liquidation Basis of Accounting)

1. Organization and Significant Accounting Policies

     Atlantic  Realty  Trust , a  Maryland  real  estate  investment  trust (the
"Trust"),  was  formed  on July 27,  1995 for the  purpose  of  liquidating  its
interests in real  properties,  its mortgage  loan  portfolio  and certain other
assets and liabilities which were transferred to the Trust from Ramco-Gershenson
Properties  Trust (formerly named RPS Realty Trust) ("RPS") on May 10, 1996 (the
"Spin-Off Transaction").  The Trust had no operations from the date of formation
to the date of the Spin-Off Transaction. The Trust adopted the liquidation basis
of accounting as of the date of the Spin-Off  Transaction based on its intention
to liquidate its assets or merge or combine  operations with another real estate
entity within  eighteen  months from the date of the Spin-Off  Transaction.  The
Trust  intends  to  conduct  its  operations  with the  intent  of  meeting  the
requirements  applicable  to a  real  estate  investment  trust  ("REIT")  under
Sections 856 through 860 of the Internal  Revenue Code of 1986,  as amended (the
"Code").  As a result,  the Trust will have no current  or  deferred  income tax
liabilities.

     Liquidation Basis of Accounting - As a result of the Spin-Off  Transaction,
the Trust has adopted the liquidation basis of accounting. The liquidation basis
of accounting is appropriate when liquidation  appears imminent and the Trust is
no longer viewed as a going concern. Under this method of accounting, assets are
stated at their  estimated net realizable  values and  liabilities are stated at
the anticipated settlement amounts.

     The valuations presented in the accompanying Consolidated Statements of Net
Assets in  Liquidation  represent  the  estimates at the dates  shown,  based on
current facts and  circumstances,  of the estimated net realizable  value of the
assets and estimated  costs of liquidating  the Trust.  In  determining  the net
realizable  values of the assets,  the Trust  considered each asset's ability to
generate future cash flows,  offers to purchase received from third parties,  if
any, and other general market  information.  Such  information was considered in
conjunction  with  operating  the Trust's plan for  disposition  of assets.  The
estimated  costs of  liquidation  represent the estimated  cost of operating the
Trust  through  its  anticipated  termination.  These  costs  primarily  include
payroll,  consulting and related costs, rent, shareholder  relations,  legal and
auditing.  Changes in these costs during the periods  presented are reflected in
the adjustments to reflect liquidation basis of accounting.  Computations of net
realizable  value  necessitate  the use of certain  assumptions  and  estimates.
Future events,  including economic conditions that relate to real estate markets
in  general,  may  differ  from  those  assumed  or  estimated  at the time such
computations  are made.  Because of inherent  uncertainty  of valuation  when an
entity is in liquidation,  the amounts ultimately  realized from assets disposed
and costs  incurred to settle  liabilities  may  materially  differ from amounts
presented.

     Pursuant to the terms of the Trust's  Amended and Restated  Declaration  of
Trust,  the Trust was to continue for a period of 18 months from the date of the
Spin-Off  Transaction,  subject to, among  certain  other  things,  satisfactory
resolution  of the RPS Tax  Issues  (as such term is  defined  in  footnote  6).
Because the RPS Tax Issues have not yet been satisfactorily  resolved, the Trust
has continued its business past that date. The Trust cannot  currently  estimate
the  timing  of the  future  satisfactory  resolution  of the  RPS  Tax  Issues.
Accordingly,  the Trust will continue  until there is a final  determination  of
these issues.


                                      F-5
<PAGE>   26


                      ATLANTIC REALTY TRUST AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        (Liquidation Basis of Accounting)

     Consolidation - The consolidated  financial statements include the accounts
of the Trust and its  subsidiary.  All  significant  intercompany  accounts  and
transactions have been eliminated in consolidation.

2.   Investment in Real Estate


                                                 Estimated Net Realized Value
Property                      Location           December 31,     December 31,
                                                    2000             1999
                                                 ------------     ------------


Hylan Shopping Center    Staten Island, NY       $38,490,625      $37,775,000
______________

(a)  Includes  estimated   cash  flows  using  a  disposition  period  of  nine
     months.  Realized values may differ depending on actual disposition results
     and time periods.
(b)  The  operations of  the  Trust and  the Hylan Shopping Center for the years
     ended December 31, 2000 and December 31, 1999 are as follows:

                                              2000           1999
                                              ----           ----

     Rental income. . . . . . . . . .      $3,986,873      $3,839,901
     Expense reimbursements . . . . .       1,607,388       1,646,457
     Other. . . . . . . . . . . . . .       1,260,416         993,353
                                           ----------      ----------
                                            6,854,677       6,479,711
                                           ----------      ----------
     Operating property expenses. . .       2,184,751       2,013,963
     Depreciation . . . . . . . . . .         259,000         259,000
     Other. . . . . . . . . . . . . .       1,365,679       1,587,863
                                           ----------      ----------
                                            3,809,430       3,860,826
                                           ----------      ----------
     Net income . . . . . . . . . . .      $3,045,247      $2,618,885
                                           ==========      ==========

3.   Shares Outstanding

     The weighted  average number of common shares  outstanding  for the periods
ended December 31, 2000, 1999, and 1998 was 3,561,553, respectively.

4.   Cash and Short-Term Investments

     Cash and  short-term  investments  at December  31, 2000 and 1999,  consist
primarily of Certificates of Deposit at a major New York bank of $22,500,000 and
$22,000,000, respectively, purchased with original maturities of three months or
less, bearing interest at a fixed rate of 5.15% and 5.30%, respectively.

5.   Other Assets

     Other  assets  include  the  estimated  interest  income  from the  Trust's
short-term investments.

6.   Income Taxes

     Even though the Trust will not be subject to income  taxes as  discussed in
Note 1, since the Trust is a public  enterprise  it is required to reconcile the
net difference between the assets and liabilities for tax purposes and financial
reporting, in accordance with the Financial Accounting Standards Board Statement
No.  109,  "Accounting  for  Income  Taxes."  Net  differences  in basis are not
material.

     During the third  quarter  of 1994,  RPS held more than 25% of the value of
its gross assets in overnight  Treasury  Bill  reverse  repurchase  transactions
which the Internal Revenue Service ("IRS") may view as non-qualifying assets for
the purposes of  satisfying  an asset  qualification  test  applicable to REITs,
based on a Revenue Ruling  published in 1977 (the "Asset Issue").  RPS requested
that  the IRS enter into a closing agreement with RPS that the Asset Issue would
not impact RPS' status as a REIT. The IRS declined


                                       F-6

<PAGE>   27

                      ATLANTIC REALTY TRUST AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        (Liquidation Basis of Accounting)


such  request.  In  February  1995,  the IRS  initiated  an  examination  of the
1991-1995  income tax  returns of RPS (the "RPS Audit"  and,  together  with the
Asset  Issue,  the "RPS Tax  Issues").  Based on  developments  in the law which
occurred since 1977, RPS' tax counsel, at that time, Battle Fowler LLP, rendered
an opinion that RPS'  investment in Treasury Bill repurchase  obligations  would
not adversely affect its REIT status.  However, such opinion is not binding upon
the IRS.

     In  connection  with the Spin-Off  Transaction,  the Trust  assumed all tax
liability  arising out of the RPS Tax Issues (other than  liability that relates
to events  occurring or actions  taken by RPS following the date of the Spin-Off
Transaction) pursuant to a tax agreement, dated May 10, 1996, by and between RPS
and the Trust.  Such  agreement  provides  that RPS (now named  Ramco-Gershenson
Properties Trust), under the direction of four trustees,  three of whom are also
trustees  of the Trust  (the  "Continuing  Trustees")  and not the  Trust,  will
control,  conduct  and  effect the  settlement  of any tax  claims  against  RPS
relating to the RPS Tax Issues. Accordingly, the Trust does not have any control
as to the timing of the  resolution  or  disposition  of any such  claims and no
assurance  can be given that the  resolution or  disposition  of any such claims
will be on  terms or  conditions  as  favorable  to the  Trust  as if they  were
resolved or disposed of by the Trust.

     RPS and the Trust also have  received an opinion from Wolf,  Block,  Schorr
and  Solis-Cohen  LLP (the "Special Tax Counsel") that, to the extent there is a
deficiency in RPS distributions arising out of the IRS examination, and provided
RPS timely makes a deficiency  dividend  (i.e.  declares and pays a distribution
which is  permitted  to relate  back to the year for which each  deficiency  was
determined to satisfy the requirement that a REIT distribute ninety-five percent
(95%)  of its  taxable  income),  the  classification  of RPS as a REIT  for the
taxable years under examination would not be affected.

     As of December  31,  2000,  the Trust has not been  required to perform its
indemnity  obligation with respect to the RPS Tax Issues other than with respect
to the payment of legal fees and expenses  incurred in connection  with the IRS'
ongoing  examination.  On March 1, 1999,  the IRS revenue agent  conducting  the
examination  issued his examination  report (the "Revenue  Agent's Report") with
respect to the tax issues in the RPS Tax Audit,  including  the RPS Tax  Issues.
The  Revenue  Agent's  Report  sets  forth a number of  positions  which the IRS
examining  agent has taken with respect to the RPS Tax Issues for the years that
are  subject to the RPS  Audit,  which  Special  Tax  Counsel to the  Continuing
Trustees  believes are not consistent with applicable law and regulations of the
IRS. One of the positions, the acquisition of assets by RPS that could be viewed
as  non-qualifying  assets for REIT purposes,  has been addressed in the opinion
letter of counsel  referred to above.  In  addition,  the IRS revenue  agent has
proposed  to  disallow  the  deductions  for bad debts and  certain  other items
claimed by RPS in the years under  examination.  In reaching his conclusion with
respect to the  deduction for bad debts,  the IRS revenue agent has  disregarded
the fact that the values  actually  obtained for the assets  corresponded to the
values  used  by RPS in  determining  its  bad  debt  deductions.  If all of the
positions  taken in the Revenue  Agent's Report were to be sustained,  RPS, with
funds supplied by the Trust, would have to distribute up to approximately  $16.5
million to its  shareholders,  in accordance  with the procedures for deficiency
dividends,  in order to preserve its status as a REIT and could, in addition, be
subject to taxes,  interest and  penalties  up to  approximately  $31.8  million
through March 31, 2001. The issuance of the Revenue  Agent's Report  constitutes
only the first step in the IRS  administrative  process for determining  whether
there is any  deficiency  in RPS' tax  liability  for the years at issue and any
adverse  determination  by the IRS  revenue  agent is subject to  administrative
appeal with the IRS and,  thereafter,  to judicial  review.  As noted above, the
Revenue  Agent's  Report  sets forth a number of  positions  which  Special  Tax
Counsel to RPS and the Trust believe are not consistent with applicable law and


                                       F-7
<PAGE>   28



                      ATLANTIC REALTY TRUST AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        (Liquidation Basis of Accounting)


regulations of the IRS. The Trust filed an administrative appeal (the "Protest")
challenging the findings  contained in the Revenue Agent's Report. The appellate
conferee to whom the  administrative  appeal was  assigned  reviewed the Revenue
Agent's Report and the Protest and, rather than  considering the appeal further,
has  returned  the case to the revenue  agent for further  factual  development.
During a meeting with the Special Tax Counsel to the  Continuing  Trustees,  the
appellate  conferee  indicated that, even assuming the assertions in the Revenue
Agent's Report justified the  disallowances,  he was required to return the case
to the revenue  agent because the facts  necessary to sustain the  assertions in
the  Report  had not been  established  to the  degree  necessary  to permit the
consideration of the case on appeal. The revenue agent has requested information
in accordance with the directions of the appellate  conferee and,  although much
of the information was examined by the agent previously, the Trust has responded
to the new request.

7.   Dividends/Distributions to Shareholders

     Under the Internal  Revenue Code, a REIT must meet certain  qualifications,
including a requirement that it distribute annually to its shareholders at least
95 percent (90% for taxable years beginning after December 31, 2000) of its REIT
taxable income.  The Trust's policy is to distribute to shareholders all taxable
income.  There were no dividends in 1998.  Dividend  distributions for the years
ended December 31, 2000 and 1999 are summarized as follows:


      Record Date                 Distribution               Payment
      -----------                 ------------               -------

     December 15, 2000            $.86 per share         December 28, 2000

     December 15, 1999            $.28 per share         December 28, 1999

8.   Commitments

     The Trust  leases  approximately  4,800  square feet of office space at 747
Third  Avenue,  New  York,  New York at an  annual  base  rent of  approximately
$293,000. This lease will expire on October 31, 2002.

9.   Recently Issued Accounting Standards

     Statement of Financial  Accounting Standards (SFAS) No. 133, Accounting for
Derivative Instruments and Hedging Activities, is effective for all fiscal years
beginning after June 15, 2000. SFAS 133, as amended,  establishes accounting and
reporting  standards for derivative  instruments,  including certain  derivative
instruments  embedded in other contracts and for hedging  activities.  The Trust
has adopted SFAS 133 effective  January 1, 2001.  Management does not expect the
adoption of SFAS 133 to have any impact on the Trust.



                                       F-8
<PAGE>   29

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the  undersigned,  thereunto duly  authorized,  on the 28th day of
March, 2001.

                                   ATLANTIC REALTY TRUST

Date:  March 28, 2001              By:  /s/ Joel M. Pashcow
                                        --------------------
                                   Name:  Joel M. Pashcow
                                   Title: President and Chairman of the Board


     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.


Signature                 Title                                Date
---------                 -------                              ----

/s/ Joel M. Pashcow       President and Chairman of the        March 28, 2001
-------------------       Board
Joel M. Pashcow


/s/ Edwin R. Frankel      Executive Vice President, Chief      March 28, 2001
--------------------      Financial Officer, Secretary and
Edwin R. Frankel          Principal Financial and
                          Accounting Officer


/s/ Edwin J. Glickman     Trustee                              March 28, 2001
---------------------
Edwin J. Glickman



/s/ Stephen R. Blank      Trustee                              March 28, 2001
---------------------
Stephen R. Blank


/s/ Edward Blumenfeld     Trustee                              March 28, 2001
---------------------
Edward Blumenfeld


/s/ Arthur H. Goldberg    Trustee
----------------------
Arthur H. Goldberg                                             March 28, 2000


/s/  William A. Rosoff    Trustee                              March 28, 2001
----------------------
William A. Rosoff




<PAGE>   30
                                  Exhibit Index

The following exhibits are filed as part of this Annual Report on Form 10-K.

Exhibit No.       Description
-----------       -----------

3.1            Amended  and  Restated   Declaration  of  Trust   of  the   Trust
               (Incorporated by reference to the Trust's definitive registration
               statement on Form 10,  dated March 28,  1996,  File No. 0-27562,
               Exhibit 3.1).

3.2            Amended  and  Restated  By-Laws  of the  Trust  (Incorporated  by
               reference  to the Trust's  definitive  registration  statement on
               Form 10, dated March 28, 1996, File No. 0-27562, Exhibit 3.2).

3.3            First  Amendment to Amended and Restated  Declaration of Trust of
               the Trust  (Incorporated  by reference to the Trust's  definitive
               registration statement on Form 10, dated March 28, 1996, File No.
               0-27562, Exhibit 3.3).

4.1            Form of  Share  Certificate  (Incorporated  by  reference  to the
               Trust's definitive registration statement on Form 10, dated March
               28, 1996, File No. 0-27562, Exhibit 4.1).

10.1           Lease  Agreement,  dated as of January 16,  1997,  by and between
               Sage Realty  Corporation,  as the lessor,  and the Trust,  as the
               lessee (Incorporated by reference to the Trust's annual report on
               Form 10-K for the year ended December 31, 1996, File No. 0-27562,
               Exhibit 10.1).

10.2           Form of  Assignment,  Assumption  and  Indemnification  Agreement
               between RPS Realty Trust and the Trust (Incorporated by reference
               to the  Trust's  definitive  registration  statement  on Form 10,
               dated March 28, 1997, File No. 0-27562, Exhibit 10.1).

10.3           Form of Tax  Agreement  between  RPS  Realty  Trust and the Trust
               (Incorporated by reference to the Trust's definitive registration
               statement  on Form 10, dated March 28,  1996,  File No.  0-27562,
               Exhibit 10.2).

10.4           Form of Information  Statement  (Incorporated by reference to the
               Trust's definitive registration statement on Form 10, dated March
               28, 1996, File No. 0-27562, Exhibit 20.1).

10.5           Employment  Agreement,  dated as of June 11, 1998, by and between
               the Trust and Edwin R. Frankel  (Incorporated by reference to the
               Trust's  quarterly report on Form 10-Q for the three months ended
               June 30, 1998, File No. 0-27562, Exhibit 10.1).

10.6           Amendment to Employment Agreement,  dated as of January 29, 2000,
               by and between the Trust and Edwin R.  Frankel  (incorporated  by
               reference to the Trust's annual report on Form 10-K, for the year
               ended December 31, 2000, File No. 0-27562, Exhibit 10.6).

10.7           Amended and Restated Standstill  Agreement,  dated as of July 21,
               2000, by and among  Atlantic  Realty Trust,  on the one hand, and
               Kimco Realty Corporation,  Kimco Realty Services, Inc. and Milton
               Cooper, on the other hand.

21.1           Subsidiary of the Registrant  (incorporated  by  reference to the
               Trust  Annual  Report  on  10-K,  for the year ended December 31,
               1999, File No. 0-27562, Exhibit 21.1).