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, 1998
                                                            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 0-18294

                        METRIC INCOME TRUST SERIES, INC.
             (Exact name of Registrant as specified in its charter)

                   CALIFORNIA                            94-3087630             
          ------------------------------    ------------------------------------
         (State or other jurisdiction of    (I.R.S. Employer Identification No.)
         incorporation or organization)


              One California Street
            San Francisco, California                     94111-5415            
           -----------------------------     -----------------------------------
         (Address of principal executive                  (Zip Code)
          offices)

Registrant's telephone number, including area code: (415) 678-2000
                                                    (800) 347-6707 in all states

Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock

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 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 ]

         No market for the Shares of Common Stock exists and  therefore a market
         value for such Shares cannot be determined.

         Shares of Common Stock outstanding as of March 24, 1999: 6,321,641



<PAGE>


                        METRIC INCOME TRUST SERIES, INC.,
                            a California Corporation

                                     PART I

Item 1.  Business.

Metric Income Trust Series, Inc., a California corporation (hereinafter referred
to as the "Fund" or  "Registrant"),  was formed in 1989.  On April 1, 1997,  the
operations  of Metric  Realty,  which had been the Advisor to the Fund since the
Fund's inception,  and certain related companies were merged with MetLife Realty
Group,  Inc. ("MRG") into SSR Realty Advisors,  Inc. ("SSR Realty"),  a Delaware
corporation.  All companies  involved in this  transaction  are  wholly-owned by
Metropolitan  Life Insurance  Company.  Metric Realty's  managing  partner as of
April 1, 1997, became SSR Realty,  which maintains its principal office in White
Plains, New York, and a major corporate office in San Francisco, California. The
Advisory  Agreement  between  Metric  Realty and the Fund was assigned by Metric
Realty to SSR Realty,  effective  March 27, 1997, with the consent of the Fund's
Independent  Directors.  This  assignment  has  had no  material  effect  on the
advisory services provided to the Fund. In early 1999, the Independent Directors
approved the extension of the Advisory Agreement to December 31, 1999.

The Fund's initial Registration Statement,  filed pursuant to the Securities Act
of 1933 (No.  33-27083),  was declared  effective by the Securities and Exchange
Commission on June 30, 1989. The Registrant  marketed its securities pursuant to
its Prospectus dated June 30, 1989, and thereafter supplemented (hereinafter the
"Prospectus").  Such  Prospectus was filed with the Commission  pursuant to Rule
424(b) of the Securities Act of 1933.

The principal business of the Fund is to acquire income producing net lease real
properties and investments in mortgage-backed securities which are guaranteed as
to payment of principal  and interest by the U.S.  Government,  U.S.  Government
agencies or  instrumentalities,  or federally chartered  corporations.  The Fund
qualifies as a real estate  investment trust ("REIT") under Sections 856 through
860 of the Internal  Revenue  Code.  The  proceeds of the offering  were used to
purchase mortgage-backed securities and twenty-five net lease properties,  which
are described in Item 2.

Beginning in July 1989 through June 1990, the Fund offered and sold  $60,254,000
in Shares of Common  Stock.  Through  December 31, 1991,  additional  funding of
$2,800,000  was provided from the Dividend  Reinvestment  Plan ("DRP").  In June
1996,  the  Board  of  Directors  voted  unanimously  to  terminate  the DRP and
Liquidity Option Program effective as to dividend payments made after August 15,
1996, and to proceed with the liquidation of the Fund's  portfolio over the next
several years. At the Fund's June 17, 1998 Annual Meeting, Shareholders approved
the Fund's Plan of Liquidation and Dissolution.

Environmental site assessments were performed for five of the Fund's convenience
stores and all other properties at the time of property acquisition. No material
adverse environmental conditions or liabilities were identified at that time. In
no case has the Fund received notice that it is a potentially  responsible party
with respect to an environmental  clean-up site. However,  Phase I Environmental
Site Assessments  commissioned by MITS in connection with the marketing for sale
of the convenience  stores revealed that Circle K, the tenant of the property in
Rubidoux,  California,  had  reported  hydrocarbon  contaminants  at the site to
regulatory authorities in April 1994. Per the terms of the lease, the lessee was
required to notify MITS at the time of  discovery of these  contaminants  and to
promptly  remediate  the problem but no such action was taken.  The Advisor then
negotiated the specific terms of an indemnification  agreement with Circle K and
the property was subsequently sold on December 24, 1998.

Investment in the Fund has been subject to certain risks,  including the lack of
any public market for the Fund's Shares which adversely affects the liquidity of
Shareholders'  investments in the Fund;  potential  restrictions on transfers of
Shares which might jeopardize the Fund's qualification as a REIT; limitations on
the  percentage  of the Fund's  Shares owned by any one person;  market risks of
mortgage-backed securities related to their sensitivity to interest rate changes
(such as the fact that an increase  in interest  rates will result in a decrease
in the  value of such  securities  and a  decrease  in rates  may  result  in an
increased  incidence of prepayment of principal at a time when  reinvestment  at
favorable  rates would be impossible);  the possibility  that the Fund might not
continue  to  qualify  as a REIT;  normal  risks  generally  attendant  upon the
ownership  of real estate such as  vacancies,  rent  levels,  changes in general
economic or fiscal conditions, regulatory risks, including zoning and other land
use laws, and natural  disasters;  costs or liabilities which may arise from any
hazardous  materials affecting the Fund's properties;  potential  non-compliance
with Americans with Disabilities Act; losses which could result from the default
or bankruptcy of any tenant of the Fund; and uninsured losses.

                                       2

<PAGE>


Item 2.  Properties.
A description of the properties formerly owned by the Fund is as follows:
<TABLE>
<CAPTION>
                                                      Date of          Date of
Name and Location                                     Purchase          Sale             Type           Size
-----------------                                     --------          ----             ----           ----
<S>                                                    <C>               <C>             <C>            <C>
Pearle Express Stores: (3)

   24 Orland Square Drive                               11/89            7/96            Retail         5,900
     Orland Park, Illinois                                                                              sq. ft.

   1281 Southlake Circle                                11/89            3/98            Retail         5,800
     Morrow, Georgia                                                                                    sq. ft.

National Convenience Stores:

   Stop N Go Store #2092 (4)                            11/89            12/98           Retail         3,100
     Mission Road                                                                                       sq. ft.
     Rubidoux, California

   Stop N Go Store #1332                                11/89            12/97           Retail         3,100
     N. Little School Road                                                                              sq. ft.
     Arlington (Kennedale), Texas

   Stop N Go Store #1386                                11/89            12/97           Retail         3,100
     Babcock Road                                                                                       sq. ft.
     San Antonio, Texas

   Stop N Go Store #2065 (4)                            11/89            12/97           Retail         3,100
     Baseline Road                                                                                      sq. ft.
     Fontana, California

   Stop N Go Store #2374 (4)                            11/89            12/97           Retail         3,100
     E. Orangethorpe Road                                                                               sq. ft.
     Placentia, California

   Stop N Go Store #2406 (4)                            11/89            12/97           Retail         3,100
     Windy Hill                                                                                         sq. ft.
     Marietta, Georgia

   Stop N Go Store #285                                 11/89            12/97           Retail         3,100
     Altamesa Blvd.                                                                                     sq. ft.
     Fort Worth, Texas

   Stop N Go Store #308                                 11/89            12/97           Retail         3,100
     West Tarrant Blvd.                                                                                 sq. ft.
     Grand Prairie, Texas

   Stop N Go #328                                       11/89            12/97           Retail         3,600
     Fredericksburg Blvd.                                                                               sq. ft.
     San Antonio, Texas

   Stop N Go Store #2378                                11/89            7/97            Retail         3,100
     Green Oaks Blvd.                                                                                   sq. ft.
     Arlington, Texas

   Stop N Go #3592                                      11/89            3/97            Retail         2,400
     25th/Loop 197                                                                                      sq. ft.
     Texas City, Texas

                                       3

<PAGE>


Item 2.  Properties (continued).
                                                       Date of          Date of
Name and Location                                      Purchase          Sale             Type           Size
-----------------                                      --------          ----             ----           ----

   Stop N Go Store #655                                 11/89            3/97            Retail         3,100
     Northwest Highway                                                                                  sq. ft.
     Dallas, Texas

   Stop N Go #3571                                      11/89            3/97            Retail         2,400
     N. Circle                                                                                          sq. ft.
     Sealy, Texas

   Stop N Go #3583                                      11/89            2/97            Retail         2,400
     Hwy 288                                                                                            sq. ft.
     Clute, Texas

   Stop N Go Store #674 (4)                             11/89            11/96           Retail         3,100
     Archibald                                                                                          sq. ft.
     Rancho Cucamonga, California

   Stop N Go Store #3755 (5)                            11/89            12/96           Retail         2,900
     FM 1960                                                                                            sq. ft.
     Houston, Texas

   Stop N Go Store #1714 (1)                            11/89            12/93           Retail         3,100
     Grand Avenue Parkway                                                                               sq. ft.
     Pflugerville, Texas

   Stop N Go Store #3531 (1)                            11/89            08/93           Retail         2,400
     Seawall Blvd.                                                                                      sq. ft.
     Galveston, Texas

   Stop N Go Store #3254 (1)                            11/89            06/93           Retail         2,400
     Stedwick Street                                                                                    sq. ft.
     San Antonio, Texas

Other Stores:

   Wickes Furniture Store                                1/90            12/97           Retail        51,000
     Torrance, California                                                                               sq. ft.

   Haverty's Furniture Store                            12/94            10/97           Retail        55,000
     Plano, Texas                                                                                       sq. ft.

   Sam's Club (2)                                        5/90            6/96            Retail        108,000
     Menomonee Falls, Wisconsin                                                                         sq. ft.

   Former Phar-Mor Store                                12/90            3/95            Retail        56,400
     Franklin Township, Ohio                                                                            sq. ft.

<FN>
(1)      In December  1991 NCS filed a petition with the U.S.  Bankruptcy  Court
         for reorganization  under Chapter 11 of the federal Bankruptcy Code. As
         a result of the  bankruptcy  proceedings,  three  stores were closed in
         1992 for which the  leases  were  rejected  and those  properties  were
         subsequently sold.
(2)      Formerly  Wholesale  Club.  The Fund's  store was vacated in April 1992
         and 100% of the  building was  subleased in 1994 and 1995.
(3)      Formerly Eyelab Superstores.
(4)      In April 1994,  through a purchase and exchange  transaction  with NCS,
         Circle K became  the  operator  of five of the Fund's  stores,  four in
         California and one in Georgia.
(5)      In August 1994, a portion of the land was sold through condemnation.
</FN>
</TABLE>
All of the  Registrant's  properties  were  owned in fee,  and all were  sold to
unaffiliated buyers.

                                       4

<PAGE>


See Selected  Financial  Data in Item 6 for lease income.  See the  Consolidated
Financial Statements in Item 8 for information  regarding the Fund's properties.
An occupancy summary is set forth on the chart following:
<TABLE>
                                OCCUPANCY SUMMARY
<CAPTION>
                                                            Occupancy rate (%) at December 31
                                                          ---------------------------------------
                                                              1998         1997         1996
                                                              ----         ----         ----
<S>                                                           <C>           <C>          <C>
COMMERCIAL BUILDINGS:

Pearle Express Stores (1).............................        N/A           100%         100%

National Convenience Stores...........................        N/A           100(2)       100(2)

Wickes Furniture Store................................        N/A           N/A          100

Sam's Club (4)........................................        N/A           N/A          N/A

Former Phar-Mor Store (3).............................        N/A           N/A          N/A

Haverty's Furniture Store.............................        N/A           N/A          100

<FN>
(1)      In July 1996,  the Orland Park,  Illinois  store was sold, and in March
         1998 the Pearle  Express store in Morrow, Georgia was sold.
(2)      Represents  occupancy at the  remaining  stores  owned by the Fund.  In
         April  1994,  through a purchase  and  exchange  transaction  with NCS,
         Circle K became  the  operator  of five of the Fund's  stores,  four in
         California  and one in Georgia.  In November and December  1996, two of
         the stores were sold,  followed by another in February  1997,  three in
         March 1997,  one in July 1997,  eight in December  1997,  and the final
         remaining  store  in  December  1998.  See  Note 8 to the  consolidated
         financial statements.
(3)      In August 1992 Phar-Mor  filed for  protection  under Chapter 11 of the
         federal  Bankruptcy  Code  (see  Item  8,  Note 6 to  the  consolidated
         financial statements). Phar-Mor rejected the Fund's lease effective May
         15, 1993,  after  closing the store at the end of April.  The store was
         subdivided in 1994 and 24,709 square feet was leased to Superpetz, Inc.
         The building was subsequently sold on March 15, 1995.
(4)      Lessee  vacated the store in April 1992,  but  remained  current in its
         lease  obligations  to the Fund.  During the fourth quarter of 1994 and
         first  quarter of 1995,  the Fund's  Advisor  reviewed and approved two
         subleases  presented by the lessee and the  building was 100%  occupied
         until it was sold in June 1996.
</FN>
</TABLE>

Item 3.  Legal Proceedings.

The Fund has been a creditor in  bankruptcy  proceedings  filed by Phar-Mor (See
Item 8, Note 6 to the  consolidated  financial  statements).  In December  1994,
Phar-Mor filed in these proceedings a preference recovery action against several
hundred   vendors  and  landlords,   including  the  Fund.  The  amount  of  the
preferential  payments  alleged  to have  been  made to the  Fund  was  $90,250,
consisting of rent paid to the Fund within 90 days of the filing of the Phar-Mor
bankruptcy  petitions.  This preference  action was dismissed in connection with
the  confirmation  of a  reorganization  plan for Phar-Mor.  In August 1995, the
Court  confirmed  Phar-Mor's  proposed  reorganization  plan  which  called  for
unsecured  creditors to receive a portion of a pool of the  company's new stock,
as well as warrants to purchase  additional  stock at a fixed price.  In October
1996,  the Fund  received  approximately  $19,000  from  Phar-Mor to satisfy its
administrative  claim and  agreed  to settle  its  remaining  outstanding  lease
rejection claim for approximately  $629,000. This settlement was approved by the
Bankruptcy  Court in January 1997. To satisfy its claim, in March 1997, the Fund
received  1,058 shares of stock and 881  warrants,  which were sold in June 1997
for approximately $7,000.

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

No matter was submitted to a vote of security holders during the last quarter of
1998.

                                       5

<PAGE>


                                     PART II

Item 5.  Market for Registrant's Shares of Common Stock and Related Stockholder 
         Matters.

No public market for the Shares exists, nor is one expected to develop. However,
Shares of Common Stock were sold through the  Dividend  Reinvestment  Plan (DRP)
pursuant to the Liquidity  Option Program (LOP).  The per Share price for Shares
acquired  through the DRP with the proceeds of the dividends was  established by
the Fund's Board of Directors,  pursuant to a formula  having as its  components
independent third-party appraisals of the Fund's properties as of December 31 of
each year, the market value of the Fund's  mortgage-backed  securities,  and the
net book value of its other assets and  liabilities as of each quarter end prior
to the dividend payment. In June 1996, the Board of Directors voted to terminate
the DRP and LOP  effective as to dividend  payments  made after August 15, 1996.
The  Board  of  Directors  believed  that  with the  implementation  of a formal
disposition  strategy for the Fund, the Plan was no longer a viable purchase and
liquidation vehicle.

In view of the  adoption  of the Plan of  Liquidation  and  Dissolution  and the
cessation of regular  quarterly  reports to Shareholders,  the Fund's Advisor no
longer provides an estimated net asset value per Share.

As of December 31, 1998 the approximate number of Shareholders was as follows:

         Title of Class                          Number of Record Holders
         --------------                          ------------------------

          Common Stock ........................           4,479

Item 6.  Selected Financial Data.

The following table presents selected  consolidated  financial data for the Fund
for the years ended  December  31, 1998,  1997,  1996,  1995 and 1994.  The data
should  be  read in  conjunction  with  the  consolidated  financial  statements
included elsewhere herein. Dividends were declared from operations and sales and
were paid  quarterly or subsequent to sale upon  recommendation  and approval of
the Fund's Board of Directors.
<TABLE>
<CAPTION>
                                                  For the Year Ended December 31
                                     -------------------------------------------------------
                                       1998(1)      1997       1996       1995       1994
                                       -------      ----       ----       ----       ----
                                           (amounts in thousands except per unit data)
 <S>                                 <C>         <C>         <C>        <C>        <C>
 Total Revenues                      $    326    $  3,954    $  4,886   $  5,156   $  4,670
 Gain (Loss) on Sale of Properties   $    (55)   $   (469)   $    760   $    126   $    (32)
 Net Income (Loss)                   $    (68)   $  2,459    $  4,552   $  3,930   $  2,888
 Net Income (Loss) per Share         $   (.01)   $   0.39    $   0.72   $   0.62   $   0.46
 Total Assets                        $  3,877    $ 21,625    $ 35,939   $ 42,211   $ 45,603
 Dividends per Share                 $   0.14    $   4.79    $   2.08   $   1.26   $   0.85
<FN>
(1)      See discussion in Item 7 regarding future results of operations.
</FN>
</TABLE>

                                       6

<PAGE>


                                  Lease Income

The following  table presents lease income for the properties by lessee included
in the Fund's consolidated financial statements:

                                          For the Year Ended December 31
                                      -------------------------------------
                                      1998(1)   1997   1996    1995    1994
                                      -------   ----   ----    ----    ----
                                               (amounts in thousands)

 National Convenience Stores (1) (2)  $  104  $1,238  $1,825  $1,852  $1,552
 Pearle Express Stores (5)                18     119     217     283     282
 Wickes Furniture Store (7)                    1,365   1,372   1,202   1,135
 Sam's Club (6)                                 --       284     524     511
 Former Phar-Mor Store (3)                      --      --        28       6
 Haverty's Furniture Store (4)                   330     411     411      11
                                      ------  ------  ------  ------  ------

 Total                                $  122  $3,052  $4,109  $4,300  $3,497
                                      ======  ======  ======  ======  ======

(1)   In April  1994,  through a purchase  and  exchange  transaction  with NCS,
      Circle  K  became  the  operator  of five of the  Fund's  stores,  four in
      California  and one in Georgia.  In November and December 1996, two stores
      were sold,  followed by another in February  1997 and three in March 1997,
      one in July 1997, eight in December 1997, and one in December 1998, all to
      unaffiliated buyers (see Note 8 to the consolidated financial statements).
(2)   Includes  $151,000,  $245,000, and $279,000 deferred lease income in 1997,
      1996, and 1995, respectively. 
(3)   On March 15, 1995, the building was sold to an unaffiliated buyer.
(4)   Acquired in December 1994 and sold to an unaffiliated  buyer  in  December
      1997 (see  Note 8  to  the  consolidated financial statements).
(5)   The Orland Park,  Illinois  store  was  sold in July 1996, and the Morrow,
      Georgia store  was sold in  March  1998 (see  Note 8 to  the  consolidated
      financial statements).
(6)   The property  was  sold  in  June  1996 (see  Note 8 to  the  consolidated
      financial statements).
(7)   Includes  $79,000  and  $162,000  deferred  lease income in 1997 and 1996,
      respectively.  The  property was sold in  December 1997 to an unaffiliated
      buyer.

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations.

This  item  should  be read  in  conjunction  with  the  Consolidated  Financial
Statements and other Items contained elsewhere in this Report.

The Fund is in the process of winding  down its  operations  and has sold all of
its real  property  assets as of  December  31,  1998.  Accordingly,  historical
financial  information  will not be  representative  of future  results.  Future
results of operations  will be limited to the orderly  liquidation of the Fund's
assets and liabilities.

Results of Operations

1998 Compared to 1997

Income (loss) before net gain (loss) on sale of properties  decreased $2,941,000
in 1998 compared to 1997. The decrease was due to the sale of most of the Fund's
assets in 1997.

Lease income  decreased  $2,930,000  in 1998 compared to 1997 due to the sale of
fifteen  of the  Fund's  properties  in 1997 as well as the  sale of the  Pearle
Express Store in March 1998.

Interest  on the Fund's  mortgage-backed  securities  declined  $281,000 in 1998
compared to 1997 due to the sale of the Fund's  entire  portfolio  at the end of
the third  quarter of 1997 which  resulted  in a $226,000  gain on sale.  A much
smaller portfolio was purchased in 1998.

Interest and other income  decreased  $191,000 in 1998 compared to 1997 as sales
proceeds invested in money market accounts decreased. Also, other income in 1997
included  $76,000  received  towards  settlement  of the Fund's  claim  filed in
conjunction with the bankruptcy and subsequent reorganization of NCS.

                                       7
<PAGE>

Depreciation  expense  decreased by $128,000 in 1998 compared to 1997 because no
depreciation  was recorded in 1998 due to the  reclassification  at December 31,
1997 of all the Fund's remaining properties to Real Estate Held for Sale.

General and  administrative  expense decreased $517,000 in 1998 compared to 1997
due  primarily to a decrease in  compensation  to the Advisor and  affiliates in
1998 compared to 1997 and to the accrual in 1997 for the purchase of a directors
and officers' liability insurance policy at a cost of $274,000.

An  impairment  provision  was  recorded  in 1997 for the Pearle  Express  store
located in Morrow, Georgia in order to reduce the carrying value of the property
to its  estimated  fair  market  value  less  cost to  sell.  The  property  was
subsequently sold in 1998. (See Note 8 to the consolidated financial statements)

As discussed in Note 8 to the consolidated  financial statements,  the Fund sold
two properties,  the Pearle Express store and the  convenience  store located in
Rubidoux,  California,  and paid additional expenses of sale for properties sold
in 1997, resulting in a net loss of $55,000.

1997 Compared to 1996

Income before net gain (loss) on sale of properties  decreased  $864,000 in 1997
compared to 1996. The decrease was primarily due to  sales-related  decreases in
lease income and interest on  mortgage-backed  securities,  which were partially
offset by gain on sale of  mortgage-backed  securities  and an increase in other
income as well as a decrease in expenses.

Lease income decreased  $1,057,000 in 1997 compared to 1996 primarily due to the
sale of Sam's  Club in June  1996,  the  Pearle  Express  Store in Orland  Park,
Illinois  in July  1996,  the NCS  stores in Rancho  Cucamonga,  California  and
Houston,  Texas in November and December  1996,  respectively,  the NCS store in
Clute,  Texas in February  1997, the NCS stores  located in Sealy,  Dallas,  and
Texas City,  Texas in March 1997, the NCS stores located in Arlington,  Texas in
July 1997, and Haverty's Furniture Store located in Plano, Texas in October 1997
(see Note 8 to the consolidated financial statements).

Interest  on the Fund's  mortgage-backed  securities  declined  $210,000 in 1997
compared to 1996 due to the reduction in the amount of  securities  owned by the
Fund resulting from principal  repayments  prior to the end of the third quarter
of 1997  and to the  sale of the  remaining  portfolio  at the end of the  third
quarter.  The  sale  resulted  in a get  gain  of  $226,000  (see  Note 3 to the
consolidated financial statements).

Interest and other  income  increased  $109,000 in 1997  compared to 1996 due to
depreciation  not being  provided for the NCS stores in 1997, nor for any of the
remaining  properties  after  the  second  quarter  of 1997  (see  Note 4 to the
consolidated  financial  statements) and the sale of the sale of the Orland Park
Pearle  Express  Store in July 1996 (see  Note 8 to the  consolidated  financial
statements).

Depreciation  expenses decreased $269,000 in 1997 compared to 1996 due primarily
to  depreciation  not being  provided for the NCS stores in 1997, nor for any of
the  remaining  properties  after the second  quarter of 1997 (see Note 4 to the
consolidated financial statements).

General and administrative  expenses increased $159,000 in 1997 compared to 1996
due  primarily  to an accrual  for the  purchase of a  directors  and  officers'
liability insurance policy at a cost of $274,000. This was partially offset by a
decrease in advisory  and  appraisal  fees due to the sale of several  stores in
1996 and 1997 as discussed above.

An impairment provision for real estate held for sale was booked in 1997 for the
Pearle  Express  store in order to reduce the carrying  value of the property to
its  estimated  fair  market  value  less  cost  to  sell  (see  Note  4 to  the
consolidated financial statements).

As discussed in Note 8 to the consolidated  financial statements,  the Fund sold
thirteen  convenience  stores,  Haverty's  Furniture Store, and Wickes Furniture
Store in 1997 resulting in a net loss of $469,000.

Year 2000 Readiness Disclosure

With the change to a new millenium,  computer programs or hardware utilizing two
digits rather than four to define the applicable year may recognize a date using
"00" as the year 1900 rather than the year 2000.  This could  result in a system
failure or miscalculations causing disruptions of operations,  including,  among
other things, a temporary inability to conduct normal business activities.

                                       8
<PAGE>

In anticipation of the year 2000, in late 1996 the Advisor  conducted a thorough
inventory of all software  programs it had in use and  identified  programs that
would require  modification to correct date handling  methodology.  Furthermore,
the Advisor  initiated a policy requiring that all future software  purchases be
year-2000  compliant.  With the exception of the Advisor's financial  accounting
system,  the majority of the hardware and software in use was  determined  to be
year-2000  compliant or it was determined that compliance could be achieved with
minor  modifications.  These modifications were 100% completed by year-end 1998.
With respect to the financial  accounting  system, the Advisor is in the process
of implementing a Year  2000-compliant  software product to replace its existing
system,  and  anticipates  the new system to be fully  operational and tested by
July  31,  1999.  All  necessary  changes  have  been and  will  continue  to be
undertaken at no cost to the Fund.

In addition to internal systems, the Advisor surveyed third parties that provide
essential business services to determine their state of year-2000 readiness. The
Fund's Servicing and Transfer Agent, Gemisys,  utilizes a platform programmed to
correctly  interpret the change to the new century.  State Street Bank and Trust
Company,  which provides custodial services with respect to the Fund's portfolio
of  mortgage-backed   securities,  also  utilizes  systems  that  are  year-2000
compliant.

In  light  of the  foregoing,  and  given  that  the  Fund  intends  to be fully
liquidated by year-end  1999,  the Advisor  anticipates  there to be no material
exposure to year-2000 issues. However, should the Fund still be in existence and
should the Advisor's new financial accounting system not be in place by December
31,  1999,  the  Advisor's  contingency  plan  would  be  to  process  necessary
transactions utilizing non-date sensitive software.

Fund Liquidity and Capital Resources

The  Fund  intends  to meet its cash  needs  from  cash  flow  generated  by its
remaining securities and from the sale of such securities.  In order to continue
to qualify as a REIT for income tax purposes, the Fund is required,  among other
things,  to distribute 95 percent of its REIT taxable income to its Shareholders
annually.  The level of cash dividends to  Shareholders in 1998 was sustained by
cash provided from net operating  activities,  from principal  repayments on the
mortgage-backed securities and from property sale proceeds.

Since  inception,  the principal  source of capital  resources has been proceeds
from the sale of the Fund's common stock.  Through June 30, 1992,  proceeds from
the sale of common stock totaled $63,054,000,  including proceeds raised through
the Dividend Reinvestment Plan ("DRP") of $2,800,000.

In June 1996, the Board of Directors voted unanimously to terminate the Dividend
Reinvestment  Plan and Liquidity  Option Program  effective as to dividends paid
after August 15, 1996, as the Fund had begun its disposition phase.  Through the
second  quarter  of 1998 the Fund's  Advisor  continued  to provide a  quarterly
estimated  net asset  value  per Share  utilizing  the same  methods  previously
utilized to calculate the DRP per Share purchase price. However, in light of the
adoption of the Plan of Liquidation and Dissolution and the cessation of regular
quarterly  reports  subsequent  to the second  quarter of 1998,  the  Advisor no
longer provides an estimated net asset value per Share.

As  presented  in the  Consolidated  Statement  of Cash Flows,  cash was used by
operating activities. In addition, cash was provided by investing activities and
from  proceeds  from sales of  properties  and  principal  payments  received on
mortgage-backed  securities.  Cash was used by investing activities for expenses
incurred  in the  sale of real  property  and the  purchase  of  mortgage-backed
securities.  Cash  was  used  by  financing  activities  for  dividends  paid to
Shareholders.

                                       9

<PAGE>


Item 8. Financial Statements and Financial Statement Schedules.
<TABLE>
                        METRIC INCOME TRUST SERIES, INC.,
                            a California corporation

                                TABLE OF CONTENTS
<CAPTION>
                                                                                                                      Page
<S>                                                                                                                    <C>
Report of Independent Auditors.........................................................................................11
Consolidated Financial Statements:
         Balance Sheets at December 31, 1998 and 1997..................................................................12
         Statements of Operations for the Years Ended December 31, 1998, 1997, and 1996................................13
         Statements of Shareholders' Equity for the Years Ended December 31, 1998, 1997, and 1996......................14
         Statements of Cash Flows for the Years Ended December 31, 1998, 1997, and 1996................................15
         Statements of Comprehensive Income or Loss for the Years Ended December 31, 1998, 1997, and 1996..............16
         Notes to Consolidated Financial Statements....................................................................17
</TABLE>


                                       10
<PAGE>









                         REPORT OF INDEPENDENT AUDITORS

Metric Income Trust Series, Inc., a California corporation:

We have audited the  accompanying  consolidated  balance sheets of Metric Income
Trust Series,  Inc., a California  corporation  ("the Fund"), as of December 31,
1998  and  1997,  and  the  related   consolidated   statements  of  operations,
shareholders'  equity, cash flows, and comprehensive  income or loss for each of
the  three  years  in the  period  ended  December  31,  1998.  These  financial
statements are the responsibility of the Fund's  management.  Our responsibility
is to express an opinion on these financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the 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 and schedule.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the consolidated  financial  position of the
Fund at  December  31,  1998  and  1997,  and the  consolidated  results  of its
operations  and its cash flows for each of the three  years in the period  ended
December 31, 1998, in conformity with generally accepted accounting principles.





                                                               Ernst & Young LLP

San Francisco, California
February 12, 1999

                                       11

<PAGE>
<TABLE>
                        METRIC INCOME TRUST SERIES, INC.,
                            A California corporation

                           CONSOLIDATED BALANCE SHEETS
                           December 31, 1998 and 1997
<CAPTION>
                                                                      1998          1997
                                                                      ----          ----
<S>                                                               <C>            <C>
ASSETS

Cash                                                              $  1,291,000   $ 19,762,000
Accounts and Interest Receivable                                        14,000         65,000
Investment in Mortgage-Backed Securities - Net                       2,550,000           --
Real Estate Held for Sale                                                 --        1,744,000
Prepaid and Other Assets                                                22,000         54,000
                                                                  ------------   ------------

     Total Assets                                                 $  3,877,000   $ 21,625,000
                                                                  ============   ============

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities

Dividends Payable                                                 $    868,000   $ 17,385,000
Payable to Sponsor and Affiliates                                        4,000         50,000
Other Accounts Payable and Accrued Liabilities                          36,000        326,000
                                                                  ------------   ------------

    Total Liabilities                                                  908,000     17,761,000
                                                                  ------------   ------------

Commitments and Contingencies

Shareholders' Equity:
Common Stock - no par value, stated at $0.001, 12,250,000 Shares
   authorized and 6,321,641 Shares issued and outstanding                6,000          6,000
Additional Paid-in Capital                                          55,200,000     55,200,000
Accumulated Dividends in Excess of Net Income                      (52,278,000)   (51,342,000)
Unrealized Holding Gain on Investment
   in Mortgage-Backed Securities                                        41,000           --
                                                                  ------------   ------------

   Total Shareholders' Equity                                        2,969,000      3,864,000
                                                                  ------------   ------------

   Total Liabilities and Shareholders' Equity                     $  3,877,000   $ 21,625,000
                                                                  ============   ============
<FN>
                 See notes to consolidated financial statements
</FN>
</TABLE>
                                       12
<PAGE>
<TABLE>
                        METRIC INCOME TRUST SERIES, INC.,
                            a California corporation

                      CONSOLIDATED STATEMENTS OF OPERATIONS
              For the Years Ended December 31, 1998, 1997 and 1996

<CAPTION>
                                                                 1998          1997         1996
                                                                 ----          ----         ----

<S>                                                         <C>           <C>           <C>
 Revenues:

 Lease income                                               $   122,000   $ 3,052,000   $ 4,109,000
 Interest on mortgage-backed securities                         120,000       401,000       611,000
 Interest and other income                                       84,000       275,000       166,000
 Gain on sale of mortgage-backed securities - net                  --         226,000          --
                                                            -----------   -----------   -----------
      Total Revenues                                            326,000     3,954,000     4,886,000
                                                            -----------   -----------   -----------


 Expenses (including $168,000, $389,000 and $467,000 paid
       or payable to advisor and affiliates in 1998, 1997
       and 1996):

 Depreciation                                                      --         128,000       397,000
 General and administrative                                     339,000       856,000       697,000
 Impairment provision for real estate held for sale                --          42,000          --
                                                            -----------   -----------   -----------
       Total Expenses                                           339,000     1,026,000     1,094,000
                                                            -----------   -----------   -----------


 Income (Loss) before Gain (Loss) on Sale of Properties         (13,000)    2,928,000     3,792,000


 Gain (Loss) on Sale of Properties - Net                        (55,000)     (469,000)      760,000
                                                            -----------   -----------   -----------


 Net Income (Loss)                                          $   (68,000)  $ 2,459,000   $ 4,552,000
                                                            ===========   ===========   ===========

 Net Income (Loss) per Share
 Income before gain (loss) on sale of properties            $      --     $      0.46   $      0.60
 Gain (loss) on sale of properties - net                          (0.01)        (0.07)         0.12
                                                            -----------   -----------   -----------

      Net Income (Loss) per Share                           $     (0.01)  $      0.39   $      0.72
                                                            ===========   ===========   ===========

 Dividends per Share                                        $      0.14   $      4.79   $      2.08
                                                            ===========   ===========   ===========
<FN>
                 See notes to consolidated financial statements
</FN>
</TABLE>
                                       13
<PAGE>
<TABLE>
                        METRIC INCOME TRUST SERIES, INC.,
                            A California corporation

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
              For the Years Ended December 31, 1998, 1997 and 1996
<CAPTION>
                                                                                                            Unrealized
                                                                                                              Holding
                                                                                                            Gain/(Loss)
                                                                           Additional     Accumulated     on Investment in
                                                  Common Stock               Paid-in  Dividends in Excess Mortgage-Backed
                                              Shares         Amount          Capital     of Net Income     Securities-Net   Total
                                              ------         ------          -------     -------------     --------------   -----
<S>                                       <C>             <C>             <C>            <C>             <C>            <C>
 Balance, January 1, 1996                    6,321,641    $      6,000    $ 55,200,000   $(14,947,000)   $    358,000   $40,617,000

 Unrealized Holding Loss
     on Investment in Mortgage-Backed
     Securities - Net                                                                                        (188,000)     (188,000)

 Income Before Gain on
     Sale of Properties                                                                     3,792,000                     3,792,000

 Gain on Sale of Properties - Net                                                             760,000                       760,000

 Dividends Declared                                                                       (13,126,000)                  (13,126,000)
                                          ------------    ------------    ------------   ------------    ------------   ------------

 Balance, December 31, 1996                  6,321,641           6,000      55,200,000    (23,521,000)        170,000    31,855,000

 Realization of Unrealized Holding Gain
     on Investment in Mortgage-Backed
     Securities - Net                                                                                        (170,000)     (170,000)

 Income Before Loss on
     Sale of Properties                                                                     2,928,000                     2,928,000

 Loss on Sale of Properties - Net                                                            (469,000)                     (469,000)

 Dividends Declared                                                                       (30,280,000)                  (30,280,000)
                                          ------------    ------------    ------------   ------------    ------------   ------------

 Balance, December 31, 1997                  6,321,641           6,000      55,200,000    (51,342,000)           --       3,864,000

 Unrealized Holding Gain
     on Investment in Mortgage-Backed
     Securities - Net                                                                                          41,000        41,000

 Loss Before Loss on
     Sale of Properties                                                                      (13,000)                       (13,000)

 Loss on Sale of Properties                                                                  (55,000)                       (55,000)
 
 Dividends Declared                                                                         (868,000)                      (868,000)
                                          ------------    ------------    ------------   ------------    ------------   ------------

 Balance, December 31, 1998                  6,321,641    $      6,000    $ 55,200,000   $(52,278,000)   $     41,000   $  2,969,000
                                          ============    ============    ============   ============    ============   ============
<FN>
                 See notes to consolidated financial statements
</FN>
</TABLE>
                                       14
<PAGE>
<TABLE>
                        METRIC INCOME TRUST SERIES, INC.,
                            a California corporation

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              For the Years Ended December 31, 1998, 1997 and 1996
<CAPTION>
                                                                      1998           1997            1996
                                                                      ----           ----            ----
<S>                                                              <C>            <C>            <C>
Operating Activities

Net income (loss)                                                $    (68,000)  $  2,459,000   $  4,552,000
Adjustments to reconcile net income (loss) to net cash provided
  (used) by operating activities
    Depreciation and amortization                                      (1,000)       122,000        389,000
    Gain on sale of mortgage-backed securities - net                     --         (226,000)          --
     Impairment provision for real estate held for sale                  --           42,000
    (Gain) loss on sale of properties - net                            55,000        469,000       (760,000)
    Changes in operating assets and liabilities:
      (Increase) decrease in accounts and interest receivable          (8,000)      (178,000)      (332,000)
      (Increase) decrease in prepaid and other assets                  19,000          1,000       (106,000)
      Increase (decrease) in payable to sponsor and affiliates        (46,000)        41,000        (13,000)
      Increase (decrease) in other accounts payable and accrued
         liabilities                                                 (290,000)       139,000       (121,000)
                                                                 ------------   ------------   ------------
Net cash provided (used) by operating activities                     (339,000)     2,869,000      3,609,000
                                                                 ------------   ------------   ------------

Investing Activities

Purchase of mortgage-backed securities                             (2,702,000)          --             --
Proceeds from sale of mortgage-backed securities                         --        6,698,000           --
Principal payments received on mortgage-backed securities             194,000        615,000      1,144,000
Proceeds from sales of properties                                   1,975,000     23,812,000      9,039,000
Cash used for selling costs of properties                            (214,000)    (1,229,000)      (485,000)
                                                                 ------------   ------------   ------------
Net cash provided (used) by investing activities                     (747,000)    29,896,000      9,698,000
                                                                 ------------   ------------   ------------

Financing Activities

Dividends paid to Shareholders                                    (17,385,000)   (16,784,000)   (10,502,000)
                                                                 ------------   ------------   ------------
Cash used by financing activities                                 (17,385,000)   (16,784,000)   (10,502,000)
                                                                 ------------   ------------   ------------

Increase (Decrease) in Cash                                       (18,471,000)    15,981,000      2,805,000
Cash at beginning of year                                          19,762,000      3,781,000        976,000
                                                                 ------------   ------------   ------------

Cash at End of Year                                              $  1,291,000   $ 19,762,000   $  3,781,000
                                                                 ============   ============   ============

<FN>
      SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES

 Unrealized holding gain (loss) on investment in mortgage-backed securities - see Note 3

 Sale of rental properties - see Note 8

                 See notes to consolidated financial statements
</FN>
</TABLE>
                                       15
<PAGE>
<TABLE>
                       METRIC INCOME TRUST SERIES, INC.,
                            a California corporation

             CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME OR LOSS
              For the Years Ended December 31, 1998, 1997 and 1996

<CAPTION>
                                                                   1998         1997         1996
                                                                   ----         ----         ----

<S>                                                              <C>        <C>           <C>
Net income (loss)                                                $(68,000)  $ 2,459,000   $ 4,552,000

Unrealized holding gain (loss) on investment in mortgage-backed
   securities - net                                                41,000          --        (188,000)
Realization of unrealized holding gain on investment in
   mortgage-backed securities - net                                  --        (170,000)         --
                                                                 --------   -----------   -----------
Comprehensive Income (Loss)                                      $(27,000)  $ 2,289,000   $ 4,364,000
                                                                 ========   ===========   ===========
<FN>
                 See notes to consolidated financial statements
</FN>
</TABLE>
                                       16
                                                       
<PAGE>
                        METRIC INCOME TRUST SERIES, INC.,
                            a California corporation

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.    Organization and Summary of Significant Accounting Policies

      Organization - Metric Income Trust Series, Inc., a California  corporation
      ("Fund"),  was organized in 1989 under the laws of the State of California
      to acquire income  producing real properties and investments in securities
      which are  guaranteed  as to payment of principal and interest by the U.S.
      Government,  U.S. Government agencies or  instrumentalities,  or federally
      chartered  corporations.  The Fund  qualifies as a real estate  investment
      trust  ("REIT")  under  Sections 856 through 860 of the  Internal  Revenue
      Code.

      Effective  April 1, 1997,  Metric  Holdings Inc.,  the indirect  Parent of
      Metric Realty,  the former Advisor,  was merged into a newly formed entity
      known as SSR Realty Advisors, Inc. ("SSR"). SSR was incorporated under the
      laws of  Delaware  on February  25,  1997 and is a  registered  investment
      adviser in accordance  with the Investment  Advisers Act of 1940. With the
      consent of the Fund, the Advisory  Agreement was assigned to SSR by Metric
      Realty  on March  27,  1997.  SSR is a  subsidiary  of  Metropolitan  Life
      Insurance Company. Under the advisory agreement,  SSR furnishes day-to-day
      management  and  carries  out  the  investment   objectives  and  policies
      established  by the Board of  Directors.  An affiliate of the advisor owns
      21,506  shares of common  stock.  The Fund has sold its real estate assets
      and is winding down its affairs.

      Consolidation  -  The  consolidated   financial   statements  include  the
      statements  of the Fund and its  wholly-owned  subsidiary  which owned all
      properties   located  in  Texas  prior  to  their  sale.  All  significant
      intercompany transactions and balances have been eliminated.

      Fair Value of Financial  Instruments - Except for the Fund's investment in
      mortgaged-backed  securities,  the fair  values  of the  Fund's  financial
      instruments   approximate   their   historic  cost,  as  reported  in  the
      consolidated  balance  sheets.  In accordance with FASB Statement 115, the
      Fund's  investments  in  mortgage-backed  securities  are reported at fair
      value.

      Accounting  Pronouncements  - The  Fund has  adopted  Statement  No.  121,
      "Accounting  for the  Impairment of Long-Lived  Assets and for  Long-Lived
      Assets to Be Disposed of" ("SFAS 121"). This statement requires impairment
      losses  to be  recorded  on  long-lived  assets  used in  operations  when
      indicators  of  impairment  are  present and the  undiscounted  cash flows
      estimated to be generated  by those assets  during the holding  period are
      less  than  the  assets' carrying  amount.  SFAS  121  also  provides  for
      long-lived  assets  that are  expected to be disposed of to be recorded at
      the lower of carrying  value or fair market value less  estimated  cost to
      sell. An  impairment  provision for real estate held for sale was recorded
      in 1997 (See Note 4).

      In 1998, the Fund adopted Statement 130, "Reporting  Comprehensive Income"
      ("SFAS  130").  This  statement  requires the  reporting of  comprehensive
      income in addition to net income  (loss)  from  operations.  Comprehensive
      income is a more inclusive financial  reporting  methodology that includes
      disclosure of certain financial information that historically has not been
      recognized in the calculation of net income (loss). Therefore,  unrealized
      holding gains and losses on mortgage-backed securities are included in the
      Consolidated Statements of Comprehensive Income or Loss.

      The Financial  Accounting Standards Board (the "FASB") issued Statement of
      Financial Accounting Standards No. 131,  "Disclosures About Segments of an
      Enterprise and Related  Information"  ("FAS 131"),  which is effective for
      financial  statements for periods  beginning  after December 15, 1997. FAS
      131  establishes  standards for the way that public  business  enterprises
      report financial  statements and interim  reporting to  shareholders.  The
      Fund adopted FAS 131 in 1998, and has determined that it has one operating
      and  reportable  segment,  therefore,  such  adoption has no effect on the
      accompanying financial statements.

      Use  of  Estimates  -  The  preparation  of  the  consolidated   financial
      statements in conformity  with generally  accepted  accounting  principles
      requires  management  to make  estimates and  assumptions  that affect the
      amounts reported in the consolidated financial statements and accompanying
      notes. Actual results could differ from those estimates.

      Cash and Cash Equivalents - The Fund considers  highly liquid  investments
      with an  original  maturity  date of three  months  or less at the time of
      purchase to be cash  equivalents.
                                       17
<PAGE>

      Real  Estate  Held for Sale - Real  estate  held for sale is stated at the
      lower of its carrying  amount or estimated fair value less disposal costs.
      Depreciation is not recorded on assets classified as held for sale.

      Revenue  Recognition  - Rental  revenue  under tenant lease  agreements is
      recognized on the  straight-line  method over the lease terms except where
      such  amounts  are  immaterial  or  where  the   underlying   tenants  are
      experiencing  financial  difficulties.  Once  difficulties  are  resolved,
      rental  revenue is straight lined (unless the adjustment is immaterial) on
      prospective  rental  streams for tenants  who have  resolved or  mitigated
      their financial difficulties.

      Depreciation - Depreciation  is computed  using the  straight-line  method
      over  estimated  useful lives of 30 years for buildings and  improvements.
      Beginning in the fourth  quarter of 1995,  properties  categorized as real
      estate held for sale are not  depreciated as a result of the Fund adopting
      SFAS 121.

      Mortgage-Backed  Securities - Mortgage-backed  securities held at December
      31, 1998,  consist of certificates  originated under or in connection with
      Federal housing programs of the Government  National Mortgage  Association
      ("GNMA") and are  guaranteed as to payment of principal and interest.  The
      Fund holds these securities as available-for-sale  investments.  Discounts
      are amortized over the terms of the related  securities using the interest
      method.  In  accordance  with  SFAS  Statement  No.  115,  mortgage-backed
      securities are carried at fair value.

      Concentrations  of Credit Risk - Financial  instruments  that  subject the
      Company to  concentrations  of credit risk  consist  primarily of cash and
      investment  in  mortgage-backed   securities.   Although   mortgage-backed
      securities are guaranteed as to principal and interest payments,  they are
      interest  rate  sensitive  financial  instruments  and  their  value  will
      generally decrease if market interest rates increase. The Fund places cash
      in  investment  grade  companies  or  financial  institutions.  Management
      believes the likelihood of incurring material losses is remote.

      Net  Income  (Loss)  and  Dividends  Per  Share - Net  income  (loss)  and
      dividends per Share are based upon 6,321,641  Shares  outstanding for each
      of the years ended December 31, 1998,  1997 and 1996.  Dividends per Share
      were  composed of $.14 return of capital in 1998,  $.37  ordinary  income,
      $.02 capital gains and $4.40 return of capital in 1997,  and $.52 ordinary
      income, $.10 capital gains and $1.46 return of capital in 1996.

      Income Taxes - The Internal  Revenue Code provides that a corporation  can
      qualify as a REIT if, among other things,  the corporation  distributes at
      least 95 percent of its taxable income to  Shareholders  each year. If the
      corporation  distributes  at least 95  percent  of its  taxable  income to
      Shareholders,  such  distributions can be treated as deductions for income
      tax  purposes.  Because the Fund  qualifies as a REIT and had  distributed
      amounts in excess of its  taxable  income  for 1998,  1997,  and 1996,  no
      provision for income taxes has been made in the accompanying  consolidated
      financial statements.

      The tax basis of the  Shareholders'  equity  differs at December  31, 1998
      from the amounts presented in the consolidated balance sheet as follows:

                  
          Financial statement basis of Shareholders' equity      $2,969,000
          Tax basis of Shareholders' equity                       2,928,000
                                                                 -----------
          Difference                                               $ 41,000
                                                                 ==========
                 
      The difference  consists of the  unrealized  holding gain on investment in
mortgage-backed securities.

2.    Transactions with Advisor and Affiliates
      In  accordance  with the  Advisory  Agreement,  the Fund  pays the Advisor
      and  affiliates  compensation  for services  provided to the Fund. Amounts
      earned by the Advisor and its  affiliates for the years ended December 31,
      1998, 1997 and 1996 were as follows:
                                                   1998       1997       1996
                                                   ----       ----       ----
      Reimbursement of administrative expenses   $ 82,000   $200,000   $200,000
      Securities management fee                    11,000     25,000     38,000
      Advisory fee                                 75,000    164,000    229,000
                                                 --------   --------   --------

                                                 $168,000   $389,000   $467,000
                                                 ========   ========   ========
                                       18
<PAGE>

      The  securities  management  fee was  earned by State  Street  Research  &
      Management Company, an affiliate of Metropolitan Life Insurance Company.

      The  quarterly  advisory  fees  payable to the Advisor  under the Advisory
      Agreement  commencing  April  1,  1994  were  calculated  at a rate of .75
      percent per annum of the appraised value of the properties. Such fees were
      payable  in full  only  if the  Fund  made  annualized  dividend  payments
      equaling  at least  8.5  percent  of the  Shareholders'  adjusted  capital
      contribution.  To the extent that the dividend paid for a calendar quarter
      was less than 8.5 percent on an annualized basis, the advisory fee payable
      to the Advisor was proportionately reduced. No dividends were paid for the
      first quarter of 1998;  therefore no advisory fee was earned.  In February
      1998, the  Independent  Directors  approved the renewal of the term of the
      Advisory  Agreement to December  31,  1998,  with flat fees of $25,000 per
      quarter to be paid to the  Advisor  with the quarter  commencing  April 1,
      1998.

3.    Mortgage-Backed Securities

      In 1998, the Fund purchased  mortgage-backed  securities of the Government
      National Mortgage Association ("GNMA").  The securities had a par value of
      $2,717,000  and were  purchased  at a $15,000  discount for a net purchase
      price  of  $2,702,000.  In  accordance  with  SFAS  115  and  Management's
      intentions,   the  Fund's  investment  in  mortgage-backed  securities  is
      classified as  "available-for-sale  securities" and reported at fair value
      with  unrealized  gains and losses  reported as a net amount in a separate
      component  of  Shareholder's  Equity.  In 1998,  the  Fund  had a  $41,000
      unrealized holding gain on investment in mortgage-backed  securities. Fair
      values of mortgage-backed securities at December 31, 1998 were as follows.

<TABLE>
<CAPTION>
                                                         Gross       Gross
                                                       Unrealized  Unrealized   Estimated
                                           Amortized    Holding      Holding      Fair
                                              Cost       Gains       Losses       Value
                                              ----       -----       ------       -----
      <S>                                  <C>          <C>            <C>     <C>
      GNMA.............................    $2,509,000   $41,000        $0      $2,550,000
</TABLE>

      The  coupon  rate of the  securities  is 6.5% per annum and the  repayment
      period terminates in 2024.

      In 1997,  sales proceeds from  mortgage-backed  securities were $6,698,000
      resulting in gross realized gains of $244,000 and gross realized losses of
      $18,000. In 1996, the fund incurred a $188,000 unrealized holding loss.

4.    Real Estate Held for Sale

      At December  31,  1997,  the two  remaining  properties  owned by the Fund
      (Rubidoux  National  Convenience  Store and the Pearle Express Store) were
      classified  as real estate held for sale.  Rubidoux  National  Convenience
      Store was  classified as real estate held for sale in 1996 when the Fund's
      Board of Directors approved a plan to market for sale the sixteen National
      Convenience  Stores located in California,  Georgia and Texas.  Two of the
      stores  were  subsequently  sold in 1996 and  thirteen  were sold in 1997.
      Rubidoux National Convenience Store was sold in 1998 (see Note 8).

      As a result of the Board of Directors' decision to proceed with an orderly
      liquidation  of the  Fund,  as of June  30,  1997,  the  remaining  Rental
      Properties owned by the Fund (Haverty's  Furniture Store, Wickes Furniture
      Store and the Pearle  Express  Store) were  classified as Real Estate Held
      for Sale in accordance with SFAS 121. Haverty's Furniture Store and Wickes
      Furniture Store were  subsequently sold in the fourth quarter of 1997. The
      Pearle Express Store was sold in 1998 (see Note 8).

      In  accordance  with SFAS 121,  an  impairment  provision  of $42,000  was
      recorded in 1997 to reduce the carrying  value of the Pearle Express Store
      to its estimated fair market value less cost to sell.

5.    Other Accounts Payable and Accrued Liabilities

      In the fourth quarter of 1997, the Fund's Board of Directors  approved the
      purchase of a directors and officers' liability insurance policy at a cost
      of  $274,000.  This  amount  was  recorded  as  an  accrual  in  the  1997
      consolidated  financial  statements and was  subsequently  paid in January
      1998.  The  insurance  covers  the  period  from  inception  of the Fund's
      operations  to six years  after sale of the Fund's last  property.  As the
      premium  is  non-refundable  and  most  of  the  Fund's  assets  had  been
      liquidated  as of December  31, 1997,  the entire  premium was expensed in
      1997.

                                       19
<PAGE>

6.    Contingencies and Major Tenant Developments

      In 1997, in connection with the marketing of the convenience  stores,  the
      Fund  commissioned  Phase I Environmental  Site Assessments which revealed
      that  Circle K, the  tenant of the  Rubidoux  National  Convenience  Store
      property, had reported hydrocarbon  contaminants to regulatory authorities
      in  April  1994.  It was  estimated  that  the  total  cost  to  cure  the
      contamination  would not exceed $120,000.  Per the terms of the lease, the
      lessee was  required  to notify the Fund at the time of  discovery  and to
      promptly  remediate  the problem  but no such  action was taken.  The Fund
      subsequently  negotiated the specific terms of indemnification with Circle
      K, and is in  receipt of an  Indemnity  Letter  executed  by Circle K. The
      property  was sold in  December  1998.  (See  Note 8).  

      The Fund  received  $76,000 in lieu of 2,638  shares of common  stock plus
      accrued  interest in 1997 in connection with settlement of its claim filed
      in conjunction with the bankruptcy and subsequent  reorganization  of NCS.
      Total compensation  received by the Fund in connection with the settlement
      approximates $338,000.

      Phar-Mor,  a former lessee of one  property,  filed for  protection  under
      Chapter 11 of the Federal  Bankruptcy Code in August 1992 and rejected the
      Fund's  lease  effective  May 15,  1993.  The  Fund  filed  claims  in the
      bankruptcy  proceeding totaling $794,000. In December 1994, Phar-Mor filed
      in the  proceedings a preference  recovery  action against several hundred
      vendors and landlords,  including the Fund. The amount of the preferential
      payments alleged to have been made to the Fund was $90,250,  consisting of
      rent  paid  to the  Fund  within  90 days of the  filing  of the  Phar-Mor
      bankruptcy  petitions.  This preference action was dismissed in connection
      with the confirmation of the  reorganization  plan of Phar-Mor.  In August
      1995, the Court confirmed  Phar-Mor's  proposed  reorganization plan which
      called  for  unsecured  creditors  to  receive a portion  of a pool of the
      company's new stock, as well as warrants to purchase additional stock at a
      fixed price. In October 1996, the Fund received approximately $19,000 from
      Phar-Mor  to  satisfy  its  administrative  claim and agreed to settle its
      remaining  outstanding lease rejection claim for  approximately  $629,000.
      The settlement  was approved by the  Bankruptcy  Court in January 1997. To
      satisfy the claim,  in March 1997, the Fund received 1,058 shares of stock
      and 881 warrants which were sold in June 1997 for $7,000.

7.    General and Administrative

      According  to Section 6.3 of the Fund's  Bylaws,  Operating  Expenses  (as
      defined)  may not  exceed the  greater of (a) 2 percent of the  Average of
      Invested  Assets  for that year or (b) 25 percent of the Net Income of the
      Fund (as  defined)  for that year,  unless a majority  of the  Independent
      Directors find this excess justified. In 1998 and 1997, Operating Expenses
      did  exceed 2 percent  of the Fund's  Average  of  Invested  Assets and 25
      percent of the Fund's Net Income.  It was  determined  unanimously  by the
      Independent Directors that the excess was justified based on the reduction
      in the amount of the Fund's  Invested Assets and Net Income as a result of
      the ongoing liquidation of the Fund's properties while the Fund's expenses
      had not declined proportionately.

8.    Sale of Rental Properties

      In December  1998 the Fund sold the Circle K store  (originally  Stop N Go
      Store #2092) located in Rubidoux,  California for $970,000.  After payment
      of expenses  of sale of $113,000  (including  real  estate  commission  of
      $58,000 paid to outside brokers),  the proceeds to the Fund were $857,000.
      The  carrying  value at the time of sale was $887,000  (including  $59,000
      deferred lease income receivable), resulting in a loss of $30,000.

      In March 1998 the Fund sold the Pearle  Express  Store  located in Morrow,
      Georgia  for  $1,005,000.  After  payment of  expenses of sale of $103,000
      (including  real estate  commissions of $80,000 paid to outside  brokers),
      the proceeds received by the Fund were $902,000. The carrying value at the
      time of sale was $916,000 (net of the $42,000  provision for impairment of
      value recognized in 1997), resulting in loss of $14,000.

      In December 1997 the Fund sold Wickes Furniture Store located in Torrance,
      California for  $7,550,000.  After payment of expenses of sale of $255,000
      (including real estate  commissions of $227,000 paid to outside  brokers),
      the proceeds to the Fund were  $7,295,000.  The carrying value at the time
      of  sale  was  $8,846,000   (including   $241,000  deferred  lease  income
      receivable),  resulting in a loss of  $1,551,000  recognized  in 1997.  An
      additional  loss of $5,000 was  recognized  in 1998  after the  payment of
      additional expenses of sale.

                                       20
<PAGE>

      In December  1997 the Fund sold the Circle K store  (originally  Stop N Go
      Store #2406) located in Marietta, Georgia for $1,228,000. After payment of
      expenses of sale of $68,000  (including real estate commissions of $49,000
      paid to outside  brokers),  the proceeds to the Fund were $1,160,000.  The
      carrying  value  at the  time of sale was  $1,169,000  (including  $73,000
      deferred lease income receivable), resulting in a loss of $9,000.

      In December  1997 the Fund sold the Circle K store  (originally  Stop N Go
      Store #2374)  located in  Placentia,  California  for  $1,417,0000.  After
      payment of expenses of sale of $76,000  (including real estate commissions
      of  $57,000  paid to  outside  brokers),  the  proceeds  to the Fund  were
      $1,341,000. The carrying value at the time of sale was $917,000 (including
      $56,000 deferred lease income receivable), resulting in a gain of $424,000
      recognized  in 1997.  A reduction  of the gain in the amount of $2,000 was
      recognized in 1998 after the payment of additional expenses of sale.

      In December  1997 the Fund sold the Circle K store  (originally  Stop N Go
      Store #2065) located in Fontana, California for $1,417,0000. After payment
      of  expenses of sale of $75,000  (including  real  estate  commissions  of
      $57,000  paid  to  outside  brokers),   the  proceeds  to  the  Fund  were
      $1,342,000. The carrying value at the time of sale was $890,000 (including
      $56,000  deferred  lease  income  receivable),  resulting  in  a  gain  of
      $452,000.

      In December 1997 the Fund's  subsidiary,  Metric Real Estate,  L.P.,  sold
      Stop N Go Store #285  located in Fort  Worth,  Texas for  $636,000.  After
      payment of expenses of sale of $42,000  (including real estate commissions
      of  $25,000  paid to  outside  brokers),  the  proceeds  to the Fund  were
      $594,000.  The carrying value at the time of sale was $790,000  (including
      $38,000 deferred lease income receivable), resulting in a loss of $196,000
      recognized in 1997. An  additional  loss of $2,000 was  recognized in 1998
      after the payment of additional expenses of sale.

      In December 1997 the Fund's  subsidiary,  Metric Real Estate,  L.P.,  sold
      Stop N Go Store #308 located in Grand Prairie, Texas for $1,004,000. After
      payment of expenses of sale of $59,000  (including real estate commissions
      of  $40,000  paid to  outside  brokers),  the  proceeds  to the Fund  were
      $945,000.  The carrying value at the time of sale was $764,000  (including
      $40,000  deferred  lease  income  receivable),  resulting  in  a  gain  of
      $181,000.

      In December 1997 the Fund's  subsidiary,  Metric Real Estate,  L.P.,  sold
      Stop N Go Store #1322  located in  Kennedale,  Texas for  $991,000.  After
      payment of expenses of sale of $57,000  (including real estate commissions
      of  $40,000  paid to  outside  brokers),  the  proceeds  to the Fund  were
      $934,000.  The carrying value at the time of sale was $899,000  (including
      $39,000 deferred lease income receivable), resulting in a gain of $35,000.

      In December 1997 the Fund's  subsidiary,  Metric Real Estate,  L.P.,  sold
      Stop N Go Store #1386 located in San Antonio,  Texas for  $841,000.  After
      payment of expenses of sale of $49,000  (including real estate commissions
      of  $34,000  paid to  outside  brokers),  the  proceeds  to the Fund  were
      $792,000.  The carrying value at the time of sale was $922,000  (including
      $50,000 deferred lease income receivable), resulting in a loss of $130,000
      recognized in 1997. An  additional  loss of $2,000 was  recognized in 1998
      after the payment of additional expenses of sale.

      In December 1997 the Fund's  subsidiary,  Metric Real Estate,  L.P.,  sold
      Stop N Go Store #328 located in San  Antonio,  Texas for  $834,000.  After
      payment of expenses of sale of $49,000  (including real estate commissions
      of  $33,000  paid to  outside  brokers),  the  proceeds  to the Fund  were
      $785,000.  The carrying value at the time of sale was $902,000  (including
      $49,000  deferred  lease  income  receivable),  resulting  in  a  loss  of
      $117,000.

      In October  1997 the Fund's  subsidiary,  Metric Real Estate,  L.P.,  sold
      Haverty's  Furniture Store located in Plano,  Texas for $4,425,000.  After
      payment  of  expenses  of  sale  of  $194,000  (including  a  real  estate
      commission  of $154,000  paid to an outside  broker),  the proceeds to the
      Fund  were  $4,231,000.  The  carrying  value  at the  time  of  sale  was
      $3,822,000 resulting in a gain of $409,000.

      In July 1997 the Fund's subsidiary,  Metric Real Estate, L.P., sold Stop N
      Go Store #2378 located in Arlington,  Texas for $1,413,000.  After payment
      of expenses of sale of $110,000  (including  a real estate  commission  of
      $81,000  paid  to an  outside  broker),  the  proceeds  to the  Fund  were
      $1,303,000.  The  carrying  value  at the  time  of  sale  was  $1,408,000
      (including $73,000 deferred lease income receivable),  resulting in a loss
      of $105,000.

                                       21
<PAGE>
      In March 1997 the Fund's subsidiary, Metric Real Estate, L.P., sold Stop N
      Go Store #3571  located in Sealy,  Texas for  $265,000.  After  payment of
      expenses of sale of $28,000  (including real estate commissions of $16,000
      paid to outside  brokers),  the  proceeds to the Fund were  $237,000.  The
      carrying value at the time of sale was $303,000 (including $9,000 deferred
      lease income receivable), resulting in a loss of $66,000.

      In March 1997 the Fund's subsidiary, Metric Real Estate, L.P., sold Stop N
      Go Store #655 located in Dallas,  Texas for  $1,392,000.  After payment of
      expenses  of sale of  $103,000  (including  a real  estate  commission  of
      $80,000  paid  to an  outside  broker),  the  proceeds  to the  Fund  were
      $1,289,000. The carrying value at the time of sale was $715,000 (including
      $43,000  deferred  lease  income  receivable),  resulting  in  a  gain  of
      $574,000.

      In March 1997 the Fund's subsidiary, Metric Real Estate, L.P., sold Stop N
      Go Store #3592 located in Texas City, Texas for $135,000. After payment of
      expenses of sale of $23,000  (including real estate  commissions of $8,000
      paid to outside  brokers),  the  proceeds to the Fund were  $112,000.  The
      carrying value at the time of sale was $272,000 (including $7,000 deferred
      lease income receivable), resulting in a loss of $160,000.

      In February 1997 the Fund's  subsidiary,  Metric Real Estate,  L.P.,  sold
      Stop N Go Store #3583 located in Clute, Texas for $264,000.  After payment
      of  expenses of sale of $29,000  (including  real  estate  commissions  of
      $16,000 paid to outside brokers),  the proceeds to the Fund were $235,000.
      The  carrying  value at the time of sale was  $373,000  (including  $9,000
      deferred lease income receivable), resulting in a loss of $138,000.

      In December 1996 the Fund's  subsidiary,  Metric Real Estate,  L.P.,  sold
      Stop N Go Store #3755  located in  Houston,  Texas for  $1,410,000.  After
      payment of expenses of sale of $100,000 (including real estate commissions
      of $81,000 paid to outside brokers) the proceeds received by the Fund were
      $1,310,000.  The  carrying  value  at the  time  of  sale  was  $1,587,000
      (including $38,000 deferred lease income receivable),  resulting in a loss
      of $277,000.

      In November  1996 the Fund sold the Circle K store  (originally  Stop N Go
      Store #674) located in Rancho Cucamonga,  California for $1,650,000. After
      payment  of the  expenses  of  sale of  $103,000  (including  real  estate
      commissions of $93,000 paid to outside  brokers) the proceeds  received by
      the  Fund  were  $1,547,000.  The  carrying  value at the time of sale was
      $1,038,000  (including $37,000 deferred lease income receivable) resulting
      in a gain of $509,000

      In July 1996 the Fund sold the  Pearle  Express  Store  located  in Orland
      Park,  Illinois for  $1,069,000.  After payment of the expenses of sale of
      $81,000  (including  real estate  commissions  of $64,000  paid to outside
      brokers) the  proceeds  received by the Fund were  $988,000.  The carrying
      value at the time of sale was $1,034,000 resulting in a loss of $46,000.

      In June 1996 the Fund sold the Sam's Club  property  located in  Menomonee
      Falls, Wisconsin for $4,910,000 (after credit to seller for a construction
      holdback of  $28,000).  After  payment of the expenses of sale of $201,000
      (including real estate  commission of $168,000 paid to an outside broker),
      the proceeds  received by the Fund were $4,709,000.  The carrying value at
      the time of sale was  $4,135,000  resulting in a gain of $574,000.  Of the
      proceeds  received  by the Fund,  $108,000  was  deposited  into an escrow
      account to secure  payment for  construction  work to be  completed by the
      tenant at the  property.  The tenant  subsequently  claimed  that the work
      specified was beyond the requirements under the original lease. The tenant
      was to pay for the work to the extent  required  under the lease,  and the
      remainder was to be paid for from the escrowed funds.  Any remaining funds
      from the escrow account were to be released to the Fund. As of December 31
      1997, it was estimated that $72,000 of the construction work would be paid
      from the escrowed funds. This amount was recognized in 1997 as a reduction
      of the previously  recognized gain on sale. In 1998, $92,000 was paid from
      escrow for the completed work. In 1998, the Fund received  $15,000 for the
      work from the tenant and expects to receive another $5,000 from the tenant
      in 1999.  The Fund also  expects to receive the  remaining  funds from the
      escrow in 1999, which are expected to approximate $20,000.

9.    Subsequent Events

      In  January  1999,  a pool of  mortgage-backed  securities  was  sold  for
      $669,000 resulting in a realized gain of $8,000.

      On January 21, 1999, the fund paid a dividend of $868,000 to  Shareholders
      of record at December 31, 1998.

                                       22

<PAGE>

                                    PART III

Item 10.  Directors and Executive Officers.

Directors

The following indicates each Director's age and his principal  experience during
the past five or more years (an "Independent  Director" is not an officer of the
Fund nor a Director or officer of the Advisor or of its affiliates):

Thomas P. Lydon, Jr. Chairman,  President and Chief Executive  Officer,  age 50.
Mr. Lydon has been  President and Chief  Executive  Officer of the Advisor since
February  1995 and became  Chairman of the Fund in March 1997.  Prior to joining
the Advisor,  Mr. Lydon was from April 1992, an Executive  Vice President of MBL
Life  Assurance  Corporation  ("MBL")  (formerly  Mutual  Benefit Life Insurance
Company)  chosen by the New Jersey  Department of Insurance to oversee,  rebuild
and organize the real estate investment  division of MBL. Mr. Lydon's experience
before joining MBL included serving as Executive Vice President and principal of
Manhattan Capital Realty  Corporation,  an investment banking firm, from 1990 to
1992,  and as Senior Vice  President  of Unicorp  American  Corporation,  a real
estate and banking firm,  from 1985 to 1990.  Mr. Lydon  graduated from Syracuse
University with a Bachelor's Degree in Business Administration in 1970.

William A.  Finelli.  Director,  Vice  President,  Chief  Financial  Officer and
Treasurer, age 41. Mr. Finelli has been Managing Director, and a Vice President,
Chief  Financial  Officer and  Treasurer  of the Advisor  since  August 1995 and
became  a  Director  of the Fund in March  1997  and its Vice  President,  Chief
Financial  Officer and Treasurer in April 1997. He is responsible for overseeing
the  day-to-day  activity of the  accounting,  finance,  legal,  technology  and
valuation areas of the Advisor. Before he joined the Advisor, Mr. Finelli served
from November  1983 as a financial  executive of MBL. His last position with MBL
was Vice  President - Real  Estate  Accounting.  Prior to his years at MBL,  Mr.
Finelli was with Ernst & Young, a public  accounting firm. Mr. Finelli graduated
from Rutgers  University with a Bachelor's Degree in Accounting in 1979 and is a
certified public accountant.

William  F.  Garlock.  Independent  Director,  age 49. Mr.  Garlock  has been an
Independent  Director of the Fund since its  formation.  He is  President  and a
director of Garlock & Company, a real estate merchant bank he formed in 1987. He
resigned in June 1993 as  President  and a member of the Board of  Directors  of
Lincoln N.C. Realty Fund  Incorporated,  a publicly held real estate  investment
trust,  positions he held for more than five years.  Prior to 1987,  Mr. Garlock
spent five years with  Blackman,  Garlock,  Flynn & Co., a real estate  merchant
banking firm he started in San  Francisco.  From 1977 through 1981, he served as
Senior Vice President in charge of Finance for Daon  Corporation,  a real estate
developer based in Canada. Mr. Garlock currently serves as a member of the Board
of Directors of Brennan  Garlock,  Inc., a private  banking  firm. He received a
Bachelor of Arts Degree from the University of California at Santa Barbara and a
Master's Degree in Business Administration from Stanford University.

William G. Moeckel,  Jr. Independent  Director,  age 52. Mr. Moeckel has been an
Independent Director of the Fund since its formation. He is President of Moeckel
& Co. and a partner of Thayer Hotel  Investors  II,  L.P., a private  investment
partnership investing in U.S. hotel assets. He was instrumental in the formation
in 1996 of this partnership and serves as its Chief  Acquisitions  Officer.  Mr.
Moeckel has over 20 years of  diversified  real estate  development  experience.
From 1989 through January of 1993, he was managing partner of Moeckel,  Murphy &
Co. From 1986 to May of 1989, he was President of  Cumberland  Peale,  Ltd. From
1984  through  1986,  he  was  Senior  Vice  President  and  Director  of  Hotel
Development of The Landmarks Group, a commercial real estate development company
based in Atlanta.  From 1978 to 1984, he was a partner in the Atlanta  office of
Laventhol  and  Horwath,  Certified  Public  Accountants.  Mr.  Moeckel has also
previously  served as Senior Vice  President  and Chief  Development  Officer of
Embassy Suites, Inc. Mr. Moeckel holds a real estate broker's license in Georgia
and is a member of the Atlanta  Board of  Realtors.  He  graduated  from Cornell
University with a Bachelor of Science Degree in 1972.

                                       23
<PAGE>
Robert M. Rouse. Independent Director, age 52. Mr. Rouse has been an Independent
Director of the Fund since its  formation.  He is the President of Woodmont Real
Estate  Services,  a real  estate  management  and  consulting  firm  located in
Belmont,  California,  which  merged with Rouse Real Estate  Associates,  a real
estate  management  and consulting  firm.  Since January 1994 he has also been a
Director of a private real estate investment trust for  institutional  investors
which has invested in apartment properties and for which the Advisory Company is
the  Advisor.  Mr.  Rouse was  president  of Rouse Real Estate  Associates  from
1986-1990.  In 1985, Mr. Rouse was President of Brichard Management Corp., a San
Francisco-based real estate investment company,  where he had responsibility for
property acquisition and management throughout California and Arizona. From 1973
to 1985,  he was  employed  by the Fox  Group,  where he  served  in a number of
capacities,  including Senior Vice President,  National Sales and Executive Vice
President and Chief Operating Officer of Fox & Carskadon Management Corporation.
Mr.  Rouse  graduated  from  Golden Gate  University  in 1969 with a Bachelor of
Science Degree in Accounting  and Management and in 1977 with a Master's  Degree
in Business  Administration-Finance.  Mr. Rouse has been  designated a Certified
Property Manager by the Institute of Real Estate Management.

Officers

Set forth  below is  information  regarding  the Fund's sole  executive  officer
(other than  Thomas P. Lydon,  Jr. and  William A.  Finelli  whose  biographical
information is set forth under the Section entitled "Directors").

Herman H. Howerton. Vice President, General Counsel and Secretary. Age 55. Since
August 1988, Mr.  Howerton has been a Vice President and General  Counsel of the
Advisor and was Senior Vice  President,  Corporate  Counsel from March to August
1988. In April,  1997, he also became Managing  Director of the Advisor.  He has
been a Vice  President  and General  Counsel and Secretary of the Fund since its
formation. Mr. Howerton received a Bachelor of Arts Degree from California State
University  at Fresno in 1965 and a Juris Doctor  Degree from Harvard Law School
in 1968. He is a member of the State Bar of California and a licensed California
real estate broker.

Compliance with Section 16(a) of the Securities Exchange Act

Section 16(a) of the Securities  Exchange Act of 1934 ("Exchange  Act") requires
the officers and directors of a public company and persons who  beneficially own
more than ten percent of a  registered  class of its equity  securities  to file
reports of ownership and changes in ownership  with the  Securities and Exchange
Commission  ("SEC") on Forms 3, 4 and 5 and to submit  copies of these  Forms to
the  company.  Under  Section 16 of the  Exchange  Act,  the Fund is required to
identify  in this  Annual  Report  the name of each  person who failed to file a
required  Form on a timely basis and to set forth the number of late Forms,  the
number of  transactions  that were not  reported on a timely basis and any known
failure to file a required Form.

Based solely on its review of the copies of any Forms 3, 4 and 5 received by it,
and written  representations from certain reporting persons that no Forms 5 were
required for those persons, the Fund believes that during the most recent fiscal
year, all filing requirements under Section 16(a) of the Exchange Act applicable
to those  persons who were, at any time during the last fiscal year of the Fund,
officers,  Directors or greater than ten percent  Shareholders  of the Fund were
complied with.

Item 11.  Compensation.

Directors  and  officers  of the Fund who are  employed  by the  Advisor  or its
affiliates  received no compensation  from the Fund during 1998.  Because all of
the  officers of the Fund are  employed  by the  Advisor,  none of the  officers
received any  compensation  from the Fund. The aggregate  remuneration  paid for
services during 1998 to all Independent  Directors (as defined below) as a group
was $28,566,  including reimbursement of expenses incurred in attending meetings
and  conducting  the business of the Fund.  No Director  received  from the Fund
aggregate remuneration for services during 1998 in excess of $60,000,  including
reimbursement  for expenses  incurred in attending  meetings and  conducting the
business  of the Fund.  Those  Directors  who are not  officers  of the Fund nor
Directors  or  officers  of the  Advisor  or its  affiliates  (the  "Independent
Directors")  received a quarterly fee of $2,250 through June 30, 1998 and $1,250
thereafter  plus $500 for each meeting of the Board  attended in person and $100
for each meeting  attended by  telephone  conference  call.  All  Directors  are
entitled  to  reimbursement  of  expenses  incurred in  attending  meetings  and
carrying  on  the  business  of  the  Fund.  For  1998,  Mr.  Moeckel   received
reimbursement  of expenses of $2,120,  Mr.  Garlock  received  reimbursement  of
expenses of $2,052, and Mr. Rouse received reimbursement of expenses of $894.

The Advisor is compensated  for its services as advisor  pursuant to an Advisory
Agreement  originally between the Fund and Metric Realty. On March 27, 1997, the
Advisory  Agreement  was  assigned  by Metric  Realty  to,  and the  obligations
thereunder  were assumed by, SSR Realty  Advisors,  Inc., an affiliate of Metric
Realty.  This  Assignment  and  Assumption  was  unanimously   approved  by  the
Independent  Directors on March 27, 1997. 
                                       24
<PAGE>
The Advisory  Agreement  provides for, among other things,  a regular  quarterly
advisory fee, certain  transactional  fees and reimbursement of certain expenses
(see Item 13.  for the amount of such  reimbursements  for  1998).  Pursuant  to
Section 4.9 of the Fund's  Bylaws,  the  Independent  Directors  are required at
least  annually to reach a  determination  that the  Advisor's  compensation  is
reasonable  in relation to the nature and  quality of services  performed.  Such
determination  must be based on the  following  criteria  and  reflected  in the
records of the  Directors'  determination:  (i) the size of the  advisory fee in
relationship to the size,  composition and profitability of the invested assets;
(ii) the investment  opportunities generated by the Advisor; (iii) advisory fees
paid to other advisors by other real estate investment  trusts;  (iv) additional
revenues realized by the Advisor and its affiliates  through their  relationship
with the Fund,  (v) the quality and extent of services  and advice  furnished by
the Advisor;  (vi) the quality of the portfolio of the Fund in  relationship  to
the  investments  generated  by the Advisor for its own  account;  and (vii) all
other factors the Independent Directors may deem relevant. On February 22, 1999,
following due consideration of each of the foregoing  criteria,  the Independent
Directors  unanimously  approved the extension of the Advisory Agreement through
the period ending December 31, 1999.

The quarterly  advisory  fees paid to the Advisor  under the Advisory  Agreement
through March 31, 1998,  were  calculated at a rate of 0.75 percent per annum of
the appraised  value of the  properties.  Such fees were payable in full only if
the Fund made annualized  dividend payments equaling at least 8.5 percent of the
Shareholders' adjusted capital contribution, i.e., the original invested capital
paid by all  Shareholders for the shares reduced by the total dividends from the
sale or  disposition  of any  property  or the sale or  principal  repayment  of
securities.  To the extent that dividends paid for a calendar  quarter were less
than 8.5 percent on an annualized basis, the advisory fee payable to the Advisor
for that  quarter was to be  proportionately  reduced.  In  connection  with the
extension  of the  Advisory  Agreement  to cover  the  period  April 1,  1998 to
December  31, 1998,  in view of the Fund's  property  sales and the  uncertainty
regarding the amount of dividends  expected to be paid for the remainder of 1998
and the need for  services  by the Advisor to wind down the affairs of the Fund,
the  advisory  fees to be paid to the  Advisor  were  modified  to flat  fees of
$25,000  per  quarter,   not  related  to  dividends  paid.   Based  on  similar
considerations,  the advisory fees to be paid to the Advisor  during 1999 are to
be flat fees of $25,000 per quarter.

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

As of March 15, 1999, the percentage of the  outstanding  Shares of common stock
of the Fund beneficially owned by any Shareholder was less than five percent. As
of such date,  the only Director or officer of the Fund who  beneficially  owned
any Shares of the Fund was William F.  Garlock,  an  Independent  Director,  who
owned  3,127.7642  Shares  (which  amount  is  less  than  one  percent  of  the
outstanding  Shares of the Fund). An affiliate of the Advisor owns 21,506 Shares
of the Fund, which amount is less than one percent of the outstanding  Shares of
the Fund.  The  members of the Board of  Directors  of the Advisor are Thomas P.
Lydon,  Jr., Gerard P. Maus and Ralph F. Verni.  The last two named  individuals
are also officers of State Street  Research & Management  Company ("State Street
Research"),  a subsidiary of Metropolitan Life Insurance Company  ("Metropolitan
Life").

Item 13.  Certain Relationships and Related Transactions.

The Fund is a party to the Advisory Agreement with the Advisor. Thomas P. Lydon,
Jr.,  the  Chairman,  President  and Chief  Executive  Officer  of the Fund,  is
President and Chief Executive Officer and a Director of the Advisor.  William A.
Finelli, a Director and Vice President,  Chief Financial Officer of the Fund, is
Vice President,  Chief Financial Officer, Treasurer and Managing Director of the
Advisor.

The term of the  Advisory  Agreement  has been  extended  by the  action  of the
Independent Directors to December 31, 1999. Services provided to the Fund by the
Advisor include real estate disposition assistance, financial services and asset
management services.

The Fund's Advisory Agreement with the Advisor provides, among other things, for
payment of regular quarterly advisory compensation,  together with reimbursement
of  certain  expenses.  (See  "Item  11.  Compensation"  above  for  information
regarding this advisory compensation.) Under the Advisory Agreement, the Advisor
and its  affiliates  are  entitled to  reimbursement  for all costs  incurred in
providing  services  to  the  Fund.  These  reimbursable  costs  fall  into  two
categories:  direct costs and allocated common overhead costs. Such reimbursable
costs  include,  but are not  limited  to, the cost of rent,  goods or  material
furnished or incurred by the Advisor in connection with services  rendered to or
for the  benefit  of the Fund  based upon the  compensation  of the  individuals
involved and an  appropriate  share of overhead.  Such  reimbursable  costs also
include costs of legal,  accounting,  and other contracted services, and related
general and  administrative  costs.  As amended,  the  Advisory  Agreement  also
provides for payment to the Advisor of a flat fee of $25,000 per  quarter.  (See
"Item 11. Compensation" above).
                                       25
<PAGE>

During 1998, SSR Realty Advisors,  Inc. ("SSR") earned advisory fees of $75,000,
and  received or had the right to receive as of December  31,  1998,  $82,500 in
reimbursement of expenses,  pursuant to the Advisory Agreement. SSR did not earn
acquisition  or other  fees  from the Fund in 1998.  Additionally,  the Fund has
entered into an agreement  with State  Street  Research  pursuant to which State
Street Research manages the Fund's mortgage-backed  securities portfolio.  State
Street  Research is a subsidiary  of  Metropolitan  Life and an affiliate of the
Advisor.  During 1998,  State Street  Research  earned  $10,596 in fees from the
Fund.

The  above-described  arrangements  were  not  made  pursuant  to  arm's  length
negotiations.  In the opinion of the Independent Directors of the Fund, however,
the terms are as beneficial to the Fund as terms which could be obtained from an
independent  third party or parties for similar services and the compensation of
the Advisor and State Street  Research is  reasonable  in relation to the nature
and quality of services  performed  by the  Advisor and State  Street  Research,
respectively.

Due to the reduction in the lease and interest income resulting from the sale of
the Fund's assets,  the Fund's actual  expenses for 1998 and projected  expenses
for  1999,  respectively,  exceed  the  limitations  set  forth in the  original
offering Prospectus, dated June 30, 1989 (the " Prospectus"), and in the Amended
and Restated Bylaws of the Corporation, dated August 3, 1989 (the "Bylaws"). The
terms of both the  Prospectus  and the Bylaws  require  that, if in any year the
total operating  expenses of the Fund exceed the greater of (a) 2 percent of the
average  invested  assets  for that year or (b) 25% of the net  income  for that
year,  the  Independent  Directors  must  conclude that the level of expenses is
justified if the Advisor is to be fully reimbursed. The Bylaws also require that
a written  disclosure be made to Shareholders  that these  limitations have been
exceeded  and as to the  factors  considered  by the  Independent  Directors  in
reaching their conclusion.

In Written  Consents  executed  in the first  quarter of 1999,  the  Independent
Directors  unanimously  found that the actual level of expenses for 1998 and the
projected level of expenses for 1999, respectively,  was and is justified.  This
finding  was based  upon the fact that the  Fund's  expenses  have not  declined
proportionately with the reduction in the Fund's asset base and income resulting
from the  winding  up of the Fund.  The  Independent  Directors  authorized  the
Advisor to be fully  reimbursed for the 1998 expenses and,  provided no category
of  expense  incurred  in 1999 is more  than 10% in  excess  of the  projections
reviewed by such Directors, for the 1999 expenses.


                                     PART IV

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

(a)      1. and 2.  See Item 8 of this  Form  10-K  for  consolidated  financial
         statements  for  the  Fund,  notes  thereto,  and  financial  statement
         schedules.  (A table of contents to consolidated  financial  statements
         and   financial   statement   schedules  is  included  in  Item  8  and
         incorporated herein by reference.)

(b)      No  reports  on Form 8-K were  required  to be  filed  during  the last
         quarter covered by this Report.  On January 6, 1999,  subsequent to the
         close of the  quarter,  a Report  was filed on Form 8-K  reporting  the
         disposition of the Circle K store in Rubidoux, California.

(c)      Copies of these  filings may be obtained by contacting  the  Securities
         and Exchange  Commission  or via a written  request to the  Shareholder
         Representative  at SSR Realty  Advisors,  Inc., One California  Street,
         Suite 1400, San Francisco, California 94111.

(d)      List  of  Exhibits (numbered  in accordance with Item 601 of Regulation
         S-K):

         3.1      Restated   Articles  of   Incorporation   of  the  Registrant.
                  Incorporated by reference to Post-Effective Amendment No. 1 to
                  the Registrant's Form S-11  Registration  Statement filed with
                  the Commission on September 29, 1989.

         3.2      Amended and Restated Bylaws of the Registrant. Incorporated by
                  reference   to  Post   Effective   Amendment   No.  1  to  the
                  Registrant's Form S-11  Registration  Statement filed with the
                  Commission on September 29, 1989.

         10.1     Advisory Agreement dated June 29, 1989, between the Registrant
                  and Metric Realty. Incorporated by reference to Post Effective
                  Amendment  No. 1 to the  Registrant's  Form S-11  Registration
                  Statement filed with the Commission on September 29, 1989.

                                       26
<PAGE>
         10.2     First  Amendment to Advisory  Agreement dated January 1, 1991.
                  Incorporated by reference to the Registrant's Annual Report on
                  Form  10-K for 1990  filed  with the  Commission  on March 25,
                  1991.

         10.3     Second  Amendment to Advisory  Agreement  dated April 1, 1991.
                  Incorporated by reference to the Registrant's Annual Report on
                  Form  10-K for 1990  filed  with the  Commission  on March 25,
                  1991.

         10.4     Third  Amendment  to Advisory  Agreement  dated April 1, 1992.
                  Incorporated by reference to the Registrant's Annual Report on
                  Form 10-K for 1993 filed with the  Commission  on February 25,
                  1994.

         10.5     Fourth  Amendment to Advisory  Agreement  dated April 1, 1993.
                  Incorporated by reference to the Registrant's Annual Report on
                  Form 10-K for 1993 filed with the  Commission  on February 25,
                  1994.

         10.6     Securities  Management  Agreement dated June 29, 1989, between
                  the  Registrant and Federal Street  Financial  Advisors,  Inc.
                  Incorporated by reference to Post-Effective Amendment No. 1 to
                  the Registrant's Form S-11  Registration  Statement filed with
                  the Commission on September 29, 1989.

         10.7     Custodial  Services  Agreement  dated  July 17,  1989  between
                  Citibank,  N.A.,  Incorporated by reference to  Post-Effective
                  Amendment  No. 2 to the  Registrant's  Form S-11  Registration
                  Statement filed with the Commission on February 28, 1990.

         10.8     Indemnification   Agreements   dated  May  7,  1991,   between
                  Registrant and the following:  William G. Moeckel, Jr., Donald
                  K. Devine, William F. Garlock, W. Patrick McDowell, and Robert
                  M. Rouse. Incorporated by reference to the Registrant's Annual
                  Report on Form  10-K  for1993  filed  with the  Commission  on
                  February 25, 1994.

         10.9     Indemnification  Agreements  dated February 11, 1994,  between
                  Registrant and the  following:  Carroll  Archibald,  Robert A.
                  Fiddaman,  Margot M.  Giusti,  Herman H.  Howerton,  and Joyce
                  Jaber.  Incorporated by reference to the  Registrant's  Annual
                  Report on Form  10-K  for1993  filed  with the  Commission  on
                  February 25, 1994.

         10.10    Fifth  Amendment  to Advisory  Agreement  dated as of April 1,
                  1994.  Incorporated by reference to the Registrant's Report on
                  Form 8-K filed with the Commission on February 15, 1995.

         10.11    Sixth  Amendment  to Advisory  Agreement  dated as of April 1,
                  1995.  Incorporated by reference to the Registrant's Report on
                  Form 10-Q filed with the Commission on May 11, 1995.

         10.12    Seventh  Amendment to Advisory  Agreement dated as of April 1,
                  1996.  Incorporated by reference to the Registrant's Report on
                  Form 10-Q filed with the Commission on May 14, 1996.

         10.13    Assignment  and  Assumption  Agreement  dated  as of March 27,
                  1997  between  Metric  Realty and  SSR Realty  Advisors, Inc.,
                  relating to the Advisory Agreement.

         10.14    Agreement  for Purchase and Sale of Sam's Club,  dated May 15,
                  1996,  incorporated by reference to the Registrant's Report on
                  Form 8-K filed with the Commission on July 9, 1996, as amended
                  on Form 8-K/A, filed with the Commission on August 23, 1996.

         10.15    Agreement  for  Purchase  and Sale of  Pearle  Express  Store,
                  located  in  Orland  Park,  Illinois,   dated  May  16,  1996,
                  incorporated by reference to the  Registrant's  Report on Form
                  8-K filed with the  Commission on July 25, 1996, as amended on
                  Form 8-K/A, filed with the Commission on October 10, 1996.

         10.16    Agreement for Purchase and Sale of Circle K Store,  located in
                  Rancho  Cucamonga,   California,   dated  November  12,  1996,
                  incorporated by reference to the  Registrant's  Report on Form
                  8-K filed with the Commission on November 22, 1996, as amended
                  on Form 8-K/A, filed with the Commission on January 8, 1997.

         10.17    Earnest Money Contract for Stop N Go Store,  located in Harris
                  County (Houston),  Texas, dated December 3, 1996, incorporated
                  by reference to the Registrant's Report on Form 8-K filed with
                  the Commission on December 23, 1996, as amended on Form 8-K/A,
                  filed with the Commission on January 29, 1997.
                                       27
<PAGE>

         10.18    First  Amendment,  dated March 31, 1997,  to lease between the
                  Registrant and Pearle,  Inc., dated May 4, 1988.  Incorporated
                  by  reference  to the  Registrant's  Report on Form 10-Q filed
                  with the Commission on May 14, 1997.

         10.19    Eighth  Amendment to Advisory  Agreement  dated as of April 1,
                  1997,  between  Registrant  and  SSR  Realty  Advisors,   Inc.
                  Incorporated by reference to the  Registrant's  Report on Form
                  10-Q filed with the Commission on May 14, 1997.

         10.20    Earnest Money Contracts for Stop N Go Stores located in Clute,
                  Sealy, and Dallas,  Texas,  dated February 10, 1997,  February
                  18, 1997, and February 7, 1997, respectively,  incorporated by
                  reference  to the  Registrant's  Report on Form 8-K filed with
                  the  Commission  on March 14, 1997,  as amended on Form 8-K/A,
                  filed with the Commission on April 18, 1997.

         10.21    Earnest  Money  Contract for Stop N Go Store  located in Texas
                  City, Texas,  dated March 13, 1997,  incorporated by reference
                  to  the  Registrant's  Report  on  Form  8-K  filed  with  the
                  Commission on April 11, 1997, as amended on Form 8-K/A,  filed
                  with the Commission on April 18, 1997.

         10.22    Earnest  Money  Contract  for  Stop  N  Go  Store  located  in
                  Arlington,   Texas,  dated  June  5,  1997,   incorporated  by
                  reference  to the  Registrant's  Report on Form 8-K filed with
                  the Commission on November 10, 1997.

         10.23    Earnest  Money  Contract  for Stop N Go Stores  located in San
                  Antonio  (Fredericksburg  Blvd. and Babcock  Road),  Arlington
                  (Kennedale - No. Little School Road), Grand Prairie,  and Fort
                  Worth,   Texas,  dated  October  31,  1997,   incorporated  by
                  reference  to the  Registrant's  Report on Form 8-K filed with
                  the  Commission  on January 5, 1998, as amended on Form 8-K/A,
                  filed with the Commission on February 27, 1998.

         10.24    Earnest  Money  Contract  for  Stop  N Go  Stores  located  in
                  Marietta,  Georgia; Placentia and Fontana,  California,  dated
                  October  31,   1997,   incorporated   by   reference   to  the
                  Registrant's  Report on Form 8-K filed with the  Commission on
                  January 5, 1998,  as  amended  on Form  8-K/A,  filed with the
                  Commission on February 27, 1998.

         10.25    Earnest Money Contract for Haverty's  Furniture  Store located
                  in Plano,  Texas  dated  September  2, 1997,  incorporated  by
                  reference  to the  Registrant's  Report on Form 8-K filed with
                  the  Commission on November 3, 1997, as amended on Form 8-K/A,
                  filed with the Commission on March 10, 1998.

         10.26    Ninth Amendment to the Advisory Agreement dated as of April 1,
                  1998,  between the Registrant and SSR Realty  Advisors,  Inc.,
                  incorporated by reference to the  Registrant's  Report on Form
                  10-K filed with the Commission on March 31, 1998.

         10.27    Agreement  for  Purchase  and Sale of Wickes  Furniture  Store
                  located in  Torrance,  California  dated  November  19,  1997,
                  incorporated by reference to the  Registrant's  Report on Form
                  8-K,  filed with the Commission on January 9, 1998, as amended
                  on Form 8-K/A, filed with the Commission on June 23, 1998.

         10.28    Agreement  for  Purchase  and  Sale of  Pearle  Express  Store
                  located  in  Morrow,   Georgia   dated   February   18,   1998
                  incorporated by reference to the  Registrant's  Report on Form
                  8-K,  filed with the  Commission on March 13, 1998, as amended
                  on Form 8-K/A, filed with the Commission on April 22, 1998.

         10.29    Tenth Amendment to the Advisory Agreement  dated as of January
                  1, 1999, between the Registrant  and SSR Realty Advisors, Inc.

         16.1     Letter from Deloitte and Touche,  LLP dated  September 27, 194
                  to the Securities  and Exchange  Commission.  Incorporated  by
                  reference  to the  Registrant's  Report on form 8-K filed with
                  the Commission on September 28, 1994.

         20.1     Letter  dated  February  15,  1995  from   Registrant  to  its
                  Shareholders.  Incorporated  by reference to the  Registrant's
                  Report on Form 8-K filed with the  Commission  on February 15,
                  1995.

                                       28
<PAGE>

         20.2     Letter  dated  February  15,  1996  from   Registrant  to  its
                  Shareholders.  Incorporated  by reference to the  Registrant's
                  Report on Form 8-K filed with the  Commission  on February 15,
                  1996.

         20.3     Letter  dated  September  26,  1997  from  Registrant  to  its
                  Shareholders.  Incorporated  by reference to the  Registrant's
                  Report on Form 8-K filed with the  Commission on September 26,
                  1997.

         20.4     Letter  dated   January  12,  1998  from   Registrant  to  its
                  Shareholders.  Incorporated  by reference to the  Registrant's
                  Report on Form 8-K filed with the  Commission  on January  12,
                  1998.

         20.5     Letter  dated  February  27,  1998  from   Registrant  to  its
                  Shareholders regarding reimbursement of expenses. Incorporated
                  by  reference  to the  Registrant's  Report on Form 10-K filed
                  with the Commission on March 31, 1998.

                                       29

<PAGE>


                                   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.

                                   REGISTRANT

                                    METRIC INCOME TRUST SERIES, INC.,
                                    a California Corporation


                                        By:     /s/ Thomas P. Lydon, Jr.
                                               --------------------------   
                                               Thomas P. Lydon, Jr.
                                               President, Chairman of the Board,
                                               and Chief Executive Officer
                                               (Principal Executive Officer)

                                       Date:   March 24, 1999
                                               --------------------------

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 date indicated.


By:      /s/ William A. Finelli        By:      /s/ Robert M. Rouse
         -----------------------               -----------------------
         William A. Finelli                    Robert M. Rouse
         Director                              Director


By:      /s/ William G. Moeckel        By:      /s/ William F. Garlock
         -----------------------                -----------------------
         William G. Moeckel                     William F. Garlock
         Director                               Director



Date:    March 24, 1999         
         -----------------------


                                       30