<PAGE>   1
                SECURITIES AND EXCHANGE COMMISSION         Exhibit Index
                            Washington, D.C. 20549         on Page 

                                    FORM 10-K

                 Annual Report Pursuant to Section 15(d) of the
                         Securities Exchange Act of 1934

       /X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                      EXCHANGE ACT OF 1934 (FEE REQUIRED)

For the fiscal year ended December 31, 1995

                         Commission File Number 1-10328

                            BRADLEY REAL ESTATE, INC.
                            ------------------------- 
            (Exact name of Registrant as specified in its charter)

                   Maryland                         04-6034603
                   --------                         ----------
      (State of Organization)     (I.R.S. Employer Identification No.)

        699 Boylston Street, Boston, Massachusetts               02116
        ------------------------------------------               -----
       (Address of Principal Executive Offices) (ZIP Code)

       Registrant's telephone number, including area code (617) 867-4200

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

  Title of each class         Name of each exchange on which registered 
  -------------------         -----------------------------------------
     Common Stock                               New York Stock Exchange

     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, and (2) 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. [ ]

     Aggregate market value of 18,608,895 Shares of Common Stock believed to be
held by non-affiliates of the registrant based upon the $14.875 closing price
for such Shares on the New York Stock Exchange on March 21, 1996: $276,807,213.

     Approximate number of Shares outstanding as of March 21, 1996: 18,658,515

DOCUMENTS INCORPORATED BY REFERENCE

     Registrant expects to file no later than April 1, 1996 its definitive Proxy
Statement for the 1996 Annual Meeting of Stockholders and hereby incorporates by
reference portions of said Proxy Statement into Part III hereof.


<PAGE>   2

                                     PART I
                                     ------

ITEM 1.  BUSINESS
         --------

     Bradley Real Estate, Inc. (the "Company") is one of the nation's oldest
continuously qualified real estate investment trusts ("REIT") under the Internal
Revenue Code. The Company focuses on the ownership and operation of community
shopping centers, primarily in the Midwestern and, to a lesser extent, the
Northeastern regions of the United States. Bradley's objective is to enhance the
operating performance and value of its portfolio through renovations, expansion
and leasing strategies designed to meet the needs of an evolving retail
marketplace. The Company also seeks to create value through the acquisition of
properties which can benefit from the Company's expertise in shopping center
management, renovation and expansion. At December 31, 1995, the Company owned 17
properties consisting of approximately 3.0 million square feet of rentable
retail space.

     Originally organized in 1961 as a Massachusetts business trust under the
name Bradley Real Estate Trust and externally advised by an outside advisor, in
October 1994 the Company reorganized as a Maryland corporation and in January
1995 acquired the REIT advisory business of the external advisor. The
acquisition resulted in the termination of an advisory arrangement extending
through August 1999, and permitted the Company to become self-administered. In
January 1995, the Company also brought in-house the property management and
leasing operations of a significant number of its properties by hiring the
management team previously employed by an independent firm that had managed the
Company's Minnesota properties.

     On October 30, 1995, the Company entered into a merger agreement to acquire
Tucker Properties Corporation ("Tucker"), a REIT whose properties also consist
primarily of community shopping centers located in the Midwestern United States.
The merger closed on March 15, 1996, and as a result, the Company presently owns
31 properties aggregating approximately 7.4 million square feet of rentable
space in 11 states.

     During 1995, the Company focused its efforts towards three strategic
objectives: to continue managing its existing properties to compete successfully
in a challenging retail environment, to increase its equity base and to continue
its growth through opportunistic acquisitions.

     Despite a competitive retail climate, the properties owned by the Company
at December 31, 1995 were at a 93% occupancy rate. During 1995, the Company
negotiated 234,000 square feet of new and renewed leases, representing 7.6% of
the aggregate portfolio, of which 189,000 square feet were new leases. The most
significant tenant additions during the year were two new anchor tenants, Barnes
& Noble Superstore and HomePlace, at the expanded and modernized Har Mar Mall in
Roseville, Minnesota. The Company also expanded Sun Ray Center in St. Paul,
Minnesota, completing construction of 6,000 square feet of new space for two 
new tenants, Boston Market and Bruegger's Bagels. During 1995 and going 
forward, the Company continues to work on leasing and expansion at Burning 
Tree Plaza in Duluth, Minnesota, and filling a significant vacancy at Westview
Center in Hanover Park, Illinois.

     The Company effected issuances of 182,500 shares in April 1995, the
proceeds of which were applied to the cash portion of the purchase price of a
small shopping center in 



                                       1

<PAGE>   3

Santa Fe, New Mexico acquired from a family partnership controlled by William 
D. Sanders, and of 2,500,000 shares in July 1995 in an underwritten public 
offering whose proceeds were used to pay-down debt. The resulting reduction in 
the Company's percentage of debt to total market capitalization to less than 
20% after the offering positioned the Company to consider further acquisitions 
of properties or portfolios of properties.

     During 1995, management of the Company considered several possible
acquisitions of additional retail properties, although only the acquisition of
the Santa Fe property was completed during the year, as management focused on
the extensive investigation and planning activities and negotiations involved in
the Tucker transaction that culminated with the execution of a merger agreement
with Tucker on October 30, 1995. The Company believes that the acquisition of
Tucker, which closed in March 1996, represents the purchase of a solid Midwest
community shopping center portfolio at a favorable yield, adds to the Company's
near-term earnings outlook and affords it greater opportunities to expand
top-line growth through future acquisitions. Strategically, the acquisition
increases the Company's operating efficiencies, substantially increases market
capitalization and the number of the Company's outstanding shares, thereby 
enhancing share liquidity, and significantly diversifies the Company's property 
and tenant base. The acquisition does, however, also significantly increase the 
Company's percentage of debt to total market capitalization, to approximately 
44%, and results in the acquisition of some properties with future tenancy and 
operating challenges that the Company believes are more than offset by the 
advantages of the transaction. The background, advantages, challenges and other 
considerations of the Tucker acquisition were set forth in detail in the
Company's February 15, 1996 proxy statement for the special meeting of
stockholders of the Company held on March 14, 1996 to consider the acquisition
(the "Merger Proxy Statement"). Following approval by the stockholders of the
Company at that meeting (and by the stockholders of Tucker at a separate meeting
on the same day), the acquisition was completed on March 15, 1996, with the
issuance by the Company of 7,428,202 shares of its common stock valued at $13.96
per share, in cancellation of all outstanding Tucker shares, payment of certain
transaction costs and the assumption of all of Tucker's liabilities.

     Tucker held title to its properties through two partnerships; eight
properties through Tucker Operating Limited Partnership ("TOP"), in which Tucker
had a 95.9% general partnership interest, and six properties through Tucker
Financing Partnership ("TFP"), a general partnership of which TOP owned 99% and
a wholly-owned Tucker corporate subsidiary owned the remaining 1%. The
properties owned by TFP secure a $100 million mortgage note due in September
2000 issued by TFP (the "Tucker REMIC Note"). Upon the acquisition of Tucker,
the Company succeeded to Tucker's interest in TOP and the wholly-owned Tucker
corporate subsidiary, and the name "Bradley" was substituted for "Tucker" in
each subsidiary and partnership. A diagram of the resulting structure appears at
page 31 of the Merger Proxy Statement.

     Concurrently with the Tucker acquisition, on March 15, 1996 the Company
entered into a new $150 million unsecured revolving credit facility with The
First National Bank of Boston. The line bears interest at the lower of the
bank's base rate or 1.75% over LIBOR. The rates available under the line become
more favorable in the event the Company meets certain loan to value tests or
receives an investment grade unsecured debt rating. In addition to replacing
outstanding borrowings under the Company's and Tucker's previously outstanding
secured lines of credit, the facility is available for the acquisition,
development, renovation and expansion of new and existing properties (including
but not limited to capital 



                                       2

<PAGE>   4

improvements, tenant improvements and leasing commissions), and for other 
working capital purposes. The new line of credit contains certain financial and 
operational covenants that, among other provisions, limit the amount of secured 
and unsecured indebtedness the Company may have outstanding at any time to a 
percentage of the Company's Consolidated Market Value as defined, and provides 
for the maintenance of certain financial tests including minimum net worth and 
debt service coverage requirements. The Company believes that such covenants 
will not adversely affect the Company's business or the operation of its 
properties.

     The Company continues to evaluate a number of additional acquisition
opportunities, as management believes that conditions remain favorable for the
acquisition of additional shopping center properties. Such acquisitions may be
effected through exchanges for existing properties, exchanges for limited
partnership interests in the newly acquired operating partnership or for newly
issued shares of the Company's common stock, joint ventures and similar
arrangements, as well as for cash under the line of credit or other funds which
may be raised through private or public issuances of debt or equity depending
upon market conditions and the Company's capital situation at the time.

     At December 31, 1995, the Company had 16 employees. Following the
acquisition of Tucker, the Company presently has approximately 75 employees.
Most of the new employees are property management personnel who will continue to
manage the properties acquired from Tucker; no member of Tucker's former senior
management is an employee of the Company.

The Company's Properties
------------------------

     Management believes the Company's portfolio is made up primarily of 
well-established, strategically located shopping centers, in suburban 
communities near major metropolitan areas. The Company's shopping centers have 
good visibility and access from major traffic arteries.




                                       3
<PAGE>   5

<TABLE>

     The following table and notes describe the Company's properties as of
December 31, 1995:
<CAPTION>
                                                                                                                 BASE LEASE
                                               RENTABLE     PERCENT LEASED AT                                      OPTION
                                     YEAR       SQUARE        DECEMBER 31                               SQUARE   EXPIRATION
SHOPPING CENTERS                   ACQUIRED      FEET       1995      1994      MAJOR TENANT(S)          FEET      DATE
----------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>        <C>         <C>       <C>       <C>                     <C>        <C>
Har Mar Mall(2)(19)                  1992       428,000      86%       90%      HomePlace                53,000    2011/2026
Roseville, Minnesota                                                            Barnes & Noble           44,856    2010/2025
                                                                                Marshalls                34,858    1998/2013
                                                                                T.J.Maxx                 25,025    1998/2008
                                                                                General Cinema           22,252    2001/2021
                                                                                General Cinema           19,950    2000/2010
                                                                                Michaels Stores          17,907    2003/2018
----------------------------------------------------------------------------------------------------------------------------
Sun Ray Shopping Center(3)           1961       254,000      97%       97%      J.C. Penney              40,451    1999/2009
St. Paul, Minnesota                                                             Marshalls                26,256    2005/2020
                                                                                T.J. Maxx                23,955    2000/2005
                                                                                Kowalski's               23,218    2000/2010
                                                                                Michaels Stores          18,127    2004/2019
----------------------------------------------------------------------------------------------------------------------------
Terrace Mall(4)                      1993       140,000      92%       90%      Rainbow Foods            59,232    2013/2033
Robbinsdale, Minnesota                                                          North Memorial           32,000    1999/2004
----------------------------------------------------------------------------------------------------------------------------
Richfield Hub Shopping Center(5)     1988       138,000      97%       96%      Marshalls                26,785    2003/2008
Richfield, Minnesota                                                            Michaels Stores          24,235    1999/2014
----------------------------------------------------------------------------------------------------------------------------
Westwind Plaza(6)                    1994        88,000      96%      100%      Northern Hydraulics      18,165    2002/2012
Minnetonka, Minnesota
----------------------------------------------------------------------------------------------------------------------------
Burning Tree Plaza(7)                1993       110,000     100%       98%      T.J. Maxx                30,000    2004/2019
Duluth, Minnesota                                                               Best Buy                 28,000    1999/2014
                                                                                Northwest Fabrics        17,682    1999/2004
----------------------------------------------------------------------------------------------------------------------------
Hub West Shopping Center(8)          1991        77,000     100%      100%      Rainbow Foods            50,817    2012/2017
Richfield, Minnesota                                                            U.S. Swim & Fitness      26,185    2001/2003
----------------------------------------------------------------------------------------------------------------------------
White Bear Hills(9)                  1993        67,000     100%      100%      Gateway Foods            45,679    2011/2021
White Bear Lake, Minnesota
----------------------------------------------------------------------------------------------------------------------------
Rivercrest Center(10)(19)            1994       429,000     100%      100%      Omni Foods               87,937    2011/2031
Crestwood, Illinois                                                             Venture                  79,903    2012/2032
                                                                                Sears Roebuck and Co.    55,000    2001/2011
                                                                                T.J. Maxx                34,425    2004/2019
                                                                                PETsMART                 31,639    2009/2030
                                                                                Best Buy                 25,000    2008/2023
                                                                                Office Max               24,000    2007/2017
                                                                                Hollywood Park           15,000    2000/2005
----------------------------------------------------------------------------------------------------------------------------
Westview Center(11)(19)              1993       326,000      78%       81%      Cub Foods                67,163    2009/2029
Hanover Park, Illinois                                                          Marshalls                34,302    2004/2019
----------------------------------------------------------------------------------------------------------------------------
Crossroads Center(12)                1992       242,000      93%       99%      K-Mart (ground lease)    96,268    2001/2020
Fairview Heights, Illinois                                                      T.J. Maxx                25,200    1998/2013
----------------------------------------------------------------------------------------------------------------------------
Grandview Plaza(13)                  1971       314,000      98%       97%      Home Quarters            84,611    2013/2033
Florissant, Missouri                                                            Schnucks                 68,025    2011/2026
                                                                                J.C. Penney               63,892     1996
                                                                                Walgreens                15,984      2043
----------------------------------------------------------------------------------------------------------------------------
St. Francis Plaza(14)                1995        30,000     100%       N/A      Walgreens                14,950      2043
Santa Fe, New Mexico                                                            Wild Oats                14,850    2006/2066
----------------------------------------------------------------------------------------------------------------------------
Hood Commons(15)                     1973       216,000      97%       98%      Shaw's                   58,258    2013/2033
Derry, New Hampshire                                                            Ames                     50,000    2000/2005
                                                                                Decelle                  26,353    1999/2014
----------------------------------------------------------------------------------------------------------------------------
Augusta Plaza(16)                    1971       152,000      89%       89%      K-Mart                   85,808    1997/2012
Augusta, Maine
----------------------------------------------------------------------------------------------------------------------------
RETAIL/OFFICE BUILDING
----------------------
585 Boylston Street(17)              1961        22,000      98%      100%      CVS Pharmacy              7,582    2001/2016
Boston, MA                                                                      
----------------------------------------------------------------------------------------------------------------------------
GROUND LEASE
------------
501-529 Nicollet Ave.(18)            1969        51,000     100%      100%      Brookfield               51,000    2086
Minneapolis, MN
----------------------------------------------------------------------------------------------------------------------------

</TABLE>


                                       4


<PAGE>   6

(1) Major tenants are defined as tenants occupying 15,000 square feet or greater
    of the rentable square footage with the exception of 585 Boylston Street and
    St. Francis Plaza. In some cases, the named tenant occupies the premises as
    a sublessee. The Company views "anchor" tenants as a subset of the major
    tenants at each property, generally consisting of those tenants which also
    represent more than 15% of the property's rentable square footage.

(2) At Har Mar, the lease to HomePlace provides current minimum annual rent of
    $584,592 upon rent commencement at the completion of tenant fit up which
    occurred in the first quarter of 1996. The lease to Barnes & Noble provides
    for current minimum annual rent of $641,628 upon rent commencement at the
    completion of tenant fit up which occurred in the third quarter of 1995. The
    lease to Marshalls provides for current minimum annual rent of $155,400. The
    lease to T. J. Maxx provides current minimum annual rent of $168,920. The
    22,252 square foot lease to General Cinema provides current minimum annual
    rent of $201,000 and the 19,950 square foot lease to General Cinema provides
    current minimum annual rent of $17,100. The lease to Michaels Stores
    provides current minimum annual rent of $111,919. There are four tenants,
    occupying an aggregate of 11,606 square feet, which are tenants-at-will. In
    1996 three leases for 4,906 square feet will expire. The Company expects
    that the majority of these leases will be renewed.

(3) At Sun Ray, the lease to J.C. Penney expires in 1999, with the tenant having
    the option to terminate upon 12 months' notice, and provides current minimum
    annual rent of $146,812. The lease to Marshalls provides current minimum
    annual rent of $182,000. The lease to T.J. Maxx provides current minimum
    annual rent of $162,968. The lease to Kowalski's provides current minimum
    annual rent of $58,045. The lease to Michaels Stores provides current
    minimum annual rent of $109,728. There are four tenants, occupying an
    aggregate of 8,810 square feet, which are tenants-at-will. In 1996, six
    leases for 29,451 square feet will expire. The Company expects that the
    majority of these leases will be renewed.

(4) At Terrace, the lease to Rainbow Foods provides current minimum annual rent
    of $444,240. North Memorial Medical Center's lease provides current minimum
    annual rent of $180,012. There are no leases expiring in 1996.

(5) At Richfield Hub, the lease to Marshalls provides current minimum annual
    rent of $174,103. The lease to Michaels Stores provides current minimum
    annual rent of $121,175. There are six tenants, occupying an aggregate of
    6,335 square feet, which are tenants-at-will. In 1996, four leases totaling
    6,940 square feet will expire. The Company expects that the majority of
    these leases will be renewed.

(6) At Westwind the lease to Northern Hydraulics provides current minimum annual
    rent of $109,898. In 1996, five leases for 12,200 square feet, will expire.
    The Company expects the majority of these leases to be renewed.

(7) At Burning Tree, the T.J. Maxx lease provides $225,000 in current minimum
    annual rent. The lease to Best Buy provides $182,000 in current minimum
    annual rent. The lease to Northwest Fabrics provides current minimum annual
    rent of $88,410. There is one tenant, occupying 1,181 square feet, which is
    a tenant-at-will. In 1996, one lease for 5,935 square feet will expire.




                                       5
<PAGE>   7

(8)  At Hub West, which is adjacent to Richfield Hub, the lease to Rainbow Foods
     provides current minimum annual rent of $464,976. The lease to U. S. Swim &
     Fitness provides current minimum annual rent of $325,117. None of the
     present lease agreements are scheduled to expire until 1999.

(9)  At White Bear Hills, the Gateway Foods lease provides current minimum 
     annual rent of $239,815. In 1996, three leases for 3,626 square feet will 
     expire.

(10) At Rivercrest, the lease to Omni Foods provides current minimum annual rent
     of $678,873. The lease to Venture provides current minimum annual rent of
     $299,636. The lease to Sears Roebuck and Co. provides current minimum 
     annual rent of $261,250. The lease to T.J. Maxx provides current minimum 
     annual rent of $275,400. The lease to PETsMART provides current minimum 
     annual rent of $256,593. The lease to Best Buy provides current minimum 
     annual rent of $168,750. The lease to OfficeMax provides current minimum 
     annual rent of $192,000. The lease to Hollywood Park provides current 
     minimum annual rent of $131,698. One tenant occupying 6,390 square feet is 
     a tenant-at-will. In 1996, four leases for 16,137 square feet will expire. 
     The Company expects the majority of these leases will be renewed.

(11) At Westview, the lease to Cub Foods provides current minimum annual rent of
     $513,125. The lease to Marshalls provides current minimum annual rent of
     $257,265. One tenant occupying 1,800 square feet is a tenant-at-will. In
     1996, two leases for 3,400 square feet will expire. The Company does not
     expect these leases to be renewed.

(12) At Crossroads Center, the lease to K-Mart is a ground lease that provides
     current minimum annual rent of $38,000. The lease to T.J. Maxx provides
     current minimum annual rent of $163,800. In 1996, two leases for 5,880
     square feet will expire, one which the Company believes will be renewed.

(13) At Grandview Plaza, the lease to Home Quarters Warehouse provides $676,888
     in current minimum annual rent. The Schnucks lease provides current minimum
     annual rent of $509,903. The lease to J.C. Penney provides $365,487 in
     current minimum annual rent and expires in 1998; however the tenant has
     exercised its option to accelerate the expiration of the lease term to 
     March 1996. The lease to Walgreens provides current minimum annual rent of
     $181,255. One tenant occupying 2,000 square feet is a tenant-at-will. In
     1996, seven leases for 80,181 square feet will expire. The Company expects
     the majority of these leases will be renewed.

(14) St. Francis Plaza was purchased in April 1995 for $5.2 million. The lease
     to Walgreens provides current minimum annual rent of $149,500. The lease to
     Wild Oats provides current minimum annual rent of $207,500. There are no
     leases expiring until 2006.

(15) At Hood Commons, the lease to Shaw's provides current minimum annual rent
     of $466,064. The lease to Ames provides current minimum annual rent of
     $113,880. The lease to Decelle provides current minimum annual rent of
     $210,824. There are four tenants occupying an aggregate of 6,785 square
     feet, which are tenants-at-will. In 1996, five leases aggregating 8,647
     square feet will expire. The Company expects the majority of these leases 
     to be renewed.





                                       6

<PAGE>   8


(16) At Augusta Plaza, the lease to K-mart provides current minimum annual rent
     of $162,792. One tenant occupying 8,222 square feet is a tenant-at-will. In
     1996, five leases for 12,080 square feet will expire. The Company expects
     the majority of these leases will be renewed.

(17) At 585 Boylston Street, the lease to CVS Pharmacy provides current minimum
     annual rent of $434,000.

(18) At 501-529 Nicollet Avenue, the unsubordinated ground lease of 51,000
     square feet of land to Brookfield Development (California), Inc. is for
     a 99-year term that commenced in 1987. This lease provides for stepped 
     minimum rents over its term, with the actual cash paid in each year
     through  1993 being $800,000, in 1994 being $950,000, in 1995 being
     $990,000 and thereafter increasing by $40,000 each year through 1998 and
     by $50,000 each year through 2003, following which minimum rent reverts to
     $1,100,000 annually for all subsequent years. Under the "leveling" method
     of averaging contractual minimum rent payments over the life of the lease,
     the minimum annual rent recognized as income by the Company for financial
     reporting purposes each year is $1,089,000. The ground tenant has
     constructed an approximately 670,000 square foot mixed-use retail and
     office tower, known as Dain Bosworth Plaza, on the site. Major tenants of
     the building include Neiman Marcus, Dain Bosworth and Marquette Bank.

(19) Har Mar Mall, Westview Center, and Rivercrest each represented 10% or more
     of the historic book value of the Company's total assets at December 31,
     1995 or accounted for 10% or more of the Company's gross revenues in 1995.
     The following tables set forth certain supplemental information with 
     respect to these properties to the extent that such information is 
     available to the Company:





                                       7

<PAGE>   9

<TABLE>

a. Percentage occupied at December 31 for the last five years:
<CAPTION>
                         Har Mar      Westview      Rivercrest
                         -------      --------      ----------
          <S>              <C>           <C>           <C>
          1995             86%           74%           100%
          1994             79%           81%           100%
          1993             83%           95%             *
          1992             86%            *              *
          1991              *             *              *
<FN>
* Information not available prior to acquisition by the Company
</TABLE>


<TABLE>
b.  The average  effective annual rentals per square foot for 1995, 1994, and 
     1993 were as follows:
<CAPTION>

                       Har Mar      Westview      Rivercrest
          <S>          <C>           <C>            <C>
          1995         $13.12        $14.65         $12.71
          1994         $15.51        $17.50         $14.77
          1993         $14.88        $15.88           *
<FN>
* Information not available prior to acquisition by the Company
</TABLE>

<TABLE>

c. Leases in effect at December 31, 1995 expiring over each of the next ten 
   years, assuming no tenants exercise renewal options:
<CAPTION>

                                  Har Mar Mall
                                  ------------

                          No. of         Square            Annual
                          Leases         Feet           Minimum Rent
                          ------         -----          ------------
        <S>                 <C>          <C>              <C>
        1996                 3            4,906           $ 64,191
        1997                 8           35,881            258,096
        1998                10           84,186            554,621
        1999                 4           19,935            188,456
        2000                10           40,749            240,050
        2001                 5           29,248            321,228
        2002                 1            2,015             16,120
        2003                 4           21,840            193,700
        2004                 2            9,319            106,170
        2005                 2            4,516             85,912

</TABLE>




                                       8
<PAGE>   10

<TABLE>
                           Rivercrest Shopping Center
                           --------------------------
<CAPTION>

                          No. of         Square            Annual
                          Leases         Feet           Minimum Rent
                          ------         -----          ------------
        <S>                   <C>        <C>              <C> 
        1996                  4          16,137           $169,407
        1997                  3           9,900            157,048
        1998                  3           4,497             76,262
        1999                  -               -                  -
        2000                  2          16,977            192,682
        2001                  4          78,500            477,500
        2002                  3          11,952            147,258
        2003                  -               -                  -
        2004                  2          37,398            328,289
        2005                  -               -                  -
</TABLE>

<TABLE>
                                 Westview Center
                                 ---------------

                          No. of         Square            Annual
                          Leases         Feet           Minimum Rent
                          ------         -----          ------------
        <S>                   <C>         <C>              <C>
        1996                  2           3,400            $ 56,200
        1997                  -               -                   -
        1998                  4          13,371             217,080
        1999                  2          16,500             166,500
        2000                  6          32,422             402,980
        2001                  5          11,085             224,932
        2002                  -               -                   -
        2003                  1           6,490              94,395
        2004                  1          34,302             274,416
        2005                  5          44,432             509,480
</TABLE>

<TABLE>

     Annual minimum future rentals to be received under non-cancelable operating
leases in effect at December 31, 1995 for the properties included in the
portfolio at December 31, 1995 and the number of leases that will expire, the 
square feet covered by such leases and the current minimum annual rent under
such expiring leases for the next ten years are as follows:
<CAPTION>

                                                       Leases Expiring
                                           -----------------------------------------
    Year Ending           Minimum           Number                        Minimum
    December 31         Future Rents       of Leases    Square Feet     Future Rents
    -----------         ------------       ---------    -----------     ------------
        <S>              <C>                  <C>         <C>             <C>
        1996             $23,178,000          48          191,070         $1,733,443
        1997              21,637,000          53          254,103          1,882,249
        1998              19,595,000          36          181,320          1,611,322
        1999              17,734,000          39          302,569          2,419,197
        2000              15,950,000          44          266,467          2,034,196
        2001              13,932,000          24          290,017          2,357,818
        2002              12,618,000           9           43,834            424,894
        2003              12,039,000           9           73,115            672,361
        2004              11,010,000          11          146,410          1,303,010
        2005               9,870,000          12           85,194            924,754

</TABLE>




                                       9

<PAGE>   11

<TABLE>

     The following table and notes describe the properties acquired upon the
acquisition of Tucker on March 15, 1996:

<CAPTION>
                                                      PERCENT                                                 BASE LEASE/
                              YEAR     RENTABLE       LEASED AT                                     SQUARE       OPTION
     SHOPPING CENTERS      ACQUIRED(1) SQUARE FEET   DEC. 31, 1995    MAJOR TENANTS (2)              FEET    EXPIRATION DATE
     ----------------      --------    -----------   -------------    -------------                 ------   ---------------
                                        
<S>                           <C>        <C>           <C>            <C>                           <C>         <C> 
ILLINOIS
Commons of Chicago Ridge      1988       286,000       76%            T.J. Maxx                     25,082     1998/2008
Chicago Ridge, Illinois                                               Marshalls                     27,000     1999/2014
                                                                      Office Depot                  27,680     2002/2012
                                                                      Cineplex Odeon                25,000     2008/2018
                                                                      Michaels Stores               17,550     1999/2004
------------------------------------------------------------------------------------------------------------------------
Chicago Ridge Annex           1995        42,000       53%            Pep Boys                      22,354     2015/2035
Chicago Ridge, Illinois
------------------------------------------------------------------------------------------------------------------------
Commons of Crystal Lake*      1993       269,000(3)    98%            Jewel/Osco                    59,804     2007/2042
Crystal Lake, Illinois                                                Handy Andy                    68,800       2018
                                                                      Venture                       81,338       2006
                                                                      (not owned)
------------------------------------------------------------------------------------------------------------------------
Heritage Square*              1992       212,000      100%            Montgomery Ward              111,016     2013/2033
Naperville, Illinois                                                  Circuit City                  28,351     2009/2024
                                                                      Stroud's                      26,703     2003/2013
------------------------------------------------------------------------------------------------------------------------
Meadows Town Mall             1988       382,000       81%            T.J. Maxx                     24,000     1999/2009
Rolling Meadows, Illinois                                             Waccamaw                     108,000     1999/2009
                                                                      Elek-Tek                      32,000     2001/2011
                                                                      Women's Club                  20,478     1998/2008
------------------------------------------------------------------------------------------------------------------------
Sheridan Village*             1990       301,000       97%            Bergner's Dept.              162,852     2006/2021
Peoria, Illinois                                                      Cohen Furniture               16,600       2007
------------------------------------------------------------------------------------------------------------------------
High Point Centre             1993       240,000      100%            Cub Foods                     62,000     2008/2033
Lombard, Illinois                                                     T.J. Maxx                     25,200     1998/2013
                                                                      Office Depot                  36,416     2003/2013
                                                                      Macfrugal's                   17,040     2006/2016
------------------------------------------------------------------------------------------------------------------------
Rollins Crossing              1995        62,000(4)   100%            Sears Hardware                21,083     2005/2020
Round Lake Beach, Illinois                                            Super K-Mart                 190,000       2033
                                                                      (not owned)
------------------------------------------------------------------------------------------------------------------------
INDIANA
Speedway SuperCenter*         1993       530,000       98%            Kohl's                        75,000     1999/2019
Speedway, Indiana                                                     Kroger                        59,515     2013/2043
                                                                      Sears Roebuck & Co.           30,825     2004/2024
                                                                      Old Navy                      15,000     2005/2010
                                                                      Kittles                       25,320     2000/2010
                                                                      PETsMART                      21,781     2002/2012
                                                                      Factory Card Outlet           16,675     2003/2013
                                                                      Lindo Super Spa               16,589     2000/2010
------------------------------------------------------------------------------------------------------------------------
The Village                   1993       355,000       97%            J.C. Penney                   60,600     1999/2004
Gary, Indiana                                                         Goldblatt's                   55,000     2000/2005
                                                                      McCrory's                     24,500     1998/2003
                                                                      Jacobsens                     22,896       1996
                                                                      Post-Tribune Publishing       19,246       1996
                                                                      Indiana Employment            18,050     1996/2000
------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       10

<PAGE>   12

<TABLE>
<CAPTION>

                                                       PERCENT LEASED                                         BASE LEASE/
                               YEAR     RENTABLE           AT                                       SQUARE      OPTION
      SHOPPING CENTERS       ACQUIRED  SQUARE FEET     DEC. 31, 1995       MAJOR TENANTS(1)          FEET   EXPIRATION DATE
      ----------------       --------  -----------     -------------       ----------------         ------  ---------------
<S>                            <C>      <C>                 <C>            <C>                     <C>         <C>
Washington Lawndale Commons*   1992     333,000             99%            Target                   83,110     2005/2025
Evansville, Indiana                                                        Sears Homelife           34,527     2003/2018
                                                                           Allied Sporting Goods    20,285     1997/2012
                                                                           Kuester's                40,857       1996
                                                                           Jo-Ann Fabrics           15,262     2003/2013
                                                                           Books-A-Million          20,515     2002/2008
------------------------------------------------------------------------------------------------------------------------
TENNESSEE
Williamson Square              1993     335,000             96%            Wal-Mart                117,493     2008/2038
Franklin, Tennessee                                                        Kroger                   63,986     2008/2038
                                                                           Carmike Cinemas          29,000       2008
------------------------------------------------------------------------------------------------------------------------
WISCONSIN
Mequon Pavilions               1994     212,000             98%            Kohl's Food Emporium     45,697     2010/2050
Mequon, Wisconsin                                                          Furniture Clearance      19,900       1997
------------------------------------------------------------------------------------------------------------------------
KENTUCKY
StonyBrook Center              1991     136,000             96%            Kroger                   79,625     2021/2046
Louisville, Kentucky
------------------------------------------------------------------------------------------------------------------------
RETAIL/OFFICE BUILDINGS
One North State*               1990     640,000             95%            First Chicago           296,782       2003
Chicago, Illinois                                                          Arthur Andersen         126,533     2003/2013 (5)
                                                                           T.J. Maxx                77,675     2001/2011
                                                                           Filene's Basement        50,000     2002/2012
                                                                           Int'l Academy of Design  27,270     2003/2008
------------------------------------------------------------------------------------------------------------------------
<FN>
  * This property is included in the blanket mortgage securing the $100 million Tucker REMIC Note due in year 2000.

(1) The year acquired is the year in which the property was acquired by Tucker or by a predecessor business that 
    transferred the property to Tucker at the time of Tucker's initial public offering in 1993.

(2) Major tenants are defined as tenants occupying 15,000 square feet or more of the rentable square feet.

(3) The amount of rentable square feet at Commons of Crystal Lake does not include approximately 81,000 square feet which 
    is owned by an insurance company and leased to Venture.

(4) The amount of rentable square feet at Rollins Crossing does not include approximately 190,000 square feet which is 
    owned by K-Mart Corp.

(5) This tenant has the right exercisable on or before April 1, 1996 to terminate its lease effective as of April 1, 1998 
    upon payment of a $1.8 million cancellation fee. The tenant has indicated it will move out of the space prior to the 
    expiration of the lease but has not yet advised the Company whether or not it will exercise its early termination 
    rights.
</TABLE>




                                       11

<PAGE>   13


Tenant Mix and Leases
---------------------

     As evidenced by the foregoing tables of the Company and Tucker, the 
Company's tenant mix is diverse and well represented by supermarkets, 
drugstores and other consumer necessity or value-oriented retailers. Such 
tenants tend to be stable performers in both good and bad economic times. As of 
March 15, 1996, fourteen of the Company's shopping centers are anchored by 
supermarkets, most of which are leading grocery chains in their respective 
markets. No tenant included in the Company's portfolio of properties on 
December 31, 1995 accounted for 10% or more of the Company's rental income in 
1995. Including the properties acquired from Tucker, no single tenant accounts 
for as much as 6% of pro forma base rental revenue and only two tenants account 
for more than 2.5% of such revenue.

     The terms of the Company's outstanding retail leases vary from tenancies at
will to 50 years. Major tenant leases are typically for 10 to 25 years, with one
or more extension options available to the lessee upon expiration of the initial
lease. By contrast, smaller shop leases are typically negotiated for three to
five year terms. The longer term of the major tenant leases serves to protect
the Company against significant vacancies and to assure the presence of strong
tenants who draw consumers to the Company's centers. The shorter term of the
smaller shop leases allows the Company to adjust rental rates for non-major
store space on a regular basis and upgrade the overall tenant mix.

     Leases to major tenants tend to provide lower minimum rents per square foot
than smaller shop leases. At December 31, 1995, major tenant leases for
properties included in the portfolio at December 31, 1995 provided an average
annual minimum rent of $6.29 per square foot, compared with non-major tenant
leases which provided an average annual minimum rent of $10.37. In general, the
Company believes that minimum rental rates for anchor tenant leases entered into
several years ago are below current market rates, while recent anchor tenant
leases and most non-anchor leases provide for minimum rental rates that more
closely reflect current market rates. The payment by tenants of minimum rents
that are below current market rates is offset in part by payment of percentage
rents.

Risk Factors
------------

General
-------

     As in every business, there are risk factors that face the Company and its
operations. Certain risk factors involve the nature of the Company's industry -
real estate operations. Others are unique to the Company, some arising from or
in connection with the Company's recent acquisition of Tucker (the "Merger"). By
setting forth below some of the factors that could cause the actual results of
the Company's operations or plans to differ materially from the Company's
expectations as set forth in statements in this Report or elsewhere that may be
considered to be "forward-looking statements," the Company seeks to avail itself
of the "safe harbor" provided in the recently enacted Private Securities
Litigation Reform Act.

Substantial Debt Obligations and Term of Debt
---------------------------------------------

     The Company's obligations for borrowed money immediately after giving
effect to the Merger aggregate approximately $221 million as compared to $39.4
million at December 31, 1995. The ratio of debt to Total Market Capitalization
of the Surviving Company is 



                                       12

<PAGE>   14

approximately 44% as compared to 20% at December 31, 1995. This increase in the 
Company's leverage and its ratio of debt to Total Market Capitalization could 
increase the risk of default under its indebtedness. Failure to pay the debt 
obligations when due could result in the Company losing its interest in the 
properties collateralizing such obligations.

     The Company believes that the ratio of debt to Total Market Capitalization
is an important factor to consider in evaluating a REIT's debt level because
this ratio is one indicator of a company's ability to borrow funds. The Company
believes that using the ratio of debt to book value of assets is not as reliable
an indicator of a REIT's debt level because the book value of a REIT's assets
indicates only the depreciated value of the REIT's property without
consideration of the market value of such assets at a particular point in time.
The use of the ratio of debt to Total Market Capitalization of a company is more
variable than the book value because it is dependent on the current stock price
of a company. Accordingly, there can be no assurance that the use of the ratio
of debt to Total Market Capitalization in evaluating the Company's debt level
will adequately protect it from being too highly leveraged.

     In particular, the maturity in September 2000 of the $100 million Tucker
REMIC Note secured by various of the properties acquired from Tucker may
increase the Company's risk of default on its indebtedness. Prior to the date
hereof, the Company has been able to refinance debt when it has become due on
terms which it believes to be commercially reasonable. There can be no assurance
that the Company will continue to be able to repay or to refinance its
indebtedness relating to the Tucker REMIC Note or any of its other indebtedness
on commercially reasonable or any other terms.

     The Company's debt obligations subject to floating interest rates
immediately after the Merger aggregate approximately $95.5 million at a weighted
average interest rate of approximately 7.2% per annum as compared to $14.6
million at a weighted average interest rate of approximately 7.6% per annum for
the Company at December 31, 1995. To the extent the Company's exposure to
increases in interest rates is not eliminated through interest rate protection
or cap agreements, such increases will adversely affect the Company's net
income, funds from operations ("FFO") and cash available for distribution and
may affect the amount of distributions it can make to its stockholders.

     The Company's new line of credit requires the Company to maintain interest
rate protection, at a rate satisfactory to the lead lender, with respect to $100
million of indebtedness. The Company has entered into an interest rate
protection agreement with The First National Bank of Boston (the "Bank"), with
respect to $40 million of indebtedness, whereby the Bank will reimburse the
Company the amount by which the then applicable three month LIBOR rate, exceeds
the then applicable cap rate per the agreement (currently 9.25%). The Company
intends to enter into an interest rate swap and/or cap agreement with the Bank
with respect to the remaining $60 million required to be hedged, thereby fixing
the interest rate on the amount subject to the swap agreement over the two year
term of the line of credit agreement. There can be no assurance that these
interest rate protection provisions will be effective.

     The foregoing risks associated with the debt obligations of the Company may
adversely affect the market price of the Company's Common Stock and may inhibit
the Company's ability to raise capital and issue equity in both the public and
private markets.




                                       13

<PAGE>   15

Restrictions on Ability of the Company to Dispose of Properties
---------------------------------------------------------------

     Pursuant to the terms of the Indenture ("Tucker REMIC Indenture") governing
the Tucker REMIC Note, prior to October 1997 principal payments on the Tucker
REMIC Note cannot be made and the properties collateralizing the Tucker REMIC
Note cannot be sold. If the Company wishes either to prepay all or part of the
$100 million principal of the Tucker REMIC Note or to sell any of the properties
collateralizing the Tucker REMIC Note after such date, the Company will incur
significant prepayment penalties. The prepayment of principal of the Tucker
REMIC Note requires an additional payment of the greater of either (i) 1% of the
amount of principal being prepaid or (ii) the product of (A) the difference
between the outstanding principal balance of the Tucker REMIC Note before
prepayment and the present value of all remaining interest and principal
payments thereon and (B) the amount of principal being prepaid divided by the
outstanding principal balance of the Tucker REMIC Note. After October 1997, in
order to release any of the properties collateralizing the Tucker REMIC Note
from the lien so that such properties may be sold, the Tucker REMIC Indenture
requires that certain additional conditions be met, including that (i) the
aggregate amount of principal repaid on the Tucker REMIC Note equal at least
125% of the amount of principal allocated to the property to be released and
(ii) certain debt service coverage ratios continue to be satisfied.

     Pursuant to the terms of the amended partnership agreement relating to the
operating partnership that holds title to several of the properties acquired
from Tucker (the "Operating Partnership"), for a period of 24 months after the
Merger, the Company, as the general partner of the Operating Partnership, may
not elect to dissolve the Operating Partnership or sell all or substantially all
of the assets of the Operating Partnership without the consent of a majority in
interest of the limited partners, except in connection with a merger or other
business combination of the Company. Thus the Company is restricted from
disposing of all or substantially all of the properties held by the Operating
Partnership.

Real Estate Investment Considerations
-------------------------------------

  Dependence on Midwestern Region and Retail Industry
  ---------------------------------------------------

     The substantial majority of the Company's properties are located in the
Midwestern region of the United States and such properties consist predominantly
of community shopping centers. The Company's performance therefore is linked to
economic conditions in the Midwest and in the market for retail space generally.
The market for retail space has been adversely affected by the ongoing
consolidation in the retail sector, the adverse financial condition of certain
large companies in this sector and the excess amount of retail space in certain
markets. To the extent that these conditions impact the market rents for retail
space, they could result in a reduction of net income, FFO and cash available
for distribution and thus affect the amount of distributions the Company can
make to its stockholders.

     In addition, the Company predominantly owns and operates retail shopping
centers catering to retail tenants. To the extent that the investing public has
a negative perception of the retail sector, the value of shares of common stock
of the Company may be negatively impacted, thereby resulting in such shares
trading at a discount below the inherent value of the assets of the Company as a
whole.




                                       14

<PAGE>   16

  Financial Condition and Bankruptcy of Tenants
  ---------------------------------------------

     Since substantially all of the Company's and Tucker's income has been, and
substantially all of the Company's income will continue to be, derived from 
rental income from retail shopping centers, the Company's net income, FFO and 
cash available for distribution would be adversely affected if a significant 
number of tenants were unable to meet their obligations to the Company or if 
the Company were unable to lease on economically favorable terms a significant 
amount of space in its shopping centers. In addition, in the event of default 
by a tenant, the Company may experience delays and incur substantial costs in 
enforcing its rights as landlord.

     At any time, a tenant of the Company's properties may seek the protection
of the bankruptcy laws, which could result in the rejection and termination of
the tenant lease. Such an event could cause a reduction of net income, FFO and
cash available for distribution and thus affect the amount of distributions the
Company can make to its stockholders. No assurance can be given that any present
tenant which has filed for bankruptcy protection will continue making payments
under its lease or that any tenants will not file for bankruptcy protection in
the future or, if any tenants file, that they will continue to make rental
payments in a timely manner. In addition, a tenant may, from time to time,
experience a downturn in its business, which may weaken its financial condition
and result in a reduction or failure to make rental payments when due. If a
lessee or sublessee defaults in its obligations to the Company, the Company may
experience delays in enforcing its right as lessor or sublessor and may incur
substantial costs and experience significant delays associated with protecting
its investment, including costs incurred in renovating and releasing the
property.

  Potential Negative Effect of One North State Property
  -----------------------------------------------------

     On a pro forma combined basis, for the year ended December 31, 1995, more
than 10% of the total revenue of the Company and Tucker was derived from rents
and expense reimbursements from tenants of Tucker's One North State property,
which is a "mixed use" property located in downtown Chicago. The total charges
currently being paid by certain of this property's tenants may be in excess of
current market rates. The leases of these tenants begin to expire in 2001. One
office tenant, however, has the option exercisable on or before April 1, 1996 to
terminate its lease, effective as of April 1, 1998, upon payment of a $1.8
million cancellation fee. This tenant has indicated that it will move out of
this space prior to the expiration of its lease, but has not yet advised the
Company whether or not it will exercise its early termination right. Pursuant to
the terms of the Tucker REMIC Indenture, this termination fee is required to be
paid into a reserve account which can be used, for among other things, to pay
for tenant alterations, leasing commissions and other lease inducements directly
related to this space. Any unused amount of this reserve account must be used to
repay the principal amounts owed under the Tucker REMIC Note. The inability of
the Company to lease such property, or a significant reduction in the amount of
rent and expense reimbursements paid by the tenants of such property, could have
an adverse impact on the operating results of the Company.

  Vacancies and Lease Renewals
  ----------------------------

     The descriptions above of the properties owned by the Company at December
31, 1995 recite the number of leases expiring during 1996 and management's
expectations as to 



                                       15
<PAGE>   17
how many tenants are likely to renew their leases. Some lease expirations 
provide the Company with the opportunity to increase rentals or to hold the 
space available for a stronger long-term tenancy. In other cases, there may be 
no immediately foreseeable strong tenancy for space, and the space may remain 
vacant for a longer period than anticipated or may be able to be re-leased only 
at less favorable rents. In such situations, the Company may be subject to 
competitive and economic conditions over which it has no control. The Company's 
underwriting and negotiation of the terms of the Tucker acquisition took into 
consideration anticipated lease expirations and possible resulting vacancies at 
One North State and the other Tucker properties. There is, however, no 
assurances that the effects of possible vacancies or lease renewals at such
properties, or at the Company's previously owned properties, may not reduce the
rental income, net income, FFO and funds available for distribution below levels
anticipated by the Company.

Possible Environmental Liabilities
----------------------------------

     Under various federal, state and local laws, ordinances and regulations, an
owner of real estate is liable for the costs of removal or remediation of
certain hazardous or toxic substances on or in such property. Such laws often
impose such liability without regard to whether the owner knew of, or was
responsible for, the presence of such hazardous or toxic substances. The
presence of such substances, or the failure to properly remediate such
substances, may adversely affect the owner's ability to sell or rent such
property or to use such property as collateral in its borrowings. All of the
Company's properties, including those acquired from Tucker, have been subjected
to Phase I or similar environmental audits (which involve inspection without
soil sampling or ground water analysis) by independent environmental
consultants. Except as described below, these environmental audit reports have
not revealed any potential significant environmental liability, nor is
management aware of any environmental liability with respect to the properties
that it believes would have a material adverse effect on the Company's business,
assets or results of operations. No assurance can be given that existing
environmental studies with respect to the properties reveal all environmental
liabilities or that any prior owner of any such property did not create any
material environmental condition not known to the Company.

     Phase II site assessments of the Commons of Chicago Ridge property acquired
from Tucker have disclosed the presence of contaminants in fill material and
soil at the property that could be associated with the property's former use as
a landfill and as the former site of an asphalt plant and storage tanks for
petroleum products (which storage tanks have been removed from the property),
but not at such levels as would require reporting to environmental agencies.
These Phase II site assessments also disclosed the presence in groundwater of
contaminants similar to those detected in the soil samples. Environmental
assessments of the property have also detected methane gas, probably associated
with the former use of the property as landfill. A regular maintenance program
was implemented by Tucker and is being continued by the Company to control the
migration and effect of the methane gas. There can be no assurance that an
environmental regulatory agency such as the Illinois Environmental Protection
Agency will not in the future require further investigation to determine the
source and vertical and horizontal extent of the contamination. If any such
investigation is required and confirms the existence of contaminants at the
levels disclosed in the Phase II site assessments, it is possible that the
relevant agency could require the Company to take action to address the
contamination, which action could range from ongoing monitoring to remediation
of the contamination. Based on the information currently available, 



                                       16

<PAGE>   18

management does not believe that the cost of responding to such contamination 
would be material to the Company.

     In connection with the execution of the merger agreement relating to the
acquisition of Tucker, the Company and certain individuals who had previously
provided a limited indemnity to Tucker for environmental liabilities at Commons
of Chicago Ridge (the "Individuals") have agreed to share the cost of having an
outside consultant conduct a new Phase II investigation of the soil and
groundwater of the property and to prepare a report recommending what action the
Company should take with respect to such matters. It is anticipated that this
outside consultant will be engaged shortly. In the event that the Company
decides to implement any of the recommendations of such consultant (the
"Recommended Work"), the Individuals have agreed to pay fifty percent of the
costs of the Recommended Work, with the Individuals' aggregate liability for the
Recommended Work limited to a maximum of $200,000. The Individuals have also
agreed to indemnify the Company and its subsidiaries and affiliates against all
claims, losses, costs and expenses incurred by such parties arising out of any
administrative, regulatory or judicial action, suit, investigation or proceeding
in connection with any applicable environmental health or safety law regarding
hazardous substances, materials, wastes or petroleum products, or any common law
right of action regarding such substances, materials, wastes or products,
whether brought by a governmental or regulatory authority by a third party, that
is initiated on or before October 4, 2003 with respect to conditions or acts at
the Commons of Chicago Ridge which existed prior to October 4, 1993. In
connection with this indemnification obligation, the Company has agreed to keep
the Individuals reasonably informed of various activities relating to the
property and to consult with the Individuals with respect to any potential
claims, settlements and remediation which could trigger the indemnification
obligations of the Individuals. There is no assurance that the Individuals will
be in a position to honor their indemnity obligations or that the liabilities
may not exceed the limit of their indemnity obligations. Regardless of such
indemnification, based on the information currently available, management of the
Company does not believe that the environmental liabilities and expenses
relating to the Commons of Chicago Ridge property would have a material effect
on the liquidity, financial condition or operating results of the Company.

Insurance
---------

     The Company carries comprehensive general liability coverage and umbrella
liability coverage on all of its properties with limits of liability which the
Company deems adequate to insure against liability claims and provide for cost
of defense. Similarly, the Company is insured against the risk of direct
physical damage in amounts the Company estimates to be adequate to reimburse the
Company on a replacement cost basis for costs incurred to repair or rebuild each
property, including loss of rental income during the reconstruction period.
Currently, the Company also insures the properties for loss caused by earthquake
or flood in the aggregate amount of $10 million per occurrence. Because of the
high cost of this type of insurance coverage and the wide fluctuations in price
and availability, the Company has made the determination that the risk of loss
due to earthquake and flood does not justify the cost to increase coverage
limits any further under current market conditions. Should the availability and
pricing of this coverage become more cost advantageous, management would
re-evaluate its position.




                                       17

<PAGE>   19

Competition
-----------

     All of the properties owned by the Company are located in developed areas.
There are numerous other retail properties and real estate companies within the
market area of each such property which compete with the Company for tenants and
development and acquisition opportunities. The number of competitive retail
properties and real estate companies in such areas could have a material effect
on (i) the Company's ability to rent space at the properties and the amount of
rents currently charged and (ii) development and acquisition opportunities. The
Company competes for tenants and acquisitions with others who have greater
resources than the Company.

Adverse Consequence of Failure to Qualify as a REIT and Other Tax Risks
-----------------------------------------------------------------------

     The Company believes that it (including its predecessor, Bradley Real
Estate Trust) has operated in a manner that permits it to qualify as a REIT
under the Code for each taxable year since its formation in 1961. Although
management of the Company believes that the Company is organized and is
operating in such a manner, no assurance can be given that the Company will be
able to continue to operate in a manner so as to qualify or remain so qualified.
Qualification as a REIT involves the application of highly technical and complex
Code provisions for which there are only limited judicial or administrative
interpretations and the determination of various factual matters and
circumstances not entirely within the Company's control. For example, in order
to qualify as a REIT, at least 95% of the Company's gross income in any year
must be derived from qualifying sources and the Company must make distributions
to stockholders aggregating annually at 95% of its REIT taxable income
(excluding net capital gains). In addition, no assurance can be given that new
legislation, new regulations, administrative interpretations or court decisions
will not change the tax laws with respect to qualification as a REIT or the
federal income tax consequences of such qualification. The Company, however, is
not aware of any currently pending tax legislation that would adversely affect
its ability to continue to operate as a REIT.

     If the Company fails to qualify as a REIT, it will be subject to federal
income tax (including any applicable alternative minimum tax) on its taxable
income at corporate rates. In addition, unless entitled to relief under certain
statutory provisions, it will also be disqualified from treatment as a REIT for
the four taxable years following the year during which qualification is lost.
This treatment would reduce the net earnings of the Company available for
investment or distribution to stockholders because of the additional tax
liability for the year or years involved. In addition, distribution would no
longer be required to be made. To the extent that distributions to stockholders
would have been made in anticipation of the Company's qualifying as a REIT, the
Company might be required to borrow funds or to liquidate certain of its
investments to pay the applicable tax. The failure to qualify as a REIT would
also constitute a default under certain debt obligations of the Company.

     Tucker represented to the Company that, since its formation, it also
operated so as to qualify as a REIT under the Code up to the time of the Merger.
If Tucker failed to qualify as a REIT in any year in which it elected so to
qualify and consequently becomes liable to pay taxes as a regular non-REIT
corporation, the liabilities of Tucker that the Company assumed in the Merger
would include such tax liability. Moreover, if it were subsequently determined
that Tucker had earnings and profits as determined for federal income tax
purposes (notwithstanding the requirement in the Merger Agreement that Tucker
distribute all earnings 



                                       18

<PAGE>   20


and profits prior to the Merger and the Company management's belief that such 
distributions were in fact made) or if former stockholders of Tucker acquired 
50% or more in value of the shares of the Company's Common Stock as a result of 
or following the Merger, Tucker's failure to qualify as a REIT could disqualify 
the Company as a REIT.

     The Company's acquisition of Tucker's general partner interest in the
Operating Partnership and Tucker's indirect interests in certain subsidiary
partnerships of the Operating Partnership involve special tax considerations,
including the qualification of each such partnership as a "partnership" for
federal income tax purposes, which also could impact the Company's ability to
qualify as a REIT following the Merger. The Company believes that its operations
and those of all such subsidiaries are such as not to result in the Company's
failure to continue to meet all requirements for qualification as a REIT.
However, there is no assurance that the Company has qualified or will qualify as
a REIT for any year until the period of limitations has expired for a challenge
to such qualification by the Internal Revenue Service.

ITEM 2.  PROPERTIES
         ----------

     The properties of the Company are described under Item 1 and, with respect
to properties owned at December 31, 1995, in Note 2 of the Notes to Financial
Statements contained in this Report.

ITEM 3.  LEGAL PROCEEDINGS
         -----------------

     Not applicable.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS
         -----------------------------------------------

   No matter was submitted to a vote of the Company's stockholders during the
fourth quarter of 1995.

   On March 14, 1996, a Special Meeting of Stockholders of the Company
approved the merger of Tucker Properties Corporation with and into the Company
and the Agreement and Plan of Merger dated October 30, 1995, all as described
in the Merger Proxy Statement, by the following vote:

                For                               7,599,486
                Against                             365,927
                Abstain                              42,141
                Broker non-votes                         0
                (Shares entitled to vote)        11,230,313

ITEM 4.A. EXECUTIVE OFFICERS OF THE REGISTRANT
          ------------------------------------

     The Company's by-laws provide that the officers of the Company shall be a
President, a Treasurer, a Secretary and such other officers as are elected or
appointed by the Directors. Each officer holds office at the pleasure of the
Directors. The Directors have determined that the following officers are
executive officers of the Company within the meaning of Rule 3b-7 under the
Securities Exchange Act:




                                       19
<PAGE>   21
    President and Chief Executive Officer -. Thomas P. D'Arcy, age 36, has held
this position since February 1996, having served as Executive Vice President
since September 1995, Senior Vice President since 1992 and Vice President since
1989. Prior to joining the Company, Mr. D'Arcy was employed by R.M. Bradley &
Co., Inc. as a member of its property management and real estate brokerage
departments for over eight years.

     Executive Vice President - Richard L. Heuer, age 43, has held this position
since late 1994. Prior to joining the Company, Mr. Heuer was employed by the
Welsh Companies, the independent property management Company that was managing
the Company's Minnesota properties.

   Executive Vice President - E. Paul Dunn, age 49, has held this position since
March 1996. Prior to joining the Company, Mr. Dunn was Executive Vice President
of the Welsh Companies in Minneapolis, Minnesota since 1983.

     Senior Vice President - Marianne Dunn, age 36, was named Senior Vice
President of the Company in September 1995, having served as Vice President of
Bradley since 1993 and as Investment Manager since 1990. Prior to joining the
Company, Ms. Dunn was employed by a lending institution as an Assistant
Treasurer in the Consumer Lending Department.

     Chief Financial Officer and Treasurer - Irving E. Lingo, Jr., age 44, has
held this position with the Company since September 1995. Prior to joining the
Company, Mr. Lingo served as Chief Financial Officer of Lingerfelt Industrial
Properties, a division of The Liberty Property Trust.

None of the Officers or Directors of the Company is related to any other Officer
or Director of the Company. No description is required with respect to any of
the foregoing persons of any type of event referred to in Item 401(f) of
Regulation S-K.




                                       20
<PAGE>   22

                                     PART II
                                     -------

ITEM  5.  MARKET FOR THE REGISTRANT'S SHARES AND RELATED STOCKHOLDER
          ----------------------------------------------------------
          MATTERS
          -------

<TABLE>
     The Company's Common Stock has traded on the NYSE (symbol "BTR") since
October 18, 1994 and before that dated traded for many years on the American
Stock Exchange. The share prices set forth below reflect a doubling of the
actual sales prices on the American Stock Exchange through October 17, 1994, as
a result of reverse stock split in October 1994, and the actual sales prices on
the New York Stock Exchange commencing October 18, 1994. The ranges of high and
low prices reported on such exchanges during 1994 and 1995 were:

<CAPTION>
Quarter Ended          High       Low              Quarter Ended         High         Low
-------------          ----       ---              -------------         ----         ---
<S>                    <C>        <C>              <C>                  <C>          <C>
March 1994             $18 3/4    $16 3/4          March 1995           $16 3/4      $14 7/8
June 1994               19 1/4     16 3/4          June 1995             16 3/8       15
September 1994          17 3/4     14 1/2          September 1995        16 7/8       15 3/8
December 1994           15 3/4     13 5/8          December 1995         16 1/4       13 1/8
</TABLE>

     The closing sale price on the NYSE on March 21, 1996 was $14 7/8. At
December 31, 1995 there were approximately 622 holders of record of the
Company's shares.

<TABLE>
    Dividends (adjusted for the one-for-two reverse stock split in 1994) have 
been paid by the Company during the past two full years as follows:

<CAPTION>
Payment                     Per Share             Payment         Per Share
-------                     ---------             -------         ---------
<S>                           <C>                 <C>                 <C>
March 31, 1994                $.32                March 31, 1995      $.33
June 30, 1994                  .32                June 30, 1995        .33
September 30, 1994             .32                September 29, 1995   .33
December 30, 1994              .33                December 29, 1995    .33
</TABLE>

     The Company has determined that approximately 16% and 26% of the
distributions paid in 1995 and 1994, respectively, were non-taxable returns of
capital to shareholders.



                                       21


<PAGE>   23

<TABLE>

ITEM 6.  SELECTED FINANCIAL DATA
         ----------------------- 
<CAPTION>
                                                                             YEARS ENDING DECEMBER 31,
                                                      -------------------------------------------------------------
                                                            1995        1994         1993         1992         1991
                                                            ----        ----         ----         ----         ----
                                                                  (Thousands of dollars, except per share data)
<S>                                                   <C>         <C>          <C>          <C>          <C>        
Rental income                                         $   36,405  $   32,875   $   22,875   $   11,839   $   10,352 

Other income                                                 167         112          594          308          202

Expenses                                                  28,141      25,343       17,934       11,360        9,850
                                                      -------------------------------------------------------------
Income before gain on sale of property                     8,431       7,644        5,535          787          704

Gain on sale of property                                       -         983            -            -            -

Net income                                            $    8,431  $    8,627   $    5,535   $      787   $      704  
                                                      =============================================================

Total assets at end of year                           $  180,545  $  166,579   $  127,931   $   93,326   $   50,345
                                                      -------------------------------------------------------------
Mortgage and bank loans payable at end of year        $   39,394  $   66,748   $   29,317   $   44,085   $   40,685
                                                      -------------------------------------------------------------

Per share:

Net income                                            $     0.85  $     1.05   $     0.82   $     0.40   $     0.38

Distributions                                         $     1.32  $     1.29   $     1.22   $     1.20   $     1.20

Weighted average shares outstanding                    9,863,767   8,191,831    6,715,813    1,972,054    1,898,284
</TABLE>



                                       22

<PAGE>   24
ITEM 7.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS
                     OF FINANCIAL CONDITION AND RESULTS OF
                                  OPERATIONS
-------------------------------------------------------------------------------

GENERAL
-------

        The Company is one of the nation's oldest continuously qualified real
estate investment trusts ("REIT") under the Internal Revenue Code. The Company
focuses on the ownership and operation of community shopping centers, primarily
in the Midwestern and the Northeastern regions of the United States. Bradley's
objective is to enhance the operating performance and value of its portfolio
through renovations, expansion and leasing strategies designed to meet the needs
of an evolving retail marketplace. The Company also seeks to create value
through the acquisition of properties which can benefit from the Company's
expertise in shopping center management, renovation and expansion. The
Company's properties consisted of approximately 3.0 million square feet of
rentable retail space at December 31, 1995.

        Originally organized in 1961 as a Massachusetts business trust under the
name Bradley Real Estate Trust and externally advised by an outside advisor, in
October 1994, the Company reorganized as a Maryland corporation and in January
1995 acquired the REIT advisory business of the external advisor. The
acquisition resulted in the termination of an advisory arrangement extending
through August 1999, and permitted the Company to become self-administered. In
January 1995, the Company also brought in-house the property management and
leasing operations of a significant number of its properties by hiring the
management team previously employed by an independent firm that had managed the
Company's Minnesota properties.

        On October 30, 1995, the Company entered into a merger agreement to
acquire Tucker Properties Corporation ("Tucker"), a REIT whose properties also
consist primarily of community shopping centers located in the Midwestern United
States. The merger closed on March 15, 1996 and as a result, the Company
presently owns 31 properties aggregating approximately 7.4 million square feet
of rentable space in 11 states.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

        During 1995, the Company spent approximately $11,466,000 on property
acquisitions and capital improvements. Of that amount, approximately $5,300,000
was spent on property acquisitions, approximately $5,073,000 on tenant specific
capital improvements and approximately $1,093,000 for other property
improvements.

        At December 31, 1995, the Company had commitments of approximately
$515,000 for tenant specific capital improvements.

        On January 31, 1995, the Company completed the acquisition of the real
estate investment trust advisory business of its former advisor, thus enabling
the Company to become self-administered. The acquisition was completed through
the issuance of 325,000 shares of common stock to the owners of the former
advisor.

        In April 1995, the Company acquired St. Francis Plaza, a 29,800 square
foot community shopping center in Santa Fe, New Mexico for approximately
$5,261,000. The purchase was financed by the assumption of $2,094,000 in debt
and the cash proceeds from the issuance of 182,500 shares of common stock.

        The Company has used its secured bank line of credit to fund
expenditures for property acquisitions and capital improvements. Interest under
the line was at the lower of the lead bank's base rate or 1.875% over LIBOR.
During 1995, the weighted average rate was 8.0%. Approximately $50,400,000 was
available under the aggregate $65,000,000 line of credit at December 31, 1995.
Effective March 15, 1996, the Company's line of credit was renegotiated in
conjunction with the merger of the Company and Tucker, discussed below, to an
aggregate $150,000,000. 


        In December 1994, the Company filed a "shelf" registration statement
with the Securities and Exchange Commission to register $125,000,000 of common
stock, preferred stock, debt securities, warrants, rights, or units of the
foregoing securities that the Company may issue through underwriters or in
privately negotiated transactions from time to time.

                                       23
<PAGE>   25

        In July 1995, the Company completed an offering under the shelf
registration of 2,500,000 common shares at a price of $16 per share. Net
proceeds from the offering were approximately $37,405,000 of which $32,600,000
was used to pay-down the line of credit, $4,712,000 was used to pay-off the
non-recourse mortgages assumed in 1994 upon the purchase of Westwind Plaza, and
the balance used for general business purposes.


        On March 15, 1996, the Company closed the merger acquisition of Tucker
after approval by the stockholders of the two companies. The acquisition was
completed through the issuance of 7,428,202 common shares of the Company valued
at $13.96 per share in exchange for 100% of the outstanding shares of Tucker,
the payment of certain transaction costs and the assumption of all of Tuckers'
liabilities. The acquisition was structured as a tax-free transaction, and is
being treated as a purchase for financial reporting purposes. The Company has
succeeded to Tucker's interest in two partnerships which hold title to all of
the former Tucker properties, and as a result now owns some of its 31 properties
directly and the others through the two partnerships (now renamed Bradley
Operating Limited Partnership and Bradley Financing Partnership). The Company
has in excess of a 95% general partner interest in each partnership. 

        In conjunction with the merger, on March 15, 1996, the Company entered
into a new $150,000,000 unsecured revolving credit facility with The First
National Bank of Boston. The line bears interest at the lower of the bank's base
rate or 1.75% over LIBOR. The rates available under the line become more
favorable in the event the Company meets certain loan-to-value tests or receives
an investment grade unsecured debt rating. In addition to replacing outstanding
borrowings under the Company's and Tucker's previously outstanding secured lines
of credit, the facility is available for the acquisition, development,
renovation and expansion of new and existing properties (including, but not
limited to, capital improvements, tenant improvements and leasing commissions),
and for other working capital purposes. 

        The Company's new line of credit contains certain financial and
operational covenants that, among other provisions, limit the amount of secured
and unsecured indebtedness the Company may have outstanding at any time to a
percentage of the Company's Consolidated Market Value as defined, and provide
for the maintenance of certain financial tests including minimum net worth and
debt service coverage requirements. The Company believes that such covenants
will not adversely affect the Company's business or the operation of its
properties. 

        The Company has entered into an agreement with Brookfield Development,
Inc., the current ground lessee, regarding the proposed sale by the Company of
its interest in 501-529 Nicollet Avenue, Minneapolis, Minnesota. The sale price,
subject to standard closing adjustments, is $12,900,000. If consummated, the
sale would result in a gain for financial reporting purposes of approximately
$9,182,000 and approximately $10,800,000 for federal income tax purposes. For
federal income tax purposes, however, the Company intends to structure the
transaction as a "like-kind" exchange. In that regard, the Company intends to
identify Brookdale Square Shopping Center, a 185,000 square foot community 
shopping center located in Brooklyn, Minnesota ("Brookdale") as the replacement
property in the exchange. The purchase price for Brookdale, subject to standard
closing adjustments, is $8,750,000. To the extent that sales proceeds from
501-529 Nicollet Avenue exceed the purchase price of Brookdale, the Company
intends to apply such excess to the line  of credit. The Company expects to
close these transactions by March 31, 1996.

        While the acquisition of Tucker results in the Company's assumption of
substantial additional indebtedness, the Company anticipates that the additional
revenues from the former Tucker properties will be sufficient to service such
debt as well as to cover the operating expenses of such properties and to make
distributions with respect to the additional shares of the Company issued to
the former Tucker stockholders. $100,000,000 of Tucker mortgage debt assumed is
represented by a REMIC note that matures September, 2000. The Company believes
that the properties securing the REMIC note and other mortgage debt have
sufficient current value to permit 

                                       24
<PAGE>   26
the refinancing of such debt upon maturity, although there can be no assurance
that property values or refinancing terms at the time of maturity will be 
favorable. In general, a goal of management is to receive an investment grade 
rating from one or more national rating agencies that will increase the 
Company's financial flexibility by permitting the Company to issue fixed-rate 
unsecured debt on favorable terms. 
        
        The Company funds operating expenses and distributions primarily from
operating cash flows, although the line of credit may also be used for these
purposes. Net cash flows provided by operating activities increased to
$12,733,000 during 1995, from $10,877,000 in 1994 and $6,532,000 in 1993.
Distributions (treated as a charge to cash flows from financing activities in
the Company's financial statements) were $13,098,000 in 1995, $10,568,000 in
1994 and $8,285,000 in 1993.

        Funds from operations ("FFO") increased $2,958,000 or 23% during 1995
from $12,790,000 in 1994 to $15,748,000 in 1995. FFO increased by $3,691,000 or
41% during 1994, from $9,099,000 in 1993. The Company generally considers FFO
to be a relevant and meaningful supplemental measure of the performance of an
equity REIT because it is predicated on a cash flow basis, as opposed to a
measure predicated on generally accepted accounting principles which gives
effect to non-cash items such as depreciation and amortization. FFO, as defined
by the National Association of Real Estate Investment Trusts and as followed by
the Company, represents net income (computed in accordance with generally
accepted accounting principles), excluding gains (or losses) from debt
restructuring and sales of property, plus depreciation and amortization, and
after adjustments for unconsolidated partnerships and joint ventures.
Adjustments for unconsolidated partnerships and joint ventures will be
calculated to reflect FFO on the same basis. Since the definition of FFO is a
guideline, computation of FFO may vary from one REIT to another. FFO does not
represent cash generated from operating activities in accordance with generally
accepted accounting principles and should not be considered as an alternative
to net income as an indicator of the Company's operating performance or as an
alternative to cash flow as a measure of liquidity. In addition, FFO is not
necessarily indicative of cash available to fund cash needs.

        The Company believes that improving its financial flexibility will
position the Company for future growth, allowing it to take advantage of
acquisition, renovation and expansion opportunities. The Company continues to
evaluate prospective acquisitions of individual properties and entire
portfolios. To fund potential acquisitions, the Company may issue securities
under the multi-security "shelf" registration referred to above either to the
public or in privately negotiated transactions. The Company may also acquire
properties through the direct issuance of securities of the Company or, via its
Operating Partnership, through the issuance of limited partnership units in the
Operating Partnership. The Company also expects that it will make further
tax-deferred "like-kind" exchanges of existing mature properties for properties
with more growth potential. In addition, the Company may acquire partial
interests in real estate assets through participation in joint venture
transactions. Finally, the Company may borrow under its line of credit to
provide the initial funds for acquisitions (and, potentially, renovations and
expansions), with such borrowings being subsequently repaid from the proceeds
of further equity or debt offerings, depending upon market conditions at the
time.

RESULTS OF OPERATIONS
---------------------

1995 Compared to 1994
---------------------

        Rental income increased $3,530,000 or 11% from $32,875,000 in 1994 to
$36,405,000 in 1995. Approximately $3,594,000 of this increase was due to the
effect of the acquisitions of Westwind Plaza and Rivercrest Center in 1994 and
St. Francis Plaza in 1995. These increases were partially offset by the effect
of the sale of Spruce Tree Centre in late 1994. Rental income from Har Mar
Mall increased approximately $598,000 while rental income from Burning Tree
Plaza increased approximately $260,000 from the prior year. Income at Har Mar
increased primarily due to the signing of leases with Barnes & Noble and
HomePlace. The increase at Burning Tree is substantially attributed to the
expansion of T.J. Maxx.


                                          25
<PAGE>   27
        Other income increased $55,000 or 49% from $112,000 in 1994 to $167,000
in 1995. This increase was primarily due to an increase in interest income,
resulting from the temporary investment of the July 1995 offering proceeds. 

        Total expenses increased $2,798,000 or 11% from $25,343,000 in 1994 to
$28,141,000 in 1995. Operations, maintenance and management expense increased
$543,000 during 1995 (from $5,315,000 to $5,858,000), due primarily to an
increase in operating expenses of $295,000 at Rivercrest, $285,000 at Har Mar
Mall and $269,000 at Westview Center, partially offset by the sale of Spruce
Tree Centre.

        Real estate tax expense increased $656,000 during 1995 (from $8,070,000
to $8,726,000); $375,000 of the increase was due to the change in properties in
the Company's portfolio. The remaining increase of $281,000 was due to tax
increases at all of the properties, most notably the Illinois properties, with
the exception of Har Mar Mall, which had a $355,000 reduction in real estate
taxes following negotiation of abatements.

        Mortgage and other interest expenses increased $181,000 during 1995,
from $4,524,000 in 1994 to $4,705,000. Approximately $270,000 of this increase
was due to mortgages on St. Francis Plaza and Westwind Plaza, partially offset
by a decrease in interest expense on the line of credit ($63,000) due to a
decrease in the average debt balance, and an increase in capitalized interest.
The average interest rate on outstanding borrowings under the line of credit
increased from 7.1% in 1994 to 8.0% in 1995.

        Depreciation and amortization expense increased from $5,146,000 in 1994
to $7,317,000 in 1995. Of this $2,171,000 increase, $1,193,000 was related to
amortizing the cost of the purchase of the advisory business of the Company's
former external advisor, consummated in January 1995; $300,000 of the increase
was due to changes in the Company's real estate holdings; and the balance of
the increase was due to real estate improvements.

        Administrative and general expenses decreased $753,000 in 1995, from
$2,288,000 in 1994 to $1,535,000 in 1995. This decrease primarily reflects
savings associated with the Company becoming self-administered following the
purchase of the advisory business of the former advisor in January 1995. 

        The acquisition of Westwind Plaza for approximately $7,500,000 was
effected in a tax-deferred exchange following the sale of Spruce Tree Centre
for $2,750,000, which resulted in a gain on sale of property of $983,000
recognized in 1994. 

        The aggregate result for 1995 was a $196,000 or 2% decrease in net
income from $8,627,000 ($1.05 per share) to $8,431,000 ($.85 per share). In
1994, income before the gain on sale of property was $7,644,000 ($.93 per
share), compared with $8,431,000 in 1995, ($.85 per share). Per share amounts
reflect weighted-average shares outstanding of 9,863,767 in 1995 and 8,191,831
in 1994, the increased number of shares primarily reflecting the 2,500,000
share public offering completed in July 1995. 

1994 Compared to 1993 
---------------------

        Rental income increased $10,000,000 or 44% from $22,875,000 in 1993 to
$32,875,000 in 1994. The increase was primarily attributable to the
acquisitions of Terrace Mall, in May 1993; Westview Center and Burning Tree
Plaza, in July 1993; White Bear Hills, in December 1993; Rivercrest Center, in
March 1994 and Westwind Plaza, in November 1994. These increases were partially
offset by the effect of the sale of Spruce Tree Centre in November 1994.

        Other income decreased $482,000 or 81% from $594,000 in 1993 to
$112,000 in 1994. During 1993, the Company had received (i) a $300,000
termination fee from a restaurant tenant at Har Mar Mall, (ii) approximately
$58,000 in interest on funds raised in the December 1992 public offering of
shares, and (iii) a $110,000 payment from the Company's directors and officers
insurance carrier to cover legal fees incurred in a prior year lawsuit. 

        Total expenses increased $7,409,000 or 41% from $17,934,000 in 1993 to
$25,343,000 in 1994 due primarily to increases in the following expenses which
were attributable to the addition of properties to the Company's portfolio
referred to above: (i) operations, maintenance and management expenses
increased $1,584,000 from $3,731,000 to $5,315,000, (ii) real estate taxes
increased $2,298,000 from $5,772,000 to $8,070,000, and (iii) depreciation and
amortization increased $1,582,000 from $3,564,000 to $5,146,000. Mortgage and
other interest increased $1,577,000 or 54% from $2,947,000 in 1993 to
$4,524,000 in 1994 primarily due to higher outstanding 


                                          26
<PAGE>   28
borrowings and higher prevailing rates of interest paid under the
revolving line of credit, offset by lower outstanding mortgage debt in 1994 as
a result of an aggregate of $20,500,000 being paid during 1993 on the Hood
Commons and Grandview construction loans, which loans carried an average rate
in excess of that on the 1994 borrowings under the line of credit.
Administrative and general expenses increased $368,000 or 19% from $1,920,000
in 1993 to $2,288,000 in 1994 reflecting both increased advisory fees to the
then external advisor resulting from the expanded portfolio and increased costs
for shareholder services resulting from public offerings in late-1992 and
mid-1993.

        The acquisition of Westwind Plaza for approximately $7,500,000 was
effected in a tax-deferred exchange following the sale of Spruce Tree Centre
for $2,750,000, which resulted in a gain of approximately $983,000. 

        The aggregate result for 1994 was a $3,092,000 or 56% increase in net
income from $5,535,000 ($.82 per share) in 1993 to $8,627,000 ($1.05 per share)
in 1994. Before the gain on sale of property, net income in 1994 would have
been $7,644,000 ($.93 per share), an increase of 38%. Per share amounts reflect
weighted-average shares outstanding of 6,715,813 for 1993 and 8,191,831 for
1994. Share and per share amounts have been adjusted for the one-for-two
reverse stock split effected October 17, 1994.


                                          27
<PAGE>   29
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
         -------------------------------------------

     See the Financial Statements and Schedule including the Index thereto,
immediately following the signature page to this report.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
         ------------------------------------------------
         ACCOUNTING AND FINANCIAL DISCLOSURE
         -----------------------------------

     Not applicable.



                                      28

<PAGE>   30



                                    PART III
                                    --------

     Registrant plans to provide information required for ITEMS 10 through 13 in
its definitive Proxy Statement for its 1996 Annual Meeting of Stockholders,
which information is hereby incorporated by reference.

                                     PART IV
                                     -------

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
         ----------------------------------------------------------------

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

(1) and (2) The Financial Statements and Schedules required by Item 8 are listed
in the Index to Financial Statements and Schedules following the signatures to
this report.

(3) The following exhibits (listed according to the exhibit index set forth in
the instructions to Item 601) of Regulation S-K, are a part of this report.

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

   3.1         Articles of Amendment and Restatement of              
               Bradley Real Estate, Inc., incorporated
               by reference to Exhibit 3.1 of the
               Company's Current Report on Form 8-K
               dated October 17, 1994.*

   3.2         Articles of Merger between Bradley Real               
               Estate Trust and Bradley Real Estate,
               Inc., incorporated by reference to
               Exhibit 3.2 of the Company's Current
               Report on Form 8-K dated October 17, 1994.*

   3.3         Articles of Merger between Tucker                     
               Properties Corporation and Bradley Real                
               Estate, Inc.**                                           

   3.4         By-laws of Bradley Real Estate, Inc.,                 
               incorporated by reference to Exhibit 3.3 
               of the Company's Current Report on Form
               8-K dated October 17, 1994.*

   4.1         Form of stock certificate for shares of               
               Common Stock of Bradley Real Estate,
               Inc., incorporated by reference to
               Exhibit 4.1 of the Company's Current
               Report on Form 8-K dated October 17, 1994.*



                                       29


<PAGE>   31

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

  10.1         Amended and Restated Agreement of Limited             
               Partnership of Bradley Operating Limited 
               Partnership in the form executed on March 15, 1996, 
               incorporated by reference to Exhibit 10.1 of the 
               Company's current report on Form 8-K dated
               November 3, 1995.*

  10.2         Revolving Credit Agreement dated as of March 15,      
               1996 by and among the Company, Bradley Operating 
               Limited Partnership and The First National Bank 
               of Boston.**                                             

  10.3         Indenture dated as of June 1, 1994 between Tucker     
               Financing Partnership (name changed March 15, 1996 
               to Bradley Financing Partnership) and Bankers Trust 
               Company of California, N.A. relating to 7.30% 
               Mortgage Notes due September 30, 2000.**                 

  10.4         1993 Stock Option and Incentive Plan, as amended      
               and restated on March 13, 1996, incorporated by 
               reference to Appendix A to the Company's Proxy 
               Statement for its 1996 Annual Meeting of
               Stockholders.*

  21.1         Subsidiaries of the Company.**                          

  23.1         Consent of KPMG Peat Marwick LLP (regarding Form      
               S-3 and Form S-8 Registration Statements).**

  27.1         Financial Data Schedule.**

------------------
      *  Previously filed.
      ** Filed herewith.

     (b) REPORT ON FORM 8-K. The Company filed a Form 8-K report on November 3,
1995 reporting in Items 5 and 7 the execution of the Agreement and Plan of
Merger dated October 30, 1995 with Tucker Properties Corporation.





                                       30
<PAGE>   32



                                   SIGNATURES
                                   ----------

      Pursuant to the requirements of section 13 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 this 25th day of March 1996.

                    BRADLEY REAL ESTATE, INC.

                 by: /s/ Thomas P. D'Arcy
                     -------------------------------
                         Thomas P. D'Arcy, President

<TABLE>

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

          <S>                                                                   <C>
          /s/  Thomas P. D'Arcy                                                 March 25, 1996
          ---------------------------------------------------------------- 
               Thomas P. D'Arcy, President, CEO and Director

          /s/  Irving E. Lingo, Jr.                                             March 25, 1996
          ----------------------------------------------------------------
               Irving E. Lingo, Jr., Chief Financial Officer and Treasurer

          /s/  Stephen G. Kasnet                                                March 25, 1996
          ----------------------------------------------------------------
               Stephen G. Kasnet, Director

          /s/  W. Nicholas Thorndike                                            March 25, 1996
          ----------------------------------------------------------------
               W. Nicholas Thorndike, Director


          ----------------------------------------------------------------
               William L. Brown, Director

          /s/  Paul G. Kirk, Jr.                                                 March 25, 1996
          ----------------------------------------------------------------
               Paul G. Kirk, Jr., Director

          /s/  John B. Hynes III                                                March 25, 1996
          ----------------------------------------------------------------
               John B. Hynes III, Director

          /s/  Joseph E. Hakim                                                  March 25, 1996
          ----------------------------------------------------------------
               Joseph E. Hakim, Director


          ----------------------------------------------------------------
               A. Robert Towbin, Director

</TABLE>


                                       31
<PAGE>   33


                   INDEX TO FINANCIAL STATEMENTS AND SCHEDULES

                                                                        PAGE

Report of Independent Auditors for the years ended                      F-2
   December 31, 1995, 1994 and 1993

Financial Statements:

   Balance Sheets - December 31, 1995 and 1994                          F-3

   For the years ended December 31, 1995, 1994 and 1993:                

      Statements of Income                                              F-4

      Statements of Cash Flows                                          F-5

      Statements of Changes in Stockholders' Equity                     F-6

      Notes to Financial Statements                                     F-7

Schedule:

   Schedule III - Real Estate and Accumulated Depreciation              F-16




     All other schedules have been omitted since they are not required, not
applicable, or the information is included in the financial statements or notes
thereto.





                                       F-1

<PAGE>   34
                         INDEPENDENT AUDITORS' REPORT

The Directors and Stockholders of
Bradley Real Estate, Inc.:

We have audited the accompanying balance sheets of Bradley Real Estate,
Inc. (formerly Bradley Real Estate Trust) as of December 31, 1995 and 1994 and
the related statements of income, changes in stockholders' equity and cash
flows for each of the years in the three-year period ended December 31, 1995.
These financial statements are the responsibility of the Company'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. 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 financial statements referred to above present
fairly, in all material respects, the financial position of Bradley Real
Estate, Inc. as of December 31, 1995 and 1994, and the results of its
operations and its cash flows for each of the years in the three-year period
ended December 31, 1995, in conformity with generally accepted accounting
principles.

KPMG Peat Marwick LLP

Boston, Massachusetts
February 19, 1996, except for note 10, which is as of March 15, 1996




                                     F-2
<PAGE>   35

                           BRADLEY REAL ESTATE, INC.

                          ---------------------------
                          B A L A N C E   S H E E T S
                          ---------------------------
<TABLE>

-----------------------------------------------------------------------------------------------------------
<CAPTION>
                                                                               DECEMBER 31,    December 31,
                                                                                   1995             1994
-----------------------------------------------------------------------------------------------------------
<S>                                                                            <C>             <C>
ASSETS
Real estate investments - at cost ...........................................  $189,405,000    $177,939,000
Accumulated depreciation and amortization ...................................    27,591,000      22,385,000
-----------------------------------------------------------------------------------------------------------
Net real estate investments .................................................   161,814,000     155,554,000

Other assets:
  Cash ......................................................................       697,000         193,000
  Rents and other receivables net of allowance
    for doubtful accounts of $711,000 in 1995
    and $459,000 for 1994 ...................................................     8,671,000       5,776,000
  Unamortized buyout of contract, net .......................................     4,372,000              --
  Deferred charges, net and other assets ....................................     4,991,000       5,056,000
-----------------------------------------------------------------------------------------------------------
                                                                               $180,545,000    $166,579,000
===========================================================================================================

LIABILITIES AND STOCKHOLDER'S EQUITY
Mortgage loans ..............................................................  $ 24,794,000    $ 27,748,000
Line of credit ..............................................................    14,600,000      39,000,000
Accounts payable and accrued expenses .......................................     6,053,000       5,252,000
-----------------------------------------------------------------------------------------------------------
                                                                                 45,447,000      72,000,000
-----------------------------------------------------------------------------------------------------------
Stockholders' equity:

  Shares of preferred stock, par value $.01 per share:
     Authorized 20,000,000 shares; Issued and outstanding,
       0 shares at December 31, 1995 and 1994 ...............................            --              --
  Shares of common stock, par value $.01 per share:
     Authorized 80,000,000 shares; Issued and outstanding shares,
       11,230,313 and 8,197,054 at December 31, 1995 and 1994, respectively .       112,000          82,000
  Shares of excess stock, par value $.01 per share:
     Authorized 50,000,000 shares; Issued and outstanding,
       0 shares at December 31, 1995 and 1994 ...............................            --              --

Additional paid-in capital ..................................................   148,407,000     103,251,000
Distributions in excess of accumulated earnings .............................   (13,421,000)     (8,754,000)
-----------------------------------------------------------------------------------------------------------
                                                                                135,098,000      94,579,000
-----------------------------------------------------------------------------------------------------------
                                                                               $180,545,000    $166,579,000
===========================================================================================================
</TABLE>


The accompanying notes are an integral part of the financial statements.



                                     F-3


<PAGE>   36
                          BRADLEY REAL ESTATE, INC.

                    ---------------------------------------
                    S T A T E M E N T S   O F   I N C O M E
                    ---------------------------------------
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
                                                           Years Ended December 31,
                                                     1995           1994            1993
--------------------------------------------------------------------------------------------
<S>                                              <C>             <C>             <C>
Income:
  Rental income ................................ $36,405,000     $32,875,000     $22,875,000
  Other income .................................     167,000         112,000         594,000
--------------------------------------------------------------------------------------------
                                                  36,572,000      32,987,000      23,469,000

Expenses:
  Operations, maintenance and management .......   5,858,000       5,315,000       3,731,000
  Real estate taxes ............................   8,726,000       8,070,000       5,772,000
  Mortgage and other interest ..................   4,705,000       4,524,000       2,947,000
  Depreciation and amortization ................   7,317,000       5,146,000       3,564,000
  Administrative and general ...................   1,535,000       2,288,000       1,920,000
--------------------------------------------------------------------------------------------
                                                  28,141,000      25,343,000      17,934,000

Income before gain on sale of property .........   8,431,000       7,644,000       5,535,000
Gain on sale of property .......................          --         983,000              --
--------------------------------------------------------------------------------------------
Net income ..................................... $ 8,431,000     $ 8,627,000     $ 5,535,000
--------------------------------------------------------------------------------------------
  Net income per share ......................... $      0.85     $      1.05     $      0.82
--------------------------------------------------------------------------------------------
Weighted average shares outstanding ............   9,863,767       8,191,831       6,715,813
--------------------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.
                                       


                                     F-4
<PAGE>   37
                           BRADLEY REAL ESTATE, INC.

                -----------------------------------------------
                S T A T E M E N T S   O F   C A S H   F L O W S
                -----------------------------------------------
<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------
                                                                               Years Ended December 31,
                                                                        1995            1994           1993
----------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>             <C>             <C>
Cash flows from operating activities:
  Net income ..................................................     $  8,431,000    $  8,627,000    $  5,535,000
  Adjustments to reconcile net income to                                            
    net cash provided by operating activities:
      Depreciation and amortization ...........................        7,317,000        5,146,000      3,564,000
      Gain on sale of property ................................               --         (983,000)            --

  Change in operating assets and liabilities:
      Increase in rents and other receivables .................       (2,895,000)      (1,428,000)    (2,572,000)
      Increase in accounts payable and accrued expenses .......          362,000        2,822,000        935,000
      Increase in deferred charges ............................         (482,000)      (3,307,000)      (930,000)
----------------------------------------------------------------------------------------------------------------
        Net cash flows provided by operating activities .......       12,733,000       10,877,000      6,532,000
----------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
  Expenditures for real estate investments ....................       (9,410,000)     (36,253,000)   (39,451,000)
  Proceeds from sales of property, net ........................               --        2,600,000             --
  Decrease in investing - related deferred charges ............          106,000               --             --
  Expenditures for purchase of advisory business ..............         (649,000)              --             --
----------------------------------------------------------------------------------------------------------------
    Net cash flows used by investing activities ...............       (9,953,000)     (33,653,000)   (39,451,000)
----------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
  Borrowings under line of credit .............................       15,300,000       38,700,000      6,100,000
  Payments under line of credit ...............................       (7,100,000)      (5,800,000)            --
  Pay-down line of credit with offering proceeds ..............      (32,600,000)              --             --
  Pay-off of Westwind mortgage loans with offering proceeds ...       (4,712,000)              --             --
  Distributions paid ..........................................      (13,098,000)     (10,568,000)    (8,285,000)
  Proceeds from public offerings, net .........................       40,508,000               --     51,158,000
  Exercise of stock options ...................................          128,000               --         68,000
  Principal payments on mortgage loans ........................         (336,000)        (449,000)   (20,868,000)
  Reorganization costs ........................................         (617,000)              --             --
  Shares issued under dividend reinvestment plan ..............          251,000          136,000         64,000
----------------------------------------------------------------------------------------------------------------
  Net cash (used by) provided by financing activities .........       (2,276,000)      22,019,000     28,237,000
----------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash ...............................          504,000         (757,000)    (4,682,000)

Cash
  Beginning of year ...........................................          193,000          950,000      5,632,000
----------------------------------------------------------------------------------------------------------------
  End of year .................................................     $    697,000    $     193,000   $    950,000
================================================================================================================
Supplemental cash flow information:
  Income taxes paid ...........................................     $    106,000    $      45,000   $         --
  Interest paid, net of amount capitalized ....................     $  4,854,000    $   4,218,000   $  2,947,000

</TABLE>

Supplemental schedule of non-cash investing and financing activities:
    In 1994, a property was purchased for $7,496,000 which included the 
Company's assumption of $4,980,000 in non-recourse mortgages.
    In 1995, the Company issued 325,000 shares of Common Stock having a value of
$4,916,000 in connection with the acquisition of the REIT advisory business of
its former advisor.
    In 1995, a property was purchased for $5,261,000 which included the 
Company's assumption of $2,094,000 in non-recourse mortgages.



The accompanying notes are an integral part of the financial statements.



                                     F-5
<PAGE>   38
<TABLE>

                            BRADLEY REAL ESTATE, INC.

----------------------------------------------------------------------------------
S T A T E M E N T  O F  C H A N G E S  I N  S T O C K H O L D E R S'  E Q U I T Y
----------------------------------------------------------------------------------

<CAPTION>
                                                                                            Retained
                                                                                            Earnings
                                                                                         (Distributions
                                                                          Additional      in Excess of
                                                            Shares          Paid-In       Accumulated
                                                         at Par Value       Capital        Earnings)
-------------------------------------------------------------------------------------------------------
<S>                                                      <C>             <C>             <C>   
Balance at December 31, 1992 .........................   $ 9,797,000     $ 42,110,000    $ (4,063,000)
  Net income .........................................             -                -       5,535,000
  Cash distributions
    ($.61 per share) .................................             -                -      (8,285,000)
  Issuance of shares net of offering
    costs of $3,564,000 ..............................     6,557,000       44,601,000               -
  Exercise of share options ..........................        12,000           56,000               -
  Shares issued under dividend
    reinvestment plan ................................        11,000           53,000               -
-------------------------------------------------------------------------------------------------------
Balance at December 31, 1993 .........................    16,377,000       86,820,000      (6,813,000)
  Net income .........................................             -                -       8,627,000
  Cash distributions
    ($1.29 per share) ................................             -                -     (10,568,000)
  Shares issued under dividend
    reinvestment plan ................................        15,000          121,000               -
  Reverse one-for-two stock split ....................    (8,195,000)       8,195,000               -
  Change in par value from $1 to $.01 ................    (8,115,000)       8,115,000               -
-------------------------------------------------------------------------------------------------------
Balance at December 31, 1994 .........................        82,000      103,251,000      (8,754,000)
  Net income .........................................             -                -       8,431,000
  Cash distributions
    ($1.32 per share) ................................             -                -     (13,098,000)
  Issuance of stock, net of offering
    costs of $2,595,000 ..............................        30,000       45,394,000               -
  Stock issued under dividend reinvestment plan                    -          251,000               -
  Exercise of stock options ..........................             -          128,000               -
  Reorganization costs ...............................             -         (617,000)              -
-------------------------------------------------------------------------------------------------------
Balance at December 31, 1995 .........................   $   112,000     $148,407,000    $(13,421,000)
=======================================================================================================
</TABLE>

The accompanying notes are an integral part of the financial statements.



                                     F-6
<PAGE>   39
                           BRADLEY REAL ESTATE, INC.

             ------------------------------------------------------
             N O T E S  T O  F I N A N C I A L  S T A T E M E N T S
             ------------------------------------------------------

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

ORGANIZATION

        Bradley Real Estate, Inc. (the "Company") was organized in 1961 as a
Massachusetts business trust. In October 1994, the Company was reorganized into
a Maryland corporation, at which time the Company changed its name to Bradley
Real Estate, Inc., to reflect its new corporate structure. For both financial
reporting and federal income tax purposes, Bradley Real Estate, Inc. is
considered to be a continuation of the same entity as Bradley Real Estate Trust;
and references to the Company include both the trust and the corporation.

        The Company's primary business is to own and operate commercial real
estate properties, consisting of shopping centers and office/retail buildings
located primarily in the midwest region of the United States. Substantially all
of the Company's income consists of rental income from tenants under the terms
of long-term operating leases. Retail leases usually include a provision for
additional rent to be paid based on gross sales on the premises. Certain leases
also include provisions for additional rent to recover allocable portions of
operating costs and real estate taxes.

        From its inception through January 31, 1995, the Company retained the
firm of R.M. Bradley & Co., Inc. (R.M. Bradley) to provide certain management
services, to serve as advisor to the Company with respect to investments and
other matters, and to provide office facilities and various personnel. In
September 1994, shareholders of the Company voted to approve the acquisition of
R.M. Bradley's real estate investment trust advisory business, thus enabling the
Company to become self-administered. The acquisition, which has been accounted
for using the purchase method of accounting, was completed through the issuance
of 325,000 shares of common stock to the former advisor. The total purchase 
price, including related costs in excess of the fair value of the net
identifiable assets acquired, was $5,565,000, which is being amortized over the
56 month remaining life of the contract at the time of the buy-out using the
straight-line method. The unamortized balance at December 31, 1995 is
$4,372,000.

        Effective January 1, 1995, the Company brought its Minnesota property
management and leasing operations in-house as a further move to vertically
integrate the Company's operations. This activity included the hiring of the
eight member management team previously employed by the independent property
management firm that was managing the Company's Minnesota properties.
--------------------------------------------------------------------------------
Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

        The financial statements are prepared on the accrual basis in accordance
with generally accepted accounting principles. The preparation of financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and 
expenses during the reporting period. Actual results could differ from these 
estimates.

Rents and Other Receivables

        Management has determined that all of the Company's leases with its
various tenants are operating leases. Revenues for such leases are recognized
using the straight-line method over the remaining term of the leases. 

Real Estate Investments

        Real estate investments are carried at cost less accumulated
depreciation. The provision for depreciation and amortization has been
calculated using the straight-line method based upon the following estimated
useful lives of assets: 

               ------------------------------------------------------
               Buildings.........................       18 - 50 years
               Improvements and Alterations......        2 - 39 years
               ------------------------------------------------------

        Expenditures for maintenance, repairs and betterments that do not
materially prolong the normal useful life of an asset are charged to operations
as incurred and amounted to $874,000, $626,000, and $378,000, for 1995, 1994 and
1993, respectively. 




                                     F-7
<PAGE>   40

Additions and betterments that substantially extend the useful lives of the 
properties are capitalized. Upon sale or other disposition of assets, the 
cost and related accumulated depreciation are removed from the accounts and 
the resulting gain or loss, if any, is reflected in income.

        Real estate investments include capitalized interest and other costs on
significant construction in progress. Capitalized costs are included in the cost
of the related asset and charged to operations through depreciation over the
asset's estimated useful life. Interest capitalized amounted to $137,000,
$89,000, and $58,000 in 1995, 1994 and 1993, respectively.

        Management reviews each property for impairment whenever events or
changes in circumstances indicate that the carrying value of a property may not
be recoverable. The review of recoverability is based on an estimate of
undiscounted future cash flows expected to result from its use and eventual
disposition. If impairment exists due to the inability to recover the carrying
value of a property, an impairment loss is recorded to the extent that the
carrying value of the property exceeds its estimated fair value.

        On March 31, 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of"
("Statement No. 121"). This Statement provides guidance for recognition and
measurement of impairment of long-lived assets, certain identifiable
intangibles and goodwill related both to assets to be held and used and assets
to be disposed of.

        Statement No. 121 is effective for financial statements issued for
fiscal years beginning after December 15, 1995. Thus, for the Company, Statement
No. 121 is effective for the 1996 financial statements. Management does not
expect implementation of Statement No. 121 to have a material effect on the
financial statements of the Company. 

Deferred Charges

        A majority of deferred charges consist of agency commissions incurred in
leasing the Company's properties. Such charges are amortized under the
straight-line method over the life of the related lease. In addition, deferred
charges includes costs incurred in connection with securing long-term debt,
including the costs of entering into interest rate protection agreements. Such
costs are amortized over the term of the related agreement. 

Earnings Per Share

        Earnings per share are based on the weighted-average number of shares
outstanding during each year exclusive of outstanding stock options, which do
not materially affect earnings per share. Per share data and weighted-average
shares outstanding have been restated on the accompanying financial statements
to reflect a one-for-two reverse share split effected on October 17, 1994.

NOTE 2 - REAL ESTATE INVESTMENTS

<TABLE>
        The following is a summary of the Company's real estate investments that
are held for lease at December 31, 1995 and 1994:

<CAPTION>
------------------------------------------------------------------------------------
                                         DECEMBER 31, 1995       December 31, 1994
------------------------------------------------------------------------------------
<S>                                         <C>                    <C>
Land ...............................        $ 35,781,000           $ 34,215,000
Buildings ..........................          88,674,000             84,991,000
Improvements and alterations .......          63,098,000             55,509,000
Construction in progress ...........           1,852,000              3,224,000
------------------------------------------------------------------------------------
                                            $189,405,000           $177,939,000
------------------------------------------------------------------------------------
Accumulated depreciation
  and amortization .................         (27,591,000)           (22,385,000)
------------------------------------------------------------------------------------
                                            $161,814,000           $155,554,000
====================================================================================
</TABLE>

        The following table sets forth detail with respect to the individual
properties owned by the Company at December 31, 1995. The aggregate cost of
those properties for federal income tax purposes was approximately $159,134,000.




                                     F-8
<PAGE>   41


<TABLE>

NOTE 2 -- REAL ESTATE INVESTMENTS (continued)

------------------------------------------------------------------------------------------------------------------------------
<CAPTION>

                                                             Mortgage & Bank loans at                   Initial cost
                                                            December 31, 1995 (Note 3)                 to the Company
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                 Buildings
                                                                                                                    and
                                                         Rate    Maturity         Balance           Land        Improvements
                                                     -------------------------------------------------------------------------
<S>                                                     <C>          <C>       <C>           <C>              <C>
SHOPPING CENTERS
  Har Mar Mall ................................              -         -               -      $ 6,551,000      $15,263,000
  Roseville, Minnesota

  Sun Ray Shopping Center*** ..................         11.750%      1996      4,586,000           82,000        2,945,000
  St. Paul, Minnesota .........................         10.000%      1996      3,734,000
                                                         9.625%      1996      4,000,000
  Terrace Mall ................................              -         -               -          630,000        1,706,000
  Robbinsdale, Minnesota

  Richfield Hub Shopping Center .................        9.875%      1998      5,431,000        3,000,000        5,390,000
  Richfield, Minnesota

  Westwind Plaza ................................            -         -               -        1,949,000        5,547,000
  Minnetonka, Minnesota

  Burning Tree Plaza ............................            -         -               -          609,000        3,744,000
  Duluth, Minnesota

  Hub West Shopping Center ......................        9.875%      1998      5,014,000          757,000          345,000
  Richfield, Minnesota

  White Bear Hills ..............................            -         -               -          750,000        3,762,000
  White Bear Lake, Minnesota

  Rivercrest Shopping Center ....................            *         *               *        7,349,000       17,147,000
  Crestwood, Illinois

  Westview Center ...............................            *         *               *        6,417,000       14,973,000
  Hanover Park, Illinois

  Crossroads Center .............................            *         *               *        2,846,000        8,538,000
  Fairview Heights, Illinois

  Grandview Plaza Shopping Center ...............            *         *               *          414,000        2,205,000
  St. Louis, Missouri

  Hood Commons ..................................            *         *               *          361,000        1,685,000
  Derry, New Hampshire

  Augusta Plaza Shopping Center .................            -         -               -          297,000        1,376,000
  Augusta, Maine

  St. Francis Plaza .............................        8.125%      2008      2,029,000        1,578,000        3,683,000
  Santa Fe, New Mexico

RETAIL/OFFICE BUILDING
  585 Boylston Street ...........................            -          -              -           77,000           18,000
  Boston, Massachusetts

GROUND LEASE
  501-29 Nicollet Avenue ........................        Base*       1996     14,600,000          852,000                -
  Minneapolis, Minnesota                                   or
  Land**                                             LIBOR + 1.875

Total ...........................................                            $39,394,000      $34,519,000      $88,327,000
<FN>

*   Rivercrest, Westview, Crossroads, Grandview, Hood Commons and 501-29 Nicollet Avenue secure borrowings under the Company's 
    line of credit aggregating $14,600,000 at December 31, 1995. Base is defined as the higher of the bank prime rate or the 
    federal funds rate + .5%. At December 31, 1995 base was 8.5%, the bank's prime rate. (See Note 3). Effective 
    January 30, 1995 the rate is Base or LIBOR + 1.875%. 
**  Land area upon which groundtenant has constructed a 670,000 square foot mixed-use retail and office tower. 
*** The mortgage loans secured by Sun Ray were paid-off on January 2, 1996.

Note:  The Sun Ray, Richfield Hub and Hub West loans are cross-collateralized.

Note:  Due to certain provisions in the line of credit agreement the Company may be subject to additional fees as determined by 
       the bank.
</TABLE>




                                     F-9
<PAGE>   42
<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------
                                         Gross amount carried
                                         December 31, 1995
-------------------------------------------------------------------------------------------------------
    Capitalized                     Buildings                                    Date    Lives on which
     Subsequent                       and                       Accumulated    Acquired   Depreciation
   to Acquisition       Land      Improvements        Total     Depreciation  by Company  is Computed
-------------------------------------------------------------------------------------------------------
    <S>             <C>           <C>             <C>           <C>              <C>        <C>
    $ 7,867,000     $ 6,786,000   $ 22,895,000    $ 29,681,000  $ 1,886,000      1992        5 - 39

     11,598,000          91,000     14,534,000      14,625,000    6,857,000      1961        3 - 33

      2,351,000         630,000      4,057,000       4,687,000      330,000      1993        6 - 39

      5,147,000       3,000,000     10,537,000      13,537,000    2,451,000      1988        2 - 39

          5,000       1,949,000      5,552,000       7,501,000      166,000      1994          39

      2,900,000         609,000      6,644,000       7,253,000      394,000      1993        5 - 39

      4,165,000         757,000      4,510,000       5,267,000      540,000      1991         31.5

         49,000         755,000      3,806,000       4,561,000      207,000      1993          39
                                               
      1,694,000       7,349,000     18,841,000      26,190,000      931,000      1994        8 - 39

      1,035,000       6,405,000     16,020,000      22,425,000    1,174,000      1993        4 - 39

        326,000       2,878,000      8,832,000      11,710,000      863,000      1992       2 - 31.5

     14,794,000         427,000     16,986,000      17,413,000    4,804,000      1971        2 - 33
                                               
     10,292,000         366,000     11,972,000      12,338,000    4,080,000      1973       3 - 31.5

      1,769,000         297,000      3,145,000       3,442,000    1,832,000      1971       3 - 31.5

             --       1,578,000      3,683,000       5,261,000       63,000      1995          39
                                               
      1,592,000          77,000      1,610,000       1,687,000    1,013,000      1961        5 - 50

        975,000       1,827,000             --       1,827,000           --      1969          --

    $66,559,000     $35,781,000    153,624,000    $189,405,000  $27,591,000
                 
</TABLE>              
                      


                                     F-10

<PAGE>   43
--------------------------------------------------------------------------------
NOTE 3 - MORTGAGE LOANS AND LINE OF CREDIT

<TABLE>
        The book value of real estate pledged as collateral for loans was
approximately $108,830,000 at December 31, 1995 (see Note 2). Scheduled
principal payments on mortgage loans and the line of credit outstanding at
December 31, 1995 are as follows:

<CAPTION>
---------------------------------------------------------------------------------
<S>                                                                <C>
1996 .........................................................     $27,133,000
1997 .........................................................         250,000
1998 .........................................................      10,282,000
1999 .........................................................         117,000
2000 .........................................................         127,000
Thereafter ...................................................       1,485,000
---------------------------------------------------------------------------------
                                                                   $39,394,000
=================================================================================
</TABLE>

        The Company's revolving bank line of credit, in effect in 1994 and 1995,
provides for borrowings of up to $65,000,000. The borrowings under this
revolving line of credit are secured by a blanket mortgage on Nicollet Avenue,
Hood Commons, Grandview Plaza, Crossroads Center, Westview Center and Rivercrest
Center (see Note 2). The current interest rates available to the Company under
the line of credit are (i) the higher of (x) the rate announced by the lead
lender as its "base rate" or (y) one half of one percent (.5%) above the
overnight federal funds effective rate published by the Board of Governors of
the Federal Reserve System and (ii) the adjusted LIBOR rate (as defined therein)
plus one and seven-eighths percent (1.875%). The weighted average effective
borrowing rate during 1995 was 8.0%. Among other requirements, the facility
provides for an annual commitment fee of .25% on the unused portion of the line
of credit. As of December 31, 1995, the line of credit matures in December 1996.

        In order to reduce the Company's (and thus the lenders') exposure to the
risks associated with floating rate debt, the line of credit requires that the
Company maintain interest rate protection, at a rate satisfactory to the lead
lender, with respect to at least $30 million of indebtedness. As required, the
Company entered into an interest rate protection agreement in January 1994 with
its lead lender for a premium of $30,000, which has the effect of mitigating
increases in interest rates available under the line of credit with respect to
the protected amount by reimbursing the Company the amount by which the then
applicable three-month LIBOR Rate (as defined in the interest rate protection
agreement) for the protected amount exceeds the then applicable cap rate (as
described below) for the protected amount. The cap rate is 8.7% for the period
January 30, 1995 through January 28, 1996 and 8.9% for the period January 29,
1996 through January 28, 1997. The interest rate protection agreement had no
effect on the Company's interest expense in 1995 or 1994.

        The Company's line of credit contains certain covenants which, among
other provisions, require lenders' consent regarding the incurrence of
additional indebtedness, the signing of certain leases and the sale and purchase
of assets by the Company. The covenants also provide for the maintenance of
certain financial tests, including minimum net worth and debt service coverage
requirements, and contain cross-default and cross-collateral provisions. The
Company believes that such covenants will not adversely affect the Company's
business or the operation of its properties. 

        On January 2, 1996, the Company paid-off its mortgage loans of
$12,320,000 secured by the Sun Ray Shopping Center investment with proceeds from
the bank line of credit.



                                     F-11
<PAGE>   44
--------------------------------------------------------------------------------
NOTE 4 - RENTALS UNDER OPERATING LEASES 

<TABLE>
        Annual minimum future rentals to be received under non-cancelable
operating leases in effect at December 31, 1995 are as follows:
<CAPTION>
---------------------------------------------------------------------------------
     <S>                                                            <C>
     1996 ......................................................    $23,178,000
     1997 ......................................................     21,637,000
     1998 ......................................................     19,595,000
     1999 ......................................................     17,734,000
     2000 ......................................................     15,950,000
     Later Years ...............................................    192,455,000
---------------------------------------------------------------------------------
Total Minimum Future Rentals ...................................   $290,549,000
=================================================================================
</TABLE>

       Total minimum future rentals do not include contingent rentals under
certain leases based upon lessees' sales volume. Contingent rentals earned
amounted to approximately $1,083,000, $1,121,000, and $772,000 in 1995, 1994 and
1993, respectively. Certain leases also require lessees to pay all or a portion
of real estate taxes and oper ating costs, amounting to $10,774,000, $9,259,000
and $6,193,000 in 1995, 1994 and 1993, respectively.

       No tenant accounted for as much as 10% of rental income in 1995, 1994 or
1993.

NOTE 5 - INCOME TAXES

       The Company has elected to be taxed as a real estate investment trust
("REIT") under the Internal Revenue Code (the "Code"). Under the Code, a
qualifying REIT that distributes at least 95% of its ordinary taxable income to
its stockholders is entitled to a tax deduction in the amount of the
distribution. In addition, qualifying REITs a re permitted to deduct capital
gain distributions in the determination of the tax on capital gains. The Company
paid distributions to stockholders aggregating $13,098,000, $10,568,000 and
$8,285,000 in 1995, 1994 and 1993, respectively. The Company has determined that
for Federal income tax purposes approximately 84% of the distributions paid in
1995 were ordinary dividends and approximately 16% were a return of capital;
approximately 74% of the distributions paid in 1994 were ordinary dividends and
approximately 26% were a return of capital; and approximately 70% of the
distributions paid in 1993 were ordinary dividends and approximately 30% were a
return of capital.

NOTE 6 - STOCKHOLDERS' EQUITY

        Per share information prior to October 17, 1994 has been adjusted to
reflect the Company's one-for-two reverse stock split effected on October 17,
1994. In December 1992, the Company issued 3,000,000 shares at a public offering
price of $14.75 per share. In January 1993, pursuant to the exercise of the
underwriters' over-allotment option in connection with such public offering, the
Company issued another 450,000 shares at the same public offering price. Net
proceeds to the Company related to the January offering were $6,224,000 after
additional offering costs of approximately $414,000.

        In July 1993, the Company issued 2,828,500 shares (including 78,500
shares issued pursuant to the underwriters' exercise of their over-allotment
option) at a public offering price of $17 per share. Net proceeds to the Company
were approximately $44,934,000 after offering costs of approximately $3,150,000.

        In December 1994, the Company filed a shelf registration with the
Securities and Exchange Commission to register $125 million of common stock,
preferred stock, debt securities, warrants, rights or units of the foregoing
securities that the Company may issue through underwriters or in privately
negotiated transactions for cash from time to time.

        In January 1995, the Company issued 325,000 shares of common stock in
conjunction with the purchase of the REIT advisory business of its former
advisor. In April 1995, the Company issued 182,500 shares of common stock at a
price of $17 per share, which proceeds were applied to the acquisition of St.
Francis Plaza. In July 1995, the Company completed a public share offering of
2,500,000 


                        

                                     F-12
<PAGE>   45
shares of common stock at a price of $16 per share. Net proceeds from the 
offering were approximately $37,405,000 (net of offering costs of approximately
$2,595,000), of which $32,600,000 was used to pay-down the Company's bank line
of credit and $4,712,000 was used to pay-off the non-recourse mortgages 
assumed in November 1994 in connection with the Westwind Plaza purchase.        

        Under the Company's Dividend Reinvestment and Share Purchase Plan in
effect since 1993, stockholders of record owning at least 100 shares may elect
to reinvest cash dividends and make limited additional cash payments (minimum
$100, maximum $2,500 per quarter) to purchase newly issued shares of the
Company without brokerage fees or other transaction costs, at a 3% discount
from market prices (as determined in the Plan). During 1995, 1994 and 1993, the
Company issued 16,714, 8,530 and 5,550 shares, respectively, under this Plan.

--------------------------------------------------------------------------------
NOTE 7 - STOCK OPTION PLANS
--------------------------------------------------------------------------------
        In 1985, the Company adopted an Incentive Stock Option Plan for officers
and key employees under which options for 75,000 shares were granted. No further
options may be granted under the 1985 plan, but options for 54,751 and 61,875
shares remain outstanding at December 31, 1995 and 1994, respectively.

        In 1993, the shareholders approved a new 1993 Stock Option Plan which
authorizes options to be granted for up to 5% of the Company's shares
outstanding. During 1995, 217,500 options were granted under this Plan. At
December 31, 1995 and 1994, 240,500 and 29,500 options, respectively, remained
outstanding under this Plan.

        A committee of the Board of Directors administers both Plans and is
responsible for selecting persons eligible to be granted options and determining
the number and purchase price of shares subject to option (which in the case of
incentive options may not be less than the fair market value of shares at the
date of grant), the duration of an option (which may not be more than ten years
from date of grant) and the times when shares may be issued upon exercise of an
option.

<TABLE>
        A summary of option transactions during the periods covered by these
financial statements is as follows:
<CAPTION>

-----------------------------------------------------------------------------------
                                                                    Exercise Prices
                                                           Shares      Per Share
-----------------------------------------------------------------------------------
<S>                                                       <C>      <C>       <C>
Outstanding at December 31, 1992 ....................      52,875  $11.50  - $22.00
Granted .............................................      44,500  $14.75  - $17.00
Exercised ...........................................      (6,000)      $11.50
-----------------------------------------------------------------------------------
Outstanding at December 31, 1993 and 1994 ...........      91,375  $11.50  - $22.00
Granted .............................................     217,500  $14.875 - $16.50
Expired .............................................      (4,624) $16.66  - $21.25
Exercised ...........................................      (9,000) $11.50  - $14.875
-----------------------------------------------------------------------------------
Outstanding at December 31, 1995 ....................     295,251  $11.50  - $22.00
===================================================================================
</TABLE>

        All options outstanding at December 31, 1995 are fully vested and have a
duration of ten years from the date of grant, subject to earlier termination in
certain circumstances.

--------------------------------------------------------------------------------
NOTE 8 - FAIR VALUE OF FINANCIAL INSTRUMENTS

        Statement of Financial Accounting Standards No. 107, "Disclosures about
Fair Value of Financial Instruments", requires the Company to make disclosure of
the fair value information of all financial instruments, whether or not
recognized in the balance sheet, for which it is practicable to estimate fair
value.

        The Company's financial instruments, other than debt and an interest
rate protection agreement for the Company's line of credit, are generally
short-term in nature and contain minimal credit risk. These instruments consist
of cash, rents and other receivables, and accounts payable. The carrying amount
of these assets and liabilities in the balance sheet are assumed to be at fair
value.



                                     F-13
<PAGE>   46
        The Company's mortgage loans are at fixed rates, and when compared with
borrowing rates currently available to the Company with similar terms and
average maturities, approximate fair value. The Company's line of credit is at a
variable rate, which results in a carrying value that approximates its fair
value. It is not practicable to estimate the fair value of the interest rate
protection agreement; however, the replacement cost of the interest rate cap is
not material based on prevailing market rates.

--------------------------------------------------------------------------------
NOTE 9 - COMMITMENTS/SUBSEQUENT EVENTS

        At December 31, 1995, the Company had commitments of approximately
$515,000 for tenant related capital improvements. Cash flow from operations and
the Company's revolving bank line of credit are available to fund these
improvements.

        The Company has entered into an agreement with Brookfield Development,
Inc., the current ground lessee, regarding the proposed sale by the Company of
its interest in 501-529 Nicollet Avenue, Minneapolis, Minnesota. The sale price,
subject to standard closing adjustments, is $12,900,000. If consummated, the
sale would result in a gain of approximately $9,182,000 for financial reporting
purposes and $10,800,000 for federal income tax purposes. For federal income tax
purposes, however, the Company intends to structure the transaction in part as a
tax deferred "like-kind" exchange. In that regard, the Company intends to
identify Brookdale Square Shopping Center, a 185,000 square foot community
shopping center located in Brooklyn Center, Minnesota ("Brookdale"), as the
replacement property in the exchange. The purchase price for Brookdale, subject
to standard closing adjustments, is $8,750,000. Brookdale is currently owned by
a major insurance Company whose asset disposition team has agreed upon the
business terms which it will recommend to its corporate office. To the extent
that the sales proceeds from 501-529 Nicollet Avenue exceed the purchase price
of Brookdale, the Company intends to apply such excess to reduce its line of
credit with the First National Bank of Boston.

--------------------------------------------------------------------------------
NOTE 10 - MERGER AGREEMENT

        On March 15, 1996, the Company closed the merger acquisition of Tucker
Properties Corporation ("Tucker"), after approval of such merger by the
stockholders of the two companies. The acquisition was completed through the
issuance of 7,428,202 common shares of the Company valued at $13.96 per share,
in exchange for 100% of the outstanding shares of Tucker, payment of certain
transaction costs and the assumption of all of Tucker's liabilities. The Tucker
shareholders received .686 of a share of Bradley for each outstanding Tucker
share. The acquisition was structured as a tax-free transaction, and will be
accounted for using the purchase method of accounting. Accordingly, the purchase
price will be allocated to the assets purchased and the liabilities assumed
based upon the fair values at the date of acquisition. Any difference between
the purchase price and fair value of net assets acquired is not expected to be
significant. As a result of the merger the Company owns 31 properties
aggregating approximately 7.4 million square feet in eleven states.

<TABLE>
        The following table sets forth certain summary unaudited pro forma
balance sheet information for the Company as if the merger had occurred as of
December 31, 1995.
<CAPTION>
--------------------------------------------------------------------------------
                                                   Historical       Pro Forma
--------------------------------------------------------------------------------
                                                                   (Unaudited)
<S>                                               <C>             <C>
Total assets ..................................   $180,545,000    $491,156,000
Total debt ....................................   $ 45,447,000    $247,966,000
Stockholders' equity ..........................   $135,098,000    $238,796,000
</TABLE>




                                     F-14
<PAGE>   47
<TABLE>
The following table sets forth certain summary unaudited pro forma operating
data for the year ended December 31, 1995 as if the merger, the July    
offering and the acquisition of St. Francis Plaza had been consummated on
January 1, 1995, after giving effect to certain adjustments including a
reduction in depreciation expense due to longer useful lives and estimated cost
savings of the combined entity.

<CAPTION>
---------------------------------------------------------------------------------
                                                    Historical      Pro Forma
---------------------------------------------------------------------------------
                                                                   (Unaudited)
<S>                                                <C>             <C>     
Total revenues ...............................     $36,572,000     $87,922,000
Net income ...................................     $ 8,431,000     $19,038,000
Net income per share .........................     $      0.85     $      1.02
</TABLE>

        The unaudited pro forma operating data are presented for comparative
purposes only and are not necessarily indicative of what the actual results of
operations would have been for the year ended December 31, 1995, nor does such
data purport to represent the results to be achieved in future periods.

        In conjunction with the merger, on March 15, 1996 the Company entered
into a new $150 million unsecured revolving credit facility with The First
National Bank of Boston. The line bears interest at a rate equal to the lower of
the bank's base rate or 1.75% over LIBOR. The rates available under the line
become more favorable in the event the Company meets certain loan-to-value
tests or receives an investment grade unsecured debt rating. In addition to
replacing outstanding borrowings under the Company's and Tucker's previously
outstanding secured lines of credit, the facility is available for the
acquisition, development, renovation and expansion of new and existing
properties (including, but not limited to, capital improvements, tenant
improvements and leasing commissions), and other working capital purposes. 

        The Company's new line of credit contains certain financial and
operational covenants that, among other provisions, limit the amount of secured
and unsecured indebtedness the Company may have outstanding at any time to a
percentage of the Company's Consolidated Market Value as defined, and provide
for the maintenance of certain financial tests including minimum net worth and
debt service coverage requirements.

<TABLE>
NOTE 11 - SUPPLEMENTARY QUARTERLY DATA (UNAUDITED)
<CAPTION>
-------------------------------------------------------------------------------------------
                                                 March 31,  June 30,  Sept. 30,  Dec. 31,
                                                    1995      1995       1995      1995
-------------------------------------------------------------------------------------------
                                                (Thousands of dollars except per share data)
<S>                                                <C>       <C>        <C>       <C>
Rental income .................................    $8,615    $8,686     $9,396    $9,708
Net income ....................................    $1,835    $1,638     $2,357    $2,601
Net income per share ..........................    $  .22    $  .19     $  .21    $  .23
</TABLE>


<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
                                                  March 31, June 30,   Sept. 30,  Dec. 31,
                                                    1994      1994       1994      1994
-------------------------------------------------------------------------------------------
                                                (Thousands of dollars except per share data)
<S>                                                <C>       <C>        <C>       <C>
Rental income ................................     $7,455    $8,474     $8,538    $8,408
Net income ...................................     $2,094    $1,994     $1,850    $2,689
Net income per share .........................     $  .25    $  .24     $  .23    $  .33
</TABLE>

                                   

                                     F-15
<PAGE>   48
<TABLE>

                                                                    SCHEDULE III

                            BRADLEY REAL ESTATE, INC.
                            -------------------------

                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                    ----------------------------------------
               
<CAPTION>

     Cost                               December 31,
     ----                               -----------
                                 1995                 1994                  1993
                                 ----                 ----                  ----
<S>                           <C>                 <C>                   <C>
Balance, beginning of year    $177,939,000        $138,189,000          $ 98,840,000
Improvements and other
     additions:                 11,466,000          41,443,000            39,349,000
Sale of property                     -              (1,683,000)                -
                              ------------        ------------          ------------
Balance, end of year          $189,405,000        $177,939,000          $138,189,000
                              ============        ============          ============


 Accumulated Depreciation
 ------------------------
Balance, beginning of year    $ 22,385,000        $ 18,156,000          $ 15,090,000
Depreciation provided            5,206,000           4,330,000             3,066,000
Sale of property                     -                (101,000)                -
                              ------------        ------------          ------------
Balance, end of year          $ 27,591,000        $ 22,385,000          $ 18,156,000
                              ============        ============          ============

</TABLE>





                                       F-16

<PAGE>   49
                              INDEX TO EXHIBITS


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

   3.3         Articles of Merger between Tucker                        
               Properties Corporation and Bradley Real                
               Estate, Inc.                                           

  10.2         Revolving Credit Agreement dated as of March 15,        
               1996 by and among the Company, Bradley Operating 
               Limited Partnership and The First National Bank 
               of Boston.                                             

  10.3         Indenture dated as of June 1, 1994 between Tucker       
               Financing Partnership (name changed March 15, 1996 
               to Bradley Financing Partnership) and Bankers Trust 
               Company of California, N.A. relating to 7.30% 
               Mortgage Notes due September 30, 2000.                 

  21.1         Subsidiaries of the Company.                            

  23.1         Consent of KPMG Peat Marwick LLP (regarding Form        
               S-3 and Form S-8 Registration Statements).             

  27.1         Financial Data Schedule.