<TABLE>
<CAPTION>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

<S>  <C>
[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, 1999

or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES                       to
    EXCHANGE ACT OF 1934 [No Fee Required] for the transition period from  ------------------     --------------

                         Commission file Number: 1-12286

                            Mid-Atlantic Realty Trust
             (Exact name of registrant as specified in its charter)

          Maryland                                                                  52-1832411
-------------------------------                                               -----------------------
(State or other jurisdiction of                                                 (I.R.S. Employer
incorporation or organization)                                                  Identification No.)

170 West Ridgely Road, Suite 300 - Lutherville, Maryland                              21093
--------------------------------------------------------                      -----------------------
(Address of principal executive offices)                                            (Zip Code)

Registrant's telephone number, including area code                                (410) 684-2000
                                                                              -----------------------

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

                                      NONE
                                      ----

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


              Common Shares of Beneficial Interest, $.01 par value

                                (Title of Class)
                                 --------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

                 _____X_____ Yes  _________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 the
Form 10-K. [X]

As of March 10,  2000,  13,912,372  common  shares  of  beneficial  interest  of
Mid-Atlantic  Realty Trust were  outstanding  and the aggregate  value of common
stock (based upon the $9.00 closing  price on that date) held by  non-affiliates
was approximately $125,211,348.

                       Documents Incorporated by Reference

The  definitive  proxy  statement  with  respect to the 2000  annual  meeting of
Mid-Atlantic Realty Trust shareholders (to be filed).
</TABLE>

                                      1
<PAGE>



                                     PART I

ITEM 1 - BUSINESS

Background

         Mid-Atlantic Realty Trust was incorporated June 29, 1993, and commenced
operations effective with the completion of its initial public share offering on
September  11,  1993.  Mid-Atlantic  Realty  Trust  qualifies  as a real  estate
investment trust ("REIT") for Federal income tax purposes.  As used herein,  the
term "MART" or the "Company"  refers to  Mid-Atlantic  Realty Trust and entities
owned or controlled by MART,  including MART Limited Partnership (the "Operating
Partnership").

         The  Company  is a  fully  integrated,  self-administered  real  estate
investment trust which owns, acquires, develops,  redevelops, leases and manages
primarily  neighborhood  or community  shopping  centers in the Middle  Atlantic
region of the United  States.  The Company's  primary  objectives are to enhance
funds from  operations  ("FFO") per share and  maximize  shareholder  value.  To
achieve  its  objectives,  the  Company  seeks to  operate  its  properties  for
long-term  FFO growth.  The Company  also  acquires  neighborhood  or  community
shopping  centers that either have dominant  anchor  tenants or contain a mix of
tenants which reflects the shopping  needs of the  communities  they serve.  The
Company also develops and redevelops shopping centers on a tenant-driven  basis,
leveraging  either existing tenant  relationships  or geographic and demographic
knowledge  while seeking to minimize  exposure to risk associated with long-term
land development.

         The Company's financial strategy is to execute its operating and growth
strategies  by  utilizing a blend of  internally  generated  funds,  issuance of
Operating   Partnership  Units,  defined  below,   proceeds  from  divestitures,
institutional   borrowings  and  issuance  of  corporate   equity  or  debt,  as
appropriate.  The Company  currently intends to maintain a ratio of secured debt
to total estimated property value at or below 50%.

         The Company has an equity interest in 33 operating shopping centers, 27
of which  are  wholly  owned by the  Company  and six in which the  Company  has
interests  ranging  from  50% to 93%,  as well as other  commercial  properties,
collectively  the  "Properties".  The  Properties  have a gross leasable area of
approximately  4,629,000 square feet, of which  approximately  93% was leased at
December 31, 1999. Of these Properties,  approximately 99% of the gross leasable
area  is  in  the  states  of  Maryland,   Virginia,  New  York,   Pennsylvania,
Massachusetts and Delaware.  The Company also owns seven undeveloped  parcels of
land  totaling  approximately  147  acres  and  varying  in size  from  three to
sixty-four acres.

         All of  MART's  interests  in  the  Properties  are  held  directly  or
indirectly  by,  and  substantially  all  of  its  operations  relating  to  the
Properties are conducted through the Operating Partnership. Units of partnership
interest in the Operating  Partnership ("Units") may be exchanged by the limited
partners for cash or common shares of beneficial  interest in MART at the option
of the Company on a one-for-one  basis. MART controls the Operating  Partnership
as the sole general partner, and owns approximately 82% of the Units at December
31, 1999.

         The  business  of the  Company is not  materially  affected by seasonal
factors.  Although  construction  may be affected  to some  extent by  inclement
weather conditions, usually during winter months, revenues from income producing
properties  held for investment are usually not affected  significantly  by such
conditions.

         The  commercial  real estate  development  and  investment  industry is
subject to widespread  competition for desirable  sites,  tenants and financing.
The  industry is  extremely  fragmented  and there are no  principal  methods of
competition.  However,  the  ability to compete  is  dependent  in part upon the
ability  to  identify  and  acquire  and/or  develop   appropriate  real  estate
investment  opportunities in a timely manner.  While many competitors have fewer
assets and financial resources than the Company, there are many competitors with
greater  financial  resources  competing  for  similar  business  opportunities.
Accordingly,  it is not  possible  to  estimate  the  Company's  position in the
industry.  In addition,  certain of the Company's real estate  projects are near
unimproved sites that could be developed  commercially and would provide further
competition  to the Company.  The management of the Company  believes,  however,
that the Company  competes  favorably  in the industry due to the quality of its
developments,  its ability to take advantage of opportunities as they arise, its
access to capital and its reputation.

         The  Company  has  61  full  time   employees  and  believes  that  its
relationship with its employees is good.

                                      2

<PAGE>


ITEM 2 - PROPERTIES

The following schedule  describes the Company's  commercial and other properties
as of December 31, 1999.

<TABLE>
<CAPTION>
                                                                               Gross
                                                                  Year(s)    Leasable
                                          Percent       Year      Built/        Area    Percent
                                         Ownership    Acquired  Redeveloped  ( Sq. Ft.) Leased    Major Tenants
                                         ---------    --------  -----------  ---------- ------    -------------

SHOPPING CENTER PROPERTIES (1)

MARYLAND
<S>                                         <C>         <C>      <C>          <C>         <C>    <C>
      Baltimore Metropolitan Area:
Harford Mall and Business Center (2)        100%        1972    1972/1984-96   613,000    97%     Hecht's, Montgomery Ward, Best
                                                                                                  Buy

Arundel Plaza Shopping Center               67%         1997     1967/1998     250,000   100%     Giant Food, Lowe's Home Center

Lutherville Station Shopping Center (3)     100%        1993     1969/1997     285,000    59%     Metro Food Market, Circuit City

North East Station Shopping Center          100%        1989       1998/-      79,000     97%     Food Lion, Sears

Timonium Shopping Center                    100%        1997       1962/-      207,000    95%     Ames, Loews Theaters, Blockbuster

Perry Hall Shopping Center                  100%        1997     1965/1996     195,000    89%     Metro Food Market (on own pad),
                                                                                                     Rite Aid, Frank's Nursery &
                                                                                                     Crafts

Enchanted Forest Shopping Center            100%        1997       1992/-      140,000    93%     Safeway, Petco

Wilkens Beltway Plaza Shopping Center       93%        1981*      1985-87/     132,000    97%     Giant Food, Provident Bank,
                                                                 1991/1995                            Radio Shack

New Town Village Shopping Center            100%       1995*       1995/-      118,000    96%     Giant Food, Blockbuster,
                                                                                                      Starbucks

Ingleside Shopping Center                   100%        1997     1963/1996     115,000   100%     Safeway, Rite Aid, Allfirst
                                                                                                     Bank, Blockbuster

Shawan Plaza Shopping Center                100%        1997       1991/-      95,000    100%     Giant Food, Nationsbank,
                                                                                                      Provident Bank

Glen Burnie Village Shopping Center         100%        1997       1972/-      94,000     74%     Rite Aid, Firestone, Allfirst
                                                                                                      Bank, West Marine

York Road Plaza Shopping Center             100%       1967*     1967/1996     91,000     97%     Giant Food, Firestone, Starbucks,
                                                                                                      Boston Market

Radcliffe Shopping Center at Towson         100%        1997     1988/1993     82,000    100%     CVS Drug, CompUSA, Linens N'
                                                                                                      Things, Bryn Mawr Stereo

Rosedale Plaza Shopping Center              100%        1989       1972/-      40,000     74%     A&P (Super Fresh), Exxon, Rite Aid

Patriots Plaza Shopping Center (3)          50%        1984*       1984/-      67,000     65%     Denny's, Dunkin Donuts

Rolling Road Plaza Shopping Center          100%       1973*     1973/1994     63,000     97%     AMF, Firestone

Timonium Crossing Shopping Center           100%        1997     1986/1996     60,000     96%     Bibelot, Cosmetic Center

Club Centre at Pikesville Shopping          100%        1997       1990/-      44,000     92%     Blockbuster

      Easton:
Shoppes at Easton Shopping Center           100%        1994       1994/-      113,000   100%     Giant Food, Wal-Mart (on own pad)

DELAWARE
      Wilmington:
Brandywine Commons Shopping Center (3)      100%        1995       1992/-      166,000   100%     Shop Rite, Office Depot,
                                                                                                      Sports Authority
      Milford:
Milford Commons Shopping Center             100%        1997        1994       61,000    100%     Food Lion, Remco
                                                                                                         Wal-Mart (on own pad)

                                      3

<PAGE>


ITEM 2 - PROPERTIES     (CONTINUED)

                                                                               Gross
                                                                  Year(s)    Leasable
                                          Percent       Year      Built/        Area    Percent
                                         Ownership    Acquired  Redeveloped  ( Sq. Ft.) Leased    Major Tenants
                                         ---------    --------  -----------  ---------- ------    -------------

PENNSYLVANIA
      Bethlehem:
Saucon Valley Square                       89%        1999        1998       81,000        100%      A&P (Super Fresh), Blockbuster

      Chambersburg:
Wayne Avenue Plaza Shopping Center         100%       1998     1990/1993     121,000        98%      Giant Food (of Carlisle), CVS
                                                                                                        Blockbuster
      Waynesboro:
Wayne Heights Plaza Shopping Center        100%       1998       1975/-      107,000        90%      Martins (Giant of Carlisle),
                                                                                                        Ames, Eckerd Drug

MASSACHUSETTS
      Pittsfield:
Del Alba Plaza Shopping Center             100%       1998       1995/-       70,000       100%      Stop & Shop, First Mass Bank

NEW YORK
      Colonie:
Colonie Plaza Shopping Center              100%       1987*      1987/-       140,000       88%      Price Chopper, Consolidated
                                                                                                        Stores

      East Greenbush:
Columbia Plaza Shopping Center             100%       1988*     1988/1997     133,000       93%      Price Chopper, Ben Franklin

VIRGINIA
      Burke:
Burke Town Plaza Shopping Center (3)       100%       1979*    1979-1982/1997 116,000       88%      Safeway, CVS Drug

      Fredericksburg:
Spotsylvania Crossing Shopping Center      93%        1987*     1987/1991     142,000       93%      Giant Food (on own pad), Kmart,
                                                                                                         Fashion Bug
      Harrisonburg:
Skyline Village Shopping Center            100%       1988*     1988/1992     127,000      100%      Richfood, Toys "R" Us

      Manassas:
Sudley Towne Plaza Shopping Center         100%       1984*       1984/-      108,000      100%      Burlington Coat Factory

      Dale City:
Smoketown Plaza Shopping Center            93%        1987*     1987/1994     176,000       92%      Hub Furniture, Frank's Nursery
                                                                                                        & Crafts


                                      4

<PAGE>

                                                                               Gross
                                                                  Year(s)    Leasable
                                          Percent       Year      Built/        Area    Percent
                                         Ownership    Acquired  Redeveloped  ( Sq. Ft.) Leased    Major Tenants
                                         ---------    --------  -----------  ---------- ------    -------------


OTHER RETAIL AND COMMERCIAL PROPERTIES (4)

MARYLAND
      Baltimore Metropolitan Area:
Orchard Square Medical Office               100%       1997       1988/-      28,000         84%      N/A

Southwest Mixed Use Property                100%       1968*     1968/1984    25,000        100%      Shell Oil, Otis, Potomac Air
                                                                                                       Gas

      Other:
Waldorf Property                            100%       1979*      1979/-      31,000        100%      AMF, Firestone

Clinton Property (3)                        100%       1971*      1971/-      29,000        100%      AMF, Suburban Bank

ILLINOIS
Chicago Property                            100%       1978       1963/-      37,000        100%      AMF

</TABLE>

<TABLE>
<CAPTION>
                                                                                             Area
                                                                               Percent        in
                                                                              Ownership     Acres            Zoning
                                                                              ---------     -----            ------

UNDEVELOPED LAND

<S>                                                                          <C>            <C>             <C>
MARYLAND
      Baltimore Metropolitan Area:
Dorsey Property                                                                 100%         19.4            Commercial

Harford Property (Adjacent to Harford                                           100%          3.0            Light Industrial

Northeast Station Property                                                      100%         63.7            Commercial

Pulaski Property                                                                100%          3.0            Industrial

      Salisbury:
Northwood Industrial Park                                                        67%         16.1            Industrial

NORTH CAROLINA
      Burlington:
Burlington Commerce Park                                                        100%         34.3            Commercial

      Hillsborough:
Hillsborough Crossing                                                           100%          8.0            Commercial

</TABLE>

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

(1)  Shopping centers in operation are subject to mortgage financing aggregating
     $134,252,869 at December 31, 1999.

(2)  The Harford  Mall  property is subject to  mortgage  financing  aggregating
     $18,994,922  at December 31, 1999. The mortgage bears interest at a rate of
     9.78% and a balloon payment of $18,148,848 is due at maturity in July 2003.
     The mortgage  allows  prepayment with a penalty of the greater of 1% of the
     outstanding      principal      balance      or     yield      maintenance.

(3)  These properties are subject to ground leases;  all of the land relating to
     the other properties listed above is owned in fee simple. The ground leases
     are         subject         to         the         following         terms:

<TABLE>
<CAPTION>

                     Property                 Annual Rent                  Remaining Lease Term
                     --------                 -----------                  --------------------

<S>                                              <C>            <C>
Lutherville Station Shopping Center              $60,000        17 years plus six 10 year options
Lutherville Station Shopping Center              $26,000        47 years
Patriots Plaza Shopping Center                   $59,700         8 years plus two 10 year options
Brandywine Commons Shopping Center              $392,600        53 years plus two 10 year options
Burke Towne Plaza Shopping Center                $80,000        32 years plus three 15 year options
Clinton Property                                 $33,000        27 years plus one 45 year option

</TABLE>

(4)  Other retail and commercial properties in operation are subject to mortgage
     financing     aggregating     $2,594,962     at    December    31,    1999.

* Developed by MART


                                      5
<PAGE>


ITEM 3 - LEGAL PROCEEDINGS

In  the  ordinary  course  of  business,   the  Company  is  involved  in  legal
proceedings.  However, there are no material legal proceedings presently pending
against the Company.



ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None



PART II

ITEM 5 - MARKET  FOR THE  REGISTRANT'S  COMMON  STOCK  AND  RELATED  STOCKHOLDER
MATTERS
The number of holders of record of the Company's  shares was 1,065 as of
March 10, 2000.

MART's  common  shares  of  beneficial  interest,  par  value  $.01  per  share,
("shares"),  began trading on the New York Stock Exchange on September 18, 1997,
under the symbol  "MRR".  The  following  table  sets  forth,  for the  quarters
indicated,  the high and low closing sale prices of MART shares on the NYSE, and
the cash distributions paid per share for the indicated period.



                            Closing Prices Per Share
                          1999           High         Low       Distributions
--------------------------------------------------------------------------------


First Quarter                         $  12.625       9.812         0.26
Second Quarter                           12.125      10.000         0.26
Third Quarter                            11.375      10.063         0.26
Fourth Quarter                           10.438       8.875         0.27




                          1998           High         Low      Distributions
--------------------------------------------------------------------------------


First Quarter                         $  14.750      13.062        0.25
Second Quarter                           14.187      12.250        0.25
Third Quarter                            13.500      11.312        0.25
Fourth Quarter                           13.062      11.250        0.26



     For the  record  shareholders  of MART  during  the  entire  year per share
dividends indicated were taxable as follows:

<TABLE>
<CAPTION>
                                                                        Per Share
                                                              ==============================
                                                              1999        1998          1997
                                                              ------------------------------
<S>                                                           <C>         <C>           <C>
Ordinary Dividends - taxable as ordinary income             $ 0.90        0.85          0.97
Capital gain distribution - taxable as capital gain            -          0.01             -
Other distribution - return of capital or
   capital gain - (depending on a shareholder's
   basis in MART shares)                                      0.15        0.15             -
                                                              ------------------------------
Total annual gross dividends per share                      $ 1.05        1.01          0.97
                                                              ==============================

Percent of total annual gross dividends per share
  -Return of capital or capital gain                          14%         15%              -
                                                              ==============================
</TABLE>
                                      6

<PAGE>



ITEM 6 - SELECTED FINANCIAL DATA

The  following  table sets forth  certain  consolidated  financial  data for the
Company  and  should  be read in  conjunction  with the  consolidated  financial
statements and notes thereto included elsewhere in this report.

<TABLE>

                                                                     Years Ended December 31,
                                         1999             1998            1997            1996            1995
                                  ----------------------------------------------------------------------------------
<S>                                      <C>              <C>             <C>             <C>             <C>
Revenues                          $      53,346,473       49,537,130      39,152,220      32,406,300      29,593,158
                                  ----------------------------------------------------------------------------------
Earnings before cumulative
effect of changes in accounting
principle and extraordinary loss         12,751,158       12,385,861       6,819,211       3,508,709       3,165,082

Cumulative effect of change
in accounting for percentage rents                -                -               -               -         612,383
                                 -----------------------------------------------------------------------------------

Earnings before extraordinary loss       12,751,158       12,385,861       6,819,211       3,508,709       3,777,465
Extraordinary loss                                -         (32,984)       (226,873)               -               -
                                 -----------------------------------------------------------------------------------
Net earnings                      $      12,751,158       12,352,877       6,592,338       3,508,709       3,777,465
                                 -----------------------------------------------------------------------------------

Net earnings per share - basic    $            0.89             0.85            0.70            0.56            0.61
Net earnings per share - diluted               0.88             0.84            0.70            0.56            0.61
                                 -----------------------------------------------------------------------------------
Total assets                      $     328,570,661      317,008,617     298,154,555     173,278,241     182,521,299
                                 -----------------------------------------------------------------------------------


Indebtedness -

   Total mortgages, convertible
   debentures, construction
   loans, notes and loans payable $     186,593,831      166,732,850     145,660,657     133,805,495     154,020,757
                                 -----------------------------------------------------------------------------------

Funds from Operations (FFO) (1)   $      22,176,751       21,203,335      13,757,178       8,621,847       7,427,274
                                 -----------------------------------------------------------------------------------
Net cash flow:

   Provided by operating
   activities                     $      25,153,624       24,255,137      16,005,958       9,898,948      11,193,068

   (Used in) provided by
   investing activities           $     (24,175,685)      (21,668,918)    (5,995,155)      4,231,471     (23,584,229)

   (Used in) provided by
   financing activities           $      (1,441,168)      (10,402,329)    (2,597,424)    (13,631,237)     12,561,025

                                 -----------------------------------------------------------------------------------
Cash dividends paid per share     $            1.05              1.01           0.97            0.93            0.89
                                 -----------------------------------------------------------------------------------

Weighted average number
of shares outstanding:

   Basic                                 14,021,403        14,240,533      9,308,682       6,211,092       6,176,991

   Diluted                               15,337,652        15,778,727      9,360,566       6,211,092       6,176,991
                                 -----------------------------------------------------------------------------------

RECONCILIATION OF NET EARNINGS TO FFO

Net Earnings                      $      12,751,158        12,352,877      6,592,338       3,508,709       3,777,465

Depreciation                              9,557,204         8,813,251      6,954,803       5,413,737       4,983,617

Gain on life insurance proceeds                   -                 -              -               -      (1,001,787)

(Gain) loss on properties                 (131,611)             4,223       (16,836)       (300,599)         280,362

Cumulative effect of change in
     accounting for percentage rents              -                 -             -               -         (612,383)

Extraordinary loss from early
extinguishment of debt                            -            32,984       226,873               -                -
                                 -----------------------------------------------------------------------------------
FFO                               $      22,176,751        21,203,335    13,757,178       8,621,847        7,427,274
                                 -----------------------------------------------------------------------------------

<FN>
          (1)  The  Company  believes  that  Funds  from  Operations  (FFO)
               provides relevant and meaningful  information about its operating
               performance  that is necessary,  along with net earnings,  for an
               understanding of its operating results.  Funds from operations is
               defined by the  National  Association  of Real Estate  Investment
               Trusts,  Inc.  (NAREIT) as net earnings  (computed in  accordance
               with  generally  accepted   accounting   principles),   excluding
               cumulative   effects  of  changes   in   accounting   principles,
               extraordinary  or unusual  items,  and gains or losses  from debt
               restructurings  and  sales of  property,  plus  depreciation  and
               amortization,  and after  adjustments  to  record  unconsolidated
               partnerships  and joint ventures on the same basis.  FFO does not
               represent  cash flows  from  operations  as defined by  generally
               accepted accounting principles (GAAP). FFO is not indicative that
               cash flows are  adequate to fund all cash needs and should not be
               considered  as an  alternative  to cash  flows  as a  measure  of
               liquidity.  The Company's FFO may not be comparable to the FFO of
               other  REITs  because  they  may  not  use  the  current   NAREIT
               definition or they may interpret the definition differently.

</FN>
</TABLE>

         In 1999, NAREIT clarified the definition of FFO to address diversity in
practice with respect to the treatment of nonrecurring  items. Under the revised
definition,  FFO will  include all  nonrecurring  items that are included in net
earnings,  except  for gains and  losses  from  sales of  depreciable  operating
properties  and items that are defined as  extraordinary  items under GAAP.  The
clarified   definition   is  effective   January  1,  2000  and  is   applicable
retroactively. It will not change the Company's calculation of FFO.

                                       7

<PAGE>


Quarterly Results of Operations (Unaudited)
The unaudited  quarterly  results of  operations  for MART for 1999 and 1998 are
summarized as follows:
<TABLE>
<CAPTION>


                                                                     Quarter Ended
1999                                             March 31,          June 30,          September 30,      December 31,
---------------------------------------------------------------------------------------------------------------------
<S>                                              <C>                <C>               <C>                <C>
Revenues                                $        13,021.750         13,232,391        13,234,389         13,857,943
                                        -----------------------------------------------------------------------------
Earnings before extraordinary loss                3,174,969          3,225,090         2,905,942          3,445,157

Extraordinary loss
    from early extinguishment of debt                     -                  -                 -                  -
                                        -----------------------------------------------------------------------------
Net earnings                            $         3,174,969          3,225,090        2,905,942           3,445,157
                                        -----------------------------------------------------------------------------
Net earnings per share - basic          $              0.22               0.22             0.20                0.25

Net earnings per share - diluted        $              0.22               0.22             0.20                0.24
                                        -----------------------------------------------------------------------------


                                                                     Quarter Ended
1998                                             March 31,          June 30,          September 30,      December 31,
---------------------------------------------------------------------------------------------------------------------


Revenues                                $        11,824,395         12,267,335        12,322,456         13,122,944
                                        -----------------------------------------------------------------------------
Earnings before extraordinary loss                3,102,987          3,002,283         2,979,240          3,301,351

Extraordinary loss
    from early extinguishment of debt              (32,984)                  -                 -                  -
                                        -----------------------------------------------------------------------------
Net earnings                            $         3,070,003          3,002,283         2,979,240          3,301,351
                                        -----------------------------------------------------------------------------
Net earnings per share - basic          $              0.21               0.20              0.21               0.23

Net earnings per share - diluted        $              0.21               0.20              0.21               0.22
                                        -----------------------------------------------------------------------------

</TABLE>


Quarterly results are influenced by a number of factors, including the timing of
property acquisitions,  sales and financing transactions and the completion of
development/redevelopment projects.

ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

The following  discussion  and analysis of operating  results covers each of the
Company's  business  segments for the years ended  December 31, 1999,  1998, and
1997.

     Management  believes that a segment  analysis  provides the most  effective
means of understanding the business.  As discussed in Note O to the consolidated
financial  statements,  segment data are reported using the accounting  policies
followed by the Company for internal reporting to management. These policies are
the same as those used for external reporting. Operating results of the segments
are reconciled to earnings from  operations in the financial  statements in Note
O.

Operating Results- Shopping Centers

The operating results of shopping center  properties are affected  significantly
by acquisition and disposition  transactions  and openings of newly developed or
redeveloped  properties.  Information  related to shopping center  acquisitions,
dispositions  and  developments/redevelopments  completed  during 1999, 1998 and
1997 is summarized in the following table:

                                                      Transaction
Property                                            Or Opening Date
Acquisitions
------------
Saucon Valley Square                                 March 1999
Wayne Heights                                        January 1998
Wayne Plaza                                          February 1998
Del Alba Plaza                                       September 1998
Club Centre                                          July 1997 (Note)
Enchanted Forest                                     July 1997 (Note)
Glen Burnie Village                                  July 1997 (Note)
Ingleside                                            July 1997 (Note)
Little Glen                                          July 1997 (Note)
Radcliffe Center                                     July 1997 (Note)
Shawan Plaza                                         July 1997 (Note)
Timonium Crossing                                    July 1997 (Note)
Timonium Shopping Center                             July 1997 (Note)
Arundel Plaza                                        December 1997
Milford Commons                                      December 1997


                                       8

<PAGE>

Operating Results - Shopping Centers (Continued)

Dispositions
------------

Page Plaza                                           April 1998
Union Hills                                          March 1997
Plaza del Rio                                        May 1997

Development/Redevelopment
-------------------------

Arundel Plaza                                        March 1999
Harford Mall                                         December 1999
North East Station                                   March 1998
Lutherville Station                                  April 1998

Note - The  properties  acquired in July 1997 were part of a  portfolio  of nine
shopping centers and a medical office building purchased from family members and
affiliates of the Pechter family ("JHP Acquisition").


Operating  results of shopping  center  properties are summarized as follows (in
thousands):
                                        1999      1998      1997
                                 --------------------------------
Revenues                         $     51,235    47,402    34,938

Operating and interest expenses,
exclusive of depreciation and
amortization                           26,958    24,402    22,440

Depreciation and amortization           9,082     8,362     6,012

Minority interest                       3,318     3,080     1,410
                                 --------------------------------
Earnings from operations         $     11,877    11,558     5,076
                                 --------------------------------

         Revenues from shopping  centers  increased by $3,833,000 in 1999 and by
$12,464,000 in 1998. The increase in 1999 was due primarily to the operations of
the  properties  acquired  in 1999  and  1998  ($2,101,000),  the  redevelopment
projects completed and opened in 1999 and 1998 ($1,266,000) and other net rental
and  occupancy  increases,  partially  offset by the sale of a property  in 1998
($210,000).  The increase in 1998 was due primarily to a full year of operations
of properties  acquired in the JHP Acquisition  ($7,544,000),  the operations of
the other properties  acquired in 1998 and 1997  ($3,382,000),  the operation of
the two redevelopment  projects which were completed in 1998  ($1,858,000),  and
other occupancy and net rental increases.  These increases were partially offset
by the sale of three properties during 1998 and 1997 ($773,000).

         Operating  and  interest   expenses   (exclusive  of  depreciation  and
amortization) for shopping center properties increased by $2,556,000 in 1999 and
by  $1,962,000  in  1998.  The  increase  in  1999  was  due  primarily  to  the
acquisitions and redevelopments referred to above ($2,020,000).  The increase in
1998 was due primarily to the acquisitions and redevelopments  referred to above
($2,348,000).  Depreciation  and amortization  expense  increased by $720,000 in
1999 and by $2,350,000 in 1998. These increases were also attributable primarily
to the  acquisitions and  redevelopments  referred to above.  Minority  interest
expense  increased by $238,000 in 1999 and by $1,670,000 in 1998.  The increases
were due  primarily  to the units of  limited  partnership  interests  issued in
connection  with  the  acquisition  of  Saucon  Valley  Square  and in  the  JHP
Acquisition.

Operating Results- All Other Properties

Operating  results  of all  other  properties  are  summarized  as  follows  (in
thousands):

                                        1999      1998      1997
                                 -------------------------------
Revenues                         $     2,111     2,135     4,214

Operating and interest expenses,
exclusive of depreciation and
amortization                             889       838     1,536

Depreciation and amortization            475       451       943

Minority interest                          4        14         9
                                 -------------------------------
Earnings from operations         $       743       832     1,726
                                 -------------------------------

         Revenues from all other properties  decreased by $24,000 in 1999 and by
$2,079,000  in 1998.  The decrease in 1998 was due  primarily to the sale of the
Gateway International Office project ("Gateway") in September 1997 ($2,346,000),
partially  offset by revenues from the medical office  building  acquired in the
JHP Acquisition ($275,000), and other occupancy and net rental changes.

         Operating  and  interest   expenses   (exclusive  of  depreciation  and
amortization)  for all other properties  increased $51,000 in 1999 and decreased
$698,000 in 1998.  The  increase in 1999 was due  primarily to real estate taxes
and  operating  costs  at  several  properties.  The  decrease  in 1998  was due
primarily to the sale of Gateway.  Depreciation  and  amortization  increased by
$24,000 in 1999 and decreased by $492,000 in 1998. The decrease in 1998 was also
attributable to the sale of Gateway.

                                       9

<PAGE>

Gain (Loss) on Properties

The  $132,000  gain  on  properties  for  1999  is due  primarily  to the  final
resolution of contingencies  in the sale agreements  relating to properties sold
in 1997.  The gain on  properties  for 1997  includes  gains on sale of  various
properties  of  approximately   $1,165,000,   including  approximately  $959,000
relating to Gateway.  These gains were  substantially  offset by a provision for
loss of $1,148,000 on a shopping center the Company sold in 1998.

Funds from Operations

         The Company  uses a  supplemental  performance  measure  along with net
earnings to report its operating  results.  This measure is referred to as Funds
from  Operations  ("FFO").  FFO is defined by the National  Association  of Real
Estate Investment  Trusts,  Inc. (NAREIT) as net earnings computed in accordance
with GAAP,  excluding  cumulative  effects of changes in accounting  principles,
extraordinary or unusual items, and gains or losses from debt restructurings and
sales of property, plus depreciation and amortization,  and after adjustments to
record  unconsolidated  partnerships  and joint ventures on the same basis.  FFO
does not represent  cash flows from  operations  as defined by GAAP.  FFO is not
indicative that cash flows are adequate to fund all cash needs and should not be
considered  as an  alternative  to cash  flows as a measure  of  liquidity.  The
Company's  FFO may not be  comparable to the FFO of other REITs because they may
not use the current  NAREIT  definition  or they may  interpret  the  definition
differently.

         FFO was  $22,177,000 in 1999,  $21,203,000  in 1998 and  $13,757,000 in
1997.  The  increases in FFO in 1999 and 1998 were due primarily to the property
acquisitions and the development and  redevelopment  projects  referred to above
and higher rents from released  space.  The reasons for  significant  changes in
revenues and expenses comprising FFO by segment are described above.

         In 1999, NAREIT clarified the definition of FFO to address diversity in
practice with respect to the treatment of nonrecurring  items. Under the revised
definition,  FFO will  include all  nonrecurring  items that are included in net
earnings,  except  for gains and  losses  from  sales of  depreciable  operating
properties  and items that are defined as  extraordinary  items under GAAP.  The
clarified   definition   is  effective   January  1,  2000  and  is   applicable
retroactively. It will not change the Company's calculation of FFO.

Liquidity and Capital Resources

The Company had cash and cash equivalents of $147,900 at December 31, 1999.

         Net cash provided by operating activities was $25,154,000, $24,255,000,
and  $16,006,000  in 1999,  1998,  and 1997,  respectively.  The changes in cash
provided by operating  activities  were due  primarily to the factors  discussed
above in the comparisons of operating results. The level of net cash provided by
operating  activities  is also affected by the timing of receipt of revenues and
the payment of operating and interest expenses.

         Net cash used by  investing  activities  increased  by  $2,507,000,  to
$24,176,000  in 1999 from  $21,669,000  in 1998.  The increase  was  primarily a
result  of  higher   distributions  to  minority   partners   ($224,000)  and  a
distribution of refinancing proceeds ($3,051,000) in 1999, partially offset by a
lower level of operating property acquisitions ($768,000).

         Net cash used by  investing  activities  increased by  $15,674,000,  to
$21,669,000 in 1998 from $5,995,000 in 1997. The increase was primarily a result
of a lower level of sales of properties  ($22,370,000) and higher  distributions
to minority  partners  ($1,728,000)  in 1998, partially  offset by a decrease in
acquisitions ($8,424,000).

         Net cash  used by  financing  activities  decreased  by  $8,961,000  to
$1,441,000 in 1999 from  $10,402,000  in 1998. The decrease was due primarily to
cash provided from financing one shopping center  ($11,100,000)  and refinancing
another  shopping  center  ($1,800,000), partially  offset  by  increased  share
repurchases of $2,016,000.

         Net cash  used by  financing  activities  increased  by  $7,805,000  to
$10,402,000 in 1998 from $2,597,000 in 1997. The increase was primarily a result
of higher dividends paid in 1998  ($5,349,000) and share  repurchases  under the
Company's plan of $3,831,000.

         The  Company  currently  has a  $75,000,000  unsecured  line of  credit
available  for  various   purposes,   including   acquisition,   development  or
redevelopment  of  properties  and  liquidity,  subject  to  various  terms  and
conditions.  The note payable  under the bank line of credit had an  outstanding
balance of $27,500,000 at December 31, 1999.

         The Company has registered to sell up to an aggregate of  approximately
$98,000,000 (based on the public offering price) of additional commons shares of
beneficial  interest and/or debt  securities.  The shares and debt may be issued
from time to time at prices,  in amounts  and on terms to be  determined  at the
time of offering.

         In order to qualify as a REIT for Federal income tax purposes,  MART is
required  to pay  dividends  to its  shareholders  of at  least  95% of its REIT
taxable  income.  MART intends to pay these dividends from operating cash flows.
While MART intends to distribute to its  shareholders  a substantial  portion of
its cash flows from operating activities, MART also intends to retain or reserve
such amounts as it considers  necessary from time to time for the acquisition or
development  of new  properties  as  suitable  opportunities  arise  and for the
expansion and renovation of its shopping  centers.  Also, MART currently has and
expects to continue to maintain a line of credit from its primary bank.

         The Company anticipates  material  commitments for capital expenditures
to include, in the next two years, the ongoing  redevelopment of six projects in
the planning stage at an estimated cost of  $6,500,000.  The Company  expects to
fund the development  projects and other capital expenditures with available net
cash flows from operating  activities and if necessary  with  construction  loan
financing,  long-term mortgage financing on unencumbered operating properties or
the use of its line of credit.

         It is management's  intention that MART  continually have access to the
capital  resources  necessary  to expand and  develop its  business.  Management
cannot practically  quantify MART's 2000 cash requirements,  but expects to meet
its short-term liquidity  requirements generally through available net cash flow
provided by operations and short-term borrowings.  To meet its long-term capital
requirements,  MART intends to obtain funds through additional equity offerings,
joint  ventures or  long-term  debt  financing in a manner  consistent  with its
financial  strategy.

         The Company  anticipates that the cash flow available from operations,
together with cash from borrowings and equity  offerings,  will be sufficient to
meet its liquidity and capital needs in both the short-and long-term.

                                       10

<PAGE>

Market Risk Information

The market risk associated with financial  instruments and derivative  financial
and  commodity  instruments  is the risk of loss from adverse  changes in market
prices or rates.  The Company's  market risk arises primarily from interest rate
risk  relating to variable rate  borrowings  used to maintain  liquidity  (e.g.,
credit  line   borrowings  )  or  finance  project   development   costs  (e.g.,
construction loans). The Company's interest rate risk management objective is to
limit the impact of interest  rate changes on earnings and cash flows.  In order
to achieve this objective, the Company relies primarily on long term, fixed rate
nonrecourse   loans  from   institutional   lenders  to  finance  its  operating
properties.  In addition,  long term fixed rate financing is typically  arranged
concurrently with or shortly after a variable rate project  construction loan is
negotiated  or the project is  complete.  The  Company  has not used  derivative
financial or commodity instruments to manage interest rate risk.

         The Company's  interest rate risk is monitored  closely by  management.
The table below presents the principal amounts, weighted average interest rates,
fair values and other data  required to evaluate the expected  cash flows of the
Company under debt agreements and its sensitivity to interest rate changes.

         At December  31,  1999,  the  Company's  variable  rate debt relates to
borrowings  under its credit line. The credit line  borrowings are assumed to be
repaid at their various repricing dates throughout 2000.

         As the  table  incorporates  only  those  exposures  that  exist  as of
December 31, 1999, it does not consider exposures or positions which could arise
after that date. As a result,  the Company's ultimate realized gain or loss with
respect to interest rate  fluctuations  will depend on the exposures  that arise
after December 31, 1999, the Company's hedging  strategies,  if any, during that
period and interest rates.

<TABLE>
<CAPTION>
                                                                          (In thousands)
                                                                                                                   Fair
                                   2000      2001        2002       2003     2004      Thereafter     Total        Value
                                   ---------------------------------------------------------------------------------------
<S>                                <C>       <C>         <C>        <C>      <C>       <C>            <C>          <C>

Fixed rate debt                    10,790    13,152      9,809      44,418   2,391     78,534         159,094      153,773

Weighted average interest rate     9.63%      8.34%      8.54%       8.34%   8.17%      7.94%           8.50%            -


Variable rate debt                 27,500         -          -           -       -          -          27,500       27,500

Weighted average interest rate     6.79%          -          -           -       -          -           6.79%            -
</TABLE>

Year 2000 Issue

The year 2000 issue relates to whether computer systems will properly  recognize
date sensitive information to allow accurate processing of transactions and data
relating to the year 2000 and beyond. In addition,  the issue relates to whether
non-Information  Technology  (IT)  systems  that  depend  on  embedded  computer
technology will recognize the year 2000.  Systems that do not properly recognize
such information could generate erroneous data or fail.

         The Company has not experienced any significant  issues with respect to
the year 2000  transition.  The  Company's IT and non-IT  systems have  operated
without  failure since  December 31, 1999, and there has been no loss of service
from major third party service providers. Although the Company believes that its
internal year 2000 issues have been addressed  appropriately and is not aware of
any specific  remaining year 2000 issues,  there can be no assurance that all of
these issues,  including those that may affect  tenants,  vendors and suppliers,
have  been   fully   resolved.

Inflation

The majority of leases for the shopping center properties contain provisions for
annual increases in rents and/or  provisions,  which may entitle MART to receive
percentage rents, based on the tenants' gross sales. Such provisions  ameliorate
the risk to MART of the adverse  effects of  inflation.  If a recession  were to
begin and continue for a prolonged time,  Funds from Operations could decline as
some  tenants may have  trouble  meeting  their lease  obligations.  Most of the
leases for the  properties  require  the tenants to pay a  substantial  share of
operating  expenses,  such as real  estate  taxes,  insurance  and  common  area
maintenance  costs,  and thereby reduce MART's  exposure to increased  costs. In
addition,  many of the leases for the  properties  are for terms of less than 10
years,  which may enable MART to seek  increased rents upon  renewal of existing
leases if rents are below the then existing market rates.

Cautionary Disclosure Relating to Forward Looking Statements

Statements made in this document  include forward looking  statements  under the
federal securities laws. Statements that are not historical in nature, including
the words "anticipate," "estimate," "should," "expect," "believe," "intend," and
similar expressions are intended to identify forward looking  statements.  While
these  statements  reflect the  Company's  good faith  beliefs  based on current
expectations,  estimates and projections about (among other things) the industry
and the markets in which the Company operates, they are not guarantees of future
performance,  involve known and unknown risks and uncertainties that could cause
actual  results  to  differ   materially  from  those  in  the  forward  looking
statements,  and  should not be relied  upon as  predictions  of future  events.
Factors which could impact future results  include (among other things)  general
economic  conditions,  local real estate  conditions,  oversupply  of  available
space, financial condition of tenants, timely ability to lease or re-lease space
upon favorable economic terms,  agreements with anchor tenants,  interest rates,
availability of financing, competitive factors, and similar considerations.  The
Company  disclaims  any  obligation  to  publicly  update or revise any  forward
looking  statement,  whether as a result of new  information,  future  events or
otherwise.  For a discussion of risks and uncertainties  that could cause actual
results  to differ  materially  from  those  contained  in the  forward  looking
statements, see "Risk Factors" filed as Exhibit 99.1 to the Company's Form 10-K.


                                       11

<PAGE>

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                          INDEPENDENT AUDITORS' REPORT


Board of Trustees and Shareholders
Mid-Atlantic Realty Trust:

         We  have  audited  the  accompanying  consolidated  balance  sheets  of
Mid-Atlantic  Realty Trust and subsidiaries as of December 31, 1999 and 1998 and
the related consolidated statements of operations, shareholders' equity and cash
flows for each of the years in the three-year period ended December 31, 1999. In
connection with our audits of the  consolidated  financial  statements,  we have
also audited the  financial  statement  schedule of real estate and  accumulated
depreciation.   These  consolidated   financial  statements  and  the  financial
statement  schedule are the  responsibility  of the  Company's  management.  Our
responsibility  is to  express  an opinion  on these  financial  statements  and
financial statement schedule 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Mid-Atlantic
Realty Trust and  subsidiaries as of December 31, 1999 and 1998, and the results
of their operations and their cash flows for each of the years in the three-year
period ended December 31, 1999, in conformity with generally accepted accounting
principles.  Also in our opinion, the related financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a
whole,  presents  fairly,  in all material  respects,  the information set forth
therein.


                                                     KPMG LLP



Baltimore, Maryland
February 11, 2000, except as to
  Note S which is as of
  March 3, 2000


                                       12

<PAGE>

<TABLE>
<CAPTION>


                                          MID-ATLANTIC REALTY TRUST AND SUBSIDIARIES
                                                    Consolidated Balance Sheets

                                                                                                     As of December 31,
                                                                                                  1999               1998
                                                                                              ----------------------------------
ASSETS
------
<S>                                                                                               <C>                <C>
Properties:
     Operating properties (Notes C and D)                                                     $   376,030,262        347,024,048
       Less accumulated depreciation and amortization                                              60,097,298         50,540,094
                                                                                              ----------------------------------
                                                                                                  315,932,964        296,483,954


     Properties in development (Note E)                                                             2,098,324         11,281,252
     Properties held for development or sale                                                        3,587,610          3,587,610
                                                                                              ----------------------------------
                                                                                                  321,618,898        311,352,816


     Cash and cash equivalents                                                                        147,878            611,107
     Notes and accounts receivable - tenants and other (Note F)                                     2,160,417          1,504,951
     Prepaid expenses and deposits                                                                  2,637,405          2,381,137
     Deferred financing costs, net (Note G)                                                         2,006,063          1,158,606
                                                                                              ----------------------------------
                                                                                              $   328,570,661        317,008,617
                                                                                              ----------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Liabilities:
     Accounts payable and accrued expenses (Note H)                                           $     6,399,153          6,306,471
     Notes payable (Note I)                                                                        27,500,000         18,400,000
     Construction loan payable (NoteD)                                                              9,000,000          9,000,000
     Mortgages payable (Note D)                                                                   136,847,831        125,401,850
     Convertible subordinated debentures (Note J)                                                  13,246,000         13,931,000
     Deferred income                                                                                  549,347            743,284
                                                                                              ----------------------------------
                                                                                                  193,542,331        173,782,605
                                                                                              ----------------------------------

    Minority interest in consolidated joint ventures                                               37,359,843         38,734,953
                                                                                              ----------------------------------

Shareholders' equity (Note L):

     Preferred shares of beneficial interest, $.01 par value,
       authorized 2,000,000 shares, issued and outstanding, none
     Common shares of beneficial interest, $.01 par value, authorized                                       -                  -
       100,000,000 shares, issued and outstanding 14,005,407 and
       14,495,045 shares, respectively                                                                140,054            144,950
     Additional paid-in capital                                                                   126,805,104        131,368,001
     Distributions in excess of accumulated earnings                                              (29,276,671)       (27,021,892)
                                                                                              ----------------------------------
                                                                                                   97,668,487        104,491,059
                                                                                              ----------------------------------

Commitments (Note M)
                                                                                              ----------------------------------
                                                                                              $   328,570,661        317,008,617
                                                                                              ----------------------------------
</TABLE>


See accompanying notes to consolidated financial statements.


                                     13
<PAGE>

<TABLE>
<CAPTION>

                                                                       MID-ATLANTIC REALTY TRUST AND SUBSIDIARIES
                                                                         Consolidated Statements of Operations

                                                                                 Years ended December 31,
                                                                   --------------------------------------------------
                                                                       1999              1998              1997
                                                                   --------------------------------------------------
<S>                                                                    <C>               <C>               <C>
REVENUES:
     Rentals                                                       $   44,463,148        41,678,283        33,115,087
     Tenant recoveries                                                  8,287,459         7,421,059         5,569,495
     Other ( Note P)                                                      595,866           437,788           467,638
                                                                   --------------------------------------------------
                                                                       53,346,473        49,537,130        39,152,220
                                                                   --------------------------------------------------
EXPENSES:
     Interest                                                          14,062,178        12,081,000        12,555,017
     Depreciation and amortization
       of property and improvements                                     9,557,204         8,813,251         6,954,803
     Operating                                                         11,046,411        10,370,414         8,960,936
     General and administrative                                         2,739,079         2,788,939         2,460,263
                                                                   --------------------------------------------------
                                                                       37,404,872        34,053,604        30,931,019
                                                                   --------------------------------------------------
EARNINGS FROM OPERATIONS
     BEFORE MINORITY INTEREST                                          15,941,601        15,483,526         8,221,201

Minority Interest                                                      (3,322,054)       (3,093,442)       (1,418,826)
                                                                   --------------------------------------------------

EARNINGS FROM OPERATIONS                                               12,619,547        12,390,084         6,802,375

Gain (loss) on properties (Note Q)                                        131,611            (4,223)           16,836
                                                                   --------------------------------------------------

EARNINGS BEFORE EXTRAORDINARY LOSS                                     12,751,158        12,385,861         6,819,211

Extraordinary loss from early
     extinguishment of debt                                                     -           (32,984)         (226,873)
                                                                   --------------------------------------------------

NET EARNINGS                                                       $   12,751,158        12,352,877         6,592,338
                                                                   --------------------------------------------------

NET EARNINGS PER SHARE - BASIC (NOTE R):
Earnings before extraordinary loss                                 $         0.89              0.85              0.72
Extraordinary loss on early extinguishment of debt                              -                 -             (0.02)
                                                                   --------------------------------------------------
Net earnings                                                       $         0.89              0.85              0.70
                                                                   --------------------------------------------------

NET EARNINGS PER SHARE - DILUTED (NOTE R):
Earnings before extraordinary loss                                 $         0.88              0.84              0.72
Extraordinary loss on early extinguishment of debt                              -                 -             (0.02)
                                                                   --------------------------------------------------
Net earnings                                                       $         0.88              0.84              0.70
                                                                   --------------------------------------------------
</TABLE>



See accompanying notes to consolidated financial statements.

                                       14
<PAGE>




<TABLE>
<CAPTION>

                                                                  MID-ATLANTIC REALTY TRUST AND SUBSIDIARIES
                                                               Consolidated Statements of Shareholders' Equity
                                                                 Years ended December 31, 1999, 1998 and 1997

                                                                                                Distributions
                                                   Number of         Common       Additional    in Excess of       Net
                                                     Common        Shares at       Paid-in      Accumulated   Shareholders'
                                                     Shares        Par Value       Capital        Earnings       Equity

<S>                                                <C>             <C>            <C>           <C>            <C>
BALANCE, December 31, 1996                         7,225,103  $    72,251          52,635,713   (21,896,662)   30,811,302

Conversion of convertible subordinated debentures  2,827,838       28,278          28,740,766             -    28,769,044

Redemption of Operating Partnership Units                  -            -             (15,000)            -       (15,000)

Share-based compensation plans                       382,307        3,823             899,499             -       903,322

Sale of common shares                              4,025,000       40,250          49,020,874             -    49,061,124

Dividends paid - $.97 per share                            -            -                   -    (9,360,567)   (9,360,567)

Net earnings                                               -            -                   -     6,592,338     6,592,338
                                                   -----------------------------------------------------------------------

BALANCE, December 31, 1997                         14,460,248     144,602         131,281,852   (24,664,891)  106,761,563

Conversion of convertible subordinated debentures     340,080       3,401           3,473,468             -     3,476,869

Share purchase plan                                  (313,200)     (3,132)         (3,827,977)            -    (3,831,109)

Share-based  compensation plans                         7,917          79             467,374             -       467,453

Other, net                                                  -           -             (26,716)            -       (26,716)

Dividends paid - $1.01 per share                            -           -                   -   (14,709,878)  (14,709,878)

Net earnings                                                -           -                   -    12,352,877    12,352,877
                                                   ----------------------------------------------------------------------


BALANCE, December 31, 1998                         14,495,045     144,950         131,368,001   (27,021,892)  104,491,059

Conversion of convertible subordinated debentures      65,235         652             670,365             -       671,017

Share purchase plan                                  (569,200)     (5,692)         (5,841,867)            -    (5,847,559)

Share-based  compensation plans                        14,327         144             608,605             -       608,749

Dividends paid - $1.05 per share                            -           -                   -   (15,005,937)  (15,005,937)

Net earnings                                                -           -                   -    12,751,158    12,751,158
                                                   ----------------------------------------------------------------------
BALANCE, December 31, 1999                         14,005,407   $ 140,054         126,805,104   (29,276,671)   97,668,487
                                                   ----------------------------------------------------------------------
</TABLE>





See accompanying notes to consolidated financial statements.


                                       15


<PAGE>

<TABLE>
<CAPTION>

                                                                              MID-ATLANTIC REALTY TRUST AND SUBSIDIARIES
                                                                                   Consolidated Statements of Cash Flows

                                                                                       Years ended December 31,
                                                                          ----------------------------------------------------
                                                                              1999               1998                1997
                                                                          ----------------------------------------------------
<S>                                                                           <C>                <C>                 <C>
Cash flows from operating activities:
     Net earnings                                                         $   12,751,158         12,352,877          6,592,338
     Adjustments to reconcile net earnings to net
       cash provided by operating activities:
       Depreciation and amortization                                           9,557,204          8,813,251          6,954,803
       Minority interest in earnings, net                                      3,322,054          3,086,093          1,356,062
       Amortization of deferred financing costs                                  315,828            247,901            374,432
       (Gain) loss on properties                                                (131,611)             4,223            (16,836)
       Changes in operating assets and liabilities:
         (Increase) decrease in assets                                          (911,734)        (1,077,090)          (539,087)
         Increase (decrease) in liabilities                                     (101,255)           662,218          1,190,388
    Other, net                                                                   351,980            165,664             93,858
                                                                           ---------------------------------------------------
          Total adjustments                                                   12,402,466         11,902,260          9,413,620
                                                                           ---------------------------------------------------
               NET CASH PROVIDED BY OPERATING ACTIVITIES                      25,153,624         24,255,137         16,005,958
                                                                           ---------------------------------------------------

Cash flows from investing activities:
     Acquisitions of and additions to properties                             (17,205,063)       (22,470,996)       (30,894,917)
     Proceeds from sales of properties                                                 -          4,498,017         26,867,723
     Payments to minority partners                                            (6,970,622)        (3,695,939)        (1,985,568)
     Receipts from minority partners                                                   -                  -             17,607
                                                                           ---------------------------------------------------
               NET CASH USED BY INVESTING ACTIVITIES                         (24,175,685)       (21,668,918)        (5,995,155)
                                                                           ---------------------------------------------------

Cash flows from financing activities:
     Proceeds from notes payable                                              67,800,000         24,677,750         34,900,000
     Principal payments on notes payable                                     (58,700,000)        (9,677,750)       (47,900,000)
     Proceeds from mortgages payable                                          25,300,000         11,600,000                  -
     Principal payments on mortgages payable                                 (13,854,019)       (18,435,646)       (38,067,252)
     Proceeds from construction loans payable                                          -            307,084          8,692,916
     Additions to deferred financing costs                                    (1,133,621)          (305,881)           (31,837)
     Proceeds from exercise of share options                                           -                 23             78,526
     Net proceeds from sale of common shares                                           -                  -         49,061,124
     Shares repurchased                                                       (5,847,559)        (3,831,109)                 -
     Dividends paid                                                          (15,005,937)       (14,709,878)        (9,360,567)
     Other, net                                                                      (32)           (26,922)            29,666
                                                                            --------------------------------------------------
               NET CASH USED BY FINANCING ACTIVITIES                          (1,441,168)       (10,402,329)        (2,597,424)
                                                                            --------------------------------------------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                            (463,229)        (7,816,110)         7,413,379

CASH AND CASH EQUIVALENTS, beginning of year                                     611,107          8,427,217          1,013,838
                                                                            --------------------------------------------------

CASH AND CASH EQUIVALENTS, end of year                                      $    147,878            611,107          8,427,217
                                                                            --------------------------------------------------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
     Interest paid                                                          $ 14,206,045         12,540,504         13,387,175
                                                                            --------------------------------------------------

Schedule of noncash investing and financing activities
---------------------------------------------------------------------
     Conversion of subordinated debentures,
          net of deferred financing costs                                   $    671,051          3,477,075         28,769,882
     Mortgages payable assumed                                                         -         16,171,755         83,922,498
     Operating Partnership Units issued                                        2,273,458                  -         36,064,913
</TABLE>

See accompanying notes to consolidated financial statements.

                                       16
<PAGE>




NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999, 1998 and 1997

A.  Summary of Significant Accounting Policies

Organization

Mid-Atlantic  Realty  Trust  was  incorporated  June  29,  1993,  and  commenced
operations effective with the completion of its initial public share offering on
September  11,  1993.  Mid-Atlantic  Realty  Trust  qualifies  as a real  estate
investment trust ("REIT") for Federal income tax purposes.  As used herein,  the
term "MART" or the "Company"  refers to  Mid-Atlantic  Realty Trust and entities
owned or controlled by MART,  including MART Limited Partnership (the "Operating
Partnership").

Description of Business

The Company is a fully  integrated,  self-administered  real  estate  investment
trust which owns, acquires, develops,  redevelops,  leases and manages primarily
neighborhood or community  shopping centers in the Middle Atlantic region of the
United States.

         The Company has an equity interest in 33 operating shopping centers, 27
of which  are  wholly  owned by the  Company  and six in which the  Company  has
ownership  interests  ranging  from  50% to 93%,  as well  as  other  commercial
properties.  The Company also owns seven  undeveloped  parcels of land  totaling
approximately 147 acres, which it is holding for development or sale.

         All of MART's  interests in properties  are held directly or indirectly
by, and all of its operations  relating to the properties are conducted through,
the Operating Partnership.  Subject to certain conditions,  units of partnership
interest in the Operating  Partnership ("Units") may be exchanged by the limited
partners for cash or, at the option of MART,  the  obligation  may be assumed by
MART and paid either in cash or in common shares of beneficial  interest in MART
on a one-for-one  basis.  MART controls the  Operating  Partnership  as the sole
general partner, and owns approximately 82% of the Units at December 31, 1999.

Basis of Presentation

The preparation of financial  statements in conformity  with generally  accepted
accounting  principles  requires management to make estimates and judgments that
affect the  reported  amounts  of assets  and  liabilities  and  disclosures  of
contingencies at the date of the financial  statements and revenues and expenses
recognized during the reporting  period.  Actual results could differ from those
estimates.  Certain amounts for prior years have been reclassified to conform to
the presentation for 1999.

Principles of Consolidation

The consolidated  financial statements include all wholly owned subsidiaries and
majority-owned partnerships, including the Operating Partnership. Investments in
unconsolidated  joint ventures are carried on the equity method. All significant
intercompany balances and transactions have been eliminated in consolidation.

         The Company owns 100%  interests in  corporate  subsidiaries  which are
general  partners in several  partnerships  which have outside partners with 50%
interests.  Under terms of the partnership  agreements,  the Company has control
over  the  partnerships,  including  acquisition,  leasing,  financing  and sale
transactions,  and accordingly, it uses the full consolidation method to account
for them.

Earnings Per Share

Basic earnings per share ("EPS") is computed by dividing  earnings  available to
common shareholders by the weighted average number of common shares outstanding.
Diluted EPS is computed  after  adjusting the numerator and  denominator  of the
basic EPS  computation for the effects of all dilutive  potential  common shares
outstanding  during the period.  The dilutive effects of convertible  securities
are  computed  using the  "if-converted"  method  and the  dilutive  effects  of
options,  warrants and their  equivalents  (including fixed awards and nonvested
shares  issued under  share-based  compensation  plans) are  computed  using the
"treasury stock" method.

Capitalization Policy

Acquisition, development and construction costs of properties in development are
capitalized including, where applicable, salaries and related costs, real estate
taxes  and  interest  costs.  Development  and  construction  costs and costs of
significant  improvements,  replacements and renovations to operating properties
are capitalized while costs of maintenance and repairs are expensed as incurred.
Direct costs  incurred in financing  transactions  are  capitalized  as deferred
costs and amortized to interest cost over the term of the related mortgage using
the interest  method.  Initial  direct costs  incurred with respect to completed
tenant leases are deferred and amortized using the straight-line method over the
terms of the related  leases.  Effective  March 19, 1998, the Company  adopted a
policy  of  charging  internal  staff  costs  associated  with  acquisitions  of
operating  properties  to expense as incurred as required by a consensus  of the
Emerging Issues Task Force of the Financial Accounting Standards Board. Prior to
that  date,  such  costs  were  capitalized  as part of the  cost of  properties
acquired. This change did not have a material effect on net earnings for 1998.

Properties

Properties to be developed or held and used in  operations  are carried at cost,
reduced for impairment  losses where  appropriate.  Properties held for sale are
carried  at the  lower of their  carrying  value  (i.e.  cost  less  accumulated
depreciation and any impairment loss recognized,  where applicable) or estimated
fair value less costs to sell. The net carrying  values of operating  properties
are  classified as properties  held for sale when senior  management  authorizes
their  disposition  and the Company  begins  marketing the  properties for sale.
Depreciation  of these  properties is  discontinued  at that time, but operating
revenues,  other operating expenses and interest continue to be recognized until
the date of sale.

                                       17

<PAGE>
Properties (continued)
         If events  or  circumstances  indicate  that the  carrying  value of an
operating  property  to be held  and  used  may be  impaired,  a  recoverability
analysis is performed  based on estimated  undiscounted  future cash flows to be
generated from the property.  If the analysis  indicates that the carrying value
is not  recoverable  from  future cash flows,  the  property is written  down to
estimated fair value and an impairment loss is recognized.

         Depreciation  is  computed  using  the  straight-line  method  over the
estimated  useful  lives  of the  related  assets,  as  follows:  Buildings  and
additions 30 -50 years;  land  improvements 5 - 15 years;  tenant  improvements,
lesser of lease term or asset useful lives; and furniture, fixtures and
equipment 3 - 10 years.

Revenue Recognition

Minimum rent revenues are generally recognized when due from tenants under terms
of the related leases. Revenues from tenant reimbursements of real estate taxes,
maintenance  and  insurance  costs  are  recognized  in the  period in which the
related  expense is  incurred.  Until  September  30, 1999, revenues  based on a
percentage  of  tenant's  sales in  excess  of  levels  specified  in the  lease
agreement were  estimated and accrued  ratably  throughout  the year.  Effective
October 1, 1999,  the Company  changed its method of accounting  for  percentage
rents to  recognize  revenues  only when a tenant's  sales  actually  exceed the
specified  minimum level as required by Staff Accounting  Bulletin 101 - Revenue
Recognition.  This  change  did not  have a  material  effect  on the  financial
statements for 1999.

Share-based Compensation Plans

The Company uses the intrinsic value method to account for share-based  employee
compensation  plans.  Under this method,  compensation  cost is  recognized  for
awards of shares to  employees  only if the quoted  market price of the share at
the grant date (or other  measurement date, if later) is greater than the amount
the employee must pay to acquire the share. Information concerning the pro forma
effects on net earnings  and net earnings per share of using a fair  value-based
method to account for share-based  employee  compensation plans, rather than the
intrinsic value method, is provided in note L.

Income Taxes

The Company qualifies, and intends to continue to qualify, as a REIT pursuant to
Sections 856 through 860 of the Internal  Revenue Code of 1986,  as amended.  In
general, under such Code provisions a trust which has made the required election
and, in the taxable year,  meets certain  requirements  and  distributes  to its
shareholders  at least 95% of its REIT  taxable  income  will not be  subject to
Federal income tax to the extent of the income which it distributes.

The REIT Modernization Act (RMA) was included in the Tax Relief Extension Act of
1999, which was enacted into law on December 17, 1999. The RMA includes numerous
amendments to the Code provisions  governing the  qualification  and taxation of
REITs.  These  amendments  are effective  January 1, 2001. The Company is in the
process of  evaluating  the  effects  of and  opportunities  presented  by these
amendments.

Cash Equivalents

All highly liquid unrestricted  investments with maturities at dates of purchase
of three months or less are considered cash equivalents.

Financial Instruments

Fair values of financial  instruments  approximate  their carrying values in the
financial statements,  except for mortgages payable and convertible subordinated
debentures  for which  fair value  information  is  presented  in notes D and J,
respectively.  The fair values of this debt at December 31, 1999 and 1998,  were
determined based on quoted market prices for publicly traded debt and discounted
estimated  future  payments to be made for other debt.  The discount  rates used
approximate  the rates currently  offered for borrowings with similar  remaining
maturities.

B.  Portfolio Acquisition

On July 1, 1997, the Company  acquired a portfolio of nine shopping  centers and
one medical  office  building  in the  Baltimore  metropolitan  area from family
members  and  affiliates  of the  Pechter  family  ("JHP").  At  closing  of the
transaction ("JHP  Acquisition"),  the Company formed the Operating  Partnership
and members of JHP were admitted as limited  partners.  The Company  assigned to
the Operating Partnership its beneficial interest in the properties owned by the
Company  and its  subsidiaries  in  exchange  for a number of Units equal to the
number of outstanding common shares of beneficial  interest of the Company.  For
the JHP  properties,  the  Operating  Partnership  issued to the  members of JHP
3,235,000  Units.  The acquisition was accounted for using the purchase  method.
The  aggregate  fair  market  value of the  assets  acquired  was  approximately
$120,000,000,  including the assumption of existing mortgage indebtedness with a
fair value of approximately $84,000,000.

         The  consolidated  statement of operations  for the year ended December
31, 1997, includes revenues and expenses related to JHP properties only from the
date of acquisition.  The Company's unaudited pro forma consolidated  results of
operations  for the year ended  December  31,  1997,  assuming  the  acquisition
occurred on January 1, 1997, are summarized as follows (in thousands, except per
share data):


                                   1997
---------------------------------------------
Revenues                         $ 46,325
Net earnings                        6,728
Earnings per share                   0.71
---------------------------------------------

         The unaudited pro forma revenues and earnings  summarized above are not
necessarily   indicative  of  the  results  that  would  have  occurred  if  the
acquisition had been consummated on January 1, 1997.

                                       18

<PAGE>

C. Operating Properties

<TABLE>
<CAPTION>

Operating properties consist of the following:              December 31,
                                                     1999                  1998
-------------------------------------------------------------------------------------
<S>                                                  <C>                   <C>
Land                                              $  76,731,707            68,845,324
Land improvements                                    31,739,820            31,383,623
Buildings                                           223,025,234           205,329,992
Improvements for tenants                             14,804,586            13,811,972
Development costs on completed projects               8,506,140             8,289,484
Furnitures, fixtures and equipment                    3,158,010             2,662,261
Deferred leasing costs                               18,064,765            16,701,392
                                                  -----------------------------------
                                                    376,030,262           347,024,048
Less accumulated depreciation and amortization       60,097,298            50,540,094
                                                  -----------------------------------
                                                  $ 315,932,964           296,483,954
                                                  -----------------------------------
</TABLE>

D. Properties and Related Accumulated Depreciation and Amortization and Debt

A summary of the  Company's  properties  and  related  mortgages  payable is as
follows at December 31, 1999:
<TABLE>
<CAPTION>

                                                                                                     Accumulated
                                                                         Cost of                    Depreciation
                                           Mortgages       Initial      Subsequent       Total           and
Classification                              Payable         Cost       Improvements       Cost      Amortization    Net Cost
------------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>           <C>             <C>           <C>            <C>         <C>
Shopping centers                          $ 134,252,869   272,563,778     86,395,676    358,959,454    54,585,445  304,374,009
Bowling centers                                       -     2,200,106         71,706      2,271,812     1,220,303    1,051,509
Office buildings                              2,594,962     9,439,113      1,099,089     10,538,202     2,694,120    7,844,082
Other rental properties                               -     2,040,072      1,063,390      3,103,462       956,486    2,146,976

Other property                                        -       681,313        476,019      1,157,332       640,944      516,388
                                            ----------------------------------------------------------------------------------
Operating properties                        136,847,831   286,924,382     89,105,880    376,030,262    60,097,298  315,932,964
Properties in development                             -     2,098,324              -      2,098,324             -    2,098,324
Properties held for development or sale               -     3,587,610              -      3,587,610             -    3,587,610
                                            ==================================================================================
                                          $ 136,847,831   292,610,316     89,105,880    381,716,196    60,097,298  321,618,898
                                            ----------------------------------------------------------------------------------
</TABLE>

         Mortgages  payable at  December  31,  1999 bear  interest at a weighted
average  effective  rate of 8.61%  and  mature  in  installments  through  2029.
Aggregate  annual  principal  payments  applicable  to mortgages  payable are as
follows at December 31, 1999:


2000            $     10,790,035
2001                   4,152,187
2002                   9,809,315
2003                  31,172,318
2004                   2,391,204
Thereafter            78,532,772
--------------------------------
Total           $    136,847,831
================================

         At December 31, 1999 and 1998,  the estimated  fair values of mortgages
payable were $132,079,000 and $131,225,000,  respectively.

The  construction  loan  payable  at  December  31,  1999 and 1998  relates to a
property on which  development was completed in 1998. The loan bears interest at
8% and is due in June 2001.

E. Properties in Development

Properties in development consist of the following:


                                               December 31,
                                      1999               1998
------------------------------------------------------------------
Land                             $    67,046             3,144,000
Construction in progress           1,267,288             6,286,980
Preconstruction costs                763,990             1,850,272
                                 ---------------------------------
                                 $ 2,098,324            11,281,252
                                 ---------------------------------

Costs of completed  development  projects are transferred to operating  property
costs when the project is completed, at which time depreciation and amortization
commences.  Construction  period interest cost capitalized  during 1999 and 1998
was approximately $242,000 and $873,000, respectively.

                                       19

<PAGE>


F. Notes and Accounts Receivable

The Company performs credit  evaluations of prospective new tenants and requires
security deposits where appropriate.  Tenants'  compliance with the terms of the
leases  is  monitored  closely  and  the  allowance  for  doubtful  accounts  is
established  based on  management's  analysis  of the  risk of loss on  specific
tenants, historical trends, and other relevant information.  Management believes
adequate  provision  has  been  made  for  the  Company's  credit  risk  for all
receivables.


G. Deferred Financing Costs

Deferred financing costs consist of the following:

                                                         December 31,
                                                   1999             1998
---------------------------------------------------------------------------
Costs related to subordinated debentures       $   676,283          711,256
Costs related to line of credit                    794,771          411,538
Costs related to operating properties' debt      2,420,417        1,626,416
                                               ----------------------------
                                                 3,891,471        2,749,210
Less accumulated amortization                    1,885,408        1,590,604
                                               ----------------------------
                                               $ 2,006,063        1,158,606
                                               ----------------------------
H. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following:


                                                     December 31,
                                               1999               1998
---------------------------------------------------------------------------
Trade accounts payable                       $ 4,930,250          4,077,756
Retainage on construction in progress            248,909            352,069
Accrued interest on subordinated debentures      294,586            309,820
Other accrued expenses                           925,408          1,566,826
                                             ------------------------------
                                             $ 6,399,153          6,306,471
                                             ------------------------------

I. Notes Payable

Notes  payable  consist  of  line  of  credit   borrowings  of  $27,500,000  and
$18,400,000  at  December  31, 1999 and 1998,  respectively.  The Company has an
agreement  with its primary bank that provides for a $75,000,000  unsecured line
of credit.  The loan maturity date is April 2002,  with the option to extend for
one year provided no event of default exists.  The agreement  contains covenants
which provide for the  maintenance  of specified debt service  coverage  ratios,
minimum  levels  of net  worth,  negative  pledges  concerning  certain  secured
financings,  and other  requirements,  among which is the  requirement  that the
Company  maintains  its status as a REIT.  The line bears  interest at the prime
rate (8.5% at December 31,1999).  However, the Company has the option to fix the
rate at LIBOR plus 1.25% for fixed periods from three to nine months. A stand-by
fee is required by the bank for any unused  portion of the line. At December 31,
1999, the unused line of credit available to the Company,  subject to compliance
with all terms and conditions of the agreement and net of outstanding letters of
credit of $773,365,  was $46,726,635.  The maximum level of borrowings under the
line of credit was  $28,500,000,  $19,800,000  and $21,300,000 in 1999, 1998 and
1997,  respectively.  The  average  amounts  of  borrowings  were  approximately
$23,937,000,  $14,236,000 and $13,191,000, in 1999, 1998 and 1997, respectively,
with weighted average interest rates approximating 6.8%, 6.8% and 7.1%

J. Convertible Subordinated Debentures

Effective  September 11, 1993,  the Company  issued  $60,000,000  of convertible
subordinated  debentures  at  7.625%  scheduled  to mature  in  September  2003.
Interest on the debentures is paid  semi-annually  on March 15 and September 15.
The debentures are convertible, unless previously redeemed, at any time prior to
maturity into common shares of beneficial  interest of the Company at $10.50 per
share,  subject to certain  adjustments.  In 1999,  $685,000 in debentures  were
converted to 65,235 common shares of beneficial interest. In 1998, $3,571,000 in
debentures  were converted to 340,080 common shares of beneficial  interest.  In
1997,  $29,693,000 in debentures  were  converted to 2,827,838  common shares of
beneficial  interest.  The balance of the  debentures,  at December 31, 1999, of
$13,246,000,  if fully converted,  would produce an additional 1,261,524 shares.
The  debentures  are  redeemable  by the  Company  at any  time  at  100% of the
principal  amount thereof,  together with accrued  interest.  The debentures are
subordinate  to all  mortgages  payable.  At  December  31,  1999 and 1998,  the
estimated fair values of convertible  subordinated  debentures were  $12,694,000
and $16,336,000 respectively.

K.  Income Taxes

As discussed  in Note A, the Company  plans to maintain its status as a REIT and
be taxed  under  Sections  856-860  of the  Internal  Revenue  Code of 1986,  as
amended.  Accordingly,  no provision has been made for Federal income taxes.  At
K.  Income Taxes (continued)
December 31, 1999, the income tax bases of the Company's  assets and liabilities
were approximately $258,000,000 and $196,000,000, respectively.

         The net  operating  losses  carried  forward from December 31, 1999 for
Federal income tax purposes aggregate  approximately  $12,000,000 and will begin
to expire in 2006.

         In connection  with its election to be taxed as a REIT, the Company has
elected to be subject to the "built-in gain" rules. Under these rules, taxes may
be payable at the time and to the extent  that the net  unrealized  gains on the
Company's  assets at the date of  conversation  to REIT status are recognized in
taxable dispositions of such assets in the ten-year period following conversion.
The remaining net unrealized  gains were

                                       20


<PAGE>

K. Income Taxes (Continued)

approximately  $90,500,000  at December 31, 1999.  Management  believes that the
Company  will not be  required  to make  payments  of taxes  on  built-in  gains
throughout the ten-year period due to the availability of the net operating loss
carryforward  to  offset  built-in  gains  which  might  be  recognized  and the
potential  for  the  Company  to make  nontaxable  dispositions,  if  necessary.
Accordingly,  at December 31, 1999, no deferred tax liability for built-in gains
has been recognized. It may be necessary to recognize a liability for such taxes
in the  future  if  management's  plans and  intentions  with  respect  to asset
dispositions or the related tax laws change.


L. Shareholders' Equity

Preferred Shares

         At its  inception on  September  11, 1993,  MART  authorized  2,000,000
preferred  shares of  beneficial  interest at a par value of $.01 per share.  At
December 31, 1999, none of these shares were issued and outstanding.

Share-Based Compensation Plans

         The Company has  established a 1993 Omnibus share plan and a 1995 share
option plan  ("Plans")  under which  trustees,  officers  and  employees  may be
granted awards of share options,  share appreciation rights,  performance shares
and/or restricted shares.  The purposes of the Plans are to provide equity-based
incentive compensation based on long-term appreciation in value of MART's shares
and to promote the interests of the Company and its  shareholders by encouraging
greater management ownership of the Company's shares.

         Share options granted generally vest over a three-year period,  subject
to certain  conditions,  typically  have an  exercise  price equal to the market
price at the grant date and have a maximum  term of ten years.  The  Company has
not granted any share appreciation rights or performance shares.

         Changes  in  options  outstanding  under the Plans  are  summarized  as
follows:

<TABLE>
<CAPTION>
                                                            Years ended December 31,
                                               1999                  1998                   1997
--------------------------------------------------------------------------------------------------
                                             Weighted              Weighted               Weighted
                                             average                average               average
                                             exercise              exercise               exercise
                                  Options     price      Options     price     Options     price
--------------------------------------------------------------------------------------------------
<S>                               <C>        <C>         <C>        <C>        <C>        <C>
Balance at beginning of year      554,533    $ 11.61     570,854    $ 11.58    395,632    $ 10.19
Options granted                         -          -           -          -    209,000      13.25
Options exercised                       -          -      (2,354)      9.97    (13,974)      9.97
Options canceled                  (24,933)     10.58     (13,967)     10.58    (19,804)     10.08
                                  ---------------------------------------------------------------
Balance at end of year            529,600    $ 11.66     554,533    $ 11.61    570,854    $ 11.58
                                  ---------------------------------------------------------------
Options exercisable               529,600    $ 11.66     514,490    $ 11.49    430,185    $ 11.04
                                  ---------------------------------------------------------------
</TABLE>


         Information   about  options   outstanding  at  December  31,  1999  is
summarized as follows:


Exercise price  Options    Remaining life    Options
  per share    outstanding    (years)      Exercisable
------------------------------------------------------
  $ 10.50       211,000         4.0           211,000
  $  8.94        33,400         5.8            33,400
  $  9.75        35,200         6.8            35,200
  $ 11.50        10,000         7.5            10,000
  $ 11.38         4,000         7.4             4,000
  $ 13.38       236,000         7.8           236,000
                -------------------------------------
                529,600                       529,600
                -------------------------------------

The per share  weighted-average  fair values of options  granted during 1997 was
$.92.  This  fair  value was  estimated  on the  dates of each  grant  using the
Black-Scholes option-pricing model with the following assumptions:

----------------------------------
Risk-free interest rate      5.78%
Dividend yield               8.47%
Volatility factor           18.43%
Life (years)                 3.00
----------------------------------


                                       21

<PAGE>

L. Shareholders' Equity (Continued)

         The option  prices were equal to the market prices at the date of grant
or vesting  date for all of the  options  granted in 1997 and,  accordingly,  no
compensation cost was recognized for these options in the financial  statements.
If the Company had applied a fair value-based  method to recognize  compensation
cost for all stock options  issued after 1994, net earnings and net earnings per
common share would have been reduced as indicated below:


                                         Years ended December 31,
                                    1999           1998           1997
----------------------------------------------------------------------------
Net earnings:
  As reported                   $   12,751,158     12,352,877     6,592,338
  Pro forma                         12,687,065     12,288,172     6,505,220
Net earnings per common share:
  Basic
      As reported                         0.89           0.85          0.70
      Pro forma                           0.88           0.84          0.69
  Diluted
      As reported                         0.88           0.84          0.70
      Pro forma                           0.88           0.84          0.69
--------------------------------------------------------------------------------

Restricted Share Plan

In 1997,  the Executive  Compensation  Committee  recommended,  and the Board of
Trustees approved, a Restricted Share Plan. The Executive Compensation Committee
believes  that  the  grant of  restricted  share  awards  provides  a  long-term
incentive  to persons who  contribute  to the growth of MART and  establishes  a
direct link between compensation and shareholder return.

         In 1997,  400,000  restricted  shares were made available for the plan.
Awards  granted in 1999,  1998 and 1997  aggregated  15,000,  1,572 and  368,333
shares, respectively, with a weighted-average market value of $10.38, $13.69 and
$13.38  per share,  respectively.  Shares  awarded  are  subject  to  forfeiture
restrictions  which  lapse at  defined  annual  rates to  2008,  subject  to the
recipients'  continued  employment with the Company.  The Company recognizes the
amortization of the fair value of the shares awarded as compensation  costs over
the terms of the awards.

Share Repurchase Plan

At December 31, 1999,  the Company was  authorized to repurchase up to 1,831,782
common shares of beneficial  interest (from a total  authorization  of 3,000,000
common shares of beneficial  interest)  pursuant to its share  repurchase  plan.
During  1999 and  1998,  the  Company  purchased  569,200  and  313,200  shares,
respectively,  at an average per share cost of $10.21 and $12.18,  respectively.
The excess of the  purchase  price over the par value of shares  repurchased  is
applied to reduce additional paid-in capital.

M. Commitments

The  Company  leases  the land  relating  to  certain  of its  properties  under
operating  leases expiring at various dates to 2053,  subject to renewal options
in most cases.  Minimum rental commitments under leases in effect as of December
31, 1999 are as follows:

2000            $     651,000
2001                  651,000
2002                  651,000
2003                  651,000
2004                  651,000
Thereafter         23,722,000
=============================
Total           $  26,977,000
-----------------------------

         Certain  of the  leases  contain  purchase  options.  All of the leases
require  the  Company to pay real  estate  taxes.  Total  annual  minimum  lease
payments amounted to $702,000 in 1999, $781,000 in 1998, and $675,000 in 1997.

N. Leases

The Company's  shopping  centers and other  commercial  properties are generally
leased on a long-term  basis.  All leases are  classified  as operating  leases.
Future minimum lease payments receivable under noncancelable operating leases in
effect as of December 31, 1999 are as follows:

2000            $  43,097,000
2001               40,082,000
2002               37,062,000
2003               33,518,000
2004               29,330,000
Thereafter        230,282,000
=============================
Total           $ 413,371,000
-----------------------------

                                       22

<PAGE>

N. Leases (Continued)

         The minimum  future lease  payments do not include  contingent  rentals
which may be paid under certain  leases on the basis of a percentage of sales in
excess of stipulated amounts. Contingent rentals amounted to $1,381,000 in 1999,
$1,435,000 in 1998, and $816,000 in 1997. On a prospective  basis,  no more than
3.3% of annual  rental  revenue is derived  from any one  tenant,  except  Royal
Ahold.  Royal Ahold minimum lease payments  represent  approximately 11% for the
years 2000 through 2004 and 31%  thereafter of the total minimum lease  payments
above.  The  percentage of total minimum lease payments in the years beyond 2004
is higher than in the prior  years due to the fact that Royal Ahold  leases have
long initial lease terms  compared with other major tenants which  generally use
renewal option terms.  Renewal option minimum lease payments are not included in
the totals above.

Effective  July 31, 1999, a principal  tenant at one of the  Company's  shopping
centers formally  rejected its lease in connection with bankruptcy  proceedings.
The  Company  ceased  accruing  revenue  under  the lease at that  time,  but is
pursuing claims against the former tenant for termination  payments and recovery
of costs of space improvements as provided in the lease agreement. The Company's
total claim is  approximately  $3,100,000  and is being  contested by the former
tenant. The ultimate outcome of this matter is not determinable at this time.

O. Segment Information

The Company's only reportable segment is Shopping Centers. This segment includes
the operation and  management of shopping  center  properties,  and revenues are
derived  primarily  from rents and  services to tenants.  These  properties  are
managed  separately  from the other property types owned by the Company  because
they require different operating strategies and management expertise.

         The  accounting  policies of the  segments are the same as those of the
Company described in Note A. Segment operating results are measured and assessed
based on a performance  measure known as Funds from Operations  ("FFO").  FFO is
defined  as  net  earnings  (computed  in  accordance  with  generally  accepted
accounting  principles),  excluding  cumulative effects of changes in accounting
principles,  extraordinary  or  unusual  items  and  gains or  losses  from debt
restructurings and sales of properties, plus depreciation and amortization,  and
after  adjustments to record  unconsolidated  partnerships and joint ventures on
the same  basis.  FFO is not a measure of  operating  results or cash flows from
operating activities as measured by generally accepted accounting principles, is
not  necessarily  indicative of cash available to fund cash needs and should not
be considered an alternative to cash flows as a measure of liquidity.

Operating results for the segments are summarized as follows:

<TABLE>
<CAPTION>
                                                     Years ended December 31,
                            1999                            1998                            1997
------------------------------------------------------------------------------------------------------------------------------------
                          Shopping     All                  Shopping     All                  Shopping       All
                          Centers     Other     Total       Centers     Other      Total       Centers      Other       Total
------------------------------------------------------------------------------------------------------------------------------------
<S>                       <C>         <C>       <C>         <C>         <C>        <C>         <C>          <C>          <C>
Revenues               $  51,235,338  2,111,135 53,346,473  47,402,079  2,135,051  49,537,130  34,938,201   4,214,019    39,152,220

Expenses, exclusive of    26,958,271    889,397 27,847,668  24,402,390    837,963  25,240,353  22,439,674   1,536,542    23,976,216
     depreciation and
     amortization of property
     and improvements
Minority Interest          3,318,389      3,665  3,322,054   3,079,697     13,745   3,093,442   1,409,598       9,228     1,418,826
                       -------------------------------------------------------------------------------------------------------------
FFO                    $  20,958,678  1,218,073 22,176,751  19,919,992  1,283,343  21,203,335  11,088,929   2,668,249    13,757,178
                       -------------------------------------------------------------------------------------------------------------

</TABLE>


A  reconciliation  of FFO  reported  above to earnings  from  operations  in the
financial statements is summarized as follows:

                                       Years ended December 31,
                                 1999            1998            1997
---------------------------------------------------------------------------
FFO                        $     22,176,751      21,203,335      13,757,178

  Depreciation and
  amortization of
  property and
  Improvements                    9,557,204       8,813,251       6,954,803
                           ------------------------------------------------
Earnings from operations   $     12,619,547      12,390,084       6,802,375
                           ------------------------------------------------

                                       23


<PAGE>
O. Segment Information (Continued)

         Substantially  all  assets  of  the  Company,  with  the  exception  of
properties  held for  development  or sale and  cash and cash  equivalents,  are
allocable to the Shopping Center segment.  Additions to long-lived assets of the
segments are summarized as follows:

<TABLE>
<CAPTION>
                                                         Years ended December 31,
                                                   1999            1998            1997
----------------------------------------------------------------------------------------------
<S>                                                <C>             <C>             <C>
Shopping Centers:
     Acquisitions                           $      10,602,882      26,417,356      129,060,063
     Development                                    6,491,855       6,738,109       15,633,614
     Improvements for tenants
       and other                                    2,614,639       5,596,654        2,117,173
                                            --------------------------------------------------

                                                   19,709,376      38,752,119      146,810,850
All others, including
     acquisitions of $4,115,752 in 1997               113,910          76,022        5,109,227
                                            ==================================================
Total                                       $      19,823,286      38,828,141      151,920,077
                                            --------------------------------------------------
</TABLE>

P. Other Revenues

         Other revenues consists of the following:


<TABLE>
<CAPTION>

                                                                Years ended December 31,
                                                         1999                 1998                1997
---------------------------------------------------------------------------------------------------------
<S>                                                      <C>                  <C>                 <C>
Interest and dividends                                $  115,320              195,693             321,185
Miscellaneous                                            480,546              242,095             146,453
                                                      ---------------------------------------------------
                                                      $  595,866              437,788             467,638
                                                      ---------------------------------------------------
</TABLE>

Q. Gain (Loss) on Properties
Gain (loss) on properties consists of the following:


<TABLE>
<CAPTION>
                                                                             Years ended December 31,
                                                                       1999            1998            1997
----------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>             <C>             <C>
Gain (loss) on sales of operating properties                       $   131,611                         1,042,727
                                                                                       (11,584)
Gain on sales of properties held for development or sale, net               -            7,361           122,109
Allowance for loss on operating properties                                  -                -        (1,148,000)
                                                                   ---------------------------------------------
                                                                   $   131,611          (4,223)           16,836
                                                                   ---------------------------------------------
</TABLE>


The gain on sales of operating properties for 1999 is due primarily to the final
resolution of contingencies  in the sale agreements  relating to properties sold
in 1997.  The gain on  properties  for 1997  includes  gains on sale of  various
properties,   including   approximately   $959,000   relating   to  the  Gateway
International  Office  project.  These  gains  were  substantially  offset  by a
provision for loss of $1,148,000 on a shopping  center the Company sold in 1998.
The gain (loss) on sales of  operating  properties  for 1997  includes  minority
interest of $75,173.

                                       24

<PAGE>

R. Earnings Per Share

The following table sets forth information  relating to the computation of basic
and diluted earnings per share:

<TABLE>
<CAPTION>


                                                                                            Years ended December 31,
                                                                                           1999         1998         1997
------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                        <C>          <C>          <C>
Numerator:
   Earnings before extraordinary loss                                                  $   12,751,158    12,385,861  6,819,211
      Dividends on unvested restricted share awards                                          (294,038)     (310,529)   (76,667)
                                                                                       ---------------------------------------

   Numerator for basic earnings per share--earnings available to common shareholders       12,457,120    12,075,332  6,742,544
      Adjustment to dividends on restricted share awards                                            -             -        537
      Interest on subordinated debentures                                                   1,111,858     1,206,760          -
                                                                                       ---------------------------------------
   Numerator for diluted earnings per share--earnings available to common shareholders $   13,568,978    13,282,092  6,743,081
                                                                                       =======================================

Denominator:(1)
   Denominator for basic earnings per share--weighted average shares outstanding           14,021,403    14,240,533  9,308,682
   Effect of dilutive securities:
      Debentures                                                                            1,306,079     1,473,257          -
      Unvested portion of restricted share awards and share options                            10,170        64,937     51,884
                                                                                       ---------------------------------------
   Denominator for diluted earnings per share--adjusted weighted average shares            15,337,652    15,778,727  9,360,566
                                                                                       ---------------------------------------
<FN>

         (1) Effects of  potentially  dilutive  securities are presented only in
periods in which they are  dilutive.  At  December  31,  1999,  the  convertible
subordinated  debentures,  if converted,  would produce an additional  1,261,524
shares and the Units,  if  exchanged,  would  produce  an  additional  3,373,463
shares.
</FN>
</TABLE>

S.       Subsequent Events

On February 15, 2000, the Company acquired Stonehedge Square Shopping Center for
approximately  $8,225,000  including the assumption of a mortgage  approximating
$5,662,000.

         On March 3, 2000, the Company acquired  Fullerton Plaza Shopping Center
for approximately $8,196,000.

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

         None.

                                       25

<PAGE>


PART III

ITEM 10 - TRUSTEES AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The information with respect to the identity and business experience of
the trustees of MART and their  remuneration,  in the definitive proxy statement
(to be filed  pursuant  to  Regulation  14A) with  respect  to the  election  of
trustees at the 2000 annual meeting of shareholders,  is incorporated  herein by
reference.

<TABLE>
<CAPTION>
         The Executive Officers of MART are as follow:

Name                   Age      Position and Business Experience
---------------------------------------------------------------------------------------------------------------
<S>                    <C>      <C>
LeRoy E.               74       Chairman of the Board of MART since September 1993.
Hoffberger

F. Patrick             52       President and CEO of MART since September 1993.
Hughes

Paul F.                46       Executive Vice President of MART since March 1996.
Robinson                        Vice President and Secretary / General Counsel of MART since September 1993.

Janice C.              44       Vice President of MART since May 1999.
Robinson                        Controller of MART since January 1998.
                                Controller and Vice President of Operations of O'Conor Real Estate Management
                                from January 1995 to December 1997.

Eugene T.              51       Treasurer of MART since September 1993.
Grady

</TABLE>
Each  executive  officer is elected  for a term  expiring  at the next regular
annual  meeting of the Board of  Trustees  of the  Company or until his/her
successor is duly elected and qualified.


ITEM 11 - EXECUTIVE COMPENSATION

The  information  required by this item is  incorporated  by reference  from the
Registrant's Proxy Statement to be filed with respect to the 2000 annual meeting
of shareholders.

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  information  required by this item is  incorporated  by reference  from the
Registrant's Proxy Statement to be filed with respect to the 2000 annual meeting
of shareholders.

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The  information  required by this item is  incorporated  by reference  from the
Registrant's Proxy Statement to be filed with respect to the 2000 annual meeting
of shareholders.

PART IV

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

(a)      1.  Financial Statements

         The following  financial  statements of  Mid-Atlantic  Realty Trust and
Subsidiaries are included in Part II Item 8:

                  Independent auditor's report
                  Consolidated balance sheets as of December 31, 1999 and 1998
                  Consolidated  statements  of  operations  for the years  ended
                  December 31, 1999,  1998 and 1997
                  Consolidated  statements of shareholders' equity for the years
                  ended  December  31, 1999, 1998 and 1997
                  Consolidated  statements  of cash  flows for the  years  ended
                  December  31,  1999,  1998  and  1997
                  Notes  to  consolidated financial statements

(a)      2.  Financial Statement Schedule

Schedule III - Real estate and accumulated depreciation and amortization

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

                                       26

<PAGE>

<TABLE>
<CAPTION>

(a)        Exhibits

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

<S>      <C>
3(a)     Declaration of Trust dated June 29, 1993  (incorporated by reference to Exhibit 3(a) to MART's  Registration  Statement on
         Form S-11,  File No.
         33-66386).
3(b)     By-laws (incorporated by reference to the Exhibit 3(b) to MART's Registration Statement on Form S-11, File No.
         33-66386).
3(c)     Amendment to Declaration of Trust dated August 4, 1998.*
4(a)     Specimen   certificate   for  Common  Shares  of  Beneficial   Interest (incorporated  by  reference  to  Exhibit  4(a) to
         MART's  Registration Statement on Form S-11, File No. 33-66386).
4(b)     Trust  Indenture  dated  September  8, 1993,  between MART and Security Trust  Company,  N.A.  (incorporated  by  reference
         to Exhibit 4(b) to MART's Registration Statement on Form S-11, File No. 33-66386).
10(a)    Mid-Atlantic Realty Trust 1993 Omnibus Share Plan, as amended through November 14, 1997 (incorporated by reference to
         Exhibit 10(a) to MART's Annual Report on Form 10-K, filed April 1, 1998).
10(b)    Mid-Atlantic  Realty  Trust 1995 Stock  Option  Plan  (incorporated  by reference  to  MART's  Registration  Statement  on
         Form  S-8,  File No. 333-12161).
10(c)    Employment Agreement between BTR Realty, Inc. and F. Patrick Hughes (incorporated by reference to Exhibit 10(b)
         to MART's  Registration Statement on Form S-11, File No. 33-66386).
10(d)    Employment Agreement between Paul F. Robinson (incorporated by reference to Exhibit 10(c) to MART's
         Registration Statement on Form S-11, File No. 33-66386).
10(e)    Amendment dated December 1, 1995 to Employment Agreement between MART and F. Patrick Hughes and MART and Paul F.
         Robinson (incorporated by reference to Exhibit 10(e) to MART's Annual Report on Form 10-K, filed April 1, 1998).
10(f)    Commitment Letter from First National Bank of Md. for Line of Credit to MART (incorporated by reference to Exhibit 10(d) to
         MART's Registration Statement on Form S-11, File No.33-66386).
10(g)    Agreement for Contribution of Interests dated April 1, 1997, among MART and the  Contributors  named  therein (incorporated
         by  reference  to Exhibit (c)1 to Form 8-K filed July 15, 1997).
10(h)    Agreement of Limited Partnership of MART Limited Partnership dated as of June 30, 1997 (incorporated by
         reference to Exhibit (c)2 to Form 8-K filed July 15, 1997).
10(i)    Partnership Purchase and Sale Agreement among BTR Gateway,  Inc., MART, and Prentiss Properties Acquisition, L.P.
         (incorporated by reference to Exhibit (b)1 to Form 8-K filed September 30, 1997).
10(j)    Mid-Atlantic Realty Trust Restricted Share Plan, adopted on November 14, 1997 (incorporated by reference to
         Exhibit 10(j) to MART's Annual Report on Form 10-K, filed April 1, 1998).
10(k)    Mid-Atlantic Realty Trust Non-Employee Trustee Deferred Compensation Plan, adopted on November 14, 1997 (incorporated by
         reference to Exhibit 10(k) to MART's Annual Report on Form 10-K, filed April 1, 1998).
10(l)    Financing Agreement dated April 23, 1999, with Named Banks (incorporated by reference to Exhibit 10(l) to MART's Quarterly
         Report on Form 10-Q for the quarter ended March 31, 1999).
12       Computation of Ratio of Earnings to Fixed Charges.*
21       Subsidiaries of the Registrant.*
23       Consent of KPMG LLP.*
27       Financial Data Schedule.*
99.1     Real Estate Investment Risks.*
</TABLE>

 *Filed herewith

(b)      Reports on Form 8-K
     None.

                                       27

<PAGE>

                                  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.

                               MID-ATLANTIC REALTY TRUST

Date:   3/22/00                /s/ F. Patrick Hughes
      -------------------      --------------------------------------
                               F. Patrick Hughes, President and
                                 Chief Executive Officer



Signatures

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

Date:  3/22/00                /s/ LeRoy E. Hoffberger
      -------------------     -----------------------------------------
                              LeRoy E. Hoffberger, Chairman

Date:  3/22/00                /s/ F. Patrick Hughes
      -------------------     -----------------------------------------
                              F. Patrick Hughes, President and Chief Executive
                                 Officer

Date:  3/22/00                /s/ Janice C. Robinson
      -------------------     ------------------------------------------------
                              Janice C. Robinson, Vice President and Controller

Date:  3/22/00                /s/ Eugene T. Grady
      -------------------     ------------------------------------------------
                              Eugene T. Grady, Treasurer

Date:  3/22/00                /s/ Robert A. Frank
      -------------------     ------------------------------------------------
                              Robert A. Frank, Trustee

Date:  3/22/00                /s/ Marc P. Blum
      -------------------     ------------------------------------------------
                              Marc P. Blum, Trustee

Date:  3/22/00                /s/ M. Ronald Lipman
      -------------------     ------------------------------------------------
                              M. Ronald Lipman, Trustee

Date:  3/22/00                /s/ Daniel S. Stone
      -------------------     ------------------------------------------------
                              Daniel S. Stone, Trustee

Date:  3/22/00                /s/ David F. Benson
      -------------------     ------------------------------------------------
                              David F. Benson, Trustee


                                      28





<PAGE>


MID-ATLANTIC REALTY TRUST AND SUBSIDIARIES

Schedule III - Real Estate and Accumulated Depreciation

<TABLE>
<CAPTION>
                                                      Intitial cost to Company    Cost capitalized subsequent to acquistion
                                                      ------------------------    -----------------------------------------

December 31, 1999                                                                                   Carrying Costs
                                                                                                    --------------
                                     Mortgages                 Buildings and
Description                           Payable      Land        Improvements           Improvements      Land        Improvements
--------------------------------------------------------------------------------------------------------------------------------


Shopping Centers

<S>                                  <C>           <C>         <C>                    <C>               <C>         <C>
Arundel Plaza                        $11,047,885   1,695,566      530,951             6,056,413         1,843,683          --
Brandywine Commons                            --          --   12,164,821                68,396                --          --
Burke Town Plaza                              --          --    2,936,134             1,837,308                --          --
Club Centre                            5,342,856   2,029,919    3,600,663                71,904                --          --
Colonie Plaza                                 --   1,137,567    7,755,095               771,598                --          --
Columbia Plaza                                --     999,739    6,887,711             3,984,211           203,353          --
Del Alba                               6,885,068   2,270,000    7,882,217                24,708                --          --
Enchanted Forest Shopping Center      11,561,370   3,873,246   15,314,736               213,692                --          --
Glen Burnie Village                           --   3,081,553    4,598,794                82,349                --          --
Harford Mall                          18,994,922     599,031    8,457,331            25,780,829           (12,954)         --
Ingleside Shopping Center                     --   3,023,230   11,817,212               151,149                --          --
Little Glen                                   --          --           --                70,370                --          --
Lutherville Station                           --          --    4,031,809            14,894,063                --          --
Milford Commons                               --     673,306    3,789,682                23,406                --          --
North East                                    --          --           --             5,883,091         2,687,905          --
Owings Mills                          12,548,175   4,381,666    9,547,434               146,295                --          --
Patriots Plaza                                --          --    1,709,846               638,998                --          --
Perry Hall Square                      5,905,931   3,538,825    6,604,216               694,560                --          --
Radcliffe Center                              --  11,205,665    5,663,480                16,855                --          --
Rolling Road Plaza                            --     338,791    1,632,268             2,099,002                --    (837,931)
Rosedale Plaza                         1,681,952   1,024,712    3,217,926               850,785                --          --
Saucon Valley Square                          --          --    4,560,182                    --         6,042,700          --
Shawan Plaza                          13,864,711   2,055,694   13,930,839                65,014                --          --
Shoppes at Easton                      7,381,422   2,600,000   10,379,069                47,093                --          --
Skyline Village                        4,956,983     555,295    6,240,003             1,119,053                --          --
Smoketown Plaza                               --     516,312   10,095,077               735,507                --          --
Spotsylvania Crossing                         --   1,544,314    6,600,616               391,682                --          --
Sudley Towne Plaza                            --     789,881    3,736,837               494,942                --          --
Timonium Crossing                      5,546,444   4,276,779    4,792,548                99,823                --          --
Timonium Shopping Center              11,367,320   6,252,248   12,090,955               774,267                --          --
Wayne Heights                                 --   1,546,720    3,837,159               129,677                --          --
Wayne Plaza                            8,388,861   1,650,300    9,230,960               857,520                --          --
Wilkens Beltway Plaza                    415,795          --    3,601,891             1,151,141           475,481   2,923,200
York Road Plaza                        8,363,174   1,562,382    2,102,575             2,844,538                --          --
                                     ----------------------------------------------------------------------------------------
                                     134,252,869  63,222,741  209,341,037            73,070,239        11,240,168   2,085,269
                                     ----------------------------------------------------------------------------------------

Office Buildings

Orchard Square                         2,594,962   1,160,666    2,959,390                32,597                --          --
Patriots Plaza                                --          --    1,522,943               256,097                --          --
Wilkens Office II                             --          --    1,644,370               293,210                --          --
Wilkens Office I                              --          --    1,383,102               379,181                --          --
Wilkens Office III                            --          --      768,642               138,004                --          --
                                     ----------------------------------------------------------------------------------------
                                       2,594,962   1,160,666    8,278,447             1,099,089
                                     ----------------------------------------------------------------------------------------

Bowling Centers

Clinton                                       --          --      457,764                63,297                --          --
Freestate                                     --     180,025      740,082                 2,719                --          --
Waldorf                                       --     243,139      579,096                 5,690                --          --
                                     ----------------------------------------------------------------------------------------
                                                     423,164    1,776,942                71,706                --          --
                                     ----------------------------------------------------------------------------------------

Other Rental Properties

Business Center                               --     395,537    1,190,692               111,315           235,022          --
Southwest                                     --          --      283,039               666,993            45,149          --
Waldorf Firestone                             --       9,261      161,543                 4,911                --          --
                                     ----------------------------------------------------------------------------------------
                                              --     404,798    1,635,274               783,219           280,171          --
                                     ----------------------------------------------------------------------------------------
Properties in Development                     --          --    2,098,324                    --                --          --


Properties held for development or Sale       --   3,587,610           --                    --                --          --

Other Property                                --          --      681,313               476,019                --          --
                                     ----------------------------------------------------------------------------------------

                                   $ 136,847,831  68,798,979  223,811,337            75,500,272        11,520,339     2,085,269
                                     ==========================================================================================

</TABLE>

                                       1

<PAGE>

Schedule III - Real Estate and Accumulated Depreciation - Continued

<TABLE>
<CAPTION>
                                                Amount at which carried                                     Life on which
                                                     at close of period                                      depreciation
December 31, 1999                                                                                           latest income
                                                 Buildings               Accumulated   Date of     Date      statement is
Description                            Land     improvements    Total    Depreciation Construction acquired    computed
--------------------------------------------------------------------------------------------------------------------------------
Shopping Centers
<S>                                   <C>          <C>        <C>            <C>      <C>              <C>       <C>
Arundel Plaza                         3,539,249    6,587,364  10,126,613     200,602                12/97     5-50 yrs.
Brandywine Commons                           --   12,233,217  12,233,217   1,711,537                11/95     5-50 yrs.
Burke Town Plaza                             --    4,773,442   4,773,442   2,232,219  7/79-7/82               5-50 yrs.
Club Centre                           2,029,919    3,672,567   5,702,486     540,887                 7/97     5-50 yrs.
Colonie Plaza                         1,137,567    8,526,693   9,664,260   2,849,417    12/87                 5-50 yrs.
Columbia Plaza                        1,203,092   10,871,922  12,075,014   2,913,476    6/88                  5-50 yrs.
Del Alba                              2,270,000    7,906,925  10,176,925     207,681                 9/98     5-50 yrs.
Enchanted Forest Shopping Center      3,873,246   15,528,428  19,401,674   1,357,068                 7/97     5-50 yrs.
Glen Burnie Village                   3,081,553    4,681,143   7,762,696     418,784                 7/97     5-50 yrs.
Harford Mall                            586,077   34,238,160  34,824,237  13,438,532    12/73                 5-50 yrs.
Ingleside Shopping Center             3,023,230   11,968,361  14,991,591     759,049                 7/97     5-50 yrs.
Little Glen                                  --       70,370      70,370      17,517                 7/97     5-50 yrs.
Lutherville Station                          --   18,925,872  18,925,872   1,355,838                10/93     5-50 yrs.
Milford Commons                         673,306    3,813,088   4,486,394     164,962                12/97     5-50 yrs.
North East                            2,687,905    5,883,091   8,570,996     202,908    2/96                  5-50 yrs.
Owings Mills                          4,381,666    9,693,729  14,075,395     903,601    12/95                 5-50 yrs.
Patriots Plaza                               --    2,348,844   2,348,844   1,079,674    6/84                  5-50 yrs.
Perry Hall Square                     3,538,825    7,298,776  10,837,601   1,489,901                 7/97     5-50 yrs.
Radcliffe Center                     11,205,665    5,680,335  16,886,000   1,182,537                 7/97     5-50 yrs.
Rolling Road Plaza                      338,791    2,893,339   3,232,130   1,413,608    6/73                  5-50 yrs.
Rosedale Plaza                        1,024,712    4,068,711   5,093,423   1,052,079                10/89     5-50 yrs.
Saucon Valley Square                  6,042,700    4,560,182  10,602,882      66,205                 3/99     5-50 yrs.
Shawan Plaza                          2,055,694   13,995,853  16,051,547   1,662,477                 7/97     5-50 yrs.
Shoppes at Easton                     2,600,000   10,426,162  13,026,162   1,219,822                 9/94     5-50 yrs.
Skyline Village                         555,295    7,359,056   7,914,351   2,455,524    5/88                  5-50 yrs.
Smoketown Plaza                         516,312   10,830,584  11,346,896   3,643,936    4/87                  5-50 yrs.
Spotsylvania Crossing                 1,544,314    6,992,298   8,536,612   2,407,509    5/87                  5-50 yrs.
Sudley Towne Plaza                      789,881    4,231,779   5,021,660   1,637,378    7/84                  5-50 yrs.
Timonium Crossing                     4,276,779    4,892,371   9,169,150     473,703                 7/97     5-50 yrs.
Timonium Shopping Center              6,252,248   12,865,222  19,117,470     944,221                 7/97     5-50 yrs.
Wayne Heights                         1,546,720    3,966,836   5,513,556     156,404                 1/98     5-50 yrs.
Wayne Plaza                           1,650,300   10,088,480  11,738,780     394,931                 2/98     5-50 yrs.
Wilkens Beltway Plaza                   475,481    7,676,232   8,151,713   1,992,311    5/81                  5-50 yrs.
York Road Plaza                       1,562,382    4,947,113   6,509,495   2,039,147                11/85     5-50 yrs.
                                     -----------------------------------------------

                                     74,462,909  284,496,545 358,959,454  54,585,445
                                     -----------------------------------------------

Office Buildings
Orchard Square                        1,160,666    2,991,987   4,152,653     340,320                 7/97     5-50 yrs.
Patriots Plaza                               --    1,779,040   1,779,040     675,368    8/85                  5-50 yrs.
Wilkens Office II                            --    1,937,580   1,937,580     680,171    1/87                  5-50 yrs.
Wilkens Office I                             --    1,762,283   1,762,283     725,790    1/85                  5-50 yrs.
Wilkens Office III                           --      906,646     906,646     272,471    1/91                  5-50 yrs.
                                     -----------------------------------------------

                                      1,160,666    9,377,536  10,538,202   2,694,120
                                     -----------------------------------------------

Bowling Centers
Clinton                                      --      521,061     521,061     306,357    8/71                  5-50 yrs.
Freestate                               180,025      742,801     922,826     648,932    3/78                  5-50 yrs.
Waldorf                                 243,139      584,786     827,925     265,014    3/79                  5-50 yrs.
                                     -----------------------------------------------

                                        423,164    1,848,648   2,271,812   1,220,303
                                     -----------------------------------------------


Other Rental Properties
Business Center                         630,559    1,302,007   1,932,566     345,384    4/90                  5-50 yrs.
Southwest                                45,149      950,032     995,181     537,288    4/68                  5-50 yrs.
Waldorf Firestone                         9,261      166,454     175,715      73,814    9/78                  5-50 yrs.
                                     -----------------------------------------------
                                        684,969    2,418,493   3,103,462     956,486
                                     -----------------------------------------------

Properties in development                    --    2,098,324   2,098,324          --    91-98

Properties held for development or
  sale                                3,587,610           --   3,587,610          --    7/73-
                                                                                        12/98
Other Property                               --    1,157,332   1,157,332     640,944                9/82-     3-10 yrs.
                                                                                                   12/98
                                     -----------------------------------------------
                                     80,319,318  301,396,878 381,716,196  60,097,298
                                     ===============================================
</TABLE>
                                       2

<PAGE>

(1)  The changes in total cost of properties are as follows:

                                         Year ended December 31,
                                  --------------------------------------------
                                        1999             1998             1997
------------------------------------------------------------------------------
Balance beginning of year       $361,892,910      328,527,402      210,258,781
Additions during year:
    Acquisitions                  10,602,882       26,417,356      133,175,815
    Improvements                   2,728,549        5,672,676        3,110,648
    Development                    6,491,855        6,738,109       15,633,614
                                 ---------------------------------------------

                                  19,823,286       38,828,141      151,920,077
                                 ---------------------------------------------

Deductions during year:
    Valuation allowance for
      loss                                --               --       (1,148,000)
    Cost of real estate sold              --       (5,462,633)     (32,340,056)
    Retirements and disposals             --               --         (163,400)
                                 ---------------------------------------------
                                          --       (5,462,633)     (33,651,456)
                                 ---------------------------------------------
Balance end of year             $381,716,196      361,892,910      328,527,402
                                 =============================================


(2) The changes in accumulated depreciation are as follows:

                                                Year ended December 31,
                                        1999             1998             1997
                                ----------------------------------------------
Balance beginning of year       $    (50,540,094)   (42,781,532)   (42,702,472)
Depreciation and Amortization         (9,557,204)    (8,813,251)    (6,954,803)
Retirements, disposals and sales                      1,054,689      6,875,743
                                 ---------------------------------------------

Balance end of year             $    (60,097,298)   (50,540,094)   (42,781,532)
                                 ==============================================

(3)  The  aggregate  cost of  properties  for  Federal  income tax  purposes  is
     approximately $342,000,000 at December 31, 1999.
(4)  See Item 2 for geographic  location of properties.
(5)  Freestate  includes one bowling center in Illinois.


                                       3

<PAGE>