FIRST AMENDMENT
                                     TO THE

                   AMENDED AND RESTATED 1994 STOCK OPTION PLAN
                    FOR OFFICERS, DIRECTORS AND EMPLOYEES OF

                       FIRST WASHINGTON REALTY TRUST, INC.
                   FIRST WASHINGTON REALTY LIMITED PARTNERSHIP

                                       AND

                        FIRST WASHINGTON MANAGEMENT, INC.

              First Washington Realty Trust,  Inc., a Maryland  corporation (the
"Company"),  First  Washington  Realty Limited  Partnership,  a Maryland limited
partnership  (the  "Partnership"),  and First  Washington  Management,  Inc.,  a
District of Columbia corporation ("FWM"),  adopted The Amended and Restated 1994
Stock Option Plan for  Officers,  Directors  and  Employees of First  Washington
Realty Trust,  Inc.,  First  Washington  Realty  Limited  Partnership  and First
Washington Management,  Inc. (the "Plan"), effective March 13, 1998 and approved
by the  stockholders  of the  Company on May 8, 1998,  for the  benefit of their
eligible  employees,  consultants and directors and those of their subsidiaries.
The Plan  consists  of two  plans,  one for the  benefit  of the  employees  and
directors of the Company and Company  Subsidiaries  (as defined therein) and one
for the employees and consultants of the Partnership,  Partnership  Subsidiaries
(as defined therein), FWM and FWM Subsidiaries (as defined therein).

               In order to amend the Plan to  increase  by 500,000 the number of
shares available for issuance,  and to provide greater  flexibility to the Board
with respect to grants of Options to Independent Directors, this First Amendment
to the Plan was adopted  effective as set forth  herein.  This First  Amendment,
together with the Plan, constitutes the entire Plan as amended to date.

              1.      Section 2.1(a) of the Plan is hereby amended in its
entirety and the following is inserted in lieu thereof:

                      "Section 2.1 - Shares Subject to Plan

                      (a) The shares of stock  subject to Option shall be Common
              Stock,  initially  shares of the Company's common Stock, par value
              $0.01 per  share,  as  presently  constituted,  and the  aggregate
              number of such shares  which may be issued  upon  exercise of such
              Options  shall not  exceed.  1,292,481;  provided,  however,  that
              effective as of the date of the next succeeding  annual meeting of
              stockholders at which the  stockholders of the Company approve the
              increase  to  1,792,481  of the  number  of shares  available  for
              issuance hereunder, the aggregate number of shares of Common Stock
              which may be issued upon  exercise or grant of an Option  shall be
              1,792,481.  The shares of Common Stock  issuable  upon exercise or
              grant  of an  Option  may  be  either  previously  authorized  but
              unissued  shares or issued shares which have been  repurchased  by
              the Company."

             2.       Section 3.3(d)(i) of the Plan is hereby amended to add the
following as the last sentence thereof:



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                      "In addition,  subject to stockholder approval as provided
                      in  Section  7.5,  effective  as of  June  1,  1999,  each
                      Independent  Director  who was  then  serving  as such was
                      granted on such date an Option to purchase 8,000 shares of
                      Common  Stock at an  exercise  price  equal to $21.75  per
                      share."

              3.      Section 3.3 (d) (ii) of the Plan is hereby deleted in its
entirety and the following is inserted in lieu thereof:

              "(ii) Subject to stockholder approval within twelve months of June
              1, 1999 and effective as of the date of such approval,  the Board,
              in its sole discretion, and consistent with the terms of the Plan,
              may from time to time grant an Option to an  Independent  Director
              for the number of shares  specified  by the Board,  at an exercise
              price per share equal to Fair  Market  Value on the date of grant;
              provided,  however, that except as provided in Section 3.3 (d) (i)
              above, no Independent Director may be granted more than one Option
              during each calendar year."

              4.      Section 7.5 (b) of the Plan is hereby deleted in its
entirety and the following is inserted in lieu thereof:

              "(b) The Plan as amended and restated herein shall be effective as
              of March 13, 1998; provided,  however,  that (i) grants of Options
              to Independent  Directors pursuant to the penultimate  sentence of
              Section 3.3 (d) (i) and the increase to 1,296,691 of the aggregate
              number of shares that may be issued  hereunder  shall be effective
              as of May 8, 1998; (ii) grants of Options to Independent Directors
              pursuant  to the  last  sentence  of  Section  3.3(d)(i)  and  the
              increase to 1,792,481 of the  aggregate  number of shares that may
              be issued  hereunder  shall not be effective  unless and until the
              stockholders  of the Company shall have  approved such  amendment;
              and (iii) no grant of Options to Independent Directors pursuant to
              Section  3.3  (d)(ii)  shall be  effective  unless  and  until the
              stockholders  of the Company shall have approved such amendment to
              the Plan."


<PAGE>



I hereby certify that the foregoing First Amendment to the Plan was duly adopted
by the Board of Directors of First  Washington  Realty Trust,  Inc. on March 10,
2000.

            Executed on this 1st day of May, 2000.



                                                /s/
                                              ----------------------------------
                                              Secretary

           ********

           I hereby certify that the foregoing  First  Amendment to the Plan was
duly adopted by First Washington Realty Limited Partnership on March 10, 2000.

            Executed on this 1st day of May, 2000.

           By its sole General Partner First Washington Realty Trust, Inc.


                                                /s/
                                              ----------------------------------
                                              Secretary

         *****

         I hereby  certify that the  foregoing  First  Amendment to the Plan was
duly adopted by the Board of Directors of First Washington  Management,  Inc. on
March 10, 2000.

         Executed on this 1st day of May, 2000.


                                                /s/
                                              ----------------------------------
                                              Secretary

         *****

         I hereby  certify that the  foregoing  First  Amendment to the Plan was
duly approved by the stockholders of First Washington  Realty Trust, Inc. on May
____, 2000.

         Executed on this ____ day May, 2000.


                                                /s/
                                               ---------------------------------
                                               Secretary


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