FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549

           [X] Quarterly Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                       For the period ended June 30, 2000

                         Commission File Number 0-25230

                       FIRST WASHINGTON REALTY TRUST, INC.

             (Exact name of registrant as specified in its charter)



Maryland                                                              52-1879972
--------------------------------------------------------------------------------
(State or other jurisdiction of                                 (I.R.S. Employer
incorporation or organization)                               identification no.)


4350 East-West Highway, Suite 400, Bethesda, MD                            20814
--------------------------------------------------------------------------------
(Address of principal executive offices)                              (Zip code)



Registrant's telephone number, including area code (301) 907-7800
                                                   --------------

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

         Common Stock, $.01 par value, outstanding as of August 8, 2000:

                        10,382,293 Shares of Common Stock


<PAGE>


                       FIRST WASHINGTON REALTY TRUST, INC.
                                    FORM 10-Q

                                      INDEX

Part I:         Financial Information                                     Page
------          ---------------------                                     ----

Item 1.         Consolidated Balance Sheets as of June 30, 2000
                (unaudited) and December 31, 1999                          1

                Consolidated Statements of Operations (unaudited)
                for the three months and six months ended
                June 30, 2000 and 1999                                     2

                Consolidated Statements of Cash Flows (unaudited)
                for the six months ended June 30, 2000 and 1999            3

                Notes to Unaudited Consolidated Financial Statements       4

Item 2.         Management's Discussion and Analysis of Financial
                Condition and Results of Operation                         8

Item 3.         Qualitative and Quantitative Disclosures about
                Market Risk                                               10

Part II:        Other Information
-------         ---------------------

Item 2.         Recent Sales of Unregistered Equity Securities            11

Item 4.         Submission of Matters to a Vote of Security Holders       12

Item 6.         Exhibits and Reports on Form 8-K                          12

                Signatures                                                13



<PAGE>


              FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                    (dollars in thousands except share data)

                                   -----------

                                                      June 30      December 31,
                                                       2000            1999
                                                      -------         ------
                                                    (unaudited)

                                     ASSETS

Rental properties:
        Land                                          $119,845      $119,965
        Buildings and improvements                     495,947       495,031
                                                      --------      --------
                                                       615,792       614,996
Accumulated depreciation                               (75,327)      (67,029)
                                                      --------      --------
Rental properties, net                                 540,465       547,967

Cash and equivalents                                    12,134         4,332
Tenant receivables, net                                 15,470        11,750
Deferred financing costs, net                            6,575         5,137
Other assets                                            16,194        14,107
                                                      --------      --------

          Total assets                                $590,838      $583,293
                                                      ========      ========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
        Mortgage notes payable                        $308,609      $298,116
        Accounts payable and accrued expenses           14,009        12,350
                                                      --------      --------
        Total liabilities                              322,618       310,466

Minority interest                                       64,834        66,267

Commitments and contingencies

Stockholders' equity:
        Convertible preferred stock $.01 par value,
        10,000,000 shares authorized, 3,800,000 shares
          designated;
         2,030,205 and 2,359,202 issued and outstanding,
          respectively,
        liquidation value of $25.00 per share               20            24
Common stock $.01 par value, 90,000,000 shares authorized;
        10,382,293 and 9,709,670 shares issued and
          outstanding, respectively                        104            97
Additional paid-in capital                             244,858       245,054
Accumulated distributions in excess of earnings       ( 41,596)      (38,615)
                                                      --------      --------

        Total stockholders' equity                     203,386       206,560
                                                      --------      --------

        Total liabilities and stockholders' equity    $590,838      $583,293
                                                      ========     =========

        The accompanying notes are an integral part of these consolidated
                             financial statements.

                                        1


<PAGE>

              FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                      (in thousands, except per share data)
                                   (unaudited)

                                              For three               For six
                                            months ended            months ended
                                              June 30,                June 30,
                                            ------------            ------------

                                           2000     1999         2000       1999
                                           ----     ----         ----       ----
Revenues:
        Minimum rents                   $18,097  $16,445      $35,808    $32,422
        Tenant reimbursements             4,717    4,106       10,124      8,404
        Percentage rents                    495      501          942        881
        Other income                        648      388        1,075        858
                                        -------   ------      -------    -------
        Total revenues                   23,957   21,440       47,949     42,565
                                        -------   ------      -------    -------

Expenses:
        Property operating
          and maintenance                 5,450    4,787       11,520      9,993
        General and administrative        1,117    1,068        2,334      2,162
        Interest                          5,964    5,677       11,784     11,202
        Depreciation and amortization     4,776    4,282        9,400      8,494
                                          -----    -----       ------     ------
        Total expenses                   17,307   15,814       35,038     31,851
                                         ------   ------       ------     ------

        Income before gain on sale of
          properties, loss from
          Management Company, minority
          interest, extraordinary
          item, and distributions to
          Preferred Stockholders          6,650    5,626       12,911     10,714

Gain on sale of properties                  648        -          648          -

Loss from Management Company               (357)    (315)        (459)     (230)
                                          -----    -----       ------     ------
Income before minority interest,
        extraordinary item, and
        distributions to Preferred
        Stockholders                      6,941    5,311       13,100     10,484

Income allocated to minority interest    (1,796)  (1,273)      (3,427)   (2,579)
                                         -------  -------      ------    -------

Income before extraordinary item and
        distributions to Preferred
        Stockholders                      5,145    4,038        9,673      7,905

Extraordinary item (net of minority
        interest)-
        Loss on early extinguishment
        of debt                            (117)       -         (117)         -
                                          -----    -----        -----     ------

Net income                                5,028    4,038        9,556      7,905

Distributions to preferred stockholders  (1,361)  (1,412)      (2,728)   (2,822)
                                         ------   ------       ------    -------

Net income allocated to
        Common Stockholders              $3,667   $2,626       $6,828     $5,083
                                         ======   ======       ======     ======

Earnings per Common Share  - Basic
        Income before extraordinary item $ 0.37   $ 0.30       $ 0.69     $ 0.59
        Extraordinary item                (0.01)    0.00        (0.01)      0.00
                                         ------   ------       ------     ------
        Net income                       $ 0.36   $ 0.30       $ 0.68     $ 0.59
                                         ======   ======       ======     ======
Earnings per Common Share - Diluted
        Income before extraordinary item $ 0.37   $ 0.30       $ 0.68     $ 0.58
        Extraordinary item                (0.01)    0.00        (0.01)      0.00
                                         ------   ------       ------     ------
        Net income                       $ 0.36   $ 0.30       $ 0.67     $ 0.58
                                         ======   ======       ======     ======
Weighted average shares of Common
        Stock - Basic                    10,157    8,787       10,100      8,682
        Dilutive effect of stock
          options and contingent stock       90       88           52         81
                                         ------    -----       ------      -----
Weighted average shares of
        Common Stock - Diluted           10,247    8,875       10,152      8,763
                                        =======   ======       ======      =====
        Distributions per share         $0.4875  $0.4875      $0.9750    $0.9750
                                        =======  =======      =======     ======

              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                        2


<PAGE>

              FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                             (Dollars in thousands)
                                   (unaudited)
                                    --------

                                                          For six months ended
                                                                June 30,
                                                          --------------------

                                                          2000            1999
                                                          ====            ====

Operating Activities:
Net Income                                              $9,556          $7,905
        Adjustments to reconcile net
        income to net cash provided by
        operating activities:
        Income allocated to minority interest            3,427           2,579
        Depreciation and amortization                    9,400           8,494
    Gain on sale of rental properties                     (648)              -
    Loss on early extinguishment of debt                   117               -
    Amortization of deferred financing costs
        and loan premiums                                 (148)           (252)
    Equity in earnings of Management Company               699             470
    Compensation paid or payable in common shares          759             642
    Provision for uncollectible accounts                   227             637
    Recognition of deferred rent                          (508)           (632)
    Net changes in:
        Tenant receivables                              (3,438)             73
        Other assets                                    (3,275)            858
      Accounts payable and accrued expenses              2,713            (339)
                                                       -------         -------
        Net cash provided by operating
        activities                                      18,881          20,435
                                                       -------         -------

Investing Activities:
        Acquisition of rental properties                     -         (10,345)
        Additions to rental properties                  (2,110)         (2,804)
        Net proceeds from sale of
        rental property                                  1,351               -
                                                        ------         -------
         Net cash used in investing activities          (  759)        (13,149)
                                                        ------         -------

Financing Activities:
        Proceeds from line of credit                    54,500          19,300
        Proceeds from mortgage notes refinancings       26,125          18,822
        Proceeds from exercise of stock options              -              49
        Repayment of line of credit                    (52,500)        (23,200)
        Repayment of mortgage notes                    (16,957)         (2,131)
        Additions to deferred financing costs           (2,048)         (3,965)
        Loan prepayment penalties                          (78)              -
        Distributions paid to Preferred Stockholders    (2,728)         (2,822)
        Distributions paid to Common Stockholders       (9,809)         (8,375)
        Distributions paid to minority interest         (4,303)         (4,082)
        Repurchase of Preferred and Common Shares       (2,522)              -
                                                        -------        -------
        Net cash used in financing activities          (10,320)         (6,404)
                                                        -------        -------

Net increase in cash and equivalents                     7,802             882
Cash and equivalents, beginning of period                4,332           3,163
                                                        -------        -------
Cash and equivalents, end of period                    $12,134          $4,045
                                                        =======        =======



              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                        3


<PAGE>

              FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                    (dollars in thousands, except share data)
                                    ---------




1.       Business

         General

                  First Washington Realty Trust, Inc. (the "Company") is a fully
         integrated  real estate  organization  with expertise in  acquisitions,
         property management, leasing, renovation and development of principally
         supermarket- anchored neighborhood shopping centers that has elected to
         be taxed as a real estate  investment trust ("REIT") under the Internal
         Revenue  Code of 1986,  as amended  (the  "Code") . The Company  owns a
         portfolio of 61 retail properties (the "Retail Properties")  containing
         a total of approximately 6.7 million square feet of gross leasable area
         ("GLA") located in the  Mid-Atlantic  region and the Chicago,  Illinois
         and Milwaukee, Wisconsin metropolitan areas.

                  The  Company  currently  owns   approximately   74.2%  of  the
         partnership  interests in First Washington  Realty Limited  Partnership
         (the  "Operating  Partnership").  All of the Company's  operations  are
         conducted through the Operating Partnership.  The Operating Partnership
         owns 42 Properties  directly and 19 Properties  are owned by lower tier
         entities in which the Operating Partnership either owns a 100% or a 99%
         interest and the Company (or a  wholly-owned subsidiary of the Company)
         owns a 1% interest.

                  Due to the  Company's  ability,  as the  general  partner,  to
         exercise  both  financial  and  operational  control over the Operating
         Partnership,  the Operating  Partnership is consolidated  for financial
         reporting purposes. Allocation of net income to the limited partners of
         the  Operating  Partnership  is based on their  respective  partnership
         interests and is reflected in the accompanying  Consolidated  Financial
         Statements  as  minority  interests.  Losses  allocable  to the limited
         partners  in  excess  of  their  basis  are  allocated  to  the  Common
         Stockholders  as the  limited  partners  have  no  requirement  to fund
         losses.

                  The  Operating  Partnership  also owns 100% of the  non-voting
         preferred  stock  of  First  Washington  Management,   Inc.  ("FWM"  or
         "Management Company") and is entitled to 99% of the cash flow from FWM.
         FWM provides  management,  leasing and related  services for the Retail
         Properties   and  to   third-party   clients,   including   individual,
         institutional and corporate property owners.

2.       Summary of Significant Accounting Policies

         Basis of Presentation

                  The unaudited interim consolidated financial statements of the
         Company  are  prepared   pursuant  to  the   Securities   and  Exchange
         Commission's  rules  and  regulations  for  reporting  on Form 10-Q and
         should be read in  conjunction  with the financial  statements  and the
         notes  thereto of the  Company's  1999 Annual  Report to  Stockholders.
         Accordingly,   certain   disclosures   accompanying   annual  financial
         statements  prepared in accordance with generally  accepted  accounting
         principles are omitted. In the opinion of management,  all adjustments,
         consisting solely of normal recurring  adjustments,  necessary for fair
         presentation of the consolidated  financial  statements for the interim
         periods have been included.  The current period's results of operations
         are not  necessarily  indicative  of results  which  ultimately  may be
         achieved for the year.

                  The consolidated  financial statements include the accounts of
         the Company and its majority  owned  entities,  including the Operating
         Partnership.  All significant  intercompany  balances and  transactions
         have been eliminated.

                                        4


<PAGE>

              FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                    (dollars in thousands, except share data)

3.       Acquisition and disposition of Rental Properties

         There were no  acquisitions  during  the first six  months of 2000.  In
July,  2000  the  Company  acquired  Goshen  Plaza  for  an  aggregate  cost  of
approximately  $4,300. During the first six months of 1999, the Company acquired
one shopping center for an aggregate cost of approximately  $15,184. The Company
sold one property  during the first six months of 2000 for $1,485.  Net proceeds
of  $1,351  were  used to  purchase  Goshen  Plaza  in July  2000 in a  tax-free
exchange. A gain on sale of property was recognized in the amount of $648.

                  The following  unaudited  pro forma results of operations  are
         presented  as if the  acquisitions  and sales of the rental  properties
         that occurred during the first six months of 2000 and 1999 had occurred
         on January 1 of the  period  presented.  The  proforma  statements  are
         provided for  information  purposes only.  They are based on historical
         information  and do not  necessarily  reflect the actual  results  that
         would  have  occurred  nor are they  necessarily  indicative  of future
         results of operations of the Company.

                                                       For the six months ended
                                                               June 30,
                                                       ------------------------
                                                       2000                1999
                                                       ----                ----
         Pro forma total revenues                   $47,854             $42,565
                                                    =======            ========
         Pro forma net income                       $ 6,793             $ 5,083
                                                    =======            ========
         Pro forma earnings per Common Share
                 - Basic                            $  0.67             $  0.59
                                                    =======             =======
         Pro forma earnings per Common Share
                 - Diluted                          $  0.67             $  0.58
                                                    =======             =======

4.       Mortgage Debt

         During the six months  ended June 30,  2000 the  Company  closed on the
following loans:

                                                                         All in
Collateral Properties               Date             Amount                Rate
---------------------               ----             ------                ----

Cudahy Center                       1/00             $ 2,215              7.94%
Racine Centre                       1/00             $ 4,585              7.89%
Whitnall Square                     1/00             $ 5,525              7.89%
Festival at Woodholme               6/00             $13,800              7.75%

                  Amortization
Term                    Period
----              ------------
10 years             30 years
10 years             30 years
10 years             30 years
10 years             30 years

         On May 19, 2000 the Company  closed on a line of credit  facility  with
First Union  National Bank  ("FUNB").  This line is  collateralized  by thirteen
properties  (Brafferton  Center,  Bryans Road, Kamp Washington,  Kenhorst Plaza,
Newtown Square,  Riverside  Square,  Shoppes of Graylyn,  Spring Valley,  Takoma
Park, The Village,  Watkins Park Plaza,  Willston Center I and Woodmoor Shopping
Center).  The line  matures on May 19,  2003 and loans under this line will bear
interest  at the  30-day  LIBOR rate plus  1.35% or 1.50%  depending  on certain
financial ratios.  As of June 30, 2000, there was $46,000  outstanding under the
Line of Credit. This line of credit replaces the UBS AG line of credit which was
due to mature in January 2001. An extraordinary  loss of $117 was recognized due
to the early extinguishment of the UBS AG line of credit.

         The  Company  currently  has in  place  a cap on  30-day  LIBOR  in the
notional amount of $46,000,  which limits the Company's  exposure to an increase
in interest rates. The cap contract covers the period from July 19, 2000 through
January 19,  2001.  The cap counter  party is required to pay to the Company any
amount in excess of 6.5%,  thereby  limiting  the  Company's  exposure to 30-day
LIBOR to a maximum of 6.5%.

         In May 2000,  simultaneously with the execution of rate lock agreements
with the lenders of Festival at Woodholme and Stonebrook  Plaza (see  subsequent
events) the Company sold its $24,000  forward  interest  rate swap  contract for
$1,640. These proceeds will be amortized over the life of the new loans and will
be recorded as a reduction of interest expense.

5.       Preferred Stock

         Effective June 1, 1999,  shares of Convertible  Preferred  Stock became
convertible  into 1.282051  shares of Common Stock.  During the six months ended
June 30, 2000, 228,597 shares of Convertible Preferred Stock were converted into
293,073 shares of Common Stock.  Commencing July 15, 1999 the Company may redeem
the Convertible  Preferred  Stock.  The current  redemption  price is $26.95 and
reduces annually in stages to $25.00 on July 15, 2004.

                                        5


<PAGE>

              FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES


              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                    (dollars in thousands, except share data)

                                    ---------



6.       Share Buyback Authorization

         In December  1999,  the  Company's  Board of Directors  authorized  the
repurchase of the Company's  Common and Preferred  Shares up to 1,000,000 common
equivalent  shares  (after taking into account the  Preferred  Stock  conversion
ratio).  The Company has repurchased  29,900 common shares and 219,646 preferred
shares for an aggregate cost of $5,857.  The repurchases  were funded  primarily
from operating cash flows and borrowings under the Line of Credit.

7.       Stock and Stock Option Plans

         In January 2000, under the current Stock Option Plan the Company issued
250,000 options each to two executive officers at a strike price of $18.6875 per
share.  The fair value of the options issued are estimated to be $555, as of the
date of the grant,  using a binomial  model with the following  weighted-average
assumptions: risk-free interest rate of 6.4%, dividend rate of 9.3 %, volatility
factors of the expected  market price of the  Company's  shares of 17.5%,  and a
weighted average expected life of the options of 2.8 years.

         On January 1, 2000, two executive  officers  received  restricted stock
grants of 150,000 each in accordance with their employment agreements.  In March
2000  these  officers  also  received  stock  grants  of 12,500  shares  each in
accordance with their employment agreements.

8.       Summary of Noncash Investing and Financing Activities

         Significant  noncash  transactions  for the six months ended June, 2000
and 1999 were as follows:

                                                              2000          1999
                                                              ----          ----

Liabilities assumed in acquisition of rental properties     $    -       $ 3,045
Common units in the Operating Partnership issued
        in connection with the payoff of deferred
        acquisition liabilities                             $1,344       $     -
Increase (decrease) in minority interest's ownership of
        the Operating Partnership                          ($  517)      $ 1,307
Accrued compensation paid through the issuance
        of Common Stock                                     $  467       $ 1,129
Exchange of debentures for 1,000,000 shares
        of preferred stock                                  $    -       $25,000

9.       Business Segments

         The Company owns one  property  type only (i.e.  neighborhood  shopping
centers).  Resource  allocation,  determination  of  compensation  packages  and
financial  analysis are performed by the Company's  management for each segment.
The Company  measures  performance  of the segments based on total revenues less
property operating and maintenance expenses, as detailed in the following table:

                                        6


<PAGE>


              FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                    (dollars in thousands, except share data)
                                    ---------
<TABLE>
<S>

                                        <C>                 <C>         <C>

                                          Retail
                                        Properties           FWM       Other (1)
                                        ----------           ---       ---------

Six months ended June 30, 2000:

Revenues                                 $ 47,441            $3,459    ($ 2,951)
Operating and maintenance expenses         11,520             3,918    (  3,918)
                                         --------            ------    ---------
Income (loss) from operations            $ 35,921           ($  459)    $   967
                                         ========            ======    =========
Commercial real estate property
 expenditures                            $  2,110            $   -      $   -
                                         ========            ======    =========
Segment assets at June 30, 2000          $590,838                -      $   -
                                         ========            ======    =========


  <C>
  Total
  =====

$ 47,949
  11,520
--------
$ 36,429
========

   2,110
--------
 590,838
========

</TABLE>



Six months ended June 30, 1999:

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

Revenues                                 $ 41,933            $3,446    ($ 2,814)
Operating and maintenance expenses          9,993             3,676    (  3,676)
                                          -------            ------    ---------
Income from operations                   $ 31,940           ($ 230)    $    862
                                          =======           =======    ========

Commercial real estate property
 expenditures                            $ 18,009            $  -      $     -
                                         ========           =======    =========
Segment assets at June 30, 1999          $543,488            $  -      $     -
                                         ========           =======    =========

  <C>

  Total
  =====

$ 18,009
--------
 543,488
========

</TABLE>

<TABLE>
<S>
                                        <C>                 <C>        <C>
                                          Retail
                                        Properties           FWM       Other (1)
                                        ----------           ---       ---------

Three months ended June 30, 2000:

Revenues                                 $ 23,708         $ 1,578      ($ 1,329)
Operating and maintenance expenses          5,450           1,935        (1,935)
                                         --------         -------       --------
Income (loss) from operations            $ 18,258        ($   357)      $    606
                                         ========         =======      =========
Commercial real estate property
 expenditures                            $    850         $  -          $   -
                                         ========         =======     ==========

<C>
 Total
======

$23,957
  5,450
-------
 18,507
=======

$   850
=======

</TABLE>

<TABLE>
<S>
                                        <C>                 <C>        <C>
                                          Retail
                                        Properties           FWM       Other (1)
                                        ----------           ---       ---------

Three months ended June 30, 1999:

Revenues                                 $ 21,127         $1,636       ($ 1,323)
Operating and maintenance expenses          4,787          1,951       (  1,951)
                                         --------        -------       ---------
Income from operations                   $ 16,340         ($ 315)       $   628
                                         ========        ========      =========

Commercial real estate property
 expenditures                            $    605         $   -         $   -
                                         ========       =========      =========


 <C>
 Total
======

$21,440
  4,787
-------
$16,653
=======

$   605
=======


</TABLE>


                                        7


<PAGE>



         The following  table  reconciles  income from operations for reportable
segments to net income as reported in the Consolidated Statements of Operations.

<TABLE>
<S>                                                     <C>
                                                          Three months ended
                                                        ------------------------
                                                                June 30,
                                                     ---------------------------

                                                     <C>                   <C>
                                                     2000                  1999
                                                     ----                  ----

Income from operations for reportable segments     $18,507               $16,653
General and administrative expenses                 (1,117)              (1,068)
Interest expense                                    (5,964)              (5,677)
Depreciation and amortization                       (4,776)              (4,282)
Income allocated to minority interest               (1,796)              (1,273)
Distributions to Preferred Stockholders             (1,361)              (1,412)
Loss from Management Company                        (  357)             (   315)
Gain on sale of properties                             648                   -
                                                   --------          -----------
Income before extraordinary items                  $  3,784               $2,626
                                                   ========               ======

         <C>
          Six months ended
          ----------------
              June 30,
          ----------------

     <C>               <C>
     2000              1999
     ----              ----
  $36,429            $32,572
  ( 2,334)            (2,162)
  (11,784)           (11,202)
  ( 9,400)            (8,494)
  ( 3,427)            (2,579)
  ( 2,728)            (2,822)
  (   459)            (  230)
      648                 -
  -------               -----
  $ 6,945              $5,083
  =======              ======

</TABLE>

(1)  Represents the adjustment for  straight-lining  of rents and reflecting the
     net income from FWM using the equity method of accounting.

10.  Subsequent Events

     On July 14, 2000, the Board of Directors declared a distribution of $0.4875
and $0.6094 per share of Common  Stock and  Preferred  Stock,  respectively,  to
shareholders of record as of August 1, 2000, payable on August 15, 2000.

     On July 27, 2000, the Company  refinanced the mortgage loan  collateralized
by Stonebrook Plaza. The new loan is in the amount of $6,400; matures in 5 years
and has an all in interest rate of 7.3% including the  amortization  of interest
rate swap contract proceeds.

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operation

Overview

     The following  discussion  should be read in conjunction with the Financial
Statements  and notes  thereto of the Company  appearing  elsewhere in this Form
10-Q. Dollars are in thousands except per share data.

     Comparison  of the three  months  ended June 30,  2000 to the three  months
ended June 30, 1999

     For the three  months  ended June 30,  2000,  the net income  allocated  to
common  stockholders  increased  by $1,041 or 39.7% from $2,626 to $3,667,  when
compared to the three months ended June 30, 1999,  primarily due to increases in
revenues  offset by an  increase in  expenses,  and an increase in the amount of
income allocated to minority interests.

     Total  revenues  increased by $2,517 or 11.7% from $21,440 to $23,957,  due
primarily to an increase in minimum rents of $1,652,  and tenant  reimbursements
of $611.  The increases  were  primarily due to the purchase of Newark  Shopping
Center in August  1999,  Saratoga  Shopping  Center in  October  1999,  Woodmoor
Shopping Center in November 1999, and Westmont  Shopping Center,  Cudahy Center,
Racine  Centre and  Whitnall  Square in December  1999  (collectively  the "1999
Acquisitions"). Total revenues increased by $1,905 due to the 1999 Acquisitions.
This  increase in total  revenues  was due  primarily  to an increase in minimum
rents of $1,370 and tenant  reimbursements of $407. For properties owned for all
of 1999 and 2000,  total  revenues  increased by $623 (3.0%).  This increase was
primarily  due  to  increases  in  minimum  rents  of  $529  (3.4%)  and  tenant
reimbursements of $285 (7.1%).  The increases in total revenues were offset by a
decrease of $376 due to the sale of properties during 1999.

     Property operating and maintenance  expense increased by $663 or 13.9% from
$4,787 to $5,450.  Operating and maintenance  expenses  increased by $482 due to
the purchase of the 1999 Acquisitions.  For properties owned for all of 1999 and
2000 total operating and maintenance  expense increased by $272 (5.8%) due to an
overall  increase in operating  expenses.  Operating  and  maintenance  expenses
decreased by $91 due to properties sold during 1999.  General and administrative
expenses  increased  by $49 or 4.6%,  from  $1,068 to $1,117  due  primarily  to
increases in payroll expenses.

                                        8


<PAGE>



     Interest  expense  increased  by $287,  or 5.1% from $5,677 to $5,964,  due
primarily to the  associated  increased  line of credit  borrowings and mortgage
indebtedness  associated with the 1999  Acquisitions.  The weighted average debt
outstanding increased from $287.2 million in 1999 to $302.2 million in 2000, and
the weighted average interest rate remained the same at 7.9%.

     Depreciation  and  amortization  expenses  increased  by $494 or 11.5% from
$4,282 to $4,776 primarily due to the 1999 Acquisitions.

     Income  allocated to minority  interests by $523, or 41.1% , from $1,273 to
$1,796  due to an  increase  in net  income,  and an  increase  in the  minority
interests ownership of the Operating Partnership from 23.9% to 25.9%.

Comparison  of the six months  ended June 30, 2000 to the six months  ended June
30, 1999

     For the six months ended June 30, 2000, the net income  allocated to common
stockholders increased by $1,745 or 34.3% from $5,083 to $6,828 when compared to
the six months  ended June 30,  1999,  primarily  due to  increases  in revenues
offset by an  increase  in  expenses,  and an  increase  in the amount of income
allocated to minority interests.

     Total revenues  increased by $5,384 or 12.6%, from $42,565 to $47,949,  due
primarily to an increase in minimum rents of $3,386,  and tenant  reimbursements
of $1,720.  The increases were primarily due to the purchase of Newark  Shopping
Center in August  1999,  Saratoga  Shopping  Center in  October  1999,  Woodmoor
Shopping Center in November 1999, and Westmont  Shopping Center,  Cudahy Center,
Racine  Centre and  Whitnall  Square in December  1999  (collectively  the "1999
Acquisitions"). Total revenues increased by $3,848 due to the 1999 Acquisitions.
This  increase in total  revenues  was due  primarily  to an increase in minimum
rents of $2,774 and tenant  reimbursements of $871. For properties owned for all
of 1999 and 2000, total revenues  increased by $1,575 (3.8%).  This increase was
primarily  due  to  increases  in  minimum  rents  of  $770  (2.4%)  and  tenant
reimbursements of $1,019 (12.4%). The increases in total revenues were offset by
a decrease of $764 due to the sale of properties during 1999.

     Property  operating and maintenance  expense increased by $1,527, or 15.3%,
from $9,993 to $11,520.  Operating and maintenance  expenses increased by $1,055
due to the purchase of the 1999  Acquisitions.  For properties  owned for all of
1999 and 2000 total operating and maintenance  expense  increased by $658 (6.7%)
primarily due to an increase in snow removal expenses. Operating and maintenance
expenses  decreased  by $186 due to  properties  sold during  1999.  General and
administrative  expenses  increased  by $172 or 8.0%,  from $2,162 to $2,334 due
primarily to increases in payroll expenses.

     Interest expense  increased by $582, or 5.2%, from $11,202 to $11,784,  due
primarily to the increase in borrowings  under the Line of Credit  ($40,700) and
an increase in new and assumed  mortgage  indebtedness  associated with the 1999
Acquisitions  ($28,501)  and net  refinancing  proceeds  ($2,619),  offset  by a
decrease in indebtedness due to the curtailment of mortgage debt ($22,326).  The
weighted  average  debt  outstanding  increased  from $282.7  million in 1999 to
$302.1  million in 2000, and the weighted  average  interest rate decreased from
7.9% to 7.8%.

     Depreciation  and  amortization  expenses  increased  by $906 or 10.7% from
$8,494 to $9,400 primarily due to the 1999 Acquisitions.

     Income allocated to minority  interests  increased by $848, or 32.9%,  from
$2,579 to $3,427  due to an  increase  in net  income,  and an  increase  in the
minority interests ownership of the Operating Partnership from 24.6% to 26.2%.

Liquidity and Capital Resources

Indebtedness

     As of June 30,  2000,  the  Company  had  total  mortgage  indebtedness  of
approximately $308,600. The mortgage indebtedness is collateralized by 48 of the
properties.  Of the  Company's  indebtedness,  $61,464  (19.9%) is variable rate
indebtedness,  and $247,145  (80.1%) is at a fixed rate. The effective  interest
rates of the  indebtedness  range  from 7.0% to 8.9%,  with a  weighted  average
interest rate of 7.8%, and will mature between 2000 and 2014. Approximately 9.5%
of the  Company's  indebtedness  will  become  due by  2001,  requiring  balloon
payments of $5,695 in 2000,  and $13,680 in 2001.  From 2000 through  2014,  the
Company will have to  refinance  an  aggregate  of  $256,765.  Since the Company
anticipates that only a small portion of the principal of such indebtedness will
be repaid  prior to  maturity  and the Company  will likely not have  sufficient
funds on hand to repay such  indebtedness,  the Company  will need to  refinance
such indebtedness  through  modification or extension of existing  indebtedness,
additional   debt  financing  or  through  an  additional   offering  of  equity
securities.

                                        9
<PAGE>

     The Company has a collateralized  revolving Line of Credit of $100,000 with
the  First  Union  National  Bank.  This  line  is  collateralized  by  thirteen
properties  (Brafferton  Center,  Bryans Road, Kamp Washington,  Kenhorst Plaza,
Newtown Square,  Riverside  Square,  Shoppes of Graylyn,  Spring Valley,  Takoma
Park,  The Village,  Watkins Park Plaza,  Willston  Center I, Woodmoor  Shopping
Center).  The line  matures on May 19,  2003 and loans under this line will bear
interest  at the  30-day  LIBOR rate plus  1.35% or 1.50%  depending  on certain
financial ratios.  As of June 30, 2000, there was $46,000  outstanding under the
Line of Credit. This line of credit replaces the UBS AG line of credit which was
due to mature in January 2001. An extraordinary  loss of $117 was recognized due
to the early extinguishment of the UBS AG line of credit.

      The Company  currently  has in place a cap on 30-day LIBOR in the notional
amount of  $46,000,  which  limits the  Company's  exposure  to an  increase  in
interest  rates.  The cap contract  covers the period from July 19, 2000 through
January 19,  2001.  The cap counter  party is required to pay to the Company any
amount in excess of 6.5%,  thereby  limiting  the  Company's  exposure to 30-day
LIBOR to a maximum of 6.5%.

Liquidity

     The Company expects to meet its short-term liquidity requirements generally
through its working  capital,  net cash provided by operations  and draws on the
Line of Credit and the leveraging of currently  unencumbered  Retail Properties.
The Company believes that the foregoing  sources of liquidity will be sufficient
to fund liquidity needs through 2001.

     The Company expects to meet certain long-term  liquidity  requirements such
as development, property acquisitions,  scheduled debt maturities,  renovations,
expansions  and  other  non-recurring  capital  improvements  through  long-term
secured  and  unsecured  indebtedness,  including  the  Line of  Credit  and the
issuance of additional  equity and debt securities.  The Company also expects to
use funds available under the Line of Credit to fund  acquisitions,  development
activities and capital improvements on an interim basis.

     The  Company  has  elected  to  qualify  as a REIT for  federal  income tax
purposes  commencing  with its tax year ended December 31, 1994. To qualify as a
REIT, the Company is required,  among other items, to pay  distributions  to its
shareholders of at least 95% of its taxable income.  The Company intends to make
quarterly distributions to its shareholders from operating cash flow.

Item 3.  Qualitative and Quantitative Disclosure about Market Risk

     The  Company  is  exposed  to  certain  financial  market  risks,  the most
predominant being fluctuations in interest rates. Interest rate fluctuations are
monitored  by  management  as an integral  part of the  Company's  overall  risk
management program,  which recognizes the  unpredictability of financial markets
and seeks to reduce the potentially adverse effect on the Company's results. Our
interest rate risk management  objective is to limit the impact of interest rate
changes on earnings and cash flows and to lower our overall  borrowing costs. To
achieve  these  objectives,  from time to time we enter into interest rate hedge
contracts such as swap and cap agreements in order to mitigate our interest rate
risk with  respect to various  debt  instruments.  We do not hold or issue these
derivative contracts for trading or speculative purposes. The effect of interest
rate  fluctuations  historically  has  been  small  relative  to  other  factors
affecting operating results, such as rental rates and occupancy.

     The Company's  operating  results are affected by changes in interest rates
on variable rate borrowings including the Company's Line of Credit facilities as
well as other  mortgages and notes with  variable  interest  rates.  If interest
rates increased by 100 basis points,  the Company's interest expense for the six
months ended June 30, 2000 would have increased by $276 based on balances during
the six months ending June 30, 2000. The following is a summary of the Company's
long term debt as of June 30, 2000:

                                       10


<PAGE>

                   Expected Maturity Date of Balloon Payments

<TABLE>
<S>
                                         <C>         <C>       <C>        <C>
                                          2000       2001      2002       2003
                                       --------    -------   ------     --------

FIXED RATE                              $5,695     $7,237     $9,031   $14,927
-----------

Average Interest Rate                     8.5%       7.8%       7.0%     7.2%

VARIABLE RATE

LIBOR-based(1):
     Potomac Plaza (LIBOR  plus 2.25%)
     Line of Credit (LIBOR
           plus 1.35%) (2)                                              46,000
     Ashburn Farms (LIBOR
        plus 1.5%)                                  6,443
                                       --------   --------   --------  --------

Total LIBOR-based                          -        6,443        -      46,000
Tax-exempt:
     Mayfair Shopping
       Center (3)

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

Total variable rate debt                   -        6,443        -      46,000
                                       --------   --------   --------  --------

Total Debt                              $5,695    $13,680     $9,031   $60,927
                                       ========   ========   ========  ========


 <C>            <C>             <C>             <C>
                                Total           Fair Value
                                Balloon         of Debt as of
   2004         Thereafter      Payments        6/30/00
 ---------      ----------      --------        -------------

     -          $  161,779      $198,669           $ 235,076


                    7.7%




 2,418                             2,418               2,418

                                  46,000              46,000

                                   6,443               6,443
----------      -----------     ---------       -------------

   2,418             -            54,861              54,861


                    3,235          3,235               3,235

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

   2,418            3,235         58,096              58,096
----------      ----------      --------         -----------

  $2,418         $165,014       $256,765            $293,172
==========      ==========      ========         ===========


</TABLE>

(1)  At June 30, 2000 the LIBOR rate was 6.5%.

(2)  This  schedule  assumes  that the Line of Credit is repaid at the  maturity
     date.

(3)  The interest rate is determined  weekly at the rate  necessary to produce a
     bid in the process of remarketing the obligation  equal to par plus accrued
     interest.  The Company also pays a 1.5% letter of credit enhancement fee to
     Mellon Bank.

                                     Part II

OTHER INFORMATION

Item 2.        Recent Sales of Unregistered Equity Securities

               None

Item 4.        Submission of matters to a vote of security holders

               On May 12,  2000  the  Company  held  its  annual  meeting  of
shareholders.  The  matters  on which the  shareholders  voted,  in person or by
proxy,  were (i) for the  election  of two  nominees  to  serve on the  Board of
Directors  for a term of three years or until their  respective  successors  are
duly  elected  and  qualify  (ii)  the   ratification   of  the  appointment  of
PricewaterhouseCoopers   as  the  Company's   independent   auditors  and  (iii)
amendements  to the Company's  Stock Option Plan. The two nominees were elected,
and  the  ratification  of the  appointment  of  the  independent  auditors  and
amendment of the Stock Option Plan were approved.  The results of the voting are
shown below:

Election of Directors:
                                                                    Votes Cast

Director                            Votes Cast For          Against or Withheld
--------                            --------------          -------------------
Stuart D. Halpert                   9,365,819                            61,734
Heywood Wilansky                    9,365,819                            61,734





                                       11


<PAGE>






Ratification of Appointment of Independent Auditors:

                                                                      Votes Cast
                                    Votes Cast For           Against or Withheld
                                    ==============           ===================

                                      9,379,646                       47,907

Amendment of the Stock Option Plan

                                                                      Votes Cast
                                    Votes Cast For           Against or Withheld
                                    ==============           ===================
                                      8,846,112                      581,441

Item 6.        Exhibits and Reports on Form 8-K

(a)            Exhibits

               10.1       New line of Credit Agreement
               10.2       Amendment to Stock Option Plan

               27 Financial Data Schedule

(b)            Reports on Form 8-K.


               None

                                       12


<PAGE>







                                   SIGNATURES

Pursuant  to the  requirements  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.

                                        FIRST WASHINGTON REALTY TRUST, INC.





Date: August 8, 2000                    /s/   James G. Blumenthal
                                        ---------------------------------
                                        By:   James G. Blumenthal
                                              Executive Vice President and
                                              Chief Financial Officer



                                       13


<PAGE>