SEVERANCE BENEFITS AGREEMENT
                        -----------------------------


     AGREEMENT, dated as of July 30, 1998, between KRANZCO REALTY TRUST, a
Maryland real estate investment trust with offices at 128 Fayette Street,
Conshohocken, Pennsylvania 19428 (the "Company"), and Bernard J. Korman, an
individual residing at 5785 Hopkins Neck Road, Easton, MD (the "Trustee").

     WHEREAS, the Trustee has been a trustee of the Company to perform
certain services to the Company upon terms and conditions which the parties
hereto have previously agreed (the "Services");

     WHEREAS, the Company recognizes that the Trustee's contributions to the
past and future growth of the Company has been substantial; and

     WHEREAS, to induce the Trustee to remain as a trustee of the Company,
the parties hereto desire to set forth certain severance benefits which the
Company will pay to the Trustee in the event of a Change in Control of the
Company (as defined in Section 2 hereof).

     IT IS AGREED:

     1.   TERM:  This Agreement shall commence on the date hereof and shall
terminate upon the earlier of (a) the date on which the Company has satisfied
all of its obligations hereunder, or (b) the date on which the Trustee is no
longer a trustee of the Company for any reason whatsoever including, without
limitation, termination without cause.  Notwithstanding the termination of
this Agreement subsequent to a Change in Control of the Company, in the event
that the Trustee is a trustee of the Company at the moment immediately prior
to a Change in Control of the Company, the Trustee shall be entitled to
receive all benefits described hereunder and the provisions hereof related
thereto shall survive such termination.

     2.   CHANGE IN CONTROL OF THE COMPANY.  For purposes of this Agreement,
a "Change in Control of the Company" shall be deemed to occur if:

               (i)  there shall have occurred a change in control of a nature
          that would be required to be reported in response to Item 6(e) of
          Schedule 14A of Regulation 14A promulgated under the Securities
          Exchange Act of 1934, as amended (the "Exchange Act"),as in effect
          on the date hereof, whether or not the Company is then subject to
          such reporting requirement, provided, however, that there shall not
          be deemed to be a Change in Control of the Company if immediately
          prior to the occurrence of what would otherwise be a Change in
          Control of the Company (a) the Trustee is the other party to the
          transaction (a "Control of the Company Event") that would otherwise
          result in a Change in Control of the Company or (b) the Trustee is
          an officer, trustee, director or more than 5% equity holder of the
          other party to the Control of the Company Event or of any entity,
          directly or indirectly, controlling such other party:

               (ii)  the Company merges or consolidates with, or sells all or
          substantially all of its assets to, another company (each, a
          "Transaction"), provided, however, that a Transaction shall not be
          deemed to result in a Change in Control of the Company if (a)
          immediately prior thereto the circumstances in (i)(a) or (i)(b)
          above exist or (b)(1) the shareholders of the Company, immediately
          before such Transaction own, directly or indirectly, immediately
          following such Transaction in excess of fifty percent (50%) of the
          combined voting power of the outstanding voting securities of the
          corporation or other entity resulting rom such Transaction (the
          "Surviving Corporation") in substantially the same proportion as
          their ownership of the voting securities of the Company immediately
          before such Transaction and (2) the individuals who were members of
          the Company's Board of Trustees immediately prior to the execution
          of the agreement providing for such Transaction constitute at least
          a majority of the members of the board of directors or the board of
          trustees, as the case may be, of the Surviving Corporation, or of a
          corporation or other entity beneficially directly or indirectly
          owning a majority of the outstanding voting securities of the
          Surviving Corporation; or

               (iii)  the Company acquires assets of another company or a
          subsidiary of the Company mergers or consolidates with another
          company (each, an "Other Transaction") and (a) the shareholders of
          the Company, immediately before such Other Transaction own,
          directly or indirectly, immediately following such Other
          Transaction 50% or less of the combined voting power of the
          outstanding voting securities of the corporation or other entity
          resulting from such Other Transaction (the "Other Surviving
          Corporation") in substantially the same proportion as their
          ownership of the voting securities of the Company immediately
          before such Other Transaction or (b) the individuals who were
          members of the Company's Board of Trustees immediately prior to the
          execution of the agreement providing for such Other Transaction
          constitute less than a majority of the members of the board of
          directors or the board of trustees, as the case may be, of the
          Other Surviving Corporation, or of a corporation or other entity
          beneficially directly or indirectly owning a majority of the
          outstanding voting securities of the Other Surviving Corporation,
          provided, however, that an Other Transaction shall not be deemed to
          result in a Change in Control of the Company if immediately prior
          thereto the circumstances in (i)(a) or (i)(b) above exist.

     3.   COMPENSATION UPON A CHANGE IN CONTROL OF THE COMPANY.

          (a)  (i)  If the Trustee is a trustee of the Company at the moment
immediately prior to a Change in Control of the Company, the Trustee shall be
entitled to receive compensation in for the form of cash equal to, on the
date of a Change in Control of the Company and with respect to each Option to
purchase common shares of beneficial interest of the Company (the "Shares")
held by the Trustee whether or not such Option has vested or is exercisable
on such date (an "Option"), the number of Shares underlying the Option,
multiplied by the amount, if any, that the exercise price of the Option or
the Closing Share Value (as defined below), whichever is less, exceeds the
Initial Share Value (as defined below).

               (ii)  With respect to each Option, in the event that the
Closing Share Value is greater that the exercise price of such Option, then
the Trustee can (1) retain the Option, or (2) forfeit the Option and receive,
in exchange therefor, a cash payment equal to the number of Shares underlying
the Option multiplied by the amount that the Closing Share Value exceeds the
exercise price of the Option.

               (iii)  For purposes of this subsection (a), the "Initial Share
Value" of an Option shall mean the average of the Closing Prices of the
Shares for the period commencing on the 180th day prior to the date of the
Change in Control of the Company and ending on the 150th day prior to the
date of the Change in Control of the Company, and the "Closing Share Value"
shall mean the Closing Price of the Shares on the date of the Change in
Control of the Company.  For purposes of this subsection (a), the "Closing
Price" of a Share on any date shall mean the last sale price, regular way,
or, in case no such sale takes place on such date, the average of the closing
bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or,
if the Shares are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Shares are listed or admitted to trading or, if the
Shares are not listed or admitted to trading on any national securities
exchange, the last quoted price, or if not so quoted, the average of the
highest bid and lowest ask prices in the overthecounter market, as reported
by the National Association of Securities Dealers, Inc. Automated Quotation
System or, if such system is no longer used, the principal other automated
quotation system that may then be in use or, if the Shares are not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making the market in the Shares as
such person is selected from time to time by the Board of Trustees of the
Company.

          (b)  The Trustee shall not be required to mitigate the amount of
any payment provided for in this Section 3 by seeking other trusteeships or
otherwise, nor shall the amount of any payment or benefit provided for in
this Section 3 be reduced by any compensation earned by him as the result of
a trusteeship for another company or by retirement benefits after the date of
termination, or otherwise, except as specifically provided in this Section 3.

     4.   SCALEBACK.  To the extent any benefits to be granted to the Trustee
hereunder constitute a "parachute payment" (within the meaning of Section
280G(b)(2) of the Code), and the Trustee would otherwise be liable for an
excise tax pursuant to Code Section 4999, there shall be a reduction in the
benefits payable or available to the Trustee hereunder such that the total
parachute payments will be less than three (3) times the Trustee's "base
amount" (within the meaning of Section 280G(b)(3) of the Code) with the
result that the excise tax under Code Section 4999 will not be payable;
provided, however, that such reduction shall occur only if the Trustee shall
realize a greater after tax economic benefit by making such reduction than if
no reduction was made.

     5.   EXPENSES.  (a)  The Company shall pay or reimburse the Trustee, as
the case may be, for all legal and accounting fees and expenses incurred by
the Trustee in connection with the structuring, negotiation and preparation
of this Agreement.

               (b)  The Company shall pay or reimburse the Trustee, as the
case may be, for all legal fees and related expenses (including the costs of
experts, evidence and counsel) paid by the Trustee as a result of (i) the
Trustee seeking to obtain or enforce any right or benefit provided by this
Agreement, or (ii) any action taken by the Company against the Trustee in
enforcing the Company's rights hereunder; provided, however, that the Company
shall reimburse the legal fees and related expenses described in this
subsection 4(b) only if and when a final judgment has been rendered in favor
of the Trustee and all appeals related to any such action have been
exhausted.

     6.   NO RETENTION RIGHTS OR OBLIGATIONS.  Nothing contained herein shall
confer upon the Trustee the right to continue as a trustee of the Company or
any subsidiary or affiliate of the Company or affect any right that the
Company or any subsidiary or affiliate of the Company may have to terminate
the service of the Trustee at any time for any reason.

     7.   GOVERNING LAW; ARBITRATION.  This Agreement shall be governed by,
and construed in accordance with, the internal laws of the State of Maryland,
without regard to Maryland's conflicts of law principles.  Any dispute or
controversy arising under this Agreement, or out of the interpretation
hereof, or based upon the breach hereof, shall be resolved by arbitration
held at the offices of the American Arbitration Association in the City of
Philadelphia in accordance with the rules and regulations of such association
prevailing at the time of the demand for arbitration by either party hereto,
and the decision of the arbitrator or arbitrators shall be final and binding
upon both parties hereto, provided, however, that the arbitrator or
arbitrators shall only have the power and authority to interpret, and not to
modify or amend, the terms and provisions hereof.  Judgment upon an award
rendered by the arbitrator or arbitrators may be entered in any court having
jurisdiction thereof.  Notwithstanding anything contained in this Section 6,
either party shall have the right to seek preliminary injunctive relief in
any court in the City of Philadelphia in aid of, and pending the final
decision in, the arbitration proceeding.

     8.   ENTIRE AGREEMENT.  This Agreement sets forth the entire agreement
of the parties and is intended to supersede all prior negotiations,
understandings and agreements with respect to the subject matter hereof.  No
provision of this Agreement may be waived or changed, except by a writing
signed by the party to be charged with such waiver or change.

     9.   SUCCESSORS; BINDING AGREEMENT.  This Agreement shall inure to the
benefit of, be binding upon and be enforceable by the Company, its successors
and assigns and the Trustee, and the Trustee's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.

     10.  NOTICES.  All notices provided for in this Agreement shall be in
writing, and shall be deemed to have been duly given when delivered
personally to the party to receive the same, when given by telex, telegram or
mailgram, or when mailed first class postage prepaid, by registered or
certified mail, return receipt requested, addressed to the party to receive
the same at his or its address above set forth, or such other address as the
party to receive the same shall have specified by written notice given in the
manner provided for in this Section 9.  All notices shall be deemed to have
been given as of the date of personal delivery, transmittal or mailing
thereof.

     11.  SEVERABILITY.  If any provision in this Agreement is determined to
be invalid, it shall not affect the validity or enforceability of any of the
other remaining provisions hereof.

     12.  EXCULPATION.  This Agreement and all documents, agreements,
understanding and arrangements relating to the matters described herein have
been executed by the undersigned in his/her capacity as an officer or trustee
of the Company which has been formed as a Maryland real estate investment
trust pursuant to an Amended and Restated Declaration of Trust of the
Company, as amended, and not individually, and neither the trustees, officers
or shareholders of the Company shall be bound or have any personal liability
hereunder or thereunder.  The Trustee shall look solely to the assets of the
Company for satisfaction of any liability of the Company in respect of this
Agreement and all documents, agreements, understandings and arrangements
relating to this transaction and will not seek recourse or commence any
action against any of the trustees, officers or shareholders of the Company
or any of their personal assets for the performance or payment of any
obligation hereunder or thereunder.  The foregoing shall also apply to any
future documents, agreements, understandings, arrangements and transactions
between the parties hereto.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

                              KRANZCO REALTY TRUST


                              By: /s/Norman M. Kranzdorf
                                  ------------------------------
                                  Norman M. Kranzdorf, President

TRUSTEE:


/s/Bernard J. Korman
--------------------
BERNARD J. KORMAN