<PAGE>
                                                                   EXHIBIT 10(y)


                    AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT


         THIS AMENDMENT NO. 1 dated as of May 13, 2003 amends the Employment
Agreement by and between MALAN REALTY INVESTORS, INC., a Michigan corporation
(the "Company"), and JEFFREY D. LEWIS ("Executive") dated as of September 26,
2000 (the "Agreement").

                                    RECITALS

         In August 2002, the Company's shareholders adopted a plan of
liquidation (the "Plan of Liquidation"). The Company wishes to retain
Executive's services as the Company's chief executive officer through the
completion of the liquidation and to make certain amendments to the Agreement in
addition to extending the term beyond the initial September 26, 2003 termination
date.

         Accordingly, the parties agree as follows (all capitalized terms not
otherwise defined herein shall have the meanings ascribed to them in the
Agreement):

         1.       EXTENSION OF TERM. Section 2 of the Agreement is hereby
amended to read in full as follows:

                           "2. TERM OF EMPLOYMENT. Executive's term of
                  employment under this Agreement shall, subject to the terms
                  hereof, terminate on the earlier of (i) September 30, 2004
                  (the "Termination Date") or (ii) the termination of
                  Executive's employment pursuant to this Agreement. The period
                  from the date of Amendment No. 1 to this Agreement until the
                  termination of this Agreement shall be the "Term." The Company
                  may extend the Term of this Agreement through December 31,
                  2004, by giving written notice of extension to Executive no
                  later than July 1, 2004."

         2.       INCREASE IN BASE SALARY.  Effective October 1, 2003,
Executive's Base Salary shall be increased to $275,000 per year during the
remainder of the Term.

         3.         PRORATION OF ANNUAL BONUS. The last Bonus payable pursuant
to Section 3.2 of the Term shall be prorated if it covers a period less than a
year, based on the relative amount of time that has elapsed since the end of the
Company's prior fiscal year.

         4.         NON-RENEWAL PAYMENT. The Company shall pay Executive $50,000
in the event that this Agreement expires pursuant to its terms, without any
further extension or renewal or early termination by either party, including
expiration following one or more extensions.

         5.       CASH BONUSES IN LIEU OF OPTIONS.

                  (a) Executive hereby agrees to the cancellation by, and hereby
         surrenders to, the Company effective as of the date of this Amendment
         all stock options held by

<PAGE>

         Executive under the Malan Realty Investors, Inc. 1994 Stock Option
         Plan, all of which are more particularly described on Exhibit A.

                  (b) In consideration of such cancellation and
         surrender, the Company agrees than when aggregate liquidating
         distributions per share made to Company shareholders pursuant to the
         Plan of Liquidation after the date of this Amendment reach the levels
         set forth below, Executive shall be entitled, subject to the terms and
         conditions set forth herein, to receive a cash bonus (each, a
         "Liquidation Bonus") such that aggregate Liquidation Bonuses paid to
         Executive pursuant to this Section 5 total the amount set opposite the
         applicable level of per share liquidating distributions (which amounts
         represent liquidating distributions in excess of the average price of
         all of Executive's options, regardless of when first exercisable):

<TABLE>
<CAPTION>

            AGGREGATE PER SHARE                  CUMULATIVE AMOUNT OF
         LIQUIDATING DISTRIBUTIONS                 LIQUIDATION BONUS
<S>                                            <C>
         $         4.00                          $        8,000
                   4.25                                  25,500
                   4.50                                  43,000
                   4.75                                  60,500
                   5.00                                  78,000
                   5.25                                  95,500
                   5.50                                 113,000
                   5.75                                 130,500
                   6.00                                 148,000
                   6.25                                 173,000
                   6.50                                 198,000
                   6.75                                 223,000
                   7.00                                 248,000
                   7.25                                 294,000
                   7.50                                 344,000
                   7.75                                 394,000
                   8.00                                 444,000
                   8.25                                 494,000
                   8.50                                 544,000
                   8.75                                 594,000
                   9.00                                 644,000
</TABLE>

         For example, when aggregate per share liquidating distributions of
         $4.00 have been paid, Executive will be entitled to a Liquidation Bonus
         of $8,000. When aggregate liquidating distributions reach $4.25 per
         share, Executive will be entitled to receive another Liquidation Bonus
         of $17,500, resulting in cumulative Liquidating Bonuses of $25,500.

                  (c) Each Liquidation Bonus will be paid as soon as practicable
         after the applicable liquidating distribution is paid to shareholders,
         less any federal, state and local taxes required to be withheld
         thereon. If the Company makes a liquidating distribution in a form
         other than cash, the Company's board of directors shall in good faith
         determine


                                       2
<PAGE>
         the fair market value per share of the liquidating distribution for
         purposes of determining the amount of any Liquidation Bonus to be paid
         to Executive hereunder, which in the Company's discretion may be paid
         in cash or in kind.

                  (d) When the Company makes its final liquidating distribution,
         if aggregate liquidating distributions exceed $4.00 per share, the
         Liquidation Bonus relating to the final liquidating distribution shall
         be prorated based on the amount of the final liquidating distribution
         to the extent that the final distribution does not reach the next
         threshold for the payment of the next Liquidation Bonus. For example,
         if aggregate liquidating distributions of $7.00 per share have been
         made, Liquidating Bonuses totaling $248,000 have been paid, and the
         final liquidating distribution is $0.125 per share, Executive would be
         entitled to a final Liquidation Bonus of $23,000.

                  (e) Anything herein to the contrary notwithstanding, Executive
         shall not be entitled to a Liquidation Bonus to the extent that such
         bonus represents cash in excess of the exercise price of an option
         that, absent this Amendment, would have expired or terminated pursuant
         to its terms before the record date for the liquidating distribution to
         which the Liquidation Bonus relates (for example, if Executive ceases
         to be an employee of the Company within one year after the date of
         grant of the option for any reason other than death, disability or
         retirement).

         6.        ASSIGNMENT TO LIQUIDATING TRUST. The Company may form a
liquidating trust in connection with winding down the Company's business (the
"Liquidating Trust"). The Company may assign this Agreement to a Liquidating
Trust provided that the Liquidating Trust assumes each and every obligation of
the Company hereunder, including the obligation to pay Liquidation Bonuses.

         7.       NO OTHER CHANGES.  Except as expressly amended hereby, the
provisions of the Agreement shall continue to remain in full force and effect
throughout the Term of the Agreement.




                                     MALAN REALTY INVESTORS, INC.


                                     By:
                                        ----------------------------------------
                                     Name:
                                          --------------------------------------
                                     Title:
                                           -------------------------------------


                                     -------------------------------------------
                                     JEFFREY D. LEWIS





                                      3
<PAGE>
                                    EXHIBIT A

                                CANCELLED OPTIONS


<TABLE>
<CAPTION>

   DATE OF AGREEMENT             NUMBER OF SHARES                 EXERCISE PRICE
   -----------------             ----------------                 --------------
<S>                             <C>                              <C>
     05/18/2000                        1,000                         $13.875

     09/25/2000                        5,000                         $13.438

     11/02/2001                      100,000                           $7.04

     06/14/2002                       20,000                           $3.60

</TABLE>

                                     MALAN REALTY INVESTORS, INC.


                                     By:
                                        ----------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------


                                     -------------------------------------------
                                     JEFFREY D. LEWIS


<PAGE>
                  MALAN REALTY INVESTORS, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENT OF NET ASSETS IN LIQUIDATION
                               (LIQUIDATION BASIS)
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                          JUNE 30,        DECEMBER 31,
                                                            2003              2002
                                                            ----              ----
                                                         (unaudited)
ASSETS
<S>                                                       <C>               <C>
      Real estate held for sale                           $179,297          $191,802
      Cash and cash equivalents                             14,760            10,008
      Restricted cash - mortgage escrow deposits             2,591             1,753
      Accounts receivable                                    1,635             3,761
      Other assets                                             629               622
                                                          --------          --------
           Total Assets                                    198,912           207,946
                                                          --------          --------

LIABILITIES
      Mortgages                                             82,890            91,330
      Convertible debentures                                42,593            42,593
      Convertible notes                                     27,000            27,000
      Accounts payable and other liabilities                12,196            13,011
      Reserve for estimated liquidation costs                5,593             7,582
                                                          --------          --------
           Total Liabilities                               170,272           181,516
                                                          --------          --------


           NET ASSETS IN LIQUIDATION                      $ 28,640          $ 26,430
                                                          ========          ========
</TABLE>



                 See Notes to Consolidated Financial Statements

                                       3

<PAGE>
                  MALAN REALTY INVESTORS, INC. AND SUBSIDIARIES

         CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                       THREE MONTHS       SIX MONTHS
                                                                      ENDED JUNE 30,    ENDED JUNE 30,
                                                                           2003              2003
                                                                       ------------     -------------

<S>                                                                    <C>              <C>
Net Assets in Liquidation beginning of period                          $     27,902     $      26,430
Operating Income                                                                 10               573
Changes in net assets in liquidation:
    Realized gain on sale of assets                                             313               313
    Decrease in fair value of real estate                                      (665)             (665)
    Decrease in reserve for estimated liquidation costs                       1,080             1,989
                                                                       ------------     -------------
Net Assets in Liquidation as of June 30, 2003                          $     28,640     $      28,640
                                                                       ============     =============
</TABLE>




                 See Notes to Consolidated Financial Statements


                                        4