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                                                                   EXHIBIT 10.26


                                 FIRST AMENDMENT
                                       TO
                              EMPLOYMENT AGREEMENT



               PAN PACIFIC RETAIL PROPERTIES, INC., a Maryland corporation (the
"Company") and JEFFREY S. STAUFFER ("Executive") have entered into that certain
Employment Agreement (the "Agreement") effective as of August 13, 1997. In order
to amend the Agreement in certain respects, the Company and Executive hereby
agree as follows effective as of __________________, 1998.

                                       I.

               Section 5.2(a) of the Agreement is hereby amended in its entirety
to read as follows:

                             (a) Amount. In the event the Company terminates
               Executive's services hereunder pursuant to Section 5.1, Executive
               shall continue to render services to the Company pursuant to this
               Agreement until the date of termination and shall continue to
               receive compensation, as provided hereunder, through the
               termination date. In addition to other compensation payable to
               Executive for services rendered through the termination date, the
               Company shall pay Executive no later than the date of such
               termination, as a single severance payment, an amount equal to
               Executive's highest monthly Base Compensation paid hereunder
               during the preceding 12 month period, multiplied by 12 (the
               "Multiplier"); provided, however, that for each full year of
               service with the Company, the Multiplier shall be increased by
               one, subject to an overall cap of 18 (the "Severance Amount").
               For example, provided that Executive has rendered continuous
               service hereunder from the Effective Date of the Agreement
               through August 13, 1999, the Executive's Severance Amount, if
               determined as of that date, shall be the Executive's highest
               monthly Base Compensation paid hereunder for the 12 month period
               preceding August 13, 1999, multiplied by 14.

                                       II.

               Section 5.4 of the Agreement is hereby amended in its entirety to
read as follows:

                      5.4 By Executive For Good Reason. Executive may terminate
               this Agreement for good reason upon at least 10 days' prior
               written notice to the Company. For purposes of this Agreement,
               "good reason" shall mean:




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                      (a) the Company's material breach of any of its respective
                      obligations hereunder and either such breach is incurable
                      or, if curable, has not been cured within 15 business days
                      following receipt by the Company of written notice from
                      Executive to the Company of such breach by the Company;

                      (b) any material decrease in Executive's authority or
                      responsibilities as Senior Vice President, Operations and
                      Development of the Company without Executive's prior
                      consent; or

                      (c) any material decrease in the overall compensation and
                      benefits payable to Executive by the Company (including,
                      without limitation, Base Compensation, bonus compensation
                      and any other compensation or benefits payable to
                      Executive under this Agreement) without Executive's prior
                      consent; or

                      (d) following a change in control (as defined in Section
                      5.6, below) of the Company, the relocation of Executive's
                      principal place of employment to a location more than 50
                      miles from Vista, California without Executive's prior
                      consent.

               In the event that Executive terminates this Agreement for good
               reason pursuant to this Section 5.4, Executive shall have the
               right to receive Executive's compensation as provided hereunder
               through the effective date of termination and shall also have the
               same rights and remedies against the Company as Executive would
               have had if the Company had terminated Executive's employment
               without cause pursuant to Section 5.1 (including the right to
               receive the Severance Amount payable and the Severance Benefits
               to be provided under Section 5.2).

                                      III.

               Section 5.6 of the Agreement is hereby amended in its entirety to
read as follows:

                      5.6 Change of Control. Executive may terminate this
               Agreement, upon at least 10 days' prior written notice to the
               Company at any time within one year after a "change in control"
               (as hereinafter defined) of the Company. In the event Executive
               terminates this Agreement for good reason within one year after a
               change in control pursuant to this Section 5.6, (i) Executive
               shall continue to render services pursuant hereto and shall
               continue to receive compensation, as provided hereunder, through
               the termination date, (ii) the Company shall pay Executive no
               later than the date of such termination, as a single severance
               payment, an amount equal to the Severance Amount and (iii)
               following such





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               termination, the Company shall provide the Severance Benefits as
               required by Section 5.2(b). Upon Executive's termination of this
               Agreement without good reason pursuant to this Section 5.6, (i)
               Executive shall have the right to receive Executive's
               compensation as provided hereunder through the effective date of
               termination, and (ii) the Company on the one hand, and Executive,
               on the other hand, shall not have any further right or remedy
               against one another except as provided in Sections 6, 7 and 8
               hereof which shall remain in full force and effect. For purposes
               of this Agreement, a "change in control" shall mean the
               occurrence of any of the following events:

                             (a) the individuals constituting the Board as of
                      the date of the initial public offering of common stock of
                      the Company (the "Incumbent Board") cease for any reason
                      to constitute at least a majority of the Board; provided,
                      however, that if the election, or nomination for election
                      by the Company's stockholders, of any new director was
                      approved by a vote of at least a majority of the Incumbent
                      Board, such new director shall be considered a member of
                      the Incumbent Board;

                             (b) provided that the number of shares of common
                      stock of the Company directly held by PPD and its
                      subsidiaries (other than the Company and the Company's
                      subsidiaries) represents 50% or less of the total
                      outstanding shares of common stock of the Company, an
                      acquisition of any voting securities of the Company (the
                      "Voting Securities") by any "person" (as the term "person"
                      is used for purposes of Section 13(d) or Section 14(d) of
                      the Securities Exchange Act of 1934, as amended (the "1934
                      Act")) immediately after which such person has "beneficial
                      ownership" (within the meaning of Rule 13d-3 promulgated
                      under the 1934 Act) of 20% or more of the combined voting
                      power of the Company's then outstanding Voting Securities;
                      or

                             (c) approval by the stockholders of the Company of:

                                    (i) a merger, consolidation, share exchange
                             or reorganization of the Company, unless the
                             stockholders of the Company, immediately before
                             such merger, consolidation, share exchange or
                             reorganization, own, directly or indirectly
                             immediately following such merger, consolidation,
                             share exchange or reorganization, at least 80% of
                             the combined voting power of the outstanding voting
                             securities of the corporation that is the successor
                             in such merger, consolidation, share exchange or
                             reorganization (the "Surviving Company") in
                             substantially the same proportion as their
                             ownership of the Voting Securities



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                             immediately before such merger, consolidation,
                             share exchange or reorganization; or

                                    (ii) a complete liquidation or dissolution
                             of the Company; or

                                    (iii) an agreement for the sale or other
                             disposition of all or substantially all of the
                             assets of the Company.

               Executed at Vista, California this ___ day of _________ 1998.

THE COMPANY

PAN PACIFIC RETAIL PROPERTIES, INC.
a Maryland Corporation

By:
    ---------------------------------
        Stuart A. Tanz
        Chief Executive Officer and President


EXECUTIVE

    ---------------------------------
        Jeffrey S. Stauffer








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