<PAGE>
 
                                                                   EXHIBIT 10.17
                                                                                
                            JDN REALTY CORPORATION


                             EMPLOYMENT AGREEMENT


          THIS AGREEMENT, dated as of May 1, 1997 (the "Effective Date"), is by
and between LEILANI L. JONES (the "Employee") and JDN REALTY CORPORATION, a
Maryland corporation (the "Company").


                                 WITNESSETH:


          WHEREAS, the Employee desires to be employed by the Company, and the
Company desires to employ the Employee, on the terms, covenants and conditions
hereinafter set forth in this Agreement.

          NOW, THEREFORE, for the reasons set forth above, and in consideration
of the mutual promises and agreements herein set forth, the Company and the
Employee agree as follows:

          1.      EMPLOYMENT.
                  ---------- 

          Subject to the terms and conditions set forth in this Agreement, on
and as of the Effective Date the Company hereby employs and engages the Employee
to hold the title of Vice President and Director of Property Management of the
Company and perform the duties of such position as set forth in the Company's
Bylaws and as designated by the board of directors of the Company (the "Board of
Directors").  In such capacity, and subject to review by the Board of Directors,
the Employee shall also perform such duties and responsibilities as may be
assigned to her from time to time by the Board of Directors.  The duties the
Employee is to perform hereunder shall be conducted from Atlanta, Georgia
metropolitan area, where the principal offices of the Company are located.  The
Employee may be required from time to time to perform her duties hereunder on an
occasional basis at such other places as the Board of Directors shall reasonably
designate or as the interests or business opportunities of the Company may
reasonably require; provided, however, that without the Employee's consent, the
Employee shall not be required to relocate from the Atlanta, Georgia
metropolitan area.  The Employee hereby accepts such employment and agrees to
serve the Company as an officer for the term of this Agreement.

          2.      TERM OF EMPLOYMENT.
                  ------------------ 

          Except as otherwise provided herein, the term of this Agreement shall
be for one (1) year commencing on the Effective Date and ending on the first
anniversary of the Effective Date (the "Employment Term").  While the Employee
is employed hereunder, the Employment Term shall automatically be extended for
one (1) year upon the occurrence of an anniversary of the Effective Date, unless
either party has given notice of intention to terminate ninety (90) days prior
to such anniversary of the Effective Date, or unless the Employee's employment
has otherwise terminated as hereinafter provided.


          3.      DEVOTION TO DUTIES.
                  ------------------ 

          The Employee agrees that during the period that she is employed
hereunder, she shall devote substantially all her business time and attention to
the business and affairs of the 
<PAGE>
 
Company, shall use her best efforts to promote the interests of the Company and
shall not enter into any other business affiliations or arrangements without the
prior written consent of the Company. Nothing in this Section 3, however, is
intended to prevent the Employee from engaging in additional activities in
connection with personal investments and community or professional affairs that
are not inconsistent with the Employee's duties and obligations under this
Agreement, including without limitation Section 10 hereof.


          4.      COMPENSATION OF EMPLOYEE.
                  ------------------------ 


          4.1.      BASE SALARY.  During the term of this Agreement, the Company
                    -----------                                                 
shall pay to the Employee as compensation for the services to be performed by
the Employee a base salary of Seventy-Eight Thousand Seven Hundred Forty-Seven
Dollars ($78,747) per year (the "Base Salary").  The Base Salary shall be
payable in installments in accordance with the Company's normal payroll
practice.  Commencing on January 1, 1997 and on January 1 of each year
thereafter, or as soon as practicable thereafter, the Compensation Committee of
the Board of Directors (the "Compensation Committee"), or the Board of Directors
if the Compensation Committee is not then in existence, shall review the Base
Salary, and shall authorize, in its discretion, an appropriate increase in the
Base Salary.

 
          4.2.      BONUS.  In addition to the compensation set forth elsewhere
                    -----                                                      
in this section 4, for each year or portion thereof during the term of this
Agreement and any extensions thereof, the Employee shall be entitled to receive
a bonus in an amount to be determined by the Compensation Committee, or the
Board of Directors if the Compensation Committee is not then in existence, in
its discretion, based upon its evaluation of the Employee's performance during
such year or portion thereof.

          4.3.      BENEFITS.  The Employee shall be entitled to participate,
                    --------                                                 
during the period of actual employment, in all regular employee benefit and
deferred compensation plans established by the Company, including, without
limitation, any savings and profit sharing plan, dental and medical plans, life
insurance, and personal catastrophe and disability insurance, such participation
to be as provided in said employee benefit plans.  The Employee shall also be
entitled during the period of actual employment to such paid vacation as is
provided in the policy adopted by the Board of Directors.  For purposes of this
Agreement, the term "period of actual employment" means the portion of the
Employment Term during which the Employee is employed, but not the portion
following the Employee's termination of employment.

          4.4.      OFFICE AND SECRETARY.  The Employee shall be provided office
                    --------------------                                        
space, secretarial assistance and such other facilities and services as are
suitable to her position and appropriate for the performance of her duties.

          4.5.      REIMBURSEMENT OF EXPENSES.  The Company shall provide for
                    -------------------------                                
the payment or reimbursement of all reasonable and necessary expenses incurred
by the Employee in connection with the performance of her duties under this
Agreement in accordance with the Company's expense reimbursement policy, as such
may change from time to time.

                                       2
<PAGE>
 
          5.      TERMINATION OF EMPLOYMENT.
                  ------------------------- 


          5.1.      TERMINATION FOR CAUSE.  "Termination For Cause", as
                    ---------------------                              
hereinafter defined, may be effected by the Company at any time during the term
of this Agreement by written notification to the Employee.  Upon Termination For
Cause, the Employee shall immediately be paid all accrued salary, bonus
compensation to the extent earned, vested deferred compensation (other than
pension plan or profit sharing plan benefits which will be paid in accordance
with the applicable plan), any benefits under any plans of the Company in which
the Employee is a participant to the full extent of the Employee's rights under
such plans, accrued vacation pay and any appropriate business expenses incurred
by the Employee in connection with her duties hereunder, all to the date of
termination, but the Employee shall not be paid any other compensation or
reimbursement of any kind, including without limitation, severance compensation.
"Termination For Cause" shall mean termination by the Company of the Employee's
employment by the Company by reason of the Employee's willful dishonesty
towards, fraud upon, or deliberate injury or attempted injury to the Company or
by reason of the Employee's willful material breach of this Agreement which has
resulted in material injury to the Company.


          5.2.      TERMINATION OTHER THAN FOR CAUSE.  Notwithstanding any other
                    --------------------------------                            
provisions of this Agreement, the Company may effect a "Termination Other Than
For Cause", as hereinafter defined, at any time upon giving written notice to
the Employee of such termination.  Upon any Termination Other Than for Cause,
the Employee shall immediately be paid all accrued salary, bonus compensation to
the extent earned, vested deferred compensation (other than pension plan or
profit sharing plan benefits which will be paid in accordance with the
applicable plan), any benefits under any plans of the Company in which the
Employee is a participant to the full extent of the Employee's rights under such
plans, accrued vacation pay and any appropriate business expenses incurred by
the Employee in connection with her duties hereunder, all to the date of
termination, and all severance compensation provided in subsection 6.2.
"Termination Other Than for Cause" shall mean termination by the Company of the
Employee's employment by the Company other than a termination pursuant to
subsection 5.1, 5.3, 5.4, 5.5 or 5.6, and shall include constructive termination
of the Employee's employment by reason of material breach of this Agreement by
the Company, such constructive termination to be effective upon notice from the
Employee to the Company of such constructive termination.

                                       3
<PAGE>
 
          5.3.      TERMINATION BY REASON OF DISABILITY.  If, during the term of
                    -----------------------------------                         
this Agreement, the Employee, in the reasonable judgment of the Board of
Directors, has failed to perform her duties under this Agreement on account of
illness or physical or mental incapacity, and such illness or incapacity
continues for a period of more than twelve (12) consecutive months, the Company
shall have the right to terminate the Employee's employment hereunder by written
notification to the Employee and payment to the Employee of all accrued salary,
bonus compensation to the extent earned, vested deferred compensation (other
than pension plan or profit sharing plan benefits which will be paid in
accordance with the applicable plans), any benefits under any plans of the
Company in which the Employee is a participant to the full extent of the
Employee's rights under such plans, accrued vacation pay and any appropriate
business expenses incurred by the Employee in connection with her duties
hereunder, all to the date of termination, with the exception of medical and
dental benefits which shall continue through the expiration of this Agreement,
but the Employee shall not be paid any other compensation or reimbursement of
any kind, including without limitation, severance compensation.


          5.4.      DEATH.  In the event of the Employee's death during the term
                    -----                                                       
of this Agreement, the Employee's employment shall be deemed to have terminated
as of the last day of the month during which her death occurs and the Company
shall pay to her estate or such beneficiaries as the Employee may from time to
time designate all accrued salary, bonus compensation to the extent earned,
vested deferred compensation (other than pension plan or profit sharing plan
benefits which will be paid in accordance with the applicable plan), any
benefits under any plans of the Company in which the Employee is a participant
to the full extent of Employee's rights under such plans, accrued vacation pay
and any appropriate business expenses incurred by the Employee in connection
with her duties hereunder, all to the date of termination, but the Employee's
estate shall not be paid any other compensation or reimbursement of any kind,
including without limitation, severance compensation.

          5.5.      VOLUNTARY TERMINATION.  In the event of a "Voluntary
                    ---------------------                               
Termination,"  as hereinafter defined, the Company shall immediately pay all
accrued salary, bonus compensation to the extent earned, vested deferred
compensation (other than pension plan or profit sharing plan benefits which will
be paid in accordance with the applicable plans), any benefits under any plans
of the Company in which the Employee is a participant to the full extent of the
Employee's rights under such plans, accrued vacation pay and any appropriate
business expenses incurred by the Employee in connection with her duties
hereunder, all to the date of termination, but no other compensation or
reimbursement of any kind, including without limitation, severance compensation.
"Voluntary Termination" shall mean termination by the Employee of Employee's
employment other than (i) constructive termination as described in subsection
5.2, (ii) termination by reason of the Employee's disability as described in
subsection 5.3, (iii) termination by reason of the Employee's death as described
in subsection 5.4, and (iv) Termination Upon a Change in Control as described in
subsection 5.6.

                                       4
<PAGE>
 
          5.6.      TERMINATION UPON A CHANGE IN CONTROL.  In the event of a
                    ------------------------------------                    
"Termination Upon a Change in Control," as hereinafter defined, the Employee
shall immediately be paid all accrued salary, bonus compensation to the extent
earned, vested deferred compensation (other than pension plan or profit sharing
plan benefits which will be paid in accordance with the applicable plans), any
benefits under any plans of the Company in which Employee is a participant to
the full extent of the Employee's rights under such plans, accrued vacation pay
and any appropriate business expenses incurred by the Employee in connection
with her duties hereunder, all to the date of termination, and all severance
compensation provided in subsection 6.1.  "Termination Upon a Change in Control"
shall mean a termination by the Employee of the Employee's employment with the
Company following a "Change in Control," as hereinafter defined.  "Change in
Control" shall mean (i) the date on which the Company first determines that any
person and all other persons which constitute a group, within the meaning of
Section 13(d)(3) of the Exchange Act, have acquired direct or indirect
beneficial ownership, within the meaning of Rule 13d-3 under the Exchange Act,
of twenty percent (20%) or more of the Company's outstanding securities, unless
a majority of the "Continuing Directors", as hereinafter defined, approves the
acquisition not later than ten (10) business days after the Company makes that
determination, or (ii) the first day on which a majority of the members of the
Board of Directors are not Continuing Directors.  "Continuing Directors" shall
mean, as of any date of determination, any member of the Board of Directors who
(i) was a member of the Board of Directors on December 31, 1993, (ii) has been a
member of the Board of Directors for the two years immediately preceding such
date of determination, or (iii) was nominated for election or elected to the
Board of Directors with the affirmative vote of the greater of (A) a majority of
the Continuing Directors who were members of the Board of Directors at the time
of such nomination or election or (B) at least four Continuing Directors.


          5.7.      NOTICE OF TERMINATION.  The Company or the Employee may
                    ---------------------                                  
effect a termination of the Employee's employment by the Company pursuant to the
provisions of this section 5 upon giving thirty (30) days' written notice to the
other party of such termination.

          6.        SEVERANCE COMPENSATION
                    ----------------------

          6.1.      TERMINATION UPON CHANGE IN CONTROL.  In the event the
                    ----------------------------------                   
Employee's employment is terminated in a Termination Upon a Change in Control,
the Employee shall be paid the following as severance compensation:


              (a) For one (1) year following such termination of employment, an
          amount (payable on the dates specified in subsection 4.1 except as
          otherwise provided herein) equal to the sum of (i) the Base Salary at
          the rate payable at the time of such termination and (ii) the average
          of the annual bonus earned by the Employee in the two (2) years
          immediately preceding the date of termination.  If, however, the
          Employee obtains other employment during such period, the amount
          payable under this paragraph (a) shall be reduced by the amount of
          compensation that the Employee is receiving from such other
          employment; provided, however, the Employee is under no obligation to
          mitigate the amount due to the Employee pursuant to this paragraph (a)
          by seeking other employment or otherwise.  Notwithstanding any
          provision in this paragraph (a) to the contrary, the Employee may, in
          the Employee's sole discretion, by delivery of a notice to the Company
          within thirty (30) days following a Termination Upon a Change in
          Control, elect 

                                       5
<PAGE>
 
          to receive from the Company a lump sum severance payment by bank
          cashier's check equal to the present value of the flow of cash
          payments that would otherwise be paid to the Employee pursuant to this
          paragraph (a). Such present value shall be determined as of the date
          of delivery of the notice of election by the Employee and shall be
          based on a discount rate equal to the interest rate on 90-day United
          States Treasury bills, as reported in the Wall Street Journal, or
          similar publication, on the date of delivery of the election notice.
          If the Employee elects to receive a lump sum severance payment, the
          Company shall make such payment to the Employee within ten (10) days
          following the date on which the Employee notifies the Company of the
          Employee's election.



              (b) In the event that the Employee is not otherwise entitled to
          fully exercise all awards granted to her under the Company's Incentive
          Stock Plan, and the Incentive Stock Plan does not otherwise provide
          for acceleration of exerciseability upon the occurrence of the Change
          in Control described herein, such awards shall become immediately
          exercisable upon a Change in Control.



              (c) The Employee shall continue to accrue retirement benefits and
          shall continue to enjoy any benefits under any plans of the Company in
          which the Employee is a participant to the full extent of the
          Employee's rights under such plans, including any perquisites provided
          under this Agreement, through the remainder of the Employment Term;
          provided, however, that the benefits under any such plans of the
          Company in which the Employee is a participant, including any such
          perquisites, shall cease upon the Employee's obtaining other
          employment.  If necessary to provide such benefits to the Employee,
          the Company shall, at its election, either: (i) amend its employee
          benefit plans to provide the benefits described in this paragraph (c),
          to the extent that such is permissible under the nondiscrimination
          requirements and other provisions of the Internal Revenue Code of 1986
          (the "Code") and the provisions of the Employee Retirement Income
          Security Act of 1974, or (ii) provide separate benefit arrangements or
          cash payments so that the Employee receives amounts equivalent
          thereto, net of tax consequences.


          6.2.      TERMINATION OTHER THAN FOR CAUSE.  In the event the
                    --------------------------------                   
Employee's employment is terminated in a Termination Other Than for Cause, the
Employee shall be paid as severance compensation her Base Salary, at the rate
payable at the time of such termination, through the remainder of the Employment
Term, on the dates specified in subsection 4.1; provided, however, that if the
Employee  obtains other employment during such period, the severance
compensation payable to the Employee during such period will be reduced by the
amount of compensation that the Employee is receiving from such other
employment.  Notwithstanding any provision in this subsection 6.2 to the
contrary, the Employee may, in the Employee's sole discretion, by delivery of a
notice to the Company within thirty (30) days following a Termination Other Than
for Cause, elect to receive from the Company a lump sum severance payment by
bank cashier's check equal to the present value of the flow of cash payments
that would otherwise be paid to the Employee pursuant to this subsection 6.2.
Such present value shall be determined as of the date of delivery of the notice
of election by the Employee and shall be based on a discount rate equal to the
interest rate on 90-day United States Treasury bills, as reported in the Wall
Street Journal, or similar publication, on the date of delivery of the election
notice.  If the Employee elects to receive a lump sum severance payment, 

                                       6
<PAGE>
 
the Company shall make such payment to the Employee within ten (10) days
following the date on which the Employee notifies the Company of the Employee's
election. In the event that the Employee is not otherwise entitled to fully
exercise all awards granted to her under the Company's Incentive Stock Plan, and
the Incentive Stock Plan does not otherwise provide for acceleration of
exerciseability upon the occurrence of a Termination Other Than for Cause
described herein, such awards shall become immediately exercisable upon a
Termination Other Than for Cause.

          6.3.      TERMINATION UPON ANY OTHER EVENT.  In the event of a
                    --------------------------------                    
Voluntary Termination, Termination For Cause, termination by reason of the
Employee's disability pursuant to subsection 5.5 or termination by reason of the
Employee's death pursuant to subsection 5.6, the Employee or her estate shall
not be paid any severance compensation.

          6.4.      PARACHUTE PAYMENT REDUCTION.  Notwithstanding any other
                    ---------------------------                            
provisions of this Agreement, any amounts payable under this Agreement
(including but not limited to severance payments) shall be limited to the
maximum amount that may be paid so that no such payment will, when combined with
all other amounts to be received by the Employee upon a change in control
(described in Section 280G(b)(2)(A) of the Code), constitute a "parachute
payment" (defined in Section 280G(b)(2) of the Code) and so that no "excess
parachute payments" (defined in Section 280G(b)(1) of the Code) made to the
Employee are taxable to the Employee pursuant to Section 4999 of the Code.  The
parties intend that the Employee shall receive the maximum payments permissible
that are not subject to the taxes described in Sections 280G and 4999 of the
Code and shall interpret this provision in accordance with such intention.  In
further accord with such intention, nothing herein shall be construed to limit
the Employee's right to receive payments that do not exceed reasonable
compensation for services or to receive payments that are otherwise not taken
into account in calculating "parachute payments" under Section 280G of the Code.

          7.      OBLIGATIONS CONTINGENT ON PERFORMANCE.
                  ------------------------------------- 

          The obligations of the Company under this Agreement, including its
obligation to pay the compensation provided for herein, shall be contingent upon
the Employee's performance of her obligations under this Agreement.

                                       7
<PAGE>
 
          8.      CONFIDENTIALITY.
                  --------------- 


          The Employee agrees to hold in strict confidence all information
concerning any matters affecting or relating to the business of the Company,
including without limiting the generality of the foregoing its manner of
operation, plans, protocols, processes, computer programs, tenant lists, client
lists, marketing information and analyses, or other data, without regard to
whether all of the foregoing matters will be deemed confidential or material.
The Employee agrees that she will not, directly or indirectly, use any such
information for the benefit of others than the Company or disclose or
communicate any of such information in any manner whatsoever other than to the
directors, officers, employees, agents and representatives of the Company who
need to know such information, who shall be informed by the Employee of the
confidential nature of such information and directed by the Employee to treat
such information confidentially.  Upon the Company's request, the Employee shall
return all information furnished to her related to the business of the Company.
The above limitations on use and disclosure shall not apply to information which
the Employee can demonstrate:  (a) was known to the Employee before receipt
thereof from the Company; (b) is learned by the Employee from a third party
entitled to disclose it; or (c) becomes known publicly other than through the
Employee.  The parties hereto stipulate that all such information is material
and confidential and gravely affects the effective and successful conduct of the
business of the Company and the Company's goodwill, and that any breach of the
terms of this section 8 shall be a material breach of this Agreement.  The terms
of this section 8 shall remain in effect following the termination of this
Agreement.


          9.      USE OF PROPRIETARY INFORMATION.
                  ------------------------------ 

          The Employee recognizes that the Company possesses a proprietary
interest in all of the information described in section 8 and has the exclusive
right and privilege to use, protect by copyright, patent or trademark,
manufacture or otherwise exploit the processes, ideas and concepts described
therein to the exclusion of the Employee, except as otherwise agreed between the
Company and the Employee in writing.  The Employee expressly agrees that any
products, inventions, discoveries or improvements made by the Employee, her
agents or affiliates, during the term of this Agreement, based on or arising out
of the information described in section 8 shall be the property of and inure to
the exclusive benefit of the Company.  The Employee further agrees that any and
all products, inventions, discoveries or improvements developed by the Employee
(whether or not able to be protected by copyright, patent or trademark) during
the course of her employment, or involving the use of the Company's time,
materials or other resources, shall be promptly disclosed to the Company and
shall become the exclusive property of the Company.

                                       8
<PAGE>
 
          10.      NON-COMPETITION AGREEMENT.
                   ------------------------- 


          10.1.      NON-COMPETITION.  The Employee agrees that, during the
                     ---------------                                       
period of actual employment, the Employee shall not, without the prior written
consent of the Company, directly or indirectly, own, manage, operate, control,
be connected with as an officer, employee, partner, consultant or otherwise, or
otherwise engage or participate in, except as an employee of the Company, or any
corporation directly or indirectly controlled by it, any corporation or other
business entity engaged in any activity competitive with the Company, including
the business of owning, developing, leasing or managing shopping center
properties.  Notwithstanding the foregoing, the ownership by the Employee of
less than 2% of any class of the outstanding capital stock of any corporation
conducting such a competitive business which is regularly traded on a national
securities exchange or in the over-the-counter market shall not be a violation
of the foregoing covenant.


          10.2.      NON-SOLICITATION.  During the period of actual employment,
                     ----------------                                          
the Employee shall not, except on behalf of or with the prior written consent of
the Company, (a) contact or solicit, directly or indirectly, any customer,
client, tenant or account whose identity the Employee obtained through
association with the Company, regardless of the geographical location of such
customer, client, tenant or account, or (b) directly or indirectly, entice or
induce, or attempt to entice or induce, any employee of the Company to leave
such employ, or employ any such person in any business similar to or in
competition with that of the Company.  The Employee hereby acknowledges and
agrees that the provisions set forth in this subsection 10.2 constitute a
reasonable restriction on her ability to compete with the Company.

          10.3.      SAVING PROVISION.  The parties hereto agree that, in the
                     ----------------                                        
event a court of competent jurisdiction shall determine that the geographical or
durational elements of this covenant are unenforceable, such determination shall
not render the entire covenant unenforceable. Rather, the excessive aspects of
the covenant shall be reduced to the threshold which is enforceable, and the
remaining aspects shall not be affected thereby.

          10.4.      EQUITABLE RELIEF.  The Employee acknowledges that the
                     ----------------                                     
extent of damages to the Company from a breach of sections 8, 9 and 10 of this
Agreement would not be readily quantifiable or ascertainable, that monetary
damages would be inadequate to make the Company whole in case of such a breach,
and that there is not and would not be an adequate remedy at law for such a
breach.  Therefore, the Employee specifically agrees that the Company is
entitled to injunctive or other equitable relief from a breach of sections 8, 9
and 10 of this Agreement, and hereby waives and covenants not to assert against
a prayer for such relief that there exists an adequate remedy at law, in
monetary damages or otherwise.

                                       9
<PAGE>
 
          11.      INDEMNIFICATION.
                   --------------- 


          11.1.      RIGHT TO INDEMNIFICATION.  The Company shall indemnify, and
                     ------------------------                                   
on request shall advance funds to, the Employee for expenses (including
attorneys' fees), judgments, penalties, fines and amounts paid in settlement if
the Employee becomes a party to, or is threatened to be made a party to, any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, investigative or otherwise, by reason of the fact that
the Employee (a) is or was an employee of the Company, or (b) is or was serving
at the request of the Company as a director, officer, partner, trustee, employee
or agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, in the manner and to the fullest extent
permitted by applicable law; provided, however, that the Company shall not
indemnify the Employee (a) in any proceeding by or in the right of the Company
against such Employee wherein the Employee shall have been adjudged to be liable
to the Company; (b) in any proceeding charging improper personal benefit to the
Employee, whether or not involving action in the Employee's official capacity,
in which the Employee was adjudged to be liable on the basis that personal
benefit was improperly received; or (c) it is established that (i) the act or
omission of the Employee was material to the matter giving rise to the
proceeding and the act or omission was committed in bad faith or was the result
of active and deliberate dishonesty, (ii) the indemnitee actually received an
improper personal benefit in money, property or services, or (iii) in the case
of any criminal proceeding, the Employee had reasonable cause to believe the act
or omission was unlawful.  If applicable law is hereafter amended, any such
amendment shall apply to this Agreement only to the extent mandated by law and
only as to the activities of the Employee subject to indemnification pursuant to
this subsection 11.1 which occur subsequent to the effective date of such
amendment.


          11.2.      RIGHT OF CLAIMANT TO ENFORCE RIGHTS.  Any indemnification
                     -----------------------------------                      
or advancement of funds required under this section 11 shall be made promptly,
and in any event within thirty (30) days of the written request of the Employee.
If a determination by the Company that the Employee is entitled to
indemnification pursuant to this section 11 is required, and the Company fails
to respond within thirty (30) days to a written request for indemnity, the
Company shall be deemed to have approved such request. If the Company denies a
written request for indemnity or advancement of expenses, in whole or in part,
or if payment in full pursuant to such request is not made within thirty (30)
days, the right to indemnification and advancement of expenses as granted by
this section 11 shall be enforceable by the Employee in any court of competent
jurisdiction.  The Employee's costs and expenses incurred in connection with
successfully establishing the Employee's right to indemnification, in whole or
in part, in any such action or proceeding shall also be indemnified by the
Company.  Neither the failure of the Company (including the Board of Directors,
independent legal counsel or the stockholders of the Company) to have made a
determination prior to the commencement of such action that indemnification of
the Employee is proper in the circumstances because the Employee has met the
applicable standard of conduct set forth in the General Corporation Law of the
State of Maryland, nor the fact that there has been an actual determination by
the Company (including the Board of Directors, independent legal counsel or the
shareholders of the Company) that the Employee has not met such applicable
standard of conduct, shall be a defense to the action or create a presumption
that the Employee has not met the applicable standard of conduct.

          11.3.      NON-EXCLUSIVITY OF RIGHTS.  The indemnification and
                     -------------------------                          
advancement of expenses provided by, or granted pursuant to, this section 11
shall not be deemed exclusive of 

                                       10
<PAGE>
 
any other rights to which the Employee may be entitled by law, the Company's
Articles of Incorporation or Bylaws, an agreement with the Company, or a
resolution of the Board of Directors or of the Company's shareholders. Any
repeal or modification of the provisions of this section 11 shall be prospective
only and shall not adversely affect any right or protection set forth herein in
favor of the Employee at the time of such repeal or modification.

          11.4.      INSURANCE.  The Company may, to the fullest extent
                     ---------                                         
permitted by law, purchase and maintain insurance, at its expense, to protect
itself and the Employee against any liability asserted against the Employee and
incurred by the Employee in any such capacity, or arising out of the Employee's
duties hereunder, whether or not the Company would have the power to indemnify
the Employee against such liability under the provisions of this section 11, the
General Corporation Law of the State of Maryland or otherwise.

          11.5.      SAVING PROVISION.  If this section 11 or any portion
                     ----------------                                    
thereof shall be invalidated on any ground by any court of competent
jurisdiction, then the Company shall nevertheless indemnify the Employee as to
expenses (including attorneys' fees), judgments, fines, penalties and amounts
paid in settlement with respect to any actual or threatened action, suit or
proceeding, whether civil, criminal, administrative, investigative or otherwise,
to the fullest extent permitted by any applicable portion of this section 11
which shall not have been invalidated, by the General Corporation Law of the
State of Maryland or by any other applicable law.


          12.      ENTIRE AGREEMENT.
                   ---------------- 


          This Agreement contains the complete agreement concerning the
employment arrangement between the parties and shall, as of the Effective Date,
supersede all other agreements or arrangements between the parties with regard
to the subject matter hereof.


          13.      BINDING AGREEMENT.
                   ----------------- 


          This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, legal representatives, successors and
assigns.  The obligations of the Company under this Agreement shall not be
terminated by reason of any liquidation, dissolution, bankruptcy, cessation of
business or similar event relating to the Company.  This Agreement shall not be
terminated by reason of any merger, consolidation or reorganization of the
Company, but shall be binding upon and inure to the benefit of the surviving or
resulting entity.



          14.      MODIFICATION.
                   ------------ 


          No waiver or modification of this Agreement or of any covenant,
condition, or limitation herein contained shall be valid unless in writing and
duly executed by the party to be charged therewith and no evidence of any waiver
or modification shall be offered or received in evidence of any proceeding,
arbitration, or litigation between the parties hereto arising out of or
affecting this Agreement, or the rights or obligations of the parties
thereunder, unless such waiver or modification is in writing, duly executed as
aforesaid.

                                       11
<PAGE>
 
          15.      SEVERABILITY.
                   ------------ 

          All agreements and covenants contained herein are severable, and in
the event any of them shall be held to be invalid or unenforceable by any court
of competent jurisdiction, this Agreement shall be interpreted as if such
invalid agreements or covenants were not contained herein.


          16.      MANNER OF GIVING NOTICE.
                   ----------------------- 

          All notices, requests and demands to or upon the respective parties
hereto shall be sent by hand, certified mail, overnight air courier service, or
telecopier (if within a reasonable time a permanent copy is given by any of the
other methods described above), in each case with all applicable charges paid or
otherwise provided for, addressed as follows, or to such other address as may
hereafter be designated in writing by the respective parties hereto:


          To Company:
          ---------- 

              JDN Realty Corporation
              3340 Peachtree Road NE
              Suite 1530
              Atlanta, Georgia  30326
              Telephone:  (404) 262-3252
              Facsimile:  (404) 364-6446

          To Employee:
          ----------- 

              Leilani L. Jones
              3340 Peachtree Road NE
              Suite 1530
              Atlanta, Georgia 30326
              Telephone:  (404) 262-3252
              Facsimile:  (404) 364-6446


Such notices, requests and demands shall be deemed to have been given or made on
the date of delivery if delivered by hand or by telecopy and on the next
following date if sent by mail or by air courier service.


          17.      REMEDIES.
                   -------- 


          In the event of a breach of this Agreement, the non-breaching party
shall be entitled to such legal and equitable relief as may be provided by law,
and shall further be entitled to recover all costs and expenses, including
reasonable attorneys' fees, incurred in enforcing the non-breaching party's
rights hereunder.

                                       12
<PAGE>
 
          18.      HEADINGS.
                   -------- 


          The headings have been inserted for convenience only and shall not be
deemed to limit or otherwise affect any of the provisions of this Agreement.

          19.      CHOICE OF LAW.
                   ------------- 

          It is the intention of the parties hereto that this Agreement and the
performance hereunder be construed in accordance with, under and pursuant to the
laws of the State of Maryland without regard to the jurisdiction in which any
action or special proceeding may be instituted.

                                       13
<PAGE>
 
          IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first stated above.



                              JDN REALTY CORPORATION



                              By:   /s/ J. Donald Nichols
                                    ---------------------
                                    J. Donald Nichols
                                    Chief Executive Officer



                                    /s/ Leilani L. Jones
                                    --------------------
                                    LEILANI L. JONES

                                       14