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SECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

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FORM 10-Q

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended September 30, 2002

OR

|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from ________ to ________

Commission file number 1-12566

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G & L REALTY CORP.(Exact name of Registrant as specified in its charter)

|Maryland(State or other jurisdiction of incorporation or organization)                 |  | 95-4449388(I.R.S. Employer Identification No.)
|-------------------------------------------------------------------------------------- |  | ----------------------------------------------
|                                                                                       |  |                                               
|439 N. Bedford Drive Beverly Hills, California(Address of Principal Executive Offices) |  | 90210(Zip Code)                               
|                                                                                       |  |                                               
|Registrants telephone number, including area code: (310) 273-9930                    

---

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 | o.
|--- | - | -- | --

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G&L REALTY CORP.

INDEX

|          |                       | Page Number         
|--------- | --------------------- | --------------------
|          |                       |                     
|Part I    | Financial Information |                     
|          |                       |                     
|          | Item 1                | Financial Statements
|          |                       |                     
|          |                       |                     
|          |                       |                     
|          |                       |                     
|          | Item 2                |                     
|          | Item 3                |                     
|          | Item 4                |                     
|Part II   | Other Information     |                     
|          | Item 1                |                     
|          | Item 2                |                     
|          | Item 3                |                     
|          | Item 4                |                     
|          | Item 5                |                     
|          | Item 6                |                     
|          |                       |                     
|Signature | 31                   

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G&L REALTY CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)

|                                                  |                                                                                                                                                    | September 30, 2002                                                                                          |        | December 31, 2001 |   
|------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------- | ------ | ----------------- | --
|                                                  |                                                                                                                                                    |                                                                                                             |        |                   |   
|                                                  |                                                                                                                                                    | (Unaudited)                                                                                                 |        |                   |   
|ASSETS                                            |                                                                                                                                                    |                                                                                                             |        |                   |   
|Rental properties (Note 3):                       |                                                                                                                                                    |                                                                                                             |        |                   |   
|                                                  | Land                                                                                                                                               |                                                                                                             | $      | 28,840            |   
|                                                  | Buildings and improvements, net                                                                                                                    |                                                                                                             |        | 141,523           |   
|                                                  | Projects under development                                                                                                                         |                                                                                                             |        | 109               |   
|                                                  |                                                                                                                                                    |                                                                                                             |        |                   |   
|                                                  | Total rental properties                                                                                                                            |                                                                                                             |        | 170,472           |   
|Cash and cash equivalents                         |                                                                                                                                                    |                                                                                                             | 1,873  |                   |   
|Restricted cash                                   |                                                                                                                                                    |                                                                                                             | 3,442  |                   |   
|Tenant rent and reimbursements receivable, net    |                                                                                                                                                    |                                                                                                             | 7,290  |                   |   
|Unbilled rent receivable, net                     |                                                                                                                                                    |                                                                                                             | 2,964  |                   |   
|Mortgage loans and notes receivable, net          |                                                                                                                                                    |                                                                                                             | 1,955  |                   |   
|Investments in unconsolidated affiliates (Note 6) |                                                                                                                                                    |                                                                                                             | 4,144  |                   |   
|Deferred charges and other assets, net (Note 4)   |                                                                                                                                                    |                                                                                                             | 6,400  |                   |   
|                                                  |                                                                                                                                                    |                                                                                                             |        |                   |   
|                                                  | TOTAL ASSETS                                                                                                                                       |                                                                                                             | $      | 198,540           |   
|                                                  |                                                                                                                                                    |                                                                                                             |        |                   |   
|LIABILITIES AND STOCKHOLDERS EQUITY              |                                                                                                                                                    |                                                                                                             |        |                   |   
|LIABILITIES:                                      |                                                                                                                                                    |                                                                                                             |        |                   |   
|                                                  | Notes payable                                                                                                                                      |                                                                                                             | $      | 190,729           |   
|                                                  | Accounts payable and other liabilities                                                                                                             |                                                                                                             |        | 6,884             |   
|                                                  | Distributions payable                                                                                                                              |                                                                                                             |        | 160               |   
|                                                  | Tenant security deposits                                                                                                                           |                                                                                                             |        | 1,432             |   
|                                                  |                                                                                                                                                    |                                                                                                             |        |                   |   
|                                                  | Total liabilities                                                                                                                                  |                                                                                                             |        | 199,205           |   
|Commitments and Contingencies (Note 8)            |                                                                                                                                                    |                                                                                                             |       |                   |   
|Minority interest in consolidated affiliates      |                                                                                                                                                    |                                                                                                             | (1,154 | )                 |   
|Minority interest in Operating Partnership        |                                                                                                                                                    |                                                                                                             |       |                   |   
|STOCKHOLDERS EQUITY (Note 5):                    |                                                                                                                                                    |                                                                                                             |        |                   |   
|                                                  | Preferred shares - $.01 par value, 10,000,000 shares authorized, liquidation preference of $25.00 per share                                        |                                                                                                             |        |                   |   
|                                                  |                                                                                                                                                   | Series A Preferred - 1,495,000 shares issued and outstanding as of September 30, 2002 and December 31, 2001 |        |                   | 15
|                                                  |                                                                                                                                                   | Series B Preferred - 1,380,000 shares issued and outstanding as of September 30, 2002 and December 31, 2001 |        |                   | 14
|                                                  | Common shares - $.01 par value, 50,000,000 shares authorized, 710,199 shares issued and outstanding as of September 30, 2002 and December 31,
2001 |                                                                                                             |        | 7                 |   
|                                                  | Additional paid-in capital                                                                                                                         |                                                                                                             |        | 40,827            |   
|                                                  | Distributions in excess of net income                                                                                                              |                                                                                                             |        | (35,134           | ) 
|                                                  | Notes receivable from stockholders                                                                                                                 |                                                                                                             |        | (5,240            | ) 
|                                                  |                                                                                                                                                    |                                                                                                             |        |                   |   
|                                                  | Total stockholders equity                                                                                                                         |                                                                                                             |        | 489               |   
|                                                  |                                                                                                                                                    |                                                                                                             |        |                   |   
|                                                  | TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                         |                                                                                                             | $      | 198,540           |   
|                                                  |                                                                                                                                                    |                                                                                                             |        |                   |   
|                                                  |                                                                                                                                                    |                                                                                                             |        |                   |   

See accompanying notes to Condensed Consolidated Financial Statements

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G&L REALTY CORP.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data)(Unaudited)

|                                                                                                             |                                                                                                              | For the Three Month Periods Ended September 30, |        | For the Nine Month Periods Ended September 30, |  
|------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------ | ----------------------------------------------- | ------ | ---------------------------------------------- | -
|                                                                                                             |                                                                                                              |                                                 |        |                                                |  
|                                                                                                             |                                                                                                              | 2002                                            |        | 2001                                           |  
|                                                                                                             |                                                                                                              |                                                 |        |                                                |  
|REVENUES:                                                                                                    |                                                                                                              |                                                 |        |                                                |  
|                                                                                                             | Rent                                                                                                         |                                                 | $      | 7,120                                          |  
|                                                                                                             | Patient revenues                                                                                             |                                                 |        | 6,549                                          |  
|                                                                                                             | Tenant reimbursements                                                                                        |                                                 |        | 658                                            |  
|                                                                                                             | Parking                                                                                                      |                                                 |        | 393                                            |  
|                                                                                                             | Interest and loan fees (Note 9)                                                                              |                                                 |        | 214                                            |  
|                                                                                                             | Lease termination income                                                                                     |                                                 |        |                                               |  
|                                                                                                             | Other income                                                                                                 |                                                 |        | 573                                            |  
|                                                                                                             |                                                                                                              |                                                 |        |                                                |  
|                                                                                                             | Total revenues                                                                                               |                                                 |        | 15,507                                         |  
|                                                                                                             |                                                                                                              |                                                 |        |                                                |  
|EXPENSES:                                                                                                    |                                                                                                              |                                                 |        |                                                |  
|                                                                                                             | Property operations                                                                                          |                                                 |        | 2,388                                          |  
|                                                                                                             | Skilled nursing operations                                                                                   |                                                 |        | 5,553                                          |  
|                                                                                                             | Depreciation and amortization                                                                                |                                                 |        | 1,553                                          |  
|                                                                                                             | Provision for doubtful accounts, notes and bonds receivable                                                  |                                                 |        | 174                                            |  
|                                                                                                             | Interest                                                                                                     |                                                 |        | 4,175                                          |  
|                                                                                                             | General and administrative                                                                                   |                                                 |        | 793                                            |  
|                                                                                                             |                                                                                                              |                                                 |        |                                                |  
|                                                                                                             | Total expenses                                                                                               |                                                 |        | 14,636                                         |  
|                                                                                                             |                                                                                                              |                                                 |        |                                                |  
|Income from operations before minority interests and equity in  (loss) earnings of unconsolidated affiliates |                                                                                                              |                                                 | 871    |                                                |  
|Equity in (loss) earnings of unconsolidated affiliates                                                       |                                                                                                              |                                                 | (96    | )                                              |  
|Minority interest in consolidated affiliates                                                                 |                                                                                                              |                                                 | (85    | )                                              |  
|Corporate income tax expense                                                                                 |                                                                                                              |                                                 | (120   | )                                              |  
|                                                                                                             |                                                                                                              |                                                 |        |                                                |  
|Income from operations before discontinued operations                                                        |                                                                                                              |                                                 | 570    |                                                |  
|Discontinued operations (Notes 2 and 9)                                                                      |                                                                                                              |                                                 |        |                                                |  
|                                                                                                             | Gain (loss) from discontinued operations (Including gain on disposal of $2,458 and loss on disposal of $138) |                                                 |        |                                               |  
|                                                                                                             |                                                                                                              |                                                 |        |                                                |  
|Net income                                                                                                   |                                                                                                              |                                                 | 570    |                                                |  
|Dividends on preferred stock                                                                                 |                                                                                                              |                                                 | (1,790 | )                                              |  
|                                                                                                             |                                                                                                              |                                                 |        |                                                |  
|Net loss available to common stockholders                                                                    |                                                                                                              | $                                               | (1,220 | )                                              | $
|                                                                                                             |                                                                                                              |                                                 |        |                                                |  
|                                                                                                             |                                                                                                              |                                                 |        |                                                |  

See accompanying notes to Condensed Consolidated Financial Statements

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G&L REALTY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)

|                                                                     |                                                                                   | Nine Months Ended September 30, |        
|-------------------------------------------------------------------- | --------------------------------------------------------------------------------- | ------------------------------- | -------
|                                                                     |                                                                                   |                                 |        
|                                                                     |                                                                                   | 2002                            |        
|                                                                     |                                                                                   |                                 |        
|                                                                     |                                                                                   | (Unaudited)                     |        
|CASH FLOWS FROM OPERATING ACTIVITIES:                                |                                                                                   |                                 |        
|                                                                     | Net income                                                                        |                                 | $      
|                                                                     | Adjustments to reconcile net income to net cash provided by Operating activities: |                                 |        
|                                                                     | Depreciation and amortization                                                     |                                 |        
|                                                                     | Amortization of deferred loan costs                                               |                                 |        
|                                                                     | Net gain on sale of assets                                                        |                                 |        
|                                                                     | Loss on change in value of interest rate hedge                                    |                                 |        
|                                                                     | Minority interests                                                                |                                 |        
|                                                                     | Equity in (income) loss of unconsolidated affiliates                              |                                 |        
|                                                                     | Provision for doubtful accounts, notes and bonds receivables                      |                                 |        
|                                                                     | Unbilled rent receivable, net                                                     |                                 |        
|                                                                     | (Increase) decrease in:                                                           |                                 |        
|                                                                     | Tenant rent and reimbursements receivable                                         |                                 |        
|                                                                     | Prepaid expense and other assets                                                  |                                 |        
|                                                                     | Accrued interest and loan fees receivable                                         |                                 |        
|                                                                     | Increase (decrease) in:                                                           |                                 |        
|                                                                     | Accounts payable and other liabilities                                            |                                 |        
|                                                                     | Tenant security deposits                                                          |                                 |        
|                                                                     |                                                                                   |                                 |        
|Net cash provided by operating activities                            |                                                                                   |                                 | 3,153  
|                                                                     |                                                                                   |                                 |        
|CASH FLOWS FROM INVESTING ACTIVITIES:                                |                                                                                   |                                 |        
|Sale of real estate assets                                           |                                                                                   |                                 | 5,141  
|Additions to rental properties                                       |                                                                                   |                                 | (1,366 
|Pre-acquisition costs                                                |                                                                                   |                                 | 122    
|Construction in progress                                             |                                                                                   |                                 | (109   
|Leasing commissions                                                  |                                                                                   |                                 | (105   
|Investment in mortgage loans and notes receivable                    |                                                                                   |                                 | (310   
|Contributions to unconsolidated affiliates                           |                                                                                   |                                 | (1,463 
|Distributions from unconsolidated affiliates                         |                                                                                   |                                 | 1,571  
|Principal payments received from mortgage loans and notes receivable |                                                                                   |                                 | 9,333  
|                                                                     |                                                                                   |                                 |        
|Net cash provided by (used in) investing activities                  |                                                                                   |                                 | 12,814 
|                                                                     |                                                                                   |                                 |        
|CASH FLOWS FROM FINANCING ACTIVITIES:                                |                                                                                   |                                 |        
|Notes payable proceeds                                               |                                                                                   |                                 | 9,513  
|Repayment of notes payable                                           |                                                                                   |                                 | (21,379
|Payment of deferred loan costs                                       |                                                                                   |                                 | 58     
|Decrease in restricted cash                                          |                                                                                   |                                 | 1,304  
|Minority interest equity contribution                                |                                                                                   |                                 | 25     
|Distributions                                                        |                                                                                   |                                 | (5,654 
|                                                                     |                                                                                   |                                 |        
|Net cash used in financing activities                                |                                                                                   |                                 | (16,133
|                                                                     |                                                                                   |                                 |        
|                                                                     |                                                                                   |                                 |        

See accompanying notes to Condensed Consolidated Financial Statements

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G&L REALTY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In
thousands)

|                                                                         |                                   | Nine Months Ended September 30, |       
|------------------------------------------------------------------------ | --------------------------------- | ------------------------------- | ------
|                                                                         |                                   |                                 |       
|                                                                         |                                   | 2002                            |       
|                                                                         |                                   |                                 |       
|                                                                         |                                   | (Unaudited)                     |       
|NET DECREASE  IN CASH AND CASH EQUIVALENTS                               |                                   |                                 | (166  
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                           |                                   |                                 | 2,039 
|                                                                         |                                   |                                 |       
|CASH AND CASH EQUIVALENTS, END OF PERIOD                                 |                                   | $                               | 1,873 
|                                                                         |                                   |                                 |       
|SUPPLEMENTAL CASH FLOW INFORMATION                                       |                                   |                                 |       
|Cash paid during the period for interest                                 |                                   | $                               | 13,660
|                                                                         |                                   |                                 |       
|NONCASH INVESTING AND FINANCING ACTIVITIES                               |                                   |                                 |       
|Distributions declared not yet paid                                      |                                   | $                               |      
|                                                                         |                                   |                                 |       
|Preferred distributions due to minority partner                          |                                   | $                               | 44    
|                                                                         |                                   |                                 |       
|Transfers from projects under development to building                    |                                   | $                               |      
|                                                                         |                                   |                                 |       
|Acquisition of property and other assets for assumption of note payable: |                                   |                                 |       
|                                                                         | Restricted cash                   |                                 | $     
|                                                                         | Land                              |                                 |       
|                                                                         | Buildings and improvements        |                                 |       
|                                                                         | Deferred charges and other assets |                                 |       
|                                                                         | Note receivable                   |                                 |       
|                                                                         |                                   |                                 |       
|                                                                         | Total                             |                                 | $     
|                                                                         |                                   |                                 |       
|Assumption of note payable for property and other assets:                |                                   |                                 |       
|                                                                         | Note payable                      |                                 | $     
|                                                                         |                                   |                                 |       

See accompanying notes to Condensed Consolidated Financial Statements

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G&L REALTY CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1.  GENERAL

G&L Realty Corp. (the Company) was formed as a Maryland corporation to continue the ownership, management, acquisition and development activities
previously conducted by G&L Development, a California general partnership, the Companys predecessor.  All of the Companys assets are held by, and all of its operations are conducted through, the following entities:

| | G&L Realty Partnership, L.P., a Delaware limited partnership (the Operating Partnership)                     
| | ---------------------------------------------------------------------------------------------------------------
| | G&L Senior Care Partnership, L.P., a Delaware limited partnership (the Senior Care Partnership)              
| | G&L Realty Financing Partnership II, L.P., a Delaware limited partnership (the Realty Financing Partnership)*
| | G&L Medical Partnership, L.P., a Delaware limited partnership (the Medical Partnership)*                     
| | G&L Gardens, LLC, an Arizona limited liability company (Maryland Gardens)*                                   
| | 435 North Roxbury Drive, Ltd., a California limited partnership (the Roxbury Partnership)                    
| | GL/PHP, LLC, a Delaware limited liability company (GL/PHP)*                                                  
| | G&L Hampden, LLC, a Delaware limited liability company (Hampden)*                                            
| | G&L Valencia, LLC, a California limited liability company (Valencia)                                         
| | G&L Tustin, LLC, a California limited liability company (Tustin)*                                            
| | G&L Holy Cross, LLC, a California limited liability company (Holy Cross)*                                    
| | G&L Burbank, LLC, a California limited liability company (Burbank)*                                          
| | GLH Pacific Gardens, LLC, a California limited liability company (Pacific Gardens)                           
| | G&L Hoquiam, LLC, a California limited liability company (Hoquiam)                                           
| | G&L Lyons, LLC, a California limited liability company (Lyons)                                               
| | G&L Coronado (1998), LLC, a California limited liability company (Coronado)                                  
| | GLH Tarzana, LLC, a California limited liability company (Tarzana)                                           
| | G&L Heritage Care, LLC, a Delaware limited liability company (Heritage)                                      
| | G&L Massachusetts, LLC, a Delaware limited liability company (Massachusetts)                                 
| | G&L Aspen, LLC, a California limited liability company (Aspen)                                               
| | G&L Tustin II, LLC, a Delaware limited liability company (Tustin II)                                         
| | G&L Tustin III, LLC, a Delaware limited liability company (Tustin III)                                       
| | G&L St. Thomas More, Inc., a Maryland corporation (St. Thomas More)                                          
| |                                                                                                                
| | *                                                                                                              
| |                                                                                                                

The Company, as the sole general partner and as owner of an approximately 95% ownership interest, controls the
Operating Partnership and the Senior Care Partnership.  The Company controls the Financing Entities through wholly owned subsidiaries incorporated either in the State of Delaware or the State of California (collectively, the
Subsidiaries and individually, a Subsidiary).  Each Subsidiary either (i) owns, as sole general partner or sole managing member, a 1% ownership interest in its related Financing Entity or (ii) owns no interest and acts
as the manager of the Financing Entity.  The remaining 99% ownership interest in each Financing Entity, which is owned 1% by a Subsidiary, is owned by the Operating Partnership, acting as sole limited partner or member.Financing Entities in
which a Subsidiary owns no interest are 100% owned by the Operating Partnership.

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G&L REALTY CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
CONTINUED (Unaudited)

References in these consolidated financial statements to the Company include its operations, assets and
liabilities including the operations, assets and liabilities of the Operating Partnership, the Senior Care Partnership, the Subsidiaries, the Financing Entities, the Roxbury Partnership (in which the Operating Partnership owns a 32.81% partnership
interest and is the sole general partner), Pacific Gardens (in which the Operating Partnership owns a 93% membership interest and is a co-managing member), Tarzana (in which the Operating Partnership owns a 85% membership interest and is a
co-managing member) and Hoquiam, Lyons, Coronado, Heritage, Massachusetts, Aspen, Tustin II, Tustin III and St. Thomas More (in which the Operating Partnership or the Senior Care Partnership own a 100% interest).

In addition to the Subsidiaries, the Company also owns interests in various unconsolidated affiliates.  Although the Companys investment represents a
significant portion of the capital of such unconsolidated affiliates and the Company exercises influence over the activities of these entities, the Company does not have the requisite level of voting control to include the assets, liabilities and
operating activities of these entities in the consolidated financial statements of the Company.   The entities in which the Company has unconsolidated financial interests are as follows:

| | GLN Capital Co., LLC (GLN)                     
| | -------------------------------------------------
| | G&L Grabel, San Pedro, LLC (San Pedro)         
| | G&L Penasquitos, LLC (Penasquitos LLC)         
| | G&L Penasquitos, Inc. (Penasquitos Inc.)       
| | G&L Parsons on Eagle Run, LLC (Eagle Run)      
| | G&L Parsons on Eagle Run, Inc. (Eagle Run Inc.)
| | Lakeview Associates, LLC (Lakeview)            
| | Tustin Heritage Place, LLC (Heritage Place)    
| | Pac Par MOB, LLC (Pacific Park)                
| | G&L Radius Realty, LLC (Radius)                
| | G&L Aurora, LLC (Aurora)                       

GLN, San Pedro, Penasquitos Inc., Penasquitos LLC, Eagle Run, Eagle
Run, Inc., Lakeview, Heritage Place, Pacific Park, Radius and Aurora are herein collectively referred to as the Unconsolidated Affiliates and individually as Unconsolidated Affiliate.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business -The Company is a self-managed Real
Estate Investment Trust (REIT) that acquires, develops, manages, finances and leases healthcare properties.  The Companys business currently consists of investments in healthcare properties.  Investments in healthcare
property consist of acquisitions, made either directly or through joint ventures, in medical office buildings (MOBs), skilled nursing facilities (SNFs) and assisted living facilities (ALFs).

Basis of Presentation -The accompanying condensed consolidated financial statements include the accounts of the Company and its Subsidiaries.  The
interests in the Roxbury Partnership, Pacific Gardens, Tarzana, the Operating Partnership and the Senior Care Partnership that are not owned by the Company, have been reflected as minority interests in the Operating Partnership.  All
significant intercompany accounts and transactions have been eliminated in consolidation.

The information presented as of and for
the three-month and nine-month periods ended September 30, 2002 and 2001 has not been audited by independent accountants, but includes all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary
for a fair presentation of the results for such periods.  The results of operations for the nine months ended September 30, 2002 are not necessarily indicative of results that might be expected for the full fiscal year.

Certain information and footnote disclosures normally included in annual financial statements have been omitted.  The Company believes that the
disclosures included in these financial statements are adequate for a fair presentation and conform to reporting requirements established by the Securities and Exchange Commission (SEC).  These condensed consolidated financial
statements should be read in conjunction with the audited consolidated financial statements and the notes included in the Companys annual report on Form 10-K as filed with the SEC.

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G&L REALTY CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
CONTINUED (Unaudited)

Recent accounting pronouncementsOn January 1, 2002, the Company adopted the provisions of SFAS
142 Goodwill and Other Intangible Assets (SFAS 142) and SFAS 144 Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS 144).  SFAS 142 discontinues the practice of amortizing goodwill and
other intangible assets and requires a periodic review process for impairment.  SFAS 144 addresses financial accounting and reporting for the disposal of long-lived assets and supercedes FAS 121 Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of.  The adoption of these statements did not have a material effect on the Companys results of operations or financial condition.

In April 2002, the Financial Accounting Standards Board (FASB) issued SFAS No. 145,Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB
Statement No. 13, and Technical Corrections (SFAS 145). The most significant provisions of this statement relate to the rescission of Statement No. 4 Reporting Gains and Losses from Extinguishment of Debt and it also amends
other existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their applicability under changed conditions. Under SFAS 145, any gain or loss on extinguishment of debt that was classified as an
extraordinary item in prior periods presented that does not meet certain defined criteria must be reclassified.   The provisions of SFAS 145 are effective for fiscal years beginning after May 15, 2002.  Management does not expect that
the adoption of this statement will have a material effect on the Companys results of operations or financial condition.

In
June 2002, FASB issued SFAS 146, Accounting for Costs Associated with Exit or Disposal Activities (SFAS 146).  SFAS 146 addresses financial accounting and reporting for costs associated with exit or disposal activities
and nullifies Emerging Issues Task Force Issue No. 94-3Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity.  SFAS 146 requires that a liability for a cost associated with an exit or
disposal activity be recognized when the liability is incurred.  The provisions of SFAS 146 are effective for exit or disposal activities that are initiated after December 31, 2002.  Management does not expect that the adoption of this
statement will have a material effect on the Companys results of operations or financial condition.

3.  BUILDINGS AND IMPROVEMENTS

Buildings and improvements consist of the following:

|                                               |       | September 30, 2002 |         | December 31, 2001 |  
|---------------------------------------------- | ----- | ------------------ | ------- | ----------------- | -
|                                               |       |                    |         |                   |  
|                                               |       | (in thousands)     |        
|Buildings and improvements                     |       | $                  | 162,510 |                   | $
|Tenant improvements                            |       |                    | 12,103  |                   |  
|Furniture, fixtures and equipment              |       |                    | 4,834   |                   |  
|                                               |       |                    |         |                   |  
|                                               |       |                    | 179,447 |                   |  
|Less accumulated depreciation and amortization |       |                    | (37,924 | )                 |  
|                                               |       |                    |         |                   |  
|                                               | Total |                    | $       | 141,523           |  
|                                               |       |                    |         |                   |  
|                                               |       |                    |         |                   |  

Rental property is recorded at cost less accumulated depreciation.  Depreciation is computed on a straight-line
basis over the estimated useful lives of the assets as follows:

|Buildings and improvements        |  |  | 40 years      | 
|--------------------------------- |  |  | ------------- | 
|Tenant improvements               |  |  | Life of lease | 
|Furniture, fixtures and equipment |  |  | 5 years       | 

Expenditures for
maintenance and repairs are charged to operations as incurred.  Significant renovations and all external costs directly related to acquisitions are capitalized.

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G&L REALTY CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
CONTINUED (Unaudited)

4.  DEFERRED CHARGES AND OTHER ASSETS

Deferred charges and other assets consist of the following:

|                                 |       | September 30, 2002 |        | December 31, 2001 |  
|-------------------------------- | ----- | ------------------ | ------ | ----------------- | -
|                                 |       |                    |        |                   |  
|                                 |       | (in thousands)     |       
|Deferred loan costs              |       | $                  | 6,651  |                   | $
|Pre-acquisition costs            |       |                    |       |                   |  
|Leasing commissions              |       |                    | 1,900  |                   |  
|Prepaid expense and other assets |       |                    | 954    |                   |  
|                                 |       |                    |        |                   |  
|                                 |       |                    | 9,505  |                   |  
|Less accumulated amortization    |       |                    | (3,105 | )                 |  
|                                 |       |                    |        |                   |  
|                                 | Total |                    | $      | 6,400             |  
|                                 |       |                    |        |                   |  

5.  STOCKHOLDERS EQUITY

Distributions in excess of net incomeThe Company has elected to be treated, for federal income tax purposes, as a REIT.  As such, the Company is
required to distribute annually, in the form of distributions to its stockholders, at least 90% of its taxable income.  In reporting periods in which distributions exceed net income, stockholders equity will be reduced by the
distributions in excess of net income in such period and will be increased by the excess of net income over distributions in reporting periods in which net income exceeds distributions.  For tax reporting purposes, a portion of the dividends
declared represents a return of capital.  The following table reconciles net income and distributions in excess of net income for the nine months ended September 30, 2002 and for the year ended December 31, 2001:

|                                                             |  | September 30, 2002 |                | December 31, 2001 |  
|------------------------------------------------------------ |  | ------------------ | -------------- | ----------------- | -
|                                                             |  |                    |                |                   |  
|                                                             |  |                    | (in thousands) |                  
|Distributions in excess of net income at beginning of period |  | $                  | (34,722        | )                 | $
|Net income during period                                     |  |                    | 4,959          |                   |  
|Less: Distributions declared                                 |  |                    | (5,371         | )                 |  
|                                                             |  |                    |                |                   |  
|Distributions in excess of net income                        |  | $                  | (35,134        | )                 | $
|                                                             |  |                    |                |                   |  

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G&L REALTY CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

6.  INVESTMENTS IN UNCONSOLIDATED AFFILIATES

The Company has investments in various unconsolidated affiliates as
described in Note 1.   The following table provides a summary of the Companys investment in each of these entities as of September 30, 2002.  (In thousands).

|                                         |  | GLN |      | San Pedro |   | Penasquitos LLC |   | Penasquitos Inc. |      | Aurora |   | Heritage Place |  
|---------------------------------------- |  | --- | ---- | --------- | - | --------------- | - | ---------------- | ---- | ------ | - | -------------- | -
|                                         |  |     |      |           |   |                 |   |                  |      |        |   |                |  
|Opening balance at beginning of period   |  | $   | 807  |           | $ | 1,351           |   | $                | (358 | )      | $ | 20             |  
|Equity in earnings (loss) of affiliates  |  |     | 5    |           |   | 122             |   |                  | (41  | )      |   |               |  
|Cash contributions                       |  |     | 1    |           |   |                |   |                  | 69   |        |   |               |  
|Cash distributions                       |  |     | (813 | )         |   |                |   |                  |     |        |   |               |  
|                                         |  |     |      |           |   |                 |   |                  |      |        |   |                |  
|Equity, before inter-company adjustments |  |     |     |           |   | 1,473           |   |                  | (330 | )      |   | 20             |  
|                                         |  |     |      |           |   |                 |   |                  |      |        |   |                |  
|Intercompany transactions:               |  |     |      |           |   |                 |   |                  |      |        |   |                |  
|Receivable (payable), net                |  |     | 18   |           |   | (8              | ) |                  | 291  |        |   | (20            | )
|                                         |  |     |      |           |   |                 |   |                  |      |        |   |                |  
|Investment in unconsolidated affiliates  |  | $   | 18   |           | $ | 1,465           |   | $                | (39  | )      | $ |               |  
|                                         |  |     |      |           |   |                 |   |                  |      |        |   |                |  

|                                         |  | Pacific Park |      | Eagle Run, Inc. |   | Eagle Run |   | Radius |     | Lakeview |   | Total | 
|---------------------------------------- |  | ------------ | ---- | --------------- | - | --------- | - | ------ | --- | -------- | - | ----- | 
|                                         |  |              |      |                 |   |           |   |        |     |          |   |       | 
|Opening balance at beginning of period   |  | $            |     |                 | $ | (501      | ) | $      | 375 |          | $ |      | 
|Equity in earnings (loss) of affiliates  |  |              | 39   |                 |   | 47        |   |        | 35  |          |   | 17    | 
|Cash contributions.                      |  |              |     |                 |   |          |   |        |    |          |   | 1,162 | 
|Cash distributions                       |  |              |     |                 |   | (343      | ) |        |    |          |   |      | 
|                                         |  |              |      |                 |   |           |   |        |     |          |   |       | 
|Equity, before inter-company adjustments |  |              | 39   |                 |   | (797      | ) |        | 410 |          |   | 1,179 | 
|                                         |  |              |      |                 |   |           |   |        |     |          |   |       | 
|Intercompany transactions:               |  |              |      |                 |   |           |   |        |     |          |   |       | 
|Receivable (payable), net                |  |              | (654 | )               |   | 30        |   |        | 48  |          |   |      | 
|                                         |  |              |      |                 |   |           |   |        |     |          |   |       | 
|Investment in unconsolidated affiliates  |  | $            | (615 | )               | $ | (767      | ) | $      | 458 |          | $ | 1,179 | 
|                                         |  |              |      |                 |   |           |   |        |     |          |   |       | 

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G&L REALTY CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
CONTINUED (Unaudited)

Following is a summary of the condensed financial information of each of the unconsolidated affiliates as of
and for the three months ended September 30, 2002.   (In thousands).

|                                 |                              | GLN |   | San Pedro |   | Penasquitos LLC |        | Penasquitos Inc. |      | Aurora |   | Heritage Place |    
|-------------------------------- | ---------------------------- | --- | - | --------- | - | --------------- | ------ | ---------------- | ---- | ------ | - | -------------- | ---
|                                 |                              |     |   |           |   |                 |        |                  |      |        |   |                |    
|Financial Position:              |                              |     |   |           |   |                 |        |                  |      |        |   |                |    
|                                 | Land                         |     | $ |          |   | $               | 2,011  |                  | $    | 641    |   | $              |   
|                                 | Buildings                    |     |   |          |   |                 | 4,218  |                  |      | 6,103  |   |                |   
|                                 | Notes receivable, net        |     |   |          |   |                 |       |                  |      |       |   |                |   
|                                 | Other assets                 |     |   | 8         |   |                 | 374    |                  |      | 1,227  |   |                |   
|                                 | Notes payable                |     |   |          |   |                 | (4,566 | )                |      | (8,385 | ) |                |   
|                                 | Other liabilities            |     |   | (8        | ) |                 | (855   | )                |      | (359   | ) |                | (10
|                                 |                              |     |   |           |   |                 |        |                  |      |        |   |                |    
|Net assets                       |                              | $   |  |           | $ | 1,182           |        | $                | (773 | )      | $ | (10            | )  
|                                 |                              |     |   |           |   |                 |        |                  |      |        |   |                |    
|Partners equity:                |                              |     |   |           |   |                 |        |                  |      |        |   |                |    
|                                 | G&L Realty Partnership, L.P  |     | $ |          |   | $               | 1,473  |                  | $    | (330   | ) | $              | 20 
|                                 | Others                       |     |   |          |   |                 | (291   | )                |      | (443   | ) |                | (30
|                                 |                              |     |   |           |   |                 |        |                  |      |        |   |                |    
|Total equity                     |                              | $   |  |           | $ | 1,182           |        | $                | (773 | )      | $ | (10            | )  
|                                 |                              |     |   |           |   |                 |        |                  |      |        |   |                |    
|Operations:                      |                              |     |   |           |   |                 |        |                  |      |        |   |                |    
|                                 | Revenues                     |     | $ | 9         |   | $               | 893    |                  | $    | 682    |   | $              |   
|                                 | Expenses                     |     |   |          |   |                 | (722   | )                |      | (764   | ) |                |   
|                                 |                              |     |   |           |   |                 |        |                  |      |        |   |                |    
|Net income (loss)                |                              | $   | 9 |           | $ | 171             |        | $                | (82  | )      | $ |               |    
|                                 |                              |     |   |           |   |                 |        |                  |      |        |   |                |    
|Allocation of net (loss) income: |                              |     |   |           |   |                 |        |                  |      |        |   |                |    
|                                 | G&L Realty Partnership, L.P. |     | $ | 5         |   | $               | 122    |                  | $    | (41    | ) | $              |   
|                                 | Others                       |     |   | 4         |   |                 | 49     |                  |      | (41    | ) |                |   
|                                 |                              |     |   |           |   |                 |        |                  |      |        |   |                |    
|Net income (loss)                |                              | $   | 9 |           | $ | 171             |        | $                | (82  | )      | $ |               |    
|                                 |                              |     |   |           |   |                 |        |                  |      |        |   |                |    
|                                 |                              |     |   |           |   |                 |        |                  |      |        |   |                |    



|                                 |                              | Pacific Park |     | Eagle  Run Inc. |   | Eagle Run |        | Radius |     | Lakeview |   | Total |       
|-------------------------------- | ---------------------------- | ------------ | --- | --------------- | - | --------- | ------ | ------ | --- | -------- | - | ----- | ------
|                                 |                              |              |     |                 |   |           |        |        |     |          |   |       |       
|Financial Position:              |                              |              |     |                 |   |           |        |        |     |          |   |       |       
|                                 | Land                         |              | $   | 822             |   | $         |       |        | $   | 1,191    |   | $     | 200   
|                                 | Buildings                    |              |     | 2,911           |   |           |       |        |     | 4,569    |   |       | 5,793 
|                                 | Notes receivable, net        |              |     |                |   |           |       |        |     |         |   |       |      
|                                 | Other assets                 |              |     | 1,564           |   |           | 438    |        |     | 1,468    |   |       | 1,010 
|                                 | Notes payable                |              |     | (4,593          | ) |           |       |        |     | (7,025   | ) |       | (5,467
|                                 | Other liabilities            |              |     | (457            | ) |           | (1,390 | )      |     | (45      | ) |       | (8    
|                                 |                              |              |     |                 |   |           |        |        |     |          |   |       |       
|Net assets                       |                              | $            | 247 |                 | $ | (952      | )      | $      | 158 |          | $ | 1,528 |       
|                                 |                              |              |     |                 |   |           |        |        |     |          |   |       |       
|Partners equity:                |                              |              |     |                 |   |           |        |        |     |          |   |       |       
|                                 | G&L Realty Partnership, L.P  |              | $   | 39              |   | $         | (797   | )      | $   | 410      |   | $     | 1,179 
|                                 | Others                       |              |     | 208             |   |           | (155   | )      |     | (252     | ) |       | 349   
|                                 |                              |              |     |                 |   |           |        |        |     |          |   |       |       
|Total equity                     |                              | $            | 247 |                 | $ | (952      | )      | $      | 158 |          | $ | 1,528 |       
|                                 |                              |              |     |                 |   |           |        |        |     |          |   |       |       
|Operations:                      |                              |              |     |                 |   |           |        |        |     |          |   |       |       
|                                 | Revenues                     |              | $   | 585             |   | $         | 2,611  |        | $   | 709      |   | $     | 294   
|                                 | Expenses                     |              |     | (506            | ) |           | (2,518 | )      |     | (639     | ) |       | (272  
|                                 |                              |              |     |                 |   |           |        |        |     |          |   |       |       
|Net income (loss)                |                              | $            | 79  |                 | $ | 93        |        | $      | 70  |          | $ | 22    |       
|                                 |                              |              |     |                 |   |           |        |        |     |          |   |       |       
|Allocation of net (loss) income: |                              |              |     |                 |   |           |        |        |     |          |   |       |       
|                                 | G&L Realty Partnership, L.P. |              | $   | 39              |   | $         | 47     |        | $   | 35       |   | $     | 17    
|                                 | Others                       |              |     | 40              |   |           | 46     |        |     | 35       |   |       | 5     
|                                 |                              |              |     |                 |   |           |        |        |     |          |   |       |       
|Net income (loss)                |                              | $            | 79  |                 | $ | 93        |        | $      | 70  |          | $ | 22    |       
|                                 |                              |              |     |                 |   |           |        |        |     |          |   |       |       

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G&L REALTY CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

7.  SEGMENT INFORMATION

The Companys business currently consists of the
following segments:

| |  | Medical office buildings  These investments consist of 24 high quality MOBs, two retail facilities and one parking facility totaling approximately 875,000 square feet and all
located in Southern California.  These properties are owned either directly by the Company or indirectly through joint ventures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |  | Skilled nursing facilities  These investments consist of eight SNFs and one senior apartment complex which is located adjacent to the SNF in Phoenix, Arizona.  The SNFs
are located in Hampden, Massachusetts; Phoenix, Arizona; Hoquiam, Washington; Hyattsville, Maryland and Chico, California.  Seven of the SNFs and the apartment complex are owned 100% by the Company.  On April 10, 2002, the Company
acquired, through a joint venture, a 75% interest in a 120-bed SNF in Massachusets.  In addition, the Company currently holds the operating licenses in three of the eight SNFs.  On March 15, 2000, the Company obtained licenses from the
Commonwealth of Massachusetts to operate the three SNFs owned by the Company in Hampden, Massachusetts.  The Company then entered into a management agreement with a third-party company to manage the facility.  As a result, all of the
assets, liabilities, revenues and expenses of these SNFs are reflected in the condensed consolidated financial statements of the Company and the segment information provided below.  The Company will be required to pay the applicable corporate
income tax on any net income produced by the SNFs located in Hampden, Massachusetts, although the Companys REIT status will not be affected.  While the Company does not intend to hold these operating licenses for the long term, the
Company believes it is currently in the best interests to own the licenses to operate these facilities.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |  | Assisted living facilities   These investments consist of five ALFs, all owned through joint ventures.  The five ALFs contain over 350 units that are typically
occupied by residents who require a less intense level of care in comparison to the SNFs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |  | Debt obligations  These investments consist of short-term secured and unsecured loans made to third parties to facilitate the acquisition of healthcare facilities.  As of
September 30, 2002, the Company had eight loans outstanding with a net book value of $1.9 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

The tables on the following pages reconcile the
Companys income and expense activity for the nine months ended September 30, 2002 and 2001 and balance sheet data as of September 30, 2002.

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G&L REALTY CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

2002 Reconciliation of Reportable Segment InformationFor the nine months ended September 30, 2002

|                                                        |                                                      | Medical Office |       | Skilled Nursing |   | Assisted Living |        | Debt Obligations |      | Other |   | Total |      
|------------------------------------------------------- | ---------------------------------------------------- | -------------- | ----- | --------------- | - | --------------- | ------ | ---------------- | ---- | ----- | - | ----- | -----
|                                                        |                                                      |                |       |                 |   |                 |        |                  |      |       |   |       |      
|                                                        |                                                      | (In thousands) |      
|Revenue:                                                |                                                      |                |       |                 |   |                 |        |                  |      |       |   |       |      
|                                                        | Rents, tenant reimb. and parking                     |                | $     | 20,891          |   | $               | 2,047  |                  | $    | 2,173 |   | $     |     
|                                                        | Patient revenues                                     |                |       |                |   |                 | 18,125 |                  |      |      |   |       |     
|                                                        | Interest and loan fees                               |                |       | 33              |   |                 | 25     |                  |      |      |   |       | 2,154
|                                                        | Other income                                         |                |       | 568             |   |                 | 769    |                  |      |      |   |       |     
|                                                        |                                                      |                |       |                 |   |                 |        |                  |      |       |   |       |      
|                                                        | Total revenues                                       |                |       | 21,492          |   |                 | 20,966 |                  |      | 2,173 |   |       | 2,154
|                                                        |                                                      |                |       |                 |   |                 |        |                  |      |       |   |       |      
|Expenses:                                               |                                                      |                |       |                 |   |                 |        |                  |      |       |   |       |      
|                                                        | Property operations                                  |                |       | 6,042           |   |                 | 520    |                  |      | 170   |   |       | 68   
|                                                        | Skilled nursing operations                           |                |       |                |   |                 | 15,915 |                  |      |      |   |       |     
|                                                        | Depreciation and amortization                        |                |       | 3,255           |   |                 | 1,014  |                  |      | 384   |   |       |     
|                                                        | Corporate tax expense                                |                |       |                |   |                 | 120    |                  |      |      |   |       |     
|                                                        | Interest                                             |                |       | 6,514           |   |                 | 1,434  |                  |      | 1,882 |   |       | 150  
|                                                        | Provision for doubtful accounts and notes receivable |                |       | 10              |   |                 | 498    |                  |      | 150   |   |       | 80   
|                                                        | General and administrative                           |                |       |                |   |                 |       |                  |      |      |   |       |     
|                                                        |                                                      |                |       |                 |   |                 |        |                  |      |       |   |       |      
|                                                        | Total expenses                                       |                |       | 15,821          |   |                 | 19,501 |                  |      | 2,586 |   |       | 298  
|                                                        |                                                      |                |       |                 |   |                 |        |                  |      |       |   |       |      
|Income (loss) from operations                           |                                                      |                | 5,671 |                 |   | 1,465           |        |                  | (413 | )     |   | 1,856 |      
|Equity in earnings (loss) of unconsolidated affiliates  |                                                      |                | 162   |                 |   | 17              |        |                  | (182 | )     |   | 5     |      
|                                                        |                                                      |                |       |                 |   |                 |        |                  |      |       |   |       |      
|Income (loss) from operations before minority interests |                                                      | $              | 5,833 |                 | $ | 1,482           |        | $                | (595 | )     | $ | 1,861 |      
|                                                        |                                                      |                |       |                 |   |                 |        |                  |      |       |   |       |      
|                                                        |                                                      |                |       |                 |   |                 |        |                  |      |       |   |       |      

2001 Reconciliation of Reportable Segment InformationFor the nine months ended September 30, 2001

|                                                        |                                                      | Medical Office |       | Skilled Nursing |   | Assisted Living |        | Debt Obligations |      | Other |   | Total |      
|------------------------------------------------------- | ---------------------------------------------------- | -------------- | ----- | --------------- | - | --------------- | ------ | ---------------- | ---- | ----- | - | ----- | -----
|                                                        |                                                      |                |       |                 |   |                 |        |                  |      |       |   |       |      
|                                                        |                                                      | (In thousands) |      
|Revenue:                                                |                                                      |                |       |                 |   |                 |        |                  |      |       |   |       |      
|                                                        | Rents, tenant reimb. And parking                     |                | $     | 19,105          |   | $               | 1,356  |                  | $    | 2,060 |   | $     |     
|                                                        | Patient revenues                                     |                |       |                |   |                 | 15,650 |                  |      |      |   |       |     
|                                                        | Interest and loan fees                               |                |       | 113             |   |                 | 6      |                  |      | 1     |   |       | 1,212
|                                                        | Lease termination income                             |                |       | 2,613           |   |                 |       |                  |      |      |   |       |     
|                                                        | Other income                                         |                |       | 193             |   |                 | 748    |                  |      |      |   |       |     
|                                                        |                                                      |                |       |                 |   |                 |        |                  |      |       |   |       |      
|                                                        | Total revenues                                       |                |       | 22,024          |   |                 | 17,760 |                  |      | 2,061 |   |       | 1,212
|                                                        |                                                      |                |       |                 |   |                 |        |                  |      |       |   |       |      
|Expenses:                                               |                                                      |                |       |                 |   |                 |        |                  |      |       |   |       |      
|                                                        | Property operations                                  |                |       | 5,994           |   |                 | 308    |                  |      | 133   |   |       | 108  
|                                                        | Skilled nursing operations                           |                |       |                |   |                 | 14,076 |                  |      |      |   |       |     
|                                                        | Depreciation and amortization                        |                |       | 3,316           |   |                 | 776    |                  |      | 383   |   |       |     
|                                                        | Provision for doubtful accounts and notes receivable |                |       | 44              |   |                 | 414    |                  |      |      |   |       | 49   
|                                                        | Corporate tax expense                                |                |       |                |   |                 | 212    |                  |      |      |   |       |     
|                                                        | Interest                                             |                |       | 6,801           |   |                 | 1,261  |                  |      | 1,136 |   |       | 539  
|                                                        | General and administrative                           |                |       |                |   |                 |       |                  |      |      |   |       |     
|                                                        |                                                      |                |       |                 |   |                 |        |                  |      |       |   |       |      
|                                                        | Total expenses                                       |                |       | 16,155          |   |                 | 17,047 |                  |      | 1,652 |   |       | 696  
|                                                        |                                                      |                |       |                 |   |                 |        |                  |      |       |   |       |      
|Income (loss) from operations                           |                                                      |                | 5,869 |                 |   | 713             |        |                  | 409  |       |   | 516   |      
|Equity in earnings (loss) of unconsolidated affiliates  |                                                      |                | 152   |                 |   |                |        |                  | (242 | )     |   | (2    | )    
|                                                        |                                                      |                |       |                 |   |                 |        |                  |      |       |   |       |      
|Income (loss) from operations before minority interests |                                                      | $              | 6,021 |                 | $ | 713             |        | $                | 167  |       | $ | 514   |      
|                                                        |                                                      |                |       |                 |   |                 |        |                  |      |       |   |       |      
|                                                        |                                                      |                |       |                 |   |                 |        |                  |      |       |   |       |      

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##### Table of Contents

G&L REALTY CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
CONTINUED (Unaudited)

2002 Reconciliation of Reportable Segment InformationAs of  September 30, 2002

|                                         |              | Medical Office |         | Skilled Nursing |   | Assisted Living |        | Debt Obligations |        | Other  |   | Total |      
|---------------------------------------- | ------------ | -------------- | ------- | --------------- | - | --------------- | ------ | ---------------- | ------ | ------ | - | ----- | -----
|                                         |              |                |         |                 |   |                 |        |                  |        |        |   |       |      
|                                         |              | (In thousands) |        
|Rental properties, net                   |              | $              | 110,143 |                 | $ | 39,159          |        | $                | 20,989 |        | $ |      |      
|Mortgage loans and notes receivable, net |              |                |        |                 |   | 268             |        |                  |       |        |   | 1,687 |      
|Cash and cash equivalents                |              |                | 1,341   |                 |   | 953             |        |                  | (3     | )      |   |      |      
|Restricted cash                          |              |                | 2,280   |                 |   | 869             |        |                  | 233    |        |   |      |      
|Tenant rent and reimb. receivable, net   |              |                | 630     |                 |   | 4,107           |        |                  | 2,243  |        |   |      |      
|Unbilled rent receivable, net            |              |                | 2,964   |                 |   |                |        |                  |       |        |   |      |      
|Investment in unconsolidated affiliates  |              |                | 850     |                 |   | 1,180           |        |                  | 2,096  |        |   | 18    |      
|Deferred loan costs, net                 |              |                | 3,399   |                 |   | 734             |        |                  | 558    |        |   |      |      
|Deferred lease costs, net                |              |                | 755     |                 |   |                |        |                  |       |        |   |      |      
|Prepaid expense and other                |              |                | 552     |                 |   | 360             |        |                  | 42     |        |   |      |      
|                                         |              |                |         |                 |   |                 |        |                  |        |        |   |       |      
|                                         | Total assets |                | $       | 122,914         |   | $               | 47,630 |                  | $      | 26,158 |   | $     | 1,705
|                                         |              |                |         |                 |   |                 |        |                  |        |        |   |       |      

8.  COMMITMENTS AND CONTINGENCIES

Neither the Company, the Operating Partnership, the Financing Entities, the Subsidiaries, Maryland Gardens, the Roxbury Partnership, Valencia, Pacific Gardens,
Hoquiam, Lyons, Coronado, Tarzana, Heritage, Massachusetts, Aspen, Tustin II, Tustin III, St. Thomas More, the Unconsolidated Affiliates nor any of the assets within their portfolios of MOBs, parking facilities, and retail space (the
Properties) is currently a party to any material litigation, except as discussed below.

In February 2000, the Operating
Partnership filed a declaratory relief action in the New Jersey State Court seeking a determination that LaSalle National Bank (LaSalle) did not have any rights against certain assets held by the Operating Partnership.  In December
2001, the Operating Partnership entered a settlement agreement with LaSalle whereby it would pay LaSalle $1.1 million and assign certain claims in full satisfaction of any amounts owed by the Operating Partnership to LaSalle.  The Operating
Partnership paid the $1.1 million to LaSalle in January 2002.

In November 1999, Landmark Healthcare Facilities, LLC (Landmark)
filed a lawsuit against Valencia, a subsidiary of the Company, entitled Landmark Healthcare Facilities, LLC v. G&L Valencia, LLC, case number 816391 in the Superior Court of California, County of Orange, claiming that Landmark is entitled to
approximately $600,000 plus interest under an agreement for the development of an MOB in Valencia, California.  In December 1999, the Company filed a counter suit to recover approximately $400,000 plus interest that was already paid under the
development agreement and for a judgment and declaration that all of Landmarks rights, title and interest in Valencia have been terminated or assigned to the Company.  On July 5, 2001, the court issued a ruling in favor of the Company in
an amount in excess of $900,000.  In January 2002, the Company accepted a settlement offer for $310,000 to be paid off over 10 months.    The Company was repaid in full in May 2002.

In January 2001, the Company settled a lawsuit with Cigna Healthcare, Inc and Cigna Healthcare of California (Cigna) and received a settlement of $4.1
million.  The settlement ended litigation against Cigna for delinquent rent, future rent and other amounts owed under a lease at the Companys MOB located in Irwindale, California.  At the time of the settlement the total delinquent
rent was approximately $1.5 million.  The Company recorded lease termination income of $2.6 million in the first quarter of 2001 for the remainder of the proceeds.

There are a number of stockholder class actions pending against the Company and its directors that arose out of the proposal by Daniel M. Gottlieb, the Chief
Executive Officer of the Company, and Steven D. Lebowitz, the

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G&L REALTY CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
CONTINUED (Unaudited)

President of the Company, to acquire all of the outstanding shares of the Companys common stock not then owned by them.  The first suit, Lukoff v. G & L
Realty Corp. et al., case number BC 241251, was filed in the Superior Court for the State of California, County of Los Angeles, on December 4, 2000.  A second suit, Abrons v. G & L Realty Corp. et al., case number 24-C-00-006109, was filed
in the Circuit Court for Baltimore City, Maryland, on December 14, 2000.  This suit was voluntarily dismissed without prejudice on June 7, 2001, and re-filed in the Superior Court for the State of California, County of Los Angeles, case number
BC 251479, on May 31, 2001.  Morse v. G & L Realty Corp. et al., case number 221719-V, was filed in the Circuit Court for Montgomery County, Maryland, on May 17, 2001.  Another suit, Harbor Finance Partners v. Daniel M. Gottlieb et
al., case number BC 251593, was filed in the Superior Court for the State of California, County of Los Angeles, on June 1, 2001.  In addition, on April 5, 2002, four former stockholders filed an individual suit in the Superior Court for the
State of California, County of Los Angeles, Lyle Weisman, et al., v. G&L Realty Corp., et al., case number BC 271401.  All these actions assert claims for breach of fiduciary duty and seek compensatory damages and other relief.  The
Lukoff, Abrons and Harbor Finance actions have been consolidated for all purposes.  The Morse action has been stayed by stipulation of the parties subject to approval of the court.

The Company is the guarantor on a $300,000 letter of credit in favor of NVHF Affiliates, LLC (NVHF), a non-profit low-income apartment owner.  In
December 1999, the Company purchased $1.3 million of subordinated bonds issued by NVHF for the acquisition of an apartment complex located in Tulsa, Oklahoma.  In order to facilitate the acquisition of the property, the Company agreed to
guarantee a letter of credit issued by the Bank of Oklahoma.  The letter of credit was established to pay the interest payments on the secured debt of the property in the event the cash flow of the property was insufficient to meet such
payments.  To date, the letter of credit has not been accessed and the property is current on its interest payments to all debt holders.  The Companys maximum liability under the guarantee is $300,000, although the Company does not
anticipate having to pay anything under this letter of credit.  As such, the Company has recorded no liability on its balance sheet related to this guarantee as of September 30, 2002.  In addition, the Company holds an unsecured promissory
note from NVHF in the amount of $562,000. The Company has held the note for almost three years and NVHF is current on all payments due under the terms of the note.

9.  ACQUISITIONS, DISPOSITIONS AND FINANCINGS

In January 2002, the Company received proceeds of
$4.6 million related to the sale of a 183-bed hospital located in Tustin, California.   The Company used $2.3 million of these proceeds to repay an outstanding loan on the hospital that was due in January 2002.  Under SFAS 144, the
Company is required to recognize any gain or loss on the sale of an asset as a gain or loss from discontinued operations in the statement of operations.  The Company recorded a gain from discontinued operations of $2.5 million related to this
sale.

In January 2002, the Company received proceeds of $10.8 million related to the repayment of two notes receivable  from
Heritage Care, Inc, the operator of a SNF located in Hyattsville, Maryland (the Heritage Care Notes).  The Company used the proceeds to repay an outstanding loan balance of $8.3 million secured by the Heritage Care Notes.  The
Company recognized $1.5 million of non-recurring interest income in the first quarter as a consequence of the early repayment of the Heritage Care Notes.  Upon repayment of the notes, the Company purchased the SNF for $14.9 million which
included the assumption of a new $11.9 million loan bearing interest at 7.05% per annum, due in January 2027 and secured by the SNF.

In
January 2002, the Company received cash proceeds of $0.7 million as return of capital related to its investment in GLN.  In May 1997, the Company, through GLN, funded a secured loan of approximately $1.5 million to a limited partnership created
to acquire a recreational vehicle park in Florida for approximately $1.2 million.  The loan provided for monthly interest only payments and was in default as of December 31, 2001.  In January 2002, the borrower sold the property for
approximately $1.8 million and repaid the outstanding loan balance due GLN.

In April 2002, the Company acquired, through a joint venture, a
120-bed SNF in Massachusetts for approximately $6.5 million.  The Company funded approximately $1.0 million in order to acquire a 75% interest in

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G&L REALTY CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -
CONTINUED (Unaudited)

this property through a joint venture with Radius Development Ring, LLC, the operator of the facility. The joint venture borrowed $5.5 million to finance the property
acquisition. The loan bears interest at 6.9% per annum and is due in 35 years.  The Companys interest in the joint venture will be reduced to 50% after the Company has received a return of its initial capital contribution plus a preferred
return on its initial contribution.

In May 2002, the Company received proceeds of $0.3 million related to the sale of a SNF located in Paso
Robles, California.   Under SFAS 144, the Company is required to recognize any gain or loss on the sale of an asset as a gain or loss from discontinued operations in the statement of operations.  The Company recorded a loss from
discontinued operations of $0.1 million related to this sale.

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|Item 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

The following discussion should be read in conjunction with the Companys Unaudited
Condensed Consolidated Financial Statements and Notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the Companys 2001 Annual Report on Form 10-K as previously filed with the SEC.

Information contained in Managements Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking
statements.  These statements can be identified by the use of forward-looking terminology such as may, will, expect, anticipate, estimate or continue or the negative
thereof or other comparable terminology.  Any one factor or combination of factors could cause the Companys actual operating performance or financial results to differ substantially from those anticipated by management.  
Factors influencing the Companys operating performance and financial results include, but are not limited to, changes in the general economy, the supply of, and demand for, healthcare related real estate in markets in which the Company has
investments, the availability of financing, governmental regulations concerning, but not limited to, new construction and development, the creditworthiness of tenants and borrowers, environmental issues, healthcare services and government
participation in the financing thereof, and other risks and unforeseen circumstances affecting the Companys investments which may be discussed elsewhere in this Quarterly Report on Form 10-Q and the Companys 2001 Annual Report on Form
10-K as previously filed with the SEC.

Results of Operations

Comparison of the
Nine Month Period Ended September 30, 2002 versus the Nine Month Period Ended September 30, 2001.

Total revenues increased by $3.7
million, or 9%, from $43.2 million in the nine months ending September 30, 2001, to $46.9 million for the same period in 2002.  The increase was due to an increase in rental revenues and tenant reimbursements of $2.8 million, an increase in
patient revenues of $2.5 million and an increase in interest and loan fee income of $0.8 million.  These increases were offset by a $2.2 million decrease in lease termination and other income.

Patient revenues relating to the skilled nursing facilities operated by the Company increased by $2.4 million, or 15%, from $15.7 million in the nine months ending
September 30, 2001, to $18.1 million for the same period in 2002 due to increased occupancy and higher patient reimbursement rates.

Rents, tenant reimbursements and parking revenues increased by $2.6 million, or 12%, from $22.5 million in the first nine months of 2001, to $25.1 million for the
same period in 2002.    The January 2002 acquisition of a SNF in Hyattsville, Maryland accounted for $1.1 million of this increase.  In addition, the Company re-leased its MOB located in Irwindale, California accounting for an
increase of $0.3 million.   The MOB was vacant for the first six months of 2001.  Increased occupancy and rental rates per the terms of its lease agreements at the Companys MOB properties accounted for an additional $1.7 million
increase in rental revenue.  These increases were offset by a decrease of $0.3 million due to the January 2002 sale of the hospital located in Tustin, California.

Interest and loan fee income increased by $0.8 million, or 57%, from $1.4 million in the nine months ending September 30, 2002, to $2.2 million for the same period in
2002.  This increase was due to fees associated with the early repayment of the Companys two notes receivable related to a SNF located in Hyattsville, Maryland.

The Company recognized lease termination income in the amount of $2.6 million in the first quarter of 2001.  This was related to the settlement of a lawsuit for
delinquent rent, future rent and other amounts owed under a lease at the Companys MOB located in Irwindale, California.  The Company sued the tenant, which had been in default on their rent since December 1999, to recover the delinquent
rent payments as well as all future rent through the end of the lease which expired on November 30, 2004.  In January 2001, the Company received a settlement in the amount of $4.1 million.  At the time of the settlement the total
delinquent rent was approximately $1.5 million.

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Total expenses increased by $5.9 million, or 16%, from $38.0 million for the nine months ended September 30 2001,
to $43.9 million for the same period in 2002.

Increased skilled nursing operating costs at the three Hampden SNFs accounted for $1.8
million of this increase in total expenses.  This increase was primarily related to rising liability insurance and staffing costs.

Property operating expenses increased approximately $0.3 million, or 5%, from $6.5 million for the nine months ending September 30, 2001 to $6.8 million for the same
period in 2002.   Increased electricity, insurance and repairs and maintenance costs at the Companys MOB properties accounted for this increase.

Depreciation and amortization expense increased $0.2 million, or 4%, from $4.5 million for the nine months ended September 30, 2001, to $4.7 million for the same
period in 2002.  This increase was related to the acquisition of the SNF in Hyattsville, Maryland in January 2002 as well as additions to building improvements and leasing commissions at the end of 2001 and during 2002.

Interest expense increased $3.6 million, or 37%, from $9.8 million for the nine months ended September 30, 2001, to $13.4 million for the same period in
2002.  This increase was due to a $0.9 million loss on the decline in the fair market value of the LIBOR interest rate cap associated with the $35 million loan with GMAC as well as an increase of $2.5 million in interest expense relating to the
same loan.  In addition, the Company recorded $0.7 million of pre-payment fees and the write-off of deferred loan fees relating to the early repayment of $7.3 million in loans secured by an ALF located in Tarzana, California.  These
increases were offset by a $0.5 million decrease in interest expense on the Companys variable rate mortgages due to lower interest rates.  While the Company recognized a $0.9 million loss related to the decline in the fair market value of
its LIBOR interest rate cap, the value of the LIBOR interest rate cap fluctuates based upon current prevailing market interest rates.  For the year ended December 31, 2001, the Company recognized a $0.5 million gain on the fair market value of
its LIBOR interest rate cap, thus, the net effect on earnings since the Companys purchase of this financial instrument has been a $0.4 million loss.

General & administrative costs decreased $0.1 million, or 4%, from $2.5 million for the nine months ended September 30, 2001, to $2.4 million for the same period
in 2002.  This decrease was attributed to a non-recurring first quarter 2001 write off of acquisition and construction costs related to a discontinued development project.

Provisions for doubtful accounts, notes and bonds receivable increased by $0.2 million, or 40%, from $0.5 million for the nine months ended September 30, 2001, to
$0.7 million for the same period in 2002.  This increase is the result of the Companys concern about the collectibility of its rents receivable related to its SNF located in Hoquaim, Washington.

Equity in earnings of unconsolidated affiliates increased $0.1 million for the nine months ended September 30, 2002 compared to the same period in 2001.  This
increase was primarily the result of increased occupancy rates at the Penasquitos and Eagle Run ALFs.  In addition, income related to the Companys 50% investment in a 23,000 square foot MOB located in Aliso Viejo, California contributed
to the increase.

Corporate income tax expense decreased by $0.1 million, or 50%, from $0.2 million for the nine months ended September 30,
2001, to $0.1 million for the same period in 2002.  This estimated tax liability is related to federal taxes due on net income earned at the Companys skilled nursing facilities located in Hampden,
Massachusetts.

The Company recognized a net gain on the sale of assets
in the amount of $2.3 million in the nine months ending September 30, 2002.   The sale, in January 2002, of a 183-bed hospital located in Tustin, California to Pacific Health Corporation, the operator of the hospital, accounted for a gain
of $2.4 million. This gain was offset by a loss of $0.1 million due to the sale, in May 2002, of a SNF located in Paso Robles, California.

Net income increased $0.3 million, from $4.7 million for the nine months ended September 30, 2001 to $5.0 million for the same period in 2002.  This increase was
primarily due to the $2.3 million gain on sale of assets, the $2.5 million increase in patient revenues, the $2.8 million increase in rents, tenant reimbursements and parking revenues and the $0.8 million increase in interest and loan fee
income.  These were offset by the

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$3.6 million increase in interest expense, the $2.6 million decrease in lease termination income and the $1.8 million increase in skilled nursing operations.

Comparison of the Three Month Period Ended September 30, 2002 versus the Three Month Period Ended September 30, 2001.

Total revenues increased by $1.7 million, or 12%, from $13.8 million in the third quarter of 2001, to $15.5 million for the same period in 2002.

Patient revenues relating to the skilled nursing facilities operated by the Company increased by $1.2 million, or 23%, from $5.3 million
in the third quarter of 2001, to $6.5 million for the same period in 2002 due to increased occupancy.

Rents, tenant
reimbursements and parking revenues increased by $0.6 million, or 8%, from $7.6 million in the third quarter of 2001, to $8.2 million for the same period in 2002.    The January 2002 acquisition of a SNF in Hyattsville, Maryland
accounted for $0.4 million of this increase.   Increased occupancy and rental rates per the terms of its lease agreements at the Companys MOB properties accounted for an additional $0.5 million increase in rental revenue.  These
increases were offset by a decrease of $0.1 million due to the January 2002 sale of the hospital located in Tustin, California.

Interest and loan fee income decreased by $0.2 million, or 50%, from $0.4 million in the third quarter of 2001, to $0.2 million for the same period in 2002. 
This decrease is due to the repayment of the Companys two notes receivable related to a SNF located in Hyattsville, Maryland in January 2002.

Total expenses increased by $1.8 million, or 14%, from $13.0 million for the three months ended September 30, 2001, to $14.8 million for the same period in 2002.

Increased skilled nursing operating costs at the three Hampden SNFs accounted for $0.8 million of this increase in total expenses. 
This increase was primarily related to rising insurance and staffing costs.

Property operating
expenses increased approximately $0.1 million, or 4%, from $2.3 million in the third quarter of 2001 to $2.4 million for the same period in 2002.   Increased insurance costs at the Companys MOB properties accounted for this increase.

Interest expense increased $0.9 million, or 27%, from $3.3 million for the three months ended September 30, 2001, to $4.2 million for the
same period in 2002.  This increase was due to an increase of $0.8 million in interest expense associated with the $35 million loan with GMAC obtained in October 2002.  In addition, the Company recorded a  loss of $0.3 million related
to the decline in the fair market value of the LIBOR interest rate cap associated with the same loan.  These increases were offset by a $0.2 million decrease in interest expense on the Companys variable rate mortgages due to lower
interest rates.

Provisions for doubtful accounts, notes and bonds receivable remained unchanged, from $0.2 million for the three months
ended September 30, 2001 to $0.2 million for the same period in 2002.

Equity in earnings of unconsolidated affiliates decreased $0.2
million for the three months ended September 30, 2002 compared to the same period in 2001.  This decrease was primarily the result of losses associated with the Companys 50% investment in an ALF located in Yorba Linda, California. 
The facility opened in March 2002 and will be producing a net loss until it reaches stabilized occupancy. The Company currently estimates that the facility will produce a positive net operating income before debt service by the second quarter
of 2003 and reach stabilized occupancy by the end of 2003.

Corporate income tax expense decreased by $0.1 million, or 50%,
from $0.2 million for the three months ended September 30, 2001, to $0.1 million for the same period in 2002.  This estimated tax liability is related to federal taxes due on net income earned at the Companys skilled nursing facilities
located in Hampden, Massachusetts.

Net income remained unchanged, from
$0.6 million for the three months ended September 30, 2001 to $0.6 million for the same period in 2002.

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Liquidity and Capital Resources

As of September 30,
2002, the Companys direct investment in net real estate assets totaled $170.5 million, $4.1 million in joint ventures and $1.9 million invested in notes receivable.  Total debt outstanding as of September 30, 2002 totaled $190.7 million.

The Company obtains its liquidity from multiple internal and external sources.  Internally, funds are derived from the operation of
MOBs, SNFs, ALFs and senior care lending activities.   The MOB Properties produced approximately $5.8 million of income before minority interests for the nine months ended September 30, 2002.  The MOB Properties contain approximately
875,000 rentable square feet and, as of September 30, 2002, were approximately 97.5% leased to over 425 tenants with lease terms typically ranging from three to ten years.   The ALFs and SNFs produced approximately $0.9 million of income
before minority interests for the nine months ended September 30, 2002.  All of the ALFs and SNFs, except for the three SNFs located in Hampden, Massachusetts where the Company holds the operating licenses and has entered into a management
agreement with a local operator, are leased to operators who are responsible for the management of the facilities.  All of the leases are for five years or less with non-credit tenants.  In the event that the operators of these facilities
are unable to effectively operate the facilities, the ability of the operators to make rental payments to the Company may become impaired and the Company may need to commit additional capital to the facilities in order to keep them operating. 
If any of these operators experience financial difficulty, the financial position of the Company and the ability of the Company to make expected distributions would likely be adversely affected.

The Companys principal external sources of capital consist of various secured loans.  As of September 30, 2002, the Company had loans outstanding of
approximately $190.7 million.   While the Company will still consider selective property acquisitions that are accretive to earnings, the Companys primary goal over the next few years is to reduce the balance on the $35 million loan
obtained from GMAC in October 2001.  The balance on the loan as of September 30, 2002 was $33.5 million. The Companys ability to reduce the balance on the $35 million loan along with its ability to make selective acquisitions requires
continued access to capital.  If the Company is unable to obtain access to new capital or to refinance its existing investments, the Companys ability to reduce the balance on the $35 million loan and to expand and even its ability to
maintain its current level of distributions to its stockholders may be impaired.  The Company is also considering selling some of its assets in the future in order to provide additional liquidity.

In 1999, the Companys board of directors approved the repurchase of up to $2 million of the Companys Series A and Series B Preferred Stock. To date, the Company has
repurchased $0.3 million of its Preferred Stock and has made no repurchases in the last two years. The Executive Committee of the board of directors has reaffirmed the Preferred Stock repurchase program on a periodic basis.

During the first nine months of 2002, the Company received proceeds of $4.6 million related to the sale of a 183-bed hospital located in Tustin,
California.   The Company used $2.3 million of these proceeds to repay an outstanding loan on the hospital.  In addition, the Company received proceeds of $10.8 million related to the repayment of two notes receivable from Heritage
Care, Inc.  The Company used the proceeds to repay an outstanding loan balance of $8.3 million secured by the notes.   In January 2002, the Company received $0.7 million as repayment of a promissory note secured by a recreational
vehicle park in Florida.   In May 2002, the Company received proceeds of $0.3 million related to the sale of a SNF located in Paso Robles, California.  Also in May, the Company used the proceeds from a new $8.3 million loan secured by
its ALF located in Tarzana, California to repay three notes totaling $7.3 million secured by the same property.  The new loan bears interest at 6.95% and is due on May 17, 2037.  The net proceeds from these refinancings and sales were used
to provide working capital for the Company.

In September 2002, the Company received an extension on a $13.2 million loan due on October 1,
2002.  The loan, which is secured by three SNFs located in Massachusetts, was extended until January 1, 2003.  Per the terms of the extension, the interest rate on the loan was increased from Libor plus 2.75% per annum to Libor plus 4.0%
per annum.  The Company expects to repay this loan in 2003 using the proceeds from a new long-term loan.  While the Company expects to obtain another extension on this loan, no assurances can be given that the Company will be successful,
or that if an extension is obtained, the terms of the extension will be similar to the current terms of the loan.

The Company paid monthly
dividends of $0.6 million to holders of the Companys Preferred Stock on the fifteenth day of each month during the first, second and third quarters of 2002 to holders of record on the

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first day of each month.  The Company declared no dividends to holders of the Companys Common Stock during the first nine months of 2002.

While the Company is highly leveraged, the Company expects to continue meeting its short-term liquidity requirements through its working capital and cash flow
provided by operations.  The Company also expects to maintain stockholder distributions in accordance with REIT requirements, although no assurances can be given that the current level of distributions will be maintained.  Long-term
liquidity requirements such as refinancing mortgages, financing acquisitions and financing capital improvements will be accomplished through long-term borrowings and the sale of assets. The Company currently has a commitment from GMAC to fund a $4.3
million loan that will be secured by the Companys SNF and adjacent apartment complex located in Phoenix, Arizona. The Company anticipates that this loan will close in the fourth quarter. In addition, Eagle Run, a joint venture in which the
Company owns a 50% interest in an ALF located in Omaha, Nebraska, is under contract to sell the ALF. The Company estimates its share of the net sales proceeds to be $1.8 million and anticipates that this sale will occur in the fourth quarter. The
Company intends to use these proceeds to fund its dividend requirements, make selective acquisitions, repurchase some of its Preferred Stock and for general corporate purposes.

Historical Cash
Flows

The Companys net cash from operating activities decreased $5.8 million, or 64%, from $9.0 million for the nine months ended
September 30, 2001 to $3.2 million for the same period in 2002.  The decrease is due primarily to the change of accounts payable and other liabilities of $3.8 million, a $2.3 million increase in net gain on sale of assets and a $1.6 million
change in tenant rent and reimbursements receivable over 2001.  These were offset by a $0.8 million change in prepaid expenses and other assets, a $0.9 million change in fair market value of the Companys LIBOR interest rate cap and a $0.3
million increase in net income.

Net cash from investing activities increased $16.0 million from a net use of $3.2 million for the nine
months ended September 30, 2001 to net cash provided of $12.8 million for the same period in 2002.  The increase was primarily due to a $9.2 million increase in principal payments received from mortgage loans and notes receivable, a $1.2
million increase in distributions from unconsolidated affiliates, a $1.3 million decrease in additions to rental properties and a $5.1 million increase in the sale of real estate assets.  These were offset by a $1.2 million increase in
contributions to unconsolidated affiliates.

Cash flows used in financing activities increased by approximately $8.8 million from $7.3
million for the nine months ended September 30, 2001, to $16.1 million for the same period in 2002.    The increase is primarily due to a $9.1 million increase in the repayment of notes payable as well as a $2.8 million decrease in
notes payable proceeds.  These were offset by a $1.2 million decrease in restricted cash, a $1.1 million decrease in distributions and a $0.8 million decrease in deferred loan costs.

New Accounting Pronouncements

On January 1, 2002, the Company adopted the provisions of SFAS 142
Goodwill and Other Intangible Assets (SFAS 142) and SFAS 144 Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS 144).  SFAS 142 discontinues the practice of amortizing goodwill and
other intangible assets and requires a periodic review process for impairment.  SFAS 144 addresses financial accounting and reporting for the disposal of long-lived assets and supercedes FAS 121 Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of.  The adoption of these statements did not have a material effect on the Companys results of operations or financial condition

In April 2002, the Financial Accounting Standards Board (FASB) issued SFAS No. 145,Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB
Statement No. 13, and Technical Corrections (SFAS 145). The most significant provisions of this statement relate to the rescission of Statement No. 4 Reporting Gains and Losses from Extinguishment of Debt and it also amends
other existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their applicability under changed conditions. Under SFAS 145, any gain or loss on extinguishment of debt that was classified as an
extraordinary item in prior periods presented that does not meet certain defined criteria must be reclassified.   The provisions of SFAS 145 are effective for fiscal years beginning after May 15, 2002.  Management does not expect that
the adoption of this statement will have a material effect on the Companys results of operations or financial condition.

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##### Table of Contents

In June 2002, FASB issued SFAS 146, Accounting for Costs Associated with Exit or Disposal Activities
(SFAS 146).  SFAS 146 addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force Issue No. 94-3Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity.  SFAS 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred.  The provisions of SFAS 146 are
effective for exit or disposal activities that are initiated after December 31, 2002.  Management does not expect that the adoption of this statement will have a material effect on the Companys results of operations or financial
condition.

Recent Developments

Due to the events of September 11 and the general
insurance environment, the Company expects a large increase in the cost of its property, liability and earthquake insurance upon their renewal in the third quarter of 2002.  Depending on the terms of the lease between the Company and its MOB
tenant, in some cases, the Company is able to pass all of the higher insurance costs onto its MOB tenants; in other cases, the Company is able to pass only a portion of the higher costs onto its MOB tenants, with the Company paying the
remainder.  Generally, the operators of the Companys SNFs and ALFs pay the insurance costs.  However, the higher insurance costs could affect the ability of the MOB tenants and SNF and ALF operators to pay the Company rent which
could have a material adverse effect on the Companys financial condition and results of operations.

In addition, the Company
currently owns a SNF located in Hoquiam, Washington which is leased to Prestige Senior Living, LLC ("Prestige"), a Washington-based operator of skilled nursing facilities. This facility was previously covered by professional liability
insurance under an insurance policy obtained by Prestige. This policy expired in August 2002, and Prestige has been unable to obtain new coverage. Both Prestige and the Company are actively seeking to obtain new coverage, however, no assurances can
be given that Prestige or the Company will be successful in obtaining professional liability coverage for this facility. While the Company believes that Prestige would be responsible for the first position of liability, if a liability-creating event
occurs at the facility while it is uninsured, the Company is unable to assess Prestige's capacity to discharge a significant liability. Therefore, the inability to obtain insurance coverage for the facility could have a material adverse effect on
the Company's financial condition and results of operations if a liability-creating event occurs at the facility while it is uninsured.

Funds from Operations

Industry analysts generally consider FFO to be an appropriate measure of the performance of a REIT.  The Companys financial statements use the concept of
FFO as defined by the Board of Governors of the National Association of Real Estate Investment Trusts (NAREIT).  FFO is calculated to include the minority interests share of income from the Operating Partnership and Senior
Care Partnership since the Operating Partnership and Senior Care Partnerships net income is allocated proportionately among all owners of Operating Partnership and Senior Care Partnership units.  The combined number of Operating
Partnership and Senior Care Partnership units held by the Company is identical to the number of outstanding shares of the Companys Common Stock, and owners of Operating Partnership and Senior Care Partnership units may, at their discretion,
convert their units into shares of Common Stock on a one-for-one basis.

The Company believes that in order to facilitate a clear
understanding of the operating results of the Company, FFO should be examined in conjunction with the Companys net income as presented in this Form 10-Q, the Selected Financial Data and Consolidated Financial Statements and Notes thereto
included in the Companys 2001 Annual Report on Form 10-K and the additional data presented below.  The Companys FFO for the nine months ended September 30, 2002 was $1.8 million compared to $0.9 million for the same period in
2001.  The table on the following page presents an analysis of FFO and additional data for the three and nine- month periods ended September 30, 2002 and 2001.

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G&L REALTY CORP. FUNDS FROM OPERATIONS AND ADDITIONAL DATA(Unaudited)

|                                                            |                                             | For the Three Month Periods Ended September 30, |        | For the Nine Month Periods Ended September 30, |  
|----------------------------------------------------------- | ------------------------------------------- | ----------------------------------------------- | ------ | ---------------------------------------------- | -
|                                                            |                                             |                                                 |        |                                                |  
|                                                            |                                             | 2002                                            |        | 2001                                           |  
|                                                            |                                             |                                                 |        |                                                |  
|                                                            |                                             | (in thousands)                                  |        |                                                |  
|Funds from Operations(1)                                    |                                             |                                                 |        |                                                |  
|Net income                                                  |                                             | $                                               | 570    |                                                | $
|Minority interest in Operating Partnership                  |                                             |                                                 |       |                                                |  
|                                                            |                                             |                                                 |        |                                                |  
|Income for Operating Partnership                            |                                             |                                                 | 570    |                                                |  
|Depreciation of real estate assets                          |                                             |                                                 | 1,332  |                                                |  
|Amortization of deferred lease costs                        |                                             |                                                 | 61     |                                                |  
|Net gain on sale of assets                                  |                                             |                                                 |       |                                                |  
|Lease termination income                                    |                                             |                                                 |       |                                                |  
|Depreciation from unconsolidated affiliates                 |                                             |                                                 | 166    |                                                |  
|Adjustment for minority interest in consolidated affiliates |                                             |                                                 | (37    | )                                              |  
|Dividends on preferred stock                                |                                             |                                                 | (1,790 | )                                              |  
|                                                            |                                             |                                                 |        |                                                |  
|Funds from Operations(1)                                    |                                             | $                                               | 302    |                                                | $
|                                                            |                                             |                                                 |        |                                                |  
|Additional Data                                             |                                             |                                                 |        |                                                |  
|Cash flows:                                                 |                                             |                                                 |        |                                                |  
|                                                            | Operating activities                        |                                                 | $      | 3,262                                          |  
|                                                            | Investing activities                        |                                                 |        | (573                                           | )
|                                                            | Financing activities                        |                                                 |        | (2,345                                         | )
|Capital expenditures                                        |                                             |                                                 |        |                                                |  
|                                                            | Building improvements                       |                                                 | $      | 264                                            |  
|                                                            | Tenant improvements                         |                                                 |        | 120                                            |  
|                                                            | Furniture, fixtures & equipment             |                                                 |        | 147                                            |  
|                                                            | Leasing commissions                         |                                                 |        | 37                                             |  
|Depreciation and amortization                               |                                             |                                                 |        |                                                |  
|                                                            | Depreciation of real estate assets          |                                                 | $      | 1,332                                          |  
|                                                            | Depreciation of non-real estate assets      |                                                 |        | 146                                            |  
|                                                            | Amortization of deferred lease costs        |                                                 |        | 61                                             |  
|                                                            | Amortization of deferred licensing costs    |                                                 |        | 14                                             |  
|                                                            | Amortization of capitalized financing costs |                                                 |        | 206                                            |  
|                                                            | Accrued rent in excess of billed rent       |                                                 | $      | 102                                            |  

|1) | FFO represents net income (computed in accordance with GAAP, consistently applied), excluding gains (or losses) from debt restructuring and sales of property, plus depreciation of
real property, less preferred stock dividends paid to holders of preferred stock during the period and after adjustments for consolidated and unconsolidated entities in which the Company holds a partial interest.  FFO is computed in accordance
with the definition adopted by NAREIT.  FFO should not be considered as an alternative to net income or any other indicator developed in compliance with GAAP, including measures of liquidity such as cash flows from operations, investing and
financing activities.  FFO is helpful in evaluating the performance of a real estate portfolio considering the fact that historical cost accounting assumes that the value of real estate diminishes predictably over time.  FFO is only one of
a range of indicators which should be considered in determining a companys operating performance.  The methods of calculating FFO among different companies are subject to variation, and FFO therefore may be an invalid measure for purposes
of comparing companies.  Also, the elimination of depreciation and gains and losses on sales of property may not be a true indication of an entitys ability to recover its investment in properties.  The Company implemented the new
methods of calculating FFO effective as of the NAREIT-suggested adoption dates of January 1, 1996 and January 1, 2000, respectively.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|Item 3. | QUANTITAT
IVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------- | -----------------------------------------------------------

The primary risk inherent in the
Companys market sensitive instruments is the risk of loss resulting from interest rate fluctuations.  Approximately 32% of the Companys notes payable bear interest at a rate indexed to the one-month LIBOR rate or Prime Rate. 
The table below provides information as of September 30, 2002 about the Companys long-term debt obligations that are sensitive to changes in interest rates, including principal cash flows by scheduled maturity, weighted average interest rate
and estimated fair value.  The weighted average interest rates presented are the actual rates as of September 30, 2002.

|                |                       |                        |       | Total |   | Fair MarketValue Sept. 30, 2002 |       
|--------------- | --------------------- | ---------------------- | ----- | ----- | - | ------------------------------- | ------
|                |                       | PRINCIPAL MATURING IN: |       |       |  
|                |                       |                        |       |       |  
|                |                       | 2002                   |       | 2003  |   | 2004                            |       
|                |                       |                        |       |       |   |                                 |       
|                |                       | (in thousands)         |       |       |   |                                 |       
|Liabilities:    |                       |                        |       |       |   |                                 |       
|Mortgage debt:  |                       |                        |       |       |   |                                 |       
|                | Fixed rate            |                        | $     | 480   |   | $                               | 2,564 
|                | Average interest rate |                        |       | 7.57  | % |                                 | 7.57  
|                | Variable rate         |                        |       | 517   |   |                                 | 15,167
|                | Average interest rate |                        |       | 7.96  | % |                                 | 9.31  
|Line of credit: |                       |                        |       |       |   |                                 |       
|                | Variable rate         |                        |       | 2,144 |   |                                 |       
|                | Average interest rate |                        |       | 6.75  | % |                                 |       
|                |                       |                        |       |       |   |                                 |       
|                |                       | $                      | 3,141 |       | $ | 17,731                          |       
|                |                       |                        |       |       |   |                                 |       

The Companys future
earnings and cash flows relating to market sensitive instruments are primarily dependent upon prevailing LIBOR market interest rate.  Based upon interest rates as of September 30, 2002, a 1% increase in the LIBOR rate would decrease future
earnings by $491,000 annually, and decrease future cash flow by $359,000 annually.  A 1% decrease in the LIBOR rate would increase future earnings by $491,000 annually, and increase future cash flow by $359,000 annually.  A 1% change in
the LIBOR rate would not have a material impact on the fair value of the Companys debt.

In November 2001, the Company purchased an
interest rate cap for $0.9 million to protect against an increase in the one month LIBOR rate on a $35 million variable rate loan the Company obtained in October 2001.  The interest rate cap is for a term of five years and protects the Company
on a specific portion of the loan, which decreases over the term of the cap, on any increase in the one month LIBOR rate above 4.25% per annum.  The one month LIBOR rate has not exceeded 4.25% since the Company purchased the interest rate
cap.

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##### Table of Contents

The table below provides information as of December 31, 2001 about the Companys long-term debt
obligations that are sensitive to changes in interest rates, including principal cash flows by scheduled maturity, weighted average interest rate and estimated fair value.  The weighted average interest rates presented are the actual rates as
of December 31, 2001.

|                |                       |                        |        | Total  |   | Fair Market Value December 31,  2001 |      
|--------------- | --------------------- | ---------------------- | ------ | ------ | - | ------------------------------------ | -----
|                |                       | PRINCIPAL MATURING IN: |        |        |  
|                |                       |                        |        |        |  
|                |                       | 2002                   |        | 2003   |   | 2004                                 |      
|                |                       |                        |        |        |   |                                      |      
|                |                       | (in thousands)         |        |        |   |                                      |      
|Liabilities:    |                       |                        |        |        |   |                                      |      
|Mortgage debt:  |                       |                        |        |        |   |                                      |      
|                | Fixed rate            |                        | $      | 2,275  |   | $                                    | 2,458
|                | Average interest rate |                        |        | 7.78   | % |                                      | 7.78 
|                | Variable rate         |                        |        | 23,905 |   |                                      | 5,589
|                | Average interest rate |                        |        | 7.34   | % |                                      | 7.34 
|Line of credit: |                       |                        |        |        |   |                                      |      
|                | Variable rate         |                        |        | 1,440  |   |                                      |      
|                | Average interest rate |                        |        | 7.0    | % |                                      |      
|                |                       |                        |        |        |   |                                      |      
|                |                       | $                      | 27,620 |        | $ | 8,047                                |      
|                |                       |                        |        |        |   |                                      |      
|                |                       |                        |        |        |   |                                      |      

The Companys future earnings and cash flows relating to market sensitive instruments are primarily dependent
upon prevailing LIBOR market interest rate.  Based upon interest rates as of December 31, 2001, a 1% increase in the LIBOR rate would decrease future earnings by $613,000, future cash flow would not be affected.  A 1% decrease in the LIBOR
rate would increase future earnings by $613,000, future cash flow would not be affected.  A 1% change in the LIBOR rate would not have a material impact on the fair value of the Companys debt.

|Item 4. | CONTROLS AND PROCEDURES
|------- | -----------------------

Within 90 days prior to the date of this report, the Company evaluated the effectiveness of
its disclosure controls and procedures.  This evaluation was performed by the Companys Chief Accounting Officer with the assistance of the Companys President and the Chief Executive Officer.  These disclosure controls and
procedures are designed to ensure that the information required to be disclosed by the Company in its periodic reports filed with the Securities and Exchange Commission (the Commission) is recorded, processed, summarized and reported,
within the time periods specified by the Commissions rules and forms, and that the information is communicated to the certifying officers on a timely basis.  Based on this evaluation, the certifying officers concluded that the Company's
disclosure controls and procedures were effective.  There have been no significant changes in the Companys internal controls or in other factors that could significantly affect the internal controls subsequent to the date of their
evaluation.

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##### Table of Contents

PART II
OTHER INFORMATION

|Item 1. | Legal Proceedings.                                  
|------- | ----------------------------------------------------
|        |                                                     
|        |                                                     
|        |                                                     
|Item 2  | Changes in Securities.                              
|        |                                                     
|        |                                                     
|        |                                                     
|Item 3  | Defaults Upon Senior Securities.                    
|        |                                                     
|        |                                                     
|        |                                                     
|Item 4  | Submission of Matters to a Vote of Security Holders.
|        |                                                     
|        |                                                     
|        |                                                     
|Item 5  | Other Information.                                  
|        |                                                     
|        |                                                     
|        |                                                     
|Item 6  | Exhibits and Reports on Form 8-K                    
|        |                                                     
|        |                                                     

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##### Table of Contents

(a)   Exhibits

|Exhibit No. |         | Note |      | Description
|----------- | ------- | ---- | ---- | -----------
|            |         |      |      |            
|            | 2.1     |      | (12) |            
|            |         |      |      |            
|            | 2.2     |      | (13) |            
|            |         |      |      |            
|            | 2.3     |      | (14) |            
|            |         |      |      |            
|            | 2.4     |      | (16) |            
|            |         |      |      |            
|            | 3.1     |      | (1)  |            
|            |         |      |      |            
|            | 3.2     |      | (3)  |            
|            |         |      |      |            
|            | 10.3    |      | (2)  |            
|            |         |      |      |            
|            | 10.3.2  |      | (15) |            
|            |         |      |      |            
|            | 10.5    |      | (1)  |            
|            |         |      |      |            
|            | 10.8.2  |      | (2)  |            
|            |         |      |      |            
|            | 10.9.2  |      | (1)  |            
|            |         |      |      |            
|            | 10.11   |      | (1)  |            
|            |         |      |      |            
|            | 10.12.2 |      | (3)  |            
|            |         |      |      |            
|            | 10.22   |      | (4)  |            
|            |         |      |      |            
|            | 10.24   |      | (4)  |            
|            |         |      |      |            
|            | 10.25   |      | (5)  |            
|            |         |      |      |            
|            | 10.30   |      | (6)  |            
|            |         |      |      |            
|            | 10.38   |      | (7)  |            
|            |         |      |      |            
|            | 10.39   |      | (7)  |            

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##### Table of Contents

(a)  Exhibits - (continued from previous page)

|Exhibit No. |       | Note |      | Description
|----------- | ----- | ---- | ---- | -----------
|            |       |      |      |            
|            | 10.40 |      | (7)  |            
|            |       |      |      |            
|            | 10.45 |      | (8)  |            
|            |       |      |      |            
|            | 10.46 |      | (8)  |            
|            |       |      |      |            
|            | 10.47 |      | (8)  |            
|            |       |      |      |            
|            | 10.48 |      | (8)  |            
|            |       |      |      |            
|            | 10.49 |      | (8)  |            
|            |       |      |      |            
|            | 10.50 |      | (8)  |            
|            |       |      |      |            
|            | 10.51 |      | (8)  |            
|            |       |      |      |            
|            | 10.52 |      | (8)  |            
|            |       |      |      |            
|            | 10.58 |      | (9)  |            
|            |       |      |      |            
|            | 10.77 |      | (10) |            
|            |       |      |      |            
|            | 10.78 |      | (10) |            
|            |       |      |      |            
|            | 10.79 |      | (10) |            
|            |       |      |      |            
|            | 10.81 |      | (11) |            
|            |       |      |      |            
|            | 10.82 |      | (15) |            
|            |       |      |      |            
|            | 10.83 |      | (15) |            
|            |       |      |      |            
|            | 21    |      |      |            

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##### Table of Contents

|1)  | Previously filed as an exhibit of like number to the Registrants Registration Statement on Form S-11 and amendments thereto (File No. 33-68984) and incorporated herein by
reference.                                                                                            
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                   
|2)  | Previously filed as an exhibit of like number to the Companys Annual Report on Form 10-K for the year ended December 31, 1993 and incorporated herein by
reference.                                                                                                              
|    |                                                                                                                                                                                                                                                                                   
|3)  | Previously filed as an exhibit of like number to the Companys Annual Report on Form 10-K for the year ended December 31, 1994 and incorporated herein by
reference.                                                                                                              
|    |                                                                                                                                                                                                                                                                                   
|4)  | Previously filed as Exhibits 10.1 (with respect to Exhibit 10.22), 10.2 (with respect to Exhibit 10.23), and 10.3 (with respect to Exhibit 10.24) to the Registrants
Quarterly Report on Form 10-Q for the Quarter ended September 30, 1995 and incorporated herein by reference.
|    |                                                                                                                                                                                                                                                                                   
|5)  | Previously filed as an exhibit of like number to the Companys Annual Report on Form 10-K for the year ended December 31, 1995 and incorporated herein by
reference.                                                                                                              
|    |                                                                                                                                                                                                                                                                                   
|6)  | Previously filed as an exhibit of like number to the Companys Quarterly Report on Form 10-Q for the quarter ended June 30, 1996 and incorporated herein by
reference.                                                                                                            
|    |                                                                                                                                                                                                                                                                                   
|7)  | Filed as an exhibit to the Companys Annual Report on Form 10-K for the year ended December 31, 1996 and incorporated herein by reference.                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                   
|8)  | Filed as an exhibit to the Companys Current Report on Form 8-K (filed as of August 15, 1997) and incorporated herein by reference.                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                   
|9)  | Filed as an exhibit to the Companys Current Report on Form 8-K (filed as of October 28, 1997) and incorporated herein by reference.                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                   
|10) | Filed as an exhibit to the Companys Annual Report on Form 10-K (filed as of April 9, 1999) for the year ended December 31, 1998 and incorporated herein by
reference.                                                                                                            
|    |                                                                                                                                                                                                                                                                                   
|11) | Filed as an exhibit to the Companys Quarterly Report on Form 10-Q (filed as of November 12, 1999) for the quarter ended September 30, 1999 and incorporated herein by
reference                                                                                                  
|    |                                                                                                                                                                                                                                                                                   
|1)  | Filed as an exhibit to the Companys Quarterly Report on Form 10-Q (filed as of May 15, 2001) for the quarter ended March 31, 2001 and incorporated herein by
reference.                                                                                                          
|    |                                                                                                                                                                                                                                                                                   
|2)  | Filed as an exhibit to the Companys Current Report on Form 8-K (filed as of October 4, 2001) and incorporated herein by reference.                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                   
|3)  | Filed as an exhibit to the Companys Current Report on Form 8-K (filed as of October 31, 2001) and incorporated herein by reference.                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                   
|4)  | Filed as an exhibit to the Companys Current Report on Form 8-K (filed as of November 13, 2001) and incorporated herein by reference.                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                   
|5)  | Filed as an exhibit to the Companys Quarterly Report on Form 10-Q (filed as of November 14, 2001) for the quarter ended September 30, 2001 and incorporated herein by
reference.                                                                                                 
|    |                                                                                                                                                                                                                                                                                   
|c)  | Management contract or compensatory plan or arrangement.                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                   
|(b) | Reports on Form 8-K                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                   
|    | None.                                                                                                                                                                                                                                                                             

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##### Table of Contents

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

|                         |     | G&L REALTY CORP.                        | 
|------------------------ | --- | --------------------------------------- | 
|                         |     |                                         | 
|                         |     |                                         | 
|Date:  November 14, 2002 | By: | /s/ DAVID E. HAMER                      | 
|                         |     |                                         | 
|                         |     | David E. Hamer Chief Accounting Officer | 

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##### Table of Contents

CERTIFICATIONS

I, Daniel M.
Gottlieb, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of G&L Realty
Corp.;

2.     Based on my knowledge, this quarterly report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.     Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in
all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.     The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

| | a)     designed such disclosure controls and procedures to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                       
| | b)     evaluated the effectiveness of the registrants disclosure controls and procedures as
of a date within 90 days prior to the filing date of this quarterly report (the Evaluation Date); and                                                                                                  
| |                                                                                                                                                                                                                                                                                                       
| | c)     presented in this quarterly report our conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the Evaluation Date;                                                                                                                        

5.     The registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the registrants
auditors and the audit committee of registrants board of directors (or persons performing the equivalent functions):

| | a)     all significant deficiencies in the design or operation of internal controls which could
adversely affect the registrants ability to record, process, summarize and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                      
| | b)     any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrants internal controls; and                                                                                                                                        

6.     The registrants
other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: November 14, 2002

|/s/ DANIEL M. GOTTLIEB                     | 
|------------------------------------------ | 
|                                           | 
|Daniel M. Gottlieb Chief Executive Officer | 

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##### Table of Contents

I, David E. Hamer, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of G&L Realty Corp.;

2.     Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.     Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in
all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.     The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

| | a)     designed such disclosure controls and procedures to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                       
| | b)     evaluated the effectiveness of the registrants disclosure controls and procedures as
of a date within 90 days prior to the filing date of this quarterly report (the Evaluation Date); and                                                                                                  
| |                                                                                                                                                                                                                                                                                                       
| | c)     presented in this quarterly report our conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the Evaluation Date;                                                                                                                        

5.     The registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the registrants
auditors and the audit committee of registrants board of directors (or persons performing the equivalent functions):

| | a)     all significant deficiencies in the design or operation of internal controls which could
adversely affect the registrants ability to record, process, summarize and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                      
| | b)     any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrants internal controls; and                                                                                                                                        

6.     The registrants
other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: November 14, 2002

|/s/ DAVID E. HAMER                      | 
|--------------------------------------- | 
|                                        | 
|David E. Hamer Chief Accounting Officer | 

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