UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K

              [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                 For the fiscal year ended December 31, 1999 or

            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                  For the transition period from _____ to _____

                           Commission file No. 1-13080

                              GROVE PROPERTY TRUST
             (Exact name of registrant as specified in its charter)

            Maryland                                    06-1391084
            --------                                    ----------
  (State or other jurisdiction             (I.R.S. Employer Identification No.)
of incorporation or organization)

        598 Asylum Avenue, Hartford, Connecticut         06105
        ----------------------------------------         -----
       (Address of Principal Executive Offices)        (Zip Code)

                                 (860) 246-1126
                                 --------------
                (Issuer's Telephone Number, including area code)


      Securities registered pursuant to Section 12(b)of the Exchange Act:

       Title of Each Class:           Name of Each Exchange on Which Registered:
       --------------------           ------------------------------------------
Common Shares of Beneficial Interest,        American Stock Exchange, Inc.
          $.01 par value

       Securities registered pursuant to Section 12(g)of the Exchange Act:
                                      None

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 during the
preceeding  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:

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

The  aggregate  market  value of voting and  non-voting  common  equity  held by
non-affiliates of the registrant, as of February 29, 2000, was $70,977,924.

The number of Common Shares of Beneficial  Interest  outstanding  as of February
29, 2000 was 8,206,175.

                      DOCUMENTS INCORPORATED BY REFERENCE:
      Definitive proxy statement for 2000 Annual Meeting of Shareholders -
                             Part III of Form 10-K


<PAGE>


                              GROVE PROPERTY TRUST
                                TABLE OF CONTENTS
                           ANNUAL REPORT ON FORM 10-K
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999


ITEM                                                                        PAGE
----                                                                        ----
                                     PART I
                                     ------

1.  Business ...............................................................   2
    The Company ............................................................   2
    The Operating Partnership ..............................................   2
    Business Objectives and Growth Strategies ..............................   3
    Financing Strategies ...................................................   3
    Revolving Credit Facility ..............................................   3
    Policies with respect to Certain Activities ............................   4
    The Apartment Communities ..............................................   4
    Property Table .........................................................   5
    The Retail Properties ..................................................   6
    Property Management ....................................................   6
    Insurance ..............................................................   7
    Competition ............................................................   7
    Regulation .............................................................   7
    Environmental Matters ..................................................   8
    Employees ..............................................................   9

 2.  Properties ...........................................................    9

 3.  Legal Proceedings ....................................................   10

 4.  Submission of Matters to a Vote of Security Holders ..................   10

                                     PART II
                                     -------

 5.  Market for Registrant's Common Equity and Related
     Stockholder Matters ..................................................   10

 6.  Selected Financial Data ..............................................   14

 7.  Management's Discussion and Analysis of Financial Condition
     and Results of Operations ............................................   15

7A.  Quantitative and Qualitative Disclosures About Market Risk ...........   19

 8.  Financial Statements and Supplementary Data ..........................   19

 9.  Changes in and Disagreements with Accountants on Accounting
     and Financial Disclosure .............................................   19

                                    PART III
                                    --------

10.  Directors and Executive Officers of the Registrant ...................   19

11.  Executive Compensation ...............................................   19

12.  Security Ownership of Certain Beneficial Owners and Management .......   20

13.  Certain Relationships and Related Transactions .......................   20

                                     PART IV
                                     -------

14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K .....   20


                                       1
<PAGE>


PART 1
------
ITEM 1.  BUSINESS
-----------------

THE COMPANY

Grove Property Trust, a Maryland real estate  investment trust (the "Company" or
"Grove"), is a self-managed and  self-administered  real estate investment trust
("REIT")  that is  engaged in the  acquisition,  repositioning,  management  and
operation  of  mid-priced  and  subsidized   multifamily  and  specialty  retail
properties in the Northeastern  United States. The Company is a fully integrated
real  estate   organization   with  in-house   acquisition,   repositioning  and
renovation, financing, marketing, leasing and property management expertise.

As of March 15,  2000,  Grove  owned  interests  in and  operated  55  Apartment
Communities containing a total of 6,154 units in Connecticut,  Massachusetts and
Rhode  Island and 4  specialty  retail  properties  in  Massachusetts  and Maine
containing  an aggregate of  approximately  118,700  rentable  square feet.  The
Apartment   Communities  are  mid-priced  and  subsidized  apartment  properties
consisting  primarily of two- and three-story  buildings in landscaped settings.
The Apartment  Communities  are well located  within their markets and appeal to
middle  income and  moderate  income  residents  who are  generally  "renters by
necessity", with the exception of the Boston suburban properties where residents
are renters by choice in many instances.

Grove's  predecessors  commenced  operations in 1980. The Company  completed its
initial  public  offering  in 1994  with  the  acquisition  of  three  apartment
properties.  At that  time,  affiliates  of  Grove  owned  additional  apartment
properties  and other real estate  assets  outside of the Company and  conducted
management  and  acquisition  activities  through  entities that were also owned
outside of the  Company.  In 1996,  management  began to  undertake  a number of
strategic initiatives intended to maximize shareholder value. In March 1997, the
Company  completed the  following:  (i) the creation of an Umbrella  Partnership
REIT (an "UPREIT")  structure by forming Grove  Operating,  L.P. (the "Operating
Partnership") to facilitate the consolidating  transactions  described below and
to provide potential sellers with a mechanism to defer their tax liability; (ii)
the  acquisition  through the Operating  Partnership  of 20 properties  owned by
affiliates of Grove; (iii) the acquisition of the property management assets and
related liabilities of Grove Property Services Limited Partnership  ("GPS"), the
entity that managed the  properties  owned by Grove as well as the 20 properties
owned by affiliates of Grove;  (iv) a $30 million private  placement  (3,333,333
shares at $9.00 per share) of equity  securities  to  investors  that  included,
among others,  four investment  funds managed by Morgan Stanley Group,  Inc. and
the  Oregon  Public  Employees  Retirement  Fund;  and (v) the  closing of a $25
million Credit Facility and a $15 million term loan facility (collectively,  the
"Consolidation Transactions").

In November  1997,  the  Company  completed a public  offering  underwritten  by
Salomon Smith Barney and  co-managed  by Lehman  Brothers.  Simultaneously,  the
Company sold additional shares directly to certain  investors.  The Company sold
an  aggregate of 4,500,000  shares at a public  offering  price per share of $10
7/8.

From the Fall of 1998  through  December 31, 1999,  the Company  repurchased  an
aggregate of 1,322,616 shares and Operating Partnership Units ("Common Units" or
"OP Units") at an average price of $11.37 for a total cost of $15 million.

During 1998, the Company  purchased 3,605  apartments  units and a 23,325 square
foot retail property for a total of  approximately  $171 million with cash, debt
and the  issuance of OP Units.  During  1999,  the Company  sold four  Apartment
Communities containing 313 apartments units for $12.8 million.

The  Company  operates  in  three  industry  segments:  residential,  subsidized
residential and retail. Certain financial data on a segment basis is included in
Note 16 to the consolidated financial statements, included elsewhere, herein.

THE OPERATING PARTNERSHIP

The Operating  Partnership  was formed to act as the vehicle for the acquisition
of properties.  Grove is the sole general  partner of the Operating  Partnership
and thereby controls the Operating Partnership. Using the Operating Partnership,
the Company is able to acquire  properties in exchange for Common  Units,  which
represent  limited  partnership  interests  in the  Operating  Partnership.  The
recipients of Common Units are restricted  from  transferring  such Common Units
for a period  of one year  from the  acquisition  date.  The  Common  Units  are
redeemable  after  such  time for cash  (based  on the fair  market  value of an
equivalent  number of Common Shares at the time of such  redemption)  or, at the
Company's  option,  for Common  Shares of the  Company on a  one-for-one  basis,
subject to certain anti-dilution  adjustments and exceptions.  While the holders
of Common Units determine  whether they want to redeem Common Units, the Company
decides if the redemption  price will be paid in cash or in Common Shares.  With
the Operating  Partnership,  the Company believes it is able to offer attractive
purchase terms to owners of properties who have little or no tax basis remaining
in such properties.  In many cases, the immediate tax liability incurred by such
owners upon a transfer of such  properties  would be significant if the purchase
price were paid in cash. By utilizing the Operating Partnership  structure,  the
Company can make payment in Common Units,  thereby deferring all or a portion of
an owner's federal income tax liability.  During 1998, the Operating Partnership
issued approximately 391,000 Common Units in conjunction with the acquisition of
20 properties with approximately  2,200 apartments.  At December 31, 1999, Grove
owned  approximately  67.7 % of the total partnership  interests,  including the
sole general  partner  interest,  in the  Operating  Partnership,  consisting of
Grove's ownership of 8,197,141 Common Units.


                                       2
<PAGE>


BUSINESS OBJECTIVES AND GROWTH STRATEGIES

The  Company's  current  long-term  objectives  are; (i)  accretively  acquiring
under-utilized multifamily properties in high-barrier-to-entry  locations in the
Northeastern United States; (ii) continuing to repurchase shares and OP Units at
prices below Net Asset Value  (NAV);  (iii)  continuing  the  repositioning  and
renovating of its property portfolio with a targeted annual return on investment
of 15%;  (iv)  aggressively  managing its  portfolio to increase  revenues at an
above  inflationary  rate and  keeping  operating  costs  at or  below  budgeted
amounts;  and (v) consistently  providing quality service and a desirable living
environment  to all of its  residents.  A variety of factors,  many of which are
beyond the  Company's  control,  may prevent the Company  from  achieving  these
objectives. In addition, future developments and events may cause the Company to
redefine its objectives either by modifying current objectives or by identifying
additional ones.

ACQUISITIONS.  The  Company's  primary  growth  strategy  has  been  to  acquire
under-utilized,   mid-priced   and  subsidized   apartment   properties  in  the
Northeastern  United States.  Grove believes that opportunities for acquisitions
in the Northeastern United States are attractive because the region is generally
characterized  by: (i) limited new construction  due to significant  barriers to
entry resulting from high construction costs, limited land availability,  strict
zoning laws and extended permitting processes; (ii) a limited number of publicly
traded companies  focusing on the acquisition of  under-utilized,  mid-priced or
subsidized  multifamily  communities;  (iii) highly fragmented markets with many
small-to-medium sized family owned companies that own older apartment properties
in which the owners are looking to sell with  minimal tax impact;  and (iv) many
older apartment properties where maintenance and improvements have been deferred
and where the Company believes  selective capital  improvements and professional
management may create opportunities for increased rents.

When evaluating  potential  acquisitions,  the following factors are among those
the Company considers: (i) the demographic  characteristics and resident profile
of the neighborhood; (ii) the age and quality of the property; (iii) the current
and  projected  cash flow of the property and the ability to increase  cash flow
through  return-oriented  capital  improvements;  (iv) the potential for capital
appreciation of the property;  (v) the terms of leases,  including the potential
for rent  increases;  (vi) the  potential  for  economic  growth and the tax and
regulatory  environment of the community in which the property is located; (vii)
the occupancy of and demand for properties of a similar type in the market;  and
(viii)   competition  from  existing   properties  and  the  potential  for  the
construction of new properties in the area.

The Company's  acquisitions of all Apartment Communities have ranged from single
communities in the $3 million range (88 apartments) to a $105 million  portfolio
that totaled 2,160 units (the "McNeil Portfolio").

REPOSITIONING AND RENOVATION.  The Company evaluates,  repositions and renovates
all acquired properties as appropriate. Subsidized residential properties in the
portfolio receive necessary renovations as required. Repositioning of subsidized
residential  assets may occur upon  partial  conversion  to market  rates.  When
pursuing  an  acquisition,   members  of  the  Company's  in-house  acquisition,
development and property management teams work together in evaluating  potential
renovation and repositioning strategies and budgets.  Additionally,  the Company
reviews its portfolio to determine where opportunities exist to make incremental
capital  improvements  that  meet its  targeted  annual  return  on cost of 15%.
Typical  renovations  include replacing carpets,  appliances,  kitchen cabinets,
counter tops,  bathroom fixtures and vanities as well as upgrading  landscaping,
adding fitness centers and community rooms, repaving existing parking spaces and
adding additional parking spaces.

FINANCING STRATEGIES

The Company intends to maintain a debt-to-total  market  capitalization ratio of
60.0% or less.  At December  31,  1999,  the Company  had debt  totaling  $195.6
million and a ratio of  debt-to-total  market  capitalization  of  approximately
53.9% based on the closing price of the Company's  Common Shares on the American
Stock Exchange of $13.25 and assuming  conversion of all OP Units.  The weighted
average interest rate on the Company's  fixed-rate  mortgage debt as of December
31,  1999  was  approximately  7.60%  and  the  weighted  average  maturity  was
approximately ten years.

REVOLVING CREDIT FACILITY

In April  1998,  the  Operating  Partnership  entered  into a  revolving  credit
facility (the "1998 Credit Facility"), which provided for a credit line of $50.0
million on an unsecured  basis.  The 1998 Credit  Facility had interest  payable
monthly at a floating rate of 1.50% above the 30, 60, or 90-day LIBOR rate.  The
1998 Credit Facility was available to fund property  acquisitions and up to $5.0
million was available to fund working  capital needs.  The 1998 Credit  Facility
was paid-off and cancelled in August 1999.

On August 13, 1999, the Company  obtained a new revolving  credit  facility (the
"1999 Credit Facility"). The 1999 Credit Facility is unsecured, has availability
of up to $40.0 million,  matures in August 2001,  and contains  other  financial
covenants. The 1999 Credit Facility bears interest payable monthly at a floating
rate of 2.0% above the 30, 60, or 90-day LIBOR rate. The 1999 Credit Facility is
available to fund future property  acquisitions and working capital needs. As of
December 31, 1999, the 1999 Credit Facility had $15.3 million outstanding.


                                       3
<PAGE>


POLICIES WITH RESPECT TO CERTAIN ACTIVITIES

GENERAL. The following is a discussion of certain current investments, financing
and other  practices of the Company.  These  practices may be amended or revised
from time to time without a vote of the Company's shareholders,  except that the
Company  cannot  change  its policy of holding  its  assets and  conducting  its
business  principally  through the Operating  Partnership without the consent of
the  holders of Common  Units as provided in the  Partnership  Agreement  of the
Operating Partnership.

INVESTMENT  OBJECTIVES AND PRACTICES.  The Company's  investment objective is to
provide quarterly  distributions of a portion of cash available for distribution
and to achieve  long-term  capital  appreciation  through increases in cash flow
from operations, reinvestment of retained cash, growth of the Company's property
portfolio   through   accretive   acquisitions  and  strategic  return  oriented
repositioning capital improvements.  The Company's practice is to acquire assets
primarily for generation of current income and appreciation.

The Company may  purchase or lease  income-producing  multifamily,  mixed-use or
specialty  retail  properties for long-term  investment,  expand and improve the
properties  acquired,  or sell  such  properties,  in  whole  or in  part,  when
circumstances  warrant.  Any financing or indebtedness  secured by the Company's
properties  will have a priority over the Common Shares in the event of a forced
sale or upon liquidation of any property in the Company's portfolio which serves
as such security.

While the Company has emphasized  equity real estate  investments in multifamily
properties,  it may, at the discretion of the Board,  invest in specialty retail
or  mixed-use  buildings,  equity  real  estate  investments  in other  types of
properties,  mortgages (including participating or convertible mortgages), stock
of other REIT's and other real estate interests.  The Company does not currently
intend to invest in mortgages or stock of other  REIT's.  The  investment by the
Company in  securities of other REIT's,  other  concerns  engaged in real estate
activities or other issues is subject to the percentage of ownership limitations
and gross income tests necessary for REIT qualification.

DISPOSITION.  The  Company  will  periodically  review  the total  assets in the
Company's portfolio. The Company could dispose of some of its properties,  based
upon management's strategic review of its total portfolio.

FINANCING PRACTICES.  The Company expects to continue to maintain a conservative
debt-to-total market  capitalization ratio of 60% or less. Such ratio represents
total debt of the  Company  as a  percentage  of the market  value of the Common
Shares  (assuming the exchange of all Common Units for Common Shares) plus total
debt of the Company.  The Company's  Third Amended and Restated  Declaration  of
Trust, as amended (the "Charter"),  and Bylaws, however, do not limit the amount
or percentage of indebtedness that the Company may incur. In addition, from time
to time, the Company may modify its debt practice in light of changing  economic
conditions,  relative  costs of debt and equity  capital,  market  values of its
properties,  general  conditions  in the market for debt and equity  securities,
fluctuations  in the market price of the Common Shares,  growth and  acquisition
opportunities  and other  factors.  Accordingly,  the  Company  may  increase or
decrease its debt-to-total market capitalization above or below 60%.

OTHER.  The  Company  intends to operate in a manner that will not subject it to
regulation under the Investment Company Act of 1940. The Company does not intend
(i) to invest in the  securities  of other issuers for the purpose of exercising
control over such issuer;  (ii) to underwrite  securities of other  issuers;  or
(iii) to trade actively in loans or other investments.

THE APARTMENT COMMUNITIES

The  Company at March 15, 2000 owned  interests  in and  operated  55  Apartment
Communities  containing a total of 6,154 units.  The Apartment  Communities  are
mid-priced and subsidized  apartment  properties that consist  primarily of two-
and three-story buildings in landscaped settings.  The Apartment Communities are
well  located  within  their  markets and appeal to middle  income and  moderate
income residents who are generally "renters by necessity", with the exception of
the Boston  suburban  properties  where  residents are renters by choice in many
instances. The Apartment Communities are located in the following states:

<TABLE>
<CAPTION>
                               Number of Apartment      Number of      Number of Subsidized       Total         Percentage of Total
                               --------------------     ----------     ---------------------      -----         -------------------
State                              Communities      Residential Units    Residential Units   Apartment Units      Apartment Units
-----                              -----------      -----------------    -----------------   ---------------      ---------------
<S>                                   <C>                 <C>                 <C>                 <C>                 <C>
Connecticut ...........                  23               2,503                   0               2,503                  40%
Massachusetts .........                  27               1,642               1,231               2,873                  47%
Rhode Island ..........                   5                 778                   0                 778                  13%
                                      -----               -----               -----               -----               -----
Totals as of March 2000                  55               4,923               1,231               6,154                 100%
                                      =====               =====               =====               =====               =====
</TABLE>

Of the current 55  Apartment  Communities,  31 have 100 units or more,  with the
largest having 416 units and the smallest  having 18 units.  Thirteen  Apartment
Communities   totaling  1,231  units  are  subsidized   under  various  programs
administered by the U.S.  Department of Housing and Urban Development ("HUD") or
the Massachusetts  Housing Finance Authority  ("MHFA").  The average size of the
Apartment  Communities  is  approximately  112 units.  Of the 6,154 units in the
Apartment  Communities,  204 units or 3.3% are studios, 2,599 units or 42.2% are
one bedrooms, 3,104 units or 50.4% are two bedrooms, 243 units or 4.0% are three
bedrooms  and 4 units or 0.1%  are  four  bedrooms.  The  Apartment  Communities
contain an aggregate of 6,034,917  million  rentable square feet with an average
unit  size of 981  square  feet.  For the year  ended  December  31,  1999,  the
Apartment  Communities  had an average  economic  occupancy rate of 96.4% and an
average monthly rental rate of $792 per unit.


                                       4
<PAGE>

<TABLE>

                                 PROPERTY TABLE
                                 --------------
<CAPTION>
                                                                                           Average Economic   Average Monthly Rental
                                                                                           ----------------   ----------------------
                                                                                          Occupancy Rate (1)     Rate Per Unit (2)
                                                                                          ------------------     -----------------
                                                                                 Average    Year      Year       Year        Year
                                         Percentage    Number   Year    Year     Sq. Ft.   Ended      Ended      Ended       Ended
        Property           Town/City      Ownership   of Units  Built Renovated  Per Unit 12/31/98  12/31/99   12/31/98    12/31/99
        --------           ---------      ---------   --------  ----- ---------  -------- --------  --------   --------    --------
<S>                        <C>               <C>        <C>     <C>     <C>       <C>       <C>       <C>        <C>         <C>
CONNECTICUT
-----------
208-210 Main St(3)(10)     Manchester        100%        28     1969    1988        929     95.7%     86.2%       $809        $840
Arbor Commons              Ellington         100%        28     1975    1988        780     95.4%     93.5%        713         729
Avon Place                 Avon               99%       156     1973    1995      1,448     99.0%     97.8%        914         963
Barons Apartments(9)       Southington       100%        54     1970    1994        900     90.0%     89.3%        742         769
Bradford Apartments        Newington          91%        64     1964    1989        894     94.7%     97.7%        714         736
Briar Knoll Apts           Vernon            100%       150     1986    1999        867     94.6%     94.3%        645         706
Brooksyde Apts             West Hartford     100%        80     1945    1997        800     97.6%     97.8%        727         767
Burgundy Studios           Middletown        100%       102     1973    1996        443     95.7%     96.5%        446         465
Cambridge Estates          Norwich           100%        92     1977    1990        939     91.9%     93.0%        756         777
Colonial Village           Plainville        100%       104     1968    1989        981     92.2%     95.8%        780         811
Dogwood Hill(8)            Hamden            100%        46     1971    1993      1,330     96.5%     96.1%        766         782
Summit & Birch Hill        Farmington        100%       184     1967    1996        937     97.5%     98.3%        823         847
Fox Hill Apartments        Enfield            97%       168     1974    1991        796     96.2%     97.5%        684         695
Fox Hill Commons           Vernon            100%        74     1965    1989        849     94.6%     95.7%        736         767
Greenfield Village         Rocky Hill        100%       147     1965    1997        735     92.9%     93.9%        690         721
Hamden Centre(8)           Hamden            100%        65     1968    1993        873     94.3%     97.2%        676         691
High Meadow                Ellington         100%       100     1975    1999        691     95.4%     96.5%        599         625
Hilltop                    Norwich           100%       120     1987    1999        986     88.4%     95.1%        661         703
Glastonbury Center         Glastonbury       100%       104     1962    1989        961     96.7%     95.4%        832         879
Loomis Manor               West Hartford      91%        43     1948    1990      1,138     94.8%     96.9%        882         915
Ocean Reef(8)              New London         97%       163     1962    1995        829     89.1%     93.1%        667         687
Park Place West            West Hartford     100%        63     1961    1989        861     95.6%     94.9%        687         706
Pinney Brook               Ellington         100%        34     1968    1999        882       n/a       n/a        n/a         n/a
Parkwood(4)(5)             East Haven        100%       102     1975    1999        857     96.6%     98.4%        620         645
Sandalwood(8)              New London         97%        39     1977    1996        517     95.1%     92.4%        481         496
Ribbon Mill                Manchester        100%       104     1908    1999      1,221     94.4%     94.6%        681         799
River's Bend               Windsor           100%       364     1973    1996      1,038     97.4%     97.0%        778         812
Westwynd Apts              West Hartford      91%        46     1969    1990        901     95.7%     98.2%        673         688
Woodbridge                 Newington         100%        73     1968    1991        792     97.0%     94.8%        741         762

MASSACHUSETTS
-------------
929 House(3)(4)(5)         Cambridge         100%       127     1975     n/a        752     98.8%     97.6%      1,075       1,190
Abington Grove(4)(5)       Abington          100%        90     1968    1999        867     92.8%     97.2%        686         713
Cedar Glen(4)(5)(7)        Reading           100%       114     1980     n/a        931     99.7%     99.1%      1,023       1,038
Chestnut Glen(4)(5)(7)     Abington          100%       130     1983     n/a      1,192     98.2%     97.9%      1,051       1,056
Coachlight Village(4)(5)   Agawam            100%        88     1967    1994        655     97.4%     98.6%        556         573
Conway Court(4)(5)(7)      Roslindale        100%        28     1920     n/a        839     91.5%    100.8%        449         452
Dean Estates               Taunton           100%        58     1984     n/a      1,014     96.1%     97.9%        705         722
Four Winds                 Fall River        100%       168     1987    1996      1,089     95.3%     97.4%        725         745
Glen Grove(4)(5)(7)        Wellesley         100%       125     1979     n/a      1,294     99.4%     98.7%      1,043       1,054
Glen Meadow(4)(5)          Franklin          100%       288     1971    1999      1,017     93.9%     90.9%        464         651
Gosnold Grove(4)(5)(7)     East Falmouth     100%        33     1978     n/a        796     96.8%     92.3%        843         835
Highland Glen(4)(6)(7)     Westwood          100%       180     1979     n/a      1,250       n/a     98.2%        n/a         841
Longfellow Glen(4)(5)(7)   Sudbury           100%       120     1984     n/a        905     95.8%     95.4%      1,130       1,164
Nehoiden Glen(4)(5)(7)     Needham           100%        61     1978     n/a        951     99.0%     98.9%      1,048       1,060
Noonan Glen(4)(5)(7)       Winchester        100%        18     1983     n/a        997     99.0%     98.7%      1,022       1,057
Norton Glen(4)(5)(7)       Norton            100%       150     1983    1999      1,100     93.2%     98.4%      1,055       1,073
Old Mill Glen(4)(5)(7)     Maynard           100%        50     1983     n/a      1,120     92.7%     96.9%      1,215       1,218
Phillips Park(4)(5)        Wellesley         100%        49     1988     n/a      1,245    102.5%     96.9%      1,351       1,378
Rockingham Glen(4)(5)      West Roxbury      100%       143     1974     n/a      1,480     96.1%     97.8%        933         921
Security Manor             Westfield          89%        63     1971    1988      1,150     99.0%     99.5%        601         617
Sturbridge Meadows(4)(5)   Sturbridge        100%       104     1985    1998      1,208     93.5%     94.0%        609         677
Summerhill Glen(4)(5)(7)   Maynard           100%       120     1980     n/a        801     94.8%     94.1%        426         425
Van Deene Manor(3)         West Springfield   89%       109     1970    1990        664     96.8%     97.9%        634         652
Spring Hill Commons        Acton             100%       123     1973    1998        732     95.1%     98.2%        777         823
Webster Green(4)(5)        Needham           100%        76     1985     n/a      1,342    100.8%     96.3%      1,308       1,329
Westwood Glen(4)(5)        Westwood          100%       156     1972     n/a        817     94.2%     92.1%      1,020         971
Wilkins Glen (4)(5)(7)     Medfield          100%       102     1975     n/a      1,249    104.5%     97.2%        547         551

RHODE ISLAND
------------
Dean Estates II            Cranston           97%        48     1970    1994      1,170     96.9%     98.8%        714         731
Royale                     Cranston           97%        76     1976    1993      1,151     97.4%     97.7%        724         745
Tanglewood (4)(5)          West Warwick      100%       176     1973    1998      1,042     96.3%     97.4%        647         682
Winchester Park (4) (5)    East Providence   100%       416     1972    1998        881     94.5%     96.6%        558         609
Winchester Wood (4) (5)    East Providence   100%        62     1989    1998      1,330     98.2%     98.7%        934         976

                                                 ----------                  -----------------------------------------------------
     Total/Weighted Average                           6,549                         981     96.0%     96.4%       $758        $792
                                                 ==========                  =====================================================
     Same Community Weighted Average (4)                                                    95.7%     96.5%       $720        $752
                                                                             =====================================================
</TABLE>

                            (NOTES ON FOLLOWING PAGE)


                                       5
<PAGE>


(1)  Average  economic  occupancy rate is derived by dividing;  actual collected
     rental income by gross  potential  rental income.  Gross  potential  rental
     income  includes  vacancy  losses and bad debt,  but does not include model
     expenses or employee concessions or discounts.
(2)  Average  monthly  rental  rate  per  unit is  derived  by  dividing  actual
     collected rental income by total number of leasable units.
(3)  The  following  Apartment  Communities  contain  additional  space which is
     rented to commercial tenants:

Apartment Communities                  Commercial Sq. Ft.
---------------------                  ------------------
208-210 Main St.                             9,597
929 House                                   11,585
Van Deene Manor                              1,630
                                            ------
Total                                       22,812
                                            ======

(4)  The same community weighted average amounts represent the average occupancy
     and rental  rates for the 31  Apartment  Communities  owned by Grove or its
     affiliated  predecessors  for the years 1998 and 1999. 26  properties  were
     purchased by Grove or its affiliated  predecessors  during or subsequent to
     such period and have been excluded  from the same  community  amounts.  The
     following  sets forth the  acquisition  dates for such  excluded  Apartment
     Communities:

<TABLE>
<CAPTION>
Apartment Communities       Acquisition Date               Apartment Communities       Acquisition Date
---------------------       ----------------               ---------------------       ----------------
<S>                              <C>                       <C>                              <C>
Tanglewood                       Jan-98                    Gosnold Grove                    Oct-98
Coachlight Village               Apr-98                    Longfellow Glen                  Oct-98
Winchester Park                  Jun-98                    Nehoiden Glen                    Oct-98
Winchester Woods                 Jun-98                    Noonan Glen                      Oct-98
Sturbridge Meadows               Aug-98                    Norton Glen                      Oct-98
Parkwood                         Aug-98                    Old Mill Glen                    Oct-98
929 House                        Oct-98                    Phillips Park                    Oct-98
Abington Grove                   Oct-98                    Summerhill Glen                  Oct-98
Cedar Glen                       Oct-98                    Webster Green                    Oct-98
Chestnut Glen                    Oct-98                    Westwood Glen                    Oct-98
Conway Court                     Oct-98                    Wilkins Glen                     Oct-98
Glen Grove                       Oct-98                    Rockingham Glen                  Nov-98
Glen Meadow                      Oct-98                    Highland Glen                    Dec-98
</TABLE>

(5)  These twenty-five  properties were purchased from non-affiliated parties in
     1998,  as noted in note 4 above.  Information  on these  properties  is not
     available for the entirety of the periods covered in the above table.
(6)  Highland Glen was purchased in December 1998 from a non-affiliated party.
(7)  These thirteen properties are subsidized residential properties.
(8)  These four properties were sold to a  non-affiliated  party on November 15,
     1999.
(9)  This property was sold to a non-affiliated party on January 5, 2000.
(10) This property was sold to a non-affiliated party on March 1, 2000.

THE RETAIL PROPERTIES

Although the  Company's  principal  focus is the  acquisition  and  ownership of
apartment communities,  it owns 4 mixed-use and specialty retail properties. One
of these properties is a community shopping center in Longmeadow,  Massachusetts
that contains  approximately  79,000  rentable  square feet of retail and office
space. The shopping center, which was originally  constructed by an unaffiliated
owner in 1962 and  subsequently  expanded in 1978, was purchased by an affiliate
of the Company in 1994 and  renovated  and  retenanted  by management at various
times from 1994 through 1999. For the year ended December 31, 1999, the shopping
center had an average  annual base rental rate of $13.92 per square foot and was
100% leased.  One of these  properties is a shopping  center in Freeport,  Maine
that contains  approximately  23,300  rentable  square feet of retail space.  An
unaffiliated  owner originally  constructed the shopping center in 1985. For the
year ended  December 31, 1999,  the shopping  center had an average  annual base
rental of $30.84 per square foot and was 92.1% leased.

The other two retail  properties  are specialty  retail  properties,  which were
acquired from an affiliate of the Company on October 31, 1997.  These properties
are in the historic  district of Edgartown,  Massachusetts.  The two  properties
were  originally  constructed in the 1800's.  The first  building,  known as the
Wharf  Building,  contains  approximately  11,000  rentable square feet, and was
renovated by the previous affiliated owner in 1996. As of December 31, 1999, the
Wharf  Building had an average  annual rental rate of $28.08 per square foot and
was 100% leased. The second building,  the Cornerblock,  contains  approximately
5,400 rentable  square feet and was  substantially  renovated by an unaffiliated
predecessor  owner in 1988.  For the twelve months ended  December 31, 1999, the
Cornerblock  had an average annual rental rate of $36.60 per square foot and was
100% leased.

PROPERTY MANAGEMENT

Grove manages its portfolio  through its staff of approximately 208 professional
and support  personnel and approximately  sixteen  part-time support  personnel,
including  the Chief  Operating  Officer and regional  property  managers at the
corporate  level and property  managers,  service  technicians,  leasing agents,
porters  and   landscapers  at  the  property   level.   Fifty   accounting  and
administrative employees support the Chief Operating Officer,  regional property
managers and on-site personnel.


                                       6
<PAGE>


During 1997, 1998 and 1999, the Company  experienced  average resident retention
rates of 62%, 68% and 62%,  respectively.  The  management  division  implements
on-site management programs,  accounting systems, marketing systems and resident
quality control and retention  procedures.  On-site  property  management  teams
perform leasing and rent collection  functions and coordinate resident services.
The Company uses newspaper advertisements,  resident referrals, apartment guides
and the Internet to market and advertise the Apartment Communities.  The Company
supplements  its  marketing  and  advertising   effort  with   point-of-purchase
materials and well-maintained  properties with strong curb appeal. The Company's
marketing personnel market the Apartment Communities on a continual basis rather
than  waiting  until  vacancies  occur.  The Company does not need to market its
subidized residential  properties due to the fact these properties have resident
waiting lists.  In addition,  the Company does not market its retail  properties
because they are fully occupied.

The  regional  managers  and  accounting  department  personnel  assist  on-site
management.  Regional  managers monitor  performance  criteria at each Apartment
Community,  and the  accounting  division  audits  and  monitor  each  Apartment
Community's financial records.

Prior  to  entering  into   commercial   leases,   Grove   conducts   background
investigations and credit checks of potential commercial tenants.

Prior to entering into  residential  and subsidized  residential  leases,  Grove
conducts  background  investigations  of potential  residents,  including credit
checks, prior landlord references and employer verifications.  Substantially all
of the apartments in the Apartment  Communities  are rented pursuant to standard
twelve-month leases, which facilitate uniform lease administration by helping to
standardize rent collections, security deposit dispositions,  evictions, repairs
and  renewals.  The Company  typically  requires  residents to provide  security
deposits  equal to one month's  rent.  In addition,  the Company  manages  lease
expirations to ensure that vacancies occur on a staggered basis.

The Company's marketing and leasing procedures are designed to ensure compliance
with all federal, state and local laws and regulations.  Underwriting guidelines
for  prospective  residents  comply  with FHAA and ADA (both as  defined  below)
regulations  and are designed to stabilize  cash flows.  Approximately  thirteen
Apartment  Communities are subsidized under various programs administered by HUD
or the MHFA.

INSURANCE

Grove carries comprehensive liability, fire, flood (where required) and extended
coverage  and  rental  loss  insurance  on  all of its  properties  with  policy
specifications,  insured limits and deductibles  customarily carried for similar
properties.  There are,  however,  certain  types of losses  which may be either
uninsurable  or  not  economically  insurable,  such  as  those  resulting  from
earthquakes,  floods,  tidal waves,  explosion of water pipes,  nuclear hazards,
wars, civil disturbances and environmental matters.

COMPETITION

All of the  Apartment  Communities  are located in developed  areas that include
other apartment communities. The number of competitive apartment properties in a
particular  area could have a material  effect on the  Company's  ability to (i)
lease apartment units or (ii) lease apartment units at newly acquired properties
and (iii)  increase the rental  rates  charged.  There are numerous  real estate
companies,  including  those  operating  in the  markets in which the  Company's
properties are located, which compete with the Company in seeking properties for
acquisition and for tenants to occupy such  properties.  The Company may compete
with  companies  that have  greater  resources  than the Company.  Further,  the
availability of single-family housing and other forms of multifamily residential
properties,  such as manufactured housing  communities,  provide alternatives to
existing and potential residents of apartment communities.

REGULATION

GENERAL.  Multifamily  apartment properties and retail properties are subject to
various laws,  ordinances and  regulations,  including  regulations  relating to
recreational  facilities  such as  swimming  pools,  activity  centers and other
common areas.

AMERICANS WITH DISABILITIES ACT. The Company's properties must comply with Title
III of the Americans with  Disabilities  Act (the "ADA") to the extent that such
properties are "public  accommodations" and/or "commercial  facilities" (each as
defined by the ADA). Compliance with the ADA could require removal of structural
barriers to handicapped  access in certain public areas of properties where such
removal is readily achievable.  The ADA does not, however,  consider residential
properties,  such as  multifamily  properties,  to be public  accommodations  or
commercial facilities, except to the extent portions of such facilities, such as
a leasing office,  are open to the public.  Noncompliance  with ADA requirements
and  applicable  state laws could result in  imposition  of fines or an award of
damages to private  litigants.  The Company may incur additional costs to comply
with such laws.

                                       7
<PAGE>


FAIR HOUSING  AMENDMENTS  ACT OF 1988.  The Fair Housing  Amendments Act of 1988
(the "FHAA") requires multifamily properties first occupied after March 13, 1990
to be accessible to the handicapped. Noncompliance with the FHAA could result in
the imposition of fines or an award of damages to private litigants.

RENT  CONTROL  LEGISLATION.  State  and  local  rent  control  laws  in  certain
jurisdictions  limit a property owner's ability to increase rents and to recover
increases  in  operating  expenses  and  costs  of  capital   improvements  from
residents. Enactment of such laws has been considered from time to time in other
jurisdictions,  although such laws have not been adopted in the jurisdictions in
which the Company currently operates. The regulations of HUD and MHFA applicable
to the Company's subsidized  residential  properties limit the Company's ability
to increase rents at these properties.

ENVIRONMENTAL MATTERS

Under various federal, state and local laws, ordinances and regulations relating
to the protection of the environment, a current or previous owner or operator of
real estate may be held  liable for the costs of  investigations  or  performing
removal or  remediation  of certain  hazardous or toxic  substances or petroleum
products  released on, under,  in, emitting from, or located on, under or in the
property and may be held liable to a  governmental  entity or third  parties for
damages,  investigation,  remediation,  or  other  costs  associated  with  such
contamination.  These laws often impose liability  without regard to whether the
owner was  responsible  for, or even knew of, the presence of such  hazardous or
toxic substances or petroleum products.  The costs of investigation,  removal or
remediation  of such  substances  may be  substantial,  and the presence of such
substances may adversely affect the owner's ability to rent or sell the property
or to borrow using such  property as  collateral  and may expose it to liability
resulting from any release of or exposure to such substances.  Moreover, certain
loan documents  provide for recourse  liability in connection  with hazardous or
toxic substances. Persons who arrange for the disposal or treatment of hazardous
or toxic  substances  at  another  location  may also be liable for the costs of
removal or remediation of such substances at the disposal or treatment facility,
whether  or not such  facility  is owned or  operated  by such  person.  Certain
environmental laws impose liability for release of asbestos containing materials
into the air, and third  parties may also seek recovery from owners or operators
of real  properties  for personal  injury  associated  with asbestos  containing
materials  and other  hazardous or toxic  substances or petroleum  products.  In
connection with the ownership  (direct or indirect),  operation,  management and
development  of real  properties,  the  Company  may be  considered  an owner or
operator of such properties regulated by such laws, ordinances,  and regulations
relating to the  protection  of the  environment  or as having  arranged for the
off-site disposal or treatment of hazardous or toxic substances and,  therefore,
if  environmental  contamination  were to be found at such  real  properties  or
off-site  locations,  the  Company  could be  potentially  liable for removal or
remediation   costs,   as  well  as  certain  other  related  costs,   including
governmental penalties and injuries to persons and property.

Federal  legislation  requires  owners  and  landlords  of  residential  housing
constructed  prior to 1978 to disclose to potential  residents or  purchasers of
the properties any known  lead-paint  hazards and will impose treble damages for
failure to give the required  notice.  The  existence of  lead-based  paint in a
property may result in lead poisoning in children  residing  therein if chips or
particles of lead-based  paint are ingested,  and the Company may be held liable
under state laws for any injuries  caused by ingestion  of  lead-based  paint by
children  living  at  the  Apartment  Communities  or any  apartment  properties
acquired by the Company in the future.

All of the Properties  were subject to Phase I (or an update of a prior Phase I)
or similar environmental assessments by independent  environmental  consultants.
Phase I  assessments  are  intended to discover  information  regarding,  and to
evaluate the  environmental  condition of, the surveyed property and surrounding
properties.  Phase I assessments generally include a historical review, a public
records review, a preliminary investigation of the surveyed site and surrounding
properties, and preparation and issuance of a written report, but do not include
soil sampling or subsurface investigations.

Various  environmental  laws and regulations also control how certain activities
can or must be conducted at the Company's  properties.  Such requirements govern
maintenance   activities,   renovation  projects  and  other  worker  operations
involving  asbestos or  lead-based  paint.  They also may govern air  emissions,
wastewater  discharges,  waste  management  or  similar  activities  related  to
operation of the Company's properties.

Under  various laws and  regulations,  owners and operators of  underground  and
aboveground  storage  tanks  containing  petroleum are obligated to meet certain
construction  and  operating  standards.  In  addition,  such  tank  owners  and
operators are responsible for remediating any contamination  caused by petroleum
released from such tanks.

Grove's  environmental  assessments  of its  properties  have not  revealed  any
environmental  liability that the Company believes would have a material adverse
effect on its business, assets or results of operations taken as a whole, nor is
the Company aware of any such material environmental liability.  Nonetheless, it
is  possible  that the  Company's  assessments  do not reveal all  environmental
liabilities  or that  material  environmental  liabilities  exist of  which  the
Company is unaware.  Moreover,  there can be no assurance  that (i) future laws,
ordinances or regulations or new interpretations of existing laws or regulations
will not impose any material environmental


                                       8
<PAGE>


liability  or  (ii)  the  current  environmental   condition  of  the  Company's
properties  will  not be  affected  by  tenants,  by the  condition  of  land or
operations in the vicinity of the Company's  properties (such as the presence of
leaking underground storage tanks), or by third parties unrelated to the Company
so as to impose any material environmental liability.

EMPLOYEES

As of February 15, 2000 the Company employed approximately 224 persons including
part time employees and its executive officers,  none of which is represented by
a labor union.  The Company  considers  its  relations  with its employees to be
good.

ITEM 2.  PROPERTIES
-------------------

The information  concerning the Company's  properties contained in Item 1 hereof
under the captions "The Apartment  Communities"  and "The Retail  Properties" is
incorporated herein by reference.

Certain  of the  Company's  properties  secure  mortgage  indebtedness  on  such
property as summarized by the following table.


<TABLE>
<CAPTION>
                             Principal Amount                      Total Book Value
                             Outstanding at        Fair Value      Principal Amount      Contractual
     Name of Property       December 31, 1999      Step up (1)       Outstanding         Interest Rate          Maturity Date
     ----------------       -----------------      -----------       -----------         -------------          -------------
                                          (amounts in thousands)
<S>                             <C>                 <C>                <C>                 <C>                  <C>
Avonplace                       $       6,342                          $     6,342         6.71% (2)              May 2008
Brooksyde                               1,937                                1,937         6.71% (2)              May 2008
Coachlight Village                      2,097                                2,097         6.71% (2)              May 2008
Colonial Village                        3,584                                3,584         6.71% (2)              May 2008
Dean Estates II                         1,225                                1,225         6.71% (2)              May 2008
Four Winds                              6,005                                6,005         6.71% (2)              May 2008
Fox Hill Apartments                     5,554                                5,554         6.71% (2)              May 2008
River's Bend                           12,389                               12,389         6.71% (2)              May 2008
Summitt & Birch Hill                    7,286                                7,286         6.71% (2)              May 2008
Royale                                  2,018                                2,018         6.71% (2)              May 2008
Barons Apartments                       1,218                                1,218           7.25%                June 2013
Bradford Apartments                     1,958                                1,958         6.71% (2)              May 2008
Burgundy Studios                        1,822                                1,822         6.71% (2)              May 2008
Cambridge Estates                       6,000                                6,000         7.04% (3)            January 2006
Parkwood                                2,863                                2,863           7.88%              October 2031
Sturbridge Meadows                      2,376                                2,376          10.08%              October 2004
Fox Hill Commons                        2,196                                2,196         6.71% (2)              May 2008
Glastonbury Center                      4,305                                4,305           8.33%              December 2003
Loomis Manor                            1,768                                1,768         6.71% (2)              May 2008
Winchester Woods                        2,338                                2,338           7.05%               March 2005
Woodbridge                              2,304                                2,304         6.71% (2)              May 2008
Dean Estates                            1,952                                1,952           7.09%              November 2006
Longmeadow Shops                        7,561                                7,561           8.20%                July 2009
Security Manor                          1,444                                1,444         6.71% (2)              May 2008
Van Deene Manor                         3,071                                3,071         6.71% (2)              May 2008
Ribbon Mill                             4,550                                4,550           7.61%              October 2029
Highmeadow                              4,350                                4,350           7.61%              October 2029
Hilltop                                 4,560                                4,560           7.61%              October 2029
Tanglewood                              6,665                                6,665           7.61%              October 2029
Briar Knoll                             6,087                                6,087           7.61%              October 2029
Glen Meadow                             2,747                                2,747           6.19%               March 2013
Westwood Glen                           4,468                                4,468           6.19%               April 2013
</TABLE>
                           ( continued on next page )


                                       9
<PAGE>


<TABLE>
<CAPTION>
                             Principal Amount                      Total Book Value
                             Outstanding at        Fair Value      Principal Amount      Contractual
     Name of Property       December 31, 1999      Step up (1)       Outstanding         Interest Rate          Maturity Date
     ----------------       -----------------      -----------       -----------         -------------          -------------
                                          (amounts in thousands)
<S>                             <C>                 <C>                <C>                 <C>                  <C>
Rockingham Glen                 $       4,553       $      219         $     4,772           7.46%               April 2018
Wilkins Glen                            1,917              418               2,335           8.96%               April 2016
Summerhill                              2,152              288               2,440           7.46%               April 2018
Nehoiden Glen                           1,066              121               1,187           8.20%                May 2008
Gosnold Grove                             729               37                 766           7.69%               April 2016
Glen Grove                              2,757              321               3,078           8.20%              October 2009
Conway Court                              502               74                 576           7.90%               April 2016
Norton Glen                             5,154            1,865               7,019          12.47%                June 2013
Cedar Glen                              2,728              325               3,053           8.40%              October 2009
Chestnut Glen                           4,751              834               5,585           9.70%              December 2011
Noonan Glen                               638              114                 752           9.75%                June 2011
Old Mill Glen                           2,158              812               2,970          12.26%              October 2012
Longfellow Glen                         5,190            2,023               7,213          12.26%                June 2013
Webster Green                           4,497              105               4,602           7.55%              December 2005
929 House                               5,226              388               5,614           7.40%               April 2018
Phillips Park                           3,068              220               3,288           8.39%              November 2006
                           ========================================================
  Total                         $     172,126       $    8,164         $   180,290
                           ========================================================
</TABLE>

(1)  These  amounts  represent  the  mortgage  step up  required  by  accounting
     principles  generally  accepted in the United States  ("GAAP") to state the
     debt at fair  value  assuming  a 7.00%  interest  rate as of the  date  the
     mortgages were assumed.
(2)  These seventeen  properties  secure the Company's $63 million interest only
     first mortgage note. The effective interest rate on this note is 6.71%.
(3)  This loan is secured by three  properties,  Cambridge  Estates,  Park Place
     West, and Arbor Commons.

Reference  is  also  made  to  Note 5 to the  Company's  Consolidated  Financial
Statements for the year ended December 31, 1999 included elsewhere herein.

ITEM 3.  LEGAL PROCEEDINGS
--------------------------

The  Company is not  presently  involved  in any legal  proceedings,  other than
litigation arising in the ordinary course of business, some of which is expected
to be covered by  liability  insurance  and all of which,  collectively,  is not
expected to have a material adverse effect on the business,  financial condition
or results of operations of the Company.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------------------------------------------------------------

The Company did not submit any matters to a vote of security  holders during the
fourth quarter of the fiscal year ended December 31, 1999.


PART II
-------

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
------------------------------------------------------------------------------

MARKET INFORMATION

The Company's Common Shares of Beneficial Interest,  $.01 par value (the "Common
Shares"),  are listed on the American Stock Exchange (the "AMEX") (Regular List)
under the symbol "GVE." The following table sets forth for the periods indicated
the high and low sale prices as reported on the AMEX and the dividends  declared
and paid by the Company on each Common Share for each such period.


                                       10
<PAGE>


1999 Quarter Ended
------------------
                                                                   Dividend per
                                          High           Low       Common Share
                                          ----           ---       ------------
March 31, 1999 ..............          $ 12.125       $ 10.438       $ 0.18
June 30, 1999 ...............          $ 13.500       $ 10.500       $ 0.18
September 30, 1999 ..........          $ 14.000       $ 12.125       $ 0.18
December 31, 1999 ...........          $ 13.250       $ 11.750       $ 0.18

1998 Quarter Ended
------------------
                                                                   Dividend per
                                          High           Low       Common Share
                                          ----           ---       ------------
March 31, 1998 ..............          $ 10.938       $ 10.125       $ 0.17
June 30, 1998 ...............          $ 11.250       $ 10.000       $ 0.17
September 30, 1998 ..........          $ 10.875       $  8.750       $ 0.17
December 31, 1998 ...........          $ 11.750       $  9.250       $ 0.17

The Company made no sales of Common Shares  during 1997,  1998 or 1999 that were
not  registered  under the  Securities  Act of 1933,  except for sales for which
information has been previously  included in a Quarterly  Report on Form 10-Q or
Form 10-QSB.

EQUITY OFFERINGS AND OP UNIT ISSUANCES

In March 1997,  the Company  completed a private  offering of  3,333,333  Common
Shares at $9.00 per share and received net proceeds of approximately $27 million
in connection therewith.

In March 1997, the Company, through the Operating Partnership,  issued 2,114,439
OP  Units at $9.00  per OP Unit in  exchange  for  partnership  interests  in 20
properties  owned by  affiliates  of the  Company  and the  assets  and  related
liabilities of GPS, the entity that managed the Company's properties.  The total
value of the OP Units at the time of  issuance  for the above  transactions  was
approximately $19 million.

In June 1997, the Company, through the Operating Partnership,  issued 420,183 OP
Units  at  $10.00  per OP  Unit  in  exchange  for  partnership  interests  in 3
properties  owned by affiliates of the Company.  The total value of the OP Units
at the time of  issuance  for the  above  transactions  was  approximately  $4.2
million.

In  September  1997,  the Company,  through the  Operating  Partnership,  issued
325,836 OP Units at $10.50 per OP Unit in exchange for partnership  interests in
3 properties owned by affiliates of the Company. The total value of the OP Units
at the time of  issuance  for the  above  transactions  was  approximately  $3.4
million.

In October 1997, the Company, through the Operating Partnership,  issued 143,334
OP Units at  $10.50  per OP Unit in  exchange  for  partnership  interests  in 2
properties  owned by affiliates of the Company.  The total value of the OP Units
at the  time of  issuance  for the  above  transaction  was  approximately  $1.5
million.

In  November  1997,  the  Company  completed  a  registered  public  offering of
3,141,475  Common  Shares and a  concurrent  offering  to certain  institutional
investors of 1,358,525  Common Shares both at $10.875 per share and received net
proceeds of approximately $45.2 million in connection therewith.

In April 1998, the Company,  through the Operating Partnership,  issued 5,818 OP
Units  at  $10.50  per OP Unit in  exchange  for  partnership  interests  in one
property  owned by an affiliate of the Company.  The total value of the OP Units
at the time of  issuance  for the  above  transaction  was  approximately  $0.06
million.

From July to December 1998,  35,307 OP Units were exchanged for Common Shares on
a one-for-one  basis.  The offer and sale of these shares was  registered on the
Company's Registration Statement on Form S-3 (no. 333-48551).

In September 1998, the Company issued 63,153 Common Shares to Executive Officers
under the 1996  Share  Incentive  Plan.  The offer and sale of these  shares was
registered on the Company's Registration Statement on Form S-8 (no. 333-53653).


                                       11
<PAGE>


In October 1998, the Company, through the Operating Partnership,  issued 845,569
OP  Units at $9.82  per OP Unit in  exchange  for  partnership  interests  in 17
properties  owned by an unaffiliated  party.  The total value of the OP Units at
the time of issuance for the above transaction was  approximately  $8.3 million.
In  addition,   on  October  31,  1998,  the  Company,   through  the  Operating
Partnership,  issued  73,440  OP Units at  $10.33  per OP Unit in  exchange  for
partnership  interests in a property owned by an unaffiliated  third party.  The
total value of the OP Units at the time of  issuance  for this  transaction  was
approximately $0.8 million.

In November 1998,  the Company sold 392,000 Common Shares  directly to Executive
Officers of the Company at a price of $10.25 per share (the then current  market
price per share).

In November 1998, the Company, through the Operating Partnership, issued 104,525
OP Units at  $10.40  per OP Unit in  exchange  for  partnership  interests  in a
property owned by an unaffiliated  third party.  The total value of the OP Units
at the  time of  issuance  for the  above  transaction  was  approximately  $1.1
million.

In January 1999, effective December 31, 1998, the Company, through the Operating
Partnership  issued  23,091  OP  Units at  $11.40  per OP Unit in  exchange  for
partnership  interests in a property owned by an unaffiliated  third party.  The
total  value of the OP Units at the time of issuance  for the above  transaction
was approximately $0.3 million.

From February to December 1999, 61,087 OP Units were exchanged for Common Shares
on a one-for-one basis. The offer and sale of these shares was registered on the
Company's Registration Statement on Form S-3 (no. 333-48551).

From June to December  1999,  56,692  Common Shares were issued upon exercise of
stock  options  under the 1994  Plan at a  weighted  average  price of $9.82 per
share.  The offer  and sale of these  shares  was  registered  on the  Company's
Registration Statement on Form S-8 (no.
333-53655).

In May 1999, the Company,  through the Operating Partnership,  issued 314,846 OP
Units at $11.05 per OP Unit to continuing  partners of certain McNeil  Portfolio
properties  because these  properties were converted to market rate  properties.
The  total  value  of the OP  Units  at the  time  of  issuance  for  the  above
transaction was approximately $3.5 million.

In October 1999, the Company,  through the Operating Partnership,  issued 76,255
OP  Units  at  $12.30  per OP Unit to  continuing  partners  of  certain  McNeil
Portfolio  properties  because these  properties  were  converted to market rate
properties.  The  total  value of the OP Units at the time of  issuance  for the
above transaction was approximately $0.9 million.

In October 1999, the Company,  through the Operating Partnership,  issued 10,683
OP Units  and paid $0.9  million  for the  remaining  minority  limited  partner
interests in five partnerships (the "Minority  Interests") that are consolidated
in the Company's  financial  statements.  As a result,  in the fourth quarter of
1999, there are no longer any Minority Interests in Consolidated Partnerships on
the  Company's  balance  sheet.  The total value of the OP Units and cash at the
time of issuance for the above transaction was approximately $1.0 million.

Except as otherwise stated above, all of the transactions referred to above were
not  registered  under the  Securities  Act of 1933 in reliance on the exemption
contained in Rule 506  thereunder  on the basis that each of the  purchasers  in
such transactions was an accredited investor.

REPURCHASES OF COMMON SHARES AND OP UNITS

From  April to  December  1998,  252,153 OP Units  were  redeemed  for cash at a
weighted average cost of $10.26 per OP Unit.

From September to December 1998,  304,630 Common Shares were  repurchased by the
Company at a weighted average cost of $9.79 per Common Share.

From  January to December  1999,  205,536 OP Units were  redeemed  for cash at a
weighted average cost of $12.63 per OP Unit.

From March to December  1999,  560,297  Common  Shares were  repurchased  by the
Company at a weighted average cost of $12.26 per Common Share.


                                       12
<PAGE>


DIVIDENDS

During 1999, the Company declared  dividends totaling $0.72 per Common Share, or
approximately  56.1% of its Funds from  Operations  ("FFO") during the year. For
1998,  the  Company  declared  dividends  totaling  $0.68 per Common  Share,  or
approximately  63% of its FFO during the year.  The payment of  dividends by the
Company will be at the discretion of the Board of Trust Managers and will depend
on  numerous  factors,  including  the  actual  cash  flow of the  Company,  its
financial condition, capital requirements,  the annual distribution requirements
under the REIT  provisions  of the Internal  Revenue Code and such other factors
that the Board of Trust Managers deems relevant.

Distributions  by the  Company  to the  extent of its  current  and  accumulated
earnings and profits for federal  income tax purposes  generally will be taxable
to shareholders as ordinary dividend income.  Distributions in excess of current
and  accumulated  earnings and profits  (return of capital) will be treated as a
non-taxable  reduction  of a  shareholder's  basis in the  Common  Shares to the
extent thereof,  and thereafter as taxable gain. Dividends that are treated as a
reduction of a shareholder's  basis in its Common Shares will have the effect of
deferring taxation until the sale of such shareholder's  Common Shares.  None of
the  $0.72  dividends   declared  for  1999   represented   return  of  capital.
Approximately 13.83% of the $0.68 dividends declared for 1998 represented return
of capital.

HOLDERS

The number of holders of record of the Common  Shares on  February  29, 2000 was
113.  The  estimated  number of  beneficial  stockholders  of  Common  Shares on
February 29, 2000 was approximately 1,200.



                                       13
<PAGE>


ITEM 6.   SELECTED FINANCIAL DATA
---------------------------------
<TABLE>
<CAPTION>
                                                                                     Years Ended December 31,
                                                                       1999         1998         1997         1996         1995
                                                                   ----------------------------------------------------------------
                                                                       (In thousands, except per share data and Apartment Data)

<S>                                                                <C>          <C>          <C>          <C>          <C>
Operating Information:
----------------------
Revenues:
  Rental income ...............................................    $  62,925    $  37,994    $  17,111    $   2,046    $   1,287
  Property and management .....................................          256          477          518         --           --
  Interest and other ..........................................        1,276          361          309           36           30
                                                                   ---------    ---------    ---------    ---------    ---------
      Total revenues ..........................................       64,457       38,832       17,938        2,082        1,317
                                                                   ---------    ---------    ---------    ---------    ---------
Expenses:
  Property operating ..........................................       23,342       13,433        6,078          656          406
  Real estate taxes ...........................................        5,631        3,798        1,770          208          149
  Related party management fees ...............................         --           --             22          109           67
  Interest expense ............................................       14,103        6,791        2,741          394           85
  Non-recurring acquisition expense (1) .......................         --          5,550         --           --           --
  Depreciation and amortization ...............................       10,289        6,167        2,701          387          216
  General and administrative (2) ..............................        8,510        2,002          908           67           56
                                                                   ---------    ---------    ---------    ---------    ---------
      Total expenses ..........................................       61,875       37,741       14,220        1,821          979
                                                                   ---------    ---------    ---------    ---------    ---------
Income before gain on sale, extraordinary items, and minority
  interests....................................................        2,582        1,091        3,718          261          338
Gain on sale of property ......................................        3,342         --           --           --           --
                                                                   ---------    ---------    ---------    ---------    ---------
Income before extraordinary items and minority interests ......        5,924        1,091        3,718          261          338
Minority interests in consolidated partnerships ...............           65           76          155         --           --
Minority interest in Operating Partnership ....................        1,838          268        1,267         --           --
                                                                   ---------    ---------    ---------    ---------    ---------
Income before extraordinary items .............................        4,021          747        2,296          261          338
Extraordinary income (expenses) related to debt refinancing and
  extinguishment ..............................................          149         (888)        --           --           --
                                                                   ---------    ---------    ---------    ---------    ---------
Net income (loss) .............................................    $   4,170    $    (141)   $   2,296    $     261    $     338
                                                                   =========    =========    =========    =========    =========
Income before extraordinary items per common share-basic ......    $    0.48    $    0.09    $    0.61    $    0.42    $    0.55
                                                                   =========    =========    =========    =========    =========
Net income (loss) per common share-basic ......................    $    0.49    $   (0.02)   $    0.61    $    0.42    $    0.55
                                                                   =========    =========    =========    =========    =========
Income before extraordinary items per common share-diluted ....    $    0.47    $    0.09    $    0.61    $    0.42    $    0.55
                                                                   =========    =========    =========    =========    =========
Net income (loss) per common share-diluted ....................    $    0.48    $   (0.02)   $    0.61    $    0.42    $    0.55
                                                                   =========    =========    =========    =========    =========
Weighted average number of common shares outstanding-basic ....        8,457        8,449        3,765          620          620
                                                                   =========    =========    =========    =========    =========
Weighted average number of common shares outstanding-diluted ..        8,618        8,458        3,785          620          620
                                                                   =========    =========    =========    =========    =========
Balance Sheet Information:
--------------------------
Real estate, before accumulated depreciation ..................    $ 316,174    $ 318,599    $ 147,767    $   9,798    $   5,393
                                                                   =========    =========    =========    =========    =========
Total assets ..................................................    $ 317,197    $ 327,115    $ 148,150    $   9,521    $   5,241
                                                                   =========    =========    =========    =========    =========
Total mortgage and revolving credit facility debt .............    $ 195,590    $ 196,391    $  49,058    $   5,669    $   1,190
                                                                   =========    =========    =========    =========    =========
Minority interests ............................................    $  32,231    $  32,872    $  25,696    $    --      $    --
                                                                   =========    =========    =========    =========    =========
Shareholders' equity ..........................................    $  67,675    $  73,783    $  68,498    $   3,483    $   3,703
                                                                   =========    =========    =========    =========    =========
Other Information:
------------------
Funds from operations (3) .....................................    $  16,035    $  12,409    $   5,977    $     596    $     508
                                                                   =========    =========    =========    =========    =========
Cash flow from (used in):
   Operating activities .......................................    $  15,866    $  15,697    $   5,821    $     718    $     585
                                                                   =========    =========    =========    =========    =========
   Investment activities ......................................    $  (1,962)   $ (52,635)   $ (40,440)   $    (302)   $     (99)
                                                                   =========    =========    =========    =========    =========
   Financing activities .......................................    $ (16,433)   $  50,734    $  35,546    $    (418)   $    (518)
                                                                   =========    =========    =========    =========    =========
Apartment Data:
---------------
Number of apartment communities (end of period) ...............           57           61           35            4            3
                                                                   =========    =========    =========    =========    =========
Number of apartment units (end of period) .....................        6,236        6,526        3,403          257          165
                                                                   =========    =========    =========    =========    =========
Average monthly rental rate per unit ..........................    $     792    $     758    $     702    $     676    $     660
                                                                   =========    =========    =========    =========    =========
Average economic occupancy rate ...............................         96.4%        96.0%        96.1%        95.5%        97.8%
                                                                   =========    =========    =========    =========    =========
Number of retail properties (end of period) ...................            4            4            3            0            0
                                                                   =========    =========    =========    =========    =========
</TABLE>

(1)  In the fourth  quarter of 1998, the Company  incurred a one-time  charge of
     $5.6 million related to the acquisition of the McNeil Portfolio. The charge
     was for the purchase of the McNeil Portfolio property management  contracts
     from an unrelated third party  management  company.  However,  this amount,
     which is a non-


                                       14
<PAGE>


     recurring item, has been excluded in calculating FFO.
(2)  In the fourth  quarter of 1999, the Company  incurred a one-time  charge of
     $3.9 million.  The charge pertains to an executive bonus  compensation plan
     initiated  by the  Compensation  Committee of the Board of Trustees in 1998
     after the successful completion of the acquisition of the McNeil Portfolio.
     It was the  initial  intent to  allocate  the  charges for this plan over a
     3-year  period;  however,  the  Company  significantly  exceeded  its  1999
     financial  goals  and  objectives  due to  strong  performance  of the 1998
     acquisitions.  Therefore, the Compensation Committee determined that it was
     appropriate  at this time to accrue the remaining  amounts under this plan.
     However,  this amount,  which is a non-recurring item, has been excluded in
     calculating FFO.
(3)  Funds from  operations or "FFO" as defined in the white paper on funds from
     operations  which was  approved by the Board of  Governors  of the National
     Association of Real Estate  Investment  Trusts ("NAREIT") in March 1995, is
     net income  computed in accordance  with GAAP,  before gains or losses from
     sales  of  properties  and  extraordinary   items,  plus  depreciation  and
     amortization and after adjustment for unconsolidated partnerships and joint
     ventures.  The  Company  considers  FFO  to be an  appropriate  measure  of
     performance  for an equity  REIT,  along  with  cash  flow  from  operating
     activities,  financing  activities  and  investing  activities,  because it
     provides  investors with an indication of an equity REIT's ability to incur
     and service debt, make capital  expenditures,  pay  distributions  and fund
     other cash needs. The Company computes FFO in accordance with the standards
     established  by  NAREIT  (including  for 1999 the  add-back  of a  one-time
     executive  bonus  change)  which may not be  comparable  to FFO reported by
     other  REITs  that do not define the term in  accordance  with the  current
     NAREIT   definition  or  that  interpret  the  current  NAREIT   definition
     differently.  FFO does not represent cash generated by operating activities
     in accordance  with GAAP and should not be considered as an  alternative to
     net  income,  determined  in  accordance  with GAAP,  as an  indication  of
     financial   performance  or  the  cash  flow  from  operating   activities,
     determined in accordance with GAAP, as a measure of liquidity.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
         OF OPERATIONS
         -------------

OVERVIEW

The following  discussion  should be read in conjunction  with the  consolidated
financial statements and notes thereto included elsewhere in this Report.

The results of operations  for the year ended December 31, 1999 include the four
properties  owned on January 1, 1997,  twenty  properties  acquired on March 14,
1997 in conjunction with the Consolidation Transactions, the fourteen properties
subsequently acquired in 1997 and the twenty-seven properties purchased in 1998.
The Consolidation  Properties (the "Consolidation  Properties") and the fourteen
subsequent acquisitions are collectively referred to as the "1997 Acquisitions".
In  addition,  all of the  previously  mentioned  properties  of the Company are
collectively referred to as the "1997 Properties".  The twenty-seven  properties
purchased during 1998 are referred to as the "1998  Acquisitions".  In addition,
all  of the  previous  mentioned  properties  of the  Company  are  collectively
referred to as the "Properties."

RESULTS OF OPERATIONS

Results of operations  of the Company for the years ended  December 31, 1999 and
1998.

Total  revenues  increased  $25.7  million from $38.8  million to $64.5  million
during the year ended  December 31, 1999, as compared to the year ended December
31, 1998. The increase is mainly due to the operations of the 1998  Acquisitions
for all of  1999.  (See  Note 2 to the  consolidated  financial  statements  for
details.)

The  Properties  experienced  an  increase  in rental  rates and an  increase in
occupancy.  The weighted  average monthly rental rates increased to $792 for the
year ended  December  31, 1999 from $758 for the year ended  December  31, 1998.
Economic  occupancy  for the year  increased  to an aggregate  weighted  average
occupancy  of 96.4% for the year  ended  December  31,  1999  from an  aggregate
weighted average occupancy of 96.0% for the year ended December 31, 1998.

Property  operating  expenses increased $9.9 million from $13.4 million to $23.3
million  during the year ended  December 31, 1999, as compared to the year ended
December 31, 1998.  The increase is primarily due to the  operations of the 1998
Acquisitions for all of 1999.

Real estate  taxes  increased  $1.8  million  from $3.8  million to $5.6 million
during the year ended  December 31, 1999, as compared to the year ended December
31,  1998.  The  increase  is  primarily  due to  the  operations  of  the  1998
Acquisitions for all of 1999.

Interest  expense  increased  $7.3 million  from $6.8  million to $14.1  million
during the year ended  December 31, 1999, as compared to the year ended December
31,  1998.  The  increase  is  primarily  due to the  debt  related  to the 1998
Acquisitions.

Depreciation and amortization  increased $4.1 million from $6.2 million to $10.3
million  during the year ended  December 31, 1999, as compared to the year ended
December 31, 1998. The increase is related to the 1998 Acquisitions.

General and administrative  expenses increased $6.5 million from $2.0 million to
$8.5 million  during the year ended  December 31, 1999,  as compared to the year
ended December 31, 1998.  This increase is primarily due to the increased  costs
associated with the change in size of the Company and costs  associated with the
executive bonus plan including a one-time charge of $3.9 million in 1999.


                                       15
<PAGE>


The  Company's   income   before   extraordinary   expenses,   related  to  debt
extinguishment,  increased $3.3 million from $0.7 million to $4.0 million during
the year ended  December  31, 1999,  as compared to the year ended  December 31,
1998.  The increase is mainly due to an increase in revenue of $25.7 million and
gains on sale of  property  of $3.3  million  offset by  increases  in  property
operating expenses of $9.9 million,  real estate taxes of $1.8 million,  general
and administrative  expenses of $6.5 million,  interest expense of $7.3 million,
depreciation  and  amortization of $4.1 million and a decrease in  non-recurring
items of $1.7 million.

Results of operations  of the Company for the years ended  December 31, 1998 and
1997.

Total  revenues  increased  $20.9  million from $17.9  million to $38.8  million
during the year ended  December 31, 1998, as compared to the year ended December
31, 1997. The increase is mainly due to the operations of the 1997  Acquisitions
and the 1998 Acquisitions.  (See Note 2 to the consolidated financial statements
for details.)

The Properties  experienced an increase in rental rates and a slight decrease in
occupancy in 1998. The weighted  average  monthly rental rates increased to $758
for the year ended  December 31, 1998 from $702 for the year ended  December 31,
1997. Economic occupancy for the year decreased to an aggregate weighted average
occupancy  of 96.0% for the year  ended  December  31,  1998  from an  aggregate
weighted average occupancy of 96.1% for the year ended December 31, 1997.

Property  operating  expenses  increased $7.3 million from $6.1 million to $13.4
million  during the year ended  December 31, 1998, as compared to the year ended
December 31, 1997.  The increase is primarily due to the  operations of the 1997
Acquisitions and the 1998 Acquisitions.

Real estate  taxes  increased  $2.0  million  from $1.8  million to $3.8 million
during the year ended  December 31, 1998, as compared to the year ended December
31, 1997.  The increase is primarily due to the 1997  Acquisitions  and the 1998
Acquisitions.  Related party  management  fees  decreased $.02 million from $.02
million to $0.0 million.  This decrease is due to  acquisition by the Company of
the  management   services   division  of  GPS  as  part  of  the  Consolidation
Transactions.

Interest expense increased  $4.1million from $2.7 million to $6.8 million during
the year ended  December  31, 1998,  as compared to the year ended  December 31,
1997.  The increase is primarily due to the  assumption of mortgage debt and new
debt related to the 1997 Acquisitions and the 1998 Acquisitions.

Depreciation and  amortization  increased $3.5 million from $2.7 million to $6.2
million  during the year ended  December 31, 1998, as compared to the year ended
December 31, 1997. The increase is related to the 1997 Acquisitions and the 1998
Acquisitions.

General and administrative  expenses increased $1.1 million from $0.9 million to
$2.0 million  during the year ended  December 31, 1998,  as compared to the year
ended December 31, 1997.  This increase is primarily due to the increased  costs
associated with the change in size of the Company.

The  Company's   income   before   extraordinary   expenses,   related  to  debt
extinguishment,  decreased $1.6 million from $2.3 million to $0.7 million during
the year ended  December  31, 1998,  as compared to the year ended  December 31,
1997.  The  decrease is mainly due to an  increase in revenue of $20.9  million,
offset by  increases  in property  operating  and  maintenance  expenses of $7.4
million, real estate taxes of $2.0 million,  general and administrative expenses
of $1.1 million, interest expense of $4.1 million, depreciation and amortization
of $3.5 million and a $5.6 million non-recurring expense for the purchase of the
management contracts related to the acquisition of the McNeil Portfolio.


SAME COMMUNITY ANALYSIS

The 31 apartment communities (3,210 apartments) owned by Grove or its affiliated
predecessors  since  the  beginning  of  1998,  a "Same  Community"  comparison,
experienced an increase in average  monthly rental rates, an increase in average
economic  occupancy and an increase in net operating income. On a Same Community
basis, the weighted average monthly rental rate per apartment  increased 4.5% to
$752 from $720 and the economic occupancy rate increased to 96.5% from 95.7% for
1999 as compared to 1998. Overall, Same Community net operating income increased
8.2% to $16.7  million  from $15.4  million for 1999 as  compared  to 1998.  Net
operating income  increased due to a 5.9% increase in revenues  partially offset
by a  2.6%  increase  in  operating  expenses.  Revenues  increased  due  to the
increases in occupancy and rental rates.  Operating expenses increased primarily
due to higher  utilities  and snow removal  expenses,  offset by lower  payroll,
property insurance and advertising  expense. The following table summarizes Same
Community operations:


                                       16
<PAGE>


                                            -------------------------
                                               Twelve Months Ended
                                                   December 31,             %
                                            -------------------------
                                              (Dollars in Millions)
                                              ---------------------

                                                 1999        1998        Change
                                                 ----        ----        ------
Economic Occupancy                               96.5%       95.7%        1.1%
                                            =========================
Average monthly rental rate per unit          $    752    $    720        4.5%
                                            =========================
Revenues (millions)                           $  27.97    $  26.42        5.9%
Operating expenses (millions)                    11.27       10.99        2.6%
                                            ====================================
    Net operating income (millions)           $  16.71    $  15.43        8.2%
                                            ====================================

LIQUIDITY AND CAPITAL RESOURCES

Cash and cash  equivalents  totaled $12.7  million as of December 31, 1999.  The
Company's ratio of long-term debt,  including amounts outstanding under the 1999
Credit Facility,  to market capitalization on December 31, 1999, was 53.9% based
on total market capitalization of $347.7 million based on 3,903,936 Common Units
and 8,197,141  Common Shares valued at $13.25 per share/unit  (the closing price
on December 31, 1999) plus long-term debt of $195.6  million  including  amounts
outstanding under the 1999 Credit Facility.

Cash  provided by operating  activities  was $15.9 million for the twelve months
ended December 31, 1999. Cash used in investing  activities was $2.0 million for
the twelve months ended December 31, 1999. Net cash used in financing activities
was $16.4 million for the twelve months ended December 31, 1999.

On December 15, 1999, the Company declared a dividend of $0.18 per share for the
quarter  ended  December 31, 1999.  The dividend was paid on January 14, 2000 to
shareholders  of record on December 30, 1999. On September 23, 1999, the Company
declared a dividend of $0.18 per share for the quarter ended September 30, 1999.
The dividend was paid on October 15, 1999 to shareholders of record on September
30, 1999. On June 18, 1999,  the Company  declared a dividend of $0.18 per share
for the quarter  ended June 30, 1999.  The dividend was paid on July 15, 1999 to
shareholders of record on June 30, 1999. On March 17, 1999, the Company declared
a dividend of $0.18 per share for the quarter ended March 31, 1999. The dividend
was paid on April 15,  1998 to  shareholders  of record on March 31,  1999.  The
dividends  declared  during the year ended  December 31, 1999 of $0.72 per share
resulted in a 56.1% payout of funds from operations.

On August 13, 1999, the Company entered into the 1999 Credit Facility.  The 1999
Credit Facility is unsecured,  has availability of up to $40.0 million,  matures
in August 2001, and contains other financial covenants. The 1999 Credit Facility
bears interest  payable  monthly at a floating rate of 2.0% above the 30, 60, or
90-day LIBOR rate. The 1999 Credit Facility is available to fund future property
acquisitions and working capital needs. As of December 31, 1999, the 1999 Credit
Facility had $15.3 million outstanding.

Acquisition  Notes  Payable are  obligations  related to three McNeil  Portfolio
properties  to pay  additional  cash and  issue  additional  Common  Units  when
apartment  units are converted to market rate units.  In 1998,  the mortgages on
the three  properties were modified to allow for each property to convert 80% of
its units to market rate units. As a result of the mortgage  modifications,  the
Company accrued $13.0 million of Acquisition Notes Payable at December 31, 1999.

Commencing  six  months  after  the  closing  date and  continuing  in six month
intervals   thereafter,   the  Company   will  make  a  payment  of   additional
consideration  for each unit  converted  to a market  rate  unit.  The number of
Common  Units to be issued  as  additional  consideration  is based on a formula
using the 15-day average  closing price of the Company's stock just prior to the
payment date. When the additional  consideration is paid, the Acquisition  Notes
Payable  will be  reduced by the amount of cash paid and the value of the Common
Units issued.  Minority interests in the Operating Partnership will be increased
by the value of the Common Units.  During 1999, the Operating  Partnership  paid
cash of $2.9 million and issued 391,101 Common Units valued at $4.4 million.  In
addition,  the Company reduced the Acquisition  Notes Payable for changes in the
number of apartment  units available for conversion to market rate units and for
changes in capitalization and interest rates. The Company anticipates paying the
amount  accrued at December 31, 1999 in cash of  approximately  $2.0 million and
Common Units valued at approximately $2.7 million during 2000.

The Company intends to meet its short-term  liquidity  requirements through cash
on hand,  cash flow provided by operations and borrowings  under the 1999 Credit
Facility. The Company considers its ability to generate cash to be adequate, and
expects it to continue to be adequate  to meet  operating  requirements  and pay
shareholder dividends in accordance with REIT requirements.  The Company may use
other sources of capital to finance additional acquisitions  including,  but not
limited to, the selling of additional


                                       17
<PAGE>


equity  interests in the Company,  non-distributed  Funds from  Operations,  the
issuance of debt securities, funds from the 1999 Credit Facility, and exchanging
Common Shares or Common Units for properties or interests in properties.

The  Company  regularly  evaluates   properties  for  possible   acquisition  or
disposition.  Individual  properties may be acquired  through direct purchase of
the property or through the purchase of the entity  owning such property and may
be made for cash or securities of the Company or the Operating  Partnership.  In
connection with any acquisition,  the Company may incur additional indebtedness.
If the  Company  acquires  or  disposes of any  property,  such  acquisition  or
disposition  could  have  a  significant  effect  on  the  Company's   financial
condition, results of operations or cash flows.

FUNDS FROM OPERATIONS

The Company considers FFO, among other factors,  when determining  distributions
to be paid to  shareholders.  FFO,  as defined in the White  Paper on Funds From
Operations,  which was  approved  by the Board of  Governors  of NAREIT in March
1995,  means net income  (computed in accordance with GAAP),  excluding gains or
losses from debt  restructuring  and sales of properties,  plus depreciation and
amortization  and after  adjustments for  unconsolidated  partnerships and joint
ventures. Adjustments for unconsolidated partnerships and joint ventures will be
calculated  to reflect funds from  operations on the same basis.  As provided in
the NAREIT guidance, items classified by GAAP as extraordinary or unusual, along
with significant  non-recurring  events that materially  distort the comparative
measurement  of  Company   performance   over  time,  are   disregarded  in  the
calculation.  The  Company  considers  FFO  to  be  an  appropriate  measure  of
performance for an equity REIT, along with cash flow from operating  activities,
financing  activities and investing  activities,  because it provides  investors
with an indication of an equity REIT's  ability to incur and service debt,  make
capital  expenditures,  pay distributions and fund other cash needs. The Company
computed FFO in accordance with the standards  established by NAREIT  (including
for 1999 the add-back of a one-time  executive  bonus  charge)  which may not be
comparable  to FFO  reported  by other  REIT's  that do not  define  the term in
accordance  with the current  NAREIT  definition  or that  interpret the current
NAREIT  definition  differently.  FFO  does  not  represent  cash  generated  by
operating  activities in accordance with GAAP and should not be considered as an
alternative to net income,  determined in accordance with GAAP, as an indication
of financial performance or the cash flow from operating activities,  determined
in accordance with GAAP, as a measure of liquidity.

Effective  January 1, 2000, based on revised NAREIT  guidance,  FFO will include
both recurring and non-recurring results of operations.  Consequently, under the
new  definition,  1999's unusual and  non-recurring  expense would not have been
excluded.

FFO  increased  $3.6 million from $12.4  million to $16.0  million for the years
ended December 31, 1998 and 1999, respectively. Dividends declared and Operating
Partnership  distributions  for the year  ended  December  31,  1999  were  $8.8
million,  representing  56% of  FFO,  while  dividends  declared  and  Operating
Partnership  distributions  for the year  ended  December  31,  1998  were  $7.8
million, representing 63% of FFO.

FFO  increased  $6.4 million from $6.0 million in 1997 to $12.4 million in 1998.
Dividends  declared and Operating  Partnership  distributions for the year ended
December 31, 1998 were $7.8 million  representing 63% of FFO. Dividends declared
and Operating  Partnership  distributions  for the year ended  December 31, 1997
were $2.6 million representing 43% of FFO.

FFO was calculated as follows:
                                                For the Year Ended December 31,
                                                -------------------------------
                                                    (dollars in thousands)


<TABLE>
<CAPTION>
                                                     1999        1998        1997
                                                     ----        ----        ----
<S>                                               <C>         <C>         <C>
Income before gain on sales, extraordinary ....   $  2,582    $  1,091    $  3,718
  items and minority interests
Real estate depreciation and amortization .....      9,713       5,894       2,530
Non-recurring expenses ........................      3,850       5,550          69
                                                  --------    --------    --------
Funds from operations before extraordinary
  items and minority interests ................     16,145      12,535       6,317

Minority interests in consolidated partnerships       (110)       (126)       (340)
                                                  --------    --------    --------
FFO ...........................................   $ 16,035    $ 12,409    $  5,977
                                                  ========    ========    ========
</TABLE>

SEASONALITY

Historically,  net income  from the  Properties  has been lower in the first and
second quarters than in the remainder of the year due to higher utility charges,
snow  removal and other  weather-related  expenses.  In  addition,  rental rates
increase ratably during the year, which results in higher rental revenues in the
second half of the year.


                                       18
<PAGE>


INFLATION

Substantially  all of the leases at the Apartment  Communities are for a term of
one year or less,  which may enable the  Company  to seek  increased  rents upon
renewal or rerenting.  Such short-term  leases  generally lessen the risk to the
Company of the potential adverse effects of inflation.

"SAFE HARBOR" STATEMENT UNDER PRIVATE SECURITIES LITIGATION REFORM ACT OF 1996

Certain statements contained in this Report, and in particular in "Business" and
this "Management's Discussion and Analysis of Financial Condition and Results of
Operations,"  statements  in other  filings  with the  Securities  and  Exchange
Commission  and  statements  in other  public  documents  of the  Company may be
forward looking and are subject to a variety of risks and uncertainties. Forward
looking   statements   generally  contain  words  like  "believes,"   "expects,"
`anticipates"  or words of similar  import.  Many  factors  could  cause  actual
results to differ materially from these statements.  These factors include,  but
are not limited to, (i)  population  shifts  which may  increase or decrease the
demand for  rental  housing,  (ii) the  ability of the  Company  effectively  to
integrate acquired properties into its operations and to adapt its operations to
the ownership of  properties  with varying  characteristics,  (iii) the value of
commercial and residential  rental  properties in the Northeast where all of the
Company's  properties  are  located,  in recent  years,  which  have  fluctuated
considerably,  (iv) the effect on the Company's  properties of competition  from
new apartment  complexes  which may be completed in proximity to such properties
thereby increasing  competition,  (v) the effect of weather and other conditions
which  can  significantly   affect  property   operating   expenses,   (vi)  the
availability  of acquisition  financing or  refinancing,  (vii)  compliance with
applicable laws and regulations,  including the regulations of HUD and MHFA, and
(viii) other factors which might be described from time to time in the Company's
filings with the Securities and Exchange Commission. In addition, the Company is
subject to the effects of changes in the general business economic conditions.

Although the Company believes that its properties will continue to be attractive
to tenants  and that it will be able to control  expenses,  future  revenue  and
operating  trends  cannot be  reliably  predicted.  These  trends  may cause the
Company to adjust its operation in the future.  Factors  external to the Company
can also  affect  the  price of the  Company's  Common  Shares.  Because  of the
foregoing and other  factors,  recent  trends should not be considered  reliable
indicators of future financial results or stock prices.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
--------------------------------------------------------------------

The Company is exposed to certain  financial  market risks, the most predominant
being  fluctuations in interest rates.  Interest rate fluctuations are monitored
by  management  as an integral  part of the  Company's  overall risk  management
program, which recognizes the unpredictability of financial markets and seeks to
reduce the potentially  adverse affect on the results of operations.  The effect
of interest  rate  fluctuations  historically  has been small  relative to other
factors affecting operating results, such as rental rates and occupancy.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
----------------------------------------------------

The financial statements are included on pages F-1 to F-20.

ITEM 9.   CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING AND
--------------------------------------------------------------------------------
          FINANCIAL DISCLOSURE
          --------------------

None

PART III
--------

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------------------------------

The  information  required by this Item 10 is incorporated by reference from the
Company's definitive Proxy Statement for its 2000 Annual Meeting of Shareholders
to be filed pursuant to Regulation 14A promulgated under the Securities Exchange
Act of 1934,  which Proxy  Statement will be filed within 120 days after the end
of the Company's fiscal year ended December 31, 1999.

ITEM 11.  EXECUTIVE COMPENSATION
--------------------------------

The  information  required by this Item 11 is incorporated by reference from the
Company's definitive Proxy Statement for its 2000 Annual Meeting of Shareholders
to be filed pursuant to Regulation 14A promulgated under the Securities Exchange
Act of 1934,  which Proxy  Statement will be filed within 120 days after the end
of the Company's fiscal year ended December 31, 1999.


                                       19
<PAGE>


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
------------------------------------------------------------------------

The  information  required by this Item 12 is incorporated by reference from the
Company's definitive Proxy Statement for its 2000 Annual Meeting of Shareholders
to be filed pursuant to Regulation 14A promulgated under the Securities Exchange
Act of 1934,  which Proxy  Statement will be filed within 120 days after the end
of the Company's fiscal year ended December 31, 1999.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------------

The  information  required by this Item 13 is incorporated by reference from the
Company's definitive Proxy Statement for its 2000 Annual Meeting of Shareholders
to be filed pursuant to Regulation 14A promulgated under the Securities Exchange
Act of 1934,  which Proxy  Statement will be filed within 120 days after the end
of the Company's fiscal year ended December 31, 1999.

PART IV
-------

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
--------------------------------------------------------------------------

(a)(1) Financial Statements:
----------------------------

The  financial  statements  listed in the  accompanying  Consolidated  Financial
Statements and Schedule Index at page F-1 are filed as part of this Report.

(a)(2) Financial Statement Schedules:
-------------------------------------

Schedule III,  Real Estate and  Accumulated  Depreciation,  is included on pages
F-17 to F-20 of this Report.

(a)(3) Exhibits:
----------------



Exhibit No.                           Description

   2.1      Contribution  Agreement,  dated as of May 30,  1997,  by and between
            Grove Operating,  L.P.,  Northeast Apartments I Limited Partnership,
            West Hartford Center Associated Limited Partnership,  Windsor Equity
            Partnership  and  Windsor  Commons   Corporation   (incorporated  by
            reference to Exhibit 2.1 to the Company's Current Report on Form 8-K
            dated May 30, 1997 (Commission File No. 1-13080))

   2.2      Form of First Amendment effective as of June 1, 1997 to Agreement of
            Limited   Partnership   of   Windsor   Arbor   Limited   Partnership
            (incorporated  by reference to Exhibit 2.2 to the Company's  Current
            Report on Form 8-K dated May 30, 1997 (Commission File No. 1-13080))

   2.3      Purchase and Sale Agreement,  dated May 14, 1997,  between  Highland
            Income  Partners,  L.P.,  as  Seller,  and  Grove  Corporation,   as
            Purchaser (incorporated by reference to Exhibit 2.1 to the Company's
            Current Report on Form 8-K dated July 2, 1997  (Commission  File No.
            1-13080))

   2.4      Purchase and Sale Agreement, dated September 5, 1997, by and between
            Werner O. Kunzli,  as Seller,  and Grove  Corporation,  as Purchaser
            (incorporated   by  reference  to  Exhibit  2.4  to  the   Company's
            Registration Statement on Form S-2 (No. 333-38183))

   2.5      Grove Operating, L.P., Solicitation of Consent and Offer to Exchange
            Certain  Outstanding  Units  of  Limited  Partnership   Interest  in
            Grove-Coastal  Associates,  L.P. for Consideration of 3,435.5 Common
            Units of Grove Operating,  L.P. with an option to holders to instead
            receive cash consideration,  dated June 19, 1997, as supplemented on
            June 19, 1997, and Letter of  Transmittal  and Addendum to Letter of
            Transmittal in connection  therewith  (incorporated  by reference to
            Exhibit 2.5 to the Company's Registration Statement on Form S-2 (No.
            333-38183))


                                       20
<PAGE>


   2.6      Agreement dated as of April 22, 1998 among The Grove Corporation and
            the twenty-two limited partnerships identified on Schedule 1 thereto
            (incorporated  by reference to Exhibit 2.1 to the Company's  Current
            Report on Form 8-K  dated  October  30,  1998  (Commission  File No.
            1-13080))

   2.7      Amendment dated as of August 31, 1998 to Conveyance  Agreement dated
            as of April 22, 1998 among The Grove  Corporation and the twenty-two
            limited partnerships  identified on Schedule 1 thereto (incorporated
            by reference to Exhibit 2.2 to the Company's  Current Report on Form
            8-K dated October 30, 1998 (Commission File No. 1-13080))

   3.1      Third Amended and Restated Declaration of Trust of the Company dated
            March 14, 1997, as amended by Articles  Supplementary  dated October
            23,  1997  and  by  Articles  of  Amendment   dated  June  30,  1998
            (incorporated by reference to Exhibit 3.0 to the Company's Quarterly
            Report on Form 10-Q for the quarter ended June 30, 1998  (Commission
            File No. 1-123080))

   3.2      Amended  and  Restated  Bylaws  of  the  Company   (incorporated  by
            reference to Exhibit 3.2 to the Company's Current Report on Form 8-K
            dated March 14, 1997 and filed March 31, 1997  (Commission  File No.
            1-13080))

   4.1      Form of Agreement of Limited  Partnership of Grove Operating,  L.P.,
            among the Company and the other partners named therein (incorporated
            by reference to Exhibit 10.2 to the Company's Current Report on Form
            8-K dated February 13, 1997 (Commission File No. 1-13080))

   4.2      Amendment  to  the  Agreement  of  Limited   Partnership   of  Grove
            Operating,  L.P.  among the  Company  and the other  partners  named
            therein  (incorporated  by reference to Exhibit 4.3 to the Company's
            Registration Statement on Form S-2 (No. 333-38183))

   4.3      Revolving  Credit  Agreement  among  Grove  Operating,  L.P.,  Grove
            Property  Trust and  BankBoston,  N.A. and the Other Banks which may
            become  parties  to  the  Agreement  with   BankBoston,   as  Agent,
            BankBoston Robertson Stephens, as Arranger, and First Union National
            Bank,   as   Syndication   Agent,   Dated  as  of  August  11,  1999
            (incorporated  by reference to Exhibit 4 to the Company's  Quarterly
            Report  on Form  10-Q  for the  quarter  ended  September  30,  1999
            (Commisssion File No. 1-13080))

   4.4      Loan Agreement, dated as of June 1, 1998, among certain subsidiaries
            of Grove Operating, L.P., as borrowers, and Lehman Brothers Holdings
            Inc., as lender

  10.1      Securities Purchase Agreement,  dated February 20, 1997, between the
            Company and Morgan Stanley Group Inc.  (incorporated by reference to
            Exhibit 10.1 to the Company's Current Report on Form 8-K dated March
            14, 1997 (Commission File No. 1-13080))

  10.2      Securities Purchase Agreement,  dated February 21, 1997, between the
            Company  and  ABKB/LaSalle   Securities  Limited   (incorporated  by
            reference to Exhibit 10.2 to the  Company's  Current  Report on Form
            8-K dated March 14, 1997 (Commission File No. 1-13080))

  10.3      Form of Securities Purchase Agreement executed by other Investors in
            the Private Placement  (incorporated by reference to Exhibit 10.3 to
            the  Company's  Current  Report  on Form 8-K dated  March  14,  1997
            (Commission File No. 1-13080))

  10.4      Registration  Rights  Agreement,  dated March 14, 1997,  between the
            Company and the Investors (incorporated by reference to Exhibit 10.4
            to the  Company's  Current  Report on Form 8-K dated  March 14, 1997
            (Commission File No. 1-13080))

  10.5      Registration  Rights  Agreement,  dated March 14, 1997,  between the
            Company,  Grove  Operating,  L.P.  and  certain  partners  of  Grove
            Operating,  L.P.  (incorporated  by reference to Exhibit 10.9 to the
            Company's   Current   Report  on  Form  8-K  dated  March  14,  1997
            (Commission File No. 1-13080))

  10.6      1994 Share Option Plan  (incorporated  by reference to Exhibit 10.16
            to the  Company's  Registration  Statement  on Form  SB-2  (File No.
            33-76732))

  10.7      1996 Share Incentive Plan of Grove Property  Trust,  Grove Operating
            LP  and  Property  Partnerships,   as  amended  to  March  11,  1998
            (incorporated  by reference to Appendix A to the Company's Notice of
            Annual Meeting and Proxy Statement dated April 30, 1998  (Commission
            File No. 1-13080))


                                       21
<PAGE>


  10.8      Noncompetition  Agreement,  dated March 14, 1997, among the Company,
            Grove Operating, L.P., National Realty Services Limited Partnership,
            GIG and Burgundy  Associates  Limited  Partnership  (incorporated by
            reference to Exhibit 10.12 to the Company's  Current  Report on Form
            8-K dated March 14, 1997 (Commission File No. 1-13080))

  10.9      Form of Noncompetition  Agreement executed by each of Damon Navarro,
            Brian Navarro,  Joseph LaBrosse and Edmund Navarro  (incorporated by
            reference to Exhibit 10.13 to the Company's  Current  Report on Form
            8-K dated March 14, 1997 (Commission File No. 1-13080))

 10.10      Amendment,   dated  as  of  October  15,  1997,  to   Noncompetition
            Agreement,  dated  March 14,  1997,  between  the  Company and Damon
            Navarro (incorporated by reference to Exhibit 10.15 to the Company's
            Registration Statement on Form S-2 (No. 333-38183))

 10.11      Amendment,   dated  as  of  October  15,  1997,  to   Noncompetition
            Agreement,  dated  March 14,  1997,  between  the  Company and Brian
            Navarro (incorporated by reference to Exhibit 10.16 to the Company's
            Registration Statement on Form S-2 (No. 333-38183))

 10.12      Amendment,   dated  as  of  October  15,  1997,  to   Noncompetition
            Agreement,  dated  March 14,  1997,  between  the Company and Edmund
            Navarro (incorporated by reference to Exhibit 10.17 to the Company's
            Registration Statement on Form S-2 (No. 333-38183))

 10.13      Amendment,   dated  as  of  October  15,  1997,  to   Noncompetition
            Agreement,  dated  March 14,  1997,  between  the Company and Joseph
            LaBrosse   (incorporated  by  reference  to  Exhibit  10.18  to  the
            Company's Registration Statement on Form S-2 (No. 333-38183))

 10.14      Employment Agreement,  dated March 14, 1997, between the Company and
            Damon  Navarro  (incorporated  by reference to Exhibit  10.14 to the
            Company's   Current   Report  on  Form  8-K  dated  March  14,  1997
            (Commission File No. 1-13080))

 10.15      Amendment,  dated as of October 15, 1997, to  Employment  Agreement,
            dated  March  14,  1997,  between  the  Company  and  Damon  Navarro
            (incorporated  by  reference  to  Exhibit  10.21  to  the  Company's
            Registration Statement on Form S-2 (No. 333-38183))

 10.16      Employment Agreement,  dated March 14, 1997, between the Company and
            Brian  Navarro  (incorporated  by reference to Exhibit  10.15 to the
            Company's   Current   Report  on  Form  8-K  dated  March  14,  1997
            (Commission File No. 1-13080))

 10.17      Amendment,  dated as of October 15, 1997, to  Employment  Agreement,
            dated  March  14,  1997,  between  the  Company  and  Brian  Navarro
            (incorporated  by  reference  to  Exhibit  10.23  to  the  Company's
            Registration Statement on Form S-2 (No. 333-38183))

 10.18      Employment Agreement,  dated March 14, 1997, between the Company and
            Edmund  Navarro  (incorporated  by reference to Exhibit 10.16 to the
            Company's   Current   Report  on  Form  8-K  dated  March  14,  1997
            (Commission File No. 1-13080))

 10.19      Amendment,  dated as of October 15, 1997, to  Employment  Agreement,
            dated  March 14,  1997,  between  the  Company  and  Edmund  Navarro
            (incorporated  by  reference  to  Exhibit  10.25  to  the  Company's
            Registration Statement on Form S-2 (No. 333-38183))

 10.20      Employment Agreement,  dated March 14, 1997, between the Company and
            Joseph LaBrosse  (incorporated  by reference to Exhibit 10.17 to the
            Company's   Current   Report  on  Form  8-K  dated  March  14,  1997
            (Commission File No. 1-13080))

 10.21      Amendment,  dated as of October 15, 1997, to  Employment  Agreement,
            dated  March 14,  1997,  between  the  Company  and Joseph  LaBrosse
            (incorporated  by  reference  to  Exhibit  10.27  to  the  Company's
            Registration Statement on Form S-2 (No. 333-38183))

 10.22      Form of Contribution  Agreement among the Company,  Grove Operating,
            L.P. and certain other parties (incorporated by reference to Exhibit
            10.1 to the Company's  Current Report on Form 8-K dated February 13,
            1997 (Commission File No. 1-13080))


                                       22
<PAGE>


 10.23      Form of  Indemnification  Agreement by and between the Company,  the
            Trust  Managers and each of Damon  Navarro,  Brian  Navarro,  Edmund
            Navarro and Joseph  LaBrosse  (incorporated  by reference to Exhibit
            10.18 to the  Company's  Registration  Statement  on Form  SB-2 (No.
            33-76732))

 10.24      Purchase and Sale Agreement  between the Company and Grove Cambridge
            Associates Limited Partnership (incorporated by reference to Exhibit
            1 to the Company's Current Report on Form 8-K dated October 30, 1995
            (Commission File No. 1-13080))

 10.25      Unlimited  Guaranty among Grove Property Trust and Bankboston,  N.A.
            dated November 6, 1998  (incorporated  by reference to Exhibit 10.31
            to the  Company's  Annual  Report  on Form  10-K for the year  ended
            December 31, 1998 (Commission File No. 1-130080))

 10.26      Promissory  Note, dated as of November 30, 1998, from Munawar Cheema
            to the Company

 10.27      Amended and Restated Agreement re Application of Dividends, dated as
            of November 30, 1998, between the Company and Munawar Cheema

    21      List of Subsidiaries

    23      Consent of Ernst & Young LLP

    27      Financial Data Schedule

(b) Reports on Form 8-K
-----------------------

None


                                       23
<PAGE>


                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on March 24, 2000.

                            GROVE PROPERTY TRUST


                            By /s/Joseph R. LaBrosse
                              -----------------------
                              Joseph R. LaBrosse
                              Chief Financial Officer


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
registrant and in the capacities and on the dates indicated.


Name                           Title                                     Date
----                           -----                                     ----

/s/ Damon D. Navarro           Trust Manager and Chairman of           3/24/00
-----------------------        the Board and Chief Executive
Damon D. Navarro               Officer (Principal executive
                               officer)

/s/ Joseph R. LaBrosse         Trust Manager and Chief Financial       3/24/00
-----------------------        Officer (Principal financial and
Joseph R. LaBrosse             accounting officer)

/s/ Edmund F. Navarro          Trust Manager and Chief Operating       3/24/00
-----------------------        Officer
Edmund F. Navarro


/s/ J. Joseph Garrahy          Trust Manager                           3/24/00
-----------------------
J. Joseph Garrahy


/s/ Harold V. Gorman           Trust Manager                           3/24/00
-----------------------
Harold V. Gorman


/s/ Gerald A. McNamara         Trust Manager                           3/24/00
-----------------------
Gerald A. McNamara


/s/ J. Timothy Morris          Trust Manager                           3/24/00
-----------------------
Timothy Morris


/s/ Keith Munsell              Trust Manager                           3/24/00
-----------------------
Keith Munsell


/s/ James F. Twaddell          Trust Manager                           3/24/00
-----------------------
James F. Twaddell


<PAGE>


                              GROVE PROPERTY TRUST

                 Consolidated Financial Statements and Schedule
                                      Index
--------------------------------------------------------------------------------


                                                                            Page
                                                                            ----

Item 14(a) (1 and 2) Financial Statements filed as part of this report

Consolidated Financial Statements:

Report of Independent Auditors                                               F-2

Consolidated Balance Sheets as of December 31, 1999 and 1998                 F-3

Consolidated Income Statements for the years ended
December 31, 1999, 1998 and 1997                                             F-4

Consolidated Statements of Changes in Shareholders' Equity
for the years ended December 31, 1999, 1998 and 1997                         F-5

Consolidated Statements of Cash Flows for the years
ended December 31, 1999, 1998 and 1997                                       F-6

Notes to Consolidated Financial Statements                                   F-7

Schedule filed as part of this report:

Schedule III - Real Estate and Accumulated Depreciation                     F-17


All other schedules are omitted since the required information is not present in
amounts  sufficient  to  require  submission  of the  schedule  or  because  the
information required is included in the financial statements and notes thereto.





                                      F-1
<PAGE>


                         Report of Independent Auditors


The Shareholders and Board of Trust Managers
Grove Property Trust

We have audited the accompanying  consolidated  balance sheets of Grove Property
Trust as of  December  31,  1999 and 1998 and the  related  consolidated  income
statements, statements of changes in shareholders' equity and statements of cash
flows for each of the three years in the period ended  December  31,  1999.  Our
audits also included the  financial  statement  schedule  listed in the Index at
item 14(a).  These financial  statements and schedule are the  responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the consolidated  financial  position of Grove Property
Trust  at  December  31,  1999  and 1998  and the  consolidated  results  of its
operations  and its cash flows for each of the three  years in the period  ended
December 31, 1999 in conformity with accounting principles generally accepted in
the  United  States.  Also  in our  opinion,  the  related  financial  statement
schedule, when considered in relation to the basic financial statements taken as
a whole,  presents  fairly in all material  respects the  information  set forth
therein.



                                         /s/ERNST & YOUNG LLP

Boston, Massachusetts
February 15, 2000



                                      F-2
<PAGE>

<TABLE>

                              GROVE PROPERTY TRUST
                           CONSOLIDATED BALANCE SHEETS
                    (Dollars in thousands, except par value)

<CAPTION>
                                                                     As of  December 31,
                                                                     -------------------

                                                                     1999           1998
                                                                     ----           ----
                                         ASSETS
                                         ------
<S>                                                               <C>            <C>
Real estate assets:
     Land ...................................................     $  45,770      $  47,208
     Buildings and improvements .............................       266,432        268,683
     Furniture, fixtures and equipment ......................         3,972          2,708
                                                                  ---------      ---------
                                                                    316,174        318,599
     Less accumulated depreciation ..........................       (17,639)        (9,651)
                                                                  ---------      ---------
       Net real estate assets ...............................       298,535        308,948
Real estate assets held for sale ............................         2,671           --
Cash and cash equivalents ...................................        12,733         15,262
Due from affiliates .........................................           112            262
Deferred charges, net of accumulated amortization
     of $229 and $153, respectively .........................         1,714          1,192
Other assets ................................................         1,432          1,451
                                                                  ---------      ---------
  Total assets ..............................................     $ 317,197      $ 327,115
                                                                  =========      =========


                        LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
     Mortgage notes payable (including fair value step up of
       $8,164 and $9,421, respectively) .....................     $ 180,290      $ 162,141
     Revolving credit facility ..............................        15,300         34,250
     Accounts payable, accrued expenses and other liabilities        11,377          5,723
     Acquisition notes payable ..............................         4,675         12,951
     Distributions payable ..................................         2,177          2,062
     Security deposits ......................................         3,394          3,194
     Due to affiliates ......................................            78            139
                                                                  ---------      ---------
  Total liabilities .........................................       217,291        220,460
Commitments and contingencies ...............................          --             --
Minority interests in consolidated partnerships .............          --              686
Minority interest in Operating Partnership ..................        32,231         32,186
Shareholders' equity:
     Preferred shares, $.01 par value per share,
       1,000,000 shares authorized; no shares
       issued or outstanding ................................          --             --
     Common shares, $.01 par value per share,
       34,000,000 shares authorized; 8,197,141
       and 8,639,659 shares issued and
       outstanding, respectively ............................            82             86
     Additional paid-in capital .............................        75,968         80,182
     Distributions in excess of earnings ....................        (8,375)        (6,485)
                                                                  ---------      ---------
  Total shareholders' equity ................................        67,675         73,783
                                                                  ---------      ---------
  Total liabilities and shareholders' equity ................     $ 317,197      $ 327,115
                                                                  =========      =========
</TABLE>

See notes to consolidated  financial statements.


                                      F-3
<PAGE>


<TABLE>
                              GROVE PROPERTY TRUST
                         CONSOLIDATED INCOME STATEMENTS
                      (In thousands, except per share data)
<CAPTION>
                                                                            For the Year Ended December 31,
                                                                            -------------------------------
                                                                            1999         1998          1997
                                                                            ----         ----          ----
<S>                                                                      <C>          <C>           <C>
Revenues:
    Rental income ..................................................     $ 62,925     $ 37,994      $ 17,111
    Property management income-affiliates ..........................          256          477           518
    Other property related income ..................................          686          178           168
    Interest  income ...............................................          590          183           141
                                                                         --------     --------      --------
        Total revenues .............................................       64,457       38,832        17,938
                                                                         --------     --------      --------

Expenses:
    Property operating expenses ....................................       23,342       13,433         6,078
    Real estate taxes ..............................................        5,631        3,798         1,770
    Related party management fees ..................................         --           --              22
    Interest expense ...............................................       14,103        6,791         2,741
    Depreciation expense ...........................................       10,036        5,977         2,568
    Amortization expense ...........................................          253          190           133
    General and administrative .....................................        8,510        2,002           908
    Non-recurring acquisition expense ..............................         --          5,550          --
                                                                         --------     --------      --------
        Total expenses .............................................       61,875       37,741        14,220
                                                                         --------     --------      --------

            Income before gain on sales, minority interests
              and extraordinary items ..............................        2,582        1,091         3,718

Gain on sales of property ..........................................        3,342         --            --
                                                                         --------     --------      --------

            Income before minority interests and extraordinary items        5,924        1,091         3,718

Minority interest in consolidated partnerships .....................           65           76           155

Minority interest in Operating Partnership .........................        1,838          268         1,267
                                                                         --------     --------      --------

           Income before extraordinary items .......................        4,021          747         2,296

Extraordinary income (loss) related to debt extinguishment, net ....          149         (888)         --
                                                                         --------     --------      --------

          Net income  (loss) .......................................     $  4,170     $   (141)     $  2,296
                                                                         ========     ========      ========

Income before extraordinary items per common share-basic ...........     $   0.48     $   0.09      $   0.61
Extraordinary income (loss) per common share-basic .................         0.01        (0.11)         --
                                                                         --------     --------      --------
Net income (loss) per common share-basic ...........................     $   0.49     $  (0.02)     $   0.61
                                                                         ========     ========      ========

Income before extraordinary items per common share-diluted .........     $   0.47     $   0.09      $   0.61
Extraordinary income (loss) per common share-diluted ...............         0.01        (0.11)         --
                                                                         --------     --------      --------
Net income (loss) per common share-diluted .........................     $   0.48     $  (0.02)     $   0.61
                                                                         ========     ========      ========

Weighted average number of common shares outstanding-basic .........        8,457        8,449         3,765
Effect of warrants and stock options ...............................          161            9            20
                                                                         --------     --------      --------
Weighted average number of common shares outstanding-diluted
                                                                            8,618        8,458         3,785
                                                                         ========     ========      ========
</TABLE>

See notes to consolidated financial statements.


                                      F-4
<PAGE>


<TABLE>
                                                         GROVE PROPERTY TRUST
                                      CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                                        (Dollars in thousands)

<CAPTION>
                                                                                                    Additional       Distributions
                                                                Number of                            Paid-In           in Excess
                                                              Common Shares     Common Shares        Capital          of Earnings
                                                              -------------     -------------        -------          -----------

<S>                                                            <C>               <C>               <C>               <C>
Shareholders' equity as of December 31, 1996 ...........          620,102        $        6        $    3,912        $     (435)
Issuance of common shares on March 14, 1997 ............        3,333,333                33            27,491              --
Common shares issued pursuant to stock options
  exercised in 1997 ....................................              394              --                   4              --
Issuance of common shares on November 24, 1997 .........        4,500,000                45            45,223              --
Issuance of executive stock grants .....................             --                --                 119
Net income .............................................             --                --                --               2,296
Declared dividends .....................................             --                --                --              (2,423)
Allocation of shareholders' equity to minority
  interest in Operating Partnership, net ...............             --                --              (7,773)             --
                                                               ----------        ----------        ----------        ----------
Shareholders' equity as of December 31, 1997 ...........        8,453,829                84            68,976              (562)
OP Units exchanged .....................................           35,307              --                --                --
Issuance of executive stock grants on
  September 15, 1998 ...................................           63,153                 1               119              --
Common shares repurchased ..............................         (304,630)               (3)           (2,979)             --
Private placement to executive officers on
  November 30, 1998 ....................................          392,000                 4             3,718              --
Net loss ...............................................             --                --                --                (141)
Declared dividends .....................................             --                --                --              (5,782)
Allocation of shareholders' equity to minority
  interest in Operating Partnership, net ...............             --                --              10,348              --
                                                               ----------        ----------        ----------        ----------
Shareholders' equity as of December 31, 1998 ...........        8,639,659                86            80,182            (6,485)
OP Units exchanged .....................................           61,087                 1              --                --
Issuance of executive stock grants .....................             --                --                 119              --
Common shares repurchased, net .........................         (560,297)               (6)           (6,762)             --
Common shares issued pursuant to stock options
  exercised in 1999 ....................................           56,692                 1               557              --
Net income .............................................             --                --                --               4,170
Declared dividends .....................................             --                --                --              (6,060)
Allocation of shareholders' equity to minority
  interest in Operating Partnership, net ...............             --                --               1,872              --
                                                               ----------        ----------        ----------        ----------
Shareholders' equity as of December 31, 1999 ...........        8,197,141        $       82        $   75,968        $   (8,375)
                                                               ==========        ==========         ==========       ==========
</TABLE>



See notes to consolidated financial statements.


                                      F-5
<PAGE>


<TABLE>
                              GROVE PROPERTY TRUST
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
<CAPTION>
                                                                                          For the Year Ended December 31,
                                                                                          -------------------------------
                                                                                       1999            1998            1997
                                                                                       ----            ----            ----

<S>                                                                                 <C>             <C>             <C>
Operating Activities:
Net income (loss) ............................................................      $  4,170        $   (141)       $  2,296
Adjustments to reconcile net income (loss) to net cash provided
     by operating activities:
        Depreciation and amortization ........................................        10,289           6,167           2,701
        Extraordinary (income) loss related to debt extinguishment, net ......          (149)            888            --
        Minority interests ...................................................         1,903             344           1,422
        Non-cash compensation expense ........................................           120             120             120
        Imputed interest - mortgage ..........................................          --              --                22
        Non-recurring acquisition expense ....................................          --             5,550            --
        Gain on sales of property ............................................        (3,342)           --              --
        Changes in other assets ..............................................           198             122            (347)
        Changes in accounts payable, accrued expenses and other liabilities ..         2,677           2,647            (393)
                                                                                    --------        --------        --------
     Net cash provided by operating activities ...............................        15,866          15,697           5,821
                                                                                    --------        --------        --------

Investing activities:
        Non-recurring acquisition expense ....................................          --            (5,550)           --
        Purchase of partnership interests ....................................        (3,372)        (19,456)        (10,417)
        Cash acquired on purchase of partnership interests ...................          --            11,031           3,565
        Deferred charges .....................................................          --               (50)             (6)
        Additions to real estate assets ......................................       (11,298)        (38,610)        (33,582)
        Proceeds from sales of property, net .................................        12,708            --              --
                                                                                    --------        --------        --------
     Net cash used in investing activities ...................................        (1,962)        (52,635)        (40,440)
                                                                                    --------        --------        --------

Financing activities:
        Net proceeds from mortgage notes payable .............................        35,382          63,000          15,079
        Repayment of mortgage notes payable ..................................       (16,762)        (22,438)        (64,009)
        Net (repayments) proceeds of Revolving Credit Facility ...............       (18,950)         18,650          15,601
        Proceeds from sale of stock and exercise of stock options ............           533           3,722          72,796
        Borrowings from affiliates, net ......................................            64              67            (659)
        Financing costs ......................................................        (1,051)         (1,245)           (668)
        Prepayment penalty on debt refinancing ...............................          --              (745)           --
        Repurchase of stock ..................................................        (6,872)         (2,982)           --
        Dividends and distributions paid .....................................        (8,777)         (7,295)         (2,594)
                                                                                    --------        --------        --------
     Net cash (used in) provided by financing activities .....................       (16,433)         50,734          35,546
                                                                                    --------        --------        --------

Net change in cash and cash equivalents ......................................        (2,529)         13,796             927
Cash and cash equivalents, beginning of year .................................        15,262           1,466             539
                                                                                    --------        --------        --------
Cash and cash equivalents, end of year .......................................      $ 12,733        $ 15,262        $  1,466
                                                                                    ========        ========        ========

Supplemental Information:
     Cash paid for interest ..................................................      $ 14,115        $  6,913        $  2,600
       Excess of liabilities over assets assumed on acquisition and
        partnership interests ................................................      $   --          $  1,989        $  1,995
     OP Units redeemed for cash ..............................................      $  2,596        $  2,588        $   --
</TABLE>

See notes to consolidated financial statements.


                                      F-6
<PAGE>

                              GROVE PROPERTY TRUST

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                December 31, 1999

1.   FORMATION AND DESCRIPTION OF THE COMPANY
     ----------------------------------------

     Grove  Property  Trust  (formerly  Grove  Real  Estate  Asset  Trust)  (the
     "Company")  was  organized  in the State of  Maryland on April 4, 1994 as a
     Real Estate  Investment  Trust  ("REIT").  The Company  currently  operates
     fifty-seven apartment communities and four specialty retail properties. The
     apartment  communities are generally mid-priced or subsidized  multi-family
     communities that are primarily located in the southern New England area.


2.   ACQUISITIONS / DISPOSITIONS AND CONSOLIDATION TRANSACTIONS
     ----------------------------------------------------------

     In March 1997, the Company formed an operating  partnership (the "Operating
     Partnership")  to  consolidate  ownership  and  control  of  the  Company's
     operations  and assets.  Substantially  all of the assets and operations of
     the Company and of  affiliates  of the Company,  including  the  management
     services  division of Grove Property  Services  Limited  Partnership,  were
     transferred to the Operating  Partnership in exchange for partnership units
     of the Operating  Partnership ("Common Units"). In addition,  the Operating
     Partnership  purchased from non-affiliated  limited partners  substantially
     all  of  the  outstanding   partnership  interests  of  twenty  properties,
     including   one  retail   property   for  Common   Units,   or  in  certain
     circumstances,  cash.  Common  Units  are  generally  exchangeable  for the
     Company's Common Shares ("Common Shares") on a one-for-one basis.

     During 1997,  the Company  acquired ten  apartment  communities  comprising
     1,168  apartment  units and two  retail  properties.  The  properties  were
     acquired in five separate  transactions for an aggregate  purchase price of
     $71.1  million.   The  acquisitions   were  funded  with  working  capital,
     borrowings under the Company's revolving credit facility,  and the issuance
     of 889,353  Common Units.  In addition,  the Company  assumed debt totaling
     $16.0 million in connection with the acquisitions.

     During  1998,  the  Company  acquired  twenty-five   apartment  communities
     comprising 3,020 apartment units and a specialty retail property.  Eighteen
     apartment  communities  located in the Greater Boston,  Massachusetts  were
     acquired   for  an   aggregate   price  of  $94.0   million   (the  "McNeil
     Transaction").  In  connection  with the McNeil  Transaction,  the  Company
     issued 919,009 Common Units at $9.82 per unit, drew down $18.7 million from
     the  revolving  credit  facility  and assumed  $62.3  million in debt.  The
     Company  expensed $5.5 million related to management  contracts  assumed in
     the McNeil  Transaction.  The  remaining  properties  were acquired in five
     separate transactions for an aggregate purchase price of $35.1 million. The
     remaining  acquisitions were funded with working capital,  borrowings under
     the Company's  revolving credit facility,  and the issuance of 5,818 Common
     Units.  In addition,  the Company  assumed debt  totaling  $14.5 million in
     connection with the acquisitions.

     During 1999, the Company  acquired the remaining  minority  limited partner
     interests  in five  partnerships  that are  consolidated  in the  Company's
     financial  statements  for $1 million  comprised of 10,063 Common Units and
     cash of  approximately  $0.9  million.  As a result,  at December 31, 1999,
     there are no longer any Minority Interests in Consolidated  Partnerships on
     the Company's balance sheet.

     Also during  1999,  the  Company  disposed  of four  apartment  communities
     totaling 313 units for net proceeds of $12.2 million and  recognized a gain
     of $3.4 million. Two additional apartment  communities have been classified
     as held for sale at December 31, 1999.

     The Company intends to continue to operate all of its apartment communities
     and retail properties as rental properties.


3.  SIGNIFICANT ACCOUNTING POLICIES
    -------------------------------

     Basis of Presentation
     ---------------------
     The financial statements are presented on a consolidated basis. Included in
     the  Company's  financial  statements  are the  accounts  of the  Operating
     Partnership and various property partnerships.  Properties are owned either
     directly  by the  Operating  Partnership  or are owned by  various  limited
     partnerships or limited  liability  companies that in turn are wholly owned
     by the Operating Partnership. All significant intercompany transactions are
     eliminated in consolidation.

     Use of Estimates
     ----------------
     The  preparation  of financial  statements  in conformity  with  accounting
     principles  generally accepted in the United States requires  management to
     make estimates and  assumptions  that affect the reported  amount of assets
     and liabilities and disclosure of contingent  assets and liabilities at the
     date of the  financial  statements  and  reported  amounts of revenues  and
     expenses  during the  reporting  period.  Actual  results could differ from
     those estimates.


                                      F-7
<PAGE>


     Cash and Cash Equivalents
     -------------------------
     The Company  considers all highly liquid debt  instruments with an original
     maturity  of  three  months  or less at the  time  of  purchase  to be cash
     equivalents.  The combined account  balances at each financial  institution
     periodically exceed the Federal Depository  Insurance  Corporation ("FDIC")
     insurance  coverage and, as a result,  there is a  concentration  of credit
     risk  related to amounts on deposit in excess of FDIC  insurance  coverage.
     The Company believes that the risk is not significant  since its cash is on
     deposit with major financial institutions.

     Real Estate Assets and Depreciation
     -----------------------------------
     Real  estate  assets are  recorded at cost less  accumulated  depreciation,
     unless considered  impaired.  If events or circumstances  indicate that the
     carrying  amount of a property  may be  impaired,  the Company will make an
     assessment of its  recoverability  by estimating  future  undiscounted cash
     flows  of  the  property.   If  the  carrying  amount  exceeds  the  future
     undiscounted cash flows, the Company should recognize an impairment loss to
     the extent the carrying  amount exceeds the fair value of the property.  To
     date,  no losses  have been  recognized  and  management  believes  that no
     impairment conditions exist.

     Expenditures   for   long-lived   replacement-type   items  in   stabilized
     properties,  such as  appliances  and  floor  coverings,  are  capitalized.
     Expenditures  for  non-recurring  items under $1,000 and for normal  tenant
     turnover   expenses  (such  as  cleaning  and  painting)  and  repairs  and
     maintenance are expensed as incurred.

     Depreciation  is provided for  buildings,  building  improvements  and land
     improvements using the straight-line method over the estimated useful lives
     of the assets  (10 to 30  years).  Additionally,  furniture,  fixtures  and
     equipment are  depreciated  using an accelerated  method over the estimated
     useful lives of the assets (5 to 7 years).

     Real Estate Assets Held for Sale
     --------------------------------
     Real estate  assets  held for sale is  recorded at the lower of cost,  less
     accumulated depreciation, or estimated sales proceeds less selling costs.

     Per Share Data
     --------------
     Income per common share information is based on the weighted average number
     of Common Shares  outstanding  during each year. On February 10, 1997,  the
     Board  of  Trust  Managers  of  the  Company   declared  a  stock  dividend
     aggregating  26,250  Common  Shares and the  concurrent  effectuation  of a
     1.125-for-one  common stock  split.  All shares  outstanding  and per share
     amounts have been restated to reflect these changes in capital structure.

     Stock-Based Compensation
     ------------------------
     The Company has adopted Financial  Accounting  Standard No. 123, Accounting
     for  Stock-Based  Compensation  ("FAS No. 123") which allows the Company to
     account for its various employee stock  compensation plans using Accounting
     Principles  Board (APB)  Opinion  No. 25,  Accounting  for Stock  Issued to
     Employees.  Under APB No. 25,  compensation  cost is the excess, if any, of
     the quoted  market price of the stock at the grant date over the amount the
     employee must pay to acquire the stock (see Note 9).

     Income Taxes and Dividends
     --------------------------
     The Company has made the election to be taxed as a REIT under  Sections 856
     through 860 of the Internal Revenue Code of 1986, as amended. To qualify as
     a REIT, the Company  generally must  distribute at least 95% of its taxable
     income to its shareholders and comply with other requirements. Accordingly,
     no provision has been made for federal  income taxes for the Company in the
     accompanying  financial  statements.  Even though the Company qualifies for
     taxation as a REIT,  the Company may be subject to certain  state and local
     taxes on its income and property and to federal  income and excise taxes on
     its  undistributed  income,  if any.  Shareholders  are taxed on  dividends
     declared and must report such dividends as either  ordinary  income,  short
     term gains,  long term gains or as a return of capital.  The federal income
     tax characteristics of dividends paid by the Company consisted of:

                                             1999        1998          1997
                                             ----        ----          ----
     Ordinary income                        57.24%      86.17%       100.00%
     Return of capital                       0.00%      13.83%         0.00%
     Capital gain                           42.76%       0.00%         0.00%

     No income taxes were paid by the Company during 1999, 1998 and 1997.

     Advertising
     -----------
     The Company expenses advertising costs as incurred.  Advertising costs were
     $0.6  million,  $0.5  million  and $0.2  million  in 1999,  1998 and  1997,
     respectively.

     Deferred Charges
     ----------------
     Deferred charges,  consisting principally of loan costs, are amortized on a
     straight-line basis over the term of the related obligation.


                                      F-8
<PAGE>


     Revenue Recognition
     -------------------
     Rental income  attributable to leases is recorded when due from tenants and
     recognized monthly as it is earned,  which is not materially different than
     the straight-line  basis. The Company generally requires tenants to provide
     a cash  security  deposit equal to one month's rent or pay the last month's
     rent in advance.  Such  payments  are deferred and are included in security
     deposits on the accompanying consolidated balance sheets.

     Impact of Recently Issued Accounting Standards
     ----------------------------------------------
     The  Financial   Accounting   Standards  Board  ("FASB")  issued  Financial
     Accounting  Standards  Board  Statement No. 133  "Accounting for Derivative
     Instruments and Hedging  Activities" ("FAS 133") in 1998, which was further
     amended  by  Financial   Accounting   Standards  Board  Statement  No.  137
     "Accounting  for Derivative and Hedging  Activities - Deferral of Effective
     Date of FASB  Statement  No. 133" in 1999.  FAS 133 must be adopted for the
     2001 financial  statements.  The Company  believes that the adoption of FAS
     133 will not have a significant impact on its reported financial  condition
     or results of operations.


4.   PRO FORMA INFORMATION (Unaudited)
     ---------------------------------

     The  acquisitions  described  in Note 2 have been  accounted  for under the
     purchase method of accounting. Results of operations for the properties are
     included  in the  consolidated  financial  statements  since  the  date  of
     acquisition. The following unaudited condensed proforma statement of income
     for  the  year  ended  December  31,  1998  assumes  all  of  the  property
     acquisitions  during 1998,  as described in Note 2, had occurred on January
     1, 1998. The unaudited  information  does not purport to represent what the
     Company's   results  of  operations   would  have  actually  been  if  such
     transactions, in fact, had occurred on January 1, 1998, nor does it purport
     to represent the results of operations for future periods.

                                                           (In thousands,
                                                        except per share data)

           Revenues.......................................     $57,953
                                                               =======
           Income before minority interests ..............     $ 1,389
                                                               =======
           Net income ....................................     $   868
                                                               =======
           Net income per common share - basic and diluted     $  0.10
                                                               =======


5.   MORTGAGE NOTES PAYABLE
     ----------------------

     Mortgage Notes Payable consist of the following at December 31, (amounts in
     thousands):

                                                         1999           1998
                                                         ----           ----
     Amortizing first mortgage notes ...........       $117,290      $ 95,141
     Interest-only first mortgage notes ........         63,000        67,000
                                                       --------      --------
                                                       $180,290      $162,141
                                                       ========      ========

     The amortizing first mortgage notes have fixed interest rates between 6.19%
     and  12.47%.  These  notes  mature  between the years 2000 and 2031 and are
     collateralized  by  thirty-three   properties  with  a  carrying  value  of
     approximately  $161.8  million as of  December  31,  1999.  These notes are
     partially  guaranteed by certain executive officers and shareholders of the
     Company.

     The  interest-only  first  mortgage  note has a principal  balance of $63.0
     million,  requires  monthly payments of interest only at an effective fixed
     interest rate of 6.71% and matures in 2008. This note is  collateralized by
     seventeen  properties  with an aggregate  carrying  value of  approximately
     $85.2 million as of December 31, 1999.

     As of December 31, 1999, the Company's  weighted  average  interest rate on
     its long-term debt is approximately 7.62% and its weighted average maturity
     is approximately ten years.

     Mortgage  Notes Payable of $180.3  million  include a fair value step up of
     $8.2 million.  The  contractual  principal  amount  outstanding of Mortgage
     Notes Payable is $172.1 million.  The $8.2 million step up relates to $45.0
     million of above  market  interest  rate  mortgages,  which were assumed in
     connection with the McNeil  Transaction.  The interest rates on the assumed
     debt are  between  7.46% and  12.47%.  The step up was  computed  using the
     Company's estimated then current market interest rate of 7.00%. The step up
     amount  is not the legal  stipulated  principal  amount  of the  respective
     mortgage and, accordingly,  this increase does not increase the contractual
     obligation of the Company.


                                      F-9
<PAGE>


     On June 1, 1998,  the Company  obtained a $63.0 million  ten-year term loan
     with a lender. A portion of the proceeds from the loan was used to repay an
     existing loan. The Company  recognized an  extraordinary  loss on the early
     extinguishment  of debt of $0.9 million  (net of $0.3 million  allocated to
     minority  interests)  as a result of the write-off of  unamortized  finance
     costs and a termination fee associated with a swap contract  related to the
     former loan.

     On March 15, 1999,  the Company  prepaid the Highland Glen mortgage note of
     $6.5 million.  This prepayment  transaction  resulted in the recognition of
     extraordinary income related to debt extinguishment of $0.3 million

     On November 1, 1999, the Company prepaid the Abington Glen mortgage note of
     approximately $2.0 million.  This prepayment resulted in the recognition of
     extraordinary income related to debt extinguishment of $0.1 million.

     Annual  principal  payments  due as of December 31, 1999 are as follows (in
     thousands):

                        Year Ending December 31,
                        ------------------------
                       2000             $    3,289
                       2001                  3,365
                       2002                  3,647
                       2003                  8,005
                       2004                  6,379
                       Thereafter          155,605
                                        ------------
                                        $  180,290
                                        ============



6.   REVOLVING CREDIT FACILITY
     -------------------------

     In April 1998, the Operating  Partnership entered into a two-year Revolving
     Credit Facility (the "1998 Credit  Facility") with its bank and retired the
     Original Revolving Credit Facility.  The 1998 Credit Facility increased the
     availability  of the credit line to $50.0  million  from $25.0  million and
     converted the line to an unsecured  line from a secured line.  Interest was
     payable  monthly  at a floating  rate of 1.50%  above the 30, 60, or 90-day
     LIBOR rate.

     On August 13, 1999, the Company  obtained a new revolving  credit  facility
     (the "1999  Credit  Facility").  The 1999  Credit  Facility  decreased  the
     availability  of the  credit  line to $40.0  million  from  $50.0  million,
     extended  the  maturity  to  August  2001 and  modified  certain  financial
     covenants.  The 1999 Credit  Facility bears interest  payable  monthly at a
     floating  rate of 2.0%  above  the 30,  60,  or 90-day  LIBOR  rate.  As of
     December 31, 1999, the 1999 Credit  Facility had $15.3 million  outstanding
     at an interest rate of 8.50%.


7.   ACQUISITION NOTES PAYABLE
     -------------------------

     Acquisition Notes Payable represent additional  consideration to be paid by
     the Company in the form of cash and  additional  Common  Units in the event
     apartment units in three properties  acquired in the McNeil Transaction are
     converted to market rate units.  The mortgages on the three properties were
     modified in 1998 to allow for each  property to convert 80% of its units to
     market rate. As a result of the mortgage modifications, the Company accrued
     $13.0 million of Acquisition Notes Payable at December 31, 1998.

     Commencing  six months after the closing date and  continuing  in six month
     intervals  thereafter,  the  Company  will  make a  payment  of  additional
     consideration  for each unit converted to a market rate unit. The number of
     Common Units to be issued as additional consideration is based on a formula
     using the 15-day average closing price of the Company's stock just prior to
     the  payment  date.  When  the  additional   consideration   is  paid,  the
     Acquisition  Notes  Payable  will be reduced by the amount of cash paid and
     the value of the Common Units issued.  Minority  interests in the Operating
     Partnership  will be  increased  by the value of the Common  Units.  During
     1999,  the  Operating  Partnership  paid cash of $2.9  million  and  issued
     391,101  Common Units  valued at $4.4  million.  In  addition,  the Company
     reduced  Acquisition  Notes  Payable for changes in the number of apartment
     units  available  for  conversion  to market  rate units and for changes in
     capitalization  and  interest  rates.  The Company  anticipates  paying the
     amount accrued at December 31, 1999 in cash of  approximately  $2.0 million
     and Common Units valued at approximately $2.7 million during 2000.


                                      F-10
<PAGE>


8.   SHAREHOLDERS' EQUITY
     --------------------

     The  following  table  outlines  the 1997,  1998 and 1999  activity  in the
     Operating Partnership equity accounts:

<TABLE>
<CAPTION>
                                                                                  Number of:
                                                                         -------------------------------
                                                                                            Limited
                                                                           Company's       Partners'
                                                                           Operating       Operating
                                                                          Partnership     Partnership
                                                                             Units           Units
                                                                             -----           -----
<S>                                                                      <C>             <C>
Outstanding at January 1, 1997 .....................................           --              --
Consolidation Transactions in March 1997
    New Equity Investment ..........................................      3,333,333            --
    Transfer of property interests-the Company .....................        620,102            --
    Transfer of property interests-Grove Companies .................           --           909,115
    Transfer of property interests-non-affiliates ..................           --         1,205,324
Common Shares issued pursuant to stock options exercised in May 1997            394            --
June 1997 acquisitions .............................................           --           420,183
September 1997 acquisitions ........................................           --           325,836
October 1997 acquisitions ..........................................           --           143,334
November 1997 Offering .............................................      4,500,000            --
April 1998 acquisitions ............................................           --             5,818
Common Units redeemed April 1998 through December 1998 .............           --          (252,153)
Common Units exchanged July 1998 through December 1998 .............         35,307         (35,307)
Common Shares repurchased September 1998 through December 1998 .....       (304,630)           --
Executive stock grants - September 1998 ............................         63,153            --
Private placement to executive officers - November 1998 ............        392,000            --
October 1998 acquisitions ..........................................           --           919,009
November 1998 acquisitions .........................................           --           104,525
December 1998 acquisitions .........................................           --            23,091
Common Units exchanged January 1999 through December 1999 ..........         61,087         (61,087)
Common Shares repurchased January 1999 through December 1999 .......       (560,297)           --
Common Shares issued pursuant to stock options exercised in 1999 ...         56,692            --
Common Units redeemed January 1999 through December 1999 ...........           --          (205,536)
May 1999 contingent issuance (see Note 7) ..........................           --           314,846
October 1999 contingent issuance (see Note 7) ......................           --            76,255
October 1999 purchase of minority limited partner interests ........           --            10,683
                                                                         ----------      ----------
Outstanding at December 31, 1999 ...................................      8,197,141       3,903,936
                                                                         ==========      ==========
    Ownership Percentage ...........................................         67.7 %          32.3 %
                                                                         ==========      ==========
</TABLE>

     Income is allocated to the Minority  Interest in the Operating  Partnership
     based  on the  weighted  average  ownership  percentage  of  the  Operating
     Partnership.  The ownership percentage is computed by dividing the weighted
     average number of Common Units held by the Limited  Partners other than the
     Company  ("Minority  Interest") by the total weighted  average Common Units
     outstanding.  Issuance  of  additional  Common  Shares in  connection  with
     requested  redemptions  of Common Units or  redemptions of Common Units for
     cash changes the ownership percentage of both the Minority Interest and the
     Company.  Such  transactions  and the  proceeds  therefrom  are  treated as
     capital  transactions  and result in an  allocation  between  Shareholders'
     Equity and  Minority  Interest to account for the change in the  respective
     percentage ownership of the underlying equity of the Operating Partnership.

     A  Common  Unit and a  Common  Share  have  essentially  the same  economic
     characteristics as they effectively share equally in the net income or loss
     and distributions of the Operating Partnership.  Common Units generally may
     be redeemed for cash or, at the election of the Company,  for Common Shares
     on a one-for-one basis, subject to certain adjustment provisions.

     The Company issued  warrants to purchase 47,248 Common Shares at a price of
     $11.31 per Common Share. The warrants expired in June 1999.

     Common Shares have been reserved for future issuance as follows:

     Common Units not owned by the Company (see above) .......       3,903,936
     Stock options issued (Note 9) ...........................       1,069,678
     Additional stock options issuable .......................         441,355
                                                                     ---------
                                                                     5,414,969
                                                                     =========


                                      F-11
<PAGE>


9.   STOCK OPTION PLANS
     ------------------

     The Company  adopted a stock  option  plan in 1994 (the "1994  Plan") for a
     maximum of 118,120 Common Shares for key employees and  non-employee  Trust
     Managers of the  Company.  Options  are granted at the market  price of the
     Company's Common Shares on the date of grant, become exercisable ratably on
     each of the first three  anniversaries  following the date of the grant and
     have a maximum term of ten years.  In May 1997, a Trust  Manager  exercised
     options on 394 Common  Shares.  In March 1997,  the Company  instituted  an
     additional  stock  option plan (the "1996  Plan").  The Company  reserved a
     total of 900,000 Common Shares, subject to adjustment, pursuant to the 1996
     Plan.  In June 1998,  the  Company  amended the 1996 Plan by  reserving  an
     additional  500,000  Common  Shares.  The  provisions  of the 1996 Plan are
     similar to the 1994 Plan.  The 1996 Plan also allows awards to advisors and
     consultants.  Pursuant to the  Consolidation  Transactions and the November
     Offering,   the  Company  granted  810,000  options  to  certain  executive
     officers,  employees  and  non-employee  Trust  Managers and an  additional
     50,000  nonqualified  options  were  granted  to a  Company  advisor.  Each
     non-employee  Trust  Manager  receives  10,000  options  upon his  original
     election to the Board and 5,000  options  each time he is  reelected to the
     Board.  The exercise  price of the options is between  $7.20 and $10.91 per
     share.  In 1999,  two Trust  Managers  exercised  options  on 6,692  Common
     Shares.

     Stock option activity is summarized as follows:


<TABLE>
<CAPTION>
                                          -----------------------------  ----------------------------  -----------------------------
                                                        1999                           1998                        1997
                                          -----------------------------  ----------------------------  -----------------------------
                                                            Weighted                      Weighted                     Weighted
                                                             Average                      Average                      Average
                                           Options       Exercise Price   Options      Exercise Price    Options     Exercise Price
                                           -------       --------------   -------      --------------    -------     --------------
<S>                                       <C>              <C>          <C>              <C>            <C>             <C>
Outstanding at beginning of year .        1,092,723        $   10.29       977,723       $   10.30        118,117       $    8.48
Granted ..........................           53,647        $   11.86       115,000       $   10.26        860,000       $   10.54
Exercised ........................          (56,692)       $    8.17          --         $    --             (394)      $    7.73
Surrendered ......................          (20,000)       $   10.90          --         $    --             --         $    --
                                          ----------                     ---------                      ---------
Outstanding at end of year .......        1,069,678        $   10.38     1,092,723       $   10.29        977,723       $   10.30
                                          ==========                     =========                      =========
Options exercisable at end of year          808,262        $   10.21       448,249       $   10.05         69,296       $    9.33
                                          ==========                     =========                      =========
</TABLE>

     The Company accounts for stock option grants in accordance with APB No. 25.
     Accordingly,  no  compensation  cost has been  recognized  for stock option
     grants  since all of the options have  exercise  prices equal to the market
     value of the Company's Common Shares at the date of grant.

     Pro forma  information  regarding  net  income  and  earnings  per share is
     required  by FAS No.  123,  and has been  determined  as if the Company had
     accounted for its employee stock options under the fair value method of FAS
     No.  123.  The fair value for these  options was  estimated  at the date of
     grant  using a  Black-Scholes  option  pricing  model  with  the  following
     assumptions  for 1999:  risk-free  interest rate of 5%;  dividend yields of
     6.84%;  volatility  factors of the expected  market price of the  Company's
     Common Shares of 0.165 and a weighted-average  expected life of the options
     of seven years.

     The  Black-Scholes   option  valuation  model  was  developed  for  use  in
     estimating  the  fair  value  of  traded  options,  which  have no  vesting
     restrictions  and are fully  transferable.  In addition,  option  valuation
     models  require the input of highly  subjective  assumptions  including the
     expected stock price volatility.  The Company's employee stock options have
     characteristics  significantly  different  from  those of  traded  options;
     furthermore,  changes in the subjective  input  assumptions  can materially
     affect the fair value estimate.  Therefore,  in management's  opinion,  the
     existing models do not necessarily provide a reliable single measure of the
     fair value of its employee stock options.

     For  purposes of pro forma  disclosures,  the  estimated  fair value of the
     options is  amortized  to expense over the  options'  vesting  period.  The
     Company's pro forma  information  follows for the years ended  December 31,
     (in thousands, except for earnings per share information):


<TABLE>
<CAPTION>
                                                                         1999              1998              1997
                                                                         ----              ----              ----
     <S>                                                           <C>               <C>               <C>
     Pro forma net income (loss)                                   $     4,076       $       (436)     $    2,221
                                                                   ===============   ===============   ================
     Pro forma net income (loss) per common share - basic          $      0.48       $       (.05)    $      0.59
                                                                   ===============   ===============   ================
     Pro forma net income (loss) per common share - diluted        $      0.47       $       (.05)    $      0.59
                                                                   ===============   ===============   ================
</TABLE>


                                      F-12
<PAGE>


10.  RELATED PARTY TRANSACTIONS
     --------------------------

     Management Fee
     --------------
     The Company provides  management  services to affiliates of the Company and
     the Operating  Partnership.  The Company  earned fees for these services of
     $225,849, $477,100 and $518,013 during 1999, 1998 and 1997, respectively.

     For the period  January 1, 1997 through March 14, 1997,  the Company paid a
     management  fee of  $22,000  to a  former  affiliate  of the  Company.  The
     management contract with the affiliate was terminated on March 14, 1997.

     Rent to Related Party
     ---------------------
     The  Company's  executive  offices were leased from an  affiliated  company
     under a  three-year  lease,  which  expired  in 1997.  The  lease  has been
     extended,  on a month-to-month basis, at a rate of $4,780 per month through
     1999. The building was sold to an unrelated  party in January 2000, and the
     lease was extended at the current rate through June 30, 2001.

     Related party rent expense was approximately  $58,000,  $79,000 and $41,000
     in 1999, 1998 and 1997, respectively.


11.  FAIR VALUE OF FINANCIAL INSTRUMENTS
     -----------------------------------

     The  following  disclosures  of  estimated  fair value were  determined  by
     management  using available  market  information and appropriate  valuation
     methodologies.  Judgment is necessary to interpret  market data and develop
     estimated fair value.  Accordingly,  the estimates presented herein are not
     necessarily  indicative  of  the  amounts  the  Company  could  realize  on
     disposition  of the  financial  instruments.  The use of  different  market
     assumptions  and/or estimation  methodologies may have a material effect on
     the estimated fair values.

     Cash  equivalents,  accounts  receivable and accounts  payable,  because of
     their short-term  nature,  approximate fair value.  Mortgage notes payable,
     the 1999 Credit Facility and the Acquisition Notes Payable are also carried
     at amounts that approximate their fair values.


12.  PENSION PLAN
     ------------

     The Company sponsors a defined  contribution pension plan (the "Plan") that
     is  qualified  under  Section  401(k) of the  Internal  Revenue  Code.  New
     full-time  employees  are eligible to join the Plan on the first day of the
     month following their 60-day waiting period.  Employee contributions are in
     accordance with I.R.S. guidelines;  the Company matches twenty-five percent
     of  employee  contributions  up to one  percent of the  individual's  total
     annual base salary.  The Company's  contribution  vests over a term of five
     years.

     Pension expense  incurred in 1999,  1998 and 1997 was $81,983,  $80,345 and
     $12,756, respectively.


13.  COMMITMENTS AND CONTINGENCIES
     -----------------------------

     The  Company,   as  an  owner  of  real  estate,   is  subject  to  various
     environmental and other laws of federal and local  governments.  Compliance
     by the Company with existing laws has not had a material  adverse effect on
     the Company's financial condition and results of operations.  However,  the
     Company  cannot predict the impact of new or changed laws or regulations on
     its current  properties or on properties that it may acquire in the future.
     The Company is party to various  litigation from time to time in the normal
     course of business.  Management believes that substantially all matters are
     covered by insurance or, in the event of an unfavorable outcome,  would not
     have a material adverse effect on the Company's financial position, results
     of operations or cash flows.

     In November 1998, the Company  guaranteed up to $8.2 million of a bank loan
     to certain  officers of the Company to be used by the  officers to purchase
     Common Shares. This guarantee was in effect at December 31, 1999.


14.  SUBSEQUENT EVENT (Unaudited)
     ----------------------------

     In the first  quarter of 2000,  the Company  sold one  apartment  community
     totaling  54 units with a net book value of $1.4  million for a net gain of
     $1.2  million.  The net proceeds of $2.6 million from the sale were used to
     repay  borrowings  under the 1999 Credit Facility and related mortgage note
     payable. In addition,  the Company sold one apartment community totaling 28
     units with a net book value of $1.3 million for a net gain of $0.3 million.
     The net  proceeds  of  $1.6  million  from  the  sale  were  used to  repay
     borrowings under the 1999 Credit Facility.


                                      F-13
<PAGE>


15.  QUARTERLY FINANCIAL DATA (Unaudited)
     ------------------------------------

     The following is a summary of selected unaudited  quarterly  financial data
     (in thousands, except per share data):


<TABLE>
<CAPTION>
                                                            --------------------------------1999---------------------------
                                                             1st Quarter     2nd Quarter     3rd Quarter     4th Quarter
                                                            January-March     April-June   July-September  October-December
                                                            -------------    -----------   --------------  ----------------

<S>                                                            <C>             <C>             <C>             <C>
Revenues ...............................................       $ 15,622        $ 16,024        $ 16,313        $ 16,498
                                                               ========        ========        ========        ========

Income before minority interests and
  extraordinary expense ................................       $  1,295        $  1,563        $  1,905        $  1,161(1)
Minority interests .....................................           (402)           (508)           (617)           (376)
                                                               --------        --------        --------        --------
Income before extraordinary items ......................            893           1,055           1,288             785
Extraordinary income (loss) related to debt
  extinguishment, net ..................................            226            --              (111)             34
                                                               --------        --------        --------        --------
Net income .............................................       $  1,119        $  1,055        $  1,177        $    819
                                                               ========        ========        ========        ========

Income before extraordinary items per common share-basic
 and diluted ...........................................       $   0.10        $   0.12        $   0.15        $   0.11
Extraordinary income (loss) per share-basic
 and diluted ...........................................           0.02            --             (0.01)           --
                                                               --------        --------        --------        --------
Net income per share-basic and diluted .................       $   0.12        $   0.12        $   0.14        $   0.11
                                                               ========        ========        ========        ========

Weighted average common shares outstanding-basic .......          8,642           8,510           8,472           8,209
Effect of warrants and stock options ...................             85             154             223             194
                                                               --------        --------        --------        --------
Weighted average common shares outstanding-diluted .....          8,727           8,664           8,695           8,403
                                                               ========        ========        ========        ========
</TABLE>


<TABLE>
<CAPTION>
                                                            --------------------------------1998---------------------------
                                                             1st Quarter     2nd Quarter     3rd Quarter     4th Quarter
                                                            January-March     April-June   July-September  October-December
                                                            -------------    -----------   --------------  ----------------

<S>                                                            <C>             <C>             <C>             <C>
Revenues ...............................................       $  7,588        $  8,652        $  9,461        $ 13,131
                                                               ========        ========        ========        ========

Income before minority interests and
  extraordinary items ..................................       $  1,626        $  1,790        $  1,733        $ (4,058)(2)
Minority interests .....................................           (439)           (478)           (444)          1,017
                                                               --------        --------        --------        --------
Income before extraordinary items ......................          1,187           1,312           1,289          (3,041)
Extraordinary loss related to debt
  extinguishment, net ..................................           --              (838)           --               (50)
                                                               --------        --------        --------        --------
Net income (loss) ......................................       $  1,187        $    474        $  1,289        $ (3,091)
                                                               ========        ========        ========        ========

Income (loss) before extraordinary items per common
 share-basic and diluted ...............................       $   0.14        $   0.16        $   0.15        $  (0.36)
Extraordinary loss per share-basic and diluted .........           --             (0.10)           --             (0.01)
                                                               --------        --------        --------        --------
Net income (loss) per share-basic and diluted ..........       $   0.14        $   0.06        $   0.15        $  (0.37)
                                                               ========        ========        ========        ========

Weighted average common shares outstanding-basic .......          8,454           8,454           8,477           8,408
Effect of warrants and stock options ...................             29               8            --                13
                                                               --------        --------        --------        --------
Weighted average common shares outstanding-diluted .....          8,483           8,462           8,477           8,421
                                                               ========        ========        ========        ========
</TABLE>

(1)  In the fourth  quarter of 1999, the Company  incurred a one-time  charge of
     $3.9 million.  The charge pertains to an executive bonus  compensation plan
     initiated  by the  Compensation  Committee of the Board of Trustees in 1998
     after the successful completion of the acquisition of the McNeil Portfolio.
     It was the  initial  intent to  allocate  the  charges for this plan over a
     3-year  period;  however,  the  Company  significantly  exceeded  its  1999
     financial  goals  and  objectives  due to  strong  performance  of the 1998
     acquisitions.  Therefore, the Compensation Committee determined that it was
     appropriate  at this time to accrue the remaining  amounts under this plan.
     However,  this amount,  which is a non-recurring item, has been excluded in
     calculating  FFO.
(2)  In conjunction  with the acquisition of the McNeil  Portfolio,  the Company
     paid  approximately $5.6 million for the purchase of the related management
     contracts from an unrelated third party management company. The term of the
     contracts  was for an  average of  approximately  20 years.  The  purchased
     contracts  historically produced gross annual revenue of approximately $1.6
     million. In accordance with accounting principles generally accepted in the
     United States,  the cost of the  management  contracts has been expensed in
     the fourth  quarter of 1998,  and as a result  there was a net loss for the
     quarter.


                                      F-14
<PAGE>


16.  SEGMENT REPORTING
     -----------------

     The  Company's  reportable  segments  are  strategic  real estate  types of
     investments.  They are  managed  separately  because  each real estate type
     requires a different strategy.

     The  Company  has  three  reportable  segments;   residential,   subsidized
     residential,  and retail. The residential segment includes those properties
     that are rented to residents only for residential purposes.  The subsidized
     residential  segment  includes  properties  that are  used for  residential
     purposes; however, these properties are operating and receive subsidization
     according to HUD and MHFA  guidelines.  The retail  segment  includes those
     properties whose space is rented for stores, restaurants,  and other retail
     uses.

     The following table presents  information  about reported segment profit or
     loss and segment  assets.  The Company  does not  allocate  income taxes or
     unusual items to segments.  In addition,  not all segments have significant
     noncash items other than  depreciation and amortization in reporting profit
     or  loss.  Amounts  are  for the  years  ended  December  31,  (dollars  in
     thousands):

<TABLE>
<CAPTION>
                                                           1999
                                                           ----

                                                  Subsidized
                                   Residential    Residential      Retail         Total
                                   -----------    -----------      ------         -----

     <S>                                 <C>            <C>            <C>            <C>
     Revenues ....................       $ 47,343       $ 14,130       $  2,679       $ 64,152
     Interest expense ............       $  8,579       $  3,017       $    451       $ 12,047
     Depreciation and amortization       $  7,798       $  1,445       $    577       $  9,820
     Segment profit ..............       $ 14,884       $  4,863       $  1,114       $ 20,861
     Extraordinary income ........       $     67       $    324       $   --         $    391
     Segment assets ..............       $245,999       $ 55,599       $ 18,972       $320,570
     FFO .........................       $ 19,008       $  5,984       $  1,674       $ 26,666
 </TABLE>


<TABLE>
<CAPTION>
                                                           1998
                                                           ----

                                                       Subsidized
                                        Residential    Residential      Retail         Total
                                        -----------    -----------      ------         -----

     <S>                                 <C>            <C>            <C>            <C>
     Revenues ....................       $ 33,840       $  1,985       $  2,422       $ 38,247
     Interest expense ............       $  4,464       $    409       $    463       $  5,336
     Depreciation and amortization       $  5,293       $    197       $    473       $  5,963
     Segment profit ..............       $  7,053       $    592       $    825       $  8,470
     Extraordinary expense .......       $  1,173       $   --         $     83       $  1,256
     Segment assets ..............       $239,505       $ 56,298       $ 19,293       $315,096
     FFO .........................       $ 13,310       $    789       $  1,370       $ 15,469
</TABLE>

     The accounting  policies of the segments are the same as those described in
     the summary of  significant  accounting  policies.  The  Company  evaluates
     performance based upon profit or loss from operations before income taxes.

     The following is a presentation  of  reconciliation  of reportable  segment
     revenues, profit or loss, and assets, to the Company's consolidated totals.
     Amounts are for the year ended December 31, (dollars in thousands):


                                                      1999            1998
                                                      ----            ----
Revenues:
---------

    Total revenues for reportable segments .       $  64,152        $  38,247
    Other revenues .........................             305              585
                                                   ---------        ---------
    Total consolidated revenues.............       $  64,457        $  38,832
                                                   =========        =========

Profit or Loss
--------------

    Total profit for reportable segments ...       $  20,861        $   8,470
    Other loss .............................         (14,429)          (1,829)
    Gain on sale of property ...............           3,342
    Unallocated amounts:
        Other corporate expenses ...........          (3,850)          (5,550)
                                                   ---------        ---------
    Income before extraordinary items
      and minority interest ................       $   5,924        $   1,091
                                                   =========        =========



                                      F-15
<PAGE>

                                                      1999            1998
                                                      ----            ----
    FFO
    ---

        FFO for reportable segments ........       $  26,666        $  15,469
        Other FFO ..........................         (10,521)          (2,934)
                                                   ---------        ---------
        FFO before minority interest .......       $  16,145        $  12,535
                                                   =========        =========

    Assets
    ------

        Total assets for reportable segments       $ 320,570        $ 315,096
        Other assets .......................          (3,373)          12,019
                                                   ---------        ---------
        Total consolidated assets ..........       $ 317,197        $ 327,115
                                                   =========        =========



                                                        1999
                                                        ----

                                         Segment                   Consolidated
                                         Totals      Non-segment      Totals
                                         ------      -----------      ------

 Other Significant Items
 -----------------------
     Interest expense ............       $12,047       $ 2,056       $14,103
     Depreciation and amortization       $ 9,820       $   469       $10,289


                                                        1998
                                                        ----
                                         Segment                   Consolidated
                                         Totals      Non-segment      Totals
                                         ------      -----------      ------

 Other Significant Items
 -----------------------
     Interest expense ............       $ 5,336       $ 1,455       $ 6,791
     Depreciation and amortization       $ 5,963       $   204       $ 6,167



                                      F-16
<PAGE>


1999
SCHEDULE III
PART 1
REAL ESTATE AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>
                                                                                                     Initial Cost
         Apartment Name              Location                  Encumbrances                   Land                  Building
         --------------              --------                  ------------                   ----                  --------
<S>                                  <C>                 <C>                               <C>                    <C>
Connecticut
-----------
208-210 Main St                      Manchester          (A)  $                            $         -            $          -
Arbor Commons                        Ellington           (B)                                   164,946                 934,695
Avon Place                           Avon                             6,342,236              1,095,513               6,207,906
Barons Apartments                    Southington         (A)          1,218,033                      -                       -
Bradford Apartments                  Newington                        1,957,653                358,864               2,036,562
Briar Knoll Apts                     Vernon                           6,086,631                956,711               5,421,363
Brooksyde Apts                       West Hartford                    1,937,190                467,829               2,651,030
Burgundy Studios                     Middletown                       1,821,650                313,856               1,778,520
Cambridge Estates                    Norwich             (B)          6,000,000                426,470               3,808,829
Colonial Village                     Plainville                       3,584,186                604,027               3,422,818
Summit & Birch Hill                  Farmington                       7,286,123              1,432,693               8,118,593
Fox Hill Apartments                  Enfield                          5,553,940              1,034,266               5,877,842
Fox Hill Commons                     Vernon                           2,195,541                395,047               2,238,597
Greenfield Village                   Rocky Hill                                                783,698               3,498,803
High Meadow                          Ellington                        4,350,444                626,395               3,549,569
Hilltop                              Norwich                          4,559,984                777,880               4,407,984
Glastonbury Center                   Glastonbury                      4,304,590                793,383               4,497,538
Loomis Manor                         West Hartford                    1,768,351                305,045               1,728,588
Park Place West                      West Hartford       (B)                                   256,440               1,453,161
Parkwood                             East Haven                       2,862,582                678,382               3,844,167
Ribbon Mill                          Manchester                       4,550,006                591,778               3,353,407
River's Bend                         Windsor                         12,389,455              2,244,296              12,909,411
Westwynd Apts                        West Hartford                                             224,822               1,273,991
Woodbridge                           Newington                        2,303,845                361,635               2,049,267

Maine
-----
Freeport Shops                       Freeport                                                1,079,260               6,115,808

Massachusetts
-------------
929 House                            Cambridge                        5,614,328              1,755,911               9,950,160
Abington Grove                       Abington                                                  490,465               2,779,304
Cedar Glen                           Reading                          3,053,448                597,351               3,384,992
Chestnut Glen                        Abington                         5,585,505              1,064,882               6,034,329
Coachlight Village                   Agawam                           2,096,516                505,464               2,864,297
Conway Court                         Roslindale                         576,573                 92,618                 524,835
Cornerblock                          Edgartown                                                 272,295               1,543,005
Dean Estates                         Taunton                          1,952,479                376,705               2,134,664
Four Winds                           Fall River                       6,004,919              1,051,300               5,957,369
Glen Grove                           Wellesley                        3,078,059                642,075               3,638,426
Glen Meadow                          Franklin                         2,747,429              1,070,881               6,068,322
Gosnold Grove                        East Falmouth                      765,652                152,784                 865,774
Highland Glen                        Westwood                                                1,070,133               6,064,083
Longfellow Glen                      Sudbury                          7,212,881              1,118,731               6,339,476
Longmeadow Shops                     Longmeadow                       7,560,769                976,373               5,532,783
Nehoiden Glen                        Needham                          1,187,154                215,233               1,219,652
Noonan Glen                          Winchester                         751,656                118,267                 670,177
Norton Glen                          Norton                           7,018,568              1,094,229               6,200,631
Old Mill Glen                        Maynard                          2,969,817                468,084               2,651,256
Phillips Park                        Wellesley                        3,287,666                875,667               4,962,113
Rockingham Glen                      West Roxbury                     4,771,820              1,139,721               6,458,416
Security Manor                       Westfield                        1,443,634                348,661               1,999,499
Sturbridge Meadows                   Sturbridge                       2,376,116                625,710               3,545,687
Summerhill Glen                      Maynard                          2,440,195                337,834               1,914,392
Van Deene Manor                      West Springfield                 3,071,031                585,049               3,360,177
Village Arms                         Acton                                                     806,777               4,571,736
Webster Green                        Needham                          4,601,574              1,654,299               9,374,358
Westwood Glen                        Westwood                         4,468,062              1,301,329               7,374,194
The Wharf                            Edgartown                                                 387,888               2,198,032
Wilkins Glen                         Medfield                         2,334,874                398,911               2,260,494

Rhode Island
------------
Dean Estates II                      Cranston                         1,225,289                253,198               1,434,786
Royale                               Cranston                         2,018,441                342,607               1,941,439
Tanglewood                           West Warwick                     6,665,359              1,048,689               5,942,569
Winchester Park                      East Providence                                         2,200,003              12,466,684
Winchester Woods                     East Providence                  2,337,800                694,825               3,937,343
                                                            --------------------        ---------------        ----------------

                                                             $      180,290,054         $   42,108,185          $  239,343,903
                                                            ====================        ===============        ================
</TABLE>

(A) - One of two  properties  that were  classified as "Real estate assets held
      for sale" on the Company's 1999 financial statements (see Note 14).
(B) - One of three properties that secure one of the Company's amortizing first
      mortgage notes


                                      F-17
<PAGE>

1999
SCHEDULE III
PART 1
REAL ESTATE AND ACCUMULATED DEPRECIATION
<TABLE>
<CAPTION>
                                           Costs Capitalized                        Gross Carrying Amount at
                                        Subsequent to Acquisition                     Close of Period (C)
Apt Name                               Land             Building                  Land               Building        Accum. Depr.
--------                               ----             --------                  ----               --------        ------------
<S>                                <C>              <C>                      <C>                 <C>               <C>
Connecticut
-----------
208-210 Main St                    $         -      $           -            $           -       $           -     $          -
Arbor Commons                            8,190             53,017                  173,136             987,712           76,574
Avon Place                           1,479,396            581,807                2,574,909           6,789,713          657,497
Barons Apartments                            -                  -                        -                   -                -
Bradford Apartments                     49,290            390,234                  408,154           2,426,796          218,020
Briar Knoll Apts                        10,981            278,330                  967,692           5,699,693          383,342
Brooksyde Apts                           6,842            565,183                  474,671           3,216,213          282,581
Burgundy Studios                        92,942            651,851                  406,798           2,430,371          189,062
Cambridge Estates                        2,133            179,239                  428,603           3,988,068          561,531
Colonial Village                        87,614            710,474                  691,641           4,133,292          345,798
Summit & Birch Hill                     38,426            591,930                1,471,119           8,710,523          664,380
Fox Hill Apartments                    241,774          1,467,791                1,276,040           7,345,633          621,154
Fox Hill Commons                        98,381            671,328                  493,428           2,909,925          239,980
Greenfield Village                     158,542          1,294,859                  942,240           4,793,662          361,796
High Meadow                            155,565          1,188,761                  781,960           4,738,330          334,926
Hilltop                                 10,644            312,534                  788,524           4,720,518          316,443
Glastonbury Center                      27,711            427,907                  821,094           4,925,445          374,175
Loomis Manor                            92,067            732,682                  397,112           2,461,270          197,941
Park Place West                         86,117            577,228                  342,557           2,030,389          154,780
Parkwood                                 3,392            184,578                  681,774           4,028,745          177,645
Ribbon Mill                              7,963            591,075                  599,741           3,944,482          255,095
River's Bend                           109,356            839,720                2,353,652          13,749,131        1,012,750
Westwynd Apts                           53,838            364,020                  278,660           1,638,011          127,705
Woodbridge                             144,487            945,017                  506,122           2,994,284          235,093

Maine
-----
Freeport Shops                           5,397            107,051                1,084,657           6,222,859          358,749

Massachusetts
-------------
929 House                             (17,624)            601,208                1,738,287          10,551,368          394,753
Abington Grove                           3,053            331,625                  493,518           3,110,929          116,888
Cedar Glen                               3,780            195,706                  601,131           3,580,698          134,352
Chestnut Glen                            6,683            267,816                1,071,565           6,302,145          238,669
Coachlight Village                       2,528             54,857                  507,992           2,919,154          169,861
Conway Court                               591             31,076                   93,209             555,911           20,895
Cornerblock                            (1,478)              8,970                  270,817           1,551,975          112,303
Dean Estates                            47,830            449,232                  424,535           2,583,896          216,835
Four Winds                              13,176            293,302                1,064,476           6,250,671          536,026
Glen Grove                               4,081             75,582                  646,156           3,714,008          138,878
Glen Meadow                             37,199          1,275,651                1,108,080           7,343,973          251,666
Gosnold Grove                              951            222,895                  153,735           1,088,669           35,748
Highland Glen                         (62,557)          (275,614)                1,007,576           5,788,469          191,230
Longfellow Glen                          7,089            149,932                1,125,820           6,489,408          249,802
Longmeadow Shops                       254,448          1,558,704                1,230,821           7,091,487          577,856
Nehoiden Glen                            1,451             15,567                  216,684           1,235,219           47,798
Noonan Glen                                748             29,641                  119,015             699,818           25,459
Norton Glen                              6,894            762,603                1,101,123           6,963,234          262,204
Old Mill Glen                            2,952             49,816                  471,036           2,701,072          104,485
Phillips Park                            5,518             52,254                  881,185           5,014,367          196,286
Rockingham Glen                         12,953            593,174                1,152,674           7,051,590          249,632
Security Manor                          84,994            520,877                  433,655           2,520,376          212,618
Sturbridge Meadows                       3,129            539,122                  628,839           4,084,809          180,916
Summerhill Glen                          2,176            210,134                  340,010           2,124,526           77,487
Van Deene Manor                        157,067            941,955                  742,116           4,302,132          356,799
Village Arms                            40,586            931,871                  847,363           5,503,607          357,289
Webster Green                           10,336             96,963                1,664,635           9,471,321          367,949
Westwood Glen                        (127,238)            465,490                1,174,091           7,839,684          284,711
The Wharf                                1,047             46,215                  388,935           2,244,247          161,522
Wilkins Glen                             2,479             91,605                  401,390           2,352,099           90,131

Rhode Island
------------
Dean Estates II                         53,850            378,526                  307,048           1,813,312          152,389
Royale                                 112,345            707,598                  454,952           2,649,037          209,420
Tanglewood                               5,244            623,344                1,053,933           6,565,913          411,127
Winchester Park                         11,001          1,033,011                2,211,004          13,499,695          695,564
Winchester Wood                          3,473             50,571                  698,299           3,987,914          210,996
                                   ------------   ----------------      -------------------   -----------------    -------------

       Totals:                      $3,661,804       $ 27,087,895             $ 45,769,989        $266,431,798      $16,187,561
                                   ============   ================      ===================   =================    =============
</TABLE>


(C)--The  aggregate  cost of land and  buildings  as of  December  31,  1999 was
     $246,537,211 for Federal income tax purposes



                                      F-18
<PAGE>


1999
SCHEDULE III (CONTINUED)
PART 1
REAL ESTATE AND ACCUMULATED DEPRECIATION

<TABLE>
<CAPTION>
                                                               Date                                  Estimated
Apt Name                               Constructed          Renovated            Acquired           Life (Years)
--------                               -----------          ---------            --------           ------------
<S>                                        <C>                 <C>                 <C>                <C>
Connecticut
-----------
208-210 Main St                            1969                1988                1997               10 to 30
Arbor Commons                              1975                1988                1997               10 to 30
Avon Place                                 1973                1995                1997               10 to 30
Barons Apartments                          1970                1994                1994               10 to 30
Bradford Apartments                        1964                1989                1997               10 to 30
Briar Knoll Apts                           1986                1999                1997               10 to 30
Brooksyde Apts                             1945                1997                1997               10 to 30
Burgundy Studios                           1973                1996                1997               10 to 30
Cambridge Estates                          1977                1990                1996               10 to 30
Colonial Village                           1968                1989                1997               10 to 30
Summit & Birch Hill                        1967                1996                1997               10 to 30
Fox Hill Apartments                        1974                1997                1997               10 to 30
Fox Hill Commons                           1965                1989                1997               10 to 30
Greenfield Village                         1965                1997                1997               10 to 30
High Meadow                                1975                1999                1997               10 to 30
Hilltop                                    1987                1999                1997               10 to 30
Glastonbury Center                         1962                1989                1997               10 to 30
Loomis Manor                               1948                1990                1997               10 to 30
Park Place West                            1961                1989                1997               10 to 30
Parkwood                                   1975                1999                1998               10 to 30
Ribbon Mill                                1908                1999                1997               10 to 30
River's Bend                               1973                1996                1997               10 to 30
Westwynd Apts                              1969                1990                1997               10 to 30
Woodbridge                                 1968                1991                1997               10 to 30

Maine
-----
Freeport Shops                             1985                1999                1998               10 to 30

Massachusetts
-------------
929 House                                  1975                                    1998               10 to 30
Abington Grove                             1968                1999                1998               10 to 30
Cedar Glen                                 1980                                    1998               10 to 30
Chestnut Glen                              1983                                    1998               10 to 30
Coachlight Village                         1967                1994                1998               10 to 30
Conway Court                               1920                                    1998               10 to 30
Cornerblock                               1800's               1988                1997               10 to 30
Dean Estates                               1984                                    1997               10 to 30
Four Winds                                 1987                1996                1997               10 to 30
Glen Grove                                 1979                                    1998               10 to 30
Glen Meadow                                1971                                    1998               10 to 30
Gosnold Grove                              1978                                    1998               10 to 30
Highland Glen                              1979                                    1998               10 to 30
Longfellow Glen                            1984                                    1998               10 to 30
Longmeadow Shops                           1962                1996                1997               10 to 30
Nehoiden Glen                              1978                                    1998               10 to 30
Noonan Glen                                1983                                    1998               10 to 30
Norton Glen                                1983                1999                1998               10 to 30
Old Mill Glen                              1983                                    1998               10 to 30
Phillips Park                              1988                                    1998               10 to 30
Rockingham Glen                            1974                                    1998               10 to 30
Security Manor                             1971                1988                1997               10 to 30
Sturbridge Meadows                         1985                1998                1998               10 to 30
Summerhill Glen                            1980                                    1998               10 to 30
Van Deene Manor                            1970                1990                1997               10 to 30
Village Arms                               1973                1998                1997               10 to 30
Webster Green                              1985                                    1998               10 to 30
Westwood Glen                              1972                                    1998               10 to 30
The Wharf                                 1800's               1996                1997               10 to 30
Wilkins Glen                               1975                                    1998               10 to 30

Rhode Island
------------
Dean Estates II                            1970                1994                1997               10 to 30
Royale                                     1976                1993                1997               10 to 30
Tanglewood                                 1973                1998                1998               10 to 30
Winchester Park                            1972                1998                1998               10 to 30
Winchester Wood                            1989                1998                1998               10 to 30
</TABLE>


                                      F-19
<PAGE>


SCHEDULE III
PART II
ROLLFORWARD OF ASSETS AND ACCUMULATED DEPRECIATION

                                                        Years
                                                     -----------
Land, buildings and related improvements              10 to 30
Furniture, fixtures and equipment                      5 to 7


The  changes in total real estate assets for the years ended  December 31 are as
     follows (in thousands):
                                         1999             1998            1997
                                      ------------------------------------------
Balance, beginning of year ....       $ 315,891        $ 146,815       $   9,448
New property acquisitions .....            --            166,268         136,321
Additions .....................           7,187            2,808           1,046
Property sales ................         (10,876)            --              --
                                      ---------        ---------       ---------
Balance, end of year ..........       $ 312,202        $ 315,891       $ 146,815
                                      =========        =========       =========


The  changes in accumulated  depreciation for the years ended December 31 are as
     follows (in thousands):
                                          1999            1998            1997
                                       -----------------------------------------
Balance, beginning of year ....        $  8,783         $  3,154        $    867
Depreciation expense ..........           8,727            5,629           2,287
Property sales ................          (1,322)
                                       --------         --------        --------
Balance, end of year ..........        $ 16,188         $  8,783        $  3,154
                                       ========         ========        ========

                                      F-20
<PAGE>


EXHIBIT INDEX:

Exhibit No.                           Description
-----------                           -----------

   2.1      Contribution  Agreement,  dated as of May 30,  1997,  by and between
            Grove Operating,  L.P.,  Northeast Apartments I Limited Partnership,
            West Hartford Center Associated Limited Partnership,  Windsor Equity
            Partnership  and  Windsor  Commons   Corporation   (incorporated  by
            reference to Exhibit 2.1 to the Company's Current Report on Form 8-K
            dated May 30, 1997 (Commission File No. 1-13080))

   2.2      Form of First Amendment effective as of June 1, 1997 to Agreement of
            Limited   Partnership   of   Windsor   Arbor   Limited   Partnership
            (incorporated  by reference to Exhibit 2.2 to the Company's  Current
            Report on Form 8-K dated May 30, 1997 (Commission File No. 1-13080))

   2.3      Purchase and Sale Agreement,  dated May 14, 1997,  between  Highland
            Income  Partners,  L.P.,  as  Seller,  and  Grove  Corporation,   as
            Purchaser (incorporated by reference to Exhibit 2.1 to the Company's
            Current Report on Form 8-K dated July 2, 1997  (Commission  File No.
            1-13080))

   2.4      Purchase and Sale Agreement, dated September 5, 1997, by and between
            Werner O. Kunzli,  as Seller,  and Grove  Corporation,  as Purchaser
            (incorporated   by  reference  to  Exhibit  2.4  to  the   Company's
            Registration Statement on Form S-2 (No. 333-38183))

   2.5      Grove Operating, L.P., Solicitation of Consent and Offer to Exchange
            Certain  Outstanding  Units  of  Limited  Partnership   Interest  in
            Grove-Coastal  Associates,  L.P. for Consideration of 3,435.5 Common
            Units of Grove Operating,  L.P. with an option to holders to instead
            receive cash consideration,  dated June 19, 1997, as supplemented on
            June 19, 1997, and Letter of  Transmittal  and Addendum to Letter of
            Transmittal in connection  therewith  (incorporated  by reference to
            Exhibit 2.5 to the Company's Registration Statement on Form S-2 (No.
            333-38183))

   2.6      Agreement dated as of April 22, 1998 among The Grove Corporation and
            the twenty-two limited partnerships identified on Schedule 1 thereto
            (incorporated  by reference to Exhibit 2.1 to the Company's  Current
            Report on Form 8-K  dated  October  30,  1998  (Commission  File No.
            1-13080))

   2.7      Amendment dated as of August 31, 1998 to Conveyance  Agreement dated
            as of April 22, 1998 among The Grove  Corporation and the twenty-two
            limited partnerships  identified on Schedule 1 thereto (incorporated
            by reference to Exhibit 2.2 to the Company's  Current Report on Form
            8-K dated October 30, 1998 (Commission File No. 1-13080))

   3.1      Third Amended and Restated Declaration of Trust of the Company dated
            March 14, 1997, as amended by Articles  Supplementary  dated October
            23,  1997  and  by  Articles  of  Amendment   dated  June  30,  1998
            (incorporated by reference to Exhibit 3.0 to the Company's Quarterly
            Report on Form 10-Q for the quarter ended June 30, 1998  (Commission
            File No. 1-123080))

   3.2      Amended  and  Restated  Bylaws  of  the  Company   (incorporated  by
            reference to Exhibit 3.2 to the Company's Current Report on Form 8-K
            dated March 14, 1997 and filed March 31, 1997  (Commission  File No.
            1-13080))

   4.1      Form of Agreement of Limited  Partnership of Grove Operating,  L.P.,
            among the Company and the other partners named therein (incorporated
            by reference to Exhibit 10.2 to the Company's Current Report on Form
            8-K dated February 13, 1997 (Commission File No. 1-13080))

   4.2      Amendment  to  the  Agreement  of  Limited   Partnership   of  Grove
            Operating,  L.P.  among the  Company  and the other  partners  named
            therein  (incorporated  by reference to Exhibit 4.3 to the Company's
            Registration Statement on Form S-2 (No. 333-38183))

   4.3      Revolving  Credit  Agreement  among  Grove  Operating,  L.P.,  Grove
            Property  Trust and  BankBoston,  N.A. and the Other Banks which may
            become  parties  to  the  Agreement  with   BankBoston,   as  Agent,
            BankBoston Robertson Stephens, as Arranger, and First Union National
            Bank,   as   Syndication   Agent,   Dated  as  of  August  11,  1999
            (incorporated  by reference to Exhibit 4 to the Company's  Quarterly
            Report  on Form  10-Q  for the  quarter  ended  September  30,  1999
            (Commisssion File No. 1-13080))

   4.4      Loan Agreement, dated as of June 1, 1998, among certain subsidiaries
            of Grove Operating, L.P., as borrowers, and Lehman Brothers Holdings
            Inc., as lender


<PAGE>


  10.1      Securities Purchase Agreement,  dated February 20, 1997, between the
            Company and Morgan Stanley Group Inc.  (incorporated by reference to
            Exhibit 10.1 to the Company's Current Report on Form 8-K dated March
            14, 1997 (Commission File No. 1-13080))

  10.2      Securities Purchase Agreement,  dated February 21, 1997, between the
            Company  and  ABKB/LaSalle   Securities  Limited   (incorporated  by
            reference to Exhibit 10.2 to the  Company's  Current  Report on Form
            8-K dated March 14, 1997 (Commission File No. 1-13080))

  10.3      Form of Securities Purchase Agreement executed by other Investors in
            the Private Placement  (incorporated by reference to Exhibit 10.3 to
            the  Company's  Current  Report  on Form 8-K dated  March  14,  1997
            (Commission File No. 1-13080))

  10.4      Registration  Rights  Agreement,  dated March 14, 1997,  between the
            Company and the Investors (incorporated by reference to Exhibit 10.4
            to the  Company's  Current  Report on Form 8-K dated  March 14, 1997
            (Commission File No. 1-13080))

  10.5      Registration  Rights  Agreement,  dated March 14, 1997,  between the
            Company,  Grove  Operating,  L.P.  and  certain  partners  of  Grove
            Operating,  L.P.  (incorporated  by reference to Exhibit 10.9 to the
            Company's   Current   Report  on  Form  8-K  dated  March  14,  1997
            (Commission File No. 1-13080))

  10.6      1994 Share Option Plan  (incorporated  by reference to Exhibit 10.16
            to the  Company's  Registration  Statement  on Form  SB-2  (File No.
            33-76732))

  10.7      1996 Share Incentive Plan of Grove Property  Trust,  Grove Operating
            LP  and  Property  Partnerships,   as  amended  to  March  11,  1998
            (incorporated  by reference to Appendix A to the Company's Notice of
            Annual Meeting and Proxy Statement dated April 30, 1998  (Commission
            File No. 1-13080))

  10.8      Noncompetition  Agreement,  dated March 14, 1997, among the Company,
            Grove Operating, L.P., National Realty Services Limited Partnership,
            GIG and Burgundy  Associates  Limited  Partnership  (incorporated by
            reference to Exhibit 10.12 to the Company's  Current  Report on Form
            8-K dated March 14, 1997 (Commission File No. 1-13080))

  10.9      Form of Noncompetition  Agreement executed by each of Damon Navarro,
            Brian Navarro,  Joseph LaBrosse and Edmund Navarro  (incorporated by
            reference to Exhibit 10.13 to the Company's  Current  Report on Form
            8-K dated March 14, 1997 (Commission File No. 1-13080))

 10.10      Amendment,   dated  as  of  October  15,  1997,  to   Noncompetition
            Agreement,  dated  March 14,  1997,  between  the  Company and Damon
            Navarro (incorporated by reference to Exhibit 10.15 to the Company's
            Registration Statement on Form S-2 (No. 333-38183))

 10.11      Amendment,   dated  as  of  October  15,  1997,  to   Noncompetition
            Agreement,  dated  March 14,  1997,  between  the  Company and Brian
            Navarro (incorporated by reference to Exhibit 10.16 to the Company's
            Registration Statement on Form S-2 (No. 333-38183))

 10.12      Amendment,   dated  as  of  October  15,  1997,  to   Noncompetition
            Agreement,  dated  March 14,  1997,  between  the Company and Edmund
            Navarro (incorporated by reference to Exhibit 10.17 to the Company's
            Registration Statement on Form S-2 (No. 333-38183))

 10.13      Amendment,   dated  as  of  October  15,  1997,  to   Noncompetition
            Agreement,  dated  March 14,  1997,  between  the Company and Joseph
            LaBrosse   (incorporated  by  reference  to  Exhibit  10.18  to  the
            Company's Registration Statement on Form S-2 (No. 333-38183))

 10.14      Employment Agreement,  dated March 14, 1997, between the Company and
            Damon  Navarro  (incorporated  by reference to Exhibit  10.14 to the
            Company's   Current   Report  on  Form  8-K  dated  March  14,  1997
            (Commission File No. 1-13080))

 10.15      Amendment,  dated as of October 15, 1997, to  Employment  Agreement,
            dated  March  14,  1997,  between  the  Company  and  Damon  Navarro
            (incorporated  by  reference  to  Exhibit  10.21  to  the  Company's
            Registration Statement on Form S-2 (No. 333-38183))

 10.16      Employment Agreement,  dated March 14, 1997, between the Company and
            Brian  Navarro  (incorporated  by reference to Exhibit  10.15 to the
            Company's   Current   Report  on  Form  8-K  dated  March  14,  1997
            (Commission File No. 1-13080))


<PAGE>


 10.17      Amendment,  dated as of October 15, 1997, to  Employment  Agreement,
            dated  March  14,  1997,  between  the  Company  and  Brian  Navarro
            (incorporated  by  reference  to  Exhibit  10.23  to  the  Company's
            Registration Statement on Form S-2 (No. 333-38183))

 10.18      Employment Agreement,  dated March 14, 1997, between the Company and
            Edmund  Navarro  (incorporated  by reference to Exhibit 10.16 to the
            Company's   Current   Report  on  Form  8-K  dated  March  14,  1997
            (Commission File No. 1-13080))

 10.19      Amendment,  dated as of October 15, 1997, to  Employment  Agreement,
            dated  March 14,  1997,  between  the  Company  and  Edmund  Navarro
            (incorporated  by  reference  to  Exhibit  10.25  to  the  Company's
            Registration Statement on Form S-2 (No. 333-38183))

 10.20      Employment Agreement,  dated March 14, 1997, between the Company and
            Joseph LaBrosse  (incorporated  by reference to Exhibit 10.17 to the
            Company's   Current   Report  on  Form  8-K  dated  March  14,  1997
            (Commission File No. 1-13080))

 10.21      Amendment,  dated as of October 15, 1997, to  Employment  Agreement,
            dated  March 14,  1997,  between  the  Company  and Joseph  LaBrosse
            (incorporated  by  reference  to  Exhibit  10.27  to  the  Company's
            Registration Statement on Form S-2 (No. 333-38183))

 10.22      Form of Contribution  Agreement among the Company,  Grove Operating,
            L.P. and certain other parties (incorporated by reference to Exhibit
            10.1 to the Company's  Current Report on Form 8-K dated February 13,
            1997 (Commission File No. 1-13080))

 10.23      Form of  Indemnification  Agreement by and between the Company,  the
            Trust  Managers and each of Damon  Navarro,  Brian  Navarro,  Edmund
            Navarro and Joseph  LaBrosse  (incorporated  by reference to Exhibit
            10.18 to the  Company's  Registration  Statement  on Form  SB-2 (No.
            33-76732))

 10.24      Purchase and Sale Agreement  between the Company and Grove Cambridge
            Associates Limited Partnership (incorporated by reference to Exhibit
            1 to the Company's Current Report on Form 8-K dated October 30, 1995
            (Commission File No. 1-13080))

 10.25      Unlimited  Guaranty among Grove Property Trust and Bankboston,  N.A.
            dated November 6, 1998  (incorporated  by reference to Exhibit 10.31
            to the  Company's  Annual  Report  on Form  10-K for the year  ended
            December 31, 1998 (Commission File No. 1-130080))

 10.26      Promissory  Note, dated as of November 30, 1998, from Munawar Cheema
            to the Company

 10.27      Amended and Restated Agreement re Application of Dividends, dated as
            of November 30, 1998, between the Company and Munawar Cheema

    21      List of Subsidiaries

    23      Consent of Ernst & Young LLP

    27      Financial Data Schedule