UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549




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Form 10-K

(Mark One)

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

For the fiscal year ended December 31, 2000

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 number 1-13092



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MALAN REALTY INVESTORS, INC.

(Exact name of registrant as specified in
charter)


|                                                                |  |                                         
|--------------------------------------------------------------- |  | ----------------------------------------
|                                                               
|                                                               
|                                                               
|                                                               
|Michigan                                                        |  | 38-1841410                              
|(State or other jurisdiction
	of incorporation or organization) |  | (I.R.S. Employer
	Identification Number)
|                                                               
|                                                               
|                                                               
|                                                               
|30200 Telegraph Rd., Ste. 105
	Bingham Farms, Michigan          |  | 48025                                   
|(Address of principal executive offices)                        |  | (Zip Code)                              

Registrants telephone number, including area code:

(248) 644-7110


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

|                                                    |  |                                           |                         | 
|--------------------------------------------------- |  | ----------------------------------------- | ----------------------- | 
|Title of Each Class                                 |  | Name of Each Exchange on Which Registered
|                                                    |  |                                          
|Common Stock, Par Value $0.01 Per Share             |  |                                           | New York Stock Exchange | 
|9 1/2% Convertible Subordinated Debentures due 2004 |  |                                           | New York Stock Exchange | 

Indicate by check mark whether the
Registrant (1) has filed all reports to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for at
least the past 90
days.       Yes

       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 the Form 10-K or any amendment to this
Form 10-K:

The aggregate market value of the
voting stock held by non-affiliates of the Registrant was
approximately $44,136,083 (computed on the basis of $9.97 per
share), which was the last sale price on the New York Stock
Exchange on February 28, 2001. (For this computation, the
Registrant has excluded the market value of all shares of its
Common Stock reported as beneficially owned by executive
officers and directors of the Registrant; such exclusion shall
not be deemed to constitute admission that any such person is an
affiliate of the Registrant.)

As of February 28, 2001,
5,169,470 shares of Common Stock, Par Value $0.01 Per Share, and
$42,743,000 aggregate principal 9 1/2% Convertible
Subordinated Debentures due 2004, were outstanding.

LIST OF DOCUMENTS INCORPORATED BY REFERENCE

Part III of this
Form 10-K incorporates by reference information from the
Registrants definitive proxy statement for the annual
shareholders meeting to be held in 2001, which is to be
filed with the Securities and Exchange Commission within
120 days of the close of Registrants fiscal year.



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TABLE OF CONTENTS


|          |  |                                                                                        |  |        |    | 
|--------- |  | -------------------------------------------------------------------------------------- |  | ------ | -- | 
|          |  |                                                                                        |  | Page  
|          |  |                                                                                        |  | Number
|          |  |                                                                                        |  |       
|          |  | PART I                                                                                 |  |        |    | 
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|Item  1.  |  | Business                                                                               |  |        | 2  | 
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|Item  2.  |  | Properties                                                                             |  |        | 3  | 
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|Item  3.  |  | Legal Proceedings                                                                      |  |        | 5  | 
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|Item  4.  |  | Submission of Matters to a Vote of Security Holders                                    |  |        | 5  | 
|          |  | PART II                                                                                |  |        |    | 
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|Item  5.  |  | Market for Registrants Common Stock and Related
	Stockholder Matters                  |  |        | 5  | 
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|Item  6.  |  | Selected Financial Data                                                                |  |        | 7  | 
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|Item  7.  |  | Managements Discussion and Analysis of Financial Condition
	and Results of Operations |  |        | 8  | 
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|Item  8.  |  | Consolidated Financial Statements and Supplementary Data                               |  |        | 16 | 
|         
|         
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|Item  9.  |  | Changes in and Disagreements with Accountants on Accounting and
	Financial Disclosure  |  |        | 38 | 
|          |  | PART III                                                                               |  |        |    | 
|         
|         
|         
|         
|Item  10. |  | Directors and Executive Officers of the Registrant                                     |  |        | 38 | 
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|Item  11. |  | Executive Compensation                                                                 |  |        | 38 | 
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|Item  12. |  | Security Ownership of Certain Beneficial Owners and Management                         |  |        | 38 | 
|         
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|Item  13. |  | Certain Relationships and Related Transactions                                         |  |        | 38 | 
|          |  | PART IV                                                                                |  |        |    | 
|         
|         
|         
|         
|Item  14. |  | Exhibits, Consolidated Financial Statement Schedules, and
	Reports on
	Form 8-K        |  |        | 38 | 



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PART I


Item 1.  Business

Malan Realty Investors, Inc. (the Company) is a
self-administered and self-managed real estate investment trust
(REIT) engaged in the ownership, management,
leasing, acquisition, development and redevelopment of
commercial retail properties. The Companys operating units
are comprised of approximately 64 community shopping centers,
free standing retail stores and theater complexes. All financial
results are aggregated into one operating segment since the
properties have similar economic characteristics. The Company
also manages properties owned by unrelated third parties on a
limited basis.

From 1994 to 2000, the Company maintained a strategy of reducing
the Kmart concentration of its portfolio by acquiring shopping
centers anchored by national retailers other than Kmart.
Acquisitions subsequent to the Companys 1994 initial
public offering (IPO) include five community
shopping centers anchored by Wal-Mart Corporation
(Wal-Mart), thirteen community shopping centers
shadow-anchored by Wal-Mart, three community shopping centers
having other national retailers as the major tenant, and a
12-plex cinema complex leased and operated by a major national
motion picture company. In addition, two of the Companys
properties previously anchored by Kmart were developed into
multiplex cinema complexes operated by Cinemark USA, one of the
nations leading theater operators.

At the time of the IPO, Kmart represented 60.1% of the
Companys rental income and 77.5% of the gross leaseable
area within the Companys portfolio. In 2000, approximately
27.2% of the Companys total revenues were derived from
Kmart and at December 31, 2000, 50.2% of its gross
leaseable area was leased to Kmart. Wal-Mart accounted for
approximately 5.5% of the Companys total revenues in 2000
and approximately 7.8% of its gross leaseable area at
December 31, 2000. The Companys total gross leaseable
area has grown from approximately 4.7 million square feet
at the time of the IPO to approximately 5.9 million
currently.

In March 2001, the Companys board of directors
adopted a new strategic plan. This plan is the culmination of a
reassessment of the Companys focus following a change in
the Companys board of directors and senior management in
May 2000. The new strategic plan includes a restructuring
of the Companys debt (see Sources of Capital
under Managements Discussion and Analysis of
Financial Condition and Results of Operations). The
Company also plans to begin selling mature and non-strategic
assets. Sale proceeds will be invested in the best investment
opportunities available within the constraints of the
Companys debt, including stock repurchases, retirement of
debt, redevelopment and repositioning of existing assets, and
strategic investment in new real estate. The Company may use
joint venture partners with development capabilities to assist
in accessing capital and to provide local expertise.

Objectives of the Company include maximizing growth and
enhancing the value of its portfolio through effective
operating, acquisition, development and financing strategies and
management policies. The Company believes that attractive
opportunities exist to increase rental revenues through
effective leasing and management of the properties in its
portfolio. The Company has entered into formal listing
agreements with local real estate brokers for every vacancy.

The Companys primary target area has historically been the
Midwestern United States; however, management is aware that
attractive opportunities may exist outside of this geographic
area and the Company may pursue such opportunities if management
believes they will enhance overall shareholder value. In
addition, certain of the properties owned by the Company have
parcels of undeveloped land, which are available for future
development. The Company will also pursue certain expansion
opportunities available within the current portfolio.

The Company is taxed as a REIT under Section 856 through
860 of the Internal Revenue Code of 1986, as amended (the
Code). As a REIT, the Company generally is not
subject to federal income taxes to the extent it distributes at
least 95% (90% for tax years subsequent to 2000) of its real
estate investment trust taxable income (as defined in the Code)
to its shareholders.

The Company presently has 22 full-time employees and believes
that its relationship with its employees is good.

2



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Item 2.  Properties

|                                    |  |                     |  |            |  |           |       |              |  |         |         |                    |  |  |      |  |  |                                                                                                                             
|----------------------------------- |  | ------------------- |  | ---------- |  | --------- | ----- | ------------ |  | ------- | ------- | ------------------ |  |  | ---- |  |  | ----------------------------------------------------------------------------------------------------------------------------
|                                    |  | Ownership           |  |            |  |           |       | Gross        |  | Percent |         |                   
|                                    |  | Interest            |  | Year       |  |           |       | Leasable     |  | Leased  |         | Anchor Tenants    
|                                    |  | (Expiration         |  | Developed/ |  | Land Area |       | Area (GLA)   |  | of      |         | (Lease Expiration/
|Property                            |  | Incl. Options)      |  | Renovated  |  | (acres)   |       | (sq. ft.)(A) |  | GLA     |         | Option Expiration)
|                                    |  |                     |  |            |  |           |       |              |  |         |         |                   
|ILLINOIS(16)                        |  |                     |  |            |  |           |       |              |  |         |         |                    |  |  |      |  |  |                                                                                                                             
|Bricktown Square, Chicago, IL       |  | Fee                 |  | 1987/1989  |  |           | 26.00 |              |  |         | 306,009 |                    |  |  | 82%  |  |  | Toys R Us (2013/2038)
	Kids R Us (2014/2039)
	Marshalls (2005/2015)
	Sportmart (2003/2018)
	Franks Nursery (2009/2029)
|Wal-Mart Plaza, Champaign, IL       |  | Fee                 |  | 1994       |  |           | 1.00  |              |  |         | 11,458  |                    |  |  | 100% |  |  | Wal-Mart(B)/Sams Club(B)                                                                                                   
|Kmart Chicago, IL                   |  | Fee                 |  | 1977       |  |           | 8.51  |              |  |         | 96,268  |                    |  |  | 100% |  |  | Kmart (2011/2061)                                                                                                           
|Wal-Mart Plaza, Decatur, IL         |  | Fee                 |  | 1992/1999  |  |           | 5.95  |              |  |         | 45,114  |                    |  |  | 97%  |  |  | Wal-Mart(B)                                                                                                                 
|Fairview Heights, IL                |  | Ground Lease (2051) |  | 1976/1992  |  |           | 12.65 |              |  |         | 96,268  |                    |  |  | 100% |  |  | Kmart (2001/2051)(C)                                                                                                        
|Kmart Franklin Park, IL             |  | Fee                 |  | 1975       |  |           | 9.84  |              |  |         | 96,268  |                    |  |  | 100% |  |  | Kmart (2011/2061)                                                                                                           
|Wal-Mart Plaza, Jacksonville, IL    |  | Fee                 |  | 1995       |  |           | 6.89  |              |  |         | 52,726  |                    |  |  | 84%  |  |  | Wal-Mart(B)/Country Market(B)                                                                                               
|Kmart Lansing, IL                   |  | Fee                 |  | 1976/1992  |  |           | 10.48 |              |  |         | 96,268  |                    |  |  | 100% |  |  | Kmart (2011/2061)                                                                                                           
|Lincoln, IL                         |  | Fee                 |  | 1975/1999  |  |           | 4.86  |              |  |         | 39,797  |                    |  |  | 100% |  |  | Staples (2009)                                                                                                              
|Kmart Loves Park, IL                |  | Ground Lease (2026) |  | 1971/1991  |  |           | 12.50 |              |  |         | 106,084 |                    |  |  | 100% |  |  | Kmart (2011/2026)                                                                                                           
|Cinemark Theatre, Melrose  Park, IL |  | Ground Lease (2048) |  | 1973/2000  |  |           | 10.90 |              |  |         | 69,313  |                    |  |  | 100% |  |  | Cinemark USA (2019/2034)                                                                                                    
|Kmart New Lenox, IL                 |  | Fee                 |  | 1977       |  |           | 8.72  |              |  |         | 88,580  |                    |  |  | 100% |  |  | Kmart (2011/2061)                                                                                                           
|Tinseltown 17, North Aurora, IL     |  | Fee                 |  | 1967/1998  |  |           | 11.36 |              |  |         | 65,416  |                    |  |  | 100% |  |  | Cinemark USA (2018/2033)                                                                                                    
|Kmart Rockford, IL                  |  | Fee                 |  | 1971/1991  |  |           | 10.70 |              |  |         | 110,471 |                    |  |  | 100% |  |  | Kmart (2011/2061)                                                                                                           
|Sherwood Plaza, Springfield, IL     |  | Fee                 |  | 1975/1991  |  |           | 13.85 |              |  |         | 124,885 |                    |  |  | 96%  |  |  | Kmart (2011/2061)                                                                                                           
|Woodriver Plaza, Woodriver, IL      |  | Fee                 |  | 1987       |  |           | 19.40 |              |  |         | 147,470 |                    |  |  | 100% |  |  | Wal-Mart (2007/2037)                                                                                                        
|                                   
|                                   
|                                   
|                                   
|INDIANA(8)                          |  |                     |  |            |  |           |       |              |  |         |         |                    |  |  |      |  |  |                                                                                                                             
|Cedar Square, Crawfordsville, IN    |  | Fee                 |  | 1991/1996  |  |           | 11.32 |              |  |         | 25,750  |                    |  |  | 94%  |  |  | Wal-Mart(B)                                                                                                                 
|Clifty Crossing, Columbus, IN       |  | Fee                 |  | 1989       |  |           | 19.90 |              |  |         | 190,919 |                    |  |  | 96%  |  |  | Wal-Mart (2009/2039)
	Jay C Foods (2009/2034)                                                                               
|Wal-Mart Plaza, Decatur, IN         |  | Fee                 |  | 1994/1997  |  |           | 5.80  |              |  |         | 36,300  |                    |  |  | 97%  |  |  | Wal-Mart(B)                                                                                                                 
|Wal-Mart Plaza, Huntington, IN      |  | Fee                 |  | 1995       |  |           | 1.00  |              |  |         | 12,485  |                    |  |  | 100% |  |  | Wal-Mart(B)                                                                                                                 
|Broadway Center, Merrillville, IN   |  | Fee                 |  | 1974/1997  |  |           | 19.89 |              |  |         | 177,692 |                    |  |  | 94%  |  |  | Kmart (2011/2061)                                                                                                           
|Flatrock Village, Rushville, IN     |  | Fee                 |  | 1988       |  |           | 14.00 |              |  |         | 73,608  |                    |  |  | 96%  |  |  | Wal-Mart (2008/2038)                                                                                                        
|Kmart Valparaiso, IN                |  | Ground Lease (2050) |  | 1974/1990  |  |           | 9.61  |              |  |         | 93,592  |                    |  |  | 100% |  |  | Kmart (2011/2050)                                                                                                           
|Cherry Tree Plaza, Washington, IN   |  | Fee                 |  | 1988       |  |           | 20.60 |              |  |         | 143,682 |                    |  |  | 100% |  |  | Wal-Mart (2008/2038)
	Jay C Foods (2008/2033)                                                                               
|                                   
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|                                   
|                                   
|KANSAS(14)                          |  |                     |  |            |  |           |       |              |  |         |         |                    |  |  |      |  |  |                                                                                                                             
|Ace Hardware, Arkansas City, KS     |  | Fee                 |  | 1976/1999  |  |           | 4.41  |              |  |         | 39,797  |                    |  |  | 56%  |  |  | Westlake Hardware (2009/2019)                                                                                               
|Wal-Mart Plaza, Chanute, KS         |  | Fee                 |  | 1995       |  |           | 1.00  |              |  |         | 15,447  |                    |  |  | 84%  |  |  | Wal-Mart(B)                                                                                                                 
|Wal-Mart Plaza, El Dorado, KS       |  | Fee                 |  | 1996       |  |           | 1.70  |              |  |         | 20,000  |                    |  |  | 72%  |  |  | Wal-Mart(B)                                                                                                                 
|Big Lots, Emporia, KS               |  | Fee                 |  | 1976       |  |           | 6.55  |              |  |         | 39,797  |                    |  |  | 100% |  |  | Big Lots (2002/2012)                                                                                                        
|Ace Hardware, Garden City, KS       |  | Fee                 |  | 1977/2000  |  |           | 5.60  |              |  |         | 39,797  |                    |  |  | 60%  |  |  | Westlake Hardware (2010/2020)                                                                                               
|Great Bend, KS                      |  | Fee                 |  | 1977       |  |           | 5.41  |              |  |         | 55,552  |                    |  |  | 0%   |  |  |                                                                                                                             
|Orscheln Farm Supply, Hays, KS      |  | Fee                 |  | 1977       |  |           | 4.96  |              |  |         | 40,050  |                    |  |  | 100% |  |  | Orscheln Farm Supply (2004/2014)                                                                                            
|Food 4 Less, Independence, KS       |  | Fee                 |  | 1976/1990  |  |           | 4.12  |              |  |         | 39,797  |                    |  |  | 100% |  |  | Food 4 Less (2001/2026)                                                                                                     
|Pine Ridge Plaza Lawrence, KS       |  | Fee                 |  | 1974/1989  |  |           | 31.57 |              |  |         | 193,033 |                    |  |  | 100% |  |  | Kmart (2018/2068)
	Kohls (2019/2055)                                                                                       
|Southwind Theater, Lawrence, KS     |  | Fee                 |  | 1997       |  |           | 7.89  |              |  |         | 42,497  |                    |  |  | 100% |  |  | Hollywood Theaters (2017/2027)                                                                                              
|Standard Supply, Liberal, KS        |  | Fee                 |  | 1977       |  |           | 4.57  |              |  |         | 40,279  |                    |  |  | 100% |  |  | Standard Supply (2003/2013)                                                                                                 
|Kmart Salina, KS                    |  | Fee                 |  | 1978       |  |           | 16.00 |              |  |         | 87,406  |                    |  |  | 100% |  |  | Kmart (2011/2061)                                                                                                           
|Kmart Topeka, KS                    |  | Fee                 |  | 1974/2000  |  |           | 13.93 |              |  |         | 108,960 |                    |  |  | 100% |  |  | Kmart (2011/2049)                                                                                                           
|South City Center, Wichita, KS      |  | Fee                 |  | 1976       |  |           | 13.74 |              |  |         | 130,380 |                    |  |  | 73%  |  |  | Kmart (2011/2061)                                                                                                           
|                                   
|                                   
|                                   
|                                   
|MARYLAND(1)                         |  |                     |  |            |  |           |       |              |  |         |         |                    |  |  |      |  |  |                                                                                                                             
|Kmart Forestville, MD               |  | Fee                 |  | 1979       |  |           | 8.00  |              |  |         | 84,180  |                    |  |  | 100% |  |  | Kmart (2011/2061)                                                                                                           

3



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|                                                      |       |                     |  |            |  |           |       |              |  |         |         |                    |  |  |      |  |  |                                                                       | 
|----------------------------------------------------- | ----- | ------------------- |  | ---------- |  | --------- | ----- | ------------ |  | ------- | ------- | ------------------ |  |  | ---- |  |  | --------------------------------------------------------------------- | 
|                                                      |       | Ownership           |  |            |  |           |       | Gross        |  | Percent |         |                   
|                                                      |       | Interest            |  | Year       |  |           |       | Leasable     |  | Leased  |         | Anchor Tenants    
|                                                      |       | (Expiration         |  | Developed/ |  | Land Area |       | Area (GLA)   |  | of      |         | (Lease Expiration/
|Property                                              |       | Incl. Options)      |  | Renovated  |  | (acres)   |       | (sq. ft.)(A) |  | GLA     |         | Option Expiration)
|                                                      |       |                     |  |            |  |           |       |              |  |         |         |                   
|MICHIGAN(7)(D)                                        |       |                     |  |            |  |           |       |              |  |         |         |                    |  |  |      |  |  |                                                                      
|Wal-Mart Plaza, Benton  Harbor, MI                    |       | Fee                 |  | 1995       |  |           | 1.30  |              |  |         | 14,280  |                    |  |  | 92%  |  |  | Wal-Mart(B)/Lowes(B)                                                
|Orchard-14, Farmington Hills, MI                      |       | Fee                 |  | 1973       |  |           | 11.49 |              |  |         | 139,670 |                    |  |  | 85%  |  |  | Kmart (2011/2061)                                                    
|Clinton Pointe Shopping Center,
	Clinton Township, MI |       | Fee                 |  | 1992       |  |           | 11.72 |              |  |         | 135,330 |                    |  |  | 97%  |  |  | Office Max (2007/2017)
	Sports Authority (2017/2067)
	Target(B)      
|The Shops at Fairlane Meadows,
	Dearborn, MI          |       | Fee                 |  | 1987       |  |           | 17.73 |              |  |         | 137,508 |                    |  |  | 92%  |  |  | Best Buy (2009/2024)
	Kids R Us (2003/2018)
	Target(B)
	Mervyns(B)
|Wal-Mart Plaza, Owosso, MI                            |       | Fee                 |  | 1993/1996  |  |           | 10.00 |              |  |         | 62,379  |                    |  |  | 96%  |  |  | Wal-Mart(B)                                                          
|Wal-Mart Plaza, Sturgis, MI                           |       | Fee                 |  | 1994       |  |           | 1.00  |              |  |         | 12,000  |                    |  |  | 100% |  |  | Wal-Mart(B)                                                          
|Westland Shopping Center,
	Westland, MI               |       | Fee                 |  | 1996       |  |           | 6.99  |              |  |         | 85,000  |                    |  |  | 78%  |  |  | Dicks Sporting Goods (2011/2026)                                    
|                                                     
|                                                     
|                                                     
|                                                     
|MINNESOTA(1)                                          |       |                     |  |            |  |           |       |              |  |         |         |                    |  |  |      |  |  |                                                                      
|Wal-Mart Plaza, Little Falls, MN                      |       | Fee                 |  | 1996       |  |           | 1.00  |              |  |         | 12,456  |                    |  |  | 100% |  |  | Wal-Mart(B)                                                          
|                                                     
|                                                     
|                                                     
|                                                     
|MISSOURI(4)                                           |       |                     |  |            |  |           |       |              |  |         |         |                    |  |  |      |  |  |                                                                      
|Kmart Cape Girardeau, MO                              |       | Fee                 |  | 1974/1991  |  |           | 5.68  |              |  |         | 79,856  |                    |  |  | 100% |  |  | Kmart (2011/2061)                                                    
|Kmart Jefferson City, MO                              |       | Fee                 |  | 1973/1991  |  |           | 9.76  |              |  |         | 124,798 |                    |  |  | 100% |  |  | Kmart (2011/2061)                                                    
|Prairie View Plaza,
	Kansas City, MO                  |       | Ground Lease (2050) |  | 1975/1992  |  |           | 3.24  |              |  |         | 104,440 |                    |  |  | 99%  |  |  | Kmart (2011/2050)                                                    
|Kmart Plaza, Springfield, MO                          |       | Fee                 |  | 1978/1991  |  |           | 7.41  |              |  |         | 98,878  |                    |  |  | 98%  |  |  | Kmart (2011/2061)                                                    
|                                                     
|                                                     
|                                                     
|                                                     
|OHIO(2)                                               |       |                     |  |            |  |           |       |              |  |         |         |                    |  |  |      |  |  |                                                                      
|Wal-Mart Plaza, Mansfield, OH                         |       | Fee                 |  | 1993/1998  |  |           | 3.90  |              |  |         | 55,316  |                    |  |  | 90%  |  |  | Wal-Mart(B)                                                          
|Shannon Station, Van Wert, OH                         |       | Fee                 |  | 1989       |  |           | 20.20 |              |  |         | 145,607 |                    |  |  | 99%  |  |  | Wal-Mart (2009/2039)
	Roundys (2010/2030)                           
|                                                     
|                                                     
|                                                     
|                                                     
|WISCONSIN(11)                                         |       |                     |  |            |  |           |       |              |  |         |         |                    |  |  |      |  |  |                                                                      
|Kmart Plaza, Ft. Atkinson, WI                         |       | Fee                 |  | 1979       |  |           | 8.90  |              |  |         | 88,608  |                    |  |  | 69%  |  |  | Kmart (2004/2054)                                                    
|Kmart Green Bay, WI                                   |       | Fee                 |  | 1974/1992  |  |           | 11.59 |              |  |         | 118,988 |                    |  |  | 100% |  |  | Kmart (2004/2049)                                                    
|Country Fair Shopping Center,
	Hales Corners, WI      |       | Fee                 |  | 1960/1991  |  |           | 10.50 |              |  |         | 152,166 |                    |  |  | 99%  |  |  | Kmart (2011/2061)                                                    
|Kmart Janesville, WI                                  |       | Fee                 |  | 1968/1991  |  |           | 13.78 |              |  |         | 104,000 |                    |  |  | 100% |  |  | Kmart (2003/2038)                                                    
|Kmart Plaza, Kenosha, WI                              |       | Fee                 |  | 1973/1994  |  |           | 9.95  |              |  |         | 119,726 |                    |  |  | 100% |  |  | Kmart (2011/2061)                                                    
|Westland Plaza, Madison, WI                           |       | Fee                 |  | 1978/1992  |  |           | 12.40 |              |  |         | 122,534 |                    |  |  | 88%  |  |  | Kmart (2002/2053)                                                    
|Kmart Madison, WI                                     |       | Fee                 |  | 1968/1991  |  |           | 12.53 |              |  |         | 106,058 |                    |  |  | 100% |  |  | Kmart (2002/2042)                                                    
|Northway Mall, Marshfield, WI                         |       | Ground Lease (2022) |  | 1978/1994  |  |           | 21.63 |              |  |         | 287,267 |                    |  |  | 99%  |  |  | Kmart (2011/2022)
	JC Penney (2004/2019)
	Younkers (2004/2019)       
|Kmart Milwaukee, WI                                   |       | Fee                 |  | 1971       |  |           | 11.23 |              |  |         | 117,791 |                    |  |  | 100% |  |  | Kmart (2011/2061)                                                    
|Kmart Oshkosh, WI                                     |       | Fee                 |  | 1968/1992  |  |           | 10.00 |              |  |         | 104,000 |                    |  |  | 100% |  |  | Kmart (2003/2038)                                                    
|Kmart Stevens Point, WI                               |       | Fee                 |  | 1972/1990  |  |           | 8.00  |              |  |         | 109,197 |                    |  |  | 80%  |  |  | Kmart (2011/2061)                                                    
|                                                      |       |                     |  |            |  |           |       |              |  |         |         |                    |  |  |      |  |  |                                                                      
|                                                      | TOTAL |                     |  |            |  |           |       |              |  |         |         | 5,921,248          |  |  |      |  |  |                                                                       | 
|                                                      |       |                     |  |            |  |           |       |              |  |         |         |                    |  |  |      |  |  |                                                                      




|    |                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(A) | Includes only Company owned square footage.                                                                                                                          
|   
|(B) | These stores and the underlying pads are owned
	and managed by third parties not related to the Company.                                                             
|   
|(C) | Kmart subleases this property to Hobby
	Lobby.                                                                                                                       
|   
|(D) | In addition to the operating properties listed,
	the Company leases approximately 6,200 square feet of office
	space for its headquarters in Bingham Farms, Michigan.

4



---



Tenant Lease Expirations and Renewals

The following table shows tenant lease expirations for the next
ten years at the Companys properties, assuming that none
of the tenants exercise any of their renewal options:

|                    |       |          |    |                |  |                |       |                   |  |               |       |                 |  |   |       |      |  |  |      |      |   |  |      |      |  
|------------------- | ----- | -------- | -- | -------------- |  | -------------- | ----- | ----------------- |  | ------------- | ----- | --------------- |  | - | ----- | ---- |  |  | ---- | ---- | - |  | ---- | ---- | -
|                    |       |          |    |                |  |                |       |                   |  | Percentage of |       | Percentage of  
|                    |       |          |    |                |  |                |       |                   |  | Total Leased  |       | Total Base     
|                    |       |          |    |                |  | Annualized     |       | Average Base      |  | Sq. Footage   |       | Rental Revenues
|                    |       | No. of   |    | Approximate    |  | Base Rent      |       | Rent Per Sq. Foot |  | Represented   |       | Represented    
|Expiration          |       | Leases   |    | Lease Area in  |  | Under Expiring |       | Under Expiring    |  | by Expiring   |       | by Expiring    
|Year                |       | Expiring |    | Square Feet    |  | Leases         |       | Leases            |  | Leases        |       | Leases         
|                    |       |          |    |                |  |                |       |                   |  |               |       |                
|                    |       |          |    | (in thousands) |  | (in thousands) |       |                   |  |               |       |                
|                   
|                   
|                   
|                   
|2001                |       |          | 36 |                |  |                | 247   |                   |  | $             | 1,506 |                 |  | $ | 6.10  |      |  |  | 4.4  | %    |   |  | 5.3  | %   
|                   
|                   
|                   
|                   
|2002                |       |          | 72 |                |  |                | 232   |                   |  |               | 2,033 |                 |  |   | 8.76  |      |  |  | 4.2  |      |   |  | 7.1  |     
|                   
|                   
|                   
|                   
|2003                |       |          | 75 |                |  |                | 693   |                   |  |               | 3,426 |                 |  |   | 4.94  |      |  |  | 12.5 |      |   |  | 12.0 |     
|                   
|                   
|                   
|                   
|2004                |       |          | 64 |                |  |                | 496   |                   |  |               | 2,939 |                 |  |   | 5.93  |      |  |  | 8.9  |      |   |  | 10.3 |     
|                   
|                   
|                   
|                   
|2005                |       |          | 28 |                |  |                | 136   |                   |  |               | 1,430 |                 |  |   | 10.51 |      |  |  | 2.4  |      |   |  | 5.0  |     
|                   
|                   
|                   
|                   
|2006 and thereafter |       |          | 68 |                |  |                | 1,236 |                   |  |               | 6,261 |                 |  |   | 5.07  |      |  |  | 22.2 |      |   |  | 22.0 |     
|                    |       |          |    |                |  |                |       |                   |  |               |       |                 |  |   |       |      |  |  |      |      |   |  |      |     
|                    | TOTAL |          |    | 343            |  |                |       | 3,040             |  |               | $     | 17,595          |  |   | $     | 5.79 |  |  |      | 54.6 | % |  |      | 61.7 | %
|                    |       |          |    |                |  |                |       |                   |  |               |       |                 |  |   |       |      |  |  |      |      |   |  |      |     

Item 3.  Legal Proceedings

In the ordinary course of business, the Company is involved in
routine litigation, none of which is expected to have a material
adverse effect on the Company. The Company also is currently
involved in a lawsuit filed in Oakland County, Michigan Circuit
Court on November 13, 2000 against the Company by
Anthony S. Gramer, its former President and Chief Executive
Officer. The lawsuit seeks in excess of $1 million for
breach of a written contract of employment. The Company believes
this lawsuit is without merit and intends to defend itself
vigorously against this legal action.

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

None.



PART II


Item 5.  Market for Registrants Common Stock and
Related Stockholder Matters

The Companys common stock is listed on the New York Stock
Exchange under the symbol MAL. As of
February 28, 2001 the Company had approximately 160
shareholders of record. The following table sets forth, for the
periods indicated, the high and low sales price as reported on
the New York Stock Exchange, the dividends declared and paid by
the Company per common share for each such period, and the
income tax treatment of such distributions:

|               |      |      |       |     |  |           |       |           |  |          |       |              |  |          |      |   |  |  |      |   |  |  |      |   |  |  |     |   | 
|-------------- | ---- | ---- | ----- | --- |  | --------- | ----- | --------- |  | -------- | ----- | ------------ |  | -------- | ---- | - |  |  | ---- | - |  |  | ---- | - |  |  | --- | - | 
|               |      |      |       |     |  |           |       | Ordinary  |  | Return   |       | Capital      |  | Unrecap.
|               |      |      |       |     |  |           |       | Taxable   |  | of       |       | Gain         |  | Sec 1250
|1999           |      | High |       | Low |  | Dividends |       | Dividends |  | Dividend |       | Distribution |  | Gain    
|               |      |      |       |     |  |           |       |           |  |          |       |              |  |         
|First Quarter  |      | $    | 15.88 |     |  | $         | 13.50 |           |  | $        | 0.425 |              |  |          | 32.6 | % |  |  | 54.0 | % |  |  | 12.1 | % |  |  | 1.3 | %
|              
|              
|              
|              
|Second Quarter |      | $    | 15.88 |     |  | $         | 13.88 |           |  |          | 0.425 |              |  |          | 32.6 |   |  |  | 54.0 |   |  |  | 12.1 |   |  |  | 1.3 |  
|              
|              
|              
|              
|Third Quarter  |      | $    | 15.50 |     |  | $         | 12.63 |           |  |          | 0.425 |              |  |          | 32.6 |   |  |  | 54.0 |   |  |  | 12.1 |   |  |  | 1.3 |  
|              
|              
|              
|              
|Fourth Quarter |      | $    | 14.13 |     |  | $         | 12.00 |           |  |          | 0.425 |              |  |          | 32.6 |   |  |  | 54.0 |   |  |  | 12.1 |   |  |  | 1.3 |  
|               |      |      |       |     |  |           |       |           |  |          |       |              |  |          |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|               |      |      |       |     |  |           |       |           |  | $        | 1.70  |              |  |          |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|               |      |      |       |     |  |           |       |           |  |          |       |              |  |          |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|               | 2000 |      |       |     |  |           |       |           |  |          |       |              |  |          |      |   |  |  |      |   |  |  |      |   |  |  |     |   | 
|               |      |      |       |     |  |           |       |           |  |          |       |              |  |          |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|First Quarter  |      | $    | 13.44 |     |  | $         | 11.88 |           |  | $        | 0.425 |              |  |          |     | % |  |  | 83.8 | % |  |  | 16.2 | % |  |  |    | %
|              
|              
|              
|              
|Second Quarter |      | $    | 14.13 |     |  | $         | 13.94 |           |  |          | 0.425 |              |  |          |     |   |  |  | 83.8 |   |  |  | 16.2 |   |  |  |    |  
|              
|              
|              
|              
|Third Quarter  |      | $    | 13.00 |     |  | $         | 12.81 |           |  |          | 0.425 |              |  |          |     |   |  |  | 83.8 |   |  |  | 16.2 |   |  |  |    |  
|              
|              
|              
|              
|Fourth Quarter |      | $    | 12.88 |     |  | $         | 10.63 |           |  |          | 0.425 |              |  |          |     |   |  |  | 83.8 |   |  |  | 16.2 |   |  |  |    |  
|               |      |      |       |     |  |           |       |           |  |          |       |              |  |          |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|               |      |      |       |     |  |           |       |           |  | $        | 1.70  |              |  |          |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|               |      |      |       |     |  |           |       |           |  |          |       |              |  |          |      |   |  |  |      |   |  |  |      |   |  |  |     |  

5



---



The Company has paid regular quarterly distributions to its
shareholders of $.425 per share ($1.70 per share on an
annualized basis) on the Common Stock since the completion of
the IPO. The Company intends to continue to declare quarterly
distributions to its shareholders. However, distributions by the
Company are determined by the Board of Directors and will depend
on the Companys actual results of operations, cash flows
from operations, economic conditions and other factors, such as
debt service requirements, cash requirements, including the
repayment or refinancing of indebtedness, capital expenditure
requirements, including improvements to and expansions of
existing properties, the development of additional properties,
and such other factors as the Board of Directors deems relevant.

In March 2001, the Company announced as part of its new
strategic plan that for periods subsequent to the first quarter
2001, it intends to declare distributions equal to approximately
two-thirds of cash available for distribution (CAD).
The Company defines CAD as funds from operations
(FFO) as defined by the National Association of Real
Estate Investment Trusts (NAREIT) plus non-cash expenses not
added back to net income in calculating FFO, less recurring
capital expenditures and payments of mortgage principal
amortization. The Company estimates that future distributions
will be paid quarterly at an annual rate of approximately $1.00
per share. Subsequent dividends may also include amounts
required to be paid to shareholders as a result of capital gains
from the sale of assets pursuant to the Companys new
strategic plan. The board expects to review the dividend policy
at least annually.

6



---



Item 6.  Selected Financial Data

The following table sets forth selected financial
information for the Company on a historical basis and should be
read in conjunction with Managements Discussion and
Analysis of Financial Condition and Results of Operations
and all of the financial statements and notes thereto included
elsewhere in this Form 10-K.



SELECTED FINANCIAL DATA


|                                                                                                                 |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |        |        | 
|---------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------- | --------------------------------------- | ------- | ------ | ------ | ---- | ------- | ------ | ------ | ---- | ------- | ------ | ------ | - | ------- | ------ | ------ | - | ------- | ------ | ------ | 
|                                                                                                                 |                                                      |                                        
|                                                                                                                 |                                                      | Year Ended December 31,                
|                                                                                                                 |                                                      |                                        
|                                                                                                                 |                                                      | 2000                                    |         | 1999   |        | 1998 |         | 1997   |        | 1996
|                                                                                                                 |                                                      |                                         |         |        |        |      |         |        |        |     
|                                                                                                                 |                                                      |                                        
|                                                                                                                 |                                                      | (In thousands, except per share data)  
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|OPERATING DATA                                                                                                   |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|Revenues                                                                                                         |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                 | Rental income                                        |                                         | $       | 29,430 |        |      | $       | 30,662 |        |      | $       | 28,084 |        |   | $       | 24,092 |        |   | $       | 23,836 |       
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                 | Percentage and overage rents                         |                                         |         | 1,531  |        |      |         | 1,307  |        |      |         | 1,215  |        |   |         | 1,177  |        |   |         | 1,164  |       
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                 | Recoveries from tenants                              |                                         |         | 10,222 |        |      |         | 10,688 |        |      |         | 9,954  |        |   |         | 9,271  |        |   |         | 9,340  |       
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                 | Interest and other income                            |                                         |         | 661    |        |      |         | 615    |        |      |         | 311    |        |   |         | 443    |        |   |         | 623    |       
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                 | Gain on sale of real estate                          |                                         |         | 3,158  |        |      |         | 1,602  |        |      |         |        |        |   |         |        |        |   |         |        |       
|                                                                                                                 |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|                                                                                                                 |                                                      | Total revenues                          |         |        | 45,002 |      |         |        | 44,874 |      |         |        | 39,564 |   |         |        | 34,983 |   |         |        | 34,963 | 
|Operating expenses                                                                                               |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                 | Property operating and maintenance                   |                                         |         | 3,215  |        |      |         | 3,115  |        |      |         | 2,876  |        |   |         | 2,867  |        |   |         | 2,769  |       
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                 | Other operating expenses                             |                                         |         | 2,151  |        |      |         | 1,752  |        |      |         | 1,615  |        |   |         | 1,493  |        |   |         | 1,481  |       
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                 | Real estate taxes                                    |                                         |         | 8,409  |        |      |         | 8,612  |        |      |         | 8,134  |        |   |         | 7,891  |        |   |         | 7,715  |       
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                 | General and administrative                           |                                         |         | 2,156  |        |      |         | 2,024  |        |      |         | 2,068  |        |   |         | 1,545  |        |   |         | 1,664  |       
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                 | Proxy contest and related costs                      |                                         |         | 3,200  |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |        |       
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                 | Depreciation and amortization                        |                                         |         | 6,795  |        |      |         | 6,368  |        |      |         | 5,633  |        |   |         | 5,068  |        |   |         | 4,920  |       
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                 | Impairment of real estate                            |                                         |         | 190    |        |      |         |        |        |      |         | 431    |        |   |         |        |        |   |         |        |       
|                                                                                                                 |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|                                                                                                                 |                                                      | Total operating expenses                |         |        | 26,116 |      |         |        | 21,871 |      |         |        | 20,757 |   |         |        | 18,864 |   |         |        | 18,549 | 
|                                                                                                                 |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|Operating income                                                                                                 |                                                      |                                         | 18,886  |        |        |      | 23,003  |        |        |      | 18,807  |        |        |   | 16,119  |        |        |   | 16,414  |       
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|Interest expense                                                                                                 |                                                      |                                         | 17,962  |        |        |      | 17,550  |        |        |      | 16,770  |        |        |   | 15,576  |        |        |   | 15,815  |       
|                                                                                                                 |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|Income before extraordinary item and cumulative effect of change
	in accounting principle                        |                                                      |                                         | 924     |        |        |      | 5,453   |        |        |      | 2,037   |        |        |   | 543     |        |        |   | 599     |       
|Extraordinary item                                                                                               |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                 | Loss on extinguishment of debt                       |                                         |         | (93    | )      |      |         | (289   | )      |      |         | (191   | )      |   |         |        |        |   |         |        |       
|                                                                                                                 |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|Income before cumulative effect of change in accounting principle                                                |                                                      |                                         | 831     |        |        |      | 5,164   |        |        |      | 1,846   |        |        |   | 543     |        |        |   | 599     |       
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|Cumulative effect of change in accounting principle                                                              |                                                      |                                         |         |        |        |      | (522    | )      |        |      |         |        |        |   |         |        |        |   |         |       
|                                                                                                                 |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|Net income                                                                                                       |                                                      | $                                       | 831     |        |        | $    | 4,642   |        |        | $    | 1,846   |        |        | $ | 543     |        |        | $ | 599     |       
|                                                                                                                 |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|Basic and diluted earnings per share                                                                             |                                                      | $                                       | 0.16    |        |        | $    | 0.90    |        |        | $    | 0.41    |        |        | $ | 0.15    |        |        | $ | 0.17    |       
|                                                                                                                 |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|Weighted-average basic shares                                                                                    |                                                      |                                         | 5,173   |        |        |      | 5,170   |        |        |      | 4,507   |        |        |   | 3,546   |        |        |   | 3,464   |       
|                                                                                                                 |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|Weighted-average diluted shares(1)                                                                               |                                                      |                                         | 5,180   |        |        |      | 5,170   |        |        |      | 4,524   |        |        |   | 3,591   |        |        |   | 3,475   |       
|                                                                                                                 |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|PRO FORMA DATA(3)                                                                                                |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|Pro forma amount assuming the change in accounting method for
	percentage rent revenue is applied retroactively: |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|Income before extraordinary item                                                                                 |                                                      |                                         |         |        |        | $    | 5,453   |        |        | $    | 1,970   |        |        | $ | 475     |        |        | $ | 659     |       
|                                                                                                                 |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|Basic and diluted earnings per share before extraordinary item                                                   |                                                      |                                         |         |        |        | $    | 1.05    |        |        | $    | 0.44    |        |        | $ | 0.13    |        |        | $ | 0.19    |       
|                                                                                                                 |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|Net income                                                                                                       |                                                      |                                         |         |        |        | $    | 5,164   |        |        | $    | 1,779   |        |        | $ | 475     |        |        | $ | 659     |       
|                                                                                                                 |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|Basic and diluted earnings per share                                                                             |                                                      |                                         |         |        |        | $    | 1.00    |        |        | $    | 0.39    |        |        | $ | 0.13    |        |        | $ | 0.19    |       
|                                                                                                                 |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|CASH FLOW DATA                                                                                                   |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|Cash provided by operating activities                                                                            |                                                      | $                                       | 5,217   |        |        | $    | 10,872  |        |        | $    | 10,069  |        |        | $ | 5,149   |        |        | $ | 7,117   |       
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|Cash provided by (used) for investing activities                                                                 |                                                      |                                         | 4,373   |        |        |      | (4,623  | )      |        |      | (40,627 | )      |        |   | (8,216  | )      |        |   | (2,162  | )     
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|Cash provided by (used for) financing activities                                                                 |                                                      |                                         | (10,626 | )      |        |      | (7,290  | )      |        |      | 31,739  |        |        |   | (2,182  | )      |        |   | (7,084  | )     
|                                                                                                                 |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|                                                                                                                 | Net increase (decrease) in cash and cash equivalents |                                         | $       | (1,036 | )      |      | $       | (1,041 | )      |      | $       | 1,181  |        |   | $       | (5,249 | )      |   | $       | (2,129 | )     
|                                                                                                                 |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|OTHER DATA                                                                                                       |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|Funds from operations(2)                                                                                         |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                 | Basic                                                |                                         | $       | 4,747  |        |      | $       | 10,214 |        |      | $       | 8,094  |        |   | $       | 5,581  |        |   | $       | 5,467  |       
|                                                                                                                 |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|                                                                                                                 | Diluted                                              |                                         | $       | 11,379 |        |      | $       | 17,017 |        |      | $       | 15,697 |        |   | $       | 13,846 |        |   | $       | 13,937 |       
|                                                                                                                 |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|Cash distributions declared per basic common share                                                               |                                                      | $                                       | 1.70    |        |        | $    | 1.70    |        |        | $    | 1.70    |        |        | $ | 1.70    |        |        | $ | 1.70    |       
|                                                                                                                 |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|                                                                                                                 |                                                      | Total gross leasable area at period end |         |        | 5,921  |      |         |        | 6,038  |      |         |        | 6,209  |   |         |        | 5,653  |   |         |        | 5,707  | 
|                                                                                                                 |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|BALANCE SHEET DATA                                                                                               |                                                      |                                         |         |        |        |      |         |        |        |      |         |        |        |   |         |        |        |   |         |       
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|Real estate, before accumulated depreciation                                                                     |                                                      | $                                       | 233,546 |        |        | $    | 267,117 |        |        | $    | 261,783 |        |        | $ | 215,785 |        |        | $ | 207,590 |       
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|Total assets                                                                                                     |                                                      |                                         | 243,983 |        |        |      | 253,480 |        |        |      | 256,837 |        |        |   | 216,138 |        |        |   | 217,852 |       
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|Mortgage indebtedness                                                                                            |                                                      |                                         | 125,011 |        |        |      | 126,601 |        |        |      | 122,279 |        |        |   | 88,585  |        |        |   | 83,643  |       
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|Convertible debentures                                                                                           |                                                      |                                         | 42,743  |        |        |      | 42,743  |        |        |      | 44,925  |        |        |   | 56,680  |        |        |   | 61,285  |       
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|Convertible notes                                                                                                |                                                      |                                         | 27,000  |        |        |      | 27,000  |        |        |      | 27,000  |        |        |   | 27,000  |        |        |   | 27,000  |       
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|Shareholders equity                                                                                             |                                                      |                                         | 39,084  |        |        |      | 47,141  |        |        |      | 51,237  |        |        |   | 33,942  |        |        |   | 34,993  |       




|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | In accordance with Statement of Financial
	Accounting Standards, No. 128, Earnings per
	Share, conversion of all of the debt securities would be
	antidilutive and as such are not included in the weighted
	average diluted shares reported above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(2) | Management considers funds from operations
	(FFO) to be a standard measure of performance of an
	equity real estate investment trust. The Company calculates FFO
	as net income or (loss) excluding gains and losses from
	sales of operating property, further adjusted for certain
	non-cash items including depreciation and amortization of real
	estate assets and including items from nonrecurring events
	except for those that are defined as extraordinary items under
	generally accepted accounting principles. It is the opinion of
	management that reduction for or inclusion of these items is not
	meaningful in evaluating income- producing real estate which, in
	general, has historically not depreciated. FFO does not
	represent cash generated from operating activities in accordance
	with generally accepted accounting principles and is not
	necessarily indicative of cash available to fund cash needs,
	including distributions. FFO should not be considered as an
	alternative to net income as an indicator of the Companys
	operating performance or as an alternative to cash flow as a
	measure of liquidity or the ability to pay distributions but
	rather as a supplemental tool to be used in conjunction with
	these factors in analyzing the Companys overall
	performance. See Funds From Operations in
	Item 7  Managements Discussion and
	Analysis of Financial Condition and Results of Operations.
	Diluted FFO assumes the conversion of all debt securities.
|   
|(3) | In 1999, the Company changed its method of
	accounting for percentage rental revenue in accordance with SEC
	Staff Accounting Bulletin No. 101, Revenue
	Recognition in Financial Statements. See Note 9 in
	the accompanying financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

7



---





|        |                                                                                       
|------- | --------------------------------------------------------------------------------------
|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
Selected Financial Data and the Companys
consolidated financial statements and notes thereto appearing
elsewhere in this Form 10-K.

Results of Operations

Comparison of Year Ended December 31, 2000 to Year Ended
December 31, 1999

Total revenue increased $128,000 from 1999. Minimum rents and
recoveries from tenants decreased $1.698 million primarily
due to sales of properties in 1999 and 2000 and lease
termination agreements executed with four tenants in late 1999
and early 2000. Percentage rent increased approximately $224,000
from 1999 primarily due to a settlement of additional percentage
rents from prior years and an overall increase in percentage
rents from the Companys anchor tenants. Interest and other
income increased approximately $46,000 primarily from the
receipt of nonrecurring lease termination fees from two tenants
in 2000. Net gains on sales of properties increased
$1.556 million over 1999. The total gross leaseable area
(GLA) of the Company decreased from approximately
6.034 million square feet at December 31, 1999 to
approximately 5.921 million square feet at
December 31, 2000 due to the sale of a property in 2000.
The percentage of GLA leased at December 31, 2000 decreased
to 94% from 95% at December 31, 1999.

Total operating expenses increased $4.245 million from 1999
primarily due to proxy contest and related costs totaling
$3.2 million, discussed further below. Property operating
and maintenance expense increased $100,000 primarily due to
extraordinary snow removal costs incurred in December 2000.
Other operating expenses increased $399,000 primarily due to an
increase in bad debt expense to provide for the potential
uncollectibility of past due rents from a former theater tenant
at Bricktown Square. General and administrative costs increased
$132,000 primarily due to legal and professional fees incurred
in connection with the Companys strategic operational
review of the Company performed in early 2000. Depreciation and
amortization increased $427,000 primarily due to capital
improvements and redevelopments that were completed in 1999 and
2000 offset by decreases attributable to property sales. Real
estate taxes decreased approximately $203,000 due to the sale of
a property in Manchester, Missouri in June 2000. In 2000,
the Company recorded a loss on impairment of real estate of
approximately $190,000 due to the reduction of the
Companys carrying value of its interest in its property in
Great Bend, Kansas to its net realizable value in accordance
with Statement of Financial Accounting Standards
(SFAS) No. 121.

Interest expense (including related amortization of deferred
financing costs) increased approximately $412,000 due to
increases in interest rates on the Companys lines of
credit in 2000 and additional borrowings. Interest capitalized
on redevelopment projects in 2000 was $32,000 compared to
$161,000 in 1999.

The Company recorded a loss on early extinguishment of debt in
2000 of $93,000 related to the repayment of debt in connection
with the sale of property in Manchester, Missouri. In 1999, the
Company recorded a net extraordinary loss of $289,000 on the
early extinguishment of debt in connection with the repayment of
a portion of the Companys Securitized Mortgage Loan and
repurchases of its 9 1/2 percent Subordinated
Convertible Debentures due 2004 (Debentures).

In 1999, the Company elected to apply the provisions of SEC
Staff Accounting Bulletin No. 101, which addresses the
proper recognition of certain revenue items including contingent
(percentage) rents. The cumulative effect of the change in
accounting principle was a reduction in percentage rental
revenue of $522,000 as of January 1, 1999.

Overall, net income decreased approximately $3.811 million
in 2000 primarily as a result of nonrecurring items related to
costs associated with a proxy contest and related payments
offset, in part, by an increase in gains on property sales and
reductions in losses on extinguishment of debt and the
cumulative effect of a change in accounting principle.

8



---



Comparison of Year Ended December 31, 1999 to Year Ended
December 31, 1998

Total revenues increased $5.310 million from 1998.
Approximately $1.602 million of the increase resulted from a
gain of $1.751 million on the sale of a freestanding Kmart
retail building located in Colma, California in March 1999
offset by a loss of $149,000 incurred on the sale of property in
Gary, Indiana in August 1999. Minimum rents and recoveries
from tenants increased $3.312 million resulting primarily
from the Companys acquisitions of a 12 shopping center
portfolio in May 1998 and the Wal-Mart Plaza in Decatur,
Illinois in March 1999 and the completion of redevelopments
at Melrose Park, Illinois in March 1999, North Aurora,
Illinois in November 1998 and Lawrence, Kansas in
October 1998. Percentage rent increased approximately
$92,000 from 1998 primarily due to overall increases in
percentage rents from the Companys anchor tenants, offset
by a decrease resulting from a change in the method in which the
Company accounts for these revenues. Interest and other income
increased approximately $304,000 primarily from the receipt of
nonrecurring lease termination fees from two tenants in 1999.
The total GLA of the Company decreased to approximately
6.034 million square feet at December 31, 1999 due to
the sale of two properties. The percentage of GLA leased at
December 31, 1999 remained the same as December 31,
1998 at 95%.

Total operating expenses increased $1.114 million from
1998. Property operating and maintenance expense, other
operating expenses, real estate taxes and depreciation and
amortization increased $239,000, $137,000, $478,000 and
$735,000, respectively, primarily due to the acquisitions and
redevelopments discussed above. General and administrative
expense decreased $44,000, primarily due to decreased
compensation expense offset by an increase in state franchise
and income taxes due to the acquisitions referred to above. In
1998, the Company recorded an impairment of real estate of
approximately $431,000 due to the write down of its interest in
the Gary, Indiana asset to its net realizable value in
accordance with SFAS No. 121. No impairments of real estate
were recorded in 1999.

Interest expense (including related amortization of deferred
financing costs) increased approximately $780,000 due to
increased debt levels from borrowing on the Companys lines
of credit, long-term financing related to the acquisitions of
properties and amortization of deferred financing costs on such
borrowings. Interest capitalized on redevelopment projects in
1999 was $161,000 compared to $447,000 in 1998.

The Company recorded a net extraordinary loss of approximately
$289,000 on the early extinguishment of debt in 1999 in
connection with the repayment of a portion of the Companys
Securitized Mortgage Loan and repurchases of Debentures. In
1998, the Company recorded a loss of $191,000 on Debenture
repurchases.

In the fourth quarter 1999, the Company changed its method of
accounting for percentage rental revenue, effective
January 1, 1999, in accordance with the U.S. Securities and
Exchange Commission Staff Accounting Bulletin No. 101. The
cumulative effect of such change as of January 1, 1999 was
to decrease revenues by $522,000 and this charge was recorded in
1999.

Overall, net income increased approximately $2.796 million
to $4.642 million in 1999 primarily as a result of net gains on
the sales of properties combined with an increase in operating
income resulting from acquisitions and redevelopments offset by
an increase in extraordinary losses recorded on the
extinguishment of debt and the cumulative effect of a change in
accounting principle discussed above.

Impact of Recently Adopted Accounting Standards

In December 1999, the SEC issued SAB
No. 101  Revenue Recognition in Financial
Statements which addresses the proper recognition of certain
revenue items including contingent (percentage) rents.
Certain of the Companys leases contain provisions whereby
additional rent is due from a tenant once the tenant has
achieved a certain sales level i.e. contingent rental. Under
SAB 101, a lessor should not recognize contingent rental
income until the changes in the factors on which the contingent
payments are based actually occur. The Company had previously
recorded accrued percentage rental income as lessees
specified sales targets were met or achievement of the sales
target was probable.

The Company elected to adopt the provisions of SAB No. 101
in the fourth quarter 1999, effective January 1, 1999. The
cumulative effect of such adoption was a reduction in percentage
rental revenue of

9



---





In June 1998, the Financial Accounting Standards Board
issued SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities. SFAS 133, as
amended, requires companies to record derivatives on the balance
sheet as assets and liabilities, measured at fair value. Gains
or losses resulting from changes in the value of those
derivatives would be accounted for depending on the use of the
derivatives and whether they qualify for hedge accounting,
SFAS 133 is effective for fiscal years beginning after
June 15, 2000. The Companys derivatives consist of
interest rate cap agreements which the Company purchased to
reduce its exposure to increases in rates on its floating rate
debt. The Company expects that the primary impact of its
adoption of SFAS 133 will be the timing of the recognition
in income of the costs of these agreements. This may cause
earnings volatility as the value of these agreements may change
from period to period. The cumulative effect of the adjustment
as of January 1, 2001 was a reduction in net income of
$450,000.

Funds From Operations

Management considers Funds From Operations (FFO) to
be a standard measure of performance of an equity real estate
investment trust. The Company uses the method of calculating FFO
prescribed by the October 1999 White Paper issued by the
National Association of Real Estate Investment Trusts (NAREIT)
which utilizes net income or loss excluding gains and losses
from sales of depreciable operating property, further adjusted
for certain non-cash items including depreciation and
amortization of real estate assets and including items from
nonrecurring events except for those that are defined as
extraordinary items under generally accepted accounting
principles. It is the opinion of management that reduction for,
or inclusion of these items, is not meaningful in evaluating
income-producing real estate, which, in general, has
historically not depreciated.

FFO does not represent cash generated from operating activities
in accordance with generally accepted accounting principles and
is not necessarily indicative of cash available to fund cash
needs, including distributions. FFO should not be considered as
an alternative to net income as an indicator of the
Companys operating performance or as an alternative to
cash flow as a measure of liquidity or the ability to pay
distributions but rather, as a supplemental tool to be used in
conjunction with these factors in analyzing the Companys
overall performance.

The Company reports FFO on both a basic and diluted basis. The
diluted basis assumes the conversion of the Companys
convertible debentures and convertible notes into shares of
common stock as well as other common stock equivalents including
those which are antidilutive to earnings per share.

10



---



The following table shows the components that comprise the
Companys FFO for each of the three years ended
December 31, 2000.

|                                                                    |  |                         |        |      |  |      |        |   |  |   |        | 
|------------------------------------------------------------------- |  | ----------------------- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | 
|                                                                    |  |                        
|                                                                    |  | Year Ended December 31,
|                                                                    |  |                        
|                                                                    |  | 2000                    |        | 1999 |  | 1998
|                                                                    |  |                         |        |      |  |     
|                                                                    |  |                        
|                                                                    |  | (In thousands)         
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Net income                                                          |  | $                       | 831    |      |  | $    | 4,642  |   |  | $ | 1,846  | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Depreciation of buildings and improvements                          |  |                         | 6,255  |      |  |      | 6,044  |   |  |   | 5,399  | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Amortization of tenant allowances and improvements                  |  |                         | 365    |      |  |      | 173    |   |  |   | 113    | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Amortization of leasing costs                                       |  |                         | 171    |      |  |      | 146    |   |  |   | 114    | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Gain on sale of real estate                                         |  |                         | (3,158 | )    |  |      | (1,602 | ) |  |   |        | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Impairment of real estate                                           |  |                         | 190    |      |  |      |        |   |  |   | 431    | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Loss on extinguishment of debt                                      |  |                         | 93     |      |  |      | 289    |   |  |   | 191    | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Cumulative effect of change in accounting principle                 |  |                         |        |      |  |      | 522    |   |  |   |        | 
|                                                                    |  |                         |        |      |  |      |        |   |  |   |        | 
|Funds From Operations, Basic                                        |  |                         | 4,747  |      |  |      | 10,214 |   |  |   | 8,094  | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Interest expense on convertible securities                          |  |                         | 6,356  |      |  |      | 6,520  |   |  |   | 7,287  | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Amortization of deferred financing costs on convertible
	securities |  |                         | 276    |      |  |      | 283    |   |  |   | 316    | 
|                                                                    |  |                         |        |      |  |      |        |   |  |   |        | 
|Funds From Operations, Diluted                                      |  | $                       | 11,379 |      |  | $    | 17,017 |   |  | $ | 15,697 | 
|                                                                    |  |                         |        |      |  |      |        |   |  |   |        | 
|Weighted average shares outstanding:                                |  |                         |        |      |  |      |        |   |  |   |        | 
|                                                                   
|                                                                   
|                                                                   
|                                                                   
|Basic                                                               |  |                         | 5,173  |      |  |      | 5,170  |   |  |   | 4,507  | 
|                                                                    |  |                         |        |      |  |      |        |   |  |   |        | 
|Diluted                                                             |  |                         | 5,180  |      |  |      | 5,170  |   |  |   | 4,524  | 
|                                                                    |  |                         |        |      |  |      |        |   |  |   |        | 
|Diluted, assuming conversion of convertible securities              |  |                         | 9,283  |      |  |      | 9,372  |   |  |   | 9,206  | 
|                                                                    |  |                         |        |      |  |      |        |   |  |   |        | 

Liquidity and Capital Resources

Cash flow from operations is the principal source of capital to
fund the Companys ongoing operations. Current efforts to
increase cash flow have centered on additional acquisitions of
properties, redevelopment opportunities at certain of the
Companys existing properties and disposition of noncore
assets.

Acquisitions

In February 2000, the Company completed the acquisition of
a ground lease interest in a portion of its property in Topeka,
Kansas. Total cost of the acquisition was $544,000, which was
funded out of proceeds from the Companys lines of credit.
As a result of the acquisition, the Company now owns the fee
interest in the entire property.

Redevelopments

Phase II of the redevelopment of the Pine Ridge Plaza in
Lawrence, Kansas is in process. The Company has entered into
lease agreements with Old Navy and Famous Footwear for spaces
consisting of 22,000 and 12,000 square feet, respectively.

Current plans also call for an additional freestanding building
of 23,500 square feet which is anticipated to be subdivided into
spaces ranging from 2,500 to 5,000 square feet each.
Construction on the project began in December 2000 and is
anticipated to be completed by the end of 2001. Total costs of
the Phase II development are estimated to be approximately
$3.5 million and are being funded through the
Companys lines of credit.

In March 2001, the Company obtained city approval to
redevelop up to 90 acres of property in Farmington Hills,
Michigan, contiguous to and inclusive of the Companys
existing 12 acre Orchard-14 Shopping Center, under a Planned
Unit Development agreement with the city. The Company intends to
acquire and redevelop portions of the 90 acres of property in
phases through a joint venture agreement with Grand/ Sakwa
Acquisitions, LLC a high quality, well-established local
developer. While the entire scope of the project and the joint
venture agreement is yet to be determined, the total costs of
the project could be as

11



---





The redevelopment of 24,280 square feet of formerly vacant space
at the Companys property in Topeka, Kansas was completed
in April 2000. The space was subdivided at a cost of
approximately $486,000, including capitalized interest, taxes
and leasing commissions, which was funded primarily from the
Companys line of credit with Greenwich Capital Markets,
Inc. The property, which also includes an 84,000 square foot
Kmart store, is now 100% leased with Harbor Freight Tools
leasing 10,380 square feet of the redeveloped space and
Sav-a-Lot leasing the remaining 13,900 square feet.

In September 2000 the Company completed redevelopment of
24,026 square feet of formerly vacant space in Garden City,
Kansas, under a lease agreement with Westlake Hardware. The
39,797 square foot building was subdivided at a cost of
approximately $375,000 including capitalized interest, taxes and
leasing commissions, which was funded from available working
capital. The remaining space of 15,771 square feet is currently
available for lease.

Capital Expenditures

The Company incurs capital expenditures in the ordinary course
of business in order to maintain its properties. Such capital
expenditures typically include roof, parking lot and other
structural repairs, some of which are reimbursed by tenants. In
2000, the Company incurred approximately $1.3 million of
capital expenditures which was funded out of reserves required
under the Companys collateralized mortgages and operating
cash flows. Approximately, $734,000 is anticipated to be
incurred in 2001 for capital expenditures, also to be funded
from similar sources.

The Company will occasionally provide inducements such as
building allowances or space improvements and/or pay leasing
commissions to outside brokers in order to procure new tenants
or renegotiate expiring leases with current tenants. The total
cost of these expenditures in 2000, excluding costs associated
with the redevelopment projects discussed above, was $685,000.
These expenditures are generally funded by operating cash flows.
In 2001, the Company anticipates spending approximately
$1.92 million on such expenditures.

Sources of Capital

In August 2000, the Company announced the resumption of a
Stock Repurchase Plan originally approved in 1995. The
Companys Board of Directors authorized the repurchase of
up to 250,000 shares of its Common Stock, such purchases to be
made in the open market or in privately negotiated transactions,
with the timing dependent upon market conditions, pending
corporate events and availability of funds. In
December 2000, the Company repurchased 11,300 shares at an
average cost of $10.22 per share. In March 2001 the Board
of Directors increased the repurchase program to 500,000 shares.

The Company has outstanding as of December 31, 2000 and
1999 $42.743 million of Debentures and $27 million of
Convertible Notes, which are convertible into shares of Common
Stock at a price of $17.00 per share. The Debentures carry a
rating of B3 from Moodys Investors Services, Inc. The
Company has in place a plan to repurchase and retire up to
$15 million aggregate principal of Debentures. Through
December 31, 2000, the Company had repurchased
$11.807 million of Debentures under the plan. No Debentures
were repurchased during the twelve months ended
December 31, 2000; however, the Company may make additional
purchases in the future as funds become available.

In June 2000, the Company completed the sale of its
property in Manchester, Missouri for $6.8 million. Net
proceeds of the sale after repayment of debt of
$1.5 million and transaction fees were approximately
$5.0 million. The proceeds were used for general corporate
purposes, including working capital, and to pay down the
outstanding balance on the Companys lines of credit.

In September 2000, the Company entered into an agreement to
sell a portion of its property in Arkansas City, Kansas. The
property consists of a vacant parcel of land adjacent to a
freestanding retail building. The

12



---





In February 2001, the Company entered into an agreement to
sell its freestanding building in Liberal, Kansas to the
existing tenant. The agreement calls for a contract price of
$420,000 and is expected to close in the second quarter of 2001
once lender approval is obtained and due diligence by the
purchaser is completed.

The Company anticipates that its cash flow from operations will
be sufficient to fund its cash needs for payment of expenses and
capital expenditures (other than acquisitions and
redevelopments). The Company will evaluate its short and long
term cash needs on an ongoing basis and may adjust its current
distribution policy to reflect its needs. In March 2001,
the Company announced a reduction in its anticipated annualized
dividend from $1.70 to $1.00 per share for periods subsequent to
first quarter 2001. The Company currently has two lines of
credit available for temporary working capital needs and intends
to enter into other secured and unsecured financing agreements
in the future as the need arises.

The Companys line of credit with Bank One (the Bank
One Line) is a revolving line of credit which expires
September 30, 2001. The Bank One Line calls for monthly
payments of interest at the Banks prime rate or 200 basis
points over LIBOR, at the Companys option, and is
collateralized by the Companys interest in Orchard-14
Shopping Center in Farmington Hills, Michigan. The
Companys line of credit with Greenwich Capital Markets,
Inc. (the Greenwich Capital Line) is a revolving
line of credit which expires November 2001 and is collateralized
by 17 properties owned by the Companys wholly owned
subsidiary, Malan Revolver, Inc. The Greenwich Capital Line
requires monthly payments of interest only at LIBOR plus 250
basis points. The amount outstanding as of December 31,
2000 under the Greenwich Capital Line was $11.7 million and
the Bank One line had no amount outstanding at that date. The
maximum available borrowings under each line as of that date
were $18.9 million and $3.0 million, respectively.

The Company has several large debt obligations coming due in the
near term and over the next several years including the
expiration of its current lines of credit later this year, the
maturity of its Securitized Mortgage Loan in 2002 and two issues
of convertible securities coming due thereafter. In March 2001,
the Company announced the adoption of a strategic plan, which
will address these debt obligations as well as the ongoing
capital needs of the Company. Among the strategies that will be
implemented are restructuring of debt to provide maximum
financial flexibility, sale of mature assets and pursuit of
redevelopment and repositioning opportunities as capital
permits,and sale of non-strategic assets and redeployment of
proceeds in the best investment opportunities available within
the constraints of the Companys debt. These investments
may include repurchase of the Companys common shares and
convertible debentures, redevelopment and repositioning of
existing assets and investment in new real estate. If the
Company is unable to identify suitable investment opportunities,
it will explore all other alternatives to maximize shareholder
value, including returning capital to shareholders following the
sale of assets or the sale of the entire Company.

Certain of the Companys debt obligations contain
cross-default and cross-acceleration provisions.

Bricktown Square Shopping Center

The Company owns Bricktown Square Shopping Center
(Bricktown) a 306,000 square foot shopping center in
Chicago, Illinois which was acquired at the time of the
Companys initial public offering from a partnership
controlled by its former President and CEO, Anthony S. Gramer.
The property collateralizes two loans, the 8.5% Secured
Convertible Notes due July 2003 (the Convertible
Notes) and the City of Chicago UDAG Loan (the UDAG
Loan) with outstanding balances of $27 million and
approximately $7.8 million, respectively, at
December 31, 2000. The UDAG Loan is secondary to the
Convertible Notes and is nonrecourse to the Company. Net
operating income and cash flows from Bricktown have been
steadily declining since 1998.

In September 2000, Meridian Entertainment Group, Inc.
(Meridian), a tenant at Bricktown, vacated a
six-screen theater operation in violation of its lease
agreement. The lease, which was assigned to Meridian by Plitt
Theaters, Inc., (Plitt) a subsidiary of Loews
Cineplex Entertainment Corporation (Loews Cineplex),
runs through June 30, 2008. Annual revenues under the lease
were approximately $930,000. The

13



---





In February 2001, another tenant at Bricktown, Franks
Nursery and Crafts (Franks), also filed for
bankruptcy protection under Chapter 11. Annual revenues
under Franks lease are approximately $403,000.
Franks has neither accepted nor rejected the lease in
bankruptcy and is currently in arrears approximately $67,000 on
its lease obligations. Should Franks reject its lease and
vacate the premises, future cash flows from the property could
be substantially further impaired.

The Company believes the current value of Bricktown is
substantially below the debt obligations that it collateralizes
and that cash flows from Bricktowns operations are
currently insufficient to support the debt service requirements
for the loans. In March 2001, the Company entered into an
agreement with the City of Chicago under which no payments will
be due on the UDAG Loan until December 2001.

Proxy Contest and Related Costs

At the Companys Annual Meeting convened on May 10,
2000 and closed on May 18, 2000, a slate of five Directors
was elected and replaced the Companys then existing Board
of Directors. The Company paid approximately $890,000 in costs
attributed to the proxy contest including expenditures for
attorneys, solicitors, public relations advisors and
advertising, printing, transportation and related expenses. This
amount includes approximately $500,000 in costs incurred by
Kensington Investment Group, Inc. and other shareholders which
were subsequently approved by the Board of Directors for payment
by the Company.

Subsequent to the opening of the annual meeting on May 10,
2000 but prior to its conclusion on May 18, 2000, the
Company made payments to the three then officers of the Company,
totaling $1.75 million. Certain of these payments are
currently the subject of litigation. The aforementioned costs
were funded out of operating cash flows and available working
capital. The Company also recorded an accrued liability of
$800,000 relating to the Companys future obligation (also
the subject of litigation) to provide lifetime health insurance
benefits to the officers. In August 2000, the Company
entered into an employment agreement with one of the officers
which included the relinquishment of any right to the lifetime
health insurance and a grant of 6,550 shares of the
Companys Common Stock.

Management Changes

In July 2000, the Company announced the departure of its
then President and Chief Executive Officer Anthony S.
Gramer. In August 2000, the Company appointed Michael K.
Kaline as President and subsequently announced the appointment
of Jeffrey D. Lewis as Chief Executive Officer. Mr. Lewis
had previously been elected to the Companys Board of
Directors in May 2000. In February 2001, the Company
announced the appointment of Elliott J. Broderick to Chief
Financial Officer and Alan K. Warnke to Vice President.

Safe Harbor Statement

Each of the above statements regarding anticipated operating
results are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Although the
Company believes the statements and projections are based upon
reasonable assumptions, actual results may differ from those
projected. Key factors that could cause actual results to differ
materially include the results of the Companys
restructuring of the Bricktown debt described above, the
Companys ability to refinance its other indebtedness as it
comes due, the Companys success in selling mature assets
and redeploying the proceeds into attractive

14



---





Inflation

The Companys long-term leases contain provisions to
mitigate the adverse impact of inflation on its results from
operations. Such provisions include clauses entitling the
Company to receive (i) scheduled base rent increases and
(ii) percentage rents based upon tenants gross sales,
which generally increase as prices rise. In addition, many of
the Companys non-anchor leases are for terms of less than
ten years, which permits the Company to seek increases in rents
upon re-rental at then current market rates if rents provided in
the expiring leases are below then existing market rates. Most
of the Companys leases require tenants to pay a share of
operating expenses, including common area maintenance, real
estate taxes, insurance and utilities, thereby reducing the
Companys exposure to increases in costs and operating
expenses resulting from inflation

Item 7a.  Quantitative and Qualitative Disclosure about
Market Risk

The Company has exposure to interest rate risk on its debt
obligations and interest rate instruments. Based on the
Companys outstanding variable rate debt at
December 31, 2000, a one percent increase or decrease in
interest rates would decrease or increase, respectively, the
Companys earnings and cash flows by approximately $117,000
on an annualized basis.

Based on the Companys consolidated debt and interest rates
in effect at December 31, 2000, a one percent increase or
decrease in interest rates would decrease or increase the fair
value of debt by approximately $3.0 million.

15



---



Item 8.  Consolidated Financial Statements and
Supplementary Data



INDEX


|                                                                                                                    |  |        |    | 
|------------------------------------------------------------------------------------------------------------------- |  | ------ | -- | 
|                                                                                                                    |  | Page  
|                                                                                                                    |  | Number
|                                                                                                                    |  |       
|Independent Auditors Report                                                                                        |  |        | 17 | 
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Consolidated Balance Sheets as of December 31, 2000 and
	1999.                                                      |  |        | 18 | 
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Consolidated Statements of Operations for Each of the Three
	Years in the Period Ended December 31, 2000.           |  |        | 19 | 
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Consolidated Statements of Shareholders Equity for Each of
	the Three Years in the Period Ended December 31, 2000. |  |        | 20 | 
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Consolidated Statements of Cash Flows for Each of the Three
	Years in the Period Ended December 31, 2000.           |  |        | 21 | 
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Notes to Consolidated Financial Statements                                                                          |  |        | 22 | 
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Consolidated Financial Statement Schedule II 
	Valuation and Qualifying Accounts                                   |  |        | 35 | 
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|                                                                                                                   
|Consolidated Financial Statement Schedule III 
	Real Estate and Accumulated Depreciation                           |  |        | 36 | 

Schedules other than the one above are omitted because they are
not applicable, not required, or the information required to be
set forth therein is included in the consolidated financial
statements or the notes thereto.

16



---





INDEPENDENT AUDITORS REPORT


To the Board of Directors and



We have audited the consolidated financial statements and the
consolidated financial statement schedules listed at Item 8
of Malan Realty Investors, Inc. and Subsidiaries (the
Company). These financial statements and the
financial statement schedules are the responsibility of the
Companys management. Our responsibility is to express an
opinion on these financial statements and the financial
statement schedules based on our audits.

We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. Those
standards require that we plan and perform the audits 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, such consolidated financial statements present
fairly, in all material respects, the financial position of the
Company as of December 31, 2000 and 1999, and the results
of its operations and its cash flows for each of the three years
in the period ended December 31, 2000, in conformity with
accounting principles generally accepted in the United States of
America. Also in our opinion, such consolidated financial
statement schedules, when considered in relation to the basic
consolidated financial statements taken as a whole, present
fairly in all material respects the information set forth
therein.

As discussed in Note 9 to the financial statements, in 1999 the
Company changed its method of accounting for percentage rents.

DELOITTE & TOUCHE LLP

Detroit, Michigan



17



---





MALAN REALTY INVESTORS, INC. AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)


|                                       |                                                                                                                                                       |                                                                                        |                                            |         |         |         |   |         |         |         |  
|-------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------- | ------------------------------------------ | ------- | ------- | ------- | - | ------- | ------- | ------- | -
|                                       |                                                                                                                                                       |                                                                                       
|                                       |                                                                                                                                                       | December 31,                                                                          
|                                       |                                                                                                                                                       |                                                                                       
|                                       |                                                                                                                                                       | 2000                                                                                   |                                            | 1999   
|                                       |                                                                                                                                                       |                                                                                        |                                            |        
|ASSETS:                                |                                                                                                                                                       |                                                                                        |                                            |         |         |         |   |        
|                                      
|                                      
|                                      
|                                      
|                                       | Real Estate (Notes 2 and 8):                                                                                                                          |                                                                                        |                                            |         |         |         |   |         |        
|                                      
|                                      
|                                      
|                                      
|                                       |                                                                                                                                                       | Land                                                                                   |                                            | $       | 29,291  |         |   | $       | 29,124  |        
|                                      
|                                      
|                                      
|                                      
|                                       |                                                                                                                                                       | Buildings and improvements                                                             |                                            |         | 236,275 |         |   |         | 237,993 |        
|                                       |                                                                                                                                                       |                                                                                        |                                            |         |         |         |   |        
|                                       |                                                                                                                                                       |                                                                                        | Total                                      |         |         | 265,566 |   |         |         | 267,117 |  
|                                      
|                                      
|                                      
|                                      
|                                       |                                                                                                                                                       |                                                                                        | Less: accumulated depreciation             |         |         | (32,020 | ) |         |         | (26,584 | )
|                                       |                                                                                                                                                       |                                                                                        |                                            |         |         |         |   |        
|                                       |                                                                                                                                                       |                                                                                        | Total                                      |         |         | 233,546 |   |         |         | 240,533 |  
|                                      
|                                      
|                                      
|                                      
|                                       | Other Assets:                                                                                                                                         |                                                                                        |                                            |         |         |         |   |         |        
|                                      
|                                      
|                                      
|                                      
|                                       |                                                                                                                                                       | Accounts receivable (net of allowance of $505 and $156 at
	December 31, 2000 and 1999) |                                            |         | 1,095   |         |   |         | 1,149   |        
|                                      
|                                      
|                                      
|                                      
|                                       |                                                                                                                                                       | Deferred financing and other                                                           |                                            |         | 6,420   |         |   |         | 7,554   |        
|                                      
|                                      
|                                      
|                                      
|                                       |                                                                                                                                                       | Cash and cash equivalents                                                              |                                            |         | 821     |         |   |         | 1,857   |        
|                                      
|                                      
|                                      
|                                      
|                                       |                                                                                                                                                       | Restricted cash  mortgage escrow deposits                                             |                                            |         | 2,101   |         |   |         | 2,387   |        
|                                       |                                                                                                                                                       |                                                                                        |                                            |         |         |         |   |        
|                                       |                                                                                                                                                       |                                                                                        | Total Assets                               |         | $       | 243,983 |   |         | $       | 253,480 |  
|                                       |                                                                                                                                                       |                                                                                        |                                            |         |         |         |   |        
|LIABILITIES:                           |                                                                                                                                                       |                                                                                        |                                            |         |         |         |   |        
|                                      
|                                      
|                                      
|                                      
|                                       | Mortgages (Note 2)                                                                                                                                    |                                                                                        | $                                          | 125,011 |         |         | $ | 126,601 |        
|                                      
|                                      
|                                      
|                                      
|                                       | Convertible debentures (Note 2)                                                                                                                       |                                                                                        |                                            | 42,743  |         |         |   | 42,743  |        
|                                      
|                                      
|                                      
|                                      
|                                       | Convertible notes (Note 2)                                                                                                                            |                                                                                        |                                            | 27,000  |         |         |   | 27,000  |        
|                                      
|                                      
|                                      
|                                      
|                                       | Accounts payable and other                                                                                                                            |                                                                                        |                                            | 2,763   |         |         |   | 2,699   |        
|                                      
|                                      
|                                      
|                                      
|                                       | Accrued distributions payable                                                                                                                         |                                                                                        |                                            | 2,199   |         |         |   | 2,198   |        
|                                      
|                                      
|                                      
|                                      
|                                       | Accrued property taxes                                                                                                                                |                                                                                        |                                            | 1,310   |         |         |   | 1,315   |        
|                                      
|                                      
|                                      
|                                      
|                                       | Accrued interest payable                                                                                                                              |                                                                                        |                                            | 3,873   |         |         |   | 3,783   |        
|                                       |                                                                                                                                                       |                                                                                        |                                            |         |         |         |   |        
|                                       |                                                                                                                                                       |                                                                                        | Total liabilities                          |         |         | 204,899 |   |         |         | 206,339 |  
|                                       |                                                                                                                                                       |                                                                                        |                                            |         |         |         |   |        
|Commitments and Contingencies (Note 5) |                                                                                                                                                       |                                                                                        |                                            |         |         |         |   |        
|                                      
|                                      
|                                      
|                                      
|Shareholders Equity (Note 3)          |                                                                                                                                                       |                                                                                        |                                            |         |         |         |   |        
|                                      
|                                      
|                                      
|                                      
|                                       | Common stock ($.01 par value, 30 million shares authorized,
	5,162,920 and 5,172,404 shares issued and outstanding as of
	December 31, 2000 and 1999) |                                                                                        |                                            | 52      |         |         |   | 52      |        
|                                      
|                                      
|                                      
|                                      
|                                       | Additional paid in capital                                                                                                                            |                                                                                        |                                            | 74,078  |         |         |   | 74,169  |        
|                                      
|                                      
|                                      
|                                      
|                                       | Accumulated distributions in excess of net income                                                                                                     |                                                                                        |                                            | (35,046 | )       |         |   | (27,080 | )      
|                                       |                                                                                                                                                       |                                                                                        |                                            |         |         |         |   |        
|                                       |                                                                                                                                                       |                                                                                        | Total shareholders equity                 |         |         | 39,084  |   |         |         | 47,141  |  
|                                       |                                                                                                                                                       |                                                                                        |                                            |         |         |         |   |        
|                                       |                                                                                                                                                       |                                                                                        | Total Liabilities and Shareholders Equity |         | $       | 243,983 |   |         | $       | 253,480 |  
|                                       |                                                                                                                                                       |                                                                                        |                                            |         |         |         |   |        

See Notes to Consolidated Financial Statements

18



---



MALAN REALTY INVESTORS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)


|                                                                                                                                   |                                           |                          |        |        |        |      |        |        |        |   |        |        |        | 
|---------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------- | ------------------------ | ------ | ------ | ------ | ---- | ------ | ------ | ------ | - | ------ | ------ | ------ | 
|                                                                                                                                   |                                           |                         
|                                                                                                                                   |                                           | Years Ended December 31,
|                                                                                                                                   |                                           |                         
|                                                                                                                                   |                                           | 2000                     |        | 1999   |        | 1998
|                                                                                                                                   |                                           |                          |        |        |        |     
|REVENUES                                                                                                                           |                                           |                          |        |        |        |      |        |        |        |   |        |       
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                   | Minimum rent (Note 5)                     |                          | $      | 29,430 |        |      | $      | 30,662 |        |   | $      | 28,084 |       
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                   | Percentage and overage rents (Note 9)     |                          |        | 1,531  |        |      |        | 1,307  |        |   |        | 1,215  |       
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                   | Recoveries from tenants                   |                          |        | 10,222 |        |      |        | 10,688 |        |   |        | 9,954  |       
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                   | Interest and other income                 |                          |        | 661    |        |      |        | 615    |        |   |        | 311    |       
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                   | Gain on sale of real estate               |                          |        | 3,158  |        |      |        | 1,602  |        |   |        |        |       
|                                                                                                                                   |                                           |                          |        |        |        |      |        |        |        |   |        |       
|                                                                                                                                   |                                           | Total Revenues           |        |        | 45,002 |      |        |        | 44,874 |   |        |        | 39,564 | 
|                                                                                                                                   |                                           |                          |        |        |        |      |        |        |        |   |        |       
|EXPENSES                                                                                                                           |                                           |                          |        |        |        |      |        |        |        |   |        |       
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                   | Property operating and maintenance        |                          |        | 3,215  |        |      |        | 3,115  |        |   |        | 2,876  |       
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                   | Other operating expenses                  |                          |        | 2,151  |        |      |        | 1,752  |        |   |        | 1,615  |       
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                   | Real estate taxes                         |                          |        | 8,409  |        |      |        | 8,612  |        |   |        | 8,134  |       
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                   | General and administrative                |                          |        | 2,156  |        |      |        | 2,024  |        |   |        | 2,068  |       
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                   | Proxy contest and related costs (Note 12) |                          |        | 3,200  |        |      |        |        |        |   |        |        |       
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                   | Depreciation and amortization             |                          |        | 6,795  |        |      |        | 6,368  |        |   |        | 5,633  |       
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                   | Impairment of real estate                 |                          |        | 190    |        |      |        |        |        |   |        | 431    |       
|                                                                                                                                   |                                           |                          |        |        |        |      |        |        |        |   |        |       
|                                                                                                                                   |                                           | Total Operating Expenses |        |        | 26,116 |      |        |        | 21,871 |   |        |        | 20,757 | 
|                                                                                                                                   |                                           |                          |        |        |        |      |        |        |        |   |        |       
|Operating income                                                                                                                   |                                           |                          | 18,886 |        |        |      | 23,003 |        |        |   | 18,807 |       
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|Interest expense                                                                                                                   |                                           |                          | 17,962 |        |        |      | 17,550 |        |        |   | 16,770 |       
|                                                                                                                                   |                                           |                          |        |        |        |      |        |        |        |   |        |       
|Income before extraordinary item and cumulative effect of change
	in accounting principle                                          |                                           |                          | 924    |        |        |      | 5,453  |        |        |   | 2,037  |       
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|Extraordinary Item
	Loss on extinguishment of debt                                                                                 |                                           |                          | (93    | )      |        |      | (289   | )      |        |   | (191   | )     
|                                                                                                                                   |                                           |                          |        |        |        |      |        |        |        |   |        |       
|Income before cumulative effect of change in accounting principle                                                                  |                                           |                          | 831    |        |        |      | 5,164  |        |        |   | 1,846  |       
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|Cumulative Effect of Change in Accounting Principle (Note 
	9)                                                                     |                                           |                          |        |        |        |      | (522   | )      |        |   |        |       
|                                                                                                                                   |                                           |                          |        |        |        |      |        |        |        |   |        |       
|Net Income                                                                                                                         |                                           | $                        | 831    |        |        | $    | 4,642  |        |        | $ | 1,846  |       
|                                                                                                                                   |                                           |                          |        |        |        |      |        |        |        |   |        |       
|Basic and diluted earnings per share before extraordinary
	item and cumulative effect of change in accounting principle
	(Note 11) |                                           | $                        | 0.18   |        |        | $    | 1.05   |        |        | $ | 0.45   |       
|                                                                                                                                   |                                           |                          |        |        |        |      |        |        |        |   |        |       
|Basic and diluted earnings per share before cumulative effect
	of change in accounting principle (Note 11)                         |                                           | $                        | 0.16   |        |        | $    | 1.00   |        |        | $ | 0.41   |       
|                                                                                                                                   |                                           |                          |        |        |        |      |        |        |        |   |        |       
|Basic and diluted earnings per share (Note 11)                                                                                     |                                           | $                        | 0.16   |        |        | $    | 0.90   |        |        | $ | 0.41   |       
|                                                                                                                                   |                                           |                          |        |        |        |      |        |        |        |   |        |       
|Pro Forma (Note 9)                                                                                                                 |                                           |                          |        |        |        |      |        |        |        |   |        |       
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|Pro forma amount assuming the change in accounting method for
	percentage rent revenue is applied retroactively:                   |                                           |                          |        |        |        |      |        |        |        |   |        |       
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|                                                                                                                                  
|Income before extraordinary item                                                                                                   |                                           |                          |        |        |        | $    | 5,453  |        |        | $ | 1,970  |       
|                                                                                                                                   |                                           |                          |        |        |        |      |        |        |        |   |        |       
|Basic and diluted earnings per share before extraordinary
	item                                                                    |                                           |                          |        |        |        | $    | 1.05   |        |        | $ | 0.44   |       
|                                                                                                                                   |                                           |                          |        |        |        |      |        |        |        |   |        |       
|Net income                                                                                                                         |                                           |                          |        |        |        |      | 5,164  |        |        |   | 1,779  |       
|                                                                                                                                   |                                           |                          |        |        |        |      |        |        |        |   |        |       
|Basic and diluted earnings per share                                                                                               |                                           |                          |        |        |        | $    | 1.00   |        |        | $ | 0.39   |       
|                                                                                                                                   |                                           |                          |        |        |        |      |        |        |        |   |        |       

See Notes to Consolidated Financial Statements

19



---





MALAN REALTY INVESTORS, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY

(in thousands, except share and per share data)


|                           |                                                                                          |       |    |                 |  |                  |        |               |   |   |         |        |   |   |        |        |  
|-------------------------- | ---------------------------------------------------------------------------------------- | ----- | -- | --------------- |  | ---------------- | ------ | ------------- | - | - | ------- | ------ | - | - | ------ | ------ | -
|                           |                                                                                          |       |    |                 |  | Accumulated      |        |              
|                           |                                                                                          |       |    |                 |  | Distributions in |        | Total        
|                           |                                                                                          | Par   |    | Additional      |  | Excess of        |        | Shareholders
|                           |                                                                                          | Value |    | Paid-in Capital |  | Net Income       |        | Equity       
|                           |                                                                                          |       |    |                 |  |                  |        |              
|Balance, January 1, 1998   |                                                                                          | $     | 37 |                 |  | $                | 50,485 |               |   | $ | (16,580 | )      |   | $ | 33,942 |       
|                          
|                          
|                          
|                          
|                           | Conversion of debentures                                                                 |       |    | 2               |  |                  |        | 2,080         |   |   |         |        |   |   |        | 2,082  |  
|                          
|                          
|                          
|                          
|                           | Secondary sale of 1,300,000 common shares of Malan Realty
	Investors, Inc., net of costs |       |    | 13              |  |                  |        | 21,466        |   |   |         |        |   |   |        | 21,479 |  
|                          
|                          
|                          
|                          
|                           | Directors compensation paid in stock                                                     |       |    |                 |  |                  |        | 48            |   |   |         |        |   |   |        | 48     |  
|                          
|                          
|                          
|                          
|                           | Stock options exercised                                                                  |       |    |                 |  |                  |        | 38            |   |   |         |        |   |   |        | 38     |  
|                          
|                          
|                          
|                          
|                           | Distributions  $1.70 per share                                                          |       |    |                 |  |                  |        |               |   |   |         | (8,198 | ) |   |        | (8,198 | )
|                          
|                          
|                          
|                          
|                           | Net income                                                                               |       |    |                 |  |                  |        |               |   |   |         | 1,846  |   |   |        | 1,846  |  
|                           |                                                                                          |       |    |                 |  |                  |        |               |   |   |         |        |   |   |        |       
|Balance, December 31, 1998 |                                                                                          |       | 52 |                 |  |                  | 74,117 |               |   |   | (22,932 | )      |   |   | 51,237 |       
|                          
|                          
|                          
|                          
|                           | Directors compensation paid in stock                                                     |       |    |                 |  |                  |        | 48            |   |   |         |        |   |   |        | 48     |  
|                          
|                          
|                          
|                          
|                           | Stock options exercised                                                                  |       |    |                 |  |                  |        | 4             |   |   |         |        |   |   |        | 4      |  
|                          
|                          
|                          
|                          
|                           | Distributions  $1.70 per share                                                          |       |    |                 |  |                  |        |               |   |   |         | (8,790 | ) |   |        | (8,790 | )
|                          
|                          
|                          
|                          
|                           | Net income                                                                               |       |    |                 |  |                  |        |               |   |   |         | 4,642  |   |   |        | 4,642  |  
|                           |                                                                                          |       |    |                 |  |                  |        |               |   |   |         |        |   |   |        |       
|Balance, December 31, 1999 |                                                                                          |       | 52 |                 |  |                  | 74,169 |               |   |   | (27,080 | )      |   |   | 47,141 |       
|                          
|                          
|                          
|                          
|                           | Directors compensation paid in stock                                                     |       |    |                 |  |                  |        | 24            |   |   |         |        |   |   |        | 24     |  
|                          
|                          
|                          
|                          
|                           | Repurchase of common stock                                                               |       |    |                 |  |                  |        | (115          | ) |   |         |        |   |   |        | (115   | )
|                          
|                          
|                          
|                          
|                           | Distributions  $1.70 per share                                                          |       |    |                 |  |                  |        |               |   |   |         | (8,797 | ) |   |        | (8,797 | )
|                          
|                          
|                          
|                          
|                           | Net income                                                                               |       |    |                 |  |                  |        |               |   |   |         | 831    |   |   |        | 831    |  
|                           |                                                                                          |       |    |                 |  |                  |        |               |   |   |         |        |   |   |        |       
|Balance, December 31, 2000 |                                                                                          | $     | 52 |                 |  | $                | 74,078 |               |   | $ | (35,046 | )      |   | $ | 39,084 |       
|                           |                                                                                          |       |    |                 |  |                  |        |               |   |   |         |        |   |   |        |       

See Notes to Consolidated Financial Statements

20



---





MALAN REALTY INVESTORS, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


|                                                                                            |                                                                                          |                                                                        |                                                                 |      |         |         |        |       |         |        |        |       |         |         |  
|------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------- | ---------------------------------------------------------------------- | --------------------------------------------------------------- | ---- | ------- | ------- | ------ | ----- | ------- | ------ | ------ | ----- | ------- | ------- | -
|                                                                                            |                                                                                          |                                                                       
|                                                                                            |                                                                                          | Years Ended December 31,                                              
|                                                                                            |                                                                                          |                                                                       
|                                                                                            |                                                                                          | 2000                                                                   |                                                                 | 1999 |         | 1998   
|                                                                                            |                                                                                          |                                                                        |                                                                 |      |         |        
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                       |                                                                                          |                                                                        |                                                                 |      |         |         |        |       |         |        |        |      
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Net Income                                                                               |                                                                        | $                                                               | 831  |         |         | $      | 4,642 |         |        | $      | 1,846 |        
|                                                                                            |                                                                                          |                                                                        |                                                                 |      |         |         |        |       |         |        |        |      
|                                                                                            | Adjustments to reconcile net income to net cash flows provided
	by operating activities: |                                                                        |                                                                 |      |         |         |        |       |         |        |        |       |        
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            |                                                                                          | Depreciation and amortization                                          |                                                                 |      | 6,795   |         |        |       | 6,368   |        |        |       | 5,633   |        
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            |                                                                                          | Amortization of deferred financing costs                               |                                                                 |      | 1,673   |         |        |       | 1,849   |        |        |       | 1,929   |        
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            |                                                                                          | Directors compensation issued in stock                                 |                                                                 |      | 24      |         |        |       | 48      |        |        |       | 48      |        
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            |                                                                                          | Net gains on sales of real estate                                      |                                                                 |      | (3,158  | )       |        |       | (1,602  | )      |        |       |         |        
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            |                                                                                          | Impairment of real estate                                              |                                                                 |      | 190     |         |        |       |         |        |        |       | 431     |        
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            |                                                                                          | Loss on extinguishment of debt                                         |                                                                 |      | 93      |         |        |       | 289     |        |        |       | 191     |        
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            |                                                                                          | Change in operating assets and liabilities that provided
	(used) cash: |                                                                 |      |         |         |        |       |         |        |        |       |         |        
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            |                                                                                          |                                                                        | Accounts receivable and other                                   |      |         | (1,379  | )      |       |         | 677    |        |       |         | (907    | )
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            |                                                                                          |                                                                        | Accounts payable, deferred income and other accrued liabilities |      |         | 148     |        |       |         | (1,399 | )      |       |         | 898     |  
|                                                                                            |                                                                                          |                                                                        |                                                                 |      |         |         |        |       |         |        |        |      
|                                                                                            |                                                                                          | Total adjustments                                                      |                                                                 |      | 4,386   |         |        |       | 6,230   |        |        |       | 8,223   |        
|                                                                                            |                                                                                          |                                                                        |                                                                 |      |         |         |        |       |         |        |        |      
|                                                                                            |                                                                                          | Net cash flows provided by operating activities                        |                                                                 |      | 5,217   |         |        |       | 10,872  |        |        |       | 10,069  |        
|                                                                                            |                                                                                          |                                                                        |                                                                 |      |         |         |        |       |         |        |        |      
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                       |                                                                                          |                                                                        |                                                                 |      |         |         |        |       |         |        |        |      
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            |                                                                                          | Real estate developed, acquired or improved, net of mortgages
	assumed |                                                                 |      | (2,406  | )       |        |       | (12,516 | )      |        |       | (40,677 | )      
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            |                                                                                          | Additions to leasehold improvements and equipment                      |                                                                 |      | (38     | )       |        |       |         |        |        |       |         |        
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            |                                                                                          | Deposits to escrow                                                     |                                                                 |      | (19,860 | )       |        |       | (20,635 | )      |        |       | (19,149 | )      
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            |                                                                                          | Disbursements from escrow                                              |                                                                 |      | 20,146  |         |        |       | 20,578  |        |        |       | 18,959  |        
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            |                                                                                          | Proceeds from sales of real estate                                     |                                                                 |      | 6,531   |         |        |       | 7,950   |        |        |       | 240     |        
|                                                                                            |                                                                                          |                                                                        |                                                                 |      |         |         |        |       |         |        |        |      
|                                                                                            |                                                                                          |                                                                        | Net cash flows provided by (used for) investing activities      |      |         | 4,373   |        |       |         | (4,623 | )      |       |         | (40,627 | )
|                                                                                            |                                                                                          |                                                                        |                                                                 |      |         |         |        |       |         |        |        |      
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                       |                                                                                          |                                                                        |                                                                 |      |         |         |        |       |         |        |        |      
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            |                                                                                          | Draws on lines of credit                                               |                                                                 |      | 5,500   |         |        |       | 17,400  |        |        |       | 29,350  |        
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            |                                                                                          | Repayment of lines of credit                                           |                                                                 |      | (5,000  | )       |        |       | (21,206 | )      |        |       | (19,050 | )      
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            |                                                                                          | Net proceeds from secondary equity offering                            |                                                                 |      |         |         |        |       |         |        |        |       | 21,479  |        
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            |                                                                                          | Principal payments on mortgages                                        |                                                                 |      | (2,090  | )       |        |       | (4,153  | )      |        |       | (494    | )      
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            |                                                                                          | Debt extinguishment costs                                              |                                                                 |      | (34     | )       |        |       | (233    | )      |        |       |         |        
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            |                                                                                          | Net proceeds from mortgages                                            |                                                                 |      |         |         |        |       | 12,281  |        |        |       | 18,000  |        
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            |                                                                                          | Distributions to shareholders                                          |                                                                 |      | (8,795  | )       |        |       | (8,793  | )      |        |       | (7,621  | )      
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            |                                                                                          | Debt issuance costs                                                    |                                                                 |      | (92     | )       |        |       | (622    | )      |        |       | (338    | )      
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            |                                                                                          | Proceeds from stock options exercised                                  |                                                                 |      |         |         |        |       | 4       |        |        |       | 38      |        
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            |                                                                                          | Repurchases of common stock                                            |                                                                 |      | (115    | )       |        |       |         |        |        |       |         |        
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            |                                                                                          | Repurchases of debentures                                              |                                                                 |      |         |         |        |       | (1,968  | )      |        |       | (9,625  | )      
|                                                                                            |                                                                                          |                                                                        |                                                                 |      |         |         |        |       |         |        |        |      
|                                                                                            |                                                                                          |                                                                        | Net cash flows provided by (used for) financing activities      |      |         | (10,626 | )      |       |         | (7,290 | )      |       |         | 31,739  |  
|                                                                                            |                                                                                          |                                                                        |                                                                 |      |         |         |        |       |         |        |        |      
|Net increase (decrease) in cash and cash equivalents                                        |                                                                                          |                                                                        | (1,036                                                          | )    |         |         | (1,041 | )     |         |        | 1,181  |      
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Cash and cash equivalents at beginning of year                                              |                                                                                          |                                                                        | 1,857                                                           |      |         |         | 2,898  |       |         |        | 1,717  |      
|                                                                                            |                                                                                          |                                                                        |                                                                 |      |         |         |        |       |         |        |        |      
|Cash and cash equivalents at end of year                                                    |                                                                                          | $                                                                      | 821                                                             |      |         | $       | 1,857  |       |         | $      | 2,898  |      
|                                                                                            |                                                                                          |                                                                        |                                                                 |      |         |         |        |       |         |        |        |      
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION 
	Cash paid for interest during the year |                                                                                          | $                                                                      | 16,201                                                          |      |         | $       | 15,976 |       |         | $      | 15,457 |      
|                                                                                            |                                                                                          |                                                                        |                                                                 |      |         |         |        |       |         |        |        |      

See Notes to Consolidated Financial Statements

21



---



MALAN REALTY INVESTORS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2000, 1999 and 1998


1.  BASIS OF PRESENTATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES

General  The Company is engaged in the
ownership, management, leasing, acquisition, development and
redevelopment of shopping centers and entertainment facilities
and leases space to tenants pursuant to lease agreements. The
lease agreements provide for terms ranging from one to
25 years and, in some cases, for annual rentals, which are
subject to upward adjustment based on operating expense levels
and sales volume.

Basis of Combination and Principles of
Consolidation  The accompanying consolidated
financial statements include the activity of the Company and its
wholly owned subsidiaries, Malan Mortgagor, Inc., Malan
Meadows, Inc., Malan Revolver, Inc., Malan
Aurora Corp. and Malan Midwest, LLC. All significant
inter-company balances and transactions have been eliminated.

Reclassifications  Certain reclassifications
have been made to prior years financial statements in order to
conform to the current year presentation.

Real Estateis stated at cost less accumulated
depreciation and amortization. Depreciation and amortization are
provided on a straight-line basis over the estimated useful
lives of the assets as follows:

|             |  |  |               | 
|------------ |  |  | ------------- | 
|            
|            
|            
|            
|Buildings    |  |  | 40 years      | 
|            
|            
|            
|            
|Improvements |  |  | 10 - 40 years | 

Maintenance and repairs are charged to expense as incurred.
Renovations which improve or extend the life of the asset are
capitalized.

Deferred Financing and Otherconsists primarily of
deferred financing costs and lease procurement costs. Deferred
financing costs at December 31, 2000 and 1999 of
$11,846,000 and $12,689,000, respectively, are amortized on a
straight-line basis over the terms of the applicable debt
agreements. Accumulated amortization of deferred financing costs
at December 31, 2000 and 1999 was $8,250,000 and
$7,453,000, respectively, and amortization expense for 2000,
1999 and 1998 was $1,673,000, $1,849,000 and $1,929,000,
respectively, and is included in interest expense in the
Consolidated Statement of Operations.

Lease procurement costs of $4,210,000 and $2,842,000 at
December 31, 2000 and 1999, respectively, consist of direct
leasing costs, tenant allowances and tenant improvements and are
amortized on a straight line basis over the terms of the
applicable tenant lease. Accumulated amortization of lease
procurement costs at December 31, 2000 and 1999 was
$1,157,000 and $848,000, respectively, and amortization expense
for 2000, 1999 and 1998 was $536,000, $318,000 and $227,000,
respectively.

Revenue Recognition  Minimum rents are
recognized on a straight-line basis over the terms of the
leases. Effective January 1, 1999, the Company began
recording percentage rental revenue when lessees specified
sales targets are achieved. Prior to 1999, the Company recorded
accrued percentage rental revenue when lessees specified
sales targets had been met or achievement of the sales targets
was probable. Recoveries from tenants are recognized as revenue
in the period that applicable costs are chargeable to tenants.

Income Taxes  The Company has elected to be
taxed as a real estate investment trust (REIT) under
the Internal Revenue Code of 1986, as amended (the
Code). As a REIT, the Company generally will not be
subject to federal income taxation at the corporate level to the
extent it distributes annually at least 95% (90% for tax years
subsequent to 2000) of its real estate investment trust taxable
income, as defined in the Code, to its shareholders and
satisfies certain other requirements. Accordingly, no provision
has been made for federal income taxes in the accompanying
financial statements.

Earnings per common share  Earnings per share
(EPS) are computed on both a basic and diluted
basis. Basic EPS excludes potential share dilution and is
computed by dividing earnings available to common shareholders
by the weighted-average number of common shares outstanding for
the period. Diluted EPS

22



---



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


reflects the potential dilution of securities that could share
in the earnings but does not include shares issuable upon
conversion of securities that would have an antidilutive effect
on earnings per share.

Distributionsof $1.70 per common share were declared for
each of the years ended December 31, 2000, 1999 and 1998 of
which $1.42, $0.92 and $1.17, respectively, represent a return
of capital for federal income tax purposes.

Cash and cash equivalentsconsist of deposits in banks
and certificates of deposit with maturities of three months or
less at the date of purchase.

Long-lived assets and long-lived assets to be disposed
of  The Companys long-lived assets are
periodically reviewed throughout the year for impairments in
value. The review is based principally on the projected,
undiscounted cash flow from the related asset.

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

Segment Information  The Companys
operating units are comprised of approximately
64 commercial retail properties. All financial results are
aggregated into one operating segment since the properties have
similar economic characteristics.

Impact of Recently Adopted Accounting
Standards  In June 1998, the Financial
Accounting Standards Board issued SFAS 133,
Accounting for Derivative Instruments and Hedging
Activities. SFAS 133, as amended, requires companies
to record derivatives on the balance sheet as assets and
liabilities, measured at fair value. Gains or losses resulting
from changes in the values of those derivatives would be
accounted for depending on the use of the derivatives and
whether they qualify for hedge accounting, SFAS 133 is
effective for fiscal years beginning after June 15, 2000.
The Companys derivatives consist of interest rate cap
agreements which the Company purchased to reduce its exposure to
increase in rates on its floating rate debt. The Company expects
that the primary impact of its adoption of SFAS 133 will be
the timing of the recognition in income of the costs of these
agreements. This may cause earnings volatility as the value of
these agreements may change from period to period. The
cumulative effect of the adjustment as of January 1, 2001
was a reduction in net income of $450,000.

23



---



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


2.  MORTGAGES, DEBENTURES AND NOTES

The following tables set forth certain information regarding the
Companys debt:

|                                        |  |                                       |  |                          |  |               |  |                |         |      |  |   |         | 
|--------------------------------------- |  | ------------------------------------- |  | ------------------------ |  | ------------- |  | -------------- | ------- | ---- |  | - | ------- | 
|                                        |  |                                       |  |                          |  |               |  |               
|                                        |  |                                       |  |                          |  |               |  | Balance       
|                                        |  |                                       |  |                          |  |               |  | December 31,  
|                                        |  |                                       |  |                          |  |               |  |               
|                                        |  | Collateral                            |  | Interest Rate            |  | Maturity Date |  | 2000           |         | 1999
|                                        |  |                                       |  |                          |  |               |  |                |         |     
|                                        |  |                                       |  |                          |  |               |  |               
|                                        |  |                                       |  |                          |  |               |  | (In thousands)
|Mortgages                               |  |                                       |  |                          |  |               |  |                |         |      |  |   |         | 
|                                       
|                                       
|                                       
|                                       
|Greenwich Capital Line of Credit        |  | 17 Retail Properties                  |  | LIBOR + 250 Basis Points |  | November 2001 |  | $              | 11,694  |      |  | $ | 11,194  | 
|                                       
|                                       
|                                       
|                                       
|UDAG Loan(3)                            |  | Bricktown Square                      |  | 5% increasing
	to 9%     |  | March 2023    |  |                | 7,827   |      |  |   | 7,919   | 
|                                       
|                                       
|                                       
|                                       
|Securitized Mortgage Loan               |  | 23 Retail Properties                  |  | 7.59%(1)                 |  | August 2002   |  |                | 57,875  |      |  |   | 57,875  | 
|                                       
|                                       
|                                       
|                                       
|Daiwa Finance Corp.                     |  | The Shops at Fairlane Meadows         |  | 8.18%                    |  | February 2007 |  |                | 12,422  |      |  |   | 12,554  | 
|                                       
|                                       
|                                       
|                                       
|Bloomfield Acceptance Company           |  | 13 Retail Properties                  |  | 7.55%                    |  | June 2028(2)  |  |                | 20,405  |      |  |   | 20,589  | 
|                                       
|                                       
|                                       
|                                       
|Wells Fargo Bank                        |  | Westland Shopping Ctr.                |  | 8.02%                    |  | November 2007 |  |                | 5,730   |      |  |   | 5,789   | 
|                                       
|                                       
|                                       
|                                       
|Bank of America, USA                    |  | North Aurora, IL, -Tinseltown Theater |  | 8.7%                     |  | November 2009 |  |                | 5,447   |      |  |   | 5,479   | 
|                                       
|                                       
|                                       
|                                       
|Firstar Bank (formerly Mercantile Bank) |  | Lawrence,
	KS-Southwind Theater       |  | 7.49%                    |  | February 2006 |  |                | 3,611   |      |  |   | 3,702   | 
|                                        |  |                                       |  |                          |  |               |  |                |         |      |  |   |         | 
|Total Mortgages                         |  |                                       |  |                          |  |               |  | $              | 125,011 |      |  | $ | 126,601 | 
|                                        |  |                                       |  |                          |  |               |  |                |         |      |  |   |         | 
|Convertible Debentures                  |  | Unsecured                             |  | 9.5%                     |  | July 2004     |  | $              | 42,743  |      |  | $ | 42,743  | 
|                                        |  |                                       |  |                          |  |               |  |                |         |      |  |   |         | 
|Convertible Notes                       |  | Bricktown Square                      |  | 8.5%                     |  | July 2003     |  | $              | 27,000  |      |  | $ | 27,000  | 
|                                        |  |                                       |  |                          |  |               |  |                |         |      |  |   |         | 




|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Overall blended rate. The interest rate on four
	different tranches are either fixed or capped through the use of
	interest rate cap agreements. The effective interest rate is
	fixed at 7.59% through February 10, 2002; thereafter, the
	interest rate on $38.375  million of mortgage loans
	converts to a variable rate based on certain requirements. Net
	settlement costs paid under interest rate cap agreements are
	recorded on an accrual basis and recognized as an adjustment to
	interest expense.
|   
|(2) | Loan is a 30-year loan expiring June 11,
	2028. The loan is prepayable at the end of 15 years, or
	June 11, 2013. Subsequent to that date, all cash flow from
	the property in excess of operating expenses is to be applied
	against accrued interest and principal with the balance of the
	loan due no later than June 11, 2028.                                                                                                                                                                              
|   
|(3) | The Company has entered into an agreement with
	the lender (City of Chicago) under which no payments will be due
	on the UDAG loan until December 2001.                                                                                                                                                                                                                                                                                                                                                          

The Greenwich Capital Line of Credit (the Greenwich
Capital Line) is a revolving line of credit provided by
Greenwich Capital Markets, Inc., a division of The Royal Bank of
Scotland, for up to $25 million. Under the financial
covenants of the agreement, the maximum allowable borrowing
under the facility at December 31, 2000 was
$18.9 million of which $11.7 million was outstanding.
The Greenwich Capital Line expires November 21, 2001.

24



---



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


The Company has a revolving line of credit, which expires
September 2001, with Bank One which allows for borrowings up to
$3.0 million. The line is collateralized by the
Companys interest in Orchard-14 Shopping Center in
Farmington Hills, Michigan. As of December 31, 2000 there
were no outstanding borrowings on the line.

The Company has Convertible Debentures (the
Debentures) and Convertible Notes (the
Notes), which are convertible into shares of Common
Stock at a price of $17 per share. The Debentures are 10-year
unsecured general obligations of the Company and carry a rating
of B3 from Moodys Investors Services, Inc. The Notes are
nine-year general obligations due July 15, 2003 secured by
a first mortgage on Bricktown Square in Chicago, Illinois. The
Debentures are redeemable by the Company at par beginning
July 15, 2001.

In September 1998, the Companys Board of Directors
approved a plan to repurchase and retire up to $15 million
aggregate principal of Debentures. Through December 31,
2000, the Company had repurchased $11.807 million principal
of Debentures. The repurchases were funded from the
Companys available working capital. The Company recorded
an extraordinary gain in 1999 of approximately $171,000 related
to the repurchases.

Interest capitalized as part of the cost of redevelopment
projects totaled $32,000, $161,000 and $447,000 in 2000, 1999
and 1998, respectively.

Several of the above debt agreements contain various financial
covenants, all of which the Company was in compliance with as of
December 31, 2000. Certain of the Companys debt
obligations contain cross-default and cross-acceleration
provisions.

Approximately scheduled principal payments for the years
subsequent to December 31, 2000 are as follows (in
thousands):

|                    |       |   |        |         | 
|------------------- | ----- | - | ------ | ------- | 
|                   
|                   
|                   
|                   
|2001                |       | $ | 12,338 |        
|                   
|                   
|                   
|                   
|2002                |       |   | 58,562 |        
|                   
|                   
|                   
|                   
|2003                |       |   | 27,740 |        
|                   
|                   
|                   
|                   
|2004                |       |   | 43,528 |        
|                   
|                   
|                   
|                   
|2005                |       |   | 852    |        
|                   
|                   
|                   
|                   
|2006 and thereafter |       |   | 51,734 |        
|                    |       |   |        |        
|                    | Total |   | $      | 194,754 | 
|                    |       |   |        |        

3.  SHAREHOLDER RIGHTS AND STOCK OPTION AND COMPENSATION
PLANS

Shareholder Rights Plan  In
September 2000, the Company amended its Shareholders Rights
Agreement. The amendment caused the rights to expire on
September 15, 2000 and terminated the Rights Agreement.

Employee Option Plan  The Company has a stock
option plan (the Employee Option Plan) to enable its
employees to participate in the ownership of the Company. Under
the Employee Option Plan, executive officers and employees of
the Company may be granted options to acquire shares of Common
Stock of the Company (Options). The Employee Option
Plan is administered by the compensation committee of the Board
of Directors (the Board), which is authorized to
select the executive officers and other employees to whom
Options are to be granted. No member of the compensation
committee is eligible to participate in the Employee Option
Plan. The aggregate number of shares of Common Stock that may be
issued upon the exercise of all Options is 400,000 shares.

The exercise price of each Option granted is equal to the fair
market value of the underlying shares on the date of grant. With
the exception of those granted on the date of the Companys
initial public offering, which vested over a three-year period
at the rate of 33 1/3% per year, Options vest over a
five-year period at the rate of 20% per year, beginning on the
first anniversary of the date of grant and are exercisable until
the tenth

25



---



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


anniversary of the date of grant. All options that were granted
but not vested at the time the current board was elected in
May 2000 became 100% vested at that time.

Directors Option Plan  The Company has a stock
option plan for non-employee directors (the Directors
Option Plan). Under the Directors Option Plan, following
each Annual Meeting of the Board each non-employee Director is
automatically granted an option to purchase 1,000 shares of
Common Stock.

All Options granted under the Directors Option Plan will have an
exercise price equal to the fair market value of the underlying
shares on the date of the grant. Each Option granted will vest
immediately upon grant but will not become exercisable by the
Director until six months following the date of grant. Options
granted to a Director will remain exercisable until the tenth
anniversary of the date of grant, or if earlier, until one year
after the Director ceases to be a member of the Board for any
reason. The aggregate number of shares that may be issued under
the Directors Option Plan is 80,000 shares.

The following table summarizes the activity for the
Companys Stock Option Plans:

|                                         |  |                      |          |                       |  |                |  |           |        |           |  |                |        |   |  |           |  |   |        | 
|---------------------------------------- |  | -------------------- | -------- | --------------------- |  | -------------- |  | --------- | ------ | --------- |  | -------------- | ------ | - |  | --------- |  | - | ------ | 
|                                         |  |                      |          |                      
|                                         |  | Employee Option Plan |          | Directors Option Plan
|                                         |  |                      |          |                      
|                                         |  | Shares               |          | Exercise              |  | Weighted       |  | Shares    |        | Exercise  |  | Weighted      
|                                         |  | Subject              |          | Price                 |  | Average        |  | Subject   |        | Price     |  | Average       
|                                         |  | to Option            |          | Per Share             |  | Exercise Price |  | to Option |        | Per Share |  | Exercise Price
|                                         |  |                      |          |                       |  |                |  |           |        |           |  |               
|Balance, January 1, 1998                 |  |                      | 303,366  |                       |  | $13.375 -      |  | $         | 15.383 |           |  |                | 12,292 |   |  | $14.375 - |  | $ | 15.331 | 
|                                         |  |                      |          |                       |  | $17.00         |  |           |        |           |  |                |        |   |  | $17.125   |  |   |        | 
|                                        
|                                        
|                                        
|                                        
|Options Granted 1998                     |  |                      | 21,000   |                       |  | $16.580        |  | $         | 16.580 |           |  |                | 4,000  |   |  | $17.688   |  | $ | 17.688 | 
|                                        
|                                        
|                                        
|                                        
|Options Exercised 1998                   |  |                      | (150     | )                     |  | $13.375        |  | $         | 13.375 |           |  |                | (2,500 | ) |  | $14.375 - |  | $ | 14.45  | 
|                                         |  |                      |          |                       |  |                |  |           |        |           |  |                |        |   |  |           |  |   |        | 
|                                         |  |                      |          |                       |  |                |  |           |        |           |  |                |        |   |  | $14.50    |  |   |        | 
|                                        
|                                        
|                                        
|                                        
|Balance, December 31, 1998               |  |                      | 324,216  |                       |  | $13.375 -      |  | $         | 15.422 |           |  |                | 13,792 |   |  | $14.375 - |  | $ | 16.174 | 
|                                         |  |                      |          |                       |  | $17.00         |  |           |        |           |  |                |        |   |  | $17.688   |  |   |        | 
|                                        
|                                        
|                                        
|                                        
|Options Granted 1999                     |  |                      |          |                       |  |                |  |           |        |           |  |                | 4,000  |   |  | $15.375   |  | $ | 15.375 | 
|                                        
|                                        
|                                        
|                                        
|Options Forfeited 1999                   |  |                      | (15,000  | )                     |  | $15.375        |  | $         | 15.375 |           |  |                |        |   |  |           |  |   |        | 
|                                        
|                                        
|                                        
|                                        
|Options Exercised 1999                   |  |                      | (300     | )                     |  | $13.375        |  | $         | 13.375 |           |  |                |        |   |  |           |  |   |        | 
|                                         |  |                      |          |                       |  |                |  |           |        |           |  |                |        |   |  |           |  |   |        | 
|Balance, December 31, 1999               |  |                      | 308,916  |                       |  | $13.375 -      |  | $         | 15.383 |           |  |                | 17,792 |   |  | $14.375 - |  | $ | 15.994 | 
|                                         |  |                      |          |                       |  | $17.00         |  |           |        |           |  |                |        |   |  | $17.688   |  |   |        | 
|                                        
|                                        
|                                        
|                                        
|Options Granted 2000                     |  |                      | 53,000   |                       |  | $13.438        |  | $         | 13.438 |           |  |                | 3,000  |   |  | $13.375   |  | $ | 13.375 | 
|                                        
|                                        
|                                        
|                                        
|Options Forfeited 2000                   |  |                      | (127,900 | )                     |  | $13.375 -      |  |           |        |           |  |                |        |   |  |           |  |   |        | 
|                                         |  |                      |          |                       |  |                |  |           |        |           |  |                |        |   |  |           |  |   |        | 
|                                         |  |                      |          |                       |  | $17.00         |  |           |        |           |  |                |        |   |  |           |  |   |        | 
|                                        
|                                        
|                                        
|                                        
|Balance, December 31, 2000               |  |                      | 234,016  |                       |  | $13.375 -      |  | $         | 14.903 |           |  |                | 20,792 |   |  | $13.375 - |  | $ | 15.529 | 
|                                         |  |                      |          |                       |  |                |  |           |        |           |  |                |        |   |  |           |  |   |        | 
|                                         |  |                      |          |                       |  | $17.00         |  |           |        |           |  |                |        |   |  | $17.688   |  |   |        | 
|                                        
|                                        
|                                        
|                                        
|Options Exercisable at December 31, 2000 |  |                      | 181,016  |                       |  |                |  | $         | 15.33  |           |  |                | 20,792 |   |  |           |  | $ | 15.689 | 
|                                         |  |                      |          |                       |  |                |  |           |        |           |  |                |        |   |  |           |  |   |        | 

The Company has elected to report compensation by applying the
requirements of Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees and therefore has
recorded no charge to income for stock options. The effect on
the Companys net income and earnings per share for 2000,
1999 and 1998 would have been immaterial had the Company
recognized compensation expense using the Black-Scholes option
pricing model utilizing the following values and
weighted-average assumptions:

|                          |  |      |      |      |  |      |      |   |  |   |      |  
|------------------------- |  | ---- | ---- | ---- |  | ---- | ---- | - |  | - | ---- | -
|                          |  | 2000 |      | 1999 |  | 1998
|                          |  |      |      |      |  |     
|Option value              |  | $    | .01  |      |  | $    | .12  |   |  | $ | .05  |  
|                         
|                         
|                         
|                         
|Dividend yield            |  |      | 12.7 | %    |  |      | 12.7 | % |  |   | 10.1 | %
|                         
|                         
|                         
|                         
|Expected volatility       |  |      | 8    | %    |  |      | 8    | % |  |   | 8    | %
|                         
|                         
|                         
|                         
|Risk-free interest rate   |  |      | 6    | %    |  |      | 6    | % |  |   | 6    | %
|                         
|                         
|                         
|                         
|Expected lives (in years) |  |      | 10   |      |  |      | 10   |   |  |   | 10   |  

26



---



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


The outstanding stock options at December 31, 2000 have a
weighted average contractual life of 5.60 years.

Stock Compensation Plan  In order to provide
an opportunity for Board members to increase their ownership,
the Company has a stock compensation plan for non-employee
directors (the Stock Compensation Plan). Under the
Stock Compensation Plan, each non-employee Director may make an
election by June 30 of each year to receive all or a
portion of the Directors compensation for the following
calendar year in the form of Common Stock of the Company in lieu
of cash. Once made, the election is irrevocable for the
following years compensation.

The number of shares of Common Stock to be paid to a Director
instead of cash compensation will be determined based on the
closing price of the Common Stock on the New York Stock Exchange
on the day before the compensation is earned by the Director
(i.e., the day before a Board meeting). A maximum of 100,000
shares may be issued under the Stock Compensation Plan. During
2000, 1999 and 1998, a total of 1,816, 3,362 and 2,870 shares,
respectively, were issued under the plan reflecting compensation
of $24,000 in 2000 and $48,000 in 1999 and 1998.

401(K) Plan The Company has a 401(k)
retirement plan (the 401(k) Plan) covering all of
its employees. Under the 401(k) plan, participants are able to
defer, until termination of employment with the Company, up to
20% of their annual compensation. The Company intends to match a
portion of the participants contributions in an amount to
be determined each year by the Board. Compensation expense in
connection with the 401(k) Plan for 2000, 1999 and 1998 was
$47,000, $34,000 and $32,000.

4.  STOCK REPURCHASE PLAN

In August 2000, the Company announced the resumption of a
Stock Repurchase Plan originally approved in 1995. The
Companys Board of Directors authorized the repurchase of
up to 250,000 shares of its Common Stock, such purchases to be
made in the open market and in private transactions, with the
timing dependent upon market conditions, pending corporate
events and availability of funds. In December 2000 the
Company repurchased, 11,300 shares at an average cost of $10.22
per share. In March 2001 the board raised the limit to
500,000 shares.

5.  COMMITMENTS AND CONTINGENCIES

Revenues derived from the Companys major tenant, Kmart,
amounted to 27.2%, 28.8% and 35.5% of total revenues for the
years ended December 31, 2000, 1999 and 1998, respectively.
Amounts billed and owing from the major tenant were $135,000 and
$133,000 at December 31, 2000 and 1999, respectively.

In connection with the mortgage agreement with Bank of America,
collateralized by the Tinseltown Theater in North Aurora,
Illinois, the Company has a standby letter of credit agreement
with Bank One in the amount of $250,000. The letter of credit
serves as additional collateral to guarantee performance of
certain environmental remediation of the property, which is the
responsibility of a former tenant.

Approximate future minimum rent under operating leases for the
years subsequent to December 31, 2000, assuming no new or
renegotiated leases or option extensions, are as follows (in
thousands):

|                    |       |   |         |         | 
|------------------- | ----- | - | ------- | ------- | 
|                   
|                   
|                   
|                   
|2001                |       | $ | 27,348  |        
|                   
|                   
|                   
|                   
|2002                |       |   | 25,037  |        
|                   
|                   
|                   
|                   
|2003.               |       |   | 22,068  |        
|                   
|                   
|                   
|                   
|2004.               |       |   | 19,515  |        
|                   
|                   
|                   
|                   
|2005.               |       |   | 17,534  |        
|                   
|                   
|                   
|                   
|2006 and thereafter |       |   | 107,697 |        
|                    |       |   |         |        
|                    | Total |   | $       | 219,199 | 
|                    |       |   |         |        

27



---



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Approximate future minimum rental payments under the terms of
all non-cancelable operating leases in which the Company is the
lessee, principally for ground leases and office rent,
subsequent to December 31, 2000, are as follows (in
thousands):

|                    |       |   |       |       | 
|------------------- | ----- | - | ----- | ----- | 
|                   
|                   
|                   
|                   
|2001                |       | $ | 406   |      
|                   
|                   
|                   
|                   
|2002                |       |   | 295   |      
|                   
|                   
|                   
|                   
|2003                |       |   | 295   |      
|                   
|                   
|                   
|                   
|2004                |       |   | 295   |      
|                   
|                   
|                   
|                   
|2005                |       |   | 283   |      
|                   
|                   
|                   
|                   
|2006 and thereafter |       |   | 7,336 |      
|                    |       |   |       |      
|                    | Total |   | $     | 8,910 | 
|                    |       |   |       |      

Rent expense for operating leases for the years ended
December 31, 2000, 1999, and 1998 was $488,000, $482,000
and $491,000, respectively.

The Company, as an owner of real estate, is subject to various
environmental laws. Compliance by the Company with existing laws
has not had a material adverse financial effect during the
three-year period ended December 31, 2000, nor does management
believe it will have a material impact in the future. However,
management cannot predict the impact of new or changed laws or
regulations on its current properties or properties that it may
require.

The Company is currently involved in a lawsuit filed in Oakland
County, Michigan Circuit Court on November 13, 2000 against
the Company by Anthony S. Gramer, its former President and Chief
Executive Officer. The lawsuit alleges breach of contract and
seeks over $1 million of damages. The Company believes this
lawsuit is without merit, has not recorded any financial
contingency, and intends to defend vigorously against the
lawsuit.

6.  FAIR VALUE OF FINANCIAL INSTRUMENTS

The following disclosure of estimated fair value was determined
using available market information and appropriate valuation
methodologies.

Cash and Cash Equivalents The carrying amount
for cash and cash equivalents approximates fair value due to the
short maturity of these instruments.

Interest Rate Hedging Instruments The Company
entered into interest rate agreements to reduce its exposure to
changes in the cost of the floating rate portion of its
Securitized Mortgage Loan.

As of December 31, 2000, the following interest rate cap
agreements were outstanding:

|               |         |       |  |           |       |      |  |  |         |  |  |  |                              | 
|-------------- | ------- | ----- |  | --------- | ----- | ---- |  |  | ------- |  |  |  | ---------------------------- | 
|               |         | LIBOR |  | Frequency |       |     
|Notional       |         | Cap   |  | of Rate   |       |     
|Amount         |         | Rate  |  | Resets    |       | Term
|               |         |       |  |           |       |     
|(In thousands) |         |       |  |           |       |     
|               | $36,875 |       |  |           | 6.67% |      |  |  | Monthly |  |  |  | July 1995 to February 2002   | 
|               | $36,875 |       |  |           | 8.75% |      |  |  | Monthly |  |  |  | February 2002 to August 2002 | 

The Company is exposed to credit risk in the event of
nonperformance by the counter parties to its interest rate cap
agreements, but has no off-balance sheet risk of loss. The
Company anticipates that its counter parties will fully perform
their obligations under the agreements.

The carrying value of the interest rate caps as of
December 31, 2000 and 1999 was $452,000 and $738,096,
respectively, and the fair value was $2,000 and $333,000,
respectively.

28



---



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Mortgages The fair value of the mortgages is
based on the present value of contractual cash flows and is as
follows at December 31 (in thousands):

|                                   |  |          |         |            |  |          |         |            |  |   |         |  |  |   |         | 
|---------------------------------- |  | -------- | ------- | ---------- |  | -------- | ------- | ---------- |  | - | ------- |  |  | - | ------- | 
|                                   |  |          |         |           
|                                   |  | 2000     |         | 1999      
|                                   |  |          |         |           
|                                   |  | Carrying |         | Estimated  |  | Carrying |         | Estimated 
|                                   |  | Amount   |         | Fair Value |  | Amount   |         | Fair Value
|                                   |  |          |         |            |  |          |         |           
|Greenwich Capital Line of Credit   |  | $        | 11,694  |            |  | $        | 11,694  |            |  | $ | 11,194  |  |  | $ | 11,194  | 
|                                  
|                                  
|                                  
|                                  
|UDAG Loan                          |  |          | 7,827   |            |  |          | 4,668   |            |  |   | 7,919   |  |  |   | 4,621   | 
|                                  
|                                  
|                                  
|                                  
|Securitized Mortgage Loan          |  |          | 57,875  |            |  |          | 57,875  |            |  |   | 59,375  |  |  |   | 59,375  | 
|                                  
|                                  
|                                  
|                                  
|Daiwa Finance Corp                 |  |          | 12,422  |            |  |          | 12,422  |            |  |   | 12,554  |  |  |   | 12,554  | 
|                                  
|                                  
|                                  
|                                  
|Bloomfield Acceptance Company      |  |          | 20,405  |            |  |          | 20,405  |            |  |   | 20,589  |  |  |   | 20,589  | 
|                                  
|                                  
|                                  
|                                  
|Wells Fargo Bank                   |  |          | 5,730   |            |  |          | 5,730   |            |  |   | 5,789   |  |  |   | 5,789   | 
|                                  
|                                  
|                                  
|                                  
|Bank of America                    |  |          | 5,447   |            |  |          | 5,447   |            |  |   | 5,479   |  |  |   | 5,479   | 
|                                  
|                                  
|                                  
|                                  
|Firstar (formerly Mercantile Bank) |  |          | 3,611   |            |  |          | 3,611   |            |  |   | 3,702   |  |  |   | 3,702   | 
|                                   |  |          |         |            |  |          |         |            |  |   |         |  |  |   |         | 
|TOTAL                              |  | $        | 125,011 |            |  | $        | 121,852 |            |  | $ | 126,601 |  |  | $ | 123,302 | 
|                                   |  |          |         |            |  |          |         |            |  |   |         |  |  |   |         | 

Convertible Debentures and Convertible Notes The fair value of the Convertible Debentures is based on the
traded value at the close of business at year-end. The carrying
value of the Convertible Debentures as of December 31, 2000
and 1999 was $42.743 million for both years. The estimated
fair value based upon the traded value at the close of business
on December 31, 2000 and 1999 was $35.477 million and
$37.665 million, respectively. Management believes that the
carrying value of the Convertible Notes as of December 31,
2000 and 1999 approximates the fair value.

The fair value estimates presented herein are based on
information available to management as of December 31, 2000
and 1999. Although management is not aware of any factors that
would significantly affect the estimated fair value amounts,
such financial instruments have not been comprehensively
revalued for purposes of these financial statements since that
date, and current estimates of fair value may differ
significantly from the amounts presented herein.

7.  SIGNIFICANT NONCASH TRANSACTIONS

Significant noncash transactions for the three years ended
December 31, 2000 are as follows:

|                                                                                                |  |                          |       |      |  |      |       |  |  |   |       | 
|----------------------------------------------------------------------------------------------- |  | ------------------------ | ----- | ---- |  | ---- | ----- |  |  | - | ----- | 
|                                                                                                |  |                         
|                                                                                                |  | Years Ended December 31,
|                                                                                                |  |                         
|                                                                                                |  | 2000                     |       | 1999 |  | 1998
|                                                                                                |  |                          |       |      |  |     
|                                                                                                |  |                         
|                                                                                                |  | (In thousands)          
|                                                                                               
|                                                                                               
|                                                                                               
|                                                                                               
|Conversion of debentures into common stock, net of unamortized
	costs (125, 286 shares in 1998) |  |                          |       |      |  |      |       |  |  | $ | 2,082 | 
|                                                                                               
|                                                                                               
|                                                                                               
|                                                                                               
|Distributions declared not yet paid                                                             |  | $                        | 2,199 |      |  | $    | 2,198 |  |  | $ | 2,200 | 

29



---



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


8.  PROPERTY ACQUISITIONS AND DISPOSITIONS

During the three years ended December 31, 2000, the Company
acquired the following properties:

|                    |  |                          |  |                    |  |                |     |             |  |   |        | 
|------------------- |  | ------------------------ |  | ------------------ |  | -------------- | --- | ----------- |  | - | ------ | 
|                    |  |                          |  |                    |  | Gross          |     |            
|                    |  |                          |  |                    |  | Leasable Area  |     | Capitalized
|Acquisition Date    |  | Property                 |  | Location           |  | (Sq. Ft.)      |     | Costs      
|                    |  |                          |  |                    |  |                |     |            
|                    |  |                          |  |                    |  |               
|                    |  |                          |  |                    |  | (In thousands)
|                   
|                   
|                   
|                   
|2/23/98             |  | Westland Shopping Center |  | Westland, MI       |  |                | 85  |             |  | $ | 7,925  | 
|Midwest Acquisition |  |                          |  |                    |  |                |     |             |  |   |        | 
|                   
|                   
|                   
|                   
|5/29/98             |  | Wal-Mart Plaza           |  | Champaign, IL      |  |                | 11  |             |  |   | 1,110  | 
|                   
|                   
|                   
|                   
|5/29/98             |  | Wal-Mart Plaza           |  | Jacksonville, IL   |  |                | 53  |             |  |   | 4,907  | 
|                   
|                   
|                   
|                   
|5/29/98             |  | Wal-Mart Plaza           |  | Crawfordsville, IN |  |                | 26  |             |  |   | 2,019  | 
|                   
|                   
|                   
|                   
|5/29/98             |  | Wal-Mart Plaza           |  | Decatur, IN        |  |                | 36  |             |  |   | 2,995  | 
|                   
|                   
|                   
|                   
|5/29/98             |  | Wal-Mart Shops           |  | Huntington, IN     |  |                | 13  |             |  |   | 1,171  | 
|                   
|                   
|                   
|                   
|5/29/98             |  | Wal-Mart Plaza           |  | Chanute, KS        |  |                | 16  |             |  |   | 1,257  | 
|                   
|                   
|                   
|                   
|5/29/98             |  | Wal-Mart Outparcel       |  | El Dorado, KS      |  |                | 20  |             |  |   | 1,546  | 
|                   
|                   
|                   
|                   
|5/29/98             |  | Wal-Mart Outlet Shops    |  | Benton Harbor, MI  |  |                | 14  |             |  |   | 1,460  | 
|                   
|                   
|                   
|                   
|5/29/98             |  | Wal-Mart Plaza           |  | Owosso, MI         |  |                | 60  |             |  |   | 5,127  | 
|                   
|                   
|                   
|                   
|5/29/98             |  | Wal-Mart Plaza           |  | Sturgis, MI        |  |                | 12  |             |  |   | 1,241  | 
|                   
|                   
|                   
|                   
|5/29/98             |  | Wal-Mart Plaza           |  | Little Falls, MN   |  |                | 13  |             |  |   | 972    | 
|                   
|                   
|                   
|                   
|5/29/98             |  | Wal-Mart Plaza           |  | Mansfield, OH      |  |                | 55  |             |  |   | 5,830  | 
|                   
|                   
|                   
|                   
|1/27/99             |  | Wal-Mart Plaza           |  | Decatur, IL        |  |                | 45  |             |  |   | 4,710  | 
|                   
|                   
|                   
|                   
|2/24/2000           |  | Ground Lease Interest    |  | Topeka, KS         |  |                |     |             |  |   | 544    | 
|                    |  |                          |  |                    |  |                |     |             |  |   |        | 
|                    |  | Totals                   |  |                    |  |                | 459 |             |  | $ | 42,814 | 
|                    |  |                          |  |                    |  |                |     |             |  |   |        | 

The Company has entered into purchase and sale agreements to
sell a freestanding retail property in Liberal, Kansas, and a
portion of its property in Arkansas City, Kansas. The contract
prices are $420,000 and $275,000, respectively. The sales are
expected to close in the second quarter of 2001.

In June 2000, the Company realized a gain of
$3.158 million on the sale of a 117,000 square foot
shopping center in Manchester, Missouri, for $6.531 million. Net
proceeds after repayment of related debt of $1.5 million
and transaction fees were $5.0 million. In conjunction with
the sale, the Company incurred an extraordinary loss of $93,000
on the early extinguishment of debt, resulting primarily from a
prepayment penalty and the charge off of unamortized deferred
financing costs associated with the debt.

In 1999, the Company sold its properties in Colma, California,
for $7.665 million and Gary, Indiana for $650,000. Net
gains of $1.602 million were realized on the sales. In
conjunction with the sale of Colma, California the Company paid
down $3.625 million on its Securitized Mortgage Loan and
recorded an extraordinary loss of $459,000 on the debt
extinguishment primarily from the charge off of deferred
financing costs associated with the pay down and a related
prepayment penalty.

9.  CHANGE IN METHOD OF ACCOUNTING FOR PERCENTAGE RENTAL
REVENUE

In December 1999, the SEC issued SAB
No. 101  Revenue Recognition in Financial
Statements which addresses the proper recognition of certain
revenue items including contingent (percentage) rents.
Certain of the Companys leases contain provisions whereby
additional rent is due from a tenant once the tenant has
achieved a certain sales level i.e. contingent rental.

Under SAB No. 101, a lessor should not recognize contingent
rental income until the changes in the factors on which the
contingent lease payments are based actually occur. The Company
had previously recorded accrued percentage rental income as
lessees specified sales targets were met or achievement of
the sales target was probable.

30



---



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


The Company elected to adopt the provisions of SAB No. 101
in the fourth quarter 1999, effective January 1, 1999. The
cumulative effect of such adoption was a reduction in percentage
rental revenue as of January 1, 1999 of approximately
$522,000.

The effect of the change on the quarters and year-end 1999 is as
follows (in thousands, except per share amounts):

|                                                                                               |  |                    |       |            |  |               |       |              |  |              |      |     |  |   |       |  |  |   |       |  
|---------------------------------------------------------------------------------------------- |  | ------------------ | ----- | ---------- |  | ------------- | ----- | ------------ |  | ------------ | ---- | --- |  | - | ----- |  |  | - | ----- | -
|                                                                                               |  |                    |       |           
|                                                                                               |  | Three Months Ended |       |           
|                                                                                               |  |                    |       | Year Ended
|                                                                                               |  | March 31,          |       | June 30,   |  | September 30, |       | December 31, |  | December 31,
|                                                                                               |  | 1999               |       | 1999       |  | 1999          |       | 1999         |  | 1999        
|                                                                                               |  |                    |       |            |  |               |       |              |  |             
|Net income under previous method of accounting for percentage
	rents                           |  | $                  | 2,135 | (1)        |  | $             | 1,182 | (1)          |  | $            | 764  | (1) |  | $ | 1,100 |  |  | $ | 5,181 |  
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Effect of change in accounting for percentage rents                                            |  |                    | (103  | )          |  |               | (130  | )            |  |              | (45  | )   |  |   | 261   |  |  |   | (17   | )
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Cumulative effect of change in accounting principle                                            |  |                    | (522  | )          |  |               |      |              |  |              |     |     |  |   |      |  |  |   | (522  | )
|                                                                                               |  |                    |       |            |  |               |       |              |  |              |      |     |  |   |       |  |  |   |       |  
|Net income under current method of accounting for percentage
	rents                            |  | $                  | 1,510 |            |  | $             | 1,052 |              |  | $            | 719  |     |  | $ | 1,361 |  |  | $ | 4,642 |  
|                                                                                               |  |                    |       |            |  |               |       |              |  |              |      |     |  |   |       |  |  |   |       |  
|Per Share Amounts:                                                                             |  |                    |       |            |  |               |       |              |  |              |      |     |  |   |       |  |  |   |       |  
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Basic and diluted earnings per share under previous method of
	accounting for percentage rents |  | $                  | .41   | (1)        |  | $             | .23   | (1)          |  | $            | .15  | (1) |  | $ | .21   |  |  | $ | 1.00  |  
|                                                                                              
|                                                                                              
|                                                                                              
|                                                                                              
|Effects of change in accounting for percentage rents                                           |  |                    | (.02  | )          |  |               | (.03  | )            |  |              | (.01 | )   |  |   | .05   |  |  |   |      |  
|                                                                                               |  |                    |       |            |  |               |       |              |  |              |      |     |  |   |       |  |  |   |       |  
|Cumulative effect of change in accounting principle                                            |  |                    | (.10  | )          |  |               |      |              |  |              |     |     |  |   |      |  |  |   | (.10  | )
|                                                                                               |  |                    |       |            |  |               |       |              |  |              |      |     |  |   |       |  |  |   |       |  
|Basic and diluted earnings per share under current method of
	accounting for percentage rents  |  | $                  | .29   |            |  | $             | .20   |              |  | $            | .14  |     |  | $ | .26   |  |  | $ | .90   |  
|                                                                                               |  |                    |       |            |  |               |       |              |  |              |      |     |  |   |       |  |  |   |       |  




|    |                                                                                                   
|--- | --------------------------------------------------------------------------------------------------
|(1) | Net income as previously reported in the Companys
	Form 10-Q as filed for the applicable quarter.

31



---



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


10.  QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized quarterly financial data for the three-month periods
indicated are as follows. 1999 amounts are restated for change
in method of accounting for percentage rental revenue as
discussed in Note 9 (in thousands except per share amounts):

|                                                                                                                         |  |         |        |         |  |         |        |            |  |   |        |  |  |   |        |  
|------------------------------------------------------------------------------------------------------------------------ |  | ------- | ------ | ------- |  | ------- | ------ | ---------- |  | - | ------ |  |  | - | ------ | -
|                                                                                                                         |  | First   |        | Second  |  | Third   |        | Fourth    
|                                                                                                                         |  | Quarter |        | Quarter |  | Quarter |        | Quarter(1)
|                                                                                                                         |  |         |        |         |  |         |        |           
|2000                                                                                                                     |  |         |        |         |  |         |        |            |  |   |        |  |  |   |        |  
|                                                                                                                         |  |         |        |         |  |         |        |            |  |   |        |  |  |   |        |  
|Revenues                                                                                                                 |  | $       | 11,029 |         |  | $       | 13,295 |            |  | $ | 10,304 |  |  | $ | 10,374 |  
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Income (loss) before extraordinary item                                                                                  |  | $       | 948    |         |  | $       | (59    | )          |  | $ | 621    |  |  | $ | (586   | )
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Net income (loss)                                                                                                        |  | $       | 948    |         |  | $       | (152   | )          |  | $ | 621    |  |  | $ | (586   | )
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Basic and diluted earnings (loss) per share before
	extraordinary item                                                   |  | $       | .18    |         |  | $       | (.01   | )          |  | $ | .12    |  |  | $ | (.11   | )
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Basic and diluted earnings (loss) per share                                                                              |  | $       | .18    |         |  | $       | (.03   | )          |  | $ | .12    |  |  | $ | (.11   | )
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|1999                                                                                                                     |  |         |        |         |  |         |        |            |  |   |        |  |  |   |        |  
|                                                                                                                         |  |         |        |         |  |         |        |            |  |   |        |  |  |   |        |  
|Revenues                                                                                                                 |  | $       | 12,749 |         |  | $       | 10,803 |            |  | $ | 10,278 |  |  | $ | 11,044 |  
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Income before extraordinary item and cumulative effect of change
	in accounting principle                                |  | $       | 2,491  |         |  | $       | 1,052  |            |  | $ | 719    |  |  | $ | 1,191  |  
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Income before cumulative effect of change in accounting principle                                                        |  | $       | 2,032  |         |  | $       | 1,052  |            |  | $ | 719    |  |  | $ | 1,361  |  
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Net income                                                                                                               |  | $       | 1,510  |         |  | $       | 1,052  |            |  | $ | 719    |  |  | $ | 1,361  |  
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Basic and diluted earnings per share before extraordinary items
	and cumulative effect of change in accounting principle |  | $       | .48    |         |  | $       | .20    |            |  | $ | .14    |  |  | $ | .23    |  
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Basic and diluted earnings per share before cumulative effect of
	change in accounting principle                         |  | $       | .39    |         |  | $       | .20    |            |  | $ | .14    |  |  | $ | .26    |  
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|                                                                                                                        
|Basic and diluted earnings per share                                                                                     |  | $       | .29    |         |  | $       | .20    |            |  | $ | .14    |  |  | $ | .26    |  




|    |                                                                                                                                                                                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Fourth quarter 2000 results are reduced by a $190,000 impairment
	of real estate due to the reduction of the Companys
	carrying value of its interest in its property in Great Bend,
	Kansas and by the recording of approximately $250,000 in bad
	debt expense due to the potential uncollectibility of past due
	rents from a former tenant at the Bricktown Square.

32



---



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


11.  EARNINGS PER SHARE

Earnings per share (EPS) data were computed as
follows (in thousands except per share amounts):

|                                                                                                      |  |                         |       |      |  |      |       |   |  |   |       |  
|----------------------------------------------------------------------------------------------------- |  | ----------------------- | ----- | ---- |  | ---- | ----- | - |  | - | ----- | -
|                                                                                                      |  |                        
|                                                                                                      |  | Year Ended December 31,
|                                                                                                      |  |                        
|                                                                                                      |  | 2000                    |       | 1999 |  | 1998
|                                                                                                      |  |                         |       |      |  |     
|Net income before extraordinary item and cumulative effect of
	change in accounting principle         |  | $                       | 924   |      |  | $    | 5,453 |   |  | $ | 2,037 |  
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Extraordinary item: Loss on extinguishment of debt                                                    |  |                         | (93   | )    |  |      | (289  | ) |  |   | (191  | )
|                                                                                                      |  |                         |       |      |  |      |       |   |  |   |       |  
|Net income before cumulative effect of change in accounting
	principle                                |  |                         | 831   |      |  |      | 5,164 |   |  |   | 1,846 |  
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Cumulative effect of change in accounting principle                                                   |  |                         |       |      |  |      | (522  | ) |  |   |       |  
|                                                                                                      |  |                         |       |      |  |      |       |   |  |   |       |  
|Net Income                                                                                            |  | $                       | 831   |      |  | $    | 4,642 |   |  | $ | 1,846 |  
|                                                                                                      |  |                         |       |      |  |      |       |   |  |   |       |  
|Weighted Average Shares Outstanding                                                                   |  |                         |       |      |  |      |       |   |  |   |       |  
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Basic                                                                                                 |  |                         | 5,173 |      |  |      | 5,170 |   |  |   | 4,507 |  
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Net options issuable upon exercise of dilutive options                                                |  |                         |       |      |  |      |       |   |  |   | 17    |  
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Shares issuable under employment agreement                                                            |  |                         | 7     |      |  |      |       |   |  |   |       |  
|                                                                                                      |  |                         |       |      |  |      |       |   |  |   |       |  
|Shares applicable to diluted earnings                                                                 |  |                         | 5,180 |      |  |      | 5,170 |   |  |   | 4,524 |  
|                                                                                                      |  |                         |       |      |  |      |       |   |  |   |       |  
|Basic and Diluted EPS:                                                                                |  |                         |       |      |  |      |       |   |  |   |       |  
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Earnings per share before extraordinary item and cumulative
	effect of change in accounting principle |  | $                       | .18   |      |  | $    | 1.05  |   |  | $ | 0.45  |  
|                                                                                                      |  |                         |       |      |  |      |       |   |  |   |       |  
|Earnings per share before cumulative effect of change in
	accounting principle                        |  | $                       | .16   |      |  | $    | 1.00  |   |  |   | 0.41  |  
|                                                                                                      |  |                         |       |      |  |      |       |   |  |   |       |  
|Earnings per share                                                                                    |  | $                       | .16   |      |  | $    | 0.90  |   |  | $ | 0.41  |  
|                                                                                                      |  |                         |       |      |  |      |       |   |  |   |       |  

Diluted EPS reflects the potential dilution of securities that
could share in the earnings but does not include shares issuable
upon conversion of securities that would have an antidilutive
effect on earnings per share.

12.  PROXY CONTEST AND RELATED COSTS

At the Companys Annual Shareholder Meeting convened on
May 10, 2000 (the meeting was adjourned on May 18,
2000), a slate of five Directors was elected and replaced the
Companys then existing Board of Directors. The Company
paid approximately $890,000 in costs relating to the proxy
contest including reimbursements to shareholders.

Subsequent to the opening of the annual meeting on May 10,
2000 but prior to its conclusion on May 18, 2000, the
Company made payments to the three then officers of the Company,
totaling $1.75 million. Certain of these payments are
currently the subject of litigation. The Company also recorded
an accrued liability of $800,000 relating to the Companys
future obligation (also the subject of litigation) to provide
lifetime health insurance benefits to the officers. In
August 2000, the Company entered into an employment
agreement with one of the officers which included the
relinquishment of any right to the lifetime health insurance and
a grant of 6,550 shares of the Companys Common Stock.

33



---



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


13.  SUMMARIZED PRO FORMA INFORMATION (UNAUDITED)

The following unaudited pro forma information is presented as if
(i). The June 1998 offering of 1.3 million shares of
common stock, (ii). The acquisition of the Westland Shopping
Center (iii). The Midwest Acquisition and (iv). The revenue
adjustment discussed in Note 9 has occurred on
January 1, 1998. In managements opinion, all
adjustments necessary to reflect these transactions have been
recorded. The proforma information is not necessarily indicative
of what the actual results of operations of the Company would
have been had such transactions actually occurred as of
January 1, 1998, nor do they purport to represent the
results of the operations of the Company for future periods (in
thousands except per share amounts).

|                    |  |                    |        | 
|------------------- |  | ------------------ | ------ | 
|                    |  | For the Year Ended
|                    |  | December 31, 1998 
|                    |  |                   
|Total revenues      |  | $                  | 41,229 | 
|                   
|                   
|                   
|                   
|Net Income          |  | $                  | 2,559  | 
|                   
|                   
|                   
|                   
|Earnings per share: |  |                    |        | 
|                   
|                   
|                   
|                   
|Basic               |  | $                  | .50    | 
|                   
|                   
|                   
|                   
|Diluted             |  | $                  | .50    | 

34



---



MALAN REALTY INVESTORS, INC.

SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS AND
RESERVES

FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

(in thousands)


|                             |                                      |              |   |            |  |            |   |            |  |  |   |     |  |  |   |     | 
|---------------------------- | ------------------------------------ | ------------ | - | ---------- |  | ---------- | - | ---------- |  |  | - | --- |  |  | - | --- | 
|                             |                                      | Balance at   |   |            |  |            |   | Balance at
|                             |                                      | Beginning of |   | Charged to |  |            |   | End of    
|                             |                                      | Year         |   | Expense    |  | Deductions |   | Year      
|                             |                                      |              |   |            |  |            |   |           
|Year ended December 31, 1998 |                                      |              |   |            |  |            |   |            |  |  |   |     |  |  |   |    
|                            
|                            
|                            
|                            
|                             | Allowance for uncollectible accounts |              | $ | 78         |  |            | $ | 148        |  |  | $ | 86  |  |  | $ | 140 | 
|                             |                                      |              |   |            |  |            |   |            |  |  |   |     |  |  |   |    
|Year ended December 31, 1999 |                                      |              |   |            |  |            |   |            |  |  |   |     |  |  |   |    
|                            
|                            
|                            
|                            
|                             | Allowance for uncollectible accounts |              | $ | 140        |  |            | $ | 175        |  |  | $ | 159 |  |  | $ | 156 | 
|                             |                                      |              |   |            |  |            |   |            |  |  |   |     |  |  |   |    
|Year ended December 31, 2000 |                                      |              |   |            |  |            |   |            |  |  |   |     |  |  |   |    
|                            
|                            
|                            
|                            
|                             | Allowance for uncollectible accounts |              | $ | 156        |  |            | $ | 525        |  |  | $ | 176 |  |  | $ | 505 | 
|                             |                                      |              |   |            |  |            |   |            |  |  |   |     |  |  |   |    

35



---



MALAN REALTY INVESTORS, INC.

SCHEDULE III  REAL ESTATE AND ACCUMULATED
DEPRECIATION

DECEMBER 31, 2000

(in thousands)


|                             |                                   |              |        |                         |  |               |        |                  |  |              |         |        |  |   |       |       |  |   |        |       | 
|---------------------------- | --------------------------------- | ------------ | ------ | ----------------------- |  | ------------- | ------ | ---------------- |  | ------------ | ------- | ------ |  | - | ----- | ----- |  | - | ------ | ----- | 
|                             |                                   |              |        |                         |  |               |        |                 
|                             |                                   |              |        |                         |  |               |        | Cost Capitalized
|                             |                                   |              |        |                         |  | Subsequent to
|                             |                                   |              |        | Initial Cost to Company |  | Acquisition  
|                             |                                   |              |        |                         |  |              
|                             |                                   |              |        |                         |  | Buildings &   |        |                  |  | Buildings & 
|State/Type (# of Properties) |                                   | Encumbrances |        | Land                    |  | Improvements  |        | Land             |  | Improvements
|                             |                                   |              |        |                         |  |               |        |                  |  |             
|ILLINOIS:                    |                                   |              |        |                         |  |               |        |                  |  |              |         |        |  |   |       |       |  |   |        |      
|                            
|                            
|                            
|                            
|                             | Community Shopping Centers(6)     |              | $      | 34,827                  |  |               | $      | 6,357            |  |              | $       | 45,070 |  |   | $     | 28    |  |   | $      | 1,420 | 
|                            
|                            
|                            
|                            
|                             | Freestanding Retail Properties(8) |              |        | *                       |  |               |        | 1,598            |  |              |         | 18,623 |  |   |       |       |  |   |        | 2,105 | 
|                            
|                            
|                            
|                            
|                             | Entertainment Facilities(2)       |              |        | 5,447                   |  |               |        | 159              |  |              |         | 6,071  |  |   |       |       |  |   |        | 8,474 | 
|                            
|                            
|                            
|                            
|INDIANA:                     |                                   |              |        |                         |  |               |        |                  |  |              |         |        |  |   |       |       |  |   |        |      
|                            
|                            
|                            
|                            
|                             | Community Shopping Centers(7)     |              |        | *                       |  |               |        | 3,405            |  |              |         | 24,501 |  |   |       |       |  |   |        | 2,961 | 
|                            
|                            
|                            
|                            
|                             | Freestanding Retail Properties(1) |              |        | *                       |  |               |        |                  |  |              |         | 2,241  |  |   |       |       |  |   |        | 38    | 
|                            
|                            
|                            
|                            
|KANSAS:                      |                                   |              |        |                         |  |               |        |                  |  |              |         |        |  |   |       |       |  |   |        |      
|                            
|                            
|                            
|                            
|                             | Community Shopping Centers(5)     |              |        | *                       |  |               |        | 942              |  |              |         | 11,135 |  |   |       | 3,446 |  |   |        | 4,469 | 
|                            
|                            
|                            
|                            
|                             | Freestanding Retail Properties(8) |              |        | *                       |  |               |        | 691              |  |              |         | 6,578  |  |   |       |       |  |   |        | 738   | 
|                            
|                            
|                            
|                            
|                             | Entertainment Facility(1)         |              |        | 3,611                   |  |               |        | 1,118            |  |              |         | 3,090  |  |   |       |       |  |   |        |       | 
|                            
|                            
|                            
|                            
|MARYLAND:                    |                                   |              |        |                         |  |               |        |                  |  |              |         |        |  |   |       |       |  |   |        |      
|                            
|                            
|                            
|                            
|                             | Freestanding Retail Properties(1) |              |        | *                       |  |               |        | 282              |  |              |         | 2,534  |  |   |       |       |  |   |        | 177   | 
|                            
|                            
|                            
|                            
|MICHIGAN:                    |                                   |              |        |                         |  |               |        |                  |  |              |         |        |  |   |       |       |  |   |        |      
|                            
|                            
|                            
|                            
|                             | Community Shopping Centers(7)     |              |        | 18,152                  |  |               |        | 6,144            |  |              |         | 44,619 |  |   |       |       |  |   |        | 571   | 
|                            
|                            
|                            
|                            
|MINNESOTA:                   |                                   |              |        |                         |  |               |        |                  |  |              |         |        |  |   |       |       |  |   |        |      
|                            
|                            
|                            
|                            
|                             | Community Shopping Centers(1)     |              |        | *                       |  |               |        | 125              |  |              |         | 847    |  |   |       |       |  |   |        |       | 
|                            
|                            
|                            
|                            
|MISSOURI:                    |                                   |              |        |                         |  |               |        |                  |  |              |         |        |  |   |       |       |  |   |        |      
|                            
|                            
|                            
|                            
|                             | Community Shopping Centers(3)     |              |        | *                       |  |               |        | 592              |  |              |         | 8,374  |  |   |       | 118   |  |   |        | 773   | 
|                            
|                            
|                            
|                            
|                             | Freestanding Retail Properties(1) |              |        | *                       |  |               |        | 85               |  |              |         | 768    |  |   |       |       |  |   |        |       | 
|                            
|                            
|                            
|                            
|OHIO:                        |                                   |              |        |                         |  |               |        |                  |  |              |         |        |  |   |       |       |  |   |        |      
|                            
|                            
|                            
|                            
|                             | Community Shopping Centers(2)     |              |        | *                       |  |               |        | 1,645            |  |              |         | 11,118 |  |   |       |       |  |   |        | 150   | 
|WISCONSIN                    |                                   |              |        |                         |  |               |        |                  |  |              |         |        |  |   |       |       |  |   |        |      
|                            
|                            
|                            
|                            
|                             | Community Shopping Centers(7)     |              |        | *                       |  |               |        | 2,045            |  |              |         | 21,535 |  |   |       |       |  |   |        | 1,657 | 
|                            
|                            
|                            
|                            
|                             | Freestanding Retail Properties(4) |              |        | *                       |  |               |        | 511              |  |              |         | 4,885  |  |   |       |       |  |   |        | 753   | 
|                             |                                   |              |        |                         |  |               |        |                  |  |              |         |        |  |   |       |       |  |   |        |      
|                             |                                   | $            | 62,037 |                         |  | $             | 25,699 |                  |  | $            | 211,989 |        |  | $ | 3,592 |       |  | $ | 24,286 |      
|                             |                                   |              |        |                         |  |               |        |                  |  |              |         |        |  |   |       |       |  |   |        |      




|  |                                                                          
|- | -------------------------------------------------------------------------
|* | Certain properties are included as collateral for
	securitized mortgages.

The changes in total real estate for the three years ended
December 31, 2000 are as follows:

|                             |                           |      |         |        |   |      |         |        |   |   |         |        |  
|---------------------------- | ------------------------- | ---- | ------- | ------ | - | ---- | ------- | ------ | - | - | ------- | ------ | -
|                             |                           | 2000 |         | 1999   |   | 1998
|                             |                           |      |         |        |   |     
|Balance at Beginning of Year |                           | $    | 267,117 |        |   | $    | 261,783 |        |   | $ | 215,785 |       
|                            
|                            
|                            
|                            
|                             | Acquisitions              |      |         | 544    |   |      |         | 9,476  |   |   |         | 41,767 |  
|                            
|                            
|                            
|                            
|                             | Improvements              |      |         | 2,479  |   |      |         | 3,062  |   |   |         | 4,918  |  
|                            
|                            
|                            
|                            
|                             | Dispositions              |      |         | (4,384 | ) |      |         | (7,204 | ) |   |         | (256   | )
|                            
|                            
|                            
|                            
|                             | Impairment of real estate |      |         | (190   | ) |      |         |        |   |   |         | (431   | )
|                             |                           |      |         |        |   |      |         |        |   |   |         |       
|Balance at end of year       |                           | $    | 265,566 |        |   | $    | 267,117 |        |   | $ | 261,783 |       
|                             |                           |      |         |        |   |      |         |        |   |   |         |       

The changes in accumulated depreciation for the three years
ended December 31, 2000 are as follows:

|                             |                       |      |        |       |   |      |        |       |   |   |        |       | 
|---------------------------- | --------------------- | ---- | ------ | ----- | - | ---- | ------ | ----- | - | - | ------ | ----- | 
|                             |                       | 2000 |        | 1999  |   | 1998
|                             |                       |      |        |       |   |     
|Balance at Beginning of Year |                       | $    | 26,584 |       |   | $    | 21,286 |       |   | $ | 15,817 |      
|                            
|                            
|                            
|                            
|                             | Depreciation for year |      |        | 6,268 |   |      |        | 6,130 |   |   |        | 5,469 | 
|                            
|                            
|                            
|                            
|                             | Dispositions          |      |        | (832  | ) |      |        | (832  | ) |   |        |       | 
|                             |                       |      |        |       |   |      |        |       |   |   |        |      
|Balance at end of year       |                       | $    | 32,020 |       |   | $    | 26,584 |       |   | $ | 21,286 |      
|                             |                       |      |        |       |   |      |        |       |   |   |        |      

36



---







|                           |        |              |  |       |         |              |  |                        |         |          |  |                  |        |  |  |             |  |              |  |         
|-------------------------- | ------ | ------------ |  | ----- | ------- | ------------ |  | ---------------------- | ------- | -------- |  | ---------------- | ------ |  |  | ----------- |  | ------------ |  | --------
|                           |        |              |  |       |         |              |  |                       
|Gross Amount at Which      |        |              |  |       |         |              |  |                       
|Carried at Close of Period |        |              |  |       |         |              |  | Life on Which         
|                           |        |              |  |       |         |              |  | Depreciation in Latest
|                           |        | Buildings &  |  |       |         | Accumulated  |  | Date of                |         | Date     |  | Income Statement
|Land                       |        | Improvements |  | Total |         | Depreciation |  | Construction           |         | Acquired |  | is Computed     
|                           |        |              |  |       |         |              |  |                        |         |          |  |                 
|                          
|                          
|                          
|                          
|$                          | 6,385  |              |  | $     | 46,490  |              |  | $                      | 52,875  |          |  | $                | 6,691  |  |  | 1975 - 1995 |  | 6/94 - 1/99  |  | 40 Years
|                          
|                          
|                          
|                          
|                           | 1,598  |              |  |       | 20,728  |              |  |                        | 22,326  |          |  |                  | 3,278  |  |  | 1967 - 1977 |  | 6/94         |  | 40 Years
|                          
|                          
|                          
|                          
|                           | 159    |              |  |       | 14,545  |              |  |                        | 14,704  |          |  |                  | 734    |  |  | 1998 - 1999 |  | 6/94         |  |         
|                          
|                          
|                          
|                          
|                          
|                           | 3,405  |              |  |       | 27,462  |              |  |                        | 30,867  |          |  |                  | 3,792  |  |  | 1973 - 1997 |  | 6/94 - 5/98  |  | 40 Years
|                           |        |              |  |       | 2,279   |              |  |                        | 2,279   |          |  |                  | 377    |  |  | 1974        |  | 6/94         |  | 40 Years
|                          
|                          
|                          
|                          
|                          
|                           | 4,388  |              |  |       | 15,604  |              |  |                        | 19,992  |          |  |                  | 1,974  |  |  | 1974 - 1996 |  | 6/94 - 5/98  |  | 40 Years
|                          
|                          
|                          
|                          
|                           | 691    |              |  |       | 7,316   |              |  |                        | 8,007   |          |  |                  | 1,175  |  |  | 1976 - 1978 |  | 6/94         |  | 40 Years
|                          
|                          
|                          
|                          
|                           | 1,118  |              |  |       | 3,090   |              |  |                        | 4,208   |          |  |                  | 240    |  |  | 1997        |  | 11/97        |  | 40 Years
|                          
|                          
|                          
|                          
|                          
|                           | 282    |              |  |       | 2,711   |              |  |                        | 2,993   |          |  |                  | 460    |  |  | 1979        |  | 6/94         |  | 40 Years
|                          
|                          
|                          
|                          
|                          
|                           | 6,144  |              |  |       | 45,190  |              |  |                        | 51,334  |          |  |                  | 5,438  |  |  | 1970 - 1996 |  | 6/94 - 5/98  |  | 40 Years
|                          
|                          
|                          
|                          
|                          
|                           | 125    |              |  |       | 847     |              |  |                        | 972     |          |  |                  | 55     |  |  | 1,996       |  | 5/98         |  | 40 Years
|                          
|                          
|                          
|                          
|                          
|                           | 710    |              |  |       | 9,147   |              |  |                        | 9,857   |          |  |                  | 1,561  |  |  | 1973 - 1978 |  | 6/94         |  | 40 Years
|                          
|                          
|                          
|                          
|                           | 85     |              |  |       | 768     |              |  |                        | 853     |          |  |                  | 125    |  |  | 1974        |  | 6/94         |  | 40 Years
|                          
|                          
|                          
|                          
|                          
|                           | 1,645  |              |  |       | 11,268  |              |  |                        | 12,913  |          |  |                  | 1,294  |  |  | 1989 - 1998 |  | 11/94 - 5/98 |  | 40 Years
|                          
|                          
|                          
|                          
|                          
|                           | 2,045  |              |  |       | 23,192  |              |  |                        | 25,237  |          |  |                  | 3,824  |  |  | 1960 - 1979 |  | 6/94         |  | 40 Years
|                          
|                          
|                          
|                          
|                           | 511    |              |  |       | 5,638   |              |  |                        | 6,149   |          |  |                  | 1,002  |  |  | 1968 - 1976 |  | 6/94         |  | 40 Years
|                           |        |              |  |       |         |              |  |                        |         |          |  |                  |        |  |  |             |  |              |  |         
|$                          | 29,291 |              |  | $     | 236,275 |              |  | $                      | 265,566 |          |  | $                | 32,020 |  |  |             |  |              |  |         
|                           |        |              |  |       |         |              |  |                        |         |          |  |                  |        |  |  |             |  |              |  |         

37



---



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 called for by this Item 10 is incorporated
herein by reference to the information included under the
captions Election of Directors and
Management in the Companys definitive Proxy
Statement for the 2000 Annual Meeting of Stockholders (the
Proxy Statement).

Item 11.  Executive Compensation

The information called for by this Item 11 is incorporated
herein by reference to the information included in the Proxy
Statement under the captions Executive Compensation
and Management  Compensation of Directors.

Item 12.  Security Ownership of Certain Beneficial
Owners and Management

The information called for by this Item 12 is incorporated
herein by reference to the information included under the
caption Security Ownership of Certain Beneficial Owners
and Management in the Proxy Statement.

Item 13.  Certain Relationships and Related
Transactions

None.



PART IV


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

A.  The following documents are filed as part of this
report:



| |        |                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a)(1) | Consolidated Financial Statements:                                                                                                                                                                                                                                                                                                                                                                                         
|
| |        | See Index to Consolidated Financial Statements and Supplementary
	Data on page  16 of this Annual Report on Form 10-K.                                                                                                                                                                                                                                                                                                     
|
| | (a)(2) | Consolidated Financial Statement Schedules:                                                                                                                                                                                                                                                                                                                                                                                
|
| |        | See Index to Consolidated Financial Statements and Supplementary
	Data on page  16 of this Annual Report on Form 10-K.                                                                                                                                                                                                                                                                                                     
|
| | (a)(3) | Exhibits:                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |        | The following exhibits listed on the attached Exhibit Index are
	included as part of this Annual Report on Form 10-K as
	required by Item  601 of Regulation S-K                                                                                                                                                                                                                                                           
|
| | (b)    | Reports on Form 8-K:                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |        | During the three-month period ending December 31, 2000,
	there were two reports on Form 8-K filed. A Form 8-K
	dated November 9, 2000 and filed on November 22, 2000
	reported that Edward J. Russell III had been elected to the
	Companys Board of Directors. A Form 8-K dated
	December 7, 2000 and filed on December 22, 2000
	reported that Edward T. Boutrous had been elected to the
	Companys Board of Directors.

38



---





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.



| |                             
| | ----------------------------
| | MALAN REALTY INVESTORS, INC.



| |     |                     
| | --- | --------------------
| | By: | /s/ JEFFREY D. LEWIS

| |                        
| | -----------------------
| |                        
| | Jeffrey D. Lewis       
| | Chief Executive Officer

Date: March 23, 2001

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.

|                                                               |  |                                                         |  |      |                | 
|-------------------------------------------------------------- |  | ------------------------------------------------------- |  | ---- | -------------- | 
|Signature                                                      |  | Title                                                   |  | Date
|                                                               |  |                                                         |  |     
|/s/ JEFFREY D. LEWISJeffrey D. Lewis                           |  | Chief Executive Officer, and Director                   |  |      | March 23, 2001 | 
|/s/ ELLIOTT J. BRODERICKElliott J. Broderick                   |  | Chief Financial Officer
	(Principle Accounting Officer) |  |      | March 23, 2001 | 
|*Edward Boutrous                                               |  | Director                                                |  |      | March 23, 2001 | 
|*Paul Gray                                                     |  | Director                                                |  |      | March 23, 2001 | 
|*Jill Holup                                                    |  | Director                                                |  |      | March 23, 2001 | 
|*John Kramer                                                   |  | Director                                                |  |      | March 23, 2001 | 
|*Andrew Miller                                                 |  | Director                                                |  |      | March 23, 2001 | 
|*Edward J. Russell III                                         |  | Director                                                |  |      | March 23, 2001 | 
|                                                              
|*By: /s/ JEFFREY D. LEWISJeffrey D. Lewis, as attorney-in-fact |  |                                                         |  |      |                | 

39



---





MALAN REALTY INVESTORS, INC.


FORM 10-K

EXHIBIT INDEX

|        |        |  |  |  |   |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------- | ------ |  |  |  | - |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |  |  | 
|Number  |        |  |  | 
|        |        |  |  | 
|        | 3(a)   |  |  |  |  |  |  | Amended and Restated Articles of Incorporation of Malan Realty
	Investors, Inc.(incorporated herein by reference to
	Exhibit 3(a) filed with the Companys Quarterly Report
	on Form 10-Q for the quarter ended June 30, 1994 (the
	1994 Second Quarter Form 10-Q).                                                                                                                                                                
|        | 3(b)   |  |  |  |  |  |  | Amended and Restated By-Laws of Malan Realty Investors, Inc.
	(incorporated herein by reference to Exhibit 3(b) filed with
	Form 8-K dated September 7, 1999.                                                                                                                                                                                                                                                                        
|        | 4(a)   |  |  |  |  |  |  | Indenture, dated as of June 24, 1994, between Malan Realty
	Investors, Inc. and The Bank of New York, as Trustee, with
	respect to the 9 1/2% Convertible Subordinated Debentures
	due 2004 (incorporated herein by reference to Exhibit 4(a)
	filed with the 1994 Second Quarter Form 10-Q).                                                                                                                                        
|        | 4(b)   |  |  |  |  |  |  | Indenture, dated as of June 24, 1994, between Malan Realty
	Investors, Inc. and IBJ Schroeder, as Trustee, with respect to
	the 8 1/2% Secured Convertible Notes due 2003 (incorporated
	herein by reference to Exhibit 4(b) filed with the 1994
	Second Quarter Form 10-Q).                                                                                                                                                         
|        | *10(a) |  |  |  |  |  |  | The Malan Realty Investors, Inc. 1994 Stock Option Plan
	(incorporated herein by reference to Exhibit 10(a) filed with
	the 1994 Second Quarter Form 10-Q).                                                                                                                                                                                                                                                                          
|        | *10(b) |  |  |  |  |  |  | Employee Agreement, dated as of June 25, 1994, between the
	Company and Anthony S. Gramer (incorporated herein by reference
	to Exhibit 10(b) filed with the 1994 Second Quarter
	Form 10-Q).                                                                                                                                                                                                                                        
|        | 10(c)  |  |  |  |  |  |  | Note Purchase Agreement, dated as of June 24, 1994, between
	Malan Realty Investors, Inc. and Merrill Lynch Global Allocation
	Fund, Inc. (incorporated herein by reference to
	Exhibit 10(e) filed with the 1994 Second Quarter Form 
	10-Q).                                                                                                                                                                                       
|        | 10(d)  |  |  |  |  |  |  | Mortgage, Security Agreement, Assignment of Rents and Financing
	Statement, dated as of June 24, 1994, made by Malan Realty
	Investors, Inc. to IBJ Schroeder Bank & Trust Company, as
	modified by First Modification of Mortgage, Security Agreement,
	Assignment of Rents and Financing Statement, dated as of
	August 1, 1994 (incorporated herein by reference to
	Exhibit 10(g) filed with the 1994 Second Quarter
	Form 10-Q).
|        | 10(e)  |  |  |  |  |  |  | Registration Rights Agreement, dated as of June 24, 1994,
	between the Company and Merrill Lynch Global Allocation Fund,
	Inc. (incorporated herein by reference to Exhibit  10(h)
	filed with the 1994 Second Quarter Form 10-Q).                                                                                                                                                                                                   
|        | *10(f) |  |  |  |  |  |  | Malan Realty Investors, Inc. 1995 Stock Option Plan for
	Non-Employees Directors (incorporated herein by reference to
	Exhibit 10(p) filed with the 1994 Form 10-K).                                                                                                                                                                                                                                                                 
|        | *10(g) |  |  |  |  |  |  | Malan Realty Investors, Inc. 1995 Stock Compensation Plan for
	Non-Employees Directors (incorporated herein by reference to
	Exhibit 10(q) filed with the 1994 Form 10-K).                                                                                                                                                                                                                                                           
|        | 10(h)  |  |  |  |  |  |  | Purchase and Sale Agreement, dated as of April 13, 1995,
	between the Company and Clinton Pointe Joint Venture
	(incorporated herein by reference to Exhibit 10(s) filed
	with the 1995 First Quarter Form 10-Q).                                                                                                                                                                                                                    
|        | 10(i)  |  |  |  |  |  |  | Agreement of Sale and Purchase, dated as of July 18, 1995,
	among TG-Ford Associates and Ford Motor Land Development
	Corporation, collectively, and Malan Realty Investors, Inc.
	(incorporated herein by reference to Exhibit 10(x) filed
	with the 1995 Second Quarter Form 10-Q).                                                                                                                                                

40



---



|        |        |  |  |  |   |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------- | ------ |  |  |  | - |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |  |  | 
|Number  |        |  |  | 
|        |        |  |  | 
|        | 10(j)  |  |  |  |  |  |  | $63,000,000 Amended and Restated Credit Agreement, dated as of
	August 16, 1995, between Malan Realty Investors, Inc. and
	National Westminster Bank Plc, New York Branch (incorporated
	herein by reference to Exhibit 10(y) filed with the
	Companys Amended Quarterly Report on Form 10-Q/ A for
	the quarter ended September 30, 1995 (the 1995 Third
	Quarter Form 10-Q/ A).                                                             
|        | 10(k)  |  |  |  |  |  |  | $63,000,000 Malan Mortgage Securities Trust 1995-A, Trust and
	Servicing Agreement, dated as of August 16, 1995, by and
	among Malan Depositor, Inc., as Depositor, Bankers Trust
	Company, as Servicer, and Marine Midland Bank, as Trustee
	(incorporated herein by reference to Exhibit 10(z) filed
	with the 1995 Third Quarter Form 10-Q/ A).                                                                                              
|        | *10(l) |  |  |  |  |  |  | First Amendment to Employment Agreement, dated as of
	August  15, 1997 between the Company and Anthony S. Gramer
	(incorporated herein by reference to Exhibit 10(m) filed
	with the 1997 Form 10-K).                                                                                                                                                                                                                                            
|        | *10(m) |  |  |  |  |  |  | Change in Control Agreement, dated as of August 15, 1997
	between the Company and Michael K. Kaline (incorporated herein
	by reference to Exhibit 10(n) filed with the 1997
	Form 10-K).                                                                                                                                                                                                                                                         
|        | *10(n) |  |  |  |  |  |  | Change in Control Agreement, dated as of August 15, 1997
	between the Company and Elliott J. Broderick (incorporated
	herein by reference to Exhibit 10(o) filed with the 1997
	Form 10-K).                                                                                                                                                                                                                                                      
|        | 10(o)  |  |  |  |  |  |  | Revolving Loan Agreement among Malan Revolver, Inc., as Company,
	Malan Realty Investors, Inc. as Parent and Greenwich Capital
	Markets, Inc. as Lender dated as of November 24, 1997
	(incorporated herein by reference to Exhibit 10(p) filed
	with the 1999 Form 10-K.                                                                                                                                                                        
|        | 10(p)  |  |  |  |  |  |  | Agreement For Purchase of Real Estate between Brandon Associates
	Westland, L.L.C., Seller and Malan Realty Investors,
	Inc., Buyer dated as of January 29, 1998
	(incorporated herein by reference to Exhibit 10(q) filed
	with the 1997 Form 10-K).                                                                                                                                                                                        
|        | 10(q)  |  |  |  |  |  |  | Agreement of Sale and Purchase between Sandor Development
	Company, as agent for sellers, and Malan Realty Investors, Inc.,
	as buyer dated as of May 6, 1998 (incorporated herein by
	reference to exhibit 10(r) filed with the June 1, 1998
	Amendment No. 1 to Form S-2).                                                                                                                                                                     
|        | 10(r)  |  |  |  |  |  |  | Loan Agreement among Malan Midwest, LLC., and Bloomfield
	Acceptance Company, LLC., dated as of May 29, 1998
	(incorporated herein by reference to Exhibit 10(s) filed
	with the June 1, 1998 Amendment No. 1 Form S-2).                                                                                                                                                                                                                         
|        | *10(s) |  |  |  |  |  |  | Second Amendment to Employment Agreement, dated as of
	December 15, 1999 between the Company and A.S. Gramer.                                                                                                                                                                                                                                                                                                                                    
|        | 10(t)  |  |  |  |  |  |  | First Modification of Revolving Loan Agreement, Note, Indenture
	of Mortgage, Deed of Trust, Deed to Secure Debt, Security
	Agreement, Financing Statement, Fixture Filing and Assignment of
	Rents and Leases, and other Loan Documents, Partial Release and
	Spreader Agreement among Malan Revolver, Inc., as Company, Malan
	Realty Investors, Inc., as Parent and Greenwich Capital Markets,
	Inc., as Lender dated as of December 21, 1999.
|        | *10(u) |  |  |  |  |  |  | Employment Agreement dated August 10, 2000 by and between
	the Company and Michael Kaline (incorporated herein by reference
	to Exhibit 10(u) filed with the 2000 Third Quarter
	Form 10-Q).                                                                                                                                                                                                                                                     
|        | *10(v) |  |  |  |  |  |  | Employment Agreement dated September 26, 2000 by and
	between the Company and Jeffrey Lewis (incorporated herein by
	reference to Exhibit 10 (v) filed with the 2000 Third
	Quarter Form 10-Q).                                                                                                                                                                                                                                                  
|        | 21     |  |  |  |  |  |  | Subsidiaries.                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        | 23(A)  |  |  |  |  |  |  | Consent of Deloitte & Touche LLP.                                                                                                                                                                                                                                                                                                                                                                                                                
|        | 24     |  |  |  |  |  |  | Powers of Attorney.                                                                                                                                                                                                                                                                                                                                                                                                                              




|  |                                                                                                                      
|- | ---------------------------------------------------------------------------------------------------------------------
|* | A management contract or compensatory plan or arrangement
	required to be filed pursuant to Item 14(c) of
	Form 10-K.

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