<PAGE>


                               UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C.  20549

                                  FORM 10-Q

                              -----------------

/X/  Quarterly report pursuant to section 13 or 15(d) of the Securities 
     Exchange Act of 1934 for the quarterly period ended September 30, 1997.

/ /  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 000-22091

                          GOLF TRUST OF AMERICA, INC.
            (Exact name of registrant as specified in its charter)


            MARYLAND                              33-0724736
 (State or other jurisdiction                  (I.R.S. Employer
              of                                 Identification
 incorporation or organization)                      Number)


       14 NORTH ADGER'S WHARF, CHARLESTON, SOUTH CAROLINA  29401
          (Address of principal executive offices) (Zip Code)

                               (803) 723-4653
          (Registrant's telephone number, including area code)

                          --------------------------

    Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports) and (2) has been subject to 
such filing requirements for the past 90 days.  Yes   X     No ___

    On November 13, 1997, there were 4,160,755 common shares outstanding of 
the registrant's only class of common stock.

<PAGE>


                            GOLF TRUST OF AMERICA, INC.
                                    FORM 10-Q
                     FOR THE QUARTER ENDED SEPTEMBER 30, 1997
                                      INDEX
<TABLE>
<CAPTION>
                                                                                                       PAGE
PART I.  FINANCIAL INFORMATION                                                                         ----
<S>                                                                                                    <C>
Item 1. Financial Information
         GOLF TRUST OF AMERICA, INC.:
          Condensed Consolidated Balance Sheets as of December 31, 1996 and 
          September 30, 1997..........................................................................   3
          Condensed Consolidated Statements of Income for the Three Months Ended 
          September 30, 1997 and Pro Forma Three Months Ended September 30, 1996......................   4
          Condensed Consolidated Statements of Income for the Period from February 12, 1997
          to September 30, 1997 and Pro Forma Nine Months Ended September 30, 1997 and 
          1996........................................................................................   5
          Consolidated Statement of Stockholders' Equity from February 12, 1997 to 
          September 30, 1997..........................................................................   6
          Condensed Consolidated Statement of Cash Flows from February 12, 1997 to 
          September 30, 1997..........................................................................   7
          Notes to Condensed Consolidated Financial Statements........................................   8
         LEGENDS GOLF:
          Condensed Combined Balance Sheets--September 30, 1997 and 1996..............................  15
          Condensed Combined Statements of Income--Nine Months Ended September 30, 
          1996 and 1997...............................................................................  16
          Condensed Combined Statements of Cash Flows--Nine Months Ended 
          September 30, 1996 and 1997.................................................................  17
          Notes to Condensed Combined Financial Statements............................................  18

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations........  20

Item 3.  Quantitative and Qualitative Disclosures About Market Risk...................................  28

PART II  OTHER INFORMATION............................................................................  29

Item 1.  Legal Proceedings............................................................................  29

Item 2.  Changes in Securities........................................................................  29

Item 3.  Defaults upon Senior Securities..............................................................  29

Item 4.  Submission of Matters to a Vote of Security Holders..........................................  29

Item 5.  Other Information............................................................................  29

Item 6.  Exhibits and Reports on Form 8-K.............................................................  30

         SIGNATURES...................................................................................  32


</TABLE>

                                                     2

<PAGE>

PART I.  FINANCIAL INFORMATION


                                 GOLF TRUST OF AMERICA, INC.

                            CONDENSED CONSOLIDATED BALANCE SHEETS

                                        (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                       DECEMBER 31,  SEPTEMBER 30,
                                                                           1996         1997
                                                                       ----------------------------
                                                                                     (Unaudited)
ASSETS (Notes 2 and 10)
<S>                                                                      <C>           <C>
Property and equipment:
  Land...................................................................   $ -        $21,580
  Golf course improvements...............................................     -         48,165
  Buildings..............................................................     -         11,236
  Furniture, fixtures, and equipment.....................................     -          9,723
                                                                            ----      ---------
Total property and equipment.............................................     -         90,704
  Less accumulated depreciation..........................................     -         12,889
                                                                            ----      ---------
Property and equipment, net (Notes 3 and 6)..............................     -         77,815
                                                                            ----      ---------
Mortgage notes receivable (Note 4).......................................     -         63,446
Cash and cash equivalents................................................     -          1,118
Rents and interest receivable............................................     -          1,760
Other....................................................................     -          1,648
                                                                            ----      ---------
Total assets.............................................................   $ -       $145,787
                                                                            ----      ---------
                                                                            ----      ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable (Note 6)...................................................   $ -        $54,865
Accounts payable and other liabilities...................................     -          1,163
                                                                            ----      ---------
Total liabilities........................................................     -         56,028
                                                                            ----      ---------
Minority interest........................................................     -         48,851
                                                                            ----      ---------
Commitments and contingencies
Stockholders' equity (Note 7):
  Preferred stock, $.01 par value, 10,000,000 shares authorized,
  no shares issued.......................................................     -              -
  Common stock, $.01 par value, 90,000,000 shares authorized, 
  4,160,755 shares issued and outstanding................................     -             42
  Additional paid-in capital.............................................     -         44,856
  Unearned compensation..................................................     -         (1,828)
  Note receivable from stock sale........................................     -         (3,298)
  Retained earnings......................................................     -          1,136
                                                                            ----      ---------
Stockholders' equity.....................................................     -         40,908
                                                                            ----      ---------
Total liabilities and stockholders' equity...............................   $ -       $145,787
                                                                            ----      ---------
                                                                            ----      ---------

</TABLE>
                                           3

<PAGE>


                          GOLF TRUST OF AMERICA, INC. 

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME

                                   (UNAUDITED)
                                  (IN THOUSANDS)



<TABLE>
<CAPTION>
                                                             FOR THE THREE    FOR THE THREE
                                                              MONTHS ENDED    MONTHS ENDED
                                                              SEPTEMBER 30,   SEPTEMBER 30,
                                                                  1997           1996
                                                             -------------------------------
                                                                              (PRO FORMA)
<S>                                                           <C>              <C>
REVENUES (Notes 1 and 2):
  Minimum rents (Note 5)....................................     $3,726         $3,566
  Capital expenditure reserve...............................        143            189
  Percentage rents..........................................        145              -
  Mortgage interest (Note 4)................................      2,051              -
                                                                --------        --------
Total revenues..............................................      6,065          3,755
                                                                --------        --------
EXPENSES:
  Depreciation and amortization (Note 3)....................        912          1,060
  General and administrative................................        937            410
                                                                --------        --------
Total expenses..............................................      1,849          1,470
                                                                --------        --------
Operating income............................................      4,216          2,285
                                                                --------        --------
OTHER INCOME (EXPENSE):
  Interest income...........................................         45              -
  Interest expense..........................................       (889)           (92)
                                                                --------        --------
Total other income (expense)................................       (844)           (92)
                                                                --------        --------
Net income before minority interest.........................      3,372          2,193
Income applicable to minority interest......................      1,757          1,129
                                                                --------        --------
Net income..................................................      1,615          1,064
                                                                --------        --------
                                                                --------        --------
Net income per common share (Note 7)........................       $.39           $.27
                                                                --------        --------
                                                                --------        --------
Weighted average number of common shares outstanding........      4,364          3,910
                                                                --------        --------
                                                                --------        --------
Distribution declared per common share outstanding..........       $.41           $.41
                                                                --------        --------
                                                                --------        --------


         See accompanying notes to condensed consolidated financial statements.

</TABLE>
                                             4

<PAGE>


                                      GOLF TRUST OF AMERICA, INC. 

                                CONDENSED CONSOLIDATED STATEMENTS OF INCOME

                                               (UNAUDITED) 
                                              (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                         PERIOD FROM    FOR THE NINE    FOR THE NINE
                                                        FEBRUARY 12 TO  MONTHS ENDED    MONTHS ENDED
                                                         SEPTEMBER 30,  SEPTEMBER 30,   SEPTEMBER 30,
                                                              1997         1997             1996
                                                       ----------------------------------------------
                                                                        (PRO FORMA)      (PRO FORMA)
<S>                                                       <C>            <C>              <C>
REVENUES (Notes 1 and 2):
  Minimum rents (Note 5)................................     $9,229        $10,852          $8,938
  Capital expenditure reserve...........................        390            510             457
  Percentage rents......................................        254            254               -
  Mortgage interest (Note 4)............................      2,232          2,232               -
                                                            -------        -------          -------
Total revenues..........................................     12,105         13,848           9,395
                                                            -------        -------          -------
EXPENSES:
  Depreciation and amortization (Note 3)................      2,061          2,509           2,600
  General and administrative............................      1,847          2,059           1,230
                                                            -------        -------          -------
Total expenses..........................................      3,908          4,568           3,830
                                                            -------        -------          -------
Operating income........................................      8,197          9,280           5,565
                                                            -------        -------          -------
OTHER INCOME (EXPENSE):
  Interest income.......................................        493            493               -
  Interest expense......................................     (1,179)        (1,231)           (275)
                                                            -------        -------          -------
Total other income (expense)............................       (686)          (738)           (275)
                                                            -------        -------          -------
Net income before minority interest.....................      7,511          8,542           5,290
Income applicable to minority interest..................      3,913          4,450           2,724
                                                            -------        -------          -------
Net income..............................................      3,598          4,092           2,566
                                                            -------        -------          -------
                                                            -------        -------          -------
Net income per common share (Note 7)....................       $.84           $.96            $.66
                                                            -------        -------          -------
                                                            -------        -------          -------
Weighted average number of common shares outstanding....      4,364          4,364           3,910
                                                            -------        -------          -------
                                                            -------        -------          -------
Distribution declared per common share outstanding......      $1.03          $1.23           $1.23
                                                            -------        -------          -------
                                                            -------        -------          -------
</TABLE>

         See accompanying notes to condensed consolidated financial statements.

                                                    5

<PAGE>

                                      GOLF TRUST OF AMERICA, INC.

                             CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                                               (UNAUDITED)
                                              (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                                      NOTE
                                                            ADDITIONAL                              RECEIVABLE     TOTAL
                                                              PAID-IN     RETURNED       UNEARNED    FOR STOCK  STOCKHOLDERS'
                                        SHARES     AMOUNT     CAPITAL     EARNINGS     COMPENSATION     SALE       EQUITY
                                       --------   --------   ----------  ----------   --------------  --------    --------
<S>                                     <C>        <C>        <C>         <C>          <C>             <C>         <C>
BALANCE, February 12, 1997..........       -        $ -        $  -         $ -          $   -         $   -       $   - 
Issuance of stock...................     4,161       42         44,856        -            (1,828)     (3,298)      42,247
Net income..........................       -          -           -          3,625           -             -         3,625
Dividends...........................       -          -           -         (2,489)          -             -        (2,489)
                                       --------   --------   ----------  ----------   --------------  --------    --------
BALANCE, September 30, 1997.........     4,161      $42        $44,856      $1,136        $(1,828)    $(3,298)     $40,908
                                       --------   --------   ----------  ----------   --------------  --------    --------
                                       --------   --------   ----------  ----------   --------------  --------    --------


                           See accompanying notes to condensed consolidated financial statements.
</TABLE>
                                                           6

<PAGE>


                                     GOLF TRUST OF AMERICA, INC. 

                             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                            (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                             PERIOD FROM
                                                                            FEBRUARY 12 TO
                                                                             SEPTEMBER 30,
                                                                                 1997
                                                                            ----------------
                                                                               (UNAUDITED)
<S>                                                                          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income.........................................................            $  3,598
  Adjustments to reconcile net income to net cash 
  provided by operating activities:
   Depreciation and amortization.....................................               2,061
   Income applicable to minority interest ...........................               3,913
   Increase in rents and interest receivable.........................              (1,760)
   Increase in other assets..........................................              (1,486)
   Increase in accounts payable and other liabilities................               1,163
                                                                                 ---------
Net cash provided by operating activities............................               7,489
                                                                                 ---------
CASH FLOWS USED IN INVESTING ACTIVITIES:
  Golf course acquisitions...........................................             (65,624)
  Increase in mortgage notes receivable..............................             (63,742)
  Capital additions..................................................                (397)
                                                                                 ---------
Net cash used in investing activities................................            (129,763)
                                                                                 ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net proceeds from long-term debt...................................              54,790
  Net proceeds from offering.........................................              73,055
  Issuance of common stock...........................................                 601
  Dividends paid.....................................................              (5,054)
                                                                                 ---------
Net cash provided by financing activities............................             123,392
                                                                                 ---------
Net increase in cash.................................................               1,118
Cash and cash equivalents, beginning of period.......................                  -
                                                                                 ---------
Cash and cash equivalents, end of period.............................            $  1,118
                                                                                 ---------
                                                                                 ---------

          See accompanying notes to condensed consolidated financial statements.
</TABLE>
                                               7

<PAGE>


                         GOLF TRUST OF AMERICA, INC. 

               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1. ORGANIZATION AND BASIS OF PRESENTATION

    Golf Trust of America, Inc. (the "Company") was incorporated in Maryland 
on November 8, 1996.  The Company is a self-administered real estate 
investment trust ("REIT") formed to capitalize upon consolidation 
opportunities in the ownership of golf courses in the United States.  The 
principal business strategy of the Company is to acquire high quality golf 
courses and to lease the golf courses to qualified third party operators, 
including affiliates of the sellers. Title to the acquired courses is held by 
Golf Trust of America, L.P., a Delaware limited partnership (the "Operating 
Partnership"), in which the Company is the sole general partner.  An 
alternative business strategy utilized to acquire a participating interest in 
the Innisbrook golf course.  This is discussed further in the Mortgages 
footnote.

    Golf Trust of America, Inc., through its wholly owned subsidiaries GTA 
GP, Inc. ("GTA GP") and GTA LP, Inc. ("GTA LP"), holds a 47.5% interest in 
the Operating Partnership.  GTA GP is the sole general partner of the 
Operating Partnership and owns a 0.2% interest therein.  GTA LP is a limited 
partner in the Operating Partnership and owns a 47.3% interest therein.

    In February 1997, the Company raised net proceeds of approximately $73 
million in its initial public offering (the "IPO").  In the IPO the Company 
sold 3,910,000 shares of common stock at $21.00 per share (including 510,000 
shares sold pursuant to the underwriters' over-allotment option, which was 
exercised in full).  The Company contributed the net proceeds of the IPO to 
the Operating Partnership in exchange for a 48.6% interest in the Operating 
Partnership. Concurrently with the closing of the IPO, the Operating 
Partnership acquired ten golf courses (the "Initial Courses") from their 
prior owners (the "Prior Owners").

    The Prior Owners were paid an aggregate of approximately $6.2 million in 
cash and approximately $43.1 million in repayment of mortgage and other 
indebtedness and were issued approximately 4.1 million OP units which 
represented a 51% limited partnership interest in the Operating Partnership. 
Control of the Operating Partnership remains in the Company as the sole 
general partner.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    BASIS OF PRESENTATION

    The accompanying unaudited consolidated financial statements have been 
prepared by the management of the Company in accordance with generally 
accepted accounting principles for interim financial information and in 
conformity with the rules and regulations of the Securities and Exchange 
Commission. Accordingly, they do not include all of the information and 
footnotes required by generally accepted accounting principles for complete 
financial statements. In the opinion of management, all adjustments 
(consisting of normal recurring adjustments) considered necessary for a fair 
presentation have been included. The results of operations for the period 
from February 12, 1997 through September 30, 1997 are not necessarily 
indicative of the results that may be expected for the full year.  These 
financial statements should be read in conjunction with the Company's 
December 31, 1996 financial statement and notes thereto included in the 
Company's Annual Report on From 10-K.

    The unaudited Pro Forma Condensed Consolidated Statements of Operations 
for the three months ended September 30, 1996 and the nine months ended 
September 30, 1996 and 1997, are presented as if the formation transactions 
had occurred January 1, 1996.  In management's opinion, all adjustments 
necessary to reflect the effects of the Formation Transaction have been made. 
 The Pro Forma Condensed Consolidated Statements of Operations are not 
necessarily indicative of what the Company's actual results of operations 
would have been assuming the formation transactions had occurred on January 
1, 1996, nor do they purport to represent the future operating results of the 
Company.

                                      8

<PAGE>

                         GOLF TRUST OF AMERICA, INC. 

               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 

    PRINCIPLES OF CONSOLIDATION

    The accompanying consolidated financial statements include the accounts 
of the Company, its wholly owned subsidiaries, and the Operating Partnership. 
 All significant intercompany transactions and balances have been eliminated 
in consolidation.

    REVENUE RECOGNITION

    The Company recognizes rental revenue on an accrual basis over the terms 
of the leases.  The Company recognizes interest income ratably over the term 
of the loan.

    CASH AND CASH EQUIVALENTS

    The Company considers all highly liquid debt instruments with an original 
maturity of three months or less to be cash equivalents.

    CONCENTRATION OF CREDIT RISK

    The Company has cash and cash equivalents in a financial institution 
which is insured by the Federal Deposit Insurance Corporation (FDIC) for 
amounts up to $100,000 per institution.  At September 30, 1997, the Company 
had amounts in excess of FDIC limits.  The Company limits its risk by placing 
its cash and cash equivalents in a high quality financial institution.  Rents 
and interest receivable from the Company's lessees and mortgagee, payable in 
arrears for the preceding month, were collected subsequent to the issuance of 
this report.

    PROPERTY AND EQUIPMENT

    Property and equipment is carried at the lower of cost or net realizable 
value.  Depreciation is computed on a straight-line basis over the estimated 
useful lives of the assets as follows:

            Golf course improvements                   15 years
            Buildings and improvements                 30 years
            Furniture, fixtures, and equipment        3-8 years

    The leases presently provide that at the end or termination of the 
existing leases, all improvements and fixtures placed on the rental property 
become property of the Company.  In addition, the leases provide for a 
capital replacement reserve to be established by the Company for each 
property.  The Company will approve disbursements from this fund for capital 
improvements to the properties.

USE OF 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.

                                   9

<PAGE>

                         GOLF TRUST OF AMERICA, INC. 

               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

    NEW ACCOUNTING PRONOUNCEMENTS

    In February 1997, the Financial Accounting Standards Board issued FAS No. 
128, "Earnings per Share," which established new standards for computations 
of earnings per share.  Statement No. 128 will be effective for periods 
ending after December 15, 1997 and will require presentation of:  (1) "Basic 
Earnings per Share," computed by dividing income available to common 
stockholders by the weighted average number of common shares outstanding 
during the period and (2) "Diluted Earnings per Share," which gives effect to 
all dilutive potential common shares that were outstanding during the period, 
by increasing the denominator to include the number of additional common 
shares that would have been outstanding if the dilutive potential common 
shares had been issued.  Had FAS 128 been effective for the period ended 
September 30, 1997, basic and diluted earnings per share would have been as 
follows:

                                                      SEPTEMBER 30,
                                                          1997
                                                      --------------
         Basic earnings per share.................           $.88
         Diluted earnings per share...............           $.84

3.  ACQUISITION OF GOLF COURSES

    On February 12, 1997, concurrent with the initial public offering of the 
Company's stock, the Company acquired the ten initial golf courses in 
exchange for the issuance of $4.1 million OP units, assumptions of $48.3 
million of notes payable and affiliate debt and $6.2 million cash.  The debt 
was repaid concurrent with the acquisition.  The seven golf courses acquired 
from The Legends Group have been accounted for at historical cost as The 
Legends Group is considered the accounting acquirer under APB No. 16.  The 
other three courses have been accounted for as a purchase.  The following is 
a summary of the golf courses and related property and equipment as of 
September 30, 1997:

<TABLE>
<CAPTION>
                                                  INITIAL    SUBSEQUENT
                                                  COURSES   ACQUISITIONS    TOTAL
                                                           (IN THOUSANDS)
                                                  --------------------------------
<S>                                                <C>         <C>         <C>
Land.............................................  $15,919    $ 5,661      $21,580
Golf course improvements.........................   43,964      4,201       48,165
Buildings and improvements.......................    8,659      2,577       11,236
Furniture and equipment..........................    4,815      4,908        9,723
                                                   -------    -------      -------
Net property and equipment.......................   73,357     17,347       90,704
Less accumulated depreciation and amortization...  (12,808)       (81)     (12,889)
                                                   -------    -------      -------
Total property and equipment.....................  $60,549    $17,266      $77,815
                                                   -------    -------      -------
                                                   -------    -------      -------
</TABLE>

                                          10

<PAGE>

                         GOLF TRUST OF AMERICA, INC. 

               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4.  MORTGAGE NOTES RECEIVABLE

    On June 23, 1997, the Operating Partnership closed and funded an initial 
$69.975 million participating loan to Golf Host Resorts, Inc. ("Golf Host 
Resorts"), which is affiliated with Starwood Capital Group LLC.  The loan is 
secured by the Innisbrook Resort, a 63-hole destination golf and conference 
facility located near Tampa, Florida.

    The Operating Partnership funded the loan with net proceeds from the 
Company's initial public offering which closed in February 1997 and with 
borrowings under the credit facility from NationsBank, N.A. described in 
Note 6.

    The initial loan of $69.975 million will be followed by a $9 million 
loan, a portion of which was funded at closing, which will be used for a 
nine-hole expansion and other improvements to the Innisbrook Resort 
facilities, currently underway.  The loan term is 30 years, with an initial 
base interest rate of 9.63% per annum, annual increases (of at least 5% but 
no more than 7%) in the interest payment for the first five years, and a 
participating interest feature throughout the term based upon the growth in 
revenues, if any, over the base year.

    Golf Host Resorts used $8,975,000 of the proceeds of the loan to purchase 
274,039 OP Units (i.e., units of limited partnership interest in the 
Operating Partnership) together with 159,326 shares of common stock of the 
Company and an option to purchase an additional 150,000 shares of common 
stock of the Company at a price (subject to certain adjustments) of $26 per 
share, exercisable before December 31, 1997 (subject to extension in certain 
circumstances).  The purchase of shares and OP Units by Golf Host Resorts 
gives it an approximate 4.95% economic interest in the Company and the 
Operating Partnership, considered as one entity.

    The $5,675,000 used to purchase the OP Units has been recorded as an 
adjustment to minority interest and the $3,298,000 used to purchase common 
stock has been recorded as a reduction of stockholders' equity.

    According to SFAS No. 91 "Accounting for Nonrefundable Fees and Costs 
Associated with Originating or Acquiring Loans and Initial Direct Costs of 
Leases," the present value of the future payments should be recognized over 
the life of the loan.  Accordingly, the Company recognizes revenue on a 
straight-line basis.  Income recognized is approximately $376,000 in excess 
of the cash received for the three months ended September 30, 1997, and the 
period from February 12 to September 30, 1997.

5.  LEASES

    The Company leases its golf courses to affiliates of the prior owners and 
other qualified operators under non-cancelable lease agreements for an 
initial period of ten years.  From the minimum lease payments, the Company is 
generally required to make available a reserve of 2-5% of the annual gross 
golf revenue of each course for capital expenditure reimbursement to the 
lessor. At September 30, 1997 the amount reserved was $390,000.  Reimbursed 
capital expenditures are approved in advance by the Company.  

    Scheduled future minimum rents to be received by the Company under the 
Leases for the next five years ending December 31 and in total thereafter are 
as follows:

                                                   AMOUNT
                                               (IN THOUSANDS)
                                               --------------
                       1997...................   $ 14,041
                       1998...................     17,848
                       1999...................     17,848
                       2000...................     17,848
                       2001...................     17,848
                       Thereafter.............     75,202
                                                 --------
                                                 $160,639
                                                 --------
                                                 --------
                                          11

<PAGE>


                         GOLF TRUST OF AMERICA, INC. 

               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


5.  LEASES (CONTINUED)

    The non-cancelable leases provide for the Company to receive the greater 
of the Base Rent Escalation or an amount equal to Participating Rent plus the 
Base Rent Escalation payable under each non-cancelable lease.  Participating 
rent will generally be paid to the Company each year in the amount, if any, 
by which the sum of 33 and 1/3% of Gross Golf Revenue exceeds the cumulative 
Base Rent Escalation since the commencement date of such Leases.  The base 
rent will generally be increased each year by the lesser of (i) 3% or (ii) 
200% of the annual percentage increase in the Consumer Price Index ("CPI").  
Annual increases in lease payments are generally limited to 5% during the 
first five years of the initial lease term.  

    Typically, the Lessee has options to extend the term of each lease six 
consecutive times for a period of 5 years.

6.  NOTE PAYABLE

    The Company has obtained a $100 million secured revolving credit facility 
(the "Credit Facility") from a group of four commercial banks led by 
NationsBank, N.A.  Borrowings under the Credit Facility carry a floating 
interest rate of LIBOR plus 1.75% (7.4% at September 30, 1997) with 
provisions for the rate to be reduced upon the attainment of Senior Debt 
Rating.  The Credit Facility availability is limited to a quarterly borrowing 
base calculation as defined in the Credit Facility.  Additional financial 
covenants include net worth, liquidity and cash flow covenants.  
Non-financial covenants include restrictions on loans outstanding, 
construction in progress, loans to officers and changes to Board of 
Directors.  At the present time, these covenants have been met.

    On September 24, 1997, the Company received a commitment from 
NationsBank, N.A. and Bank of America NT & SA to amend and restate the Credit 
Facility contingent upon a successful follow-on public stock offering.  The 
restated Credit Facility would increase the amount available to $125 million 
on an unsecured basis and adjust the interest rate to LIBOR plus 1.75%.  Up 
to 20% of the Credit Facility may be used for working capital needs.  

7.  COMMON STOCK AND EMPLOYEE INCENTIVE PLANS

    In February 1997, the Company adopted the 1997 Stock Incentive Plan (the 
"Stock Incentive Plan").  Under the Stock Incentive Plan, the Compensation 
Committee of the Board of Directors may grant stock awards relating to 
500,000 shares of Common Stock.  Option grants under the Stock Incentive Plan 
vest ratably over a period of three years from the date of grant and expire 
ten years from the date of grant. 

    In February 1997, the Company adopted the 1997 Non-Employee Directors' 
Plan (the "Directors' Plan"). Under the Directors' Plan, the Compensation 
Committee is authorized to grant stock awards to purchase up to 100,000 
shares of the Company's common stock at prices equal to the fair value of the 
stock on the date of grant.  Under the Directors' Plan, 20,000 options which 
vest immediately, have been granted.

    In May 1997, the Company adopted the 1997 Stock-Based Incentive Plan (the 
"New 1997 Plan"). Under the New 1997 Plan, the Compensation Committee of the 
Board of Directors is authorized to grant awards relating in the aggregate up 
to 600,000 shares of the Company's common stock.  Option grants generally 
vest ratably over a period of three years from the date of grant and expire 
ten years from the date of grant.  Restricted stock grants generally vest 
ratably over a period of four years from the date of grant.

                                  12

<PAGE>

                         GOLF TRUST OF AMERICA, INC. 

               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

7.  COMMON STOCK AND EMPLOYEE INCENTIVE PLANS (CONTINUED)

Transactions involving the plans are summarized as follows:


                                                                WEIGHTED
                                                                 AVERAGE
     OPTION SHARES                                  SHARES    EXERCISED PRICE 
     -------------                                  -------   ----------------
     Outstanding at December 31, 1996............      -             $  -
     Granted.....................................   940,000           23.88
     Exercised...................................      -                -
     Expired and/or canceled.....................      -                -
                                                    -------          --------
     Outstanding at September 30, 1997...........   940,000           $23.88
                                                    -------          --------
                                                    -------          --------

    On September 19, 1997, the Company issued 70,000 restricted common shares 
to officers of the Company under the New 1997 Plan.  These shares were issued 
for $.01 when the market price was $26.1875.  The difference in these amounts 
will be recognized as compensation expense over the vesting term of four 
years.

The Company has adopted Statement of Financial Accounting Standards (SFAS) 
123, "Accounting for Stock-Based Compensation," effective February 1997.  In 
accordance with the provisions of SFAS No. 123, the Company continues to 
apply APB Opinion 25 and related interpretation in  accounting for its stock 
option plans and, accordingly, has not recognized compensation cost.  If the 
Company had elected to recognize compensation cost based on fair value of the 
options granted at the grant date as prescribed by SFAS No. 123, net income 
per quarter and earnings per share would have been reduced to the pro forma 
amounts indicated in the table below (in thousands, except per share 
amounts):

                                                     PERIOD FROM
                                                     FEBRUARY 12
                                                   (INCEPTION) TO
                                                    SEPTEMBER 30,
                                                         1997
                                                    (IN THOUSANDS)
                                                   ---------------
         Net income--as reported.................       $3,598
         Net income--pro forma...................       $2,997
         Earnings per share--as reported.........       $  .84
         Earnings per share--pro forma...........       $  .69


    The fair value of each option grant is estimated on the date of grant 
using the Black-Scholes option-pricing model with the following assumptions:  

                                                     PERIOD FROM
                                                     FEBRUARY 12
                                                   (INCEPTION) TO
                                                    SEPTEMBER 30,
                                                         1997
                                                   ---------------
        Expected dividend yield.................          6.00%
        Expected stock price volatility.........         15.16%
        Risk-free interest rate.................          6.32%
        Expected life of options................        3 years


     The weighted average fair value of options granted during 1997 was $4.25.

                                         13

<PAGE>

                         GOLF TRUST OF AMERICA, INC. 

               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

8.  MINORITY INTEREST

    Minority interest consisting of OP Units is redeemable for cash at the 
request of the OP Unit holder or at the Company's option convertible into 
shares of stock of the Company subject to certain limitations.  Beginning in 
February 1998, fifty percent of the OP Units (2,310,157 at September 30, 
1997) will become redeemable.

9.  SUBSEQUENT EVENTS

DECLARATION OF DIVIDENDS

    On October 15, 1997, the Board of Directors declared a quarterly dividend 
distribution of $.41 per share for the quarter ended September 30, 1997, to 
stockholders of record on October 27, 1997, which was paid on November 10, 
1997.

ACQUISITIONS

    On October 3, 1997, the Company acquired Lost Oaks, formerly known as 
Tarpon Woods Golf Country Club, an 18-hole golf course located in Tarpon 
Springs, Florida for $5.9 million in cash including closing costs.  The 
Company leases the golf course to an affiliate of Starwood under a 
Participating Lease.

    On October 17, 1997, the Company acquired Club of the Country, an 18-hole 
semi-private country club located in Kansas City, Kansas for $2.6 million in 
cash and OP Units valued at approximately $.5 million. 

401(k) AND PROFIT SHARING PLAN

    Effective November 1, 1997, the Company adopted the Golf Trust of 
America, LP 401(k) Profit Sharing Plan & Trust available to all employees who 
have earned one year of vesting service and are at least 21 years of age.  
Participants may contribute from 1% to 12% of their earnings, in whole 
percentages, on a before-tax basis.  The Company contributes to participants' 
accounts based on the amount the participant elects to defer and a matching 
contribution equal to $0.50 on each dollar contributed by a participant up to 
6% of the participant's gross pay.  The Company may also make a discretionary 
profit sharing contribution.

FOLLOW-ON OFFERING

    On November 5, 1997, the Company announced a follow-on equity offering of 
3 million shares of common stock for 25 5/8 per share.  The Company granted 
to the underwriters of the offering an option to purchase an additional 
450,000 shares of common stock to cover any overallotments.  

    On November 10, 1997, the Company received net proceeds of approximately 
$71.8 million (assuming no exercise of the over-allotment option). The 
Company used the proceeds to repay approximately $60.7 million under the line 
of credit leaving a $4.3 million balance related to an obligation of a prior 
owner.  The increase in the line of credit balance from the September 30th 
balance of $54.8 million to a November 10 balance of $60.7 million is due to 
subsequent acquisitions funding of $8.325 million and working capital 
advances of $1.8 million.  The Company will use the remaining proceeds for 
general corporate purposes, including the acquisition of additional golf 
properties and funding of existing expansion commitments.

                                          14

<PAGE>


                                    LEGENDS GOLF

                          COMBINED CONDENSED BALANCE SHEETS

                                    (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                     DECEMBER 31,   SEPTEMBER 30,
                                                                          1996           1997
                                                                     ------------   --------------
                                                                                     (UNAUDITED)
<S>                                                                   <C>             <C>
ASSETS
CURRENT:
  Cash...............................................................      $841           $274
  Accounts receivable................................................     1,290          1,755
  Inventories........................................................       502            508
                                                                        -------        --------
  Total current assets...............................................     2,633          2,537
                                                                        -------        --------
Property and equipment, less accumulated depreciation
 and amortization....................................................    35,060          2,893
                                                                        -------        --------
Other assets:
  Investment in Golf Trust of America, LP............................         -          2,879
  Advances to affiliates.............................................    11,673         13,520
  Other..............................................................       438             40
                                                                        -------        --------
  Total other assets.................................................    12,111         16,439
                                                                        -------        --------
                                                                        $49,804        $21,869
                                                                        -------        --------
                                                                        -------        --------
LIABILITIES AND OWNERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable and accrued expenses..............................    $2,050         $2,301
  Accrued rent.......................................................       -            1,050
  Current maturities of long-term debt...............................    26,697              -
                                                                        -------        --------
  Total current liabilities..........................................    28,847          3,351
Advances from affiliates.............................................    13,167          8,187
Long-term debt, less current maturities..............................       616          1,092
                                                                        -------        --------
  Total liabilities..................................................    42,630         12,630
                                                                        -------        --------
Commitments and contingencies
Owners' equity:
  Common stock, $1 par--shares authorized, 300,000;
  Outstanding, 1,000.................................................         3              3
  Members' contributions.............................................         1              7
  Additional paid-in capital.........................................       300          3,832
  Members' accumulated deficit.......................................    (1,970)        (6,049)
  Retained earnings..................................................     8,840         11,446
                                                                        -------        --------
  Total owners' equity...............................................     7,174          9,239
                                                                        -------        --------
                                                                        $49,804        $21,869
                                                                        -------        --------
                                                                        -------        --------
</TABLE>
                    See accompanying notes to combined financial statements.

                                              15

<PAGE>


                                    LEGENDS GOLF

                          COMBINED CONDENSED STATEMENTS OF INCOME

                                    (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                          FOR THE QUARTER                  FOR THE NINE
                                                                ENDED                      MONTHS ENDED
                                                             SEPTEMBER 30,                 SEPTEMBER 30, 
                                                         ---------------------        ----------------------
                                                          1996          1997           1996          1997
                                                         ---------------------        ----------------------
                                                             (UNAUDITED)                         (UNAUDITED)
<S>                                                      <C>            <C>            <C>           <C>
REVENUES:
  Gross golf revenues................................    $2,713         $3,494        $11,354        $13,576
  Other revenues.....................................       811          1,089          3,095          4,003
                                                        -------         ------        -------        --------
          Total revenues.............................     3,524          4,583         14,449         17,579
                                                        -------         ------        -------        --------
    COSTS AND EXPENSES:
  General and administrative.........................     1,578          1,658          3,834          4,931
  Operating expenses.................................     2,267          2,352          5,229          6,678
  Depreciation and amortization......................       575             62          1,579            870
  Rents..............................................       198          3,232            737          8,173
                                                        -------         ------        -------        --------
          Total costs and expenses...................     4,618          7,304         11,379         20,652
                                                        -------         ------        -------        --------
    Operating income (loss)..........................    (1,094)        (2,721)         3,070         (3,073)
Equity in earnings of Golf Trust of America, LP......     -              1,453           -             3,369
Interest expense.....................................      (368)           (19)          (883)          (439)
                                                        -------         ------        -------        --------
    Net income (loss)................................   $(1,462)       $(1,287)        $2,187          $(143)
                                                        -------         ------        -------        --------
                                                        -------         ------        -------        --------


                            See accompanying notes to combined financial statements.

                                                      16

</TABLE>

<PAGE>

                                    LEGENDS GOLF

                    COMBINED CONDENSED STATEMENTS OF CASH FLOWS

                                    (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                       FOR THE NINE
                                                                                       MONTHS ENDED
                                                                                       SEPTEMBER 30,
                                                                                  ------------------------
                                                                                    1996           1997
                                                                                  ------------------------
                                                                                               (UNAUDITED)
<S>                                                                               <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)............................................................    $2,187          $(143)
  Adjustments to reconcile net income (loss) to net cash provided by 
  Operating activities:
   Depreciation and amortization...............................................     1,579            870
   Equity in earnings of Golf Trust of America, LP.............................         -         (3,369)
   Loss on disposal of property................................................       254              -
   Decrease (increase) in:
    Accounts receivable........................................................      (527)          (465)
    Inventories................................................................      (221)            (6)
    Prepaid expenses/other assets..............................................      (458)           156
   Increase  in accounts payable and accrued expenses..........................     2,360          1,276
                                                                                  --------       ---------
Net cash provided by operating activities......................................     5,174         (1,681)
                                                                                  --------       ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Property and equipment additions.............................................      (361)        (1,176)
  Increase in investment in Golf Trust of America, LP..........................         -           (173)
  Distributions from Golf Trust of America, LP.................................         -          2,318
  Increase in advances to affiliates...........................................    (4,744)        (1,847)
                                                                                  --------       ---------
Net cash used in investing activities..........................................    (5,105)          (878)
                                                                                  --------       ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from long-term debt.................................................     1,188            654
  Payments on long-term debt...................................................      (365)          (178)
  Increase in advances from affiliates.........................................       (47)         3,056
  Decrease in advances from stockholder........................................         -           (211)
  Distribution to stockholder..................................................    (1,020)        (1,329)
                                                                                  --------       ---------
Net cash provided by financing activities......................................      (244)         1,992
                                                                                  --------       ---------
Net increase (decrease) in cash................................................       175           (567)
Cash, beginning of period......................................................       400            841
                                                                                  --------       ---------
Cash, end of period............................................................      $225           $274
                                                                                  --------       ---------
                                                                                  --------       ---------

</TABLE>
                       See accompanying notes to combined financial statements.

                                                  17

<PAGE>


                             LEGENDS GOLF

             NOTES TO COMBINED CONDENSED FINANCIAL STATEMENTS

1. ORGANIZATION AND BASIS OF PRESENTATION

    The accompanying combined condensed financial statements include the 
accounts of three S-Corporations (Seaside Resorts, Ltd. d/b/a Oyster Bay Golf 
Club; Heritage Golf Club, Ltd.; and Golf Legends, Ltd.) and five limited 
liability companies (Legends of Virginia, LC; Oyster Bay Golf Management, 
LLC; Heritage Golf Management, LLC; Legends Golf Management, LLC; and 
Virginia Legends Golf Management, LLC).  The entities, referred to 
collectively as Legends Golf, are engaged in the operation of golf courses in 
North Carolina, South Carolina, and Virginia.

    The accompanying combined condensed financial statements of Legends Golf 
have been presented on a historical cost basis since the Legends Golf was the 
subject of a business combination upon the contribution of real estate and 
other properties in exchange for interest in a limited partnership formed by 
the operating partnership for inclusion in a public offering.  All 
significant intercompany balances and transactions have been eliminated.  
Additionally, certain classifications may vary from those of the individual 
companies' financial statements.

    Minority interest attributed to the minority shareholder of Legends of 
Virginia, LC is not reflected as the company is in a capital deficit 
position. Therefore, the total deficit is attributed to the majority owner.

    The Companies financial statements are being presented on a combined 
basis as under the terms of the operating leases implemented under the 
Formation Transactions, the lease obligations are cross-collateralized among 
all four Legends lessees.  This presentation better presents the ability of 
the lessees to service the leases.

    The interim financial statements are unaudited; however, in the opinion 
of the management, the interim financial statements include all adjustments, 
consisting only of normal recurring adjustments, necessary for a fair 
presentation of the results for the interim period.  The results of 
operations for such interim period are not necessarily indicative of the 
results to be obtained for the full year.

2.  CONTRIBUTION OF ASSETS

    On February 12, 1997, the Companies contributed the golf course land and 
improvements, buildings and certain equipment with a net book value of 
$36,321 net of related debt of $26,454 to Golf Trust of America, LP (GTA, 
LP). Concurrently with the contribution of assets, the majority owner 
contributed the underlying land for four of the courses to the Companies.  
The majority owner's basis in the land was $3,532.  The contribution was 
concurrent with an initial public offering of the common stock of Golf Trust 
of America, Inc. (GTA, Inc.), its general partner.  The Companies received 
limited partnership units convertible to common shares of GTA, Inc. and cash 
of $8.4 million which was used to repay certain affiliate indebtedness.

    Concurrent with the contribution of assets, the Companies transferred the 
operations of the golf courses along with related assets and liabilities to 
four newly formed affiliated lessee companies, Oyster Bay Golf Management, 
LLC; Heritage Golf Management, LLC; Legends Golf Management, LLC; and 
Virginia Golf Management, LLC (Legends Lessees) which have entered into lease 
agreements with GTA, LP (Note 3).

    The remaining assets of the Companies consist of limited partnership 
units in GTA, LP and receivables and payables from affiliates.

                                     18

<PAGE>

                             LEGENDS GOLF

             NOTES TO COMBINED CONDENSED FINANCIAL STATEMENTS

3.  LEASES

    Concurrent with the Formation Transactions, the Legends Lessees entered 
into leases to operate the golf courses.  The Company is obligated under the 
non-cancelable lease agreements for an initial period of ten years.  Under 
the lease agreements, the Legends Lessees are responsible for all operating 
expenses and fixed asset purchases and improvements.  However, the lessee is 
required to make available 2 to 3 percent of the annual gross golf revenue to 
the lessor for reimbursement of fixed asset expenditures.  Capital 
expenditures must be approved in advance by the lessor.  

    Future minimum rental obligations to be paid by the Company under the 
Leases for the next five years ending December 31 and in total thereafter are 
as follows: 

                                                   AMOUNT 
     YEAR ENDING DECEMBER 31,                   (IN THOUSANDS)
     ------------------------                   --------------
         1997.................................     $10,637
         1998.................................      12,057
         1999.................................      12,057
         2000.................................      12,057
         2001.................................      12,057
         Thereafter...........................      60,285
                                                  ----------
                                                  $119,150
                                                  ----------
                                                  ----------

    The non-cancelable leases require the Company to pay, the greater of the 
Base Rent Escalation or an amount equal to Participating Rent plus the Base 
Rent Escalation payable under each non-cancelable lease.  Participating rent 
will be paid by the Company each year in the amount, if any, by which the sum 
of 33 and 1/3 percent of Gross Golf Revenue exceeds the cumulative Base Rent 
Escalation since the commencement date of such Leases.  Participating rent 
was $81,000 and $149,000 for the quarter and nine months ended September 30, 
1997, respectively. The base rent will be increased each year by the lesser 
of (i) 3 percent or (ii) 200 percent of the annual percentage increase in the 
Consumer Price Index ("CPI").  Annual increases in lease payments are limited 
to 5 percent during the first five years of the initial lease term.  

    The Company has options to extend the term of each lease six consecutive 
times for a period of 5 years each.

                                     19

<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

OVERVIEW

    Golf Trust of America, Inc. ("GTA") was incorporated in Maryland on 
November 8, 1996.  The Company was formed to capitalize upon consolidation 
opportunities in the ownership of upscale golf courses in the United States. 
The Company's principal business strategy is to acquire upscale golf courses 
and then lease the golf courses to qualified third party operators, including 
affiliates of the sellers.  Title to the acquired courses is held by Golf 
Trust of America, L.P., a Delaware limited partnership (the "Operating 
Partnership"), in which the Company is the sole general partner.  The courses 
are leased to lessees not affiliated with the Company.  The Company has the 
ability to issue units of limited partnership interest ("OP Units") in the 
Operating Partnership. OP Units are redeemable by their holder for cash or, 
at the election of the Company, for shares of Common Stock on a one-for-one 
basis (their "Redemption Right").  When the Company acquires a golf course in 
exchange for OP Units, in most instances the seller of the course does not 
recognize taxable income gain until it exercises the Redemption Right.  OP 
Units can thus provide an attractive tax-deferred sale structure for golf 
course sellers.  The Company believes its has a distinct competitive 
advantage in the acquisition of upscale golf courses, including those which 
might not otherwise be available for purchases, because of (i) its 
utilization of a multiple independent lessee structure (ii) management's 
substantial industry knowledge, experience, and relationships within the golf 
community, (iii) the Company's strategic alliances with prominent golf course 
operators and (iv) its ability to issue OP Units to golf course owners on a 
tax-deferred basis.

    In February 1997, the Company raised net proceeds of approximately $73 
million in its IPO and consummated the Formation Transactions.  In the IPO 
the Company sold 3,910,000 shares of Common Stock at $21.00 per share 
(including 510,000 shares sold pursuant to the underwriters' over-allotment 
option, which was exercised in full).  The Company contributed the net 
proceeds of the IPO to the Operating Partnership in exchange for a 49% 
interest in the Operating Partnership.  

         The leases (the "Participating Leases") between the Company, as 
lessor, and each Lessee provide for payments ("Lease Payments") comprised of 
Base Rent, including minimum rent increases for a minimum of five years, and 
Participating Rent based on growth in revenue at the Golf Course.

    The Company's primary sources of revenue are Lease Payments under the 
Participating Leases and mortgage payments under the Participating Mortgage. 
Each Lessee has only nominal capitalization and a Lessee's ability to make 
its Lease Payments to the Company under its Participating Lease will be 
dependent upon such Lessee's ability to generate sufficient cash flow from 
the operation of the Golf Course(s) leased by it.  Participating Rent is 
generally equal to 33-1/3% of the increase in Gross Golf Revenues over the 
Gross Golf Revenues for the Golf Course for the base year, as adjusted by the 
Company in determining the initial Base Rent.  Base Rent will increase each 
year by the Base Rent Escalator during the first five years of the lease term 
(and for an additional five years thereafter following an exercise of the 
Lessee Performance Option).  The Base Rent Escalator for a given year 
generally equals the lesser of (i) 3% or (ii) 200% of the change in the CPI 
over the prior year.  Annual increases in Lease Payments are limited to a 
maximum of 5% for the first five years of the lease terms.

    Management believes the principal source of growth in Gross Golf Revenues 
at the Golf Courses will be increased green fees, cart fees, and other 
related fees.  In order to achieve higher revenues, management believes the 
Lessees will need to continue to offer golfers a high quality golf experience 
as it relates to the pace of play, condition of the Golf Course and overall 
quality of the facilities.

THE GOLF COURSES

    Concurrently with the closing of the IPO, the Company acquired the 10 
Initial Courses from the Prior Owners. The ten Initial Courses are located in 
South Carolina (4), Virginia (2), Alabama, Georgia, North Carolina and Texas. 
Title to the Initial Courses is held by the Operating Partnership.  The 
Initial Courses were contributed by their Prior Owners to the Operating 
Partnership in exchange for approximately $6.2 million in cash, the 
assumption of approximately $43.1 million of mortgage and other indebtedness 
and approximately 4.1 million OP Units, which 

                                     20
<PAGE>

represented a 51% limited partnership interest in the Operating Partnership.  
Control of the Operating Partnership remains in the hands of the Company, as 
the sole general partner.

    On June 23, 1997, the Company closed the $78.975 million Participating 
Mortgage with the Innisbrook Resort Owner in connection with a merger 
transaction that resulted in the Innisbrook Resort Owner acquiring the 
Innisbrook Resort, as well as the Tamarron Resort, an 18-hole destination 
golf and conference facility located near Durango, Colorado.  The Company 
made an initial advance of $69.975 million, which will be followed by 
additional advances of up to $9.0 million to be used for a nine-hole 
expansion and other improvements to the Innisbrook Resort facilities 
currently underway.  The Company was granted a first lien on the Innisbrook 
Resort, including the golf courses, the conference facilities and the 
undeveloped land, but excluding the hotel, which consists of individually 
owned condominiums.  Troon Golf manages the golf facilities at the Innisbrook 
Resort.  The condominium rental pool and conference facility at the 
Innisbrook Resort is managed by Westin.  Westin has agreed to pay up to $2.5 
million per year to the Innisbrook Resort Owner to supplement results of 
operations with respect to the operations at the Innisbrook Resorts ("The 
Westin Guaranty").  The Westin Guaranty, which is for a period of up to five 
years, is designed to ensure receipt by the Company of Base Interest payments 
under the Participating Mortgage.  The Participating Mortgage has a 30-year 
maturity, a 5% annual increase in the Base Interest for the first five years 
and a participating interest feature throughout the term based upon the 
growth in revenues over a base year.  The Company has the right to acquire 
the Innisbrook Resort at the expiration of the term of the Participating 
Mortgage, including any early expiration resulting from a default of the 
borrower thereunder.  The purchase price shall equal the lesser of the fair 
market value of the Innisbrook Resort (but in no event less than the 
outstanding balance of the Participating Mortgage), as determined by a third 
party appraisal, or 400,000 shares (125,000 shares under certain 
circumstances) of the Company's Common Stock and cancellation of the 
outstanding principal balance of the Participating Mortgage.

    On August 19, 1997, the Company acquired Tiburon, a 27-hole, upscale golf 
course located in Omaha, Nebraska for $5.4 million in cash and Common Stock 
valued at approximately $600,000 and leased the Golf Course to Granite Golf 
under a Participating Lease.

    On September 2, 1997, the Company acquired Raintree, an 18-hole golf 
course facility located in Akron, Ohio, for $1.2 million in cash and OP Units 
valued at approximately $3.4 million and leased the Golf Course to the Prior 
Owner under a Participating Lease.

    On September 30, 1997, the Company acquired Eagle Watch, an 18-hole golf 
course located in Atlanta, Georgia, for $4.5 million in cash and OP Units 
valued at approximately $1.9 million.  The Company leases the Golf Course 
under a Participating Lease to an affiliate of the Prior Owner.

    On October 3, 1997, the Company acquired Lost Oaks, formerly known as 
Tarpon Woods Golf Country Club, an 18-hole golf course located in Tarpon 
Springs, Florida for $5.9 million in cash including closing costs.  The 
Company leases the golf course to an affiliate of Starwood under a 
Participating Lease.

    On October 17, 1997, the Company acquired Club of the Country, an 18-hole 
semi-private country club located in Kansas City, Kansas for $2.6 million in 
cash and OP Units valued at approximately $.5 million. 

                                      21

<PAGE>

FINANCIAL RESULTS

    The following discussion and analysis of financial condition and pro 
forma results of operations of the Company, and the Legends Group Prior 
Owners is based upon the Company's financial statements as of December 31, 
1996, the pro forma consolidated balance sheet and income statement of the 
Company and the Legend Lessees, and the historical combined financial 
statements of The Legends Group, the accounting acquiror with respect to 
seven of the Initial Courses.  In establishing the amount of Base Rent for 
the Courses, the Company and the Lessees considered, in addition to actual 
historical results of operations, a number of other factors which under the 
accounting rules of the Securities and Exchange Commission cannot be 
reflected in the pro forma financial information for the Lessees.  Such 
factors include (i) cost savings expected to be achieved the Lessees as a 
result of operational changes following completion of the Formation 
Transaction (affecting the Legends Group courses), (ii) revenue enhancing 
programs that certain Lessees intend to implement following completion of the 
Formation Transactions (affecting Legends Resort Courses, Oyster Bay and 
Heritage Golf Club) and (iii) estimated revenues and expenses at the two 
recently opened Initial Courses (Royal New Kent and Stonehouse Golf Club).  The
pro forma financial information for the Company and the Legends Lessees reflect
initial Base Rent and no Participating Rent.

                                 22

<PAGE>

RESULTS OF OPERATIONS OF THE COMPANY

FOR THE PERIOD FROM FEBRUARY 12 TO SEPTEMBER 30, 1997

    For the period from February 12 to September 30, 1997, the Company 
received $12,105,000 in revenue from the Participating Leases for the Initial 
Courses and interest received on the mortgage note receivable.  Included in 
revenue was $254,000 in Participating Rent from 8 of the 10 Initial Courses.

    Total expenses before minority interest, totaling $2,729,000 for the 
period from February 12 to September 30, 1997, reflect depreciation and 
amortization, general and administrative expenses and interest expense.

    Net income before minority interest for the period from February 12 to 
September 30, 1997 was $7,511,000.

LIQUIDITY AND CAPITAL RESOURCES OF THE COMPANY

    Cash flow from operating activities for the period from February 12 to 
September 30, 1997, was $7,489,000.  This reflects net income before minority 
interest, plus noncash charges to income for depreciation, loan fee 
amortization and working capital changes.  Cash flows used in investing 
activities reflect increases in the mortgage receivable related to the 
Innisbrook facility of $63,742,000 and golf course acquisitions of 
$65,624,000.  These investments are discussed in greater detail in the 
preceding "Golf Courses" Cash flows provided by financing activities, 
totaling $123,392,000 represents the net borrowing of $54,790,000 under the 
Credit Facility (discussed below) and offering proceeds of $73,055,000 less 
dividend distributions of $5,054,000.

    Concurrent with the closing of the IPO, the Company borrowed 
approximately $4,325,000 that, together with the net proceeds of the IPO, was 
used to retire mortgage indebtedness and other debt of the Prior Owners, to 
fund the cash portion of the purchase of the Initial Courses and to provide 
initial working capital.  The Company has agreed to maintain approximately 
$4,325,000 of indebtedness for up to 10 years to accommodate a Prior Owner's 
efforts to seek to minimize certain adverse tax consequences from its 
contribution of one of the Initial Courses to the Company.  This loan has 
been consolidated with the Credit Facility.

    On June 20, 1997, the Company entered into the Credit Facility 
($54,790,000 outstanding as of September 30, 1997) to be used primarily for 
the acquisition of additional golf courses, but a portion of which may also 
be used for acquisition of the Expansion Facilities, for capital expenditures 
or for general working capital purposes.  The Credit Facility imposes certain 
conditions on the Company's ability to draw on the Credit Facility, 
including, without limitation, a borrowing base calculation.  On September 
24, 1997, the Company negotiated a reduction in the interest rate from LIBOR 
plus 2.0% to LIBOR plus 1.75%. Additionally, the Company has received a 
commitment to increase the Credit Facility, upon completion of its second 
public stock offering, to $125 million and to convert it to an unsecured 
facility.

    On November 5, 1997, the Company announced a follow-on equity offering of 
3 million shares of common stock for 25 5/8 per share.  The Company granted 
to the underwriters of the offering an option to purchase an additional 
450,000 shares of common stock to cover any overallotments.  

    On November 10, 1997, the net proceeds of approximately $71.8 million 
(assuming no exercise of the over-allotment option). The Company used the 
proceeds to repay approximately $60.7 million under line of credit borrowings 
leaving a $4.3 million balance related to an obligation of a prior owner.  
The increase in the line of credit balance from the September 30th balance of 
$54.8 million to a November 10 balance of $60.7 million is due to subsequent 
acquisitions funding of $8.325 million and working capital advances of $1.8 
million.  The Company will use the remaining proceeds for general corporate 
purposes, including the acquisition of additional golf course acquisitions 
and funding of existing expansion commitments.

                                      23

<PAGE>

    The Company intends to invest in additional golf courses as suitable 
opportunities arise, but the Company will not undertake investments unless 
adequate sources of financing are available.  The Company anticipates that 
future acquisitions would be funded with debt financing provided by the Line 
of Credit, the issuance of OP Units or with proceeds of additional equity 
offerings.  In the future, the Company may negotiate additional credit 
facilities or issue corporate debt instruments.  Any debt issued or incurred 
by the Company may be secured or unsecured, long-term or short-term, fixed or 
variable interest rate and may be subject to such other terms, as the Board 
of Directors deems prudent. The Company currently has no binding agreement to 
acquire any additional golf courses.  The Company is in active negotiations 
regarding the acquisition of additional golf courses, although there can be 
no assurance that the Company will acquire any of these golf courses.

    The Company's acquisition capabilities are enhanced by its existing 
capital structure.  The Company intends to maintain a capital structure with 
consolidated indebtedness representing no more than 50% of its total market 
capitalization.

    The Participating Leases require the Company to reserve annually between 
2.0% and 5.0% of the Gross Golf Revenues of the Golf Courses to fund capital 
expenditures.  Any capital expenditures in excess of such amounts will be 
funded by the Lessees.  For the nine months ended September 30, 1997, the 
Company had reserved $390,000 to fund capital expenditures under the 
Participating Leases.

    The Company also has agreed to fund certain improvements of $1.25 million 
at Lost Oaks and up to $3 million at Northgate Country Club.  In addition, 
the Company has committed to provide up to an additional $7.3 million under 
the Participating Mortgage.

PRO FORMA RESULTS OF OPERATIONS OF THE COMPANY

    On a pro forma basis for the nine months ended September 30, 1996 and 
1997, the Company would have received $9,395,000 and $11,616,000, 
respectively, in Base Rent from the Participating Leases for the Golf 
Courses.  For the nine months ended September 30, 1996, this amount does not 
include $923,000 in rent from Legends of Virginia LC related to its two 
courses, Stonehouse Golf Club and Royal New Kent, because such courses opened 
in June 1996 and August 1996, respectively.

    On a pro forma basis the Company would have also recognized interest 
income under the Participating Mortgage of $2,232,000 for the nine months 
ended September 30, 1997.  These amounts reflect no participation revenue.

    Total pro forma expenses of $4,105,000 and $5,306,000 revenue/income for 
the nine months ended September 30, 1996 and 1997, respectively, reflect 
depreciation and amortization, general and administrative expenses and 
interest expense.  Depreciation expense is based on the Company's cost of 
acquiring the Golf Courses, except for the Golf Courses acquired by the 
Company from The Legends Group.  The contribution of these Golf Courses is 
treated for accounting purposes as a reorganization of the interests of The 
Legends Group in the contributed Golf Courses and has been accounted for at 
historical cost.  Pro forma expenses for the nine months ended September 30, 
1996, do not include $290,000 of depreciation related to the period these 
courses were not operational in 1996.  If these courses had been operational 
in all of 1996, total pro forma expenses for the nine months ended September 
30, 1996, would have been $4,395,000.

    Minority interest totaling $2,724,000 for the nine months ended September 
30, 1996, ($2,809,000 if the Legends of Virginia Golf Courses had been fully 
operational for all of 1996) and $4,450,000 for the nine months ended 
September 30, 1997, reflects the 47.5% and 52.6% interest respectively of the 
Prior Owners, management and operators in the pro forma net income of the 
Operating Partnership.

    Pro forma net income for the nine months ended September 30, 1996, is 
$2,566,000 ($3,118,000 if the Legends of Virginia Golf Courses had been fully 
operational for all of 1996).  Pro forma net income for the nine months ended 
September 30, 1997, is $4,092,000. 

                                 24

<PAGE>

OTHER DATA (UNAUDITED)

    Estimated Funds from Operations and Cash Available for Distribution are 
calculated as follows:

<TABLE>
<CAPTION>
                                                         PERIOD FROM
                                                      FEBRUARY 12, 1997        NINE MONTHS      NINE MONTHS
                                                   (INCEPTION OF OPERATIONS)      ENDED            ENDED
                                                     THROUGH SEPTEMBER 30,     SEPTEMBER 30,    SEPTEMBER 30,
                                                             1997                 1997              1996
                                                   --------------------------  --------------   --------------
                                                          (HISTORICAL)                  (PRO FORMA)
<S>                                                     <C>                      <C>              <C>
Income before minority interest...................                  $7,511            $8,542            $5,290
Depreciation and amortization.....................                   2,061             2,509             2,600
Interest expense reduction for common stock
 equivalents......................................                      86                86                -
                                                                 -----------        ---------          --------
Funds from Operations.............................                   9,658            11,137             7,890

Adjustments:
  Noncash mortgage revenue........................                    (376)             (376)               -
  Estimated capital expenditures..................                    (390)             (510)             (457)
                                                                 -----------        ---------          --------
Cash Available for Distribution...................                   8,892            10,251             7,433
Additional Base Rent for courses not operational 
 during entire period.............................                      -                 -                923
                                                                 -----------        ---------          --------
Adjusted cash available for distribution..........                  $8,892           $10,251            $8,356
                                                                 -----------        ---------          --------
                                                                 -----------        ---------          --------
</TABLE>

    In accordance with the resolution adopted by the Board of Governors of 
the National Association of Real Estate Investment Trusts, Inc. ("NAREIT"), 
Funds From Operations represents net income (loss) (computed in accordance 
with generally accepted accounting principles ("GAAP")), excluding gains (or 
losses) from debt restructuring or sales of property, plus depreciation of 
real property, and after adjustments for unconsolidated partnership and joint 
ventures.  Funds From Operations should not be considered as an alternative 
to net income or other measurements under GAAP as an indicator of operating 
performance or to cash flows from operating investing or financial activities 
as a measure of liquidity.  Funds From Operations does not reflect working 
capital changes, cash expenditures for capital improvements or principal 
payments on indebtedness.  The Company believes that Funds From Operations is 
helpful to investors as a measure of the performance of an equity REIT, 
because along with cash flows from operating activities, financing activities 
and investing activities, it provides investors with an understanding of the 
ability of the Company to incur and service debt and make capital 
expenditures.  Compliance with the NAREIT definition of Funds From Operations 
is voluntary.  Accordingly, the Company's calculation of funds from 
operations in accordance with the NAREIT definition may be different than 
similarly titled measures used by other REITs. See "Distribution Policy."

    Noncash mortgage revenue represents the difference between interest 
revenue on the Participating Mortgage reported by the Company in according 
with GAAP and the actual cash payment to be received by the Company.  Pro 
forma income before minority interest for the nine months ended September 30, 
1996, reflects base rent from Legends of Virginia for the period during which 
the Golf Courses it leases from the Company, Stonehouse Golf Club and Royal 
New Kent, were actually operating (Stonehouse Golf Club opened in June 1996 
and Royal New Kent opened in August 1996).  The adjustment above reflects 
additional Base Rent payable during the Golf Courses' initial year of 
operations (i.e., to reflect a full year's initial Base Rent).  The 
Participating Leases require the Company to reserve annually between 2.0% and 
5.0% of the Gross Golf Revenues of the Golf Courses to fund capital 
expenditures.  Any capital expenditures in excess of such amounts will be 
funded by the Lessees. 

                                     25

<PAGE>


THE LEGENDS GROUP RESULTS OF OPERATIONS

    As part of the Formation Transactions, the Company acquired the following 
seven Initial Courses from The Legends Group:  Heritage Golf Club, Heathland, 
Moorland, Parkland, Oyster Bay, Royal New Kent and Stonehouse Golf Club.  
These seven Initial Courses are operated by four Legends Lessees.  The 
Legends Resort Courses--Heathland, Moorland and Parkland--share a common 
clubhouse, driving rang., golf carts and other facilities and are leased by a 
single Legends Lessee pursuant to a single Participating Lease.  The newly 
opened Initial Courses--Royal New Kent and Stonehouse Golf Club--are in 
similar stages of operation and are leased by a single Legend.  Lessee 
pursuant to separate Participating Leases.  Each of the other two Legends 
Initial Courses are leased by separate Legends Lessees.  

    The following discussion and analysis addresses the combined historical 
results of operations of the Initial Courses contributed by The Legends 
Group. However, the results of operations of such courses do not purport to 
represent the pro forma results of operations of the Legends Lessees or the 
Company and should not be used to assess the operating performance of the 
Legends Lessees or the Company.  Two of the Initial Courses contributed by 
The Legends Group, Stonehouse Golf Club and Royal New Kent, opened in June 
and August 1996, respectively.

    For purposes of financial presentation, the term "Legends Golf" refers to 
the combined operation of all seven Initial Courses contributed by The 
Legends Group, and the term "Golf Legends" refers to operations of the three 
Initial Courses located at the Legends Resort.

THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996

    Revenue from golf operations increased 28.8% from $2,713,000 to 
$3,494,000, the revenue per player increased from $49.47 to $53.64, 
and the total rounds played increased 8.4% from 54,839 to 65,136.  The 
increase in total number of rounds is primarily due to the opening of the two 
Legends of Virginia courses in mid-1996.  Of the 10,297 increase in rounds, 
Legends of Virginia, LC accounted for 7,600 rounds and a total revenue 
increase of $840,000.

    The number of rounds played significantly influences other revenue 
sources, including food and beverage and merchandise sales.  While the number 
of rounds increased 8.4% other revenue increased 34.3% to $1,089,000 from 
$811,000 principally due to a 27.6% increase in food and beverage sales 
resulting from additional demand created by occupants of the newly 
constructed golf villas at the Legends Resort and sales at Legends of 
Virginia, LC as well as a 13.3% increase in pro shop sales resulting 
principally from Legends of Virginia, LC sales.  Other income increased as a 
result of reinstituting the course photography.

    Operating expenses increased 58.2% to $7,304,000 from $4,618,000. 
Principal components of the $2,686,000 increase were (i) operating costs 
exclusive of lease payments to Golf Trust and depreciation expense of 
approximately $416,000 associated with the two Legends of Virginia courses 
opened in mid-1996, (ii) lease payments to Golf Trust, land lease payments to 
the prior owner and depreciation expense totaling $2,503,000 for 1997 
compared to $776,000 for 1996 (increase $1,727,000 when there were no lease 
payments to Golf Trust), and (iii) increased costs of the food and beverage 
operations consistent with the increase in sales, (iv) increased maintenance 
costs resulting from the addition of personnel to improve the quality of 
course maintenance.

    Interest expense decreased 94.8% to $19,000 from $368,000 as a result of 
lower borrowings outstanding related to debt for the courses which was 
transferred in connection with the Formation Transaction's retirement of debt.

    Equity in earnings of Golf Trust of America, LP results from the 
approximately 43% limited partnership interest held by Legends Golf.

    Net loss decreased $175,000 from $1,462,000 to $1,287,000 primarily as a 
result of the equity in earnings of Golf Trust of America, LP offset by 
additional rent expense.

                                    26

<PAGE>


NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996

    Revenue from golf operations increased 19.6% from $11,354,000 to 
$13,576,000, the revenue per player increased from $57.77 to $59.12, and the 
total rounds played increased 16.8% from 196,539 to 229,618.  The increase in 
total number of rounds is primarily due to the opening of the two Legends of 
Virginia courses in mid-1996.  Of the 33,079 increase in rounds, Legends of 
Virginia, LC accounted for 25,881 rounds and a total revenue increase of 
$1,822,000.

    The number of rounds played significantly influences other revenue 
sources, including food and beverage and merchandise sales.  While the number 
of rounds increased 16.8% other revenue increased 29.3% to $4,003,000 from 
$3,095,000 principally due to a 26.3% increase in food and beverage sales 
resulting from additional demand created by occupants of the newly 
constructed golf villas at the Legends Resort and sales at Legends of 
Virginia, LC as well as a 11.9% increase in pro shop sales resulting 
principally from Legends of Virginia, LC sales.  Other income increased as a 
result of reinstituting the course photography.

    Operating expenses increased 81.5% to $20,652,000 from $11,379,000. 
Principal components of the $9,273,000 increase were (i) additional operating 
costs exclusive of lease payments to Golf Trust and depreciation expense of 
approximately $1,056,000 associated with increased activity of the two 
Legends of Virginia courses opened in mid-1996, (ii) lease payments to Golf 
Trust, land lease payments to the prior owner and depreciation expense 
totaling $8,790,000 for 1997 compared to $2,319,000 for 1996 (increase 
$6,471,000) when there were no lease payments to Golf Trust (iii) $321,000 
attributable to clubhouse repairs at Golf Legends and Oyster Bay along with 
the addition of several maintenance personnel at all courses to improve the 
quality of the course maintenance, (iv) increased costs of the food and 
beverage operations consistent with the increase in sales, and (v) an 
increase of $656 in maintenance equipment lease expense.

    Interest expense decreased 50.3% to $439,000 from $883,000 as a result of 
lower borrowings outstanding related to debt for the courses which was 
transferred in connection with the Formation Transaction's retirement of debt.

    Equity in earnings of Golf Trust of America, LP results from the 
approximately 43% limited partnership interest held by Legends Golf.

    Net income decreased $2,330,000 from $2,187,000 to a loss of $1,143,000 
primarily as a result of the additional rent expense offset and the 
additional expenses of the new courses offset by the reduction in 
depreciation, land lease cost, interest and the equity in the earnings of 
Golf Trust of America, LP.

                                   27

<PAGE>


IMPORTANT FACTORS RELATED TO FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS

    The preceding section, "Management's Discussion and Analysis of Financial 
Condition and Results of Operations," and other sections of this Quarterly 
Report contain various "forward-looking statements" within the meaning of 
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the 
Securities Exchange Act of 1934, as amended, which represent the Company's 
expectations or beliefs concerning future events, including, without 
limitation, statements containing the words "believes," "anticipates," 
"expects," and words of similar import; and also including, without 
limitation, the following: statements regarding the Company's continuing 
ability to target and acquire high quality golf courses; the expected 
availability of the Line-of-Credit and other debt and equity financing; the 
sufficiency of the Company's working capital, cash flow and financing to 
support the Company's future operating and capital requirements; the Initial 
Lessees' future cash flows, results of operations and overall financial 
performance; the planned acquisition and/or financing of certain golf 
courses; the expected completion and acquisition of the Expansion Facilities; 
the expected dividend distribution rate; the intended limit on the Company's 
level of consolidated indebtedness; the expected tax treatment of the 
Company's operations; the Company's beliefs about continued growth in the 
golf industry; statements regarding the possible redemption of OP Units and 
exercise of the Lessee Performance Options; and the expected completion of 
real estate developments near certain Initial Courses.  Such forward-looking 
statements relate to future events and the future financial performance of 
the Company and the industry and involve known and unknown risks, 
uncertainties and other important factors which could cause actual results, 
performance or achievements of the Company or industry to differ materially 
from the future results, performance or achievements expressed or implied by 
such forward-looking statements.

    Investors should carefully consider the various factors identified in the 
preceding section, "Management's Discussion and Analysis of Financial 
Condition and Results of Operation," and elsewhere in this Quarterly Report 
that could cause actual results to differ materially from the results 
predicted in the forward-looking statements.  Further, the Company 
specifically cautions investors to consider the following important factors 
in conjunction with the forward-looking statements:  the possible decline in 
the Company's ability to locate and acquire quality golf courses and to 
negotiate acceptable lease terms; the possibility that Company management 
lacks the skills to manage the Company's planned process of acquisitions and 
expansions; the possible adverse effect of changing economic conditions, 
including interest rate movements and changes in the real estate market both 
locally and nationally; the effect of severe weather or natural disasters; 
and the effect of competitive pressures from other golf course acquirors and 
other golf course lessors.  Because of the foregoing factors, the actual 
results achieved by the Company in the future may differ materially from the 
expected results described in the forward-looking statements.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    Not applicable.

                                   28

<PAGE>


PART II:     OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

    Not applicable

ITEM 2.  CHANGES IN SECURITIES

(C) RECENT SALES OF UNREGISTERED SECURITIES.

    On August 18, 1997, the Company issued 21,429 shares of Common Stock to 
Granite Golf in connection with the acquisition of Tiburon Golf Club.  On 
September 2, 1997, the Operating Partnership issued 121,529 OP Units to the 
Prior Owner of Raintree Country Club in exchange for its interest in Raintree 
Country Club.  On September 19, 1997, the Company sold 70,000 shares of 
Common Stock to its executive officers pursuant to the New Stock Incentive 
Plan.  On September 30, 1997, the Company issued 70,158 OP Units to the Prior 
Owner of Eagle Watch.  On October 17, 1997, the Company issued 19,231 OP 
Units to the Prior Owner of Club of the Country.  These issuances were 
effected in reliance upon an exemption from registration under Section 4(2) 
of the Securities Act as a transaction not involving a public offering.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

    Not applicable.

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

    Not applicable

ITEM 5.  OTHER INFORMATION

    Not applicable.


                                       29

<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(A) EXHIBITS

    The following exhibits are part of this quarterly report on Form 10-Q for 
the quarterly period ended September 30, 1997 (and are numbered in accordance 
with Item 601 of Regulation S-K)

EXHIBIT NO.    DESCRIPTION
-------------------------------------------------------------------------------
3.1*           Articles of Amendment and Restatement of the Company, as filed 
               with the State Department of Assessments and Taxation of
               Maryland on January 31, 1997, (previously filed as Exhibit 3.1A 
               to the Company's Registration Statement on Form S-11
               (Commission File No. 333-15965) Amendment No. 2 (filed 
               January 30, 1997) and incorporated herein by reference).

3.2*           Bylaws of the Company as currently in effect (previously filed 
               as Exhibit 3.2 to the Company's Registration Statement on
               Form S-11 (Commission File No. 333-15965) Amendment No. 1 (filed
               January 15, 1997) and incorporated herein by reference).

10.1.0*        First Amended and Restated Agreement of Limited Partnership of 
               the Operating Partnership (the "Partnership Agreement")
               (previously filed as Exhibit 10.1 to the Company's Annual Report
               on Form 10-K (Commission File No. 000-22091), filed March
               31, 1997, and incorporated herein by reference).

10.1.1**       Exhibit A to the Partnership Agreement, as revised through the 
               date hereof.

10.4.2*        Contribution and Leaseback Agreement, dated as of August 29, 
               1997, by and among John J. Rainieri, Sr., Betty Rainieri and
               Raintree Country Club, Inc. and Golf Trust of America, L.P. 
               (previously filed as Exhibit 10.4.2 to the Company's 
               Registration Statement on Form S-11 (Commission File 
               No. 333-36847), filed September 30, 1997, and incorporated 
               herein by reference).

10.5*          Purchase and Sale Agreement, dated as of May 19, 1997, by and 
               between Tiburon Limited Partnership, as seller, and Granite
               Golf Group, Inc. as buyer. (previously filed as Exhibit 10.5 
               to the Company's Registration Statement on Form S-11
               (Commission File No. 333-36847), filed September 30, 1997, and
               incorporated herein by reference).

10.6*          Assignment and Assumption of Purchase and Sale Agreement, dated
               as of August 18, 1997, by and among Granite Golf Group, Inc.,
               as assignor, and Golf Trust of America, L.P., as assignee. 
               (previously filed as Exhibit 10.6 to the Company's Registration
               Statement on Form S-11 (Commission File No. 333-36847), filed 
               September 30, 1997 and incorporated herein by reference).

10.7*          Credit Agreement, dated as of June 20, 1997, by and among Golf 
               Trust of America, L.P., as Borrower, Golf Trust of America,
               Inc., GTA GP, Inc. and GTA LP, Inc., as Guarantors, the Lenders
               referred to therein, and NationsBank N.A., as Agent (previously 
               filed as Exhibit 10.1 to the Company's Current Report on 
               Form 8-K, dated June 20, 1997 and filed August 12, 1997, and 
               incorporated herein by reference).

10.8*          Loan Agreement, dated as of June 20, 1997, by and between Golf 
               Host Resorts, Inc., as Borrower, and Golf Trust of America, 
               L.P., as Lender (previously filed as Exhibit 10.2 to the 
               Company's Current Report on Form 8-K, dated June 20, 1997 and 
               filed August 12, 1997 and incorporated herein by reference).

10.9*          1997 Non-Employee Directors' Plan (previously filed as Exhibit 
               10.7 to the Company's Registration Statement on Form S-11 
               (Commission File No. 333-15965) Amendment No. 1 (filed January 
               15, 1997) and incorporated herein by reference).


                                          30

<PAGE>


10.10*         Golf Trust of America, Inc. 1997 Stock Incentive Plan 
               (previously filed as Exhibit 10.6 to the Company's 
               Registration Statement on Form S-11 (Commission File No. 
               333-15965) Amendment No. 1 (filed January 15, 1997) and 
               incorporated herein by reference).

10.11*         Golf Trust of America, Inc. 1997 Stock-Based Incentive Plan 
               (the "New Stock Incentive Plan") (previously filed as Exhibit 
               10.3 to the Company's Quarterly Report on Form 10-Q 
               (Commission File No. 000-22091), filed August 15, 1997, and 
               incorporated herein by reference).

10.12*         Form of Nonqualified Stock Option Agreement for use under the 
               New Stock Incentive Plan (previously filed as Exhibit 10.4 to 
               the Company's Quarterly Report on Form 10-Q (Commission File 
               No. 000-22091), filed August 15, 1997, and incorporated herein 
               by reference).

10.13*         Form of Employee Incentive Stock Option Agreement for use 
               under the New Stock Incentive Plan (previously filed as 
               Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q 
               (Commission File No. 000-22091), filed August 15, 1997, and 
               incorporated herein by reference).

10.14*         General Provisions Applicable to Restricted Stock Awards 
               Granted Under the New Stock Incentive Plan (previously filed 
               as Exhibit 10.14 to the Company's Registration Statement on 
               Form S-11 (Commission File No. 333-36847), filed September 30, 
               1997, and incorporated herein by reference).

10.15*         Form of Restricted Stock Award Agreement for use under the New 
               Stock Incentive Plan (previously filed as Exhibit 10.15 to the 
               Company's Registration Statement on Form S-11 (Commission File 
               No. 333-36847), filed September 30, 1997, and incorporated 
               herein by reference).

10.16*         Employment Agreement between the Company and W. Bradley Blair, 
               II dated February 7, 1997 (previously filed as Exhibit 10.7 to 
               the Company's Annual Report on Form 10-K (Commission File No. 
               000-22091), filed on March 31, 1997, and incorporated herein 
               by reference).

10.17*         Amended and Restated Employment Agreement between the Company 
               and David J. Dick, dated July 25, 1997(previously filed as 
               Exhibit 10.17 to the Company's Registration Statement on Form 
               S-11 (Commission File No. 333-36847), filed September 30, 
               1997, and incorporated herein by reference).

10.18*         Amended and Restated Employment Agreement between the Company 
               and Scott D. Peters, dated July 25, 1997(previously filed as 
               Exhibit 10.18 to the Company's Registration Statement on Form 
               S-11 (Commission File No. 333-36847), filed September 30, 
               1997, and incorporated herein by reference).


*Previously filed
**Filed herewith

(B) REPORTS ON FORM 8-K

(1) A current report on Form 8-K dated June 20, 1997 was filed on August 12,
    1997.  It disclosed the closings of the Line of Credit and the Innisbrook
    transaction.

(2) A current report on Form 8-K dated November 11, 1997 was filed on November
    12, 1997.  It disclosed the terms and conditions of the Company's agreement
    with the underwriters for the Company's recent equity stock offering.  


                                        31

<PAGE>

SIGNATURES

    Pursuant to the requirements 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.

                                       GOLF TRUST OF AMERICA, INC., registrant

Date:                                  /s/ W. BRADLEY BLAIR, III
---------------------------------      ---------------------------------------
                                       W. Bradley Blair, II
                                       PRESIDENT, CHIEF EXECUTIVE OFFICER AND 
                                       CHAIRMAN OF THE BOARD OF DIRECTORS

Date:                                   /s/ SCOTT D. PETERS
---------------------------------      ---------------------------------------
                                        Scott D. Peters
                                        SENIOR VICE PRESIDENT AND CHIEF 
                                        FINANCIAL OFFICER



                                       32