SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

         (Mark One)
 X       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
--       EXCHANGE ACT OF 1934

         For the quarterly period ended June 30, 2003 or

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

         For the transition period from ___________ to ___________

                          Commission File Number 1-9997

                               KOGER EQUITY, INC.
             (Exact name of registrant as specified in its charter)

                  FLORIDA                                       59-2898045
         (State or other jurisdiction of                      (I.R.S. Employer
         incorporation or organization)                     Identification No.)

      225 NE MIZNER BOULEVARD, SUITE 200
         BOCA RATON, FLORIDA                                  33432
     (Address of principal executive offices)               (Zip Code)

       Registrant's telephone number, including area code: (561) 395-9666

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
    -----     -----

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

                           Class                   Outstanding at July 31, 2003
              Common Stock, $.01 par value             21,323,773 shares


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                       KOGER EQUITY, INC. AND SUBSIDIARIES

                                      INDEX
                                                                                                              PAGE NO.

PART I.   FINANCIAL INFORMATION

<S>                                                                                                                <C>
            Independent Accountants' Report...............................................................         3

    Item 1.  Financial Statements (Unaudited):

            Condensed Consolidated Balance Sheets--
               June 30, 2003 and December 31, 2002........................................................         4

            Condensed Consolidated Statements of Operations
               for the Three and Six Months Ended
               June 30, 2003 and 2002.....................................................................         5

            Condensed Consolidated Statement of Changes in
               Shareholders' Equity for the Six Months
               Ended June 30, 2003 .......................................................................         6

            Condensed Consolidated Statements of Cash Flows
               for the Six Months Ended June 30, 2003 and 2002............................................         7

            Notes to Condensed Consolidated Financial
               Statements for the Six Months
               Ended June 30, 2003 and 2002...............................................................         8

    Item 2.  Management's Discussion and Analysis of Financial Condition
               and Results of Operations .................................................................        14

    Item 3. Quantitative and Qualitative Disclosures About Market Risk ...................................        18

    Item 4. Controls and Procedures ......................................................................        18

PART II. OTHER INFORMATION

    Item 1.  Legal Proceedings............................................................................        19

    Item 4.  Submission of Matters to a Vote of Security Holders..........................................        19

    Item 5.  Other Information............................................................................        20

    Item 6.  Exhibits and Reports on Form 8-K.............................................................        23

    Signatures and Certification..........................................................................    24, 25

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                                       2
<PAGE>




INDEPENDENT ACCOUNTANTS' REPORT

To the Board of Directors and Shareholders of
  Koger Equity, Inc.
Boca Raton, Florida:

We have reviewed the accompanying condensed consolidated balance sheet of Koger
Equity, Inc. and subsidiaries (the "Company") as of June 30, 2003, and the
related condensed consolidated statements of operations for the three-month and
six-month periods ended June 30, 2003 and 2002, the condensed consolidated
statement of changes in shareholders' equity for the six-month period ended June
30, 2003 and the condensed consolidated statements of cash flows for the
six-month periods ended June 30, 2003 and 2002. These financial statements are
the responsibility of the Company's management.

We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with auditing standards generally accepted in the United States of America, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should
be made to such condensed consolidated financial statements for them to be in
conformity with accounting principles generally accepted in the United States of
America.

We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the consolidated balance sheet of the
Company as of December 31, 2002, and the related consolidated statements of
operations, changes in shareholders' equity, and cash flows for the year then
ended (not presented herein); and in our report dated February 21, 2003, we
expressed an unqualified opinion on those consolidated financial statements. In
our opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of December 31, 2002 is fairly stated, in all
material respects, in relation to the consolidated balance sheet from which it
has been derived.




DELOITTE & TOUCHE LLP
Certified Public Accountants

West Palm Beach, Florida
July 18, 2003





                                       3
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                       KOGER EQUITY, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                (Unaudited - See Independent Accountants' Report)
                        (In thousands, except share data)

                                                                                           June 30,        December 31,
                                                                                             2003              2002
                                                                                         -----------        ----------
ASSETS
Real Estate Investments:
  Operating properties:
<S>                                                                                     <C>                   <C>
     Land                                                                               $   110,653           $   110,653
     Buildings                                                                              784,145               783,185
     Furniture and equipment                                                                  3,488                 3,320
     Accumulated depreciation                                                              (164,470)             (149,830)
                                                                                        ------------          -----------
          Operating properties, net                                                         733,816               747,328
   Undeveloped land held for investment                                                       9,995                 9,995
   Undeveloped land held for sale, net of allowance                                           3,041                 3,831
Cash and cash equivalents                                                                     4,741                 4,627
Restricted cash                                                                              14,417                13,340
Accounts receivable, net of allowance for
   uncollectible accounts of $1,558 and $1,280                                               13,007                12,183
Other assets                                                                                 17,721                13,781
                                                                                        -----------           -----------
     TOTAL ASSETS                                                                       $   796,738           $   805,085
                                                                                        ===========           ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
   Mortgages and loans payable                                                          $   426,371           $   431,698
   Accounts payable                                                                           2,648                 3,801
   Accrued real estate taxes payable                                                          7,997                   147
   Other accrued liabilities                                                                 10,889                13,435
   Dividends payable                                                                          7,463                 7,453
   Advance rents and security deposits                                                        5,224                 5,483
                                                                                        -----------           -----------
     Total Liabilities                                                                      460,592               462,017
                                                                                        -----------           -----------

Commitments and contingencies                                                                    --                    --
                                                                                        -----------           -----------

Shareholders' Equity:
   Preferred stock, $.01 par value; 50,000,000 shares
     authorized; no shares issued                                                                --                    --
   Common stock, $.01 par value; 100,000,000 shares
     authorized; 29,845,732 and 29,826,632 shares
     issued; 21,322,431 and 21,294,894 shares outstanding                                       298                   298
   Capital in excess of par value                                                           472,364               472,156
   Notes receivable from stock sales to officers                                             (5,266)               (5,266)
   Accumulated other comprehensive loss                                                        (212)                 (212)
   Retained earnings                                                                            613                 7,813
   Treasury stock, at cost; 8,523,301 and 8,531,738 shares                                 (131,651)             (131,721)
                                                                                        ------------          -----------
     Total Shareholders' Equity                                                             336,146               343,068
                                                                                        -----------           -----------
     TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                         $   796,738           $   805,085
                                                                                        ===========           ===========

See notes to unaudited condensed consolidated financial statements.

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                                       4
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<TABLE>
<CAPTION>


                       KOGER EQUITY, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                (Unaudited - See Independent Accountants' Report)
                      (In thousands, except per share data)

                                                                                  Three Months                       Six Months
                                                                                  Ended June 30,                    Ended June 30,
                                                                                  --------------                    --------------
                                                                              2003            2002             2003          2002
                                                                            ---------       --------         ---------     --------
REVENUES
<S>                                                                         <C>             <C>              <C>           <C>
   Rental and other rental services                                         $  35,964       $ 31,855         $  72,244     $  62,450
   Management fees                                                                126            963               331         1,751
   Other                                                                           --             --                 5             2
                                                                            ---------       --------         ---------     ---------
       Total operating revenues                                                36,090         32,818            72,580        64,203
                                                                            ---------       ---------        ---------     ---------

EXPENSES
   Property operations                                                         14,694         11,928            28,042        22,388
   Depreciation and amortization                                                8,156          6,731            16,612        13,252
   General and administrative                                                   3,086          2,947             6,030         5,457
   Direct costs of management fees                                                  2            822                88         1,833
   Other                                                                           31             49                67            82
                                                                            ---------       --------         ---------     ---------
       Total operating expenses                                                25,969         22,477            50,839        43,012
                                                                            ---------       --------         ---------     ---------

OPERATING INCOME                                                               10,121         10,341            21,741        21,191
                                                                            ---------       --------         ---------     ---------

OTHER INCOME AND (EXPENSE)
   Interest income                                                                 86             87               140           232
   Mortgage and loan interest, including amortization
     of deferred loan costs of $368 and $299 for the three
       months and $725 and $588 for the six months                             (7,367)        (6,029)          (14,770)     (11,823)
                                                                            ----------      ---------        ----------   ----------
       Total other income and (expense)                                        (7,281)        (5,942)          (14,630)     (11,591)
                                                                            ----------      ---------        ----------   ----------

INCOME BEFORE GAIN ON SALE OR DISPOSITION OF
  ASSETS, INCOME TAXES AND MINORITY INTEREST                                    2,840          4,399             7,111         9,600
Gain on sale or disposition of assets                                             589             --               589             1
                                                                            ---------       --------         ---------     ---------
INCOME BEFORE INCOME TAXES AND MINORITY INTEREST                                3,429          4,399             7,700         9,601
Income tax expense (benefit)                                                      (21)            62               (21)           93
                                                                            ----------      --------         ----------    ---------
INCOME BEFORE MINORITY INTEREST                                                 3,450          4,337             7,721         9,508
Minority interest                                                                  --             --                --            20
                                                                            ---------       --------         ---------     ---------
NET INCOME                                                                  $   3,450       $  4,337         $   7,721     $   9,488
                                                                            =========       ========         =========     =========

EARNINGS PER  SHARE:
   Basic                                                                    $    0.16       $   0.20         $    0.36     $    0.45
                                                                            =========       ========         =========     =========
   Diluted                                                                  $    0.16       $   0.20         $    0.36     $    0.44
                                                                            =========       ========         =========     =========

WEIGHTED AVERAGE SHARES:
   Basic                                                                       21,311         21,255            21,305        21,241
                                                                            =========       ========         =========     =========
   Diluted                                                                     21,382         21,469            21,335        21,408
                                                                            =========       ========         =========     =========

See notes to unaudited condensed consolidated financial statements.
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                                       5
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                                        KOGER EQUITY, INC. AND SUBSIDIARIES
                                      CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
                                                   SHAREHOLDERS' EQUITY
                                     (Unaudited - See Independent Accountants' Report)
                                                      (In thousands)

                                  Common Stock      Capital      Notes        Accumulated                          Total
                                  ------------      in Excess    Receivable   Other                                 Share-
                                Shares      Par     of Par       from Stock   Comprehensive Retained   Treasury     holders'
                                Issued      Value   Value        Sales        Loss          Earnings   Stock        Equity
                                ------      -----   -----        -------      ---------    --------   ----------   ------
BALANCE,
<S>        <C> <C>              <C>         <C>      <C>           <C>            <C>      <C>          <C>        <C>
  DECEMBER 31, 2002             29,827      $298     $472,156      $(5,266)       $(212)   $    7,813   $(131,721) $343,068

Common stock sold                                          64                                                  70       134
Options exercised                   19        --          144                                                           144
Dividends declared                                                                           (14,921)               (14,921)
Net income                                                                                     7,721                  7,721
                               --------     -----     --------    -------         ------    ---------  ----------    ------

BALANCE,
  JUNE 30, 2003                 29,846     $298      $472,364      $(5,266)       $(212)  $      613   $(131,651)  $336,146
                                ======     ====      ========      ========       ======  ==========    ========    =======

</TABLE>

See notes to unaudited condensed consolidated financial statements.


                                       6
<PAGE>

<TABLE>
<CAPTION>


                       KOGER EQUITY, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                (Unaudited - See Independent Accountants' Report)
                                 (In thousands)

                                                                                                   Six Months
                                                                                                  Ended June 30,
                                                                                             2003              2002
                                                                                         -----------        ----------
OPERATING ACTIVITIES
<S>                                                                                      <C>                <C>
   Net income                                                                            $   7,721          $   9,488
   Adjustments to reconcile net income to net cash
     provided by operating activities:
     Depreciation and amortization                                                          16,612             13,252
     Amortization of deferred loan costs                                                       725                588
     Provision for uncollectible accounts                                                      328                384
     Minority interest                                                                          --                 20
     Gain on sale or disposition of assets                                                    (589)                (1)
     Changes in assets and liabilities:
       (Increase) decrease in receivables and other assets                                    (536)             1,145
       Increase in accounts payable, accrued liabilities
         and other liabilities                                                               3,902              1,636
                                                                                         ---------          ---------
       Net cash provided by operating activities                                            28,163             26,512
                                                                                         ---------          ---------
INVESTING ACTIVITIES
   Property acquisitions                                                                        --           (125,354)
   Tenant improvements to first generation space                                            (2,627)            (1,059)
   Tenant improvements to existing properties                                               (2,644)            (1,976)
   Building improvements                                                                    (2,246)            (2,250)
   Deferred tenant costs                                                                    (1,101)            (1,035)
   (Additions to) disposals of furniture and equipment                                        (168)                95
   Increase in restricted cash                                                                (873)                --
   Purchase of limited partner interests in Koger-Vanguard Partnership, L.P.                    --            (16,465)
   Proceeds from sale of assets                                                              1,580                  1
                                                                                         ---------          ---------
       Net cash used in investing activities                                                (8,079)          (148,043)
                                                                                         ----------         ----------
FINANCING ACTIVITIES
   Proceeds from exercise of stock options                                                     134              2,121
   Proceeds from sales of common stock                                                         144                140
   Proceeds from mortgages and loans                                                        31,000             80,000
   Principal payments on mortgages and loans payable                                       (36,327)            (7,466)
   Dividends paid                                                                          (14,921)           (51,592)
   Distributions paid to limited partners                                                       --               (398)
   Financing costs                                                                              --                (80)
                                                                                         ---------          ----------
       Net cash (used in) provided by financing activities                                 (19,970)            22,725
                                                                                         ----------         ---------
Net increase (decrease) in cash and cash equivalents                                           114            (98,806)
Cash and cash equivalents - beginning of period                                              4,627            113,370
                                                                                         ---------          ---------
Cash and cash equivalents - end of period                                                $   4,741          $  14,564
                                                                                         =========          =========
SUPPLEMENTAL CASH FLOW INFORMATION
   Cash paid during the period for interest                                              $  13,910          $  11,023
                                                                                         =========          =========
   Cash paid during the period for income taxes                                          $      --          $     426
                                                                                         =========          =========

</TABLE>

See notes to unaudited condensed consolidated financial statements.


                                       7
<PAGE>


                       KOGER EQUITY, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               FOR THE SIX MONTHS
                          ENDED JUNE 30, 2003 AND 2002
                (Unaudited - See Independent Accountants' Report)

       1. BASIS OF PRESENTATION. The condensed consolidated financial statements
include the accounts of Koger Equity, Inc. and its wholly-owned subsidiaries
(the "Company" or "KE"). All material intercompany transactions and accounts
have been eliminated in consolidation. The financial statements have been
prepared in accordance with the rules and regulations of the Securities and
Exchange Commission related to interim financial statements.

During January 2002, the Company acquired all of the remaining limited
partnership units in Koger-Vanguard Partners, L.P., a Delaware limited
partnership (the "Partnership" or "KVP"), for approximately $16.5 million. These
partnership units were convertible into 999,710 shares of the Company's common
stock. The Company previously consolidated the Partnership with an associated
minority interest. The acquisition of this minority interest was recorded using
the purchase method of accounting. As a result, the excess of the fair value of
the acquired net assets over the purchase price (approximately $6.2 million) was
recorded as a reduction in the carrying value of the acquired fixed assets.

The accompanying condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto for the
year ended December 31, 2002, included in the Company's Form 10-K Annual Report
for the year ended December 31, 2002. The accompanying balance sheet at December
31, 2002 has been derived from the audited financial statements at that date and
is condensed.

All adjustments which, in the opinion of management, are necessary to fairly
present the results for the interim periods have been made. Certain prior year
amounts have been reclassified in order to conform to current year presentation.
Results of operations for the three and six months ended June 30, 2003 are not
necessarily indicative of the results to be expected for the full year.

       New Accounting Standards. Statement of Financial Accounting Standards
("SFAS") No. 142 discontinues the practice of amortizing goodwill and indefinite
lived intangible assets and initiates an annual review for impairment.
Impairment will be examined more frequently if certain indicators are
encountered. Intangible assets with a determinable useful life will continue to
be amortized over that period. The amortization provisions apply to goodwill and
intangible assets acquired after September 30, 2001. SFAS No. 142 is effective
for fiscal years beginning after December 15, 2001. The Company adopted the
Statement effective January 1, 2002. SFAS No. 142 also requires the separate
recognition of intangible assets acquired as part of an asset acquisition,
including the value attributable to leases in place and certain customer
relationships. The Company recorded $274,000 of the estimated value of leases in
place as part of its acquisition of Three Ravinia Drive in January 2002 and
$5,859,000 of the estimated value of leases in place as part of its acquisition
of The Lakes on Post Oak in December 2002. The Company intends to amortize these
intangible assets on a straight-line basis over the next four years.

In April 2002, the Financial  Accounting  Standards  Board ("FASB")  issued
SFAS No. 145,  "Rescission of FASB  Statements  No. 4, 44, and 64,  Amendment of
FASB Statement No. 13, and Technical  Corrections." This Statement rescinds SFAS
No. 4, "Reporting Gains and Losses from  Extinguishment of Debt." Under SFAS No.
4, all  gains  and  losses  from  extinguishment  of debt  were  required  to be
aggregated and, if material, classified as an extraordinary item, net of related
income tax effect.  Under SFAS No. 145, gains and losses from  extinguishment of
debt should be classified as extraordinary  items only if they meet the criteria
in  Accounting  Principles  Board  Opinion No. 30. SFAS No. 145 is effective for
fiscal years  beginning  after May 15, 2002. The Company's  adoption of SFAS No.
145  has not had a  material  impact  on its  condensed  consolidated  financial
statements.


                                       8
<PAGE>


In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." This Statement applies to costs associated
with an exit activity that does not involve an entity newly acquired in a
business combination, an asset retirement obligation covered by SFAS No. 143 or
with a disposal activity covered by SFAS No. 144. SFAS No. 146 requires that a
liability for a cost associated with an exit or disposal activity shall be
recognized and measured initially at its fair value in the period in which the
liability is incurred provided that such fair value can be reasonably estimated.
An exception applies for certain one-time termination benefits that are incurred
over time. The Company adopted SFAS No. 146 effective January 1, 2003. The
Company's adoption of SFAS No. 146 has not had a material impact on its
condensed consolidated financial statements.

In November 2002, the FASB issued FASB Interpretation ("FIN") No. 45,
"Guarantor's Accounting and Disclosure Requirements for Guarantees of
Indebtedness of Others." FIN No. 45 requires certain guarantees to be recorded
at fair value and also requires significant new disclosures related to
guarantees, even when the likelihood of making any payments under the guarantee
is remote. FIN No. 45 generally applies to contracts or indemnification
agreements that contingently require the guarantor to make payments to the
guaranteed party based on changes in an underlying variable that is related to
an asset, liability, or an equity security of the guaranteed party. FIN No. 45
is effective for guarantees issued or modified after December 31, 2002. The
Company adopted FIN No. 45 effective January 1, 2003. The Company's adoption of
FIN No. 45 has not had a material impact on its condensed consolidated financial
statements.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation--Transition and Disclosure." SFAS No. 148 amends SFAS No. 123,
"Accounting for Stock-Based Compensation," to provide alternative methods of
transition to the fair value method of accounting for stock-based employee
compensation. In addition, SFAS No. 148 amends the disclosure provisions of SFAS
No. 123 to require prominent disclosure about the effects of an entity's
accounting policy with respect to stock-based employee compensation on reported
net income and earnings per share in annual and interim financial statements.
SFAS No. 148 does not amend SFAS No. 123 to require companies to account for
their employee stock-based awards using the fair value method. However, the
disclosure provisions are required for all companies with stock-based employee
compensation, regardless of whether they utilize the fair value method of
accounting described in SFAS No. 123 or the intrinsic value method described in
APB Opinion No. 25, "Accounting for Stock Issued to Employees." SFAS No. 148's
transition provisions are effective for fiscal years ending after December 15,
2002. The Company adopted the interim disclosure provisions of SFAS No. 148
effective January 1, 2003. The Company's adoption of SFAS No. 148 has not had a
material impact on its condensed consolidated financial statements.

In January 2003, the FASB issued FIN No. 46, "Consolidation of Variable Interest
Entities," which is intended to clarify the application of ARB No. 51,
"Consolidated Financial Statements" to certain entities in which equity
investors do not have the characteristics of a controlling financial interest or
do not have sufficient equity at risk for the entity to finance its activities
without additional subordinated financial support. FIN No. 46 requires the
consolidation of variable interest entities ("VIEs") in which the variable
interest will absorb a majority of the entity's expected losses if they occur,
receive a majority of the entity's expected residual returns if they occur, or
both. FIN No. 46 is effective for VIEs created after January 31, 2003. The
Company's adoption of FIN No. 46 has not had a material impact on its condensed
consolidated financial statements.

2. ORGANIZATION. Koger Equity, Inc. ("KE"), a Florida corporation, was
incorporated in 1988 to own and manage commercial office buildings and other
income-producing properties. KE is a self-administered and self-managed real
estate investment trust (a "REIT") and its common stock is listed on the New
York Stock Exchange under the ticker symbol "KE." As of June 30, 2003, KE owned
and managed 124 office buildings containing 8.93 million rentable square feet,
primarily located within 16 suburban office projects in nine cities in the
Southeastern United States and Houston, Texas.

In addition to managing its own properties, the Company provided asset
management services to Crocker Realty Trust, a related party. In 2002, the
Company managed 70 office buildings for AP-Knight LP, a related party. The
Company and AP-Knight LP terminated this property management agreement effective
December 31, 2002. The Company and Crocker Realty Trust terminated the asset
management agreement on May 1, 2003.


                                       9
<PAGE>

3. CRITICAL ACCOUNTING POLICIES AND ESTIMATES. The preparation of condensed
consolidated financial statements in conformity with accounting principles
generally accepted in the United States of America requires the Company to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, revenues, and expenses and the disclosure of contingent assets and
liabilities. These estimates are based on historical experience and various
other factors that are believed to be reasonable under the circumstances.
However, actual results could differ from the Company's estimates under
different assumptions or conditions. On an ongoing basis, the Company evaluates
the reasonableness of its estimates.

The Company believes the following critical accounting policies affect the
significant estimates and assumptions used in the preparation of its condensed
consolidated financial statements:

         Investments in Real Estate. Rental property and improvements, including
interest and other costs capitalized during construction, are included in real
estate investments and are stated at cost. Expenditures for ordinary maintenance
and repairs are expensed to operations as they are incurred. Significant
renovations and improvements, which improve or extend the useful life of the
assets, are capitalized. Except for amounts attributed to land, rental property
and improvements are depreciated as described below.

The Company recognizes gains on the sale of property in accordance with SFAS No.
66. Revenues from sales of property are recognized when a significant down
payment is received, the earnings process is complete and the collection of any
remaining receivables is reasonably assured.

In September 2002, the Company entered into an agreement to sell approximately
14.5 acres of undeveloped land at its Atlanta Gwinnett property for
approximately $3.6 million. This sale is contingent on certain zoning revisions
and is expected to close in the fourth quarter of 2003.

Additionally, the Company entered an agreement to sell approximately 7.7 acres
of undeveloped land at its Charlotte Carmel property for approximately $1.6
million. This sale was closed in the second quarter of 2003.

         Depreciation and Amortization. The Company computes depreciation on its
operating properties using the straight-line method based on estimated useful
lives of three to 40 years. A significant portion of the acquisition cost of
each operating property is allocated to the acquired buildings (usually 85% to
90%). The allocation of the acquisition cost to buildings and the determination
of the useful lives are based on the Company's estimates. If the Company were to
allocate acquisition costs inappropriately to buildings or to incorrectly
estimate the useful lives of its operating properties, it may be required to
adjust future depreciation expense. Deferred tenant costs (leasing commissions
and tenant relocation costs) are amortized over the term of the related leases.
Intangible assets recorded under the terms of SFAS No. 142 are amortized over
the average life of the underlying leases.

         Impairment of Long-Lived Assets. The Company's long-lived assets
include investments in real estate. The Company assesses impairment of
long-lived assets whenever changes or events indicate that the carrying value
may not be recoverable. The Company assesses impairment of operating properties
based on the operating cash flows of the properties. In performing its
assessment, the Company must make assumptions regarding estimated future cash
flows and other factors to determine the fair value of the respective assets.
During the quarter ended June 30, 2003, no impairment charges were recorded. If
these estimates or their related assumptions change in the future, the Company
may be required to record impairment charges.

         Revenue Recognition. Rental income is generally recognized over the
lives of leases according to provisions of the underlying lease agreements.
Certain leases provide for tenant occupancy during periods for which no rent is
due or where minimum rent payments increase during the term of the lease. For
these leases, the Company records rental income for the full term of each lease
on a straight-line basis. For the quarters ended June 30, 2003 and 2002, the
recognition of rental revenues on a straight-line basis for applicable leases
increased rental revenues by $1,075,000 and $534,000, respectively, over the
amount which would have been recognized based upon the contractual provisions of
these leases. For the six months ended June 30, 2003 and 2002, the recognition


                                       10
<PAGE>

of rental revenues on a straight-line basis for applicable leases increased
rental revenues by $2,370,000 and $994,000, respectively, over the amount which
would have been recognized based upon the contractual provisions of these
leases.

The Company generates management fees and leasing commissions income by
providing on-site property management and leasing services to third party
owners. Management fees are generally earned monthly and are a based on a
percentage of the managed properties' monthly rental and other operating
revenues. Leasing commissions are earned when the Company, on behalf of the
third party owner, negotiates or assists in the negotiation of new leases,
renewals and expansions of existing leases, and are generally a percentage of
rents to be received under the initial term of the respective leases.

The management and leasing agreements between the Company and third party owners
generally are based on annually renewable terms and may be terminated in certain
cases and for certain reasons by either party with a 30 to 90 day (depending on
the terms of the specific agreement) notice.

         Allowances for Doubtful Accounts. The Company maintains allowances for
doubtful accounts for estimated losses resulting from the inability of its
tenants to make required payments for rents and other rental services. In
assessing the recoverability of these receivables, the Company makes assumptions
regarding the financial condition of the tenants based primarily on past payment
trends and certain financial information that tenants submit to the Company. If
the financial condition of the Company's tenants were to deteriorate and result
in an impairment of their ability to make payments, the Company may be required
to increase its allowances by recording additional bad debt expense. Likewise,
should the financial condition of its tenants improve and result in payments or
settlements of previously reserved amounts, the Company may be required to
record a reduction in bad debt expense.

      Minority Interest. During 1998, KE acquired a suburban office park in
Charlotte, North Carolina for a purchase price of $52.3 million. The transaction
was structured as a contribution of the property to KVP in exchange for 999,710
limited partner units valued at $22.95 million. In connection with this
transaction, KVP assumed $22.2 million of debt and received a contribution of
$7.2 million from KE in exchange for general partner interests. The limited
partner units were entitled to a cumulative preferred return, which approximated
the average dividend rate on KE's shares. In addition, the limited partner units
carried with them the right to redeem the units for common shares of KE on a
one-unit-for-one-share basis or, at the option of KE, the units may be redeemed
for cash.

KE's general partner interests included a majority of the partnership's voting
rights, and the limited partners were not granted any veto or additional control
rights. Therefore, KE has reported KVP's assets, liabilities and operations in
its condensed consolidated financial statements. The limited partnership units
and earnings thereon were reported as minority interests.

During January 2002, the Company acquired all of the remaining limited
partnership units in KVP for approximately $16.5 million. These partnership
units were convertible into 999,710 shares of the Company's common stock.

      Federal Income Taxes. The Company is qualified and has elected tax
treatment as a real estate investment trust under the Internal Revenue Code (a
"REIT"). A corporate REIT is a legal entity that owns income-producing real
property, and through distributions of income to its shareholders, is permitted
to reduce or avoid the payment of federal income taxes at the corporate level.
To maintain qualification as a REIT, the Company must distribute to shareholders
at least 90 percent of REIT taxable income. To the extent that the Company pays
dividends equal to 100 percent of REIT taxable income, the earnings of the
Company are taxed at the shareholder level. However, the use of net operating
loss carryforwards, which may reduce REIT taxable income to zero, are limited
for alternative minimum tax purposes. Distributed capital gains on sales of real
estate are not subject to tax; however, undistributed capital gains are taxed as
capital gain. Although Koger Realty Services, Inc.("KRSI") is consolidated with
the Company for financial reporting purposes, this entity is subject to federal
income tax and files separate federal and state income tax returns.


                                       11
<PAGE>

      Stock Options. Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" requires expanded disclosures of
stock-based compensation arrangements with employees and encourages (but does
not require) compensation cost to be measured based on the fair value of the
equity instrument awarded. Companies are permitted, however, to continue to
apply Accounting Principles Board Opinion No. 25 ("APB 25"), which recognizes
compensation cost based on the intrinsic value of the equity instrument awarded.
The Company has continued to apply APB 25 to its stock based compensation awards
to employees and has disclosed the required pro forma effect on net income and
earnings per share.

                                                        Three Months
                                                        Ended June 30,
                                                    2003              2002
                                                ------------------------------
Net income - As reported                         $3,450,000        $4,337,000
             - Pro forma                         $3,236,000        $4,122,000
Diluted earnings per share - As reported              $0.16             $0.20
                             - Pro forma              $0.15             $0.19


                                                          Six Months
                                                        Ended June 30,
                                                    2003              2002
                                                ------------------------------
Net income - As reported                          $7,721,000       $9,488,000
             - Pro forma                          $7,294,000       $8,863,000
Diluted earnings per share - As reported              $0.36             $0.44
                             - Pro forma              $0.34             $0.41


      Fair Value of Financial Instruments. The Company believes the carrying
amount of its financial instruments (temporary investments, accounts receivable,
and accounts payable) is a reasonable estimate of fair value of these
instruments. Based on a market interest rate of 7.0 percent, the fair value of
the Company's mortgages and loans payable would be approximately $429.9 million
at June 30, 2003.

      Cash and Cash Equivalents. Cash in excess of daily requirements is
invested in short-term monetary securities. Such temporary cash investments have
an original maturity of less than three months and are deemed to be cash
equivalents for purposes of the condensed consolidated financial statements.

      Restricted Cash. Restricted cash represents amounts contractually placed
in escrow for purposes of making payments for certain future building
improvements, tenant allowances, leasing commissions, real estate taxes, and
debt service.

       4. FEDERAL INCOME TAXES. KE is qualified and has elected tax treatment as
a REIT under the Internal Revenue Code. A REIT is a taxable corporation that
owns income-producing real property, and through distributions of income to its
shareholders, is permitted to reduce or avoid the payment of federal income
taxes at the corporate level. To maintain qualification as a REIT, in addition
to certain other requirements, KE must distribute to shareholders at least 90
percent of REIT taxable income. To the extent that KE pays dividends equal to
100 percent of REIT taxable income, the taxable earnings of KE are taxed at the
shareholder level. KE has a net operating loss carryforward of approximately
$2,414,000, which may be used to reduce REIT taxable income. However, the use of
net operating loss carryforwards is limited for alternative minimum tax
purposes. During the first quarter of 2002, the Company made payments of
approximately $385,000 for the Company's 2001 estimated alternative minimum tax
liability. These payments were refunded to the Company during the fourth quarter
of 2002.

Although KRSI is consolidated with KE for financial reporting purposes, this
entity is subject to federal income tax and files separate federal and state
income tax returns. KRSI operated at a net loss for the first six months of 2003
and has, therefore, recorded no provision for federal income taxes for the three
and six months ended June 30, 2003.

       5. STATEMENTS OF CASH FLOWS. Cash in excess of daily requirements is
invested in short-term monetary securities. Such temporary cash investments have
an original maturity date of less than three months and are deemed to be cash
equivalents for purposes of the statements of cash flows.

During January 2002, the Company acquired all of the remaining limited
partnership units in Koger-Vanguard Partners, L.P., a Delaware limited
partnership, for approximately $16.5 million. These partnership units were
convertible into 999,710 shares of the Company's common stock.



                                       12
<PAGE>

On January 31, 2002, the Company acquired a 31-story office building located in
Atlanta, Georgia and containing approximately 800,000 rentable square feet for
$125.0 million and other transaction costs. The purchase of the property was
funded with cash and by an $80 million draw from the Company's secured revolving
credit facility. As of June 30, 2003, approximately 67% of the property's
rentable space was leased.

During the second quarter of 2003, the Company sold approximately 7.7 acres of
undeveloped land at its Charlotte Carmel property for approximately $1.6 million
and recognized a gain of approximately $585,000.

       6. EARNINGS PER COMMON SHARE. Basic earnings per common share has been
computed based on the weighted average number of shares of common stock
outstanding for each period. Diluted earnings per common share is similar to
basic earnings per share except that the weighted average number of common
shares outstanding is increased to include the number of additional common
shares that would have been outstanding if the dilutive common shares underlying
the options had been issued. The treasury stock method is used to calculate
dilutive shares which reduces the gross number of dilutive shares by the number
of shares purchasable from the proceeds of the options assumed to be exercised.
See Exhibit 11 for weighted average number of shares of common stock
outstanding, dilutive shares, and computations of basic and diluted earnings per
share.

       7. MORTGAGES AND LOANS PAYABLE. At June 30, 2003, the Company had
$426,371,000 of loans outstanding, which are collateralized by mortgages on the
Company's operating properties. Annual maturities for mortgages and loans
payable are summarized as follows (in thousands):
<TABLE>
<CAPTION>

                           Year Ending December 31,
<S>                           <C>                                         <C>
                              2003                                        $    2,593
                              2004                                           113,631
                              2005                                             6,112
                              2006                                            23,706
                              2007                                            98,098
                              Subsequent Years                               182,231
                                                                          ----------
                                    Total                                 $  426,371
                                                                          ==========
</TABLE>

       8. DIVIDENDS. The Company paid quarterly dividends of $0.35 per share on
February 6, 2003 to shareholders of record on December 31, 2002. The Company
paid quarterly dividends of $0.35 per share on May 1, 2003 to shareholders of
record on March 31, 2003. During the quarter ended June 30, 2003, the Company's
Board of Directors declared a quarterly dividend of $0.35 per share payable on
August 7, 2003 to shareholders of record on June 30, 2003. The Company currently
expects that significantly all dividends paid for 2003 will be treated as
ordinary income to the recipient for income tax purposes.

       9. SEGMENT REPORTING. The Company operates in one business segment, the
ownership and management of commercial real estate. The Company's primary
business is the ownership, development, and operation of income-producing office
properties. Management operates each property as an individual operating segment
and has aggregated these operating segments into a single segment for financial
reporting purposes due to the fact that all of the individual operating segments
have similar economic characteristics. All of the Company's operations are
located in the Southeastern United States and Houston, Texas.

       10. NOTES RECEIVABLE FROM STOCK SALES. On February 17, 2000, and in
conjunction with the Company's plan to repurchase up to 2.65 million shares of
common stock (the "Shares"), the Board of Directors granted to Mr. Thomas J.
Crocker, Chief Executive Officer, the right to purchase up to 500,000 Shares and
to Mr. Robert E. Onisko, former Chief Financial Officer, the right to purchase
up to 150,000 Shares. These officers were entitled to make purchases of one
Share for every three Shares purchased by the Company as part of this plan. The
Shares were to be purchased from the Company at the same time and for the same
price as the Company purchased Shares. In addition, the Company agreed to loan


                                       13
<PAGE>

up to 75% of the purchase price for the Shares to Mr. Crocker and to Mr. Onisko.
These loans are collateralized by the Shares purchased. These loans bear
interest at 150 basis points over the applicable LIBOR rate. Approximately
$861,000 of these loans are subject to recourse and the remaining loans will be
without recourse. Accrued interest on these loans is a recourse obligation and
any paid interest is not refundable if the stock is returned in settlement of
the loans. In 2000, Mr. Crocker acquired 302,495 Shares and Mr. Onisko acquired
100,831 Shares under this plan. In 2002, Mr. Crocker acquired 17,875 Shares and
Mr. Onisko acquired 1,659 Shares under this plan. The Company's loans to Mr.
Crocker and Mr. Onisko were made under the terms of a contract which precedes
the Sarbanes-Oxley Act.

       11. SUBSEQUENT EVENT. On August 4, 2003, the Company entered into a
binding agreement to acquire two properties known as the Rosemeade and CIGNA
buildings in Dallas, Texas for approximately $33.2 million. The two office
buildings combined contain approximately 280,000 square feet of rentable space
and are to be acquired from State Teachers Retirement System of Ohio, an
unrelated third party.

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

The following discussion should be read in conjunction with the condensed
consolidated financial statements and related notes appearing elsewhere in this
Form 10-Q, and the Management's Discussion and Analysis of Financial Condition
and Results of Operations included in the Company's Annual Report on Form 10-K
for the period ended December 31, 2002.

During January 2002, the Company acquired all of the remaining limited
partnership units in Koger-Vanguard Partners, L.P., a Delaware limited
partnership, for approximately $16.5 million. These partnership units were
convertible into 999,710 shares of the Company's common stock.

On January 31, 2002, the Company acquired Three Ravinia Drive, an 800,000 square
foot office building located in Atlanta, Georgia, for approximately $125.0
million and other transaction costs. As of June 30, 2003, approximately 67% of
the property's rentable space was leased.

On December 6, 2002, the Company acquired The Lakes on Post Oak, an 1.2 million
square foot, suburban three office building complex located in Houston, Texas,
for approximately $101.5 million and other transaction costs. The Company
allocated approximately $12.4 million and $90.7 million of the net purchase
price to the value of the acquired land and building, respectively. As of June
30, 2003, approximately 74% of the property's rentable space was leased.

RESULTS OF OPERATIONS

Rental and other rental services revenues totaled $35,964,000 for the quarter
ended June 30, 2003, compared to $31,855,000 for the quarter ended June 30,
2002. Rental and other rental services revenues totaled $72,244,000 for the six
months ended June 30, 2003, compared to $62,450,000 for the six months ended
June 30, 2002. These increases resulted primarily from the acquisition of The
Lakes on Post Oak property in December 2002 ($4.7 million and $9.5 million for
the quarter and six months ended June 30, 2002, respectively) and an increase in
rental revenues from the Three Ravinia Drive property acquired on January 31,
2002 ($400,000 and $2.0 million for the quarter and six months ended June 30,
2002, respectively). The effect of these increases was partially offset by a
decline in rental revenues at the remainder of the Company's properties. At June
30, 2003, the Company's buildings were on average 82 percent occupied with an
average rental rate of $17.20 per rentable square foot. Excluding Three Ravinia
Drive and The Lakes on Post Oak, which were considered to be in lease-up periods
at June 30, 2003, the remainder of the Company's buildings were on average 86
percent occupied. At June 30, 2002, the Company's buildings were on average 87
percent occupied with an average rental rate of $16.74 per rentable square foot.


                                       14
<PAGE>

Management fee revenues totaled $126,000 for the quarter ended June 30, 2003,
compared to $963,000 for the quarter ended June 30, 2002. Management fee
revenues totaled $331,000 for the six months ended June 30, 2003, compared to
$1,751,000 for the six months ended June 30, 2002. These decreases were due
primarily to the loss of fees from the AP-Knight LP management agreement that
was terminated in December 2002 and the loss of fees from the Crocker Realty
Trust management agreement that was terminated in May 2003.

Property operations expense includes such charges as utilities, real estate
taxes, janitorial, maintenance, property insurance, provision for uncollectible
rents and management costs. The amount of property operations expense and its
percentage of total rental revenues for the applicable periods are as follows:
<TABLE>
<CAPTION>

                                                                                       Percent of
                                                                                     Rental and Other
            Period                                           Amount                  Rental Services
 ------------------------------------                    --------------             ------------------

<S>  <C> <C>                                       <C>                                   <C>
June 30, 2003--Quarter                             $          14,694,000                 40.9%
June 30, 2002--Quarter                             $          11,928,000                 37.4%
June 30, 2003--Six Months                          $          28,042,000                 38.8%
June 30, 2002--Six Months                          $          22,388,000                 35.8%
</TABLE>


These increases in property operations expenses were due primarily to increases
in the Company's expenditures for property insurance and maintenance and
an increase in the Company's provision for bad debts in 2003 as compared to the
same periods in 2002.

Depreciation expense has been calculated on the straight-line method based upon
the useful lives of the Company's depreciable assets, generally 3 to 40 years.
Depreciation expense increased $1,112,000 for the three months ended June 30,
2003, compared to the same period in 2002. Depreciation expense increased
$2,288,000 for the six months ended June 30, 2003, compared to the same period
in 2002. These increases were due primarily to the Company's acquisition of the
Three Ravinia Drive property on January 31, 2002, and the acquisition of The
Lakes on Post Oak property in December 2002. Amortization expense increased
$313,000 for the three months ended June 30, 2003, compared to the same period
in 2002. Amortization expense increased $1,072,000 for the six months ended June
30, 2003, compared to the same period in 2002. These increases were due
primarily to an increase in the Company's expenditures for deferred tenant costs
and the amortization of the recorded fair value of leases acquired in the
purchases of Three Ravinia Drive and The Lakes on Post Oak.

General and administrative expenses for the three months ended June 30, 2003 and
2002, totaled $3,086,000 and $2,947,000, respectively. General and
administrative expenses for the six months ended June 30, 2003 and 2002, totaled
$6,030,000 and $5,457,000, respectively. These increases were due primarily to
an increase in professional fees, a reduction in the allocation of corporate
overhead to direct costs of management fees, the cost of relocating the
Company's corporate management offices, and the write off of certain amounts
related to abandoned development projects. These increases were partially offset
by reduced accruals for special distributions payable to certain of the
Company's executive officers. Additionally, the Company accrued certain amounts
during the second quarter of 2003 that are payable to the Company's former Chief
Financial Officer under the terms of a settlement agreement.

Direct costs of management fees decreased $820,000 the three months ended June
30, 2003, compared to the same period in 2002. Direct costs of management fees
decreased $1,745,000 the six months ended June 30, 2003, compared to the same
period in 2002. These decreases were due primarily to the loss of the AP-Knight
LP management agreement that was terminated in December 2002 and the loss of the
Crocker Realty Trust asset management agreement that was terminated in May 2003.

Interest revenues decreased $92,000 for the six months ended June 30, 2003
compared to the same period in 2002. This decrease was due primarily to a
decline in the Company's average invested cash balances.


                                       15
<PAGE>

For the three months ended June 30, 2003, interest expense increased to
$7,367,000 from $6,029,000 for the three months ended June 30, 2002. For the six
months ended June 30, 2003, interest expense increased to $14,770,000 from
$11,823,000 for the six months ended June 30, 2002. These increases were due
primarily to an increase in the Company's average debt balance in 2003 as
compared to 2002 primarily due to the Company's acquisition of The Lakes on Post
Oak in December 2002. At June 30, 2003 and 2002, the weighted average interest
rate on the Company's outstanding debt was approximately 6.42 percent and 7.04
percent, respectively.

LIQUIDITY AND CAPITAL RESOURCES

       Operating Activities-- During the six months ended June 30, 2003, the
Company generated approximately $28.2 million in net cash from operating
activities. The Company's primary internal sources of cash are the collection of
rents from buildings owned by the Company. As a REIT for federal income tax
purposes, the Company is required to pay out annually, as dividends, at least 90
percent of its REIT taxable income (which, due to non-cash charges, including
depreciation and net operating loss carryforwards, may be substantially less
than cash flow). In the past, the Company has paid out dividends in amounts at
least equal to its REIT taxable income. The Company believes that its cash
provided by operating activities will be sufficient to cover debt service
payments and to pay the dividends required to maintain REIT status through 2003.
Dividends are determined quarterly by the Company's board of directors.

The level of cash flow generated by rents depends primarily on the occupancy
rates of the Company's buildings and changes in rental rates on new and renewed
leases and under escalation provisions in existing leases. At June 30, 2003,
leases representing approximately 13.2 percent of the gross annualized rent from
the Company's properties, without regard to the exercise of options to renew,
were due to expire during the remainder of 2003. These scheduled expirations
represent 208 leases for space in buildings located in 15 of the 16 centers or
locations in which the Company owns buildings. Certain of these tenants may not
renew their leases or may reduce their demand for space. During the six months
ended June 30, 2003, leases were renewed on approximately 44 percent of the
Company's rentable square feet that were scheduled to expire during the
six-month period. Current market conditions in certain markets may require that
rental rates at which leases are renewed or at which vacated space is leased be
lower than rental rates under existing leases. Based upon the amount of leases
that will expire during 2003 and the competition for tenants in the markets in
which the Company operates, the Company has and expects to continue to offer
incentives to certain new and renewal tenants. These incentives may include the
payment of tenant improvement costs and, in certain markets, reduced rents
during initial lease periods.

Governmental tenants (including the State of Florida and the United States
Government) which account for approximately 24 percent of the Company's occupied
space at June 30, 2003 may be subject to budget reductions in times of recession
and governmental austerity measures. Consequently, there can be no assurance
that governmental appropriations for rents may not be reduced. Additionally,
certain of the private sector tenants that have contributed to the Company's
rent stream may reduce their current demands, or curtail their future need, for
additional office space. During 2002, the State of Florida eliminated its
Department of Labor, which has had an adverse impact on the Company's property
in Tallahassee.

Historically, the Company has benefited from generally positive economic
conditions and stable occupancy levels for office buildings in many of the
metropolitan areas in which the Company owns buildings. The Company believes
that the Southeastern and Southwestern United States provides significant
economic growth potential due to diverse regional economies, expanding
metropolitan areas, skilled work force and moderate labor costs. However, the
Company is currently experiencing reduced demand in the markets in which it owns
buildings. Cash flow from operations could be reduced if a weakened economy
continues to result in lower occupancy rates and lower rental income for the
Company's buildings, which may in turn affect the amount of dividends paid by
the Company.

       Investing Activities-- During January 2002, the Company acquired all of
the remaining limited partnership units in Koger-Vanguard Partners, L.P., a
Delaware limited partnership, for approximately $16.5 million. These partnership
units were convertible into 999,710 shares of the Company's common stock.


                                       16
<PAGE>

On January 31, 2002, the Company acquired Three Ravinia Drive, an 800,000 square
foot office building located in Atlanta, Georgia, for approximately $125.0
million and other transaction costs. The Company allocated approximately $7.0
million and $118.3 million of the net purchase price to value of the acquired
land and building, respectively. As of June 30, 2003, approximately 67% of the
property's rentable space was leased.
During the second quarter of 2003, the Company sold approximately 7.7 acres of
undeveloped land at its Charlotte Carmel property for approximately $1.6
million.

At June 30, 2003, substantially all of the Company's invested assets were in
real properties. Improvements to the Company's existing properties have been
financed through internal operations and lender required escrow accounts at The
Lakes on Post Oak. During the six months ended June 30, 2003, the Company's
expenditures for improvements to first generation space and to existing
properties increased $1.6 million from the corresponding period in 2002. This
increase was due primarily to increased tenant allowances for capital
improvements.

       Financing Activities-- The Company has a $100 million secured revolving
credit facility ($31.0 million of which had been borrowed on June 30, 2003)
provided by Fleet Bank. During the six months ended June 30, 2003, the Company
used a portion of its revolving credit facility to pay off a $7.7 million loan
with New York Life Insurance Company. At June 30, 2003, the Company had no
unencumbered properties. Loan maturities and normal amortization of mortgages
and loans payable are expected to total approximately $2.6 million during the
remainder of calendar year 2003.

The foregoing discussion contains forward-looking statements concerning 2003.
The actual results of operations for 2003 could differ materially from those
projected because of factors affecting the financial markets, reactions of the
Company's existing and prospective investors, the ability of the Company to
identify and execute development projects and acquisition opportunities, the
ability of the Company to renew and enter into new leases on favorable terms
with creditworthy tenants, and other risk factors. See Item 7, "Management's
Discussion and Analysis of Financial Condition and Results of Operations - -
Cautionary Statement Relevant to Forward-Looking Information for Purpose of the
`Safe Harbor' Provisions of the Private Securities Litigation Reform Act of
1995" in the Company's Annual Report on Form 10-K for the Fiscal Year Ended
December 31, 2002, which is incorporated herein by reference.


                                       17
<PAGE>

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

       Interest Rate Risk. The Company currently has a $100 million secured
revolving credit facility ($31.0 million of which had been borrowed on June 30,
2003) and approximately $78.5 million of other loans with variable interest
rates. The Company may incur additional variable rate debt in the future to meet
its financing needs. Increases in interest rates on such debt could increase the
Company's interest expense, which would adversely affect the Company's cash flow
and its ability to pay dividends to its shareholders. The Company has not
entered into any interest rate hedge contracts in order to mitigate the interest
rate risk with respect to the secured revolving credit facility. However, the
Company has entered into a two-year LIBOR interest rate cap with a maximum LIBOR
rate of 5.45% on a $77.0 million loan secured by The Lakes on Post Oak property
in Houston, Texas. As of June 30, 2003, the Company had borrowed approximately
$109.5 million of variable rate debt. If the weighted average interest rate on
this variable rate debt were 100 basis points higher or lower, annual interest
expense would be increased or decreased by approximately $1,095,000.

      Additionally, the Company had $316.9 million outstanding under loans with
fixed interest rates as of June 30, 2003. The Company may incur additional fixed
rate debt in the future to meet its financing needs. Should market interest
rates decline, the Company's use of fixed rate debt financing may result in the
recognition of interest expense at rates higher than market rates. Assuming the
Company was unable to refinance its existing fixed rate debt and if the market
interest rate on this debt were 100 basis points lower than the fixed rates, the
Company's above market annual interest expense would be approximately $3,169,000
as compared to variable rate debt financing.

Item 4.    Controls and Procedures.

The Company maintains disclosure controls and procedures that are designed to
ensure that information required to be disclosed in the Company's filings under
the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the periods specified in the rules and forms of the Securities
and Exchange Commission. Such information is accumulated and communicated to the
Company's management, including its principal executive officer and principal
financial officer, as appropriate, to allow timely decisions regarding required
disclosure. The Company's management, including the principal executive officer
and the principal financial officer, recognizes that any set of controls and
procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives.

Within 90 days prior to the filing date of this quarterly report on Form 10-Q,
the Company has carried out an evaluation, under the supervision and with the
participation of the Company's management, including the Company's principal
executive officer and the Company's principal financial officer, of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures. Based on such evaluation, the Company's principal executive
officer and principal financial officer concluded that the Company's disclosure
controls and procedures are effective.

There have been no significant changes in the Company's internal controls or in
other factors that could significantly affect the internal controls subsequent
to the date of their evaluation in connection with the preparation of this
quarterly report on Form 10-Q.





                                       18
<PAGE>


                           PART II. OTHER INFORMATION
Item 1.  Legal Proceedings

       None.

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

An annual meeting of shareholders of the Company was held on May 21, 2003 to
consider and take action on the election of seven directors.

All of the  Company's  nominees for director  were elected by a majority of
the votes cast.





                                       19
<PAGE>



Item 5.  Other Information

(a)    The following table sets forth, with respect to each office project or
       location at June 30, 2003, gross square feet, rentable square feet,
       percentage occupied, and the average annual rent per rentable square foot
       occupied.

<TABLE>
<CAPTION>
                                                                                                               Average
                                                                                                                Annual
                                                   Gross                Rentable                               Rent Per
                                                   Square                Square           Percent               Square
Office Project/Location                             Feet                  Feet           Occupied (1)           Foot (2)
-----------------------                           ----------           -----------       ------------           --------
<S>                                                <C>                   <C>                   <C>               <C>
Atlanta Chamblee                                   1,199,800             1,124,174             96%               $18.15
Atlanta Gwinnett                                     274,400               262,789             92%                19.22
Atlanta Perimeter                                    184,000               176,503             64%                21.21
Atlanta Three Ravinia (3)                            845,000               804,528             67%                17.69 (4)
Charlotte University                                 190,600               182,891             95%                17.72
Charlotte Vanguard                                   548,200               526,355             72%                17.20
Houston Post Oak (3)                               1,265,000             1,204,852             74%                17.89
Jacksonville Baymeadows                              793,400               751,430             98%                15.08 (4)
Jacksonville JTB                                     436,000               416,773            100%                12.51 (4)
Memphis Germantown                                   562,600               530,688             75%                18.67
Orlando Central                                      699,700               615,886             94%                16.58
Orlando Lake Mary                                    318,000               303,481             65%                18.87
Orlando University                                   405,200               383,786             82%                19.36
Richmond Paragon                                     154,300               145,127             97%                19.13
St. Petersburg                                       715,500               668,144             85%                16.64
Tallahassee                                          960,300               834,025             71%                17.63
                                                ------------          ------------
   Total                                           9,552,000             8,931,432
                                                 ===========          ============
Weighted Average - Total Company                                                               82%               $17.20
                                                                                            ======               ======
Weighted Average - Operational Buildings                                                       86%               $17.05
                                                                                            ======               ======
Weighted Average - Building in Lease-up                                                        71%               $17.82
                                                                                            ======               ======

</TABLE>

(1)  The percent  occupied rates have been calculated by dividing total rentable
     square feet occupied in an office building by total rentable square feet in
     such building.

(2)  Rental  rates are  computed by  dividing  (a) total  annualized  base rents
     (which excludes  expense  pass-through  and  reimbursements)  for an office
     project or  location as of June 30,  2003 by (b) the  rentable  square feet
     applicable to such total annualized rents.

(3)  Currently in a lease-up  period.  The Company  considers an acquired office
     project to be in a lease-up period until the earlier of 85% occupancy or 18
     months.

(4)  Includes the effect of "triple net" leases where tenants pay  substantially
     all operating costs in addition to base rent.



                                       20
<PAGE>



(b)  The following  schedule  sets forth for all of the Company's  buildings (i)
     the number of leases  which will expire  during the  remainder  of calendar
     year 2003 (without  regard to any  renewals),  calendar  years 2004 through
     2011, and years  subsequent to 2011, (ii) the total rentable area in square
     feet covered by such leases,  (iii) the percentage of total rentable square
     feet  represented  by such leases,  (iv) the average annual rent per square
     foot for such leases,  (v) the current annualized base rents represented by
     such  leases,  and  (vi) the  percentage  of gross  annualized  base  rents
     contributed  by such leases.  This  information  is based on the  buildings
     owned by the  Company on June 30, 2003 and on the terms of leases in effect
     as of June 30,  2003,  on the  basis of then  existing  base  rentals,  and
     without  regard to the  exercise  of  options  to renew.  Furthermore,  the
     information  below does not reflect  that some leases have  provisions  for
     early termination for various reasons, including, in the case of government
     entities,   lack  of  budget   appropriations.   Leases  were   renewed  on
     approximately  44 percent of the Company's  rentable square feet which were
     scheduled to expire during the six months ended June 30, 2003.

<TABLE>
<CAPTION>
                                                       Percentage of        Average                                Percentage
                                                       Total Square        Annual Rent             Total             of Total
                       Number of        Number of       Feet Leased         per Square          Annualized         Annual Rents
                        Leases          Square Feet    Represented by       Foot Under          Rents Under       Represented by
             Period    Expiring          Expiring      Expiring Leases     Expiring Leases     Expiring Leases    Expiring Leases
             ------  ---------------   --------------- ---------------     ---------------     ---------------    ---------------

<S>          <C>          <C>             <C>               <C>                <C>             <C>                    <C>
             2003         208             958,336           13.1%              $17.31          $  16,592,164          13.2%
             2004         215             997,667           13.7%               17.78             17,737,905          14.1%
             2005         179             956,083           13.1%               16.69             15,958,521          12.7%
             2006         126             805,546           11.0%               17.11             13,780,753          11.0%
             2007          77             988,851           13.5%               17.16             16,968,673          13.5%
             2008          46             682,654            9.4%               18.08             12,339,972           9.8%
             2009          23           1,098,055           15.0%               17.90             19,656,385          15.6%
             2010           7             146,455            2.0%               17.17              2,514,908           2.0%
             2011           4             109,146            1.5%               14.76              1,610,967           1.3%
             Other         11             565,484            7.7%               15.09              8,535,816           6.8%
                      -------         -----------        --------                            ---------------       --------

             Total        896           7,308,277          100.0%              $17.20           $125,696,064         100.0%
                       ======          ==========          ======              ======           ============         ======
</TABLE>


                                       21
<PAGE>




(c)     The Company believes that Funds from Operations is one measure of the
        performance of an equity real estate investment trust. Funds from
        Operations should not be considered as an alternative to net income as
        an indication of the Company's financial performance or to cash flow
        from operating activities (determined in accordance with accounting
        principles generally accepted in the United States of America) as a
        measure of the Company's liquidity, nor is it necessarily indicative of
        sufficient cash flow to fund all of the Company's needs. Funds from
        Operations is calculated as follows:
<TABLE>
<CAPTION>

                                                                              Three Months
                                                                              Ended June 30,
                                                                            ----------------
                                                                            2003        2002
                                                                            ----------------
                                                                              (in thousands)

<S>                                                                     <C>           <C>
        Net Income                                                      $   3,450     $   4,337
        Depreciation - real estate                                          7,390         6,277
        Amortization - deferred tenant costs                                  432           338
        Amortization - fair value of acquired leases                          432            --
        Gain on sale of non-operating assets                                 (589)           --
                                                                        ----------   ----------
           Funds from Operations                                           $11,115      $10,952
                                                                           =======      =======

                                                                                Six Months
                                                                              Ended June 30,
                                                                              --------------
                                                                               2003     2002
                                                                              --------------
                                                                               (in thousands)

        Net Income                                                      $   7,721     $   9,488
        Depreciation - real estate                                         14,581        12,319
        Amortization - deferred tenant costs                                  828           702
        Amortization - fair value of acquired leases                          924            --
        Minority interest                                                      --            20
        Gain on sale of non-operating assets                                 (589)           (1)
                                                                        ----------   -----------
           Funds from Operations                                           $23,465      $22,528
                                                                           =======      =======

</TABLE>

(d)     On June 23, 2003, Robert E. Onisko tendered his resignation as the
        Company's Chief Financial Officer. Mr. Onisko's duties and
        responsibilities have been reassigned to Steven A. Abney, the Company's
        Vice President, Finance and Chief Accounting Officer.


                                       22
<PAGE>


Item 6.  Exhibits and Reports on Form 8-K

    (a)   Exhibits

             Number                Description
             ------                -----------

               10(a)               Deed of Trust and Security Agreement
                                   (Virginia), dated April 1, 2003, between
                                   Koger Equity, Inc. and Fleet National Bank

               10(b)               Assignment of Leases and Rents dated as of
                                   April 1, 2003, between Koger Equity, Inc. and
                                   Fleet National Bank

               10(c)               Certificate Regarding Additional Property
                                   delivered by Koger Equity, Inc.,
                                   dated as of April 1, 2003

               10(d)               Indemnity Agreement Regarding Hazardous
                                   Materials, dated as of April 1, 2003, by
                                   Koger Equity, Inc.

               11                  Earnings Per Share Computations.

               15                  Letter re:  Unaudited interim financial
                                   information.

               99                  Certification of Principal Executive Officer
                                   and Principal Financial Officer

(b) Reports on Form 8-K

On April 14, 2003, the Company filed a Form 8-K/A-2 (dated December 6, 2002)
amending Form 8-K/A filed on February 19, 2002 (dated December 6, 2002),
reporting under Item 2, Acquisition or Disposition of Assets, the acquisition of
The Lakes on Post Oak property in Houston, Texas, and including under Item 7,
Financial Statements and Exhibits, (a) Financial Statements of real estate
acquired, (b) pro forma financial information, and (c) the Koger Equity, Inc.
News Release, dated December 10, 2002, incorporated by reference.

On May 12, 2003, the Company filed a Form 8-K (dated May 8, 2003) reporting
under Item 9, Regulation FD Disclosure, the announcement of its quarterly
results for the period ended March 31, 2002, and related supplemental
information, dated March 31, 2002, and including under Item 7, Financial
Statements and Exhibits, the Koger Equity, Inc. News Release, dated May 8, 2003,
and related supplemental information.

On May 22, 2003, the Company filed a Form 8-K (dated May 21, 2003) reporting
under Item 9, Regulation FD Disclosure, the announcement of a quarterly
dividend, and including under Item 7, Financial Statements and Exhibits, the
Koger Equity, Inc. News Release, dated February 19, 2003.

On June 27, 2003, the Company filed a Form 8-K (dated June 25, 2003) reporting
under Item 9, Regulation FD Disclosure, the announcement of the appointment of
Steven A. Abney as the Company's Chief Accounting Officer and providing under
Item 7, Financial Statements and Exhibits, the Koger Equity, Inc. News Release
dated June 25, 2003.




                                       23
<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.




                                      KOGER EQUITY, INC.
                                          Registrant


Dated:  August 8, 2003                /s/ Steven A. Abney
                                ------------------------------------
                                       Steven A. Abney
                            Vice President, Finance and Chief Accounting Officer
                                     (Principal Financial Officer)
                                      Koger Equity, Inc.








                                       24
<PAGE>

                                 CERTIFICATE OF
           PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

Each of the undersigned hereby certifies in his capacity as an officer of Koger
Equity, Inc. (the "Company") that he has reviewed this quarterly report and, to
the best of his knowledge and belief, reviewed this Form 10-Q for the period
ended June 30, 2003 of Koger Equity, Inc. and certifies as follows:

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

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

3.   We are responsible for establishing and maintaining disclosure controls and
     procedures  (as defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for
     the registrant and have:

          a.   Designed such disclosure controls and procedures,  or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  to ensure that material information relating to the
               registrant,  including  its  consolidated  subsidiaries,  is made
               known to us by others within those entities,  particularly during
               the period in which this report is being prepared;

          b.   Evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls  and   procedures  and  presented  in  this  report  our
               conclusions  about the  effectiveness of the disclosure  controls
               and  procedures,  as of the  end of the  period  covered  by this
               report based on such evaluation; and

          c.   Disclosed in this report any change in the registrant's  internal
               control  over  financial   reporting  that  occurred  during  the
               registrant's most recent fiscal quarter (the registrant's  fourth
               fiscal  quarter  in  the  case  of an  annual  report)  that  has
               materially  affected,  or  is  reasonably  likely  to  materially
               affect,   the   registrant's   internal  control  over  financial
               reporting; and

4. We have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant's auditors and the audit committee
of the registrant's board of directors (or persons performing the equivalent
functions):

          a.   All  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; and

          b.   Any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal control over financial reporting.

Dated:  August 8, 2003                       /s/ Thomas J. Crocker
                                        ------------------------------------
                                              Thomas J. Crocker
                                           Chief Executive Officer
                                          (Principal Executive Officer)
                                               Koger Equity, Inc.

Dated:  August 8, 2003                        /s/ Steven A. Abney
                                        ------------------------------------
                                               Steven A. Abney
                                        Vice President, Finance and Chief
                                                Accounting Officer
                                             (Principal Financial Officer)
                                                Koger Equity, Inc.



                                       25
<PAGE>
<TABLE>
<CAPTION>



                                                                     EXHIBIT 11

                         EARNINGS PER SHARE COMPUTATIONS
                      (In Thousands Except Per Share Data)


                                                                                                 Three Months
                                                                                               Ended June 30,
                                                                                             2003            2002
                                                                                          ----------      ---------
EARNINGS PER COMMON AND DILUTIVE
  POTENTIAL COMMON SHARE:
<S>                                                                                       <C>             <C>
  Net Income                                                                              $   3,450       $   4,337
                                                                                          =========       =========
  Shares:
  Weighted average number of common
      shares outstanding - Basic                                                             21,311          21,255
                                                                                          =========       =========

EARNINGS PER SHARE - BASIC                                                                $     0.16      $    0.20
                                                                                          ==========      =========
  Shares:
  Weighted average number of common
        shares outstanding - Basic                                                           21,311          21,255
  Effect of dilutive securities (a):
      Stock options                                                                              71             214
                                                                                          ---------       ---------
  Adjusted weighted average common shares - Diluted                                          21,382          21,469
                                                                                          =========       =========

EARNINGS PER SHARE - DILUTED                                                              $    0.16       $    0.20
                                                                                          =========       =========


                                                                                                  Six Months
                                                                                               Ended June 30,
                                                                                             2003            2002
                                                                                          ----------      ---------
EARNINGS PER COMMON AND DILUTIVE
  POTENTIAL COMMON SHARE:
  Net Income                                                                              $   7,721       $   9,488
                                                                                          =========       =========
  Shares:
  Weighted average number of common
      shares outstanding - Basic                                                             21,305          21,241
                                                                                          =========       =========

EARNINGS PER SHARE - BASIC                                                                $    0.36       $    0.45
                                                                                          =========       =========
  Shares:
  Weighted average number of common
        shares outstanding - Basic                                                           21,305          21,241
  Effect of dilutive securities (a):
      Stock options                                                                              30             167
                                                                                          ---------       ---------
  Adjusted weighted average common shares - Diluted                                          21,335          21,408
                                                                                          =========       =========

EARNINGS PER SHARE - DILUTED                                                              $    0.36       $    0.44
                                                                                          =========       =========

(a) Shares issuable were derived using the "Treasury Stock Method" for all
dilutive potential shares.
</TABLE>



                                       26
<PAGE>






                                                                     EXHIBIT 15



August 8, 2003


Koger Equity, Inc.
225 NE Mizner Boulevard, Suite 200
Boca Raton, Florida  33432




We have made a review,  in accordance  with  standards  established  by the
American  Institute of Certified Public  Accountants,  of the unaudited  interim
financial  information of Koger Equity,  Inc. and subsidiaries for the three and
six month periods ended June 30, 2003 and 2002, as indicated in our report dated
July 18, 2003;  because we did not perform an audit,  we expressed no opinion on
such financial information.

We are aware that our report  referred to above,  which is included in your
Quarterly  Report  on  Form  10-Q  for the  quarter  ended  June  30,  2003,  is
incorporated  by  reference  in  Registration  Statement  No.  33-55179 of Koger
Equity, Inc. on Form S-3,  Registration  Statement No. 33-54617 of Koger Equity,
Inc. on Form S-8, Registration  Statement No. 333-20975 of Koger Equity, Inc. on
Form S-3,  Registration  Statement No.  333-23429 of Koger Equity,  Inc. on Form
S-8,  Registration  Statement No.  333-37919 of Koger Equity,  Inc. on Form S-3,
Registration  Statement  No.  333-33388  of Koger  Equity,  Inc. on Form S-8 and
Registration Statement No. 333-38712 of Koger Equity, Inc. on Form S-8.

We also are aware that the aforementioned  report,  pursuant to Rule 436(c)
under the Securities  Act of 1933, is not considered a part of the  Registration
Statements prepared  or  certified  by an  accountant  or a report  prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.



DELOITTE & TOUCHE LLP
West Palm Beach, Florida



<PAGE>

                                                                    EXHIBIT  99


                                 CERTIFICATE OF
                           PRINCIPAL EXECUTIVE OFFICER
                         AND PRINCIPAL FINANCIAL OFFICER

Each of the undersigned hereby certifies in his capacity as an officer of Koger
Equity, Inc. (the "Company") that he has reviewed this quarterly report and, to
the best of his knowledge and belief, the quarterly report of the Company on
Form 10-Q for the quarterly period ended June 30, 2003 fully complies with the
requirements of Section 13(a) of the Securities Exchange Act of 1934, that the
quarterly report does not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the report not
misleading, and that the information contained in such report fairly presents,
in all material respects, the financial condition of the Company at the end of
such period and the results of operations and cash flows of the Company for such
period.


Dated:  August 8, 2003                   /s/ Thomas J. Crocker
                                    ------------------------------------
                                          Thomas J. Crocker
                                       Chief Executive Officer
                                       (Principal Executive Officer)
                                          Koger Equity, Inc.

Dated:  August 8, 2003                    /s/ Steven A. Abney
                                    ------------------------------------
                                           Steven A. Abney
                                     Vice President, Finance and Chief
                                            Accounting Officer
                                         (Principal Financial Officer)
                                          Koger Equity, Inc.