<PAGE>   1
                                  UNITED STATES
                       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 MARCH 31, 1998 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.)


3986 BOULEVARD CENTER DRIVE, SUITE 101 
        JACKSONVILLE, FLORIDA                                 32207 
   (Address of principal executive                          (Zip Code)
        offices) 

    Registrant's telephone number, including area code: (904) 398-3403

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 April 30, 1998
    Common Stock, $.01 par value                    26,509,629 shares


<PAGE>   2



                       KOGER EQUITY, INC. AND SUBSIDIARIES

                                      INDEX
<TABLE>
<CAPTION>
                                                                                  PAGE NO.
<S>                                                                               <C>
PART I.   FINANCIAL INFORMATION

            Independent Accountants' Report...................................         2

    Item 1. Financial Statements:

            Condensed Consolidated Balance Sheets
               March 31, 1998 and December 31, 1997...........................         3

            Condensed Consolidated Statements of Operations
               for the Three Month Periods Ended
               March 31, 1998 and 1997........................................         4

            Condensed Consolidated Statement of Changes in
               Shareholders' Equity for the Three Month Period
               Ended March 31, 1998...........................................         5

            Condensed Consolidated Statements of Cash Flows
               for the Three Month Periods Ended March 31, 1998 and 1997......         6

            Notes to Condensed Consolidated Financial
               Statements for the Three Month Periods
               Ended March 31, 1998 and 1997..................................         7

    Item 2.    Management's Discussion and Analysis of Financial Condition
               and Results of Operations......................................         9

PART II.     OTHER INFORMATION

    Item 1.  Legal Proceedings................................................        12

    Item 5.  Other Information................................................        13

    Item 6.  Exhibits and Reports on Form 8-K.................................        16

    Signatures................................................................        17
</TABLE>








                                        1

<PAGE>   3



INDEPENDENT ACCOUNTANTS' REPORT

To the Board of Directors and Shareholders of
Koger Equity, Inc.
Jacksonville, Florida

We have reviewed the accompanying condensed consolidated balance sheet of Koger
Equity, Inc. and subsidiaries (the "Company") as of March 31, 1998, and the
related condensed consolidated statements of operations for the three month
periods ended March 31, 1998 and 1997, the condensed consolidated statement of
changes in shareholders' equity for the three month period ended March 31, 1998
and the condensed consolidated statements of cash flows for the three month
periods ended March 31, 1998 and 1997. 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 generally accepted auditing standards, 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 generally accepted accounting principles.

We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of the Company as of December 31,
1997, 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 23, 1998, 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, 1997 is fairly stated, in all material respects, in relation
to the consolidated balance sheet from which it has been derived.



DELOITTE & TOUCHE  LLP
Jacksonville, Florida
April 24 , 1998









                                        2

<PAGE>   4



                          PART I. FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS
                       KOGER EQUITY, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                (UNAUDITED - SEE INDEPENDENT ACCOUNTANTS' REPORT)
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                          MARCH 31,    DECEMBER 31,
                                                               1998            1997
                                                          ---------    ------------
<S>                                                       <C>          <C>      
ASSETS
Real Estate Investments:
  Operating properties:
     Land                                                 $ 115,176       $ 111,697
     Buildings                                              591,827         567,332
     Furniture and equipment                                  2,272           2,220
     Accumulated depreciation                              (110,779)       (104,700)
                                                          ---------       ---------
       Operating properties - net                           598,496         576,549
   Properties under construction:
     Land                                                     9,395           8,978
     Buildings                                               23,321          18,608
   Undeveloped land held for investment                      13,927          13,249
   Undeveloped land held for sale                             1,263           1,512
Cash and temporary investments                               25,159          16,955
Accounts receivable, net of allowance for
   uncollectible accounts of $240 and $250                    4,802           5,646
Investment in Koger Realty Services, Inc.                       810             472
Cost in excess of fair value of net assets acquired,
   net of accumulated amortization of $728 and $685           1,828           1,870
Other assets                                                 13,751          12,258
                                                          ---------       ---------
     TOTAL ASSETS                                         $ 692,752       $ 656,097
                                                          =========       =========

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
   Mortgages and loans payable                            $ 199,772       $ 181,963
   Accounts payable                                           5,620           8,802
   Accrued real estate taxes payable                          3,100           3,294
   Accrued liabilities - other                                5,405           6,623
   Dividends payable                                          6,627           6,352
   Advance rents and security deposits                        5,835           4,801
                                                          ---------       ---------
     Total Liabilities                                      226,359         211,835
                                                          ---------       ---------

Commitments and Contingencies

Shareholders' Equity:
   Common stock                                                 285             284
   Capital in excess of par value                           454,188         441,451
   Retained earnings                                         31,984          30,947
   Treasury stock, at cost                                  (20,064)        (28,420)
                                                          ---------       ---------
     Total Shareholders' Equity                             466,393         444,262
                                                          ---------       ---------
     TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY           $ 692,752       $ 656,097
                                                          =========       =========
</TABLE>

See Notes to Condensed Consolidated Financial Statements.

                                        3

<PAGE>   5



                       KOGER EQUITY, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                (UNAUDITED - SEE INDEPENDENT ACCOUNTANTS' REPORT)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                  THREE MONTH PERIOD
                                                    ENDED MARCH 31,
                                                  1998           1997
                                                --------       --------
<S>                                             <C>            <C>     
REVENUES
   Rental and other rental services             $ 30,335       $ 25,512
   Management fees                                   485            641
   Interest                                          183            534
   Income from Koger Realty Services, Inc.           414            210
   Gain on TKPL note to Southeast                                    46
                                                --------       --------
       Total revenues                             31,417         26,943
                                                --------       --------

EXPENSES
   Property operations                            11,614          9,968
   Depreciation and amortization                   6,680          5,493
   Mortgage and loan interest                      3,282          4,159
   General and administrative                      1,501          1,363
   Direct cost of management fees                    299            517
   Undeveloped land costs                             94            114
   Recovery of loss on land held for sale                          (381)
                                                --------       --------
         Total expenses                           23,470         21,233
                                                --------       --------

INCOME BEFORE INCOME TAXES                         7,947          5,710
Income taxes                                         283             17
                                                --------       --------

NET INCOME                                      $  7,664       $  5,693
                                                ========       ========

EARNINGS PER COMMON SHARE AND
   COMMON EQUIVALENT SHARE:
   Basic                                        $   0.30       $   0.27
                                                ========       ========
   Diluted                                      $   0.29       $   0.25
                                                ========       ========

WEIGHTED AVERAGE COMMON SHARES AND
    COMMON EQUIVALENT SHARES OUTSTANDING:
   Basic                                          25,504         20,962
                                                ========       ========
   Diluted                                        26,279         22,360
                                                ========       ========
</TABLE>

See Notes to Condensed Consolidated Financial Statements.












                                        4

<PAGE>   6



                       KOGER EQUITY, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
                              SHAREHOLDERS' EQUITY
                (UNAUDITED - SEE INDEPENDENT ACCOUNTANTS' REPORT)
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                    COMMON STOCK                                                                         TOTAL
                                    ------------            CAPITAL IN                        TREASURY STOCK             SHARE-
                                                  PAR        EXCESS OF      RETAINED        --------------------         HOLDERS'
                                  SHARES         VALUE       PAR VALUE      EARNINGS       SHARES          COST          EQUITY
                                  ------         -----       ---------      --------       ------          ----          ------
<S>                             <C>            <C>          <C>             <C>           <C>            <C>            <C>     
Balance, December 31, 1997        28,389       $    284       $441,451      $ 30,947         2,982       $(28,420)      $444,262
Common stock sold                                               11,940                      (1,005)         8,289         20,229
401(k) Plan contribution                                           126                          (9)            76            202
Stock options exercised               86              1            671                           1             (9)           663
Dividends declared                                                            (6,627)                                     (6,627)
Net income                                                                     7,664                                       7,664
                                --------       --------       --------      --------      --------       --------       --------
Balance, March 31, 1998           28,475       $    285       $454,188      $ 31,984         1,969       $(20,064)      $466,393
                                ========       ========       ========      ========      ========       ========       ========
</TABLE>

See Notes to Condensed Consolidated Financial Statements.

















                                        5

<PAGE>   7



                       KOGER EQUITY, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                (UNAUDITED - SEE INDEPENDENT ACCOUNTANTS' REPORT)
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                              THREE MONTH PERIOD
                                                                                ENDED MARCH 31,
                                                                              1998            1997
                                                                            --------       --------
<S>                                                                         <C>            <C>     
OPERATING ACTIVITIES
   Net income                                                               $  7,664       $  5,693
   Adjustments to reconcile net income to net cash
     provided by operating activities:
     Depreciation and amortization                                             6,680          5,493
     Recovery of loss on land held for sale                                                    (381)
     Income from Koger Realty Services, Inc.                                    (414)          (210)
     Provision for uncollectible accounts                                         56             37
     Amortization of mortgage discounts                                                          24
     Decrease in accounts payable, accrued
       liabilities and other liabilities                                      (3,284)        (2,145)
     (Increase) decrease in receivables and other assets                        (746)         1,073
                                                                            --------       --------
       Net cash provided by operating activities                               9,956          9,584
                                                                            --------       --------

INVESTING ACTIVITIES
   Property acquisitions                                                     (12,493)
   Building construction expenditures                                        (10,549)        (2,380)
   Tenant improvements to first generation space                                (137)
   Tenant improvements to existing properties                                 (1,571)        (1,630)
   Building improvements to existing properties                                 (282)          (328)
   Energy management improvements                                                              (361)
   Deferred tenant costs                                                        (413)          (172)
   Additions to furniture and equipment                                          (52)           (61)
   Proceeds from sale of assets                                                               2,910
   Dividends received from Koger Realty Services, Inc.                            76             76
                                                                            --------       --------
       Net cash used in investing activities                                 (25,421)        (1,946)
                                                                            --------       --------

FINANCING ACTIVITIES
   Proceeds from exercise of warrants and stock options                          589            363
   Proceeds from sale of common stock                                         20,229             75
   Proceeds from mortgages and loans                                          15,000
   Dividends paid                                                             (6,352)        (1,046)
   Principal payments on mortgages and loans                                  (5,692)          (818)
   Financing costs                                                              (105)           (78)
                                                                            --------       --------
       Net cash provided by (used in) financing activities                    23,669         (1,504)
                                                                            --------       --------
Net increase in cash and cash equivalents                                      8,204          6,134
Cash and cash equivalents - beginning of period                               16,955         35,715
                                                                            --------       --------
Cash and cash equivalents - end of period                                   $ 25,159       $ 41,849
                                                                            ========       ========

SUPPLEMENTAL CASH FLOW INFORMATION
   Cash paid during the period for interest, net of amount capitalized      $  3,235       $  4,134
                                                                            ========       ========
   Cash paid during the period for income taxes                             $    260       $      0
                                                                            ========       ========
</TABLE>


See Notes to Condensed Consolidated Financial Statements.


                                        6

<PAGE>   8



                       KOGER EQUITY, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                           FOR THE THREE MONTH PERIODS
                          ENDED MARCH 31, 1998 AND 1997
                (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"). All material intercompany transactions have been eliminated.
The financial statements have been prepared in accordance with the rules and
regulations of the Securities and Exchange Commission related to interim
financial statements.

The financial statements should be read in conjunction with the consolidated
financial statements and notes thereto for the year ended December 31, 1997,
included in the Company's Form 10-K Annual Report for the year ended December
31, 1997. The balance sheet at December 31, 1997, has been derived from the
audited financial statements at that date and is condensed.

All adjustments of a normal recurring nature which, in the opinion of
management, are necessary to present a fair statement of the results for the
interim periods have been made. Results of operations for the three month period
ended March 31, 1998, are not necessarily indicative of the results to be
expected for the full year.

Certain 1997 amounts have been reclassified to conform with 1998 presentation.

       2. ORGANIZATION. Koger Equity, Inc. ("KE"), a Florida corporation, was
incorporated in 1988 for the purpose of investing in the ownership of income
producing properties, primarily commercial office buildings. KE is totally
self-administered and self-managed.

In addition to managing its own properties, KE, through certain related
entities, provides property management services to third parties. In conjunction
with Koger Real Estate Services, Inc. ("KRES"), a Florida corporation and a
wholly-owned subsidiary of KE, KE manages 21 office buildings owned by Centoff
Realty Company, Inc. ("Centoff"), a subsidiary of Morgan Guaranty Trust Company
of New York.

       3. FEDERAL INCOME TAXES. The Company is operated in a manner so as to
qualify and has elected tax treatment as a real estate investment trust under
the Code (a "REIT"). As a REIT, the Company is required to distribute annually
at least 95 percent of its REIT taxable income to its shareholders. Since the
Company had no REIT taxable income during 1997 and does not expect to have REIT
taxable income during 1998, no provision has been made for Federal income taxes.
To the extent that the Company pays dividends equal to 100 percent of REIT
taxable income, the earnings of the Company are not taxed at the corporate
level. However, the use of net operating loss carryforwards, which may reduce
REIT taxable income to zero, are limited for alternative minimum tax purposes.

       4. 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 the three month
period ended March 31, 1998, the Company contributed 9,197 shares of common
stock to the Company's 401(k) Plan. These shares had a value of

                                        7

<PAGE>   9



approximately $202,000 based on the closing price of the Company's common stock
on the American Stock Exchange on December 31, 1997. During January, 1998, the
Company assumed a mortgage loan with an outstanding balance of approximately
$8,501,000 in conjunction with the acquisition of an office building. During the
three month period ended March 31, 1997, the Company contributed 23,657 shares
of common stock to the Company's 401(k) Plan. These shares had a value of
approximately $444,000 based on the closing price of the Company's common stock
on the American Stock Exchange on December 31, 1996. In addition, the Company
issued 15,455 shares of common stock as payment for certain 1996 bonuses for
senior management. These shares had a value of approximately $278,000 based on
the closing price of the Company's common stock on the American Stock Exchange
on January 6, 1997.

       5. EARNINGS PER COMMON SHARE. Earnings per common share have been
computed based on the weighted average number of shares of common stock and
common stock equivalents outstanding during the applicable periods.

       6. MORTGAGES AND LOANS PAYABLE. At March 31, 1998, the Company had
$199,772,000 of loans outstanding, which are collateralized by mortgages on
certain operating properties.

Annual maturities for mortgages and loans payable are as follows (in thousands):

<TABLE>
<CAPTION>
            YEAR ENDING DECEMBER 31,
            <S>                                      <C>     
                     1998                            $  1,950
                     1999                              12,868
                     2000                               3,113
                     2001                               3,382
                     2002                              11,375
                     Subsequent Years                 167,084
                                                     --------
                           Total                     $199,772
                                                     ========
</TABLE>

       7. DIVIDENDS. The Company paid a quarterly dividend of $0.25 per share on
February 4, 1998, to shareholders of record on December 31, 1997. During the
quarter ended March 31, 1998, the Company's Board of Directors declared a
quarterly dividend of $0.25 per share payable on May 6, 1998, to shareholders of
record on March 31, 1998. The Company currently expects that all dividends paid
during 1998 will be treated as ordinary income for income tax purposes.

       8. STOCK OPTIONS. During the quarter ended March 31, 1998, the Company
granted options to purchase 447,500 shares of its common stock. All options were
granted with an exercise price equal to the market value at the date of grant.

       9. SUBSEQUENT EVENTS. On April 22, 1998, the Company acquired an office
and retail complex consisting of (i) four office buildings containing
approximately 326,000 gross square feet, (ii) a retail development consisting of
seven buildings containing approximately 112,000 gross square feet and (iii)
approximately 22 acres of developable land. These properties were acquired for a
purchase price of approximately $58.23 million and are located in Birmingham,
Alabama. This acquisition was partially funded by drawing $49 million from the
Company's secured revolving credit facility.



                                        8

<PAGE>   10



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, 1997.

RESULTS OF OPERATIONS.

Rental and other rental services revenues totaled $30,335,000 for the quarter
ended March 31, 1998, compared to $25,512,000 for the quarter ended March 31,
1997. The increase in rental revenues resulted primarily from (i) the increase
in the Company's average rental rate and (ii) rental revenues from the
properties acquired and construction completed during 1997 and 1998
($3,011,000). At March 31, 1998, the Company's buildings were on average 92
percent leased with an average rental rate of $15.17.

Management fee revenues totaled $485,000 for the quarter ended March 31, 1998,
compared to $641,000 for the quarter ended March 31, 1997. This decrease was due
primarily to a leasing commission earned by KRES during 1997.

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
                                                                 TOTAL RENTAL
                    PERIOD                   AMOUNT                REVENUES
         ------------------------          -----------           ------------
         <S>                               <C>                   <C>  
         March 31, 1998 - Quarter          $11,614,000               38.3%
         March 31, 1997 - Quarter          $ 9,968,000               39.1%
</TABLE>

Property operations expense increased primarily due to (i) increase in accruals
for real estate taxes and (ii) operations expenses for the properties acquired
and construction completed during 1997 and 1998 ($1,462,000).

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 $952,000 for the three month period ended March
31, 1998, compared to the same period last year, due to (i) improvements made to
the Company's existing properties during 1997 and (ii) the properties acquired
and construction completed during 1997 and 1998 ($627,000). Amortization expense
increased $235,000 for the three month period ended March 31, 1998, compared to
the same period last year, due primarily to deferred financing costs which were
incurred during 1997 for the secured revolving credit facility.

Interest expense decreased by $877,000, during the three month period ended
March 31, 1998, compared to the same period last year, primarily due to (i) the
reduction in the average balance of mortgages and loans payable and (ii) the
interest capitalized due to the Company's construction of office buildings. At
March 31, 1998, the weighted average interest rate on the Company's
outstanding debt was approximately 8.2 percent.

                                        9

<PAGE>   11




General and administrative expenses for the three month periods ended March 31,
1998 and 1997, totaled $1,501,000 and $1,363,000, respectively, which is 0.8
percent and 0.9 percent (annualized) of average invested assets. This increase
is primarily due to (i) the increase in group insurance costs for employees and
(ii) increases in payroll costs.

Direct costs of management contracts decreased $218,000 for the three month
period ended March 31, 1998, compared to the same period last year, due to
decreased costs associated with providing property management services for all
management contracts.

Based on the proceeds received from the sale of the Miami land parcel and the
Company's analysis of the fair value of the remaining land parcels held for sale
during the three months ended March 31, 1997, the Company reversed $381,000 of
the provision for loss on land held for sale which had been previously recorded.

Net income totaled $7,664,000 for the quarter ended March 31, 1998, compared to
net income of $5,693,000 for the corresponding period of 1997. This improvement
is due to the increase in rental revenues and the reduction in interest expense.
These items were partially offset by the increases in (i) property operations
expense and (ii) depreciation and amortization expense.


LIQUIDITY AND CAPITAL RESOURCES.

       OPERATING ACTIVITIES - During the three months ended March 31, 1998, the
Company generated approximately $10 million in net cash from operating
activities. The Company's primary internal sources of cash are (i) the
collection of rents from buildings owned by the Company and (ii) the receipt of
management fees paid to the Company in respect of properties managed on behalf
of Centoff and others. As a REIT for Federal income tax purposes, the Company is
required to pay out annually, as dividends, 95 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 1998.

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 March 31, 1998, leases representing approximately 22.3 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 1998. This
represents 893 leases for space in buildings located in 22 of the 23 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 three months
ended March 31, 1998, leases were renewed on approximately 68 percent of the
Company's net rentable square feet which were scheduled to expire during the
three month period. For those leases which renewed during the three months ended
March 31, 1998, the average rental rate increased from $15.14 to $15.72.
However, current market conditions in certain markets may

                                       10

<PAGE>   12



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
significant number of leases which will expire during 1998 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 improvements costs and in
certain markets reduced rents during initial lease periods.

The Company continues to benefit from improving economic conditions and reduced
vacancy levels for office buildings in many of the metropolitan areas in which
the Company owns buildings. The Company believes that the southeastern and
southwestern regions of the United States provide significant economic growth
potential due to their diverse regional economies, expanding metropolitan areas,
skilled work force and moderate labor costs. However, the Company cannot predict
whether such economic growth will continue. Cash flow from operations could be
reduced if economic growth were not to continue in the Company's markets and if
this resulted in lower occupancy rates for the Company's buildings.

Governmental tenants (including the State of Florida and the United States
Government) which account for approximately 21.7 percent of the Company's leased
space at March 31, 1998, 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 which have contributed to
the Company's rent stream may reduce their current demands, or curtail their
future need, for additional office space.

       INVESTING ACTIVITIES - At March 31, 1998, 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. During the
three month period ended March 31, 1998, the Company's expenditures for
improvements to existing properties decreased $466,000 from the corresponding
period of the prior year primarily due to the reduction in expenditures for
energy management improvements.

The Company has eight buildings under construction which will contain
approximately 684,000 net rentable square feet. Expenditures for construction of
these eight buildings are expected to total approximately $55.5 million,
excluding land and tenant improvement costs.

On January 30, 1998, the Company acquired a building, containing 127,700 net
rentable square feet, located in Richmond, Virginia for a purchase price of
$16.5 million. On February 1, 1998, the Company acquired a building, containing
20,000 net rentable square feet, located in Jacksonville, Florida for a purchase
price of $2.0 million. On March 6, 1998, the Company acquired 14.41 acres of
land located in Jacksonville, Florida for a purchase price of $2.3 million.

       FINANCING ACTIVITIES - The Company has a $100 million secured revolving
credit facility ($10 million of which was outstanding on March 31, 1998)
provided by First Union National Bank of Florida, Morgan Guaranty Trust Company
of New York, AmSouth Bank, N.A. and Guaranty Federal Bank. In addition, the
Company has a cash balance of $25.2 million at March 31, 1998.

On March 27, 1998, the Company issued 1,000,000 shares of its common stock to
Wheat First Securities, Inc. at a price per share of $20.246875.


                                       11

<PAGE>   13



Loan maturities and normal amortization of mortgages and loans payable are
expected to total approximately $2.7 million over the next 12 months.
Significant maturities of the Company's mortgages and loans payable do not begin
to occur until 2006. The Company has filed shelf registration statements with
respect to the possible issuance of up to $300 million of its common and/or
preferred stock. The Company has issued $90.6 million of its common stock under
such registration statements.


                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

       None.



















                                       12

<PAGE>   14




ITEM 5.  OTHER INFORMATION

(a)    The following table sets forth, with respect to the Company's centers at
       March 31, 1998, number of buildings, net rentable square feet, percentage
       leased, and the average annual rent per net rentable square foot leased.
<TABLE>
<CAPTION>
                                                                                                                AVERAGE
                                                                          NET                                    ANNUAL
                                                 GROSS                  RENTABLE                               RENT PER
                                                 SQUARE                  SQUARE             PERCENT             SQUARE
KOGER  CENTER/LOCATION                            FEET                    FEET              LEASED(1)          FOOT (2)
----------------------                          --------               ---------            ---------         ---------
<S>                                             <C>                    <C>                  <C>               <C>   
Atlanta Chamblee                                1,158,200                948,100               96%              $15.49
Atlanta Gwinnett                                   97,300                 79,800               93%               16.26
Atlanta Perimeter                                 181,100                154,100               91%               16.88
Austin                                            458,400                370,900               98%               18.50
Charlotte Carmel                                  206,300                170,800               78%               17.44
Charlotte East                                    574,800                468,900               88%               13.59
El Paso                                           364,100                298,300               93%               15.26
Greensboro South                                  749,200                610,700               94%               14.64
Greenville Park Central                           161,700                134,000               91%               16.82
Greenville Roper Mt.                              357,400                290,500               95%               15.59
Jacksonville Baymeadows                           681,100                571,800               97%               15.33
Jacksonville Central                              828,200                666,000               90%               12.15
Jacksonville Deerwood                              29,600                 23,000              100%               16.48
Memphis Germantown                                366,400                299,100               97%               17.96
Orlando Central                                   713,800                565,400               92%               14.90
Orlando University                                194,600                159,600               98%               17.75
Richmond Paragon                                  154,300                127,700               92%               18.24
San Antonio Airport                               258,800                200,100               94%               16.21
San Antonio West                                  960,700                788,900               89%               13.73
St. Petersburg                                    640,100                519,400               90%               14.06
Tallahassee                                       960,300                789,600               85%               17.38
Tulsa                                             581,100                476,400               84%               11.64
                                               ----------              ---------

   TOTAL                                       10,677,500              8,713,100               92%              $15.17
                                               ==========              =========              ====              ======
</TABLE>


(1)      The percent leased rates have been calculated by dividing total net
         rentable square feet leased in an office building by net rentable
         square feet in such building, which excludes public or common areas.
(2)      Rental rates are computed by dividing (a) total annualized base rents
         (which excludes expense pass-through and reimbursements) for a Koger
         Center or location as of March 31, 1998 by (b) the net rentable square
         feet applicable to such total annualized rents.







                                       13

<PAGE>   15



(b)      The following schedule sets forth for all of the Company's office
         buildings (i) the number of leases which will expire during the
         remainder of calender year 1998 and calendar years 1999 through 2006,
         (ii) the total net rentable area in square feet covered by such leases,
         (iii) the percentage of total net rentable square feet represented by
         such leases, (iv) the average annual rent per square foot for such
         leases, (v) the current annualized rents represented by such leases,
         and (vi) the percentage of gross annualized rents contributed by such
         leases. This information is based on the buildings owned by the Company
         on March 31, 1998 and on the terms of leases in effect as of March 31,
         1998, 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 68
         percent of the Company's net rentable square feet which were scheduled
         to expire during the three month period ended March 31, 1998.


<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
------         ----------      -----------      ---------------    ---------------     ---------------   ---------------
<C>            <C>             <C>              <C>                <C>                 <C>               <C>  
1998                893         1,813,890             22.8%             $14.76            $ 26,772,414          22.3%
1999                663         1,421,918             17.9%              14.75              20,973,711          17.4%
2000                465         1,332,191             16.8%              15.73              20,954,721          17.4%
2001                223         1,205,443             15.2%              15.81              19,062,524          15.8%
2002                124           713,089              9.0%              15.82              11,279,717           9.4%
2003                 63           480,425              6.0%              13.98               6,715,979           5.6%
2004                 74           266,304              3.4%              10.03               2,671,993           2.2%
2005                  4            29,673              0.4%              12.41                 368,114           0.3%
2006                 11           220,035              2.8%              18.68               4,110,000           3.4%
OTHER                16           453,737              5.7%              16.44               7,461,415           6.2%
                  -----         ---------            -----                                ------------          ---- 

TOTAL             2,536         7,936,705            100.0%             $15.17            $120,370,588         100.0%
                  =====         =========            =====              ======            ============         ====== 
</TABLE>























                                       14

<PAGE>   16




(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 generally
        accepted accounting principles) 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 (in
        thousands):


<TABLE>
<CAPTION>
                                                           THREE MONTH PERIOD
                                                             ENDED MARCH 31,
                                                           1998          1997
                                                          -------       ------
        <S>                                               <C>           <C>   
        Net Income                                        $ 7,664       $5,693
        Depreciation - real estate                          6,006        5,051
        Amortization - deferred tenant costs                  332          235
        Amortization - goodwill                                42           42
        Recovery of loss on land held for sale                            (381)
        Gain on TKPL note to Southeast                                     (46)
                                                          -------      -------  
           Funds  from Operations                         $14,044      $10,594
                                                          =======      =======
</TABLE>


















                                       15

<PAGE>   17



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

             (a)  Exhibits

<TABLE>
<CAPTION>
                  EXHIBIT
                   NUMBER   DESCRIPTION
                  -------   -----------
                  <S>       <C>                                    
                     11     Earnings Per Share Computations.
                     15     Letter re: Unaudited interim financial information.
                     27     Financial Data Schedule (for SEC use only).
</TABLE>

            (b)   Reports on Form 8-K
                  On February 2, 1998, the Company filed a Form 8-K (dated
                  December 29, 1997) reporting under Item 5, Other Events, that
                  the Company had increased its secured revolving credit
                  facility to $100 million with First Union National Bank,
                  Guaranty Federal Bank F.S.B., AmSouth Bank and Morgan Guaranty
                  Trust Company of New York and providing under Item 7,
                  Financial Statements and Exhibits, copies of the loan
                  documents evidencing the $100 million secured revolving credit
                  facility.

                  On February 4, 1998, the Company filed a Form 8-K/A (dated
                  December 29, 1997) reporting under Item 5, Other Events, that
                  an exhibit had been inadvertently omitted from the Form 8-K,
                  dated December 29, 1997, and providing under Item 7, Financial
                  Statements and Exhibits, a copy of the exhibit which was
                  inadvertently omitted.

                  On March 26, 1998, the Company filed a Form 8-K (dated March
                  23, 1998) reporting under Item 5, Other Events, that the
                  Company had (i) agreed to the purchase of an office and retail
                  development located in Birmingham, Alabama, (ii) engaged in
                  negotiations for the acquisition of a property which would be
                  made by a newly formed so called "downREIT" limited
                  partnership with the Company as general partner and (iii)
                  employed David B. Hiley as its Executive Vice President and
                  Chief Financial Officer effective April 1, 1998, and providing
                  under Item 7, Financial Statements and Exhibits, Statement of
                  Revenues and Certain Expenses for the agreed upon acquisition.

                  On March 30, 1998, the Company filed a Form 8-K (dated March
                  24, 1998) reporting under Item 5, Other Events, that the
                  Company had signed an Underwriting Agreement relating to the
                  sale by the Company in an underwritten public offering of
                  1,000,000 shares of the Company's Common Stock between the
                  Company and Wheat, First Securities, Inc. The Company also
                  provided under Item 7, Financial Statements and Exhibits, a
                  copy of the Underwriting Agreement.












                                       16

<PAGE>   18




                                   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





                                          [VICTOR A. HUGHES, JR.]
                                    -----------------------------------
                                           VICTOR A. HUGHES, JR.
                                           CHAIRMAN OF THE BOARD
                                          CHIEF EXECUTIVE OFFICER

Dated: May 7, 1998


                                            [JAMES L. STEPHENS]
                                    -----------------------------------
                                            JAMES L. STEPHENS
                                            VICE PRESIDENT AND
                                         CHIEF ACCOUNTING OFFICER








                                       17