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

                                    FORM 10-K
                                   (Mark One)
[X]  Annual report  pursuant to Section 13 or 15(d) of the  Securities  Exchange
     Act of 1934

    For the fiscal year ended                           December 31, 2000
                               ----------------------------------------------

                                                        OR

[    ]  Transition  report  pursuant  to Section  13 or 15(d) of the  Securities
     Exchange Act of 1934

       For the transition period from              to
                                      ------------    ----------

       Commission file number    1-10641
                              ----------

                           MILESTONE PROPERTIES, INC.
-----------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

       Delaware                                              65-0158204
-------------------------------------  -----------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
  incorporation or organization)

150 E. Palmetto Park Rd. 4th Floor, Boca Raton, FL               33432
---------------------------------------------------  --------------------------
(Address of principal executive offices)                        (Zip Code)

Registrant's telephone number, including area code           (561) 394 - 9533
                                                     ---------------------------

       Securities Registered under Section 12(b) of the Exchange Act: None

         Securities Registered under Section 12 (g) of the Exchange Act:

                     Common Stock, par value $.01 per share
                     --------------------------------------
                                (Title of Class)

       $.78 Convertible Series A Preferred Stock, par value $.01 per share
       -------------------------------------------------------------------
                                (Title of Class)

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

       The aggregate market value of the voting stock held by  non-affiliates of
the  Registrant,  computed  by  reference  to the average bid and asked price on
March 22, 2001, was approximately  $1.875 for the Common Stock and $2.63 for the
$.78 Convertible Series A Preferred Stock.

       As of March 22, 2001,  4,288,542 shares of the Registrant's  Common Stock
were outstanding and 16,423 shares of the Registrant's $.78 Convertible Series A
Preferred Stock were outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                                  Location in Form 10-K in Which
             Document                                 Document is Incorporated
             --------                            ------------------------------

 Registrant's 2001 Proxy Statement to be filed              Part III
 with the Commission no later than April 30, 2001


<PAGE>




                                TABLE OF CONTENTS


                                     PART I


Item 1.        Business . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 2.        Description of Property . . . . . . . . . . . . . . . . . . .12
Item 3.        Legal Proceedings . . . . . . . . . . . . . . . . . . . . . .14
Item 4.        Submission of Matters to a Vote of Security Holders . . .    14


                                                      PART II

Item 5.        Market for Registrant's Common Stock and Related
               Stockholder Matters . . . . . . . . . . . . . . . . . . . . .15
Item 6.        Selected Financial Data . . . . . . . . . . . . . . . . . . .17
Item 7.        Management's Discussion and Analysis of Financial
               Condition and Results of Operations . . . . . . . . . . . . .17
Item 7A.       Quantitative and Qualitative Disclosures about Market Risk   22
Item 8.        Financial Statements and Supplementary Disclosure . . . .    23
Item 9.        Changes in and Disagreements with Accountants on
               Accounting and Financial Disclosure . . . . . . . . . . . . .23


                                                     PART III

Item 10.       Directors and Executive Officers of the Registrant . . . .   24
Item 11.       Executive Compensation . . . . . . . . . . . . . . . . . . . 24
Item 12.       Security Ownership of Certain Beneficial Owners
               and Management . . . . . . . . . . . . . . . . . . . . . . . 24
Item 13.       Certain Relationships and Related Transactions . . . . . .   24


                                                      PART IV

Item 14.       Exhibits, Financial Statement Schedule and Reports
               on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . .25

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29

Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . .  .F-2




<PAGE>



                                                      PART I

This Annual  Report on Form 10-K for the year ended  December  31, 2000 filed by
Milestone Properties,  Inc.  ("Milestone") contains or incorporates by reference
certain  forward-looking  statements  within the  meaning of Section  27A of the
Securities  Act of 1933 and Section 21E of the  Securities  Exchange Act of 1934
and  Milestone  intends that such  forward-looking  statements be subject to the
safe harbors created thereby. Such forward-looking  statements involve risks and
uncertainties and include,  but are not limited to, statements  regarding future
events  and its plans,  goals and  objectives.  Such  statements  are  generally
accompanied  by words such as  "intend,"  "anticipate,"  "believe,"  "estimate,"
"expect" or similar terms. Milestone's actual results may differ materially from
such  statements.  Factors that could cause or  contribute  to such  differences
include,   without  limitation,   the  following:  (i)  its  plans,  strategies,
objectives, expectations and intentions are subject to change at any time at its
discretion;  (ii) general  economic and business  conditions,  which may,  among
other  things,  affect  the  demand  for  retail  space  or  retail  goods,  the
availability and creditworthiness of prospective  tenants,  rental terms and the
terms and  availability of financing,  are subject to change at any time;  (iii)
adverse  changes  in  real  estate  markets   including,   among  other  things,
competition  with  other  companies;  (iv)  adverse  changes  in the  properties
Milestone  owns which could require the  expenditure of funds to fix or maintain
such  properties;   (v)  the  general  risks  of  real  estate  development  and
acquisitions,  such  as  changes  in  demographics,  construction  delays,  cost
overruns,  work stoppages and slowdowns,  the cost and  availability  of skilled
labor and weather conditions; (vi) governmental actions and initiatives, such as
seizures of property,  condemnation  and  construction of alternative  roadways;
(vii)  environmental and safety  conditions and hazards;  and (viii) other risks
and  uncertainties  indicated from time to time in Milestone's  filings with the
Securities and Exchange  Commission and in the documents  incorporated herein by
reference.  Although  Milestone  believes that the  assumptions  underlying  its
forward-looking  statements are reasonable,  any of the assumptions  could prove
inaccurate and, therefore, Milestone cannot make any assurances that the results
contemplated in such forward- looking statements will be realized. The inclusion
of such  forward-looking  information should not be regarded as a representation
by Milestone or any other person that the future events,  plans or  expectations
contemplated by Milestone will be achieved. Furthermore, past performance is not
necessarily an indicator of future performance.

Item 1.        Business.
               --------

Recent Developments

         On March 30,  2001,  the Board of  Directors  of  Milestone  approved a
definitive  merger  agreement  pursuant to which  Milestone  will be acquired by
Concord Assets Group,  Inc.  ("Concord") which is owned by Leonard S. Mandor and
Robert A. Mandor.  Concord,  together  with its  affiliates,  including  Leonard
Mandor  and  Robert  Mandor,   (the   "Acquisition   Group")   beneficially  own
approximately  68.8% of  Milestone's  outstanding  common  stock.  In  addition,
Leonard Mandor is Milestone's  Chairman and Chief  Executive  Officer and Robert
Mandor is Milestone's President, Chief Financial Officer and Director. Under the
merger agreement, each public shareholder other than the Acquisition Group, will
receive  in cash  $2.65  per  share of common  stock  owned  and each  holder of
Milestone's  Series A  Preferred  Stock  will  receive  per share in cash  $2.65
multiplied  by the number of shares of common  stock  into  which such  holder's
shares of Series A Preferred Stock may be converted.

                                                         1

<PAGE>



     Milestone  entered  into  the  merger  agreement  following  the  Board  of
Directors approval based in part upon the unanimous  recommendation of a special
committee  comprised  of  non-management   directors  of  Milestone's  Board  of
Directors.  The special committee has received an opinion from Brooks,  Houghton
Securities,  Inc.  that the price of $2.65  per  share is fair from a  financial
point of view to the stockholders  other than Leonard Mandor,  Robert Mandor and
their affiliates.

         Notwithstanding its recommendation and consistent with the terms of the
merger agreement, if the special committee concludes that the failure to provide
information to, or engage in discussions with any other parties, interested in a
possible  acquisition of the Company,  would be inconsistent  with its fiduciary
duties  to  Milestone's   stockholders,   the  special   committee  may  provide
information to, and engage in discussions and negotiations  with such interested
parties. Under specified circumstances, Milestone has the right to terminate the
merger  agreement  and to  enter  into an  agreement  with a party  proposing  a
competing  transaction.  In the event the merger  agreement  is  terminated  for
certain  reasons,  Milestone will be obligated to pay Concord a break-up fee and
reimbursed costs not to exceed $600,000.  Concord, together with its affiliates,
including Leonard Mandor and Robert Mandor,  possess  sufficient voting power to
approve the transaction  contemplated by the merger  agreement and to approve or
disapprove any competing transaction approved by the special committee.

Introduction

         Milestone  Properties,  Inc.,  directly  and through  its wholly  owned
subsidiaries,  is  engaged  in the  business  of  owning,  acquiring,  managing,
developing  and  investing  in  commercial  real estate and real estate  related
assets. Milestone, together with its subsidiaries, is hereinafter referred to as
the "Company." The Company is primarily engaged in the ownership,  operation and
management  of  interests  in  commercial  real  estate  properties,   currently
consisting of (i) 10 properties  owned in fee (the "Fee  Properties"),  (ii) the
ownership of wraparound notes (the "Wraparound Notes") and wraparound  mortgages
(the "Wraparound  Mortgages" and,  together with the Wraparound Notes, the "Wrap
Debt")  which are  secured by 9  commercial  real  properties  (the  "Underlying
Properties" and, together with the Fee Properties,  the "Properties")  (iii) one
land  parcel,  and (iv) the  operation  and  management  of the  Properties.  At
December 31, 2000, the Properties  included  shopping  centers,  strip malls and
single tenant  properties  and have an aggregate  gross leasable area ("GLA") of
1,076,309  square feet, of which 435,386  square feet are in the Fee  Properties
and 640,923 square feet are in the Underlying Properties. Additional information
regarding the Properties and the land parcel is set forth in Table 1. Summary of
Properties  and  Underlying  Debt located in Item 2.  Description of Property of
this Report.

         The Company's  objectives are to realize upon, maintain and improve the
value of its real estate holdings and to generate cash flow. To accomplish these
objectives, the Company may (i) continue to manage the Properties,  (ii) acquire
additional  commercial  properties to develop and/or hold for investment,  (iii)
expand, improve or redevelop the Properties or properties owned by affiliates of
the Company or third parties through the acquisition and development of adjacent
parcels, (iv) engage in management services for affiliates of the Company and/or
others,  (v) invest in real estate  backed or related  securities,  (vi) acquire
related businesses and/or (vii) engage in such other activities or businesses as
are consistent  with the Company's  overall  objectives.  In connection with its
activities,  the  Company  may  also  consider  selling  one or  more of its Fee
Properties  and/or  financing or  refinancing  one or more of the  Properties or
additional properties acquired by the

                                                         2

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Company in order to fund its business activities.  In addition,  the Company may
enter into joint ventures and/or similar  arrangements with developers or owners
of shopping centers or other commercial properties.  These ventures may take the
form of joint ownership,  participation in general or limited  partnerships,  or
other forms of  investment,  and may  provide  for the  payment of  preferential
distributions, guaranteed returns and/or fees for services. The Company may also
make  secured  real  estate  mortgage  loans,   including  mortgages  junior  to
institutional  or  other  indebtedness,  in  connection  with  the  acquisition,
development, redevelopment or improvement of properties, either to affiliated or
unaffiliated parties.

         The  Company's  business is operated as a single  segment for financial
reporting  purposes.  For  financial  information  regarding the Company for the
fiscal  years ended  December  31,  2000,  1999 and 1998,  see the  Consolidated
Financial  Statements  of the Company and the notes thereto in Part IV, Item 14.
Exhibits, Financial Statement Schedule and Reports on Form 8-K of this Report.

Background

         Milestone was  incorporated  on November 30, 1989 under the laws of the
State of Delaware.  On December 18, 1990,  Concord  Milestone  Income Fund, L.P.
("CMIF") and Concord  Milestone Income Fund II, L.P. ("CMIF II")  (collectively,
the  "Predecessor  Partnerships")  were merged  with and into the  Company  (the
"Acquisition").  The Company  succeeded to the business  and  operations  of the
Predecessor  Partnerships  and  the  partnership  interests  in the  Predecessor
Partnerships  were  converted  into  shares  of  Milestone's  common  stock  and
preferred  stock. In October 1995, the Company  entered into various  agreements
with  affiliates  of  Concord  Assets  Group,   Inc.,  a  New  York  Corporation
("Concord"),  pursuant to which the Company acquired certain real estate related
assets for cash and approximately 2,545,000 shares of common stock.

         At the close of  business  on March 5,  1999,  Milestone  canceled  and
retired 2,983,284 shares of its Series A Preferred Stock,  representing  greater
than 99% of the then outstanding shares of Series A Preferred Stock, pursuant to
the  terms of a court  approved  settlement  of a  purported  class  action  and
derivative  lawsuit brought against  Milestone,  certain of its past and present
members  of its Board of  Directors  and  executive  officers,  and  Concord  in
connection with the Acquisition.

The Wrap Debt

         Certain material terms generally  appearing in the Wraparound Notes and
Wraparound Mortgages are described below. Since the provisions of the Wraparound
Notes and Wraparound  Mortgages are complex and extensive,  and provisions  vary
among the Wraparound Notes and Wraparound Mortgages, no attempt has been made to
describe in detail or to summarize all  provisions of the  Wraparound  Notes and
Wraparound Mortgages.

         The Wrap Debt was issued to  affiliates  of Concord by certain  limited
partnerships  (the  "Partnerships")  sponsored by Concord.  Such  affiliates  of
Concord were formed for the purposes of (i) acquiring the Underlying Properties,
(ii) selling such  properties to the  Partnerships  in exchange for cash and the
Wrap Debt and (iii) leasing the Underlying Properties back from the Partnerships
pursuant to master leases (the "Master Leases"). The payment of the Wrap Debt is
secured by the  Underlying  Properties.  Certain  directors  and officers of the
Company are also directors, officers and controlling stockholders of the general
partner of each of the Partnerships (the "General Partners").

                                                         3

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In October 1995, as part of the Acquisition, the Company acquired certain of the
Wrap Debt and became the lessee under the Master Leases.

         As the holder of the Wrap Debt,  the Company is required to satisfy the
obligations under notes and mortgages held by lenders  (typically banks or other
commercial  lenders) on each Underlying  Property with a priority senior to that
of the Company,  including,  without limitation, debt owed to the prior owner of
such property  under any purchase money notes issued by the  Partnerships  which
own the respective  Underlying  Property in connection with the  acquisitions of
such respective Underlying Property (all such senior indebtedness being referred
to herein collectively as the "Underlying Debt"). The Partnerships are obligated
to the Company for the Wrap Debt which wraps around and includes the  obligation
to pay the  Underlying  Debt,  and is secured by a  mortgage  on the  Underlying
Property.  The Wrap Debt is in a second  priority  position  subordinate  to the
Underlying  Debt and, in some  instances,  may be in a third  priority  position
overall, subordinate to a bank or commercial lender and a seller or other second
priority lender.

         At December 31, 2000, a description  of the balances,  interest  rates,
monthly  payments of principal and  interest,  prepayment  provisions,  maturity
dates and amount of any balloon  payments with respect to the Underlying Debt is
set forth in Table 1 in Item 2. Description of Property.

         The Wraparound Notes

         The Company is currently the holder of 14 Wraparound  Notes relating to
9 Underlying  Properties.  The maturity dates of the Wraparound Notes range from
2001 to 2016. Each of the Wraparound  Notes is a non-recourse  obligation of the
issuing  Partnership  and includes the obligation to satisfy the Underlying Debt
for the corresponding  Underlying Property.  The Underlying Debt associated with
an  Underlying  Property  in some  instances  consists  of  multiple  notes  and
mortgages  which may have different  priorities in relation to one another,  but
all of which are  superior in right to the  Wraparound  Note and the  Wraparound
Mortgage relating to such Underlying  Property. A Wraparound Note may be prepaid
by the Partnership issuing such note by (i) the payment of the excess of (a) the
outstanding balance of such Wraparound Note,  including accrued interest and any
discount  element over (b) the then  aggregate  outstanding  balance,  including
accrued  interest,  of  the  Underlying  Debt  associated  with  the  particular
Underlying  Property,  and (ii) the  assumption  of the  borrower's  obligations
pursuant  to the  Underlying  Debt  associated  with the  particular  Underlying
Property.  The  wraparound   mortgagor's,   i.e.,  the  Partnership  owning  the
Underlying  Property,  source of debt service payments on the Wraparound Note is
the rent it  receives  as lessor  under the  Master  Leases.  Additionally,  any
percentage  rent payable to the  Partnership  pursuant to a Master Lease will be
paid to the  Company  as the  holder  of the  Wraparound  Note  on the  relevant
Underlying Property as partial prepayment under such Wraparound Note.

         At December 31, 2000, a description of the current  balances,  interest
rates,  annual debt service,  maturity dates and amounts of any balloon payments
with  respect  to the  Wraparound  Notes  is set  forth  in  Table  2 in Item 2.
Description of Property.

         The Wraparound Mortgages

     The Company is currently the holder of 14 Wraparound  Mortgages relating to
9 Underlying  Properties.  The maturity dates of the Wraparound  Mortgages range
from 2001 to 2016. The
                                                         4

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Wraparound Mortgages provide that the Company, as the wraparound mortgagee, will
pay, or cause to be paid, on a non-recourse  basis, all payments required by the
Underlying Debt so long as the wraparound mortgagor,  i.e., the Partnership that
owns the related  Underlying  Property,  makes all payments under the Wraparound
Notes to the Company.  If the Company  fails to make any payment  required to be
made by it within 30 days  after the due date of such  payment,  the  wraparound
mortgagor  may make such  payment and deduct the amount of such payment from the
next  succeeding  payments  required to be made under the  Wraparound  Note. The
Partnerships,  as wraparound  mortgagors,  are obligated  under the terms of the
Wraparound  Mortgages not to perform any act which would  constitute a breach of
the underlying mortgage(s) securing the applicable Underlying Debt.

         The Wraparound  Mortgages  provide that the Partnership,  as wraparound
mortgagor of each Underlying  Property,  will maintain all buildings,  equipment
and other improvements on the related Underlying Property. In the event that the
buildings and any other  improvements  are damaged or destroyed,  in whole or in
part,  or in the event of a taking of a portion of the premises  under the power
of eminent domain,  the wraparound  mortgagor is required to restore the same as
nearly  as  possible  to the  condition  they were in  immediately  prior to the
casualty or taking.  Insurance  proceeds  and  condemnation  awards will be made
available,  subject to the  wraparound  mortgagee's  control  and subject to the
rights of the holders of the underlying  mortgages,  to the extent  necessary to
comply with the  foregoing.  The  wraparound  mortgagor  is required to maintain
property,  casualty and public liability  insurance on each Underlying  Property
and cannot remove improvements or fixtures or structurally alter any building.

         Pursuant  to the terms of the  Wraparound  Mortgages,  the  outstanding
balance of each  corresponding  Wraparound Note becomes due and payable upon the
occurrence  of  certain  specified  events,  subject to grace  periods  and cure
rights,  including,  without  limitation,  (i)  the  failure  of the  wraparound
mortgagor to make any payment or perform any covenant required under the related
Wraparound  Mortgage,  (ii) the  commencement  of any  action or  proceeding  to
foreclose  any lien senior to the lien created by such  Wraparound  Mortgage and
(iii) the  Partnerships,  as  wraparound  mortgagors,  becoming  the debtor in a
bankruptcy  or  insolvency  proceeding.  In  addition,  after any default by the
wraparound mortgagor under a Wraparound Mortgage, the Company, as the wraparound
mortgagee,  may exercise certain rights of the wraparound mortgagor with respect
to the management of the related Underlying Property.

         The Company, as the wraparound  mortgagee,  has the right to refinance,
restructure,  alter, increase, renew or rearrange the Underlying Debt subject to
certain  terms  and  conditions,  including,  without  limitation,  that (i) the
refinanced portion of the Underlying Debt cannot increase the obligations of the
wraparound mortgagor, except in certain limited circumstances and (ii) the rents
payable on the  Underlying  Properties  pursuant  to the  operating  leases (the
"Operating  Leases") on the related  Underlying  Properties should reasonably be
expected to satisfy the debt service  obligations on the  refinanced  portion of
the Underlying  Debt.  The wraparound  mortgagor is required to cooperate in the
execution of documents necessary to effectuate the refinancing, so long as it is
not required to become obligated thereon.

The Master Leases

     Certain  material  terms  generally  appearing  in the  Master  Leases  are
described below. Since
                                                         5

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the  provisions of the Master Leases are complex and  extensive,  and provisions
vary among the Master Leases,  no attempt has been made to describe in detail or
to summarize all provisions of the Master Leases.

         The Company is  currently  the master  lessee  under  eight  individual
leases on each of the Underlying Properties with the exception of the Underlying
Property located in Natchez, MS. The expiration dates of the Master Leases range
from 2001 to 2016. As the master lessee, the Company leases an entire Underlying
Property (i.e., a shopping center or single tenant commercial property) from the
owner of such Underlying Property and re-leases it under Operating Leases to the
tenant(s) who occupy such property.

         The Master Leases were initially entered into by affiliates of Concord,
as tenants,  and the  Partnerships,  as landlords,  and are coterminous with the
Wraparound Notes and Wraparound Mortgages. The rent payable by the Company under
each Master Lease for an Underlying Property is approximately the same amount as
the debt service due under each Wraparound  Note for such  Underlying  Property.
The Company is both the holder of each Wrap Debt and the lessee under the Master
Leases relating to the Underlying Properties. Prior to the Acquisition,  certain
of  Concord's  affiliates,  as  tenants,  and  certain of the  Partnerships,  as
lessors,  amended the applicable  Master Leases  pursuant to which,  among other
things,  the rent payable  under such Master Leases was reduced by the amount of
the fees, if any,  payable by the lessor to the General  Partner.  As the master
lessee and the wraparound  mortgagee,  the Company  collects the rents under the
Operating  Leases and  applies  such  amounts to the  operating  expenses of the
Underlying  Property and the payment of the Underlying  Debt. The obligations of
the Company as master lessee under the Master Leases are  guaranteed by Concord.
Such  guaranty was not affected by the  transfer  and  assignment  of the master
lessee interest in the Master Leases to the Company pursuant to the Acquisition,
and the Company is not  obligated  to  indemnify  Concord  with  respect to such
guaranty. The Master Leases are subject and subordinate to the Underlying Debt.

         As between  the  Company,  as lessor,  and the  operating  tenants,  as
lessees,  the  tenants  are  generally  responsible  for payment of rents to the
Company and, in some instances,  for all or a portion of their pro rata share of
operating  expenses and, to a lesser extent,  for the  maintenance and repair of
the Underlying Property.

         Pursuant to the Master Leases, the Company,  as master lessee, (i) pays
a fixed  base rent to the  applicable  Partnership,  as master  lessor,  (ii) is
entitled to receive the revenues payable under the Operating Leases and (iii) is
responsible for operating the Underlying Property. The Company is also obligated
to pay percentage  rent to the Partnership  equal to certain  percentages of net
operating income in excess of certain  threshold  amounts,  which are subject to
adjustment.

         Each  Partnership,  as  master  lessor  under  the  Master  Leases,  is
responsible for the maintenance, repair and replacement of the physical property
when necessary.  The Company,  as master lessee,  can cause the Partnership,  as
master lessor, subject to certain limitations, to borrow additional amounts on a
wraparound basis to finance improvements to the related Underlying Property.

         Pursuant  to each Master  Lease,  the  Company,  as master  lessee,  is
responsible  for compliance  with all  applicable  laws and  regulations  and is
required to keep the Underlying Property insured at

                                                         6

<PAGE>



certain minimum levels for certain  specified losses.  The Company's  management
believes that the Properties are adequately insured. The Master Leases also have
termination and assignment provisions.

         The amount of annual  rents due with  respect to each Master  Lease and
the termination dates thereof are set forth in Table 2 in Item 2. Description of
Property.

Acquisition and Disposition of Real Estate and Real Estate Related Assets

         From time to time,  in the normal  course of business,  the Company may
sell,  or  may  take  action  to  sell,  certain  real  estate  assets.   Recent
acquisitions and dispositions are as follows:

         On November 10, 2000, a wraparound note held by the Company on a 68,337
square foot shopping center located in Deland,  Florida (the "Deland Property"),
was paid as a  result  of the  sale of the  Deland  Property  by its  owner,  an
affiliate of the Company (the  partnership that owned the Deland Property) to an
unrelated third party. In connection with the sale of the Deland  Property,  the
Company,  as a master lessee on a Master Lease on the Deland Property,  canceled
the subject Master Lease. Of the gross proceeds, approximately $642,000 was used
to satisfy the underlying  mortgage debt on the Deland Property.  As a result of
the payment of the wraparound  note,  the Company  realized net cash proceeds of
approximately  $662,800 and recorded a book loss of approximately $59,000 in the
fourth quarter of 2000.

         On  February  25,  2000,  a  wraparound  note held by the  Company on a
138,954  square foot shopping  center  located in Quincy,  Illinois (the "Quincy
Property"),  was  terminated as a result of a foreclosure  sale by the bank (the
holder of the  Underlying  Debt).  The Company  had  previously  terminated,  by
written  notice,  the Master  Lease  associated  with the Quincy  Property as of
December 31, 1998. As a result of the foreclosure sale by the bank of the Quincy
Property and the termination of the Wraparound Note and the Underlying Debt, the
Company recorded a book gain of approximately $1,727,000 in the first quarter of
2000, but received no cash proceeds.

         On February 15, 2000, a wraparound note held by the Company on a 91,800
square foot single tenant commercial  building located in Palatka,  Florida (the
"Palatka Property"), was paid as a result of the sale of the Palatka Property by
its owner, an affiliate of the Company (the  partnership  that owned the Palatka
Property),  to an unrelated  third  party.  In  connection  with the sale of the
Palatka  Property,  the Company,  as the master  lessee on a Master Lease on the
Palatka  Property,  canceled the subject  Master Lease.  Of the gross  proceeds,
approximately $1,067,000 was used to satisfy the underlying mortgage debt on the
Palatka  Property.  As a result of the  payment of the  wraparound  note and the
satisfaction  of the underlying  mortgage  debt,  the Company  realized net cash
proceeds of  approximately  $911,000 and  recorded a book gain of  approximately
$631,000 in the first quarter of 2000.

         On February 3, 2000, a wraparound  note held by the Company on a 43,200
square foot single tenant commercial  building located in Warsaw,  Virginia (the
"Warsaw  Property"),  was paid as a result of the sale of the Warsaw Property by
its owner,  an affiliate of the Company (the  partnership  that owned the Warsaw
Property),  to an unrelated  third  party.  In  connection  with the sale of the
Warsaw  Property,  the  Company,  as the master  lessee on a Master Lease on the
Warsaw  Property,  canceled the subject  Master  Lease.  Of the gross  proceeds,
approximately $768,000 was used to

                                                         7

<PAGE>



satisfy the underlying mortgage debt on the Warsaw Property.  As a result of the
payment of the wraparound note and the  satisfaction of the underlying  mortgage
debt,  the Company  realized  net cash  proceeds of  approximately  $519,000 and
recorded a book gain of approximately $315,000 in the first quarter of 2000.

         On January 13, 2000, a wraparound  note held by the Company on a 43,200
square foot single tenant commercial building located in Hamilton, New York (the
"Hamilton Property"),  was paid as a result of the sale of the Hamilton Property
by its owner,  an  affiliate  of the  Company  (the  partnership  that owned the
Hamilton Property),  to an unrelated third party. In connection with the sale of
the Hamilton  Property,  the Company,  as the master lessee on a Master Lease on
the Hamilton Property, canceled the subject Master Lease. Of the gross proceeds,
approximately  $774,000 was used to satisfy the underlying  mortgage debt on the
Hamilton  Property.  As a result of the payment of the  wraparound  note and the
satisfaction  of the underlying  mortgage  debt,  the Company  realized net cash
proceeds of  approximately  $521,000 and  recorded a book gain of  approximately
$375,000 in the first quarter of 2000.

         On January 7, 2000, a  wraparound  note held by the Company on a 32,400
square foot single tenant commercial building located in Walpole,  New Hampshire
(the  "Walpole  Property"),  was  paid as a result  of the  sale of the  Walpole
Property by its owner, an affiliate of the Company (the  partnership  that owned
the Walpole Property),  to an unrelated third party. In connection with the sale
of the Walpole Property,  the Company, as the master lessee on a Master Lease on
the Walpole Property,  canceled the subject Master Lease. Of the gross proceeds,
approximately  $736,000 was used to satisfy the underlying  mortgage debt on the
Walpole Property. As a result of the payment of the wraparound note, the Company
realized net cash proceeds of approximately $510,000 and recorded a book gain of
approximately $381,000 in the first quarter of 2000.

         On January 7, 2000, a  wraparound  note held by the Company on a 46,400
single-tenant commercial building located in Savannah,  Tennessee (the "Savannah
Property"),  was paid as a result of the sale of the  Savannah  Property  by its
owner,  an  affiliate of the Company  (the  partnership  that owned the Savannah
Property)  to an  unrelated  third party.  In  conjunction  with the sale of the
Savannah  Property,  the Company,  as the master lessee on a Master Lease on the
Savannah Property, canceled the subject Master Lease. As a result of the payment
of the wraparound  note, the Company realized net cash proceeds of approximately
$173,000 and recorded a book gain of approximately $129,000 in the first quarter
of 2000.

         On November 12, 1999, a wraparound note held by the Company on a 45,000
square foot shopping center located in Southwick,  Massachusetts (the "Southwick
Property"),  was paid as a result of the sale of the  Southwick  Property by its
owner,  an affiliate of the Company (the  partnership  that owned the  Southwick
Property),  to an unrelated  third  party.  In  connection  with the sale of the
Southwick  Property,  the Company, as the master lessee on a Master Lease on the
Southwick  Property,  canceled  the  subject  Master  Lease.  As a result of the
payment of the  wraparound  note,  the  Company  realized  net cash  proceeds of
approximately $520,000 and recorded a book gain of approximately $514,000 in the
fourth quarter of 1999.

         On October 21, 1999, five wraparound  notes held by the Company on five
separate   single-  tenant   commercial   buildings   (collectively   the  "Five
Properties"),  were paid as a result of the sale of the Five Properties by their
owners, affiliates of the Company (the partnerships that owned the Five

                                                         8

<PAGE>



Properties)  to  unrelated  parties.  In  conjunction  with the sale of the Five
Properties,  the Company,  as the master lessee on a Master Lease on each of the
Five Properties, canceled the subject Master Leases. The negotiated sales prices
of the Five Properties  aggregated  $12,500,000.  As a result of the sale of the
Five  Properties,  the payment of the wraparound notes and the assumption of the
underlying  mortgage debt by the buyers,  the Company realized net cash proceeds
of approximately $5,400,000 and recorded a book gain of approximately $2,316,000
in the fourth quarter of 1999.

         On July 30,  1999,  a  wraparound  note held by the Company on a 31,170
square foot single tenant commercial building located in Franklin,  Pennsylvania
(the  "Franklin  Property"),  was paid as a result  of the sale of the  Franklin
Property by its owner, an affiliate of the Company (the  partnership  that owned
the Franklin Property), to an unrelated third party. In connection with the sale
of the Franklin Property, the Company, as the master lessee on a Master Lease on
the Franklin Property, canceled the subject Master Lease. Of the gross proceeds,
approximately  $1,348,000  was used to defease the  underlying  bond debt.  As a
result of the payment of the  wraparound  note,  the Company  realized  net cash
proceeds of  approximately  $896,000 and  recorded a book gain of  approximately
$1,527,000 in the third quarter of 1999.

         On April 27, 1999,  a  wraparound  note held by the Company on a 52,700
square foot shopping  center  property  located in Baton Rouge,  Louisiana  (the
"Baton  Rouge  Property"),  was paid as a result of the sale of the Baton  Rouge
Property by its owner, an affiliate of the Company (the  partnership  that owned
the Baton Rouge  Property),  to an unrelated third party. In connection with the
sale of the Baton Rouge Property,  the Company, as the master lessee on a Master
Lease on the Baton Rouge  Property,  canceled the subject  Master Lease.  Of the
gross  proceeds,  approximately  $1,896,208  was used to satisfy the  underlying
mortgage  debt on the Baton  Rouge  Property.  As a result of the payment of the
wraparound  note and the  satisfaction  of the  underlying  mortgage  debt,  the
Company  realized net cash proceeds of  approximately  $2,045,000 and recorded a
book gain of approximately $306,000 in the second quarter of 1999.

         On April 6, 1999,  a  wraparound  note held by the Company on a 125,803
square foot shopping center  property  located in Pascagoula,  Mississippi  (the
"Pascagoula  Property"),  was  paid as a result  of the  sale of the  Pascagoula
Property by its owner, an affiliate of the Company (the  partnership  that owned
the Pascagoula  Property),  to an unrelated  third party. In connection with the
sale of the Pascagoula  Property,  the Company, as the master lessee on a Master
Lease on the Pascagoula Property, canceled the subject Master Lease. As a result
of the payment of the wraparound note, the Company realized net cash proceeds of
approximately  $2,178,000 and recorded a book gain of approximately  $845,000 in
the second quarter of 1999.

Investment in Land Venture Partnerships ("Ventures")

         On  May  1,  1999  and  August  27,  1999,  the  Company  made  initial
investments  of $262,469 and $46,762,  respectively,  in the  Ventures,  and the
Ventures assumed contracts to purchase certain land parcels in the South Florida
area. The land purchase  contracts  contained options to extend the closing date
for an additional fee.  Subsequent to the initial  investment,  the Company made
additional  net  capital  contributions  of  $2,991,036  to  the  Ventures.  The
consolidated  financial  statements of the Company include the operating results
for the Ventures from the date of the Company's investments.


                                                         9

<PAGE>



         On December 29, 1999,  the Ventures  completed the purchase of a parcel
of land (the "Land Parcel") located in Miami,  Florida  (Miami-Dade County) from
an unrelated  third party for  $3,512,000.  In connection  with the purchase,  a
$2,000,000  first mortgage was obtained.  For the first 12 months,  the payments
were interest only at 9.5%. After that, the note requires  twenty-three  monthly
payments of principal  and interest  beginning on December 29, 2000 based upon a
25 year  amortization  schedule.  The note requires interest rate adjustments on
December  29, 2000 and  December  29,  2001 equal to the base rate (prime  rate)
announced by Citibank,  N.A., New York, from time-to-time,  plus one percent. On
December 29, 2000,  the interest rate on such note was changed to  approximately
10.6%. A balloon payment of  approximately  $1,966,000 is required at the end of
year three (December 2002) of the mortgage.

         The  investments  included in the Ventures at December 31, 2000 did not
include any  deposits as compared to deposits of $700,000 at December  31, 1999.
Any such deposits expired during 2000.  Additional capital  contributions may be
required  by the  Company  to pay  expenses  of the  Ventures  in  excess of its
revenues.  The  Land  Parcel  is  currently  under  contract  to be  sold  to an
unaffiliated third party for a price of $5,300,000.

Investment Policy

         There are no  limitations  on the  percentage  of  assets  which may be
invested in any one  investment  or on the type of  investments  the Company may
make.  The Company has no present  intention of  investing  in or acquiring  the
securities of other  companies for the purpose of exercising  control over other
companies.  The Company does not  currently  intend to expand its  operations to
include non-real estate related activities, but may do so if the Company's Board
of  Directors  determines  it to be in the best  interest  of the  Company.  The
Company's  policies  towards its  investments are not subject to the vote of the
Company's stockholders.

Real Estate Revenue

         For the years ended December 31, 2000,  1999 and 1998, no tenant at any
individual  property accounted for more than 10% of the Company's total revenue.
However,  the total revenue from K- Mart  Corporation's  leases with the Company
accounted for  approximately  18%, 30% and 29%,  respectively,  of the Company's
aggregate  rent  revenue  for the past three  years.  The  K-Mart  Corporation's
audited financial  statements may be found in the SEC's Edgar database under the
following:  K-Mart Corp.,  stock symbol:  KM, New York Stock Exchange,  SIC code
5331, SEC Commission File No. 1-327.

Potential Environmental Risks

         Under various federal,  state and local environmental laws,  ordinances
and regulations, the Company, as a current or previous owner or operator of real
property,  may be held liable for the costs of removal or remediation of certain
hazardous    or    toxic    substances,    including,    without    limitations,
asbestos-containing  materials,  that  could be  located  on,  in or under  such
property.  Such laws and regulations  often impose liability  whether or not the
owner or operator knew of, or was responsible for, the presence of the hazardous
or toxic substances.  The costs of any required  remediation or removal of these
substances  could be  substantial  and the  Company's  liability  as an owner or
operator  as to any  property  is  generally  not  limited  under  such laws and
regulations,  and could exceed the property's value and the Company's  aggregate
assets.  The Company's ability to sell or rent a property,  or to borrow using a
property as collateral may be adversely affected by the presence of

                                                        10

<PAGE>



these substances or failure to remediate such substances  properly.  Under these
laws and  regulations,  the Company,  as an owner,  operator,  or any entity who
arranges  for  the  disposal  of   hazardous  or  toxic   substances,   such  as
asbestos-containing  materials, at a disposal site, may also be liable for these
costs, as well as certain other costs, including governmental fines and injuries
to persons or properties.  To date,  the Company,  has not incurred any costs of
removal or  remediation  of such  hazardous or toxic  substances.  However,  the
presence,  with or  without  the  Company's  knowledge,  of  hazardous  or toxic
substances  at any  property  held or operated by the Company,  could  adversely
affect the Company's business,  operating results and financial  condition.  The
Company is not aware of  environmental  conditions at any of the properties that
it owns or in which it has an  investment  which  would have a material  adverse
impact on the Company.

Competition

         Any rental  property that the Company  currently owns or leases or that
the Company  purchases in the future  (whether  retail,  office,  industrial  or
residential)  may have  competition  from similar  properties in the vicinity in
which such property is located, some which may be substantial.  Such competition
will generally be for the retention of existing tenants and for new tenants upon
space becoming vacant.  The Company  believes that the  profitability of each of
its properties is based, in part, upon such properties' geographic location, the
operations  and  identity of the  property's  tenants,  the  performance  of the
property and leasing  managers,  the maintenance and appearance of the property,
the  ease of  access  to the  property  and the  adequacy  of  property  related
facilities.  The Company also believes that general economic  circumstances  and
trends may affect the operation and competitiveness of the property.

         Numerous other  developers,  managers and owners of real estate compete
with the Company for  management  and leasing  revenues,  land for  development,
properties for acquisition  and tenants for  properties,  many of which may have
greater  financial and other  resources  than the Company and may have operating
development experience greater than the Company's. In addition, retailers at the
operating  properties face increasing  competition from outlet malls, mail order
catalogues,  discount shopping clubs, direct mail and telemarketing  operations.
The  development  of competing  properties  and  renovations  and  expansions of
existing competing properties could negatively affect the Company by encouraging
shoppers to make their purchases at the newer,  expanded or renovated  competing
center,  attracting  more  popular  tenants  or  luring  tenants  away  from the
competing  operating  property.   Increased  competition  could  materially  and
adversely affect the Company's revenues.

Employees

         The  Company  currently  employs 20 people.  The  Company is party to a
management agreement (the "Management Agreement") with Concord pursuant to which
the Company provides management  services,  assists in the management of Concord
properties  and provides  certain  personnel and office space and general office
services  to Concord  and for which the  Company  receives  reimbursements  from
Concord.  The Management  Agreement is renewable  annually.  Except for services
provided by certain  employees to Concord pursuant to the Management  Agreement,
all of the  employees  are employed on a full time basis to provide  services to
the Company.

                                                        11

<PAGE>



Item 2.        Description of Property.
               -----------------------

         The  Company's  executive  offices are located at 150 E.  Palmetto Park
Road, 4th Floor, Boca Raton, Florida,  33432 where it leases approximately 8,000
square feet of office space.

         The Company is currently  engaged in the  ownership and operation of 19
commercial real estate properties  consisting of shopping  centers,  strip malls
and free standing  department  stores, and one land parcel. The following tables
describe and  summarize  certain data for each such  property.  See also Item 1.
Business,  for a description of additional  terms relating to the Properties and
the Company's investment policies.

         Table 1.    Summary of Properties and Underlying Debt.
                     -----------------------------------------

         Table 2.    Summary of Wraparound Notes.
                     ---------------------------


                                                        12

<PAGE>



Table 1. Summary of Properties and Underlying Debt at December 31, 2000
<TABLE>
<CAPTION>


                                                  Occup-                      Monthly                                     Balance at
                                                  ancy   Underlying Interest  Payments of                                   Maturity
                                          GLA     Rate     Debt at     Rate   Principal & Prepaymnet         Maturity   (Assuming no
Location          Property               (Sq Ft)   (%)    12/31/00     (%)    Interest    Provision            Date      Prepayment)
================= ====================== ======== ======= ========== ======= ============ ================= ===========  ==========
<S>                              <C>      <C>      <C>       <C>      <C>     <C>         <C>                    <C>        <C>
Rochester, NY     Ridgemont Plaza(1),(6)  84,181   100       864,108  9.250   15,992      1% premium             1/1/02     747,266

Janesville, WI    Blackhawk Village (4)   88,500    85       717,072   9.00   14,060      none                  7/31/02     540,492
                                                              91,742   9.00    1,529      none                   8/1/07           0

No. Canton, OH    Kmart Corp (1),(6)      84,181   100     1,883,644   9.00   21,669      Pre-payable at a      9/30/12           0
                                                                                          discount

Natchez, MS       Morgantown Plaza (4)    92,646   100     2,152,874   7.59   15,519      None until 2004;       5/1/08   1,951,900
                                                                                          then 1% premium

Sandy, PA         Sandy Plaza (1), (4)    34,019   100     1,165,000   7.00      (3)      None until 2004;      12/1/06           0
                                                                                          then 3% declining
                                                                                          1% annually

Montgomery, AL    Chisolm Shopping        39,075   100     1,065,074   8.75   14,500      2% premium             4/1/07     396,073
                   Center (4)

Paris, TN         Paris Plaza (4)        102,453    87       493,202  13.50    8,859      1% premium             4/1/08           0
                                                             233,046   9.25    8,467      Pre-payable at par     7/1/03           0

Danville, IL      Holiday Square (4)      50,978   100       235,346  9.625    9,663      1% premium             9/1/02      64,250

Sunrise, FL       Pine Oak Plaza(2),(5)   16,994    87     1,135,238   7.48    8,095      none                   5/1/08   1,027,700

Jacksonville, FL  Regency Walk(2),(5)     34,436    90     1,803,203   7.87   13,335      none                   5/1/08   1,643,700

Orange Park, FL   Orange Park(2),(5)      21,509    70     1,270,786   7.39    8,992      none                   4/1/08   1,147,600

Boca Raton, FL    Teeca Plaza(2),(5)      22,589    94     1,763,573   7.39   12,450      none                   7/1/08   1,591,000

W. Palm Beach, FL Country Grove           16,642    96       864,015   7.51    6,159      none                   9/1/08     780,150
                   Plaza(2),(5)

Jacksonville, FL  Mandarin                63,346    99     3,888,460   8.00   28,984      none                  10/1/08   3,542,000
                   Central(2),(5)

Ft.Lauderdale, FL Pine Crest(2),(5)       40,408    73     2,347,217   7.00   15,967      none                 11/11/08   2,063,000

Davie, FL         Lincoln Park(2),(5)     46,190    83     3,166,205   7.58   22,684      5% premium            11/1/08   2,854,000

Miami, FL         Miami-Dade County          n/a   n/a     2,000,000   10.6      (7)      none                 12/29/02   1,966,000
                   Land Parcel

Columbus, NE      Cottonwood              64,890   100     1,203,211  12.00   17,201      none                   9/1/10       9,274
                   Plaza(1),(6)                               56,164   9.50      697      none                   7/1/11           0

Zanesville, OH    Sunrise Shopping       130,072    90     1,719,555   8.16   13,693      3% premium             6/1/09   1,471,500
                   Center(2),(4)

Blackstone, VA    Family Dollar(2),(4)    43,200    21             0    n/a      n/a      n/a                       n/a         n/a
----------------- ---------------------- ---------- ------------  ------------ --------- ----------------- -----------------------
</TABLE>

(1)      Annual real estate taxes are the responsibility of the tenant.
(2)      Represents a Fee Property.
(3)      Principal and interest are paid semi annually in accordance
         with the respective bond documents.
(4)      Represents a shopping center.
(5)      Represents a strip mall.
(6)     Represents a free standing department
        store.
(7)     Monthly payments of approximately
        $19,100 in year 2001 and 2002 dependent
        on a floating interest rate of bank prime
        plus one percent.

                                                               13

<PAGE>



Table 2. Summary of Wraparound Notes and Master Leases at December 31, 2000
<TABLE>
<CAPTION>

                             Carrying      Face Amount     Annual                Balance at    Annual
                 Interest    Amount of         of        Payments of   Final      Maturity     Master         Master
                   Rate     Wraparound     Wraparound    Principal & Maturity   (Assuming no    Lease         Lease
     Location      (%)         Notes          Notes        Interest     Date     Prepayment)   Payment     Termination
================ ========  ============= =============== =========== ========  ============  ========= ==============
<S>                  <C>       <C>             <C>           <C>     <C>                  <C>  <C>           <C>
Rochester, NY        9.75      1,380,268       1,661,424     220,906 12/31/14             0    220,906       12/31/14
                    10.00        130,625         225,891           0 12/31/14       910,735          0            n/a
Janesville, WI      10.25      1,318,663       2,057,637     268,502 12/31/16             0    268,502       12/31/16
                    11.00         15,000          20,644           0 12/31/16       106,688          0            n/a
No Canton, OH        9.11      2,008,597       2,675,131     333,272 12/31/14             0    333,272       12/31/14
                    11.00         26,575          38,924           0 12/31/14       216,478          0            n/a
                    11.00        180,408         218,677           0 12/31/14     1,115,854          0            n/a
Natchez, MS         10.00        840,595       3,187,906     516,210 05/01/08     3,187,906        n/a            n/a
Sandy, PA           10.00        419,021       1,994,602     207,726  6/30/01             0    207,726        6/30/01
Montgomery, AL       9.75        705,332       2,015,635     236,100  6/30/01             0    236,100        6/30/01
Danville, IL         9.75        574,996       1,539,365     202,772  6/30/01             0    202,772        6/30/01
Paris, TN           10.00        867,047       2,679,715     288,924  6/30/01             0    288,924        6/30/01
                    11.00         51,016          90,992           0  6/30/01        78,242          0            n/a
Columbus, NE         9.75      1,968,411       2,233,342     227,124  6/30/01             0    227,124        6/30/01
---------------- --------  ------------- --------------- ----------- --------  ------------  --------- --------------
</TABLE>

Item 3.        Legal Proceedings.
               -----------------

         As previously reported, the Company is the plaintiff in a Florida state
court action against certain  insurance  companies (the "National Union Action")
for their refusal to contribute to the settlement of certain previously-reported
actions (known as the "Winston  Actions") which involved the Company and certain
of its present and former  officers and directors.  The National Union Action is
currently  in  discovery,  and the  Company  is not in a  position  to render an
opinion as to its outcome.

         For a detailed description of the other Winston Actions, the settlement
thereof, (the "Winston Settlement"),  and the commencement of the National Union
Action,  please see the Company's  Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999 (and the cross-references therein).

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

         No matters were  submitted to a vote of the security  holders,  through
the  solicitation  of proxies  or  otherwise,  during the fourth  quarter of the
fiscal year ended December 31, 2000.


                                                        14

<PAGE>



                                                      PART II

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

         The Common  Stock and the Series A  Preferred  Stock were traded on the
New York  Stock  Exchange  (the  "NYSE")  under  symbols  "MPI"  and "MPI  PRA",
respectively,  from January 29, 1991 through  July 3, 1998.  The NYSE  suspended
trading in shares of the Common Stock and Series A Preferred  Stock prior to the
market  opening on July 6, 1998.  On or about July 6, 1998, a market began to be
made  for  shares  of the  Common  Stock  and  Series A  Preferred  Stock on the
Over-The-  Counter (the "OTC")  Bulletin Board with the ticker  symbols"MPRP"and
"MPRPP", respectively.

         The table  below  sets  forth the high and low bid  quotations  for the
Common Stock and the Series A Preferred  Stock,  as reported on the OTC Bulletin
Board,  for the 2000 and1999  fiscal years.  The high and low bid quotations for
the  Common  Stock  and  Series  A  Preferred  Stock  represent  prices  between
broker-dealers,  and  do  not  include  retail  mark-ups  or  mark-downs  or any
commission to the broker-dealer and may not represent actual transactions.


Common Stock                                             High            Low
=============================================== =============  =============
2000
First Quarter                                        $  3-1/4       $  2-3/4
Second Quarter                                          3-3/4        2-11/16
Third Quarter                                           4-1/8         2-5/16
Fourth Quarter                                          2-1/4          1-3/4
1999
First Quarter                                      $        2        $ 13/16
Second Quarter                                         3-9/16          1-1/2
Third Quarter                                           3-4/5          3-1/4
Fourth Quarter                                          3-1/2          2-3/4



Series A Preferred Stock                                  High            Low
=============================================== ==============  =============
2000
First Quarter                                        No reported trading
Second Quarter                                       No reported trading
Third Quarter                                        No reported trading
Fourth Quarter                                       No reported trading




                                15

<PAGE>



Series A Preferred Stock                                  High            Low
1999
----
First Quarter                                         $ 2-9/10            $ 2
Second Quarter                                           2-3/4          2-3/4
Third Quarter                                            3-1/4          2-5/8
Fourth Quarter                                            No reported trading

         On March 22, 2001,  the average bid and asked price of the Common Stock
was $1.875.  There has been no reported  trading on the Series A Preferred Stock
since July 15, 1999 when the  average bid and ask price was $2.63.  On March 22,
2001, management estimates that there were approximately 1,718 record holders of
the Common Stock and 6 record holders of the Series A Preferred Stock.

Dividend Policy

         Common Stock

         Milestone has never declared any cash dividends on its Common Stock and
has no present intention to declare or pay cash dividends on the Common Stock in
the foreseeable  future.  While there are no restrictions on Milestone's ability
to declare dividends,  except for the preference of the Series A Preferred Stock
(discussed below),  the Company  anticipates that in the future earnings will be
retained  to finance the  Company's  operations.  Any  decision as to the future
declaration  of  dividends  on the Common  Stock will  depend on the  results of
operations and the financial  condition of the Company and such other factors as
Milestone's Board of Directors,  in its discretion,  deems relevant. See Item 7.
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operation - Liquidity and Capital Resources.

         Series A Preferred Stock

         Milestone's Board of Directors  determined not to declare any dividends
on the Series A Preferred  Stock  during the years ended  December  31, 2000 and
1999. The last dividend declared by Milestone was for the quarter ended December
31,  1995 and was paid on  February  15,  1996 at  $0.195  per share of Series A
Preferred Stock.

         Since September 30, 1995,  holders of the Series A Preferred Stock have
not been entitled to receive  dividends on a cumulative  basis.  Pursuant to the
Certificate of Designations of the Series A Preferred Stock, after such date, no
cash dividend may be paid on the Common Stock unless full dividends of $0.195 on
all  outstanding  shares  of  Series A  Preferred  Stock  for the  then  current
quarterly  dividend  period are declared and either paid or sufficient  sums for
the  payment  thereof  are set  aside.  As a  result  of  Milestone's  Board  of
Directors'  determination  not to declare a dividend for the quarter  ended June
30,  1997,  which was the sixth  consecutive  quarter for which no dividend  was
declared,  the number of persons  entitled to serve as directors on  Milestone's
Board of  Directors  has been  increased by one, and the holders of the Series A
Preferred Stock, who are otherwise  entitled to elect one member of the Board of
Directors, became entitled to elect a second member of the Board of Directors to
fill such newly created  directorship.  At the annual  meeting in May 1999,  the
holders  of the  Series A  Preferred  Stock  elected  Harvey  Shore to fill such
position.  Any  decision as to the future  payment of  dividends on the Series A
Preferred Stock will depend on the results of

                                                        16

<PAGE>



operations and the financial  condition of the Company and such other factors as
Milestone's Board of Directors,  in its discretion,  deems relevant. See Item 7.
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operation - Liquidity and Capital Resources.

         See Item 3, Legal  Proceedings,  for a cross-reference to a description
of the  Company's  repurchase  and  retirement  of 2,983,284  shares of Series A
Preferred Stock during 1999.

Item 6.        Selected Financial Data.

 (Amounts in thousands, except per share information)

         The  following  table sets forth a summary  of the  selected  financial
information for the Company. The information below should be read in conjunction
with the audited financial statements and with the information presented in Item
7,  Management's  Discussion and Analysis of Financial  Condition and Results of
Operations.

<TABLE>
<CAPTION>


                                                              2000          1999          1998          1997           1996
================================================== =============== =============  ============ =============  =============
<S>                                                       <C>           <C>           <C>           <C>            <C>
Total revenues                                            $ 13,286      $ 19,632      $ 25,515      $ 30,092       $ 33,722
Total expenses                                              12,310        20,185        32,693        34,244         35,843
Income (loss) before income taxes and minority                 976         (553)       (7,178)       (4,152)        (2,121)
interest
Provision (benefit) for income taxes                           461       (2,012)         1,253         (721)            366
Net income (loss) before minority interest                     515         1,459       (8,431)       (3,431)        (2,487)
Minority interest in net loss of consolidated
subsidiary                                                     26            664             0            0               0
                                                   ---------------  ------------  ------------ -------------   ------------
Income (loss) attributable to common stockholders    $         541   $    2,123      $ (8,431)     $ (3,431)      $ (2,487)
                                                     =============   ===========     =========     =========      =========

Income (loss) per common share, basic               $         .13    $      0.50    $   (1.99)    $   (0.82)     $   (0.65)
                                                    ==============  ============    ==========    ==========     ==========
Income (loss) per common share, diluted            $         .12    $        .43   $     1.99     $   (0.82)     $   (0.65)
                                                   =============== ============== ============    ==========     ==========

Weighted average common shares outstanding,
basic                                                        4,289        4,260         4,235         4,207          3,846
                                                    ==============  ============    ==========  ============  ============
Weighted average common shares outstanding,
diluted                                                      4,361        4,991          -             -               -
                                                    ==============  ============  ======================================
Total assets                                          $     51,945    $  63,278     $  86,922    $  112,223     $  182,095
                                                      ============    ==========    ==========   ===========    ==========
Mortgages and notes payable                           $     30,119    $  38,199     $  47,977   $    67,740    $    71,563
                                                      ============    ==========    ==========  ============   ============
-------------------------------------------------- --------------- -------------  ------------ -------------  -------------
</TABLE>


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


     Certain  statements  made in this  report may  constitute  "forward-looking
statements"  within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act. See Item 1.
Business.

                                                         17

<PAGE>



         The following  discussion  and analysis  should be read in  conjunction
with the Consolidated  Financial Statements of the Company and the notes thereto
appearing in Item 14 of this report.

         The Company is engaged in the business of owning, acquiring,  managing,
developing  and  investing  in  commercial  real estate and real estate  related
assets.


Results of Operations

         Calendar Year 2000 Compared to Calendar Year 1999

         For the year ended December 31, 2000,  the Company  reported net income
of $541,051 on total revenues of  $13,285,571,  or $.13 per common share,  basic
computation.  For the year ended December 31, 1999,  the Company  reported a net
income of $2,123,119 on total revenues of $19,632,289, or $.50 per common share,
basic  computation.  The 1999 results  included a  nonrecurring  reversal by the
Company of a previously  recorded  income tax payable  accrual of  approximately
$2,800,000 which the Company no longer believed was a necessary liability.

         Total revenues for the year ended  December 31, 2000 were  $13,285,571,
as compared to $19,632,289,  for the year ended December 31, 1999, a decrease of
$6,346,718, or 32%, due to the following:

         i) Rent decreased  $2,230,256,  or 31%, in 2000 compared to 1999.  This
decrease  is  primarily  due to property  sales,  of the  Underlying  Properties
subsequent to the second quarter of 1999.

        ii) Interest  income  decreased  $1,710,536,  or 36%, for the year ended
December 31, 2000 compared to the year ended December 31, 1999. This decrease is
primarily due to a decrease in interest  income related to the Wraparound  Notes
on Underlying  Properties  which were sold  subsequent to the second  quarter of
1999.

          iii) For the year ended December 31, 2000 the Company had gains on the
sale of real estate and real estate  related assets of $3,499,462 as compared to
gains on the sale of real estate and real estate  related  assets of  $5,507,817
for the year ended December 31, 1999.

         Master Lease expenses decreased  $4,055,199,  or 65%, due to a decrease
in the  number of  properties  leased by the  Company as a result of the sale of
some of the Underlying Properties by their owners.

         Salaries,  general and administrative expenses decreased $1,563,643, or
35%  due  primarily  to  nonrecurring  1999  salary  expenses  of  approximately
$1,351,000  resulting  from (i) the  repurchase  of 222,200  options to purchase
shares of the Company's common stock from certain  executives of the Company for
approximately  $650,000, (ii) there were no year-end bonuses in 2000 as compared
to $701,000 in year-end bonuses for several executive officers of the Company in
1999, (iii) non- recurring  professional fees of approximately $485,000 relating
to legal fees and other professional

                                                         18

<PAGE>



fees incurred in fiscal year 1999.  The decrease in salary  expenses in 2000 was
partially  offset by an accrual of an employment  contract payout for an officer
of the Company of approximately $558,000.

         Expired extensions to land purchase contracts  decreased  $483,860,  or
39% as there were fewer land purchase  contracts  being  extended in fiscal year
2000.

         Professional  fees  decreased  $476,738,  or 52% due  primarily to fees
associated  with the  settlement  of the Winston  Actions which were paid in the
first quarter of fiscal 1999.

         Interest expense for the year ended December 31, 2000 was $2,630,705, a
decrease of $1,080,731 or 29%, from  $3,711,436  for the year ended December 31,
1999.  Such decrease is due to a reduction in the Underlying Debt related to the
Underlying  Properties of the Company resulting from property sales in both 1999
and 2000.

         Income tax expense for the year ended December 31, 2000 was $460,600 as
compared to an income tax benefit of $2,012,216  for the year ended December 31,
1999.  The 1999 benefit was due primarily to the Company  reversing a previously
recorded  income tax accrual of  approximately  $2,800,000  which the Company no
longer believed was a necessary liability.

         Calendar Year 1999 Compared to Calendar Year 1998

         For the year ended December 31, 1999,  the Company  reported net income
of $2,123,119 on total revenues of $19,632,289, or $0.50 per common share, basic
computation. The 1999 results included a nonrecurring reversal by the Company of
a previously  recorded  income tax payable accrual of  approximately  $2,800,000
which the  Company no longer  believes is a  necessary  liability.  For the year
ended December 31, 1998, the Company reported a net loss of $8,431,112, or $1.99
per common share,  on total  revenues of  $25,515,391.  These results  include a
nonrecurring charge of approximately $7,084,000 related to the settlement of the
Winston Actions.

         Total revenues for the year ended  December 31, 1999 were  $19,632,289,
as compared to $25,515,391,  for the year ended December 31, 1998, a decrease of
$5,883,102, or 23%, due to the following:

         i) Rent decreased  $2,446,047,  or 25%, in 1999 compared to 1998.  This
decrease is  primarily  due to the net of: (1)  property  sales,  which caused a
decrease in rent revenue of  approximately  $4,089,000  which is offset by (2) a
full year of rents  received on the  properties  purchased  during  1998,  which
caused an increase in rent revenue of approximately $1,478,000.

        ii) Interest  income  decreased  $3,475,761,  or 42%, for the year ended
December 31, 1999 compared to the year ended December 31, 1998. This decrease is
primarily due to: (1 ) a decrease of approximately $2,754,000 in interest income
related to the Wraparound Notes on Underlying Properties which have been sold by
its owners; and (2) a decrease of approximately $515,000 in interest income as a
result of less cash on hand during  1999 due to the cash  expended to settle the
Winston Actions.

          iii) For the year ended December 31, 1999 the Company had gains on the
sale of real estate and real estate  related assets of $5,507,817 as compared to
gains on the sale of real estate and real estate  related  assets of  $5,617,844
for the year ended December 31, 1998.

                                                         19

<PAGE>



         Master Lease expenses decreased  $6,147,169,  or 50%, due to a decrease
in the  number of  properties  leased by the  Company as a result of the sale of
some of the Underlying Properties by their owners.

         Salaries,  general and administrative expenses increased $1,543,054, or
54% primarily due to an increase in salary expense of  approximately  $1,447,000
as the result of the  repurchase  of 222,200  options to purchase  shares of the
Company's common stock, from certain executives of the Company for approximately
$650,000,  which amount represents the excess of the current market price of the
common stock over the exercise  price of the options.  Also,  increasing  salary
expense was an increase of  approximately  $701,000 in the year-end  bonuses for
several executive officers of the Company.

         Expired  extensions  to land  purchase  contracts  for the  year  ended
December 31, 1999 were  $1,232,659 as compared to $0 for the year ended December
31, 1998 due to the Company's investments in Ventures during 1999.

         Professional  fees  decreased  $349,184,  or 27% due  primarily to fees
associated  with the  settlement  of the Winston  Actions which were paid in the
first  quarter  of fiscal  1999 and  which  had been the cause of a  significant
amount of legal fee expense in 1998.

         Interest expense for the year ended December 31, 1999 was $3,711,436, a
decrease of $1,763,015 or 32%, from  $5,474,451  for the year ended December 31,
1998.  Such  decrease  was  primarily  due to a decrease in interest  expense of
approximately  $2,362,000  on the  underlying  debt as a  result  of  Underlying
Property  sales,  as previously  described,  which were offset by a full year of
interest  expense  on  the  properties  purchased  during  1998,  as  previously
described.

         Depreciation  and amortization for the year ended December 31, 1999 was
$865,102, a decrease of $48,425 or 5%, from $913,527 for the year ended December
31, 1998. Such decrease was primarily due to the net of property disposition and
property purchases.

         Income tax benefit for the year ended  December 31, 1999 was $2,012,216
as compared to an income tax expense of $1,253,056  for the year ended  December
31, 1998, due primarily to the Company  reversing a previously  recorded accrual
of approximately $2,800,000 during 1999.

Cash Flows

         For the year ended December 31, 2000, cash used in operating activities
was  $3,229,489,  cash provided by investing  activities was $8,698,622 and cash
used in financing  activities  was  $4,862,973.  The primary uses of these funds
were payments to satisfy underlying  mortgage debt as a result of property sales
of the related  Underlying  Property,  by its owner, an affiliate of the Company
(i.e.,  the  Partnership  that  owned the  Underlying  Property)  as  previously
discussed  in Item 1.  Business.  The primary  source of the funds was  payments
received by the Company on its Wraparound Notes, as previously described.

         For the year ended December 31, 1999, cash used in operating activities
was $15,310,661,  cash provided by investing activities was $22,908,711 and cash
used in financing  activities was  $11,392,094.  The primary uses of these funds
were payments  associated  with the Winston  Settlement  and payments to satisfy
underlying mortgage debt as a result of property sales of the related Underlying
Property,  by its owner, an affiliate of the Company (i.e., the Partnership that
owned the Underlying Property) as previously discussed in Item 1. Business.  The
primary source of the funds

                                                         20

<PAGE>



was payments  received by the Company on its  Wraparound  Notes,  as  previously
described.
         For the year ended December 31, 1998, cash used in operating activities
was $6,567,933,  cash provided by investing  activities was $24,721,432 and cash
used in financing activities was $19,762,435.  The primary uses and provision of
these  funds was a direct  result  of the  property  purchases  and sales by the
Company  during  1998,  as well as the  payments  received by the Company on its
Wraparound Notes, as a result of the sale of the related Underlying Property, by
its owner,  an affiliate of the Company (i.e.,  the  Partnership  that owned the
Underlying Property).

Liquidity and Capital Resources

         During  2000 and  1999,  the  Company  generated  cash as a  result  of
payments  received  by  the  Company  on its  Wraparound  Notes,  as  previously
described,  as a result of the sale of the related Underlying  Property,  by its
owner,  an  affiliate  of the  Company  (i.e.,  the  Partnership  that owned the
Underlying  Property).  This trend may continue as the  Partnerships  attempt to
sell the remaining Underlying Properties.

         The  Company's  total  current   investment  is  $3,070,888  in  active
Ventures, as previously discussed. As of December 31, 2000 there are no deposits
to purchase land parcels in the South Florida area. The Ventures  currently have
a Land Parcel  under  contract to be sold to an  unaffiliated  third party for a
price of $5,300,000.

         The  Company's   existing   borrowings  and  the  encumbrances  on  the
properties securing those borrowings may inhibit or result in increased costs to
the Company in connection with its ability to incur future  indebtedness  and/or
raise substantial equity capital in the marketplace.

         The  Company  has  invested  available  funds  in  secure,  short-term,
interest  bearing  investments.  On a  short-term  basis,  the cash  position is
believed to be sufficient to support all  operating  activities.  On a long-term
basis, the Company believes that its levels of working capital,  liquidity, cash
flow from  operations,  and access to credit are  sufficient  to support  future
operations.

         Other  than  described  herein,  management  is not  aware of any other
trends,  events,  commitments  or  uncertainties  that  will,  or are likely to,
materially impact the Company's liquidity.

Current Accounting Issues

SFAS No. 133 and No. 138

         Statement  of  Financial   Accounting   Standards   ("SFAS")  No.  133,
"Accounting for Derivative Instruments and Hedging Activities" and SFAS No. 138,
"Accounting for Certain Derivative  Instruments and Certain Hedging  Activities,
an Amendment of FASB 133"  establishes  accounting  and reporting  standards for
derivative  instruments,  including certain derivative  instruments  embedded in
other contracts, and for hedging activities.  It requires an entity to recognize
all  derivatives  as either assets or  liabilities in the statement of financial
position, and measure those instruments at fair value. Changes in the fair value
of those derivatives will be reported in earnings or other comprehensive  income
depending on the use of the derivative and whether the derivative  qualifies for
hedge  accounting.  SFAS No. 133 and SFAS No. 138 are  effective  for all fiscal
quarters of all fiscal years  beginning after June 30, 2000. The Company adopted
SFAS No. 133, as amended by SFAS No. 138, on January 1, 2001.

                                                         21

<PAGE>



         The  Company has  identified  a minimal  number of embedded  derivative
instruments,  and these were  evaluated for  recording on the Company's  balance
sheet at January  1, 2001.  Within  certain  of its leases  with  tenants in its
properties,  the  Company  has  embedded  derivatives  resulting  from  possible
limitations on scheduled rent increases, based on changes in CPI. These types of
limitations  are common in the Company's  industry.  These embedded  derivatives
have been valued at an insignificant  amount, so the effect of adopting this new
accounting pronouncement is inconsequential at January 1, 2001.

         The  adoption of SFAS No. 133  resulted in the Company  recording a net
transition adjustment of an insignificant amount, so the effect of the recording
of this new accounting  pronouncement is inconsequential at January 1, 2001. The
Company  expects  that the  adoption  of SFAS No.  133  will  not  increase  the
volatility  of its  reported  earnings,  as the  embedded  derivatives  have not
resulted in any material  change in the Company's  earnings or cash flows in the
past. The Company  believes that its embedded  derivatives  are not likely to be
material in the future.

SFAS No. 140

         Statement of Financial  Accounting  Standards No. 140,  "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities -
- a replacement  of FASB No. 125," was issued in September  2000. It revises the
standards for accounting for  securitizations  and other  transfers of financial
assets and collateral and requires certain  disclosures but will carry over most
of SFAS No. 125's provisions without reconsideration.  SFAS 140 is effective for
transfers and servicing of financial assets and  extinguishments  of liabilities
occurring  after March 31, 2001. This statement is effective for recognition and
reclassification  of collateral and for  disclosures  related to  securitization
transactions and collateral for fiscal years ending after December 15, 2000. The
adoption of the  provisions of SFAS No. 140 is not expected to have any material
impact on the Company.

Item 7A.       Quantitative and Qualitative Disclosures about Market Risk.

         The Company, in its normal course of business, is theoretically exposed
to interest rate changes as they relate to real estate  mortgages and the effect
of such  mortgage  rate  changes on the value of real estate.  However,  for the
Company,  most of its mortgage debt is at fixed rates, is for extended terms, is
not assumable  and would be  unaffected by any sudden change in interest  rates.
The Company's  possible risk is from increases in long-term real estate mortgage
rates that may occur over a decade or more,  as this may  decrease  the  overall
value of real  estate.  Since the  Company  has the intent to hold its  existing
mortgages to maturity (or until the sale of a Property), there is believed to be
no interest  rate  market risk on the  Company's  results of  operations  or its
working capital position.  The Company estimates the fair value of its long term
fixed rate mortgage loans generally using discounted cash flow analysis based on
current  borrowing  rates for similar types of debt.  At December 31, 2000,  the
fair value of the mortgage loans was estimated to be  $29,731,468  compared to a
carrying value amount of $30,118,735.

         The Company's  cash  equivalents  and short-term  investments,  if any,
generally bear variable interest rates.  Changes in the market rates of interest
on short-term  investments will affect the interest earned by the Company. Since
the Company does not rely on its interest earnings on short-term  investments to
fund working  capital  needs,  changes in these  interest rates will not have an
impact on the Company's results of operations or working capital position.



                                                         22

<PAGE>



Item 8. Financial Statements and Supplementary Disclosure.

         The Company's  Consolidated  Financial Statements and the notes thereto
appear in Item 14 of this Report.

Item 9.  Changes  in  and  Disagreements  With  Accountants  on  Accounting  and
     Financial Disclosure.


         During the last two fiscal years,  no changes of accountants  occurred,
and no disagreements  with  accountants on accounting and financial  disclosures
occurred.






                                                        23

<PAGE>



                                                      PART III

         Certain  information  required by Part III is omitted  from this report
since the Company plans to file with the  Securities  and Exchange  Commission a
definitive  proxy  statement for its 2001 Annual  Meeting of  Stockholders  (the
"Proxy  Statement")  no later  than 120 days  after the end of the  fiscal  year
covered by this Report, and certain information included therein is incorporated
herein by reference.

Item 10.       Directors and Executive Officers of the Registrant.
               --------------------------------------------------

         The information regarding the Company's directors required by this Item
is  incorporated  by  reference to the section in the Proxy  Statement  entitled
"Election of Directors."

         The information  regarding the Company's executive officers required by
this Item is  incorporated  by reference to the sections in the Proxy  Statement
entitled "Election of Directors" and "Executive Officers."

         The  information   regarding  compliance  with  Section  16(a)  of  the
Securities  Exchange  Act of  1934,  as  amended,  by the  directors,  executive
officers  and  beneficial  owners  of more than 10% of the  Common  Stock or the
Series A Preferred  Stock required by this Item is  incorporated by reference to
the section in the Proxy Statement entitled "Section 16(a) Beneficial  Ownership
Reporting Compliance."

Item 11.       Executive Compensation.
               ----------------------

         The  information  regarding  compensation  of directors  and  executive
officers of the Company  required by this Item is  incorporated  by reference to
the  section  in the  Proxy  Statement  entitled  "Executive  Compensation"  and
"Compensation of Directors."

Item 12.       Security Ownership of Certain Beneficial Owners and Management.
               --------------------------------------------------------------

         The  information  regarding  security  ownership of certain  beneficial
owners and management  required by this Item is incorporated by reference to the
section  in  the  Proxy  Statement  entitled  "Security   Ownership  of  Certain
Beneficial Owners and Management."

Item 13.       Certain Relationships and Related Transactions.
               ----------------------------------------------

         The   information   regarding   certain   relationships   and   related
transactions  required by this Item is incorporated by reference to the sections
in the Proxy Statement entitled  "Compensation  Committee Interlocks and Insider
Participation" and "Certain Relationships and Related Transactions."

                                                         24

<PAGE>



                                                      PART IV

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

(a)(1)         Financial Statements and Financial Statement Schedule.
               -----------------------------------------------------

The following consolidated financial statements of the Company are filed as part
of this report:

                                                                       Page
         Independent Auditors' Report of Ahearn, Jasco + Company, P.A.  F-1

         Consolidated Balance Sheets - December 31, 2000 and 1999       F-2

         Consolidated Statements of Revenues and Expenses -
                     Years Ended December 31, 2000, 1999 and 1998       F-3

         Consolidated Statements of Stockholders' Equity -
                     Years Ended December 31, 2000, 1999 and 1998       F-4

         Consolidated Statements of Cash Flows -
                     Years Ended December 31, 2000, 1999 and 1998       F-5

         Notes to Consolidated Financial Statements                     F-7

(a)(2)         Financial Statement Schedule.
               ----------------------------
               Schedule III Real Estate and Accumulated Depreciation    S-1

               This financial  statement schedule of the Company for each of the
               years ended December 31, 2000,  1999 and 1998 is filed as part of
               this  Form  10-K  and  should  be read in  conjunction  with  the
               Consolidated Financial Statements,  and related notes thereto, of
               the Company.  All other financial  statement  schedules have been
               omitted  because the required  information  is not present or not
               present  in  amounts  sufficient  to  require  submission  of the
               schedule or because the  information  required is included in the
               consolidated financial statements or notes thereto.

(a)(3)         Exhibits.
               --------

               The exhibits to this report are listed below:






                                                         25

<PAGE>



Exhibit        Description

3.1  Certificate of Amendment to Certificate  of  Incorporation  of the Company,
     filed on December 18, 1990 (incorporated by reference to Exhibit 3.1 to the
     Company's Form 10- K filed with the Commission on March 29, 1991).

3.2  Certificate  of Amendment to the  Company's  certificate  of  Incorporation
     (incorporated  by reference to Exhibit B to the Company's  definitive Proxy
     Statement filed with the Commission on April 30, 1999).

4.1  Certificate of Designations of $.78 Convertible Series A Preferred Stock of
     the  Company,  filed on December  18, 1990  (incorporated  by  reference to
     Exhibit 4.1 to the Company's  Form 10-K filed with the  Commission on March
     29, 1991).

4.2  Certificate of Amendment to Certificate of Designations of $.78 Convertible
     Series A Preferred Stock of the Company filed on June 9, 1994 (incorporated
     by  reference  to Exhibit 4.5 to the  Company's  Form 10-QSB filed with the
     Commission on August 15, 1994).

4.3  Specimen  form of Common Stock  Certificate  (incorporated  by reference to
     Exhibit 4.2 to the Company's  Form 10-K filed with the  Commission on March
     29, 1991).

4.4  Specimen  form of $.78  Convertible  Series A Preferred  Stock  Certificate
     (incorporated  by reference to Exhibit 4.3 to the Company's Form 10-K filed
     with the Commission on March 29, 1991).

4.5  Rights Agreement,  dated as of March 31, 1993,  between the Company and The
     Bank of New York, as Rights Agent  (incorporated  by reference to Exhibit 1
     to the Company's Form 8-A filed with the Commission on March 31, 1993).

10.1 Amended  Indemnification  Agreement between the Company and related parties
     (incorporated by reference to Exhibit 19.2 to the Company's Form 10-Q filed
     with the Commission on May 14, 1992).

10.2 Second Amended and Restated Management and Reimbursement  Agreement between
     the Company and Concord  (incorporated  by reference to Exhibit 19.3 to the
     Company's Form 10-KSB filed with the Commission on March 30, 1993).

10.3 Purchase  Money  Promissory  Note Purchase and Money  Mortgage and Security
     Agreement  with The  Benderson  85-1  Trust  for the  Tonawanda,  New York,
     property (incorporated by referenced to Exhibit 10.33 to the Company's Form
     10-QSB filed with the Commission on August 14, 1993).

10.4 1993 Employee Stock Option Plan  (incorporated by reference to Exhibit 10.2
     to the Company's Form 10-KSB filed with the Commission on March 31, 1994).

10.5 1993 Non-Employee  Director Stock Option Plan (incorporated by reference to
     Exhibit 10.21 to the Company's Form 10-KSB filed
               with the Commission on March 31, 1994).

                                                         26

<PAGE>


Exhibit   Description


10.6 Property Management Agreement, dated November 20, 1995, between the Company
     and  Milestone  Property  Management , Inc.  (incorporated  by reference to
     Exhibit  10.31 to the  Company's  Form 10-KSB filed with the  Commission on
     March 30, 1996).

10.7 Stipulation and Agreement of Settlement  dated August 5, 1998, by and among
     John Winston and Leonard S. Mandor,  Robert A. Mandor, Joan LeVine,  Harvey
     Jacobson, Gregory McMahon, Geoffrey S. Aaronson, Milestone Properties, Inc.
     and Concord Assets Group, Inc.  (incorporated by reference to Exhibit 10.01
     to the Company's Form 8-K filed with the Commission on August 14, 1998).

10.8 Third  Amendment  Management  Agreement  dated  January 1, 1998 between the
     Company and  Concord.  (incorporated  by  reference  to Exhibit 10.8 to the
     Company's Form 10-K filed with the Commission on March 30, 1999).

10.9 Employment  Agreement  dated  January 1, 1999,  entered  into  between  the
     Company and Leonard S. Mandor.  (incorporated  by reference to Exhibit 10.9
     to the Company's Form 10-K filed with the Commission on March 30, 1999).

10.10Employment  Agreement  dated  January 1, 1999,  entered  into  between  the
     Company and Robert A. Mandor.  (incorporated  by reference to Exhibit 10.10
     to the Company's Form 10-K filed with the Commission on March 30, 1999).

10.11Employment  Agreement  dated  January 1, 1999,  entered  into  between  the
     Company and Harvey  Shore.  (incorporated  by reference to Exhibit 10.11 to
     the Company's Form 10-K filed with the Commission on March 30, 1999).

10.12Employment  Agreement  dated  January 1, 1999,  entered  into  between  the
     Company and Joseph P. Otto.  (incorporated by reference to Exhibit 10.12 to
     the Company's Form 10- K filed with the Commission on March 30, 1999).

10.13Employment  Agreement  dated  January 1, 1999,  entered  into  between  the
     Company and Patrick S. Kirse.  (incorporated  by reference to Exhibit 10.13
     to the Company's Form 10- K filed with the Commission on March 30, 1999).

10.14Description  of Long Term  Incentive  Plan.  (incorporated  by reference to
     Exhibit 10.14 to the Company's Form 10-K filed with the Commission on March
     30, 1999).

10.15Description of Management  Incentive  Plan.  (incorporated  by reference to
     Exhibit 10.15 to the Company's Form 10-K filed with the Commission on March
     30, 1999).

10.16Description of the Company's 1999 Stock  Incentive  Plan  (incorporated  by
     reference to Exhibit A to the Company's  definitive  Proxy  Statement filed
     with the Commission on April 30, 1999).



                                                         27

<PAGE>



Exhibit  Description

21   Subsidiaries of the Company (filed herewith).

27   Financial Data Schedule  Article 5 included for Electronic  Data Gathering,
     Analysis  and  Retrieval  (EDGAR)  purpose  only.  This  Schedule  contains
     financial  information  extracted from the  consolidated  balance sheet and
     consolidated  statements  of revenues  and expenses and is qualified in its
     entirety by reference to such financial statements. (filed herewith)

99.1 Agreement  and Plan of Merger  among  Concord  Assets  Group,  Inc. and its
     wholly-owned subsidiary,  MST Merger Corp., and Milestone Properties,  Inc.
     dated April  2, 2001. (filed herewith)

99.2 Press  release  issued April  2, 2001 related to the  Agreement and Plan of
     Merger. (filed herewith)

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

               No reports on Form 8-K have been filed during the last quarter of
               the period covered by this report.



                                                         28

<PAGE>



                                                     SIGNATURES

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

                                      MILESTONE PROPERTIES, INC.

                                      By        /s/ Leonard S. Mandor
                                                ---------------------
                                                Leonard S. Mandor
                                                Chairman of the Board and
                                                Chief Executive Officer

                                      Date:     March 26, 2001

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

Signature and Title                     Date

/s/ Leonard S. Mandor                                             March 26, 2001
---------------------
Leonard S. Mandor
Chairman of the Board and Chief Executive Officer

/s/ Robert A. Mandor                                              March 26, 2001
--------------------
Robert A. Mandor
President, Chief Financial Officer and Director

/s/ Joseph P. Otto                                                March 26, 2001
------------------
Joseph P. Otto
Vice President and Director

/s/ Patrick S. Kirse                                              March 26, 2001
--------------------
Patrick S. Kirse
Vice President of Accounting
(Principal Accounting Officer)

/s/ Geoffrey S. Aaronson                                          March 26, 2001
------------------------
Geoffrey Aaronson
Director

/s/ Harvey Jacobson                                               March 26, 2001
-------------------
Harvey Jacobson
Director

/s/ Gregory McMahon                                               March 26, 2001
-------------------
Gregory McMahon
Director

/s/ Harvey Shore                                                  March 26, 2001
------------------------
Harvey Shore
Director



<PAGE>



                                            INDEPENDENT AUDITORS' REPORT



To the Board of Directors of
Milestone Properties, Inc.

We have  audited  the  accompanying  consolidated  balance  sheets of  Milestone
Properties,  Inc. and subsidiaries (the "Company"),  as of December 31, 2000 and
1999,  and  the  related  consolidated  statements  of  revenues  and  expenses,
stockholders'  equity and cash  flows for each of the three  years in the period
ended December 31, 2000. Our audits also included the  information  contained in
the financial  statement  schedule of real estate and accumulated  depreciation.
These consolidated  financial statements and the financial statement schedule of
real estate and accumulated depreciation are the responsibility of the Company's
management.  Our  responsibility  is to express  an opinion on the  consolidated
financial  statements  and the financial  statement  schedule of real estate and
accumulated depreciation based on our audits.

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

In our opinion, the consolidated financial statements referred to above, present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
Milestone  Properties,  Inc. and  subsidiaries as of December 31, 2000 and 1999,
and the results of their  operations  and their cash flows for each of the three
years in the period ended  December  31, 2000,  in  conformity  with  accounting
principles  generally accepted in the United States.  Also, in our opinion,  the
information  contained in the  financial  statement  schedule of real estate and
accumulated  depreciation,  when  considered in relation to the basic  financial
statements, presents fairly, in all material respects, the information set forth
therein.

/s/ Ahearn, Jasco + Company, P.A.
Pompano Beach, Florida

March 26, 2001









                                                         F-1

<PAGE>

<TABLE>
<CAPTION>


                                     MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
                                             CONSOLIDATED BALANCE SHEETS

                                                                       December 31, 2000         December 31, 1999
                                                                       -----------------         -----------------
ASSETS
Current Assets:
<S>                                                                    <C>                           <C>
    Cash and cash equivalents                                          $ 8,638,417                   $   8,032,257
    Restricted cash                                                             0                          222,000
    Restricted cash for settlement                                      1,501,692                        1,614,156
    Loans receivable                                                    1,290,361                        1,370,471
    Accounts receivable                                                   523,342                          567,112
    Accrued interest receivable                                         1,287,997                        2,694,289
    Due from related party                                                752,625                          762,102
    Prepaid expenses and other                                            553,388                          723,397
    Deposits to purchase land                                                   0                          700,000
                                                                       ---------------                ------------
         Total current assets                                          14,547,822                       16,685,784

    Property, improvements and equipment, net                          24,360,527                      24,884,220
    Wraparound notes, net                                              10,486,554                      18,641,853
    Deferred income tax asset, net                                      1,883,088                       2,293,167
    Management contract rights, net                                       112,553                         117,875
    Debt financing costs and other, net                                   554,336                         655,393
                                                                       -------------              ----------------
         Total assets                                                  $  51,944,880               $   63,278,292
                                                                       =============               ===============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
    Accounts payable and accrued expenses                              $1,419,720                  $    2,567,866
    Accrued litigation payable                                          1,501,692                       1,614,156
    Accrued interest payable                                              120,069                         148,173
    Master Lease payable                                                1,411,015                       3,916,308
    Current portion of mortgages and notes payable                      1,074,271                       4,203,029
                                                                       -----------                    -----------
         Total current liabilities                                       5,526,767                     12,449,532
                                                                       -----------                     ----------

    Mortgages and notes payable, long term portion                     29,044,464                      33,996,162
                                                                       ----------                      ----------

         Total liabilities                                             34,571,231                      46,445,694
                                                                       ----------                      ----------


Commitments and Contingencies

Stockholders' Equity:
    Common stock ($.01 par value, 10,000,000 shares
       authorized, 4,943,633 shares issued, and 4,288,542
       outstanding, in 2000 and 1999)                                      49,436                           49,436
    Preferred stock (Series A $.01 par value, $10 liquidation
       preference, 1,000,000 shares authorized, 16,423
       shares issued and outstanding in  2000 and 1999)                       164                             164
    Additional paid in surplus                                         45,340,638                      45,340,638
    Accumulated deficit                                               (24,762,546)                    (25,303,597)
    Held in treasury - 655,091 shares of common, at cost               (3,254,043)                     (3,254,043)
                                                                   ---------------                 ---------------

       Total stockholders' equity                                      17,373,649                      16,832,598
                                                                   --------------                  ---------------

       Total liabilities and stockholders' equity                   $  51,944,880                  $   63,278,292
                                                                       ==========                   ==============

                             See Accompanying Notes to Consolidated Financial Statements

</TABLE>






                                                         F-2

<PAGE>

<TABLE>
<CAPTION>


                                         MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
                                       CONSOLIDATED STATEMENTS OF REVENUES AND EXPENSES
                                     For the Years Ended December 31, 2000, 1999 and 1998



                                                         December 31, 2000      December 31, 1999       December 31, 1998
                                                         -----------------      -----------------       -----------------

REVENUES
<S>                                                        <C>                     <C>                     <C>
   Rent                                                    $    5,071,670          $   7,301,926           $   9,747,973
   Interest income                                              3,005,074              4,715,610               8,191,371
   Revenue from management company operations                     474,919                664,264                 457,546
   Tenant reimbursements                                        1,113,578              1,060,451               1,002,691
   Management and reimbursement income                             43,143                 49,978                  83,091
Percentage rent                                                    77,725                332,243                 414,875
   Gain on sale of real estate and real estate related assets    3,499,462             5,507,817               5,617,844
                                                               -----------           -----------              ----------
       Total revenues                                          13,285,571             19,632,289              25,515,391
                                                               ----------             ----------              ----------

EXPENSES
   Master Lease expense                                         2,157,345              6,212,544              12,359,713
   Interest expense                                             2,630,705              3,711,436               5,474,451
   Depreciation and amortization                                  783,302                865,102                 913,527
   Salaries, general and administrative                         2,852,893              4,416,536               2,873,482
Property expenses                                               1,812,523              1,881,872               1,682,791
   Expired extensions to land purchase contracts                  748,799              1,232,659                       0
Expenses for management company operations                        876,494                940,828               1,031,690
Professional fees                                                 447,633                924,371               1,273,555
Settlement fees                                                         0                      0               7,084,238
                                                       ------------------      ------------------              ----------

       Total expenses                                          12,309,694             20,185,348              32,693,447
                                                              ------------            ----------              ----------

Income (loss) before income taxes and minority interest           975,877               (553,059)             (7,178,056)

Provision (benefit) for income taxes                              460,600             (2,012,216)              1,253,056
                                                             ------------            -----------             ------------

Net income (loss) before minority interest                        515,277              1,459,157              (8,431,112)

Minority interest in net loss of consolidated subsidiaries        25,774                 663,962                       0
                                                            ------------            -------------       ----------------

Net income (loss) attributable to common stockholders     $       541,051          $   2,123,119        $     (8,431,112)
                                                            ==============           ============           =============

Income (loss) per common share, basic                  $            0.13       $            0.50    $              (1.99)
                                                         =================      =================      ==================

Weighted average common shares outstanding, basic              4,288,542               4,260,417               4,235,245
                                                             ============           ============          ==============

Income (loss) per common share, diluted                $            0.12       $            0.43    $              (1.99)
                                                         =================      =================      ==================

Weighted average common shares outstanding, diluted            4, 360,589              4,990,970
                                                         =================          ============



                                 See Accompanying Notes to Consolidated Financial Statements
</TABLE>

                                                             F-3

<PAGE>

<TABLE>
<CAPTION>


                                         MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
                                       CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                     For the Years Ended December 31, 2000, 1999 and 1998






                                                     Common Stock           Preferred Stock             Treasury Stock

                                                    Shares       Cost        Shares        Cost       Shares          Cost
============================================     =========== ==========  ============= ==========  =========== ===============
<S>                                                <C>          <C>          <C>          <C>        <C>          <C>
Balance, January 1, 1998                           4,905,959    $49,060      3,033,995    $30,341    (692,591)    $(3,440,418)
                                                 ----------- ----------  ------------- ----------  ----------- ---------------
Conversion of preferred stock into common stock       37,674        376       (34,288)      (344)

Reserve for preferred stock settlement repurchase

Net loss for the year ended December 31, 1998
                                                 ----------- ----------  ------------- ----------  ----------- ---------------
Balance, December 31, 1998                         4,943,633     49,436      2,999,707     29,997    (692,591)     (3,440,418)
                                                 ----------- ----------  ------------- ----------  ----------- ---------------
Cancellation of Series A Preferred Stock                                    (2,983,284)   (29,833)

Issuance of Treasury Stock                                                                             37,500         186,375

Net income for the year ended December 31, 1999
                                                  ----------- ----------  ------------- ----------  ----------- ---------------
Balance, December 31, 1999                         4,943,633     49,436         16,423        164    (655,091)     (3,254,043)
                                                  ----------- ----------  ------------- ----------  ----------- ---------------
Net income for the year ended December 31, 2000
                                                 ----------- ----------  ------------- ----------  ----------- ---------------
Balance, December 31, 2000                         4,943,633    $49,436         16,423      $ 164    (655,091)    $(3,254,043)
                                                 ----------- ----------  ------------- ----------  ----------- ---------------


                                                           Additional
                                                           paid in        Accumulated
                                                            Surplus          deficit     Stockholders' equity


============================================            ==============  =============== ====================
<S>                                                        <C>            <C>                    <C>
Balance, January 1, 1998                                   $48,105,428    $(18,995,604)          $25,748,807
                                                        --------------  --------------- --------------------
Conversion of preferred stock into common stock                   (32)                                     0

Reserve for preferred stock settlement repurchase          (2,608,216)                           (2,608,216)

Net loss for the year ended December 31, 1998                               (8,431,112)          (8,431,112)

                                                        --------------  --------------- --------------------
Balance, December 31, 1998                                  45,497,180     (27,426,716)           14,709,479
                                                        --------------  --------------- --------------------
Cancellation of Series A Preferred Stock                       29,833                                     0

Issuance of Treasury Stock                                  (186,375)                                     0

Net income for the year ended December 31, 1999                               2,123,119            2,123,119

                                                        --------------  --------------- --------------------
Balance, December 31, 1999                                  45,340,638     (25,303,597)           16,832,598
                                                        --------------  --------------- --------------------
Net income for the year ended December 31, 2000                                 541,051              541,051
                                                        --------------  --------------- --------------------
Balance, December 31, 2000                                $ 45,340,638    $(24,762,546)         $ 17,373,649
                                                        --------------  --------------- --------------------

                                     See Accompanying Notes to Consolidated Financial Statements
</TABLE>


                                                                     F-4

<PAGE>

<TABLE>
<CAPTION>


                                             MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
                                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   For the Years Ended December 31, 2000, 1999 and 1998


                                                       December 31, 2000       December 31, 1999         December 31, 1998
                                                       -----------------      ------------------        ------------------

CASH FLOW FROM OPERATING ACTIVITIES

<S>                                                    <C>                              <C>                  <C>
   Net income (loss)                                   $            541,051             $ 2,123,119          $   (8,431,112)
   Adjustments to reconcile net income (loss) to
         net cash used in operating activities:
   Depreciation and amortization                                    783,302                 865,102                 913,527
   Deferred taxes                                                   410,079                 700,903               1,064,288
   Litigation and settlement fees                                         0                       0              7,084,238
   Gain on sale of real estate related assets                    (3,499,462)             (5,507,817)             (5,617,844)
   Changes in operating assets and liabilities
         Decrease in accounts receivable                             43,770                 245,443                 453,070
         Decrease (increase) in due from related party                9,477                  80,983                (451,234)
         Decrease in accrued interest receivable                  1,406,292               2,491,143               3,280,096
         Decrease (increase) in prepaid expenses and other          170,009                 379,548                (671,355)
         Decrease (increase) in deposits to purchase land           700,000                (700,000)                      0
         Increase (decrease) in accounts payable/accrued expenses(1,148,146)             (2,735,220)                465,025
         Decrease in accrued litigation payable                    (112,464)             (8,078,298)                      0
         (Decrease) increase in accrued interest payable            (28,104)               (158,673)                 47,730
         Decrease in Master Lease payable                        (2,505,293)             (5,016,894)             (4,704,362)
                                                               -------------            ------------             -----------

         Net cash used in operating activities                   (3,229,489)            (15,310,661)             (6,567,933)
                                                               -------------             ----------              -----------

CASH FLOW FROM INVESTING ACTIVITIES

   Principal repayments on loans receivable                          80,110                  73,971                  68,302
   Principal repayments on wraparound notes                       2,114,278               3,850,399               5,190,630
   Investment in wraparound notes                                         0                       0                (108,838)
   Purchase of building and land                                          0              (3,511,669)            (18,515,000)
   Purchase of leasehold improvements                              (271,679)               (635,057)               (484,209)
   Proceeds from realization of real estate related assets, net   6,775,913              22,685,567              19,407,819
   Proceeds from the sale of real estate assets                           0                       0              17,379,628
   Proceeds from redemption of investments in preferred stock             0                 445,500               1,783,100
                                                             -------------------       -------------           ------------

         Net cash provided by investing activities                8,698,622              22,908,711              24,721,432
                                                               -------------            -----------             ------------

</TABLE>





                                                            F-5

<PAGE>

<TABLE>
<CAPTION>


                                        MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
                                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                        (continued)
                                   For the Years Ended December 31, 2000, 1999 and 1998



                                                        December 31, 2000       December 31, 1999       December 31, 1998
                                                        -----------------       -----------------       -----------------

CASH FLOW FROM FINANCING ACTIVITIES

<S>                                                                    <C>             <C>                    <C>
   Proceeds from mortgages and notes payable                           0               3,750,000              18,749,000
   Principal payments on mortgages and notes payable          (5,197,437)            (13,527,938)            (38,511,435)
   Changes in amounts in restricted cash                         334,464               (1,614,156)                      0
                                                           --------------           -------------       -----------------


         Net cash used in financing activities                (4,862,973)            (11,392,094)            (19,762,435)
                                                            -------------             -----------            ------------


NET INCREASE (DECREASE) IN
         CASH AND CASH EQUIVALENTS                               606,160              (3,794,044)             (1,608,936)

CASH AND CASH EQUIVALENTS,
         BEGINNING OF PERIOD                                   8,032,257              11,826,301             13,435,237
                                                           --------------           ------------             ----------

CASH AND CASH EQUIVALENTS,
         END OF PERIOD                               $         8,638,417         $     8,032,257         $   11,826,301
                                                           ==============          =============          =============

SUPPLEMENTAL DISCLOSURE OF
         CASH FLOW INFORMATION


         Cash paid during the period for interest    $         2,658,809         $     3,870,109        $     5,426,721
                                                           ==============          ==============        ==============


         Cash paid during the period for income taxes$              72,877      $        100,272       $        174,396
                                                          =================       ==============        ===============


</TABLE>

SUPPLEMENTAL DISCLOSURE OF NON-CASH
         FINANCING AND INVESTING ACTIVITIES


At the close of business  on March 5, 1999,  the  Company  canceled  and retired
2,983,284  shares of Series A Preferred  Stock,  $.01 par value,  resulting in a
reduction  of Series A Preferred  Stock and an increase  in  Additional  Paid In
Surplus of $29,833.  This transaction  occurred pursuant to the terms of a court
approved  settlement as discussed in Note 14. Legal  Proceedings.  Also,  37,500
shares of  Treasury  Stock  were  issued at a cost of $4.97 per share to certain
Non-Employee  Directors  pursuant to the  Company's  1999 Stock  Incentive  Plan
resulting in a reduction  in Treasury  Stock and  Additional  Paid In Surplus of
$186,375. The transaction is described in detail in Note 9. Capital Stock.

On February 25, 2000, the Company's interest in a Wraparound Note and Wraparound
Mortgage encumbering a shopping center in Quincy,  Illinois was terminated.  The
transaction resulted in the termination of a Wraparound Note of $1,156,057,  the
underlying  mortgage and note payable of  $2,883,019  and resulted in a gain for
the Company of $1,726,962.




             See Accompanying Notes to Consolidated Financial Statements


                                                        F-6

<PAGE>



                                    MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
                                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     Organization and Basis of Presentation

Milestone Properties, Inc. ("Milestone"),  directly and through its wholly owned
subsidiaries,  is  engaged  in the  business  of  owning,  acquiring,  managing,
developing  and  investing  in  commercial  real estate and real estate  related
assets. Milestone, together with its subsidiaries, is hereinafter referred to as
the "Company".

Milestone was  incorporated  on November 30, 1989 under the laws of the state of
Delaware. On December 18, 1990, the Concord Milestone Income Fund, L.P. ("CMIF")
and  Concord  Milestone  Income Fund II, L.P.  ("CMIF  II")  (collectively,  the
"Predecessor  Partnerships") were merged with and into the Company.  The Company
succeeded to the business and operations of the Predecessor Partnerships and the
partnership interests in the Predecessor Partnerships were converted into shares
of Milestone's  common stock and preferred  stock.  In October 1995, the Company
entered into various agreements with affiliates of Concord Assets Group, Inc., a
New York Corporation ("Concord"), pursuant to which the Company acquired certain
real estate related assets for cash and approximately 2,545,000 shares of common
stock. See note 12 for a description of related party transactions with Concord.

2.     Summary of Significant Accounting Policies

Business

The Company is primarily engaged in a single business industry,  commercial real
estate,  which  involves  the  ownership of a land  parcel,  and the  ownership,
operation and management of 19 interests in commercial real estate properties at
December 31, 2000 consisting of (i)10 fee interests (the "Fee  Properties")  and
(ii) wraparound  notes (the  "Wraparound  Notes") and wraparound  mortgages (the
"Wraparound Mortgages" and, together with the Wraparound Notes, the "Wrap Debt")
which are secured by 9 commercial real properties (the  "Underlying  Properties"
and, together with the Fee Properties,  the  "Properties").  The Company is also
the master lessee (the "Master  Lessee")  under  individual  leases (the "Master
Leases") on each of the Underlying Properties.  The Properties are located in 11
states. The Company also invests directly in real estate and real estate related
assets.

Revenue Recognition

Rental and interest  income is accrued as earned  except when doubt exists as to
collectibility,  in which case the accrual is discontinued. When rental payments
due under leases vary from a straight-  line basis  because of free rent periods
or  stepped  increases,  income  is  recognized  on  a  straight-line  basis  in
accordance with generally  accepted  accounting  principles.  Expense recoveries
represent  a portion  of  property  operating  expense  billed  to the  tenants,
including  common  area  maintenance,  real estate  taxes and other  recoverable
costs.  Expense  recoveries  are  recognized in the period when the expenses are
incurred.  Rental  income based on a tenant's  revenues  ("percentage  rent") is
accrued when a tenant reports sales that exceed a specified amount.



                                                        F-7

<PAGE>



Principles of Consolidation and Minority Interest in Consolidated Subsidiary

The  consolidated   financial  statements  include  the  accounts  of  Milestone
Properties,  Inc. and its subsidiaries.  Inter-company accounts and transactions
have been eliminated in the consolidated  financial statements.  On May 1, 1999,
the Company began investing in venture partnerships  ("Ventures") with unrelated
third parties.  The Ventures  contracted for the  acquisition of land parcels in
the South  Florida  area.  Minority  investors  owned  approximately  17% of the
Ventures at December 31, 2000. The ownership  percentages changed throughout the
investment  periods  as  additional   capital  was  contributed.   The  minority
investors'  proportionate  share in the Ventures  after- tax results is shown in
the accompanying  statements of revenues and expenses.  The minority  investors'
interest in the consolidated subsidiary is insignificant at year end.

Basis of Accounting, Fiscal Year

The Company's  records are maintained on an accrual basis of accounting for both
financial and tax reporting purposes.  The Company's fiscal year is the calendar
year.

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

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with a maturity of
three  months  or less to be cash  equivalents.  The  carrying  value  of  these
investments  approximates  fair market  value.  At times,  cash balances held at
financial institutions were in excess of federally insured limits.

Cash of  $1,501,692  is  restricted  at  December  31, 2000 per the terms of the
Winston Settlement; see note 14 for a description of the Winston Settlement.

Property, Improvements and Equipment and Related Depreciation and Amortization

Properties are stated at cost,  less  depreciation  computed on a  straight-line
basis over their  estimated  useful lives of 26.5 - 50 years.  The allocation of
costs  between  land and  depreciable  assets are based upon  estimates  made by
management.   Building  improvements  and  equipment  are  stated  at  cost  and
depreciated  on a  straight-line  basis using an  estimated  useful life of five
years.  Leasehold  improvements are amortized on a straight-line  basis over the
lesser of the estimated useful life or the remaining term of the Master Lease.

Investment Allowances and Impairments

The  Company  assesses  at least  annually  the  probability  that  the  amounts
collectible  under the  contractual  terms of each Wraparound Note will equal or
exceed the carrying  amount of such Wraparound  Note.  When management  believes
that a Wraparound Note has been impaired,  the Company measures impairment based
on the  estimated  fair  value  of the  underlying  properties,  using  internal
analysis and independent appraisals when necessary. For the years ended December
31,

                                                        F-8

<PAGE>



2000, 1999 and 1998, no valuation allowances were recorded.

The  Company  individually  reviews  each of the  Fee  Properties  for  possible
impairment at least  annually,  and more  frequently if  circumstances  warrant.
Impairment is determined to exist when  estimated  amounts  recoverable  through
future cash flows from  operations  on an  un-discounted  basis is less than the
property's  carrying  value.  If a property is determined to be impaired,  it is
written down to its estimated fair value to the extent that the carrying  amount
exceeds  the fair  value of the  property.  No write  downs  for  impairment  of
property investments were recorded in 2000, 1999 and 1998.

The determination of impairment is based, not only upon future cash flows, which
rely upon estimates and  assumptions  including  expense  growth,  occupancy and
rental rates, but also upon market  capitalization and discount rates as well as
other market indicators. The Company believes that the estimates and assumptions
used  are  appropriate  in  evaluating  the  carrying  amount  of the  Company's
Wraparound  Notes and  Properties.  However,  changes in market  conditions  and
circumstances  may occur in the near term which would cause these  estimates and
assumptions  to change,  which,  in turn,  could  cause the  amounts  ultimately
realized  upon  the  sale or  other  disposition  of the  Wraparound  Notes  and
Properties to differ materially from their carrying value. Such changes may also
require future write-downs.

Management Contract Rights

Milestone  Property  Management,  Inc.,  a  subsidiary  of the Company  ("MPMI")
completed the purchase of the assets,  i.e., the management  contracts,  used in
connection  with the  shopping-center  management  business  of  Concord  Assets
Management,  Inc.  ("CAMI"),  a wholly owned subsidiary of Concord Assets Group,
Inc.  ("Concord"),  for an  aggregate  purchase  price  of  $5,190,210  in 1992.
Pursuant to the management contract,  CAMI agreed to provide property management
services to the properties owned by limited  partnerships  syndicated by Concord
and  master-leased  to  subsidiaries  of Concord.  The total  purchase  price of
$5,190,210 was allocated  $4,670,210 to the management  contract rights acquired
from CAMI, and $520,000 to goodwill.

Management  contract rights are being amortized over a period of twenty-five and
thirty  years.  The  balance of any  unamortized  management  contract  right is
written off for those  management  agreements  that are terminated  prior to the
expiration of the initial management contract term.

Debt Financing Costs

Debt financing costs are being amortized over the life of each respective loan.

Income Taxes

The Company  accounts for income taxes in accordance with Statement of Financial
Accounting  Standards  ("SFAS")  No. 109,  "Accounting  for Income  Taxes" which
requires the  recognition  of deferred tax assets and  liabilities  at currently
enacted tax rates for the expected future tax benefits or consequences of events
that have been included in the financial  statements  and tax returns.  Deferred
taxes are provided for the  temporary  differences  between the tax basis of the
assets and liabilities and the amounts reported in the financial  statements.  A
valuation allowance is recognized,  if necessary, to reduce the net deferred tax
asset to an amount that is more likely than not to be realized.

                                                        F-9

<PAGE>



Income (loss) per Common Share

SFAS No. 128,  "Earnings per Share,"  requires  companies  with complex  capital
structures  or common  stock  equivalents  to  present  both  basic and  diluted
earnings  per share  ("EPS") on the face of the income  statement.  Basic EPS is
calculated as income  available to common  stockholders  divided by the weighted
average number of common shares  outstanding  during the period.  Diluted EPS is
calculated  using the "if converted"  method for convertible  securities and the
treasury stock method for options prescribed by APB15,  "Earnings per Share." In
certain circumstances,  the conversion of stock options and Convertible Series A
Preferred Stock are excluded from diluted EPS if the effect of such inclusion is
anti-dilutive.  The  numerators  of  EPS  computations  are as  reported  in the
consolidated  statements of revenues and expenses;  the denominators include the
effects of common share equivalents of outstanding stock options and Convertible
Series A Preferred Stock which totals 4,360,589 and 4,990,970  respectively,  in
2000 and 1999. For 1998, the common share equivalents,  if converted, would have
increased common shares outstanding by 3,610,081 shares.

Comprehensive Income (Loss)

A statement of  comprehensive  income (loss) is not presented  since the Company
has no items of other comprehensive  income (loss).  Comprehensive income is the
same as net income for the periods presented.

Segment Reporting

SFAS  No.  131,  "Disclosures  about  Segments  of  an  Enterprise  and  Related
Information,"   establishes  annual  and  interim  reporting  standards  for  an
enterprise's  operating  segments and related  disclosures  about its  products,
services,  geographic  areas and major customers.  The Company's  operations are
within one reportable segment.

Recent Accounting Pronouncements

SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" and
SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities,  an  Amendment of FASB 133"  established  accounting  and  reporting
standards for derivative  instruments,  including certain derivative instruments
embedded in other contracts,  and for hedging activities.  It requires an entity
to recognize all derivatives as either assets or liabilities in the statement of
financial position,  and measure those instruments at fair value. Changes in the
fair  value  of  those  derivatives  will  be  reported  in  earnings  or  other
comprehensive  income  depending  on the use of the  derivative  and whether the
derivative  qualifies for hedge accounting.  These  pronouncements are effective
for all fiscal  quarters of fiscal  years  beginning  after June 30,  2000.  The
Company  adopted  SFAS No.  133, as amended by SFAS No. 138, on January 1, 2001.
The  Company  does not  expect  this  adoption  to have any  impact on  reported
earnings,   comprehensive  income,  or  financial  position,  as  the  Company's
derivative  instruments  embedded in certain leases are  insignificant,  and the
Company does not use any hedging activities.

Statement of Financial  Accounting  Standards No. 140, "Accounting for Transfers
and  Servicing of Financial  Assets and  Extinguishments  of  Liabilities  - - a
replacement  of FASB No.  125," was issued in  September  2000.  It revises  the
standards for accounting for  securitizations  and other  transfers of financial
assets and collateral and requires certain  disclosures but will carry over most
of SFAS No. 125's provisions without reconsideration.  SFAS 140 is effective for
transfers and servicing of

                                                       F-10

<PAGE>



financial assets and  extinguishments  of liabilities  occurring after March 31,
2001.  This  statement is effective  for  recognition  and  reclassification  of
collateral  and for  disclosures  related  to  securitization  transactions  and
collateral  for fiscal years ending after December 15, 2000. The adoption of the
provisions  of SFAS No. 140 is not expected to have any  material  impact on the
Company.

Reclassifications

Certain  prior year  amounts  have been  reclassified  to conform  with the 2000
financial presentation.

3.     Acquisition and Disposition of Real Estate and Real Estate Related Assets

On November 10, 2000, a wraparound  note held by the Company on a 68,337  square
foot shopping  center located in Deland,  Florida (the "Deland  Property"),  was
paid as a result of the sale of the Deland  Property by its owner,  an affiliate
of the Company (the  partnership that owned the Deland Property) to an unrelated
third party. In connection with the sale of the Deland Property, the Company, as
a master lessee on a Master Lease on the Deland  Property,  canceled the subject
Master Lease. Of the gross proceeds,  approximately $642,000 was used to satisfy
the underlying mortgage debt on the Deland Property.  As a result of the payment
of the wraparound  note, the Company realized net cash proceeds of approximately
$662,800 and recorded a book loss of approximately $59,000 in the fourth quarter
of 2000.

On February 25, 2000, a wraparound  note held by the Company on a 138,954 square
foot shopping center located in Quincy,  Illinois (the "Quincy  Property"),  was
terminated  as a result of a  foreclosure  sale by the bank  (the  holder of the
Underlying Debt). The Company had previously terminated,  by written notice, the
Master Lease  associated  with the Quincy Property as of December 31, 1998. As a
result  of the  foreclosure  sale by the  bank of the  Quincy  Property  and the
termination of the Wraparound Note and the Underlying Debt, the Company recorded
a book gain of  approximately  $1,727,000  in the  first  quarter  of 2000,  but
received no cash proceeds.

On February 15, 2000, a wraparound  note held by the Company on a 91,800  square
foot single tenant commercial building located in Palatka, Florida (the "Palatka
Property"),  was paid as a result  of the sale of the  Palatka  Property  by its
owner,  an  affiliate  of the Company  (the  partnership  that owned the Palatka
Property),  to an unrelated  third  party.  In  connection  with the sale of the
Palatka  Property,  the Company,  as the master  lessee on a Master Lease on the
Palatka  Property,  canceled the subject  Master Lease.  Of the gross  proceeds,
approximately $1,067,000 was used to satisfy the underlying mortgage debt on the
Palatka  Property.  As a result of the  payment of the  wraparound  note and the
satisfaction  of the underlying  mortgage  debt,  the Company  realized net cash
proceeds of  approximately  $911,000 and  recorded a book gain of  approximately
$631,000 in the first quarter of 2000.

On February 3, 2000,  a wraparound  note held by the Company on a 43,200  square
foot single tenant commercial building located in Warsaw,  Virginia (the "Warsaw
Property"),  was paid as a  result  of the sale of the  Warsaw  Property  by its
owner,  an  affiliate  of the  Company  (the  partnership  that owned the Warsaw
Property),  to an unrelated  third  party.  In  connection  with the sale of the
Warsaw  Property,  the  Company,  as the master  lessee on a Master Lease on the
Warsaw  Property,  canceled the subject  Master  Lease.  Of the gross  proceeds,
approximately  $768,000 was used to satisfy the underlying  mortgage debt on the
Warsaw  Property.  As a result of the  payment  of the  wraparound  note and the
satisfaction  of the underlying  mortgage  debt,  the Company  realized net cash
proceeds of  approximately  $519,000 and  recorded a book gain of  approximately
$315,000 in the first quarter of 2000.

                                                       F-11

<PAGE>



On January 13, 2000, a  wraparound  note held by the Company on a 43,200  square
foot  single  tenant  commercial  building  located in  Hamilton,  New York (the
"Hamilton Property"),  was paid as a result of the sale of the Hamilton Property
by its owner,  an  affiliate  of the  Company  (the  partnership  that owned the
Hamilton Property),  to an unrelated third party. In connection with the sale of
the Hamilton  Property,  the Company,  as the master lessee on a Master Lease on
the Hamilton Property, canceled the subject Master Lease. Of the gross proceeds,
approximately  $774,000 was used to satisfy the underlying  mortgage debt on the
Hamilton  Property.  As a result of the payment of the  wraparound  note and the
satisfaction  of the underlying  mortgage  debt,  the Company  realized net cash
proceeds of  approximately  $521,000 and  recorded a book gain of  approximately
$375,000 in the first quarter of 2000.

On January 7, 2000,  a  wraparound  note held by the Company on a 32,400  square
foot single tenant  commercial  building located in Walpole,  New Hampshire (the
"Walpole Property"), was paid as a result of the sale of the Walpole Property by
its owner, an affiliate of the Company (the  partnership  that owned the Walpole
Property),  to an unrelated  third  party.  In  connection  with the sale of the
Walpole  Property,  the Company,  as the master  lessee on a Master Lease on the
Walpole  Property,  canceled the subject  Master Lease.  Of the gross  proceeds,
approximately  $736,000 was used to satisfy the underlying  mortgage debt on the
Walpole Property. As a result of the payment of the wraparound note, the Company
realized net cash proceeds of approximately $510,000 and recorded a book gain of
approximately $381,000 in the first quarter of 2000.

On  January  7,  2000,  a  wraparound  note  held  by the  Company  on a  46,400
single-tenant commercial building located in Savannah,  Tennessee (the "Savannah
Property"),  was paid as a result of the sale of the  Savannah  Property  by its
owner,  an  affiliate of the Company  (the  partnership  that owned the Savannah
Property)  to an  unrelated  third party.  In  conjunction  with the sale of the
Savannah  Property,  the Company,  as the master lessee on a Master Lease on the
Savannah Property, canceled the subject Master Lease. As a result of the payment
of the wraparound  note, the Company realized net cash proceeds of approximately
$173,000 and recorded a book gain of approximately $129,000 in the first quarter
of 2000.

On November 12, 1999, a wraparound  note held by the Company on a 45,000  square
foot  shopping  center  property  located  in  Southwick,   Massachusetts   (the
"Southwick  Property"),  was  paid as a  result  of the  sale  of the  Southwick
Property by its owner, an affiliate of the Company (the  partnership  that owned
the Southwick  Property),  to an unrelated  third party.  In connection with the
sale of the Southwick  Property,  the Company,  as the master lessee on a Master
Lease on the Southwick Property,  canceled the subject Master Lease. As a result
of the payment of the wraparound note, the Company realized net cash proceeds of
approximately  $520,000 and recorded a book gain of approximately  $514,000,  in
the fourth quarter of 1999.

On October 21, 1999, five wraparound  notes held by the Company on five separate
single-tenant  commercial buildings  (collectively the "Five Properties"),  were
paid as a result of the sale of the Five Properties by their owners,  affiliates
of the Company (the  partnerships  that owned the Five  Properties) to unrelated
parties.  In conjunction with the sale of the Five Properties,  the Company,  as
the master lessee on a Master Lease on the Five Properties, canceled the subject
Master Lease.  The  negotiated  sales prices of the Five  Properties  aggregated
$12,500,000.  As a result of the sale of the Five Properties, the payment of the
wraparound  notes and the  assumption  of the  underlying  mortgage  debt by the
buyers,  the Company realized net cash proceeds of approximately  $5,400,000 and
recorded a book gain of approximately $2,316,000 in the fourth quarter of 1999.

On July 30, 1999, a wraparound  note held by the Company on a 31,170 square foot
single tenant

                                                       F-12

<PAGE>



commercial building located in Franklin, Pennsylvania (the "Franklin Property"),
was paid as a result  of the sale of the  Franklin  Property  by its  owner,  an
affiliate of the Company (the partnership that owned the Franklin Property),  to
an unrelated third party. In connection with the sale of the Franklin  Property,
the Company,  as the master  lessee on a Master Lease on the Franklin  Property,
canceled  the  subject  Master  Lease.  Of  the  gross  proceeds,  approximately
$1,348,000  was used to defease  the  underlying  bond debt.  As a result of the
payment of the  wraparound  note,  the  Company  realized  net cash  proceeds of
approximately  $896,000 and recorded a book gain of approximately  $1,527,000 in
the third quarter of 1999.

On April 27, 1999, a wraparound note held by the Company on a 52,700 square foot
shopping  center  property  located in Baton Rouge,  Louisiana (the "Baton Rouge
Property"),  was paid as a result of the sale of the Baton Rouge Property by its
owner, an affiliate of the Company (the  partnership  that owned the Baton Rouge
Property), to an unrelated third party. In connection with the sale of the Baton
Rouge Property, the Company, as the master lessee on a Master Lease on the Baton
Rouge  Property,  canceled  the subject  Master  Lease.  Of the gross  proceeds,
approximately $1,896,208 was used to satisfy the underlying mortgage debt on the
Baton Rouge Property.  As a result of the payment of the wraparound note and the
satisfaction  of the underlying  mortgage  debt,  the Company  realized net cash
proceeds of  approximately  $2,045,000 and recorded a book gain of approximately
$306,000 in the second quarter of 1999.

On April 6, 1999, a wraparound note held by the Company on a 125,803 square foot
shopping center property  located in Pascagoula,  Mississippi  (the  "Pascagoula
Property"),  was paid as a result of the sale of the Pascagoula  Property by its
owner,  an affiliate of the Company (the  partnership  that owned the Pascagoula
Property),  to an unrelated  third  party.  In  connection  with the sale of the
Pascagoula Property,  the Company, as the master lessee on a Master Lease on the
Pascagoula  Property,  canceled  the subject  Master  Lease.  As a result of the
payment of the  wraparound  note,  the  Company  realized  net cash  proceeds of
approximately  $2,178,000 and recorded a book gain of approximately  $845,000 in
the second quarter of 1999.

4.     Investment in Land Venture Partnerships ("Ventures")

On May 1, 1999 and August 27,  1999,  the Company made  initial  investments  of
$262,469 and $46,762,  respectively,  in the Ventures,  and the Ventures assumed
contracts to purchase  certain land parcels in the South Florida area.  The land
purchase  contracts  contained  options  to  extend  the  closing  date  for  an
additional  fee.  Subsequent  to  the  initial  investment,   the  Company  made
additional  net  capital  contributions  of  $2,991,036  to  the  Ventures.  The
consolidated  financial  statements of the Company include the operating results
for the Ventures from the date of the Company's investments.

On December 29, 1999,  the Ventures  completed  the purchase of a parcel of land
(the  "Land  Parcel")  located in Miami,  Florida  (Miami-Dade  County)  from an
unrelated  third  party for  $3,512,000.  In  connection  with the  purchase,  a
$2,000,000  first mortgage was obtained.  For the first 12 months,  the payments
were interest only at 9.5%. After that, the note requires  twenty-three  monthly
payments of principal  and interest  beginning on December 29, 2000 based upon a
25 year  amortization  schedule.  The note requires interest rate adjustments on
December  29, 2000 and  December  29,  2001 equal to the base rate (prime  rate)
announced by Citibank,  N.A., New York, from time-to-time,  plus one percent. On
December 29, 2000,  the interest rate on such note was changed to  approximately
10.6%. A balloon payment of  approximately  $1,966,000 is required at the end of
year three of the mortgage.


                                                       F-13

<PAGE>



The  investments  included in the  Ventures at December 31, 2000 did not include
any deposits as compared to deposits of $700,000 at December 31, 1999.  Any such
deposits expired during 2000.  Additional capital  contributions may be required
by the Company to pay  expenses of the Ventures in excess of its  revenues.  The
Land Parcel is  currently  under  contract to be sold to an  unaffiliated  third
party for a price of $5,300,000.

5.     Property, Improvements and Equipment

Property,  improvements and equipment at December 31, 2000 and 1999 consisted of
the following:

<TABLE>
<CAPTION>


                                                     December 31, 2000        December 31, 1999
============================================  ======================== ========================
<S>                                                      <C>                     <C>
Land                                                     $   5,473,169           $    5,473,169
Building                                                    20,978,628               20,978,628
Leasehold improvements and equipment                         1,484,112                1,330,885
                                                         -------------              -----------
Total, at cost                                              27,935,909               27,782,682
Less: Accumulated depreciation                             (3,575,382)              (2,898,462)
                                                        --------------             ------------
Total, net                                               $ 24,360,527             $ 24,884,220
                                                         =============            =============
--------------------------------------------  ------------------------ ------------------------
</TABLE>


6.     Investment in Wraparound Notes

Investment  in  Wraparound  Notes   represents   obligations  due  from  limited
partnerships (the "Partnerships"). Certain directors and officers of the Company
are also directors, officers and controlling stockholders of the general partner
of  each  of the  Partnerships.  The  original  formation  of  the  Partnerships
typically  involved the purchase of a property by the  Partnership  for cash and
certain non-recourse promissory notes (the "Wraparound Notes"), payment of which
was secured by the purchased property (the "Underlying  Property").  The related
Wraparound Notes were subordinate to the Underlying  Property Mortgage Debt (the
"Underlying Debt"). The property was then leased back (the "Master Leases") from
the Partnership for a fixed annual rental fee. The Partnerships are obligated to
make fixed payments of principal and interest on certain  Wraparound Notes. Such
payments  approximate the Master Lease  obligations.  The Company is entitled to
all rents under the tenant operating leases and is required to satisfy all other
landlord obligations.  The payments received by the Company from the tenants are
used to make the Master Lease payments to the Partnerships.

Upon the sale of an  Underlying  Property,  proceeds  are  initially  applied to
satisfy  the  Underlying  Debt,  and the  balance,  to the extent  proceeds  are
available,  is divided between a preferred return to the  Partnership's  limited
partners and then repayment of the Wraparound Note.

Each of the Wraparound Notes gives the Company a lien on the Underlying Property
as well as the Partnership's  interest in the Master Lease. The Wraparound Notes
are  subordinate to the Underlying  Debt. The Wraparound  Notes have  maturities
ranging from 2001 to 2016. Six of the Wraparound Notes have been extended in six
month  increments  since their  original  December  31, 1999  maturities  as the
Partnerships attempt to sell the Underlying Properties.  The scheduled principal
receipts of the Wraparound Notes are as follows (dollar amounts in thousands):


                                                       F-14

<PAGE>




     Year Ending December 31st:
=====================================
       2001                   $ 5,604
       2002                       196
       2003                       216
       2004                       237
       2005                       261
  Thereafter (a)                3,973
                            ---------
      Total                    10,487
                             ========
------------------  -----------------

a - Excludes $1,575 of the original issue discount.

The following  schedule  depicts  Wraparound  Notes which are subordinate to the
Underlying Debt on such properties:

<TABLE>
<CAPTION>

                                                                    Face Amount
                          Closing     Interest        Final         of Mortgage         Carrying Amount of     Interest Due
      Location             Date       Rate (%)    Maturity Date        Loans              Mortgage Loans        and Accrued
=====================  ============= ===========  ==============  =============== ==== =====================  ===============
<S>                         <C>             <C>         <C>             <C>                        <C>                <C>
Rochester, NY               10/23/95        9.75        12/31/14        1,661,424                  1,380,268          169,427
                                           10.00        12/31/14          225,891                    130,625                0
Janesville, WI              10/23/95       10.25        12/31/16        2,057,637                  1,318,663          221,165
                            02/11/98       11.00        12/31/16           20,644                     15,000                0
No. Canton, OH              10/23/95        9.11        12/31/14        2,675,131                  2,008,597          254,100
                            10/23/95       11.00        12/31/14           38,924                     26,575                0
                            10/15/96       11.00        12/31/14          218,677                    180,408                0
Natchez, MS                 10/23/95       10.00        05/01/08        3,187,906                    840,595          116,684
Sandy, PA                   10/23/95       10.00         6/30/01        1,994,602    a               419,021          101,831
Montgomery, AL              10/23/95        9.75         6/30/01        2,015,635                    705,332          100,280
Paris, TN                   10/23/95       10.00         6/30/01        2,679,715                    867,047          136,814
                            10/23/95       11.00         6/30/01           90,992                     51,016                0
Danville, IL                10/23/95        9.75         6/30/01        1,539,365                    574,996           76,585
Columbus, NE                10/23/95        9.75         6/30/01        2,233,342                  1,968,411          111,111
                                                          Totals      $20,639,885                $10,486,554       $1,287,997
                                                                       ==========                 ==========        =========
---------------------  ------------- -----------  --------------  --------------- ---- ---------------------  ---------------
</TABLE>

a - Includes discount elements totaling in aggregate $1,575,000.

The following  schedule  represents a roll forward of  Wraparound  Notes for the
years ended December 31, 2000 and 1999:

<TABLE>
<CAPTION>

                                                               2000                      1999
=================================================== ========================== =========================
<S>                                                               <C>                       <C>
Beginning balance                                                 $ 18,641,853              $ 39,529,787
Investment in wraparound notes                                         154,758                         0
Principal repayments                                               (2,232,734)               (3,782,763)
Notes satisfied from property sales                                (6,077,323)              (17,105,171)
Valuation allowance                                                          0                         0
                                                          --------------------        ------------------
Ending balance                                                   $ 10,486,554              $ 18,641,853
                                                                 =============             =============
--------------------------------------------------- -------------------------- -------------------------
</TABLE>

On February 25, 2000, a wraparound  note held by the Company on a 138,954 square
foot shopping

                                                       F-15

<PAGE>



center located in Quincy, Illinois (the "Quincy Property"),  was terminated as a
result of a foreclosure  sale by the bank (the holder of the  Underlying  Debt).
The Company had  previously  terminated,  by written  notice,  the Master  Lease
associated  with the Quincy Property as of December 31, 1998. As a result of the
foreclosure  sale by the bank of the Quincy  Property and the termination of the
Wraparound  Note and the Underlying  Debt,  the Company  recorded a book gain of
approximately  $1,727,000  in the first  quarter  of 2000 but  received  no cash
proceeds.

The maturity dates of the remaining  Wraparound  Notes and Wraparound  Mortgages
currently held by the company range through 2016.

7.     Leases

As Lessor

The  Properties  have a gross  leasable  area  of  approximately  1,076,309  and
1,551,640  square  feet of  which  approximately  90% and 94% was  leased  as of
December 31, 2000 and 1999, respectively.

Minimum  base  rental  income  under  tenant  lease  agreements  relating to the
Properties having remaining lease terms ranging from one to 17 years at December
31, 2000 is as follows (dollars amounts in thousands):


Year Ending December 31st:
====================================
      2001                 $   4,337
      2002                     3,047
      2003                     1,942
      2004                     1,258
      2005                       529
   Thereafter                  1,608
                           ---------
      Total                 $ 12,721
                            ========
----------------- ------------------

For the  years  ended  December  31,  2000,  1999 and  1998,  no  tenant  at any
individual  property accounted for more than 10% of the Company's total revenue.
However,  the total revenue from K- mart  Corporation's  leases with the Company
accounted for  approximately  18%, 30% and 29%,  respectively,  of the Company's
aggregate rent revenue.

As Lessee

Minimum  rental  expense under the Master  Leases,  having  original lease terms
ranging from 2001 to 2016, at December 31, 2000 is as follows (dollar amounts in
thousands):


Year Ending December 31st:
====================================
      2001                 $   1,404
      2002                       823
      2003                       823
      2004                       823
      2005                       823
   Thereafter                  7,941
                           ---------
      Total                 $ 12,637
                            ========
----------------- ------------------

Although the Company's  lease  payments are not  contingent  upon receiving rent
from the Properties,
                                                       F-16

<PAGE>



such  payments  are  expected to be made from such  receipts  and the receipt of
interest and principal payments from the Wraparound Notes.

On December  31,  1998,  the Master  Lease on the  property  located in Natchez,
Mississippi (the "Natchez  Property")  expired. As a result of such Master Lease
expiration,  the Company, as the tenant under such Master Lease, assigned all of
its  rights,  title and  interests  in the  Natchez  Property to Quincy II Plaza
Associates, the landlord under such Master Lease and Quincy II Plaza Associates,
assumed all of the Company's related obligations under such Master Lease.

The  expiration  dates of the eight Master Leases  currently held by the Company
range  from June 2001 to  December  2016.  Six of the  Master  Leases  have been
extended in six month  increments  since their original  expirations in December
1999 as the Partnerships attempt to sell the Underlying Properties.

8.     Mortgages and Notes Payable

The  mortgages  and  notes  payable  are  non-recourse  to the  Company  and are
collateralized  by the  Properties.  The  scheduled  principal  payments  of the
mortgages and notes payable at December 31, 2000 are as follows  (dollar amounts
in thousands):


Year Ending December 31st:
====================================
      2001                 $   1,074
      2002                     4,273
      2003                       846
      2004                       863
      2005                       963
   Thereafter                 22,100
                             -------
      Total                 $ 30,119
                            ========
----------------- ------------------

The interest rates on the mortgages and notes payable range from 7.00% to 13.5%.
The  mortgage and notes  payable and related  terms at December 31, 2000 for the
Properties are  summarized as follows  (dollar  amounts in thousands,  except as
noted):
<TABLE>
<CAPTION>


                        Underlying                    Monthly Payment
                          Debt at       Interest     Provisions (Actual   Maturity
      Location           12/31/00       Rate (%)          Dollars)        Date (2)
=====================  ============= =============== ================== =============
<S>                              <C>           <C>               <C>           <C> <C>
Rochester, NY                    864           9.250             15,992        1/1/02
Janesville, WI                   717            9.00             14,060       7/31/02
                                  92            9.00              1,529        8/1/07
No. Canton, OH                 1,884            9.00             21,669       9/30/12
Natchez, MS                    2,153            7.59             15,519        5/1/08
Sandy, PA                      1,165            7.00                (1)       12/1/06
Montgomery, AL                 1,065            8.75             14,500        4/1/07
Paris, TN                        493           13.50              8,859        4/1/08
                                 233            9.25              8,467        7/1/03
Danville, IL                     235           9.625              9,663        9/1/02
Sunrise, FL                    1,135            7.48              8,095        5/1/08

</TABLE>

                                                       F-17

<PAGE>
<TABLE>
<CAPTION>


                        Underlying                    Monthly Payment
                          Debt at       Interest     Provisions (Actual   Maturity
      Location           12/31/00       Rate (%)          Dollars)        Date (2)
=====================  ============= =============== ================== =============
<S>                            <C>              <C>              <C>           <C> <C>
Jacksonville, FL               1,803            7.87             13,335        5/1/08
Orange Park, FL                1,271            7.39              8,992        4/1/08
Boca Raton, FL                 1,764            7.39             12,450        7/1/08
West Palm Beach, FL              864            7.51              6,159        9/1/08
Jacksonville, FL               3,889            8.00             28,984       10/1/08
Ft. Lauderdale, FL             2,347            7.00             15,967      11/11/08
Davie, FL                      3,166            7.58             22,684       11/1/08
Miami, FL                      2,000            10.6                (3)       12/1/02
Columbus, NE                   1,203           12.00             17,201        9/1/10
                                  56            9.50                697        7/1/11
Zanesville, OH                 1,720            8.16             13,693        6/1/09
                             -------
Total                       $ 30,119
                            ========
---------------------  ------------- --------------- ------------------ -------------
</TABLE>

      (1) Principal and interest are paid semi annually in accordance  with the
bond documents.

       (2)  Certain   mortgages  and  notes  contain   various  terms  regarding
prepayment penalties.

       (3)   Monthly  payments  of  approximately  $19,100 in year 2001 and 2002
             dependant  on a  floating  interest  rate of bank  prime  plus  one
             percent.

The Company  estimates the fair value of its long term fixed rate Mortgage Loans
generally  using  discounted  cash flow analysis based on the Company's  current
borrowing  rates for similar types of debt. At December 31, 2000, the fair value
of the Mortgage  Loans was  estimated to be  $29,731,468  compared to a carrying
value amount of $30,118,735.

The following  schedule  represents a reconciliation  of the mortgages and notes
payable for the years ended December 31, 2000 and 1999:



                                           2000                1999
=================================== =================== ===================
Balance at January 1st                     $ 38,199,191      $   47,977,129
Principal repayments                        (8,080,456)        (13,527,938)
Proceeds from loans                                   0           3,750,000
                                     ------------------       -------------
Balance at December 31st                   $ 30,118,735      $ 38,199,191
                                           ============      ==============
----------------------------------- ------------------- -------------------

9.     Capital Stock

Common and Preferred Stock

The  authorized  capital stock of the Company  consists of 10,000,000  shares of
Common  Stock at  December  31, 2000 and 1999 and  1,000,000  shares of Series A
Preferred Stock at December 31, 2000 and 1999.

The shares of Common  Stock are  entitled  to one vote per  share.  The Series A
Preferred Stock has
                                                       F-18

<PAGE>



limited voting  rights.  The Series A Preferred  Stock has a $10.00  liquidation
preference  and has a  preferential  right to receive a  quarterly  dividend  of
$0.195 per share before dividends can be paid on the Common Stock.

At the close of  business  on March 5,  1999,  Milestone  canceled  and  retired
2,983,284 shares of its Series A Preferred Stock,  representing greater than 99%
of the then  outstanding  shares of Series A  Preferred  Stock,  pursuant to the
terms of a court approved  settlement of a purported class action and derivative
lawsuit  brought against  Milestone,  certain of its past and present members of
its Board of Directors and executive officers,  and Concord.  See Note 14, Legal
Proceedings.

On December 21, 1995, the conversion  ratio for the Series A Preferred Stock was
adjusted  to  provide  for the  receipt  of one share of Common  Stock  upon the
conversion of .91 shares of Series A Preferred Stock. Previously, the conversion
ratio was 1.6 shares of Series A Preferred  Stock for one share of Common Stock.
The new  conversion  ratio,  which was  effective  as of November  1, 1995,  was
determined  pursuant  to the  Certificate  of  Designations  for  the  Series  A
Preferred Stock.

After  September  30,  1995,  holders of the Series A Preferred  Stock  having a
liquidation  preference of $10.00 per share,  were no longer entitled to receive
dividends on a cumulative basis.  Pursuant to the Certificate of Designations of
the Series A Preferred  Stock,  after such date, no cash dividend may be paid on
the Common  Stock unless full  dividends of $0.195 per share on all  outstanding
shares  of Series A  Preferred  Stock for the then  current  quarterly  dividend
period are declared and either paid or sufficient  sums for the payment  thereof
are set apart. As a result of Milestone's Board of Directors'  determination not
to declare a dividend for the quarter  ended June 30, 1997,  which was the sixth
consecutive  quarter for which no dividend was  declared,  the number of persons
entitled to serve as directors on  Milestone's  Board of Directors was increased
by one, and the holders of the Series A Preferred Stock, who, at that date, only
elected one member of the Board of  Directors,  were  entitled to elect a second
member of the Board of Directors to fill such newly created directorship. At the
annual meeting in May 1999, the holders of the Series A Preferred  Stock elected
Harvey Shore to fill such  position.  Any  decision as to the future  payment of
dividends  on the  Series A  Preferred  Stock  will  depend  on the  results  of
operations and the financial  condition of the Company and such other factors as
Milestone's Board of Directors, in its discretion, deems relevant.

Milestone's  Board of Directors  determined  not to declare any dividends on the
Series A Preferred  Stock for the years ended  December  31, 2000 and 1999.  The
last  dividend  declared by the Company was for the quarter  ended  December 31,
1995 and was paid on February 15, 1996 at $0.195 per share of Series A Preferred
Stock.

Stock Options

In May 1994, the Common Stockholders  approved the adoption of the 1993 Employee
Stock Option Plan (the "Employee Stock Option Plan"). The total number of shares
of Common Stock which may be issued  pursuant to the exercise of options granted
under the Employee Stock Option Plan is 300,000.  In June 1997, the Compensation
Committee granted 300,000 options exercisable for 300,000 shares of Common Stock
at a per  option  exercise  price  of  $0.50.  During  June  1999,  the  Company
repurchased   222,200  options  from  certain  executives  of  the  Company  for
approximately  $650,000,  representing the excess of the current market price of
the Common Stock over the exercise price of the options. The $650,000 payment to
repurchase the options was expensed directly as

                                                       F-19

<PAGE>



compensation  expense in the quarter in which such options were repurchased.  In
addition,  certain vested options were repurchased for about $49,000 in February
2001 after the resignation of an officer in December 2000. Options granted under
the Employee  Stock Option Plan expire on the tenth  anniversary  of the date of
their grant, or upon termination for cause of the grantee's  employment with the
Company.

In May 1994,  the Common  Stockholders  also  approved  the adoption of the 1993
Non-Employee Director Stock Option Plan (the "Non-Employee Director Stock Option
Plan").  Options granted under such plan expire on the tenth  anniversary of the
date of their grant, or upon the grantee's removal or resignation from the Board
of Directors.  The exercise price for each option granted under the Non-Employee
Director  Stock Option Plan is  determined by averaging the high and low trading
prices  of the  Common  Stock  on  the  date  of the  option  grant.  Under  the
Non-Employee  Director Stock Option Plan,  the Company  granted 2,500 options to
each  non-employee  director in each of 1993 (upon adoption of the plan),  1994,
1995,  1996 and 1997, at a per option exercise price of $4.75,  $4.375,  $1.375,
$1.6875 and $0.50,  respectively.  During 1999,  Milestone's  Board of Directors
approved the  cancellation  of the options to purchase  12,500  shares of Common
Stock held by each Non-Employee Director. The cancellation of the 12,500 options
coincided with Milestone's Board of Directors approval of the granting of 12,500
shares of Common Stock to each of the Non-  Employee  Directors  pursuant to the
Company's 1999 Stock Incentive Plan. The 12,500 shares of Common Stock issued to
each Non-Employee Director were issued from the Company's Treasury Stock.

SFAS No. 123,  "Accounting  for Stock  Based  Compensation",  requires  expanded
disclosure  of  stock  based  compensation   arrangements  with  employees,  and
encourages, but does not require compensation cost be measured based on the fair
value of the equity instrument  awarded.  Companies are permitted 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 uses APB 25 for its stock based compensation awards. Accordingly, no
compensation  costs related to employee stock option awards have been recognized
in the consolidated financial statements of the Company.

No options were  exercised  and no  additional  options were granted  during the
years ended December 31, 2000 and 1999. During 2000, zero options were canceled,
so as of December 31, 2000,  54,000  options remain  outstanding.  The pro forma
disclosure provisions of SFAS No. 123 for the year ended December 31, 2000, 1999
and 1998 are as follows:

<TABLE>
<CAPTION>

                                                        2000                  1999                  1998
============================ ================= ======================  ==================  ======================
<S>                                                         <C>               <C>                   <C>
Net Income (loss)            As Reported                    $ 541,051         $ 2,123,119           $ (8,431,112)
                             Pro Forma                      $ 501,646         $ 2,092,403           $ (8,460,946)
Income (loss) per            As Reported                 $       0.13      $         0.50       $          (1.99)
Common Share, basic          Pro Forma                   $       0.12      $         0.49       $          (1.93)
Income (loss) per            As Reported                 $       0.12      $         0.43
Common Share, diluted        Pro Forma                   $       0.12      $         0.42
---------------------------- ----------------- ----------------------  ------------------  ----------------------
</TABLE>



                                                       F-20

<PAGE>



For the purposes of providing pro forma  disclosures,  the fair value of options
granted in 1997 were  estimated  using the Black Scholes  options  pricing model
with the following weighted average assumption; (i) a risk free interest rate of
5.75%, (ii) an expected life of six years, (iii) volatility of 58.8% and (iv) no
dividends. The estimated fair value compensation cost of the related options was
amortized to expense over the options' vesting period.

Certain information relating to the options under the Employee Stock Option Plan
and the Non- Employee Director Stock Option Plan during the years ended December
31, 2000, 1999 and 1998 are as follows:

<TABLE>
<CAPTION>

                                              2000                             1999                            1998
                                    ===========================  ================================ ==============================
                                     Number        Weighted         Number          Weighted          Number        Weighted
                                       of           Average           of            Average             of           Average
                                    Options        Exercise         Options      Exercise Price      Options        Exercise
                                                     Price                                                            Price
=============================================== ===============  ============= ================== ============== ===============
<S>                                      <C>          <C>              <C>               <C>             <C>            <C>
Outstanding at January 1st               54,000       $    0.50        313,700           $   0.74        313,700        $   0.74
Granted                                       0             n/a              0                n/a              0             n/a
Exercised                                     0             n/a              0                n/a              0             n/a
Repurchased                                   0             n/a      (222,200)                n/a              0             n/a
Canceled                                      0             n/a       (37,500)                n/a              0             n/a
Forfeited                                     0             n/a               0               n/a              0             n/a
                                    -----------                  --------------                     ------------
Outstanding at December 31st             54,000       $    0.50         54,000          $    0.50        313,700        $   0.74
                                       ========                     ==========                           =======
Options exercised at December 31st            0                              0                                 0
----------------------------------------------- ---------------  ------------- ------------------ -------------- ---------------
</TABLE>

All  granted  options  are  currently  exercisable  and carry the same  weighted
average exercise price.

10.    Income Taxes

The provision for income taxes for the years ended  December 31, 2000,  1999 and
1998 are as follows:

<TABLE>
<CAPTION>

                                                       2000              1999              1998
=============================================== ================== ================= ================
Current Tax:
-----------
<S>                                                          <C>       <C>                      <C>
Federal                                                      $   0     $ (2,822,856)            $   0
State and Other                                             64,378           109,740          188,768
                                                       -----------      ------------       ----------
Total Current Tax                                           64,378       (2,713,116)          188,768
Deferred Tax:
------------
Federal                                                    355,867           595,765          904,645
State and Other                                             40,355           105,135          159,643
                                                       -----------      ------------       ----------
Total Deferred Tax                                         396,222           700,900        1,064,288
                                                        ----------        ----------        ---------
Total provision (benefit) for income taxes               $ 460,600     $ (2,012,216)      $ 1,253,056
                                                         =========     =============      ===========
----------------------------------------------- ------------------ ----------------- ----------------
</TABLE>

Temporary differences between the amount reported in the consolidated  financial
statements and the tax basis of assets and liabilities result in deferred taxes.
There was an increase in the  valuation  allowance  for  deferred  tax assets of
$2,361,651  and $  4,953,862  for the years  ended  December  31, 2000 and 1998,
respectively; there was no change in the allowance in 1999. Realization of the

                                                       F-21

<PAGE>



deferred tax asset is  dependent,  in part,  on  generating  sufficient  taxable
income in the future.  Although  such  realization  is not assured,  the Company
believes  that it is more  likely  than not  that the  deferred  tax  asset  not
allowanced  will be  recognized.  Should  estimates of future  taxable income be
reduced  the  deferred  tax  asset   valuation   allowance   would  be  adjusted
accordingly.  The Company has a federal tax net  operating  loss  ("NOL")  carry
forward of  approximately  $18,750,000  at December  31,  2000,  and this amount
includes an adjustment,  which results in a book  adjustment to the NOL deferred
tax asset and the related  allowance of $2,361,651 in 2000.  The tax NOLs expire
at various dates through 2020.  Deferred tax assets and  liabilities at December
31, 2000, 1999 and 1998 are as follows:
<TABLE>
<CAPTION>


                                                                       2000             1999             1998
===============================================================  ================ ================ =================
Deferred Tax Assets:
-------------------
<S>                                                                 <C>               <C>                <C>
Acquisition Costs                                                   $     193,100     $    329,492       $   880,345
Principal amortization and allowance on Wraparound Notes                2,610,500        3,759,550         2,789,768
Net Operating Loss Carryforward                                         7,500,600        4,369,331         4,953,862
Other                                                                           0            5,468          613,697
                                                                 ----------------     ------------          -------
Gross Deferred Tax Assets                                              10,304,200        8,463,841         9,237,672
Less: Valuation Allowance                                             (8,330,512)      (5,968,862)       (5,968,862)
                                                                      -----------       ---------        ----------
Deferred Tax Asset, net of valuation allowance                         1,973,688         2,494,979        3,268,810
                                                                     ------------        ---------        ---------


Deferred Tax Liability:
----------------------
Accelerated depreciation                                                   90,600         201,812            274,740
                                                                     ------------       ----------       -----------
Gross deferred tax liabilities                                             90,600          201,812           274,740
                                                                     ------------        ---------       -----------
Net deferred tax asset                                              $  1,883,088      $ 2,293,167        $ 2,994,070
                                                                      ===========       ==========        ==========
---------------------------------------------------------------  ---------------- ---------------- -----------------
</TABLE>

The  provision  (benefit)  for income tax  differs  from the amount  obtained by
applying  the  statutory  federal  income  tax rate to  pre-tax  losses  for the
following reasons:
<TABLE>
<CAPTION>


                                                                            2000            1999          1998
====================================================================== ===============  =============  ===========
<S>                                                                              <C>          <C>          <C>
Statutory rate (benefit) on pre-tax income (loss)                                35.0%        (35.0)%      (35.0)%
Increase (decrease) in taxes:
From State and other taxes, net of Federal tax benefit                            10.2           15.7          2.4
Change in NOL, net of valuation allowance                                            0          141.8         35.0
Basis difference on asset dispositions                                               0           34.6         14.0
Reversal of prior year provision                                                     0        (512.1)          0.0
Permanent differences and other                                                    2.0          (8.8)         1.1
                                                                              --------      ---------      ------
Total                                                                           47.2%        (363.8)%      17.5%
                                                                              ========       ========      =======
---------------------------------------------------------------------- ---------------  -------------  -----------
</TABLE>

During 1999,  certain  wraparound  notes held by the Company on properties  sold
during the year were  satisfied.  The  realization  of the  deferred  tax assets
relating to the wraparound notes was recorded as a non-cash tax adjustment. Also
in 1999,  the Company  reversed  income taxes  payable of  $2,800,000  which the
Company no longer  believed  was a necessary  liability.  The  reversal of these
accruals  reduced  the 1999  income tax  provision,  but did not affect  cash or
liquidity.




                                                       F-22

<PAGE>



11.    Fair Value of Financial Instruments

The  following  estimated  fair values  were  determined  by the  Company  using
available market information and valuation methodologies  considered appropriate
by  management.  However,  considerable  judgement is necessary to interpret and
apply market data to develop  specific fair value  estimates for given financial
instruments,  and the use of  different  market  assumptions  and/or  estimation
methodologies  could  have a material  effect on  reported  fair value  amounts.
Accordingly,  the estimates  presented herein are not necessarily  indicative of
the amounts that could be realized upon  disposition of the Company's  financial
instruments.

Cash and cash  equivalents,  accounts and loan  receivables and accounts payable
and accrued expenses are reflected in the consolidated balance sheets at amounts
considered by management to reasonably approximate fair value due to their short
term nature.  The Company  estimates  the fair value of its long term fixed rate
mortgage  loans  generally  using  discounted  cash flow  analysis  based on the
Company's  current  borrowing  rates for similar  types of debt. At December 31,
2000 and 1999, the aggregate  carrying value of the notes and mortgages  payable
as  compared  to  the  aggregate  fair  value  of  such   instruments   was  not
significantly different.

The fair value of the Wraparound Notes has been estimated by management based on
the estimated fair value of the Underlying Properties.  At December 31, 2000 and
1999, the fair value of the Wraparound Notes was estimated to be $15,062,104 and
$28,351,790, compared to a carrying value amount of $10,486,554 and $18,641,853,
respectively.  The legal value of the wraparound  notes at December 31, 2000 and
1999  was  $20,639,885  and  $35,454,708,  respectively.  There  were  9 and  16
Underlying Properties on December 31, 2000 and 1999, respectively.

The fair value estimates presented herein are based on information  available as
of December 31, 2000 and 1999.  Although  management is not aware of any factors
that  would   significantly   affect  the  estimated  fair  value   amounts,   a
comprehensive  re-evaluation of all of the Properties has not been performed for
purposes of these financial statement disclosures.

12.    Related Party Transactions

The Company is party to a management agreement (the "Management Agreement") with
Concord pursuant to which the Company provides management  services,  assists in
the  management of Concord  properties,  provides  certain  personnel and office
space  and  general  office  services  to  Concord  which the  Company  receives
reimbursements from Concord. The Management Agreement is renewable annually. For
the years ended  December 31,  2000,  1999 and 1998  reimbursed  expenses to the
Company were $19,530, $54,547 and $215,684, respectively.

As of December  31, 2000 and 1999,  the Company had  recorded  receivables  from
Concord of $527,485 and  $520,669,  respectively.  Such  receivables  consist of
management  fees due to the Company and expenses for general office  services as
well as salary reimbursements.

Concord is wholly owned by Leonard S. Mandor and Robert A. Mandor,  both of whom
are executive officers and directors of Concord and the Company. Concord and its
subsidiaries  own a majority of the  outstanding  common  stock of the  Company.
Therefore,  both may be deemed to  beneficially  own more than a majority of the
voting stock of the Company.

                                                       F-23

<PAGE>



The  Company  sublet a portion of its  leased  office  space and shares  certain
overhead expenses with Tristone Partners,  Inc. ("Tristone").  Leonard S. Mandor
and Robert A. Mandor, are majority owners of Tristone.  At December 31, 2000 and
1999,  the Company  had  recorded  receivables  from  Tristone  of $109,363  and
$103,018, respectively.

In addition, the Company received property management fees of $128,250, $128,904
and $132,388 during 2000, 1999 and 1998, respectively,  from a partnership whose
general partner is an affiliate of the Company.

13.    Commitments and Contingent Liabilities

The  Company's  office  facility  in  Boca  Raton,   Florida  is  subject  to  a
noncancellable  five year operating lease agreement  commencing  January 1, 1998
and expiring  December 31, 2002.  Aggregate  annual rental payments for the year
ended December 31, 2000,  1999 and 1998 for the Company were $207,253,  $183,479
and  $176,374,   respectively.   Future  minimum   annual   payments  under  the
noncancellable  operating  lease  agreement,  as of December  31,  2000,  are as
follows:


Year Ending December 31st:
=====================================
       2001                   198,421
       2002                   206,358
                              -------
      Total                 $ 404,779
                            =========
------------------  -----------------

The  Company  has  accrued  performance  related  bonuses to  certain  executive
officers in the amount of $0 and  $1,187,038  for the years ended  December  31,
2000 and 1999, respectively.

As of December 31, 2000 and 1999,  the Company has  $1,501,692  and  $1,614,156,
respectively,  accrued  for  settlement  fees  relating  to a class  action  and
derivative lawsuit brought against the Company. Such settlement required,  among
other things,  the payment of $3.00 in cash in exchange for each eligible  share
of  Series A  Preferred  Stock  required  to be  surrendered  as of the close of
business  on  March 5,  1999.  See note 14.  Legal  Proceedings  for  additional
information regarding the class action and derivative lawsuit.

Under  various  federal,  state and local  environmental  laws,  ordinances  and
regulations,  the  Company,  as a current or previous  owner or operator of real
property,  may be held liable for the costs of removal or remediation of certain
hazardous    or    toxic    substances,    including,    without    limitations,
asbestos-containing  materials,  that  could be  located  on,  in or under  such
property.  Such laws and regulations  often impose liability  whether or not the
owner or operator knew of, or was responsible for, the presence of the hazardous
or toxic substances.  The costs of any required  remediation or removal of these
substances  could be  substantial  and the  Company's  liability  as an owner or
operator  as to any  property  is  generally  not  limited  under  such laws and
regulations,  and could exceed the property's value and the Company's  aggregate
assets.  The Company's ability to sell or rent a property,  or to borrow using a
property  as  collateral  may be  adversely  affected  by the  presence of these
substances or failure to remediate such  substances  properly.  Under these laws
and regulations,  the Company, as an owner, operator, or any entity who arranges
for the disposal of hazardous or toxic substances,  such as  asbestos-containing
materials,  at a disposal site,  may also be liable for these costs,  as well as
certain  other costs,  including  governmental  fines and injuries to persons or
properties.  To date,  the  Company,  has not  incurred  any costs of removal or
remediation of such

                                                       F-24

<PAGE>



hazardous  or toxic  substances.  However,  the  presence,  with or without  the
Company's  knowledge,  of hazardous or toxic  substances at any property held or
operated  by  the  Company,  could  adversely  affect  the  Company's  business,
operating  results  and  financial  condition.  The  Company  is  not  aware  of
environmental  conditions at any of the  properties  that it owns or in which it
has an investment which would have a material adverse impact on the Company.

14.     Legal Proceedings

       As previously reported,  during 1996 Milestone,  certain past and present
members of its Board of Directors and  executive  officers,  and Concord  Assets
Group, Inc. ("Concord"),  a New York Corporation,  were named as defendants in a
purported class action and derivative lawsuit (the "Winston Actions")  commenced
in the Court of Chancery of the State of Delaware (the "Delaware Court"). In the
Winston Actions, the plaintiff,  a Series A Preferred Stockholder  purporting to
bring the action on behalf of himself, all other Series A Preferred Stockholders
and  derivatively  on behalf  of  Milestone,  alleged  that in  connection  with
Milestone's  acquisition in October 1995 of certain wraparound notes, wraparound
mortgages  and fee  properties  from certain  affiliates  of Concord and certain
related  transactions  (collectively,  the  "Transactions"),  Milestone  and its
directors  engaged in  self-dealing,  violated  federal  securities  laws and an
injunction  against such violations and breached their  fiduciary  duties to the
Series A Preferred  Stockholders.  The  plaintiff  claimed,  among other things,
that, as a result of the Transactions, Milestone would not have sufficient funds
to pay dividends on the Series A Preferred  Stock and that the properties  which
were not  transferred  to  Union  Properties  Investors,  Inc.  ("UPI"),  a then
wholly-owned  Delaware  subsidiary  of  Milestone,  in the Transfer were grossly
inferior to the properties that were transferred to UPI.

         On August 5, 1998,  the counsel for the named  plaintiff in the Winston
Actions  and the counsel  for the  defendants  entered  into a  Stipulation  and
Agreement of Settlement (the "Winston Settlement  Agreement") which memorialized
the terms of a settlement (the "Winston  Settlement") of the Winston Actions. On
January 28, 1999, the Delaware Court approved the Winston Settlement  Agreement,
which  approval  became final  effective as of the close of business on March 5,
1999.  At such time,  (i) the shares of Series A  Preferred  Stock owned by each
Series A Preferred  Stockholder  who was eligible to  participate in the Winston
Settlement  and who did not properly opt out of the Winston  Settlement  and who
owned shares of Series A Preferred Stock as of the close of business on March 5,
1999 were  canceled  and  represented  only the right of such Series A Preferred
Stockholder  to receive $3.00 in cash from the Company in exchange for each such
share;  (ii) the  holders  of shares of the  Series A  Preferred  Stock  between
October 23, 1995 and the close of business on March 5, 1999, other than Series A
Preferred  Stockholders  who  properly  opted  out  of  the  Winston  Settlement
Agreement or who were precluded from  participating  in the Winston  Settlement,
released  any and all claims they may have had against the Company and the other
named  defendants  in  connection  with  the  Transactions;   (iii)  Milestone's
stockholders  other than Series A Preferred  Stockholders  who were  eligible to
participate in the Winston  Settlement and who properly opted out of the Winston
Settlement  released all derivative  claims in connection with the Transactions;
and (iv) the Winston  Actions were  dismissed.  In  connection  with the Winston
Actions,  the Company  retained  counsel for all of the  defendants  (including,
without  limitation,  Leonard S.  Mandor,  Robert A.  Mandor,  Harvey  Jacobson,
Gregory McMahon and Geoffrey Aaronson (each of whom is a director and/or officer
of the  Company)) and assumed  responsibility  for the payment of all legal fees
incurred by such persons in connection  with the Winston Actions and the Winston
Settlement (subject to the insurance coverage litigation described below).


                                                       F-25

<PAGE>



         The foregoing  description  of the Winston  Settlement  and the Winston
Settlement  Agreement  is  qualified in its entirety by reference to the Winston
Settlement  Agreement,  a copy of  which  was  filed  by the  Company  with  the
Securities  and Exchange  Commission  (the  "Commission")  on August 14, 1998 as
Exhibit 10.01 to the Company's  Quarterly  Report on Form 10-Q for the quarterly
period ended June 30, 1998.

         The Company  maintains a directors  and officers  insurance and company
reimbursement  policy (the  "National  Policy")  issued by  National  Union Fire
Insurance Company of Pittsburgh,  PA ("National  Union") with a $2,000,000 limit
and an excess directors and officers liability and company  reimbursement policy
(the "Stonewall  Policy") issued by Stonewall  Surplus Lines Insurance  Company,
now known as American  Dynasty  Surplus Lines Insurance  Company  ("Stonewall"),
with a $2,000,000  limit.  The Company  believes that the amounts that it has to
pay  pursuant  to the  Winston  Settlement  and in  connection  with the Winston
Actions  are  covered  losses  under  both the  National  Union  Policy  and the
Stonewall  Policy.  In addition,  the Company  believes  that the legal fees and
other  expenses  incurred by the Company and the other  defendants in connection
with the Winston Actions are also covered losses under the National Union Policy
and the Stonewall Policy.  In connection with a previous proposed  settlement of
the Winston  Actions which was never  consummated,  National Union and Stonewall
both refused to  contribute  to such proposed  settlement,  asserting  that such
proposed  settlement  did not  encompass  any  covered  loss (as  defined in the
National Policy and the Stonewall  Policy,  respectively).  On January 29, 1998,
the Company  commenced  a lawsuit in the United  States  District  Court for the
Southern District of New York against National Union and Stonewall in connection
with such refusal to contribute to such proposed  settlement.  In the complaint,
the plaintiffs  alleged that National Union and Stonewall  wrongfully  failed to
contribute to the proposed  settlement  and sought  reimbursement  from National
Union and  Stonewall  up to the limits of their  respective  policies.  National
Union and  Stonewall  both answered the  complaint  and denied  liability.  As a
result of the termination of the previously proposed settlement,  the Company on
one hand, and Stonewall and National Union, on the other hand, agreed to dismiss
such action  without  prejudice and such action was dismissed on May 29, 1998 by
the United  States  District  Court for the Southern  District of New York.  The
Company gave both National Union and Stonewall notice of the Winston  Settlement
and  provided  each of them with a copy of the Winston  Settlement  Agreement on
August 12, 1998.  National Union and Stonewall  reviewed the Winston  Settlement
Agreement and separately informed the Company that their basic position, denying
coverage, had not changed. On February 12, 1999, the Company commenced a lawsuit
in the Circuit  Court for the Fifteenth  Judicial  Circuit in and for Palm Beach
County, Florida against both National Union and Stonewall alleging,  among other
things,  that National Union and Stonewall have wrongfully refused to contribute
to the Winston  Settlement  and seeking  reimbursement  from National  Union and
Stonewall  up to the limits of their  respective  policies.  At this  time,  the
Company  is not in a  position  to render an  opinion  as to the  outcome of the
National Union and Stonewall Actions.

Claims and Litigation

From time to time the  Company is  exposed  to claims  and legal  actions in the
normal  course of  business,  some of which are  initiated  by the  Company.  At
December 31, 2000,  management  believes that any such outstanding  issues other
than the Winston Actions will be resolved  without  significantly  impairing the
financial condition of the Company.



                                                       F-26

<PAGE>



15.      Consolidated Quarterly Summary of Operations (unaudited)

The  following  is a  summary  of  financial  information  with  respect  to the
Company's  operations for the four fiscal  quarters  during fiscal year 2000 and
1999:
<TABLE>
<CAPTION>


                                                        Fourth                Third            Second            First
                                2000                   Quarter               Quarter          Quarter           Quarter
================================================= ================= ===  ===============  ================  ===============
<S>                                                     <C>                  <C>               <C>              <C>
Total revenues                                          $ 2,137,711          $ 2,491,822       $ 2,643,168      $ 6,012,870
Total expenses                                          3,280,417             2,761,523         2,751,535        3,516,219
                                                       ------------          -----------     -------------     -----------
(Loss) income before income taxes and
minority interest                                       (1,142,706)            (269,701)         (108,367)        2,496,651
Benefit (provision) for income taxes                     (555,103)               49,202            17,406          949,095
                                                       ------------          -----------   ---------------    ------------
Net  income (loss) before minority interest               (587,603)            (318,903)         (125,773)        1,547,556
Minority interest in net loss of consolidated
subsidiary                                                  5,745                 1,969            1,364            16,696
                                                   ----------------       --------------   ---------------      ----------
Net income (loss)                                        (581,858)             (316,934)         (124,409)       1,564,252
                                                      =============         ============     =============       =========
Net income (loss) per common share, basic                    (.14)               (0.07)               (.03)            .37
                                                  =================      ===============  ================= ==============
Net income (loss) per common share, diluted                  (.14)               (0.07)               (.03)            .36
                                                  =================      ===============  ================= ===============
-------------------------------------------------                                                           ---------------
</TABLE>

<TABLE>
<CAPTION>
                                                        Fourth                Third            Second            First
                                1999                   Quarter               Quarter          Quarter           Quarter
================================================= ================= ===  ===============  ================  ===============
<S>                                                     <C>                  <C>               <C>              <C>
Total revenues                                          $ 5,600,512          $ 4,943,530       $ 5,017,243      $ 4,071,004
Total expenses                                          6,374,924             4,650,885         4,569,362        4,590,177
                                                        -----------           ----------        ----------       ---------
(Loss) income before income taxes and
minority interest                                         (774,412)              292,645           447,881        (519,173)
(Benefit) provision for income taxes                   (3,177,452)    a         964,986           486,366         (286,116)
                                                       ------------          -----------       -----------      -----------
Net  income (loss) before minority interest               2,403,040            (672,341)          (38,485)        (233,057)
Minority interest in net loss of consolidated
subsidiary                                                663,962                      0                0                 0
                                                     --------------      ----------------  ---------------  ---------------
Net income (loss)                                       3,067,002             ( 672,341)         ( 38,485)        (233,057)
                                                      =============         ============     =============     ============
Net income (loss) per common share, basic                      .72                 (.16)             (.01)            (.05)
                                                  ==================     ===============   ===============  ===============
Net income (loss) per common share, diluted                     .65                (.16)             (.01)            (.05)
                                                   ================      ===============   ===============  ===============
------------------------------------------------- ----------------- ---  ---------------  ----------------  ---------------

Note:    a   Includes approximately $2,800,000 of a reversal of a prior year accrual.  See Note 11 for a description of
              income taxes.

</TABLE>


                                                        F-27

<PAGE>



                                    MILESTONE PROPERTIES, INC. AND SUBSIDIARIES

                                                    SCHEDULE III
                                      Real Estate and Accumulated Depreciation
                                                 December 31, 2000

<TABLE>
<CAPTION>

                                                                        Cost of                Accumulated    Date   Depreciation
           Location      Encumbrances      Land           Building  Improvements    Total     Depreciation  Acquired     Life
========================================  ===========  ============ ============ =========== ============= ========  ===========
Pine Oak Plaza,
<S>                        <C>            <C>           <C>           <C>         <C>         <C>           <C>  <C>          <C>
Sunrise, FL                $   1,135,238  $   110,000   $   990,000   $   49,845  $1,149,845  $   (96,512)  9/24/97           50
Regency Walk,
Jacksonville, FL               1,803,203      215,000     1,935,000      215,922   2,365,922     (200,648)  4/01/98           50
Orange Park,
Orange Park, FL                1,270,786      150,000     1,350,000       15,830   1,515,830      (78,402)  4/17/98           50
Teeca Plaza,
Boca Raton, FL                 1,763,573      207,500     1,867,500      159,784   2,234,784     (177,225)  7/15/98           50
Country Grove Plaza,
W. Palm Beach, FL                864,015      110,000       990,000       15,981   1,115,981      (50,916)  9/11/98           50
Mandarin Central,
Jacksonville, FL               3,888,460      465,000     4,185,000      115,080   4,765,080     (217,587) 10/13/98           50
Pine Crest,
Ft. Lauderdale, FL             2,347,217      320,000     2,880,000       13,503   3,213,503     (135,002) 10/27/98           50
Lincoln Park,
Davie, FL                      3,166,205      384,000     3,456,000       35,866   3,875,866     (159,028) 11/10/98           50
Sunrise Shopping Center
Zanesville, OH                 1,719,554            0     2,530,219      368,498   2,898,717   (1,340,100) 10/23/95           50
Family Dollar Stores,
Blackstone, VA                         0            0       794,909        8,607     803,516     (658,391) 10/23/95        26.65
Land Parcel
Miami, FL                      2,000,000    3,511,669             0            0   3,511,669             0 12/29/99          n/a
----------------------------------------  -----------  ------------ ------------ ----------- ------------- --------  -----------
Totals                       $19,958,251  $ 5,473,169  $ 20,978,628    $ 998,916 $27,450,713 $ (3,113,811)
                             ===========  ===========  ============    ========= =========== =============
----------------------------------------  -----------  ------------ ------------ ----------- ------------- --------  -----------
</TABLE>



                                                        S-1

<PAGE>



                                    MILESTONE PROPERTIES, INC. AND SUBSIDIARIES

                                                    SCHEDULE III
                                      Real Estate and Accumulated Depreciation
                                                 December 31, 2000


Reconciliation of Property and Improvements:


                           2000              1999              1998
==================== ================= ================= =================
Beginning Balance         $ 27,194,053      $ 23,291,713       $25,546,306
Acquisitions                         0         3,511,669        18,515,000
Improvements                   256,660           390,671           351,585
Dispositions                         0                    0   (21,121,178)
                     ----------------- --------------------   ------------
Ending Balance            $ 27,450,713      $ 27,194,053      $23,291,713
                          ============      ============      ============
-------------------- ----------------- ----------------- -----------------


Reconciliation of Accumulated Depreciation:


                            2000              1999              1998
===================== ================= ================= =================
Beginning Balance           $ 2,480,526       $ 1,879,050       $ 6,065,951
Depreciation expense            633,285           601,476           492,686
Dispositions                           0                 0      (4,679,587)
                      ------------------------------------      -----------
Ending Balance              $ 3,113,811       $ 2,480,526       $1,879,050
                            ===========       ===========       ===========
--------------------- ----------------- ----------------- -----------------


At  December  31,  2000,  the tax basis of the  Company's  owned real estate was
approximately $25,527,351.




                                                        S-2

<PAGE>