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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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Form 10-K



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(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, 2003



OR



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



For the transition period from  to



Commission file number 000-24594



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MEREDITH ENTERPRISES, INC.

(formerly West Coast Realty Investors, Inc.)

(Exact name of registrant as specified in its charter)



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|                                                             |  |                                  
|------------------------------------------------------------ |  | ---------------------------------
|Delaware                                                     |  | 95-4246740                       
|State or other jurisdiction of incorporation or organization |  | (IRS Employer Identification No.)



3000 SAND HILL ROAD
BUILDING 2, SUITE 120

MENLO PARK, CALIFORNIA 94025

(Address of principal executive offices) (Zip Code)



(650) 233-7140

Registrants telephone number, including area code



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



|                             |  |                                          
|---------------------------- |  | -----------------------------------------
|Title of each class          |  | Name of each exchange on which registered
|Common Stock, $.01 par value |  | American Stock Exchange                  



Securities
registered pursuant to Section 12(g) of the Act: None



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Indicate by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for 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 any amendment to this Form 10-K  x



Indicate by check mark whether the registrant
is an accelerated filer (as defined in Exchange Act rule 12b-2)     Yes ̈No  x



The aggregate market value of voting and non-voting common equity of the registrants common stock held by non-affiliates was $9,540,136 as of June 30, 2003.



As of March 12, 2004, there were 975,298 shares of the registrants common stock outstanding.



Documents incorporated by reference. None



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MEREDITH ENTERPRISES, INC.

(formerly West Coast Realty Investors, Inc.)



ANNUAL REPORT ON FORM 10-K

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003



TABLE OF CONTENTS



|         |  |                            |  |                                                                                       |  |         
|-------- |  | -------------------------- |  | ------------------------------------------------------------------------------------- |  | --------
|         |  |                            |  |                                                                                       |  | Page No.
|         |  | Forward-Looking Statements |  | 2                                                                                    
|         |  |                            | 
|PART I   |  |                            |  |                                                                                       |  |         
|         |  | ITEM 1:                    |  | Business                                                                              |  | 3       
|         |  |                            |  | Risk Factors                                                                          |  | 10      
|         |  | ITEM 2:                    |  | Properties                                                                            |  | 22      
|         |  | ITEM 3:                    |  | Legal Proceedings                                                                     |  | 25      
|         |  | ITEM 4:                    |  | Submission of Matters to a Vote of Security Holders                                   |  | 26      
|         |  |                            | 
|PART II  |  |                            |  |                                                                                       |  |         
|         |  | ITEM 5:                    |  | Market for Registrants Common Equity and Related Stockholder Matters                 |  | 27      
|         |  | ITEM 6:                    |  | Selected Financial Data                                                               |  | 28      
|         |  | ITEM 7:                    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 29      
|         |  | ITEM 7A:                   |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 38      
|         |  | ITEM 8:                    |  | Financial Statements and Supplementary Data                                           |  | 39      
|         |  | ITEM 9:                    |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure  |  | 64      
|         |  | ITEM 9A:                   |  | Disclosure Controls and Procedures                                                    |  | 64      
|         |  |                            | 
|PART III |  | ITEM 10:                   |  | Directors and Executive Officers of the Registrant                                    |  | 65      
|         |  | ITEM 11:                   |  | Executive Compensation                                                                |  | 68      
|         |  | ITEM 12:                   |  | Security Ownership of Certain Beneficial Holders and Management                       |  | 71      
|         |  | ITEM 13:                   |  | Certain Relationships and Related Transactions                                        |  | 72      
|         |  | ITEM 14:                   |  | Principal Accounting Fees and Services                                                |  | 73      
|         |  |                            | 
|PART IV  |  | ITEM 15:                   |  | Exhibits, Financial Statement Schedules and Reports on Form 8-K                       |  | 74      
|         |  |                            |  | Exhibit Index                                                                         |  | 75      
|         |  |                            |  | Signatures                                                                            |  | 79      
|         |  |                            |  | Schedule III-Real Estate and Accumulated Depreciation                                 |  | 82      



As used in this Annual Report on Form
10-K, unless the context otherwise requires, the terms we, us, or the Company and our refer to Meredith Enterprises, Inc., a Delaware corporation, formerly West Coast Realty Investors, Inc.



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Special Note Regarding Forward-Looking Statements



This annual report contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are identified by words such as believes, expects, may,
will, should, seeks, approximately, intends, plans, pro forma, estimates, or anticipates or in their negative form or other variations, or by
discussions of strategy, plans or intentions. Forward-looking statements are based on assumptions, data or methods that may be incorrect, imprecise or incapable of being realized. These statements include our statements of this nature concerning the
following:



| |  | the commercial real estate market;
| | - | ----------------------------------



| |  | our future revenues;
| | - | --------------------



| |  | our future revenue mix, net operating income and operating results;
| | - | -------------------------------------------------------------------



| |  | our future cash requirements;
| | - | -----------------------------



| |  | competition, our competitors and our ability to compete;
| | - | --------------------------------------------------------



| |  | our financial and managerial controls, reporting systems and procedures, and other systems and processes;
| | - | ---------------------------------------------------------------------------------------------------------



| |  | property values;
| | - | ----------------



| |  | any particular tenants intentions or financial condition, such as its plans to renew or terminate a property lease, or the likelihood that it will default upon a property
lease;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | vacancies;
| | - | ----------



| |  | interest rates;
| | - | ---------------



| |  | our operating costs;
| | - | --------------------



| |  | our future depreciation expenses;
| | - | ---------------------------------



| |  | litigation matters and legal proceedings, our defenses to such matters and our contesting of such matters;
| | - | ----------------------------------------------------------------------------------------------------------

| |  | our ability to meet our debt obligations;
| | - | -----------------------------------------



| |  | the proposed sales of certain properties;
| | - | -----------------------------------------



| |  | our ability to obtain outside financing;
| | - | ----------------------------------------



| |  | identifying, acquiring and successfully integrating new properties;
| | - | -------------------------------------------------------------------



| |  | our ability to successfully construct the planned shopping center on 2.5 acres in Garden Grove, California;
| | - | -----------------------------------------------------------------------------------------------------------



| |  | the type and locations of real estate investments we may make;
| | - | --------------------------------------------------------------



| |  | our ability to qualify as a real estate investment trust under the Internal Revenue Code of 1986, as amended;
| | - | -------------------------------------------------------------------------------------------------------------



| |  | environmental risks;
| | - | --------------------



| |  | natural disasters and other threats to our properties; and
| | - | ----------------------------------------------------------



| |  | the economies of the geographic areas where our properties are located.
| | - | -----------------------------------------------------------------------



These statements are subject to risks and uncertainties that could cause actual results and events to differ materially. For a detailed discussion of these risks and
uncertainties, see Risk Factors at the end of this Item 1. We undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this annual report.



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PART I



|ITEM 1. |  | BUSINESS
|------- |  | --------



Overview



Meredith
Enterprises, Inc. (formerly West Coast Realty Investors, Inc.) is a real estate company engaged in acquiring, owning and managing, suburban office, retail shopping center and light industrial properties. We were originally incorporated in 1989 under
the laws of the State of Delaware. We have elected to be taxed as a real estate investment trust, or REIT, for federal income tax purposes, which requires, among a number of other organizational and operational requirements, that we
distribute at least 90% of our taxable income (excluding capital gains) to our stockholders. From inception to March 31, 2002, West Coast Realty Advisors, Inc. advised us and West Coast Realty Management, Inc. managed our properties. Each of these
companies is a wholly owned subsidiary of Associated Financial Group, Inc., and we sometimes refer to them together in this annual report as the Advisor. Since March 31, 2002, we have been self-managed and self-administered.



At December 31, 2003, we had a real estate portfolio of 12 properties, including:



| |  | three light industrial properties totaling 151,225 square feet;
| | - | ---------------------------------------------------------------



| |  | one shopping center of 321,621 square feet;
| | - | -------------------------------------------



| |  | one restaurant facility of 5,133 square feet;
| | - | ---------------------------------------------



| |  | three suburban office properties representing 94,806 square feet; and
| | - | ---------------------------------------------------------------------



| |  | four properties held for sale totaling 53,715 square feet.
| | - | ----------------------------------------------------------



In addition to the above, we own a 2.5 acre parcel of undeveloped land in Garden Grove; we intend to construct a multi-tenant shopping center comprising approximately
30,000 square feet on this parcel. All of our properties are located in California and Georgia. Because our only Georgia property is our Northlake Festival retail center in Atlanta, any reference in this report to the location of any other property
is to a city in California.



Our executive offices are located at 3000 Sand
Hill Road Building 2, Suite 120, Menlo Park, California 94025, and our telephone number is (650) 233-7140.



Business Strategies



Our business
objective is to increase stockholders long-term total return through dividends and the appreciation in value of our common stock.



We seek to grow our asset base through (1) the acquisition of suburban office, retail shopping center and light industrial properties, (2) the acquisition of portfolios
of similar properties, (3) the rehabilitation and repositioning of suburban office, retail shopping center and light industrial properties and (4) purchasing parcels of undeveloped land and constructing suburban office, retail shopping center or
light industrial properties on them. Our strategy is to operate in markets that demonstrate superior economic growth while restrained by entitlement limitations of similar properties. We intend to continue to target selected California and
Southeastern markets where assets are currently owned, and we can benefit from our real estate expertise and access to superior properties introduced by high quality brokers. Specific strategies include:



| |  | increasing cash flow through new net leases for existing properties;
| | - | --------------------------------------------------------------------



| |  | evaluating and refinancing of existing and new properties;
| | - | ----------------------------------------------------------



| |  | development of suburban office, retail shopping center and light industrial properties;
| | - | ---------------------------------------------------------------------------------------



| |  | rehabilitation, repositioning and disposing of non-strategic properties;
| | - | ------------------------------------------------------------------------



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| |  | reinvesting sales proceeds into new properties; and
| | - | ---------------------------------------------------



| |  | expanding our sources of private and institutional real estate capital for future acquisition purposes.
| | - | -------------------------------------------------------------------------------------------------------



Significant Recent Events



| |  | On February 10, 2004, we granted options to purchase 53,335 shares of our common stock to employees and directors at the then market price of $16.00 per share;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | On March 2, 2004, we paid the balance due of $2,764,432, pursuant to its terms, on our loan secured by our Ontario property;
| | - | ----------------------------------------------------------------------------------------------------------------------------



| |  | In March 2004, we extended the due date on the loan secured by our Banco Popular property for three months to June 18, 2004 at the same variable interest rate and interest only
payment schedule; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | We have extended the term of the lease on the two Sacramento properties (Java City) to July 31, 2004, under the same terms, when we expect the tenant to move out and stop paying
rent.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Significant Events During 2003



| |  | On December 19, 2003, we sold our property in Cerritos for a gross sales price of $3,740,000;
| | - | ---------------------------------------------------------------------------------------------



| |  | Wherehouse Entertainment, Inc., a tenant in our Fresno property declared bankruptcy in January 2003 and vacated the premises on November 30, 2003;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------



| |  | On November 25, 2003, we sold our vacant property in Chino for gross sales price of $2,300,000;
| | - | -----------------------------------------------------------------------------------------------



| |  | During the fourth quarter of 2003, we established a 401(k) plan for our employees;
| | - | ----------------------------------------------------------------------------------



| |  | On September 30, 2003, our board of directors declared a dividend of $0.25 per share for the quarter then ended, $0.05 per share lower than the previous quarter;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | On August 12, 2003, we sold our vacant Vacaville property for gross sales price of $2,100,000;
| | - | ----------------------------------------------------------------------------------------------



| |  | On June 23, 2003, we paid $1,500,000 to acquire a 4,880 square foot office building on a 0.5 acre parcel on a corner surrounded by the land we purchased in Garden Grove in March
2003;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The tenant in our Chino property vacated upon the end of the lease in early April and owes approximately $75,000 in rent;
| | - | -------------------------------------------------------------------------------------------------------------------------



| |  | On March 26, 2003, we acquired a 2.5 acre parcel of undeveloped land in Garden Grove for $2,200,000; we intend to construct a multi-tenant shopping center comprising approximately
30,000 square feet on this parcel;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | On March 24, 2003, we changed our name from West Coast Realty Investors, Inc. to Meredith Enterprises, Inc; and
| | - | ---------------------------------------------------------------------------------------------------------------



| |  | On March 3, 2003, we granted a total of 91,669 options to purchase our common stock to three employees and four directors at $10.25 per share, the fair market value at the date of
grant.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Significant Events During 2002



| |  | We became a self-managed REIT upon the termination of our agreement with the Advisor;
| | - | -------------------------------------------------------------------------------------



| |  | We sold the Huntington Beach and Corona properties for a gross sales price of $3,800,000
| | - | ----------------------------------------------------------------------------------------



| |  | The tenant in our Ontario property, Adelphia Communications, declared bankruptcy. The rent has been paid through March 31, 2004;
| | - | --------------------------------------------------------------------------------------------------------------------------------



| |  | We refinanced four loans to a base fixed interest rate of 6.97% and we received net proceeds of approximately $6,500,000 from this refinancing;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------



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| |  | We listed our common stock on the American Stock Exchange under the symbol MPQ;
| | - | ---------------------------------------------------------------------------------



| |  | We restated our certificate of incorporation to implement a one-for-three reverse stock split; and
| | - | --------------------------------------------------------------------------------------------------



| |  | On October 15, 2002, we purchased the Northlake Festival Shopping Center in Atlanta, Georgia for approximately $21,000,000.
| | - | ---------------------------------------------------------------------------------------------------------------------------



Significant Events During 2001



| |  | We reorganized our business by electing a new board of directors at our annual meeting of stockholders, accepting the resignations of all of our previous directors;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Allen Meredith became our first employee and was appointed our new Chairman of the Board, President and Chief Executive Officer;
| | - | --------------------------------------------------------------------------------------------------------------------------------



| |  | We listed four of our retail properties for sale because their operations are not consistent with our business strategy;
| | - | ------------------------------------------------------------------------------------------------------------------------



| |  | We appointed Charles Wingard as our acting Chief Financial Officer and he became an employee; and
| | - | -------------------------------------------------------------------------------------------------



| |  | We began evaluating our strategic goals, including the disposition of certain properties, primarily properties with retail operations that are inconsistent with our new investment
objectives. Based on appraisals and holding periods, we determined in conjunction with the Advisor, that the total expected future cash flows from operations and the ultimate disposition of six properties were less than their carrying values at
September 30, 2001. As a result, in the third quarter of 2001, we recorded an impairment loss totaling $3,800,000, primarily related to the Riverside and Vacaville properties, measured as the amount by which the carrying amount of the asset exceeded
its fair value.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Our Policies for Investment, Financing, and
Conflicts of Interest



Our bylaws do not restrict the types of
transactions that we may enter into and do not restrict transactions between affiliates and the company. Our investment policies, financing policies and conflict of interest policies are set by our board of directors The board of directors has
adopted the policies summarized below, including the Code of Business Conduct and Ethics we adopted on March 22, 2004 pursuant to new requirements of the American Stock Exchange. Our board may amend or revise them from time to time, however, without
a vote of our stockholders, except that



| | (1) | changes in our conflict of interest policies must be approved by a majority of the independent directors and otherwise be consistent with legal requirements; and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | if we decide to change our policy to increase the percentage of debt we incur above 65% of our overall portfolio fair market value, we will implement the change only after we seek
and obtain the approval of the holders of a majority in voting power of our outstanding shares.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Investment Policies



Investments in Real Estate or Interests in Real Estate. Our business objective is to increase stockholders long-term total return through increases in the
dividend and the appreciation in value of our common stock. We seek to grow our asset base through:



| | (1) | acquiring suburban office, retail shopping center and light industrial properties, both within and outside California;
| | --- | ----------------------------------------------------------------------------------------------------------------------



| | (2) | acquiring portfolios of similar properties;
| | --- | -------------------------------------------



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| | (3) | rehabilitating and repositioning suburban office, retail shopping center and light industrial properties; and
| | --- | -------------------------------------------------------------------------------------------------------------



| | (4) | purchasing parcels of undeveloped land and constructing suburban office, retail shopping center or light industrial properties on them.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------



We intend to operate in markets that are experiencing economic growth while restrained by
entitlement limitations of similar properties.



| | We | also intend to maximize our value to our stockholders by increasing cash flow by:
| | -- | ---------------------------------------------------------------------------------



| | (1) | internal growth of triple net leases from our existing properties and leasing vacant space;
| | --- | -------------------------------------------------------------------------------------------



| | (2) | evaluating and refinancing debt arrangements with lenders;
| | --- | ----------------------------------------------------------



| | (3) | rehabilitating, repositioning and disposing of some of our retail properties and possibly other properties that are not consistent with our strategy, and recycling the proceeds from
sales into new properties; and
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | seeking out and expanding our sources of private and institutional real estate capital for future acquisition purposes.
| | --- | -----------------------------------------------------------------------------------------------------------------------



Our October 2002 acquisition of the Northlake Festival Shopping Center in Atlanta, Georgia
represented a change in our business focus, which had previously been to acquire, own and manage suburban office, retail shopping center and light industrial properties in California.



Securities of or Interests in Persons Primarily Engaged in Real Estate Activities and Other Issuers. We also may invest in securities
of other entities engaged in real estate activities or invest in securities of other issuers, including investments for the purpose of exercising control over those entities. We may acquire all or substantially all of the securities or assets of
other REITs or similar entities where those investments would be consistent with our investment policies. We do not currently intend to invest in the securities of other issuers, and federal tax laws place restrictions on such ownership by a REIT.
In making any of the investments described in this paragraph we intend to comply with the percentage of ownership limitations and gross income tests necessary for REIT qualification under the Internal Revenue Code. Also, we will not make any
investments if the proposed investment would cause us to be an investment company under the Investment Company Act of 1940.



No Investments in Mortgages. We do not own any mortgages and do not currently intend to invest in mortgages or to engage in originating, servicing or warehousing
mortgages.



Financing Policies



Our organizational documents do not limit the amount of debt we may incur. We have adopted a
policy that we shall not incur any additional liabilities if, after giving effect to the additional liabilities, total liabilities would exceed 65% of what the board of directors believes is the fair market value of our total portfolio. Fair market
value for this purpose may differ from the amounts reported on our December 31, 2003 financial statements prepared under generally accepted accounting principles because the financial statements reduce the value of the assets by accumulated
depreciation and do not record any appreciation in value above the cost of the property. We may, however, from time to time re-evaluate our borrowing policies in light of then current economic conditions, relative costs of debt and equity capital,
market value of our real estate assets, growth and acquisition opportunities and other factors. If we decide to change this policy to increase the percentage of debt we incur, we will implement the change only after we seek and obtain the approval
of the holders of a majority in voting power of our outstanding shares. Modification of this policy may adversely affect the interests of our stockholders.



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To the extent that the board of directors determines to seek additional capital, we may raise capital through additional
equity offerings, debt financing or retention of cash flow or a combination of these methods. Our retention of cash flow is subject to provisions in the Internal Revenue Code requiring a REIT to distribute a specified percentage of taxable income,
and we must also take into account taxes that would be imposed on undistributed taxable income.



We have not established any limit on the number or amount of mortgages on any single property or on our portfolio as a whole.



Conflict of Interest Policies



Our board of directors is subject to provisions of Delaware law that are designed to eliminate or minimize potential conflicts of interest. We can give no assurances,
however, that these policies will always eliminate the influence of those conflicts. If these policies are not successful, the board could make decisions that might fail to reflect fully the interests of all stockholders.



Under Delaware law, a director may not misappropriate corporate opportunities that he or she
learns of solely by serving as a member of the board of directors. In addition, under Delaware law, no contract or transaction between a corporation and one or more of its directors or officers, or between a corporation and any other corporation,
partnership, association, or other organization in which one or more of its directors or officers, are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer
is present at or participates in the meeting of the board or committee which authorizes the contract or transaction, or solely because any such directors or officers votes are counted for such purpose, if:



| | (1) | the material facts as to the directors or officers relationship or interest and as to the contract or transaction are disclosed or are known to the board of directors or
the committee, and the board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors are less than a quorum; or
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | the material facts as to the directors or officers relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled
to vote on the matter, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | the contract or transaction is fair as to the company as of the time it is authorized, approved or ratified, by the board of directors, a committee or the stockholders.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Our board of directors has adopted a policy that all conflicting
interest transactions must be authorized by a majority of the disinterested directors, but only if there are at least two directors who are disinterested with respect to the matter at issue. In addition, under the applicable rules of the American
Stock Exchange, related party transactions are subject to appropriate review and oversight by the our Audit Committee, which is composed of John H. Redmond (its chair), Patricia F. Meidell and James P. Moore.



Our bylaws contain a provision providing in summary as follows: Any director, affiliate,
officer, employee or agent of the company may acquire, own, hold, and dispose of shares of the companys capital stock for his individual account, and may exercise all rights of a stockholder to the same extent and in the same manner as if he
were not a director, officer, employee, or agent of the company. Any director, affiliate, officer, employee, or agent of the company may have personal business interests and may engage in personal business activities. These interests and activities
may include the acquisition,



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syndication, holding, management, operation or disposition, for his own account or for the account of others, of
interests in mortgages, interests in real property including, but not limited to, real property investments presented to and rejected by the company, or interests in persons engaged in the real estate business. Any director, officer, employee, or
agent of the company may (a) be interested as director, officer, director, stockholder, partner, member, advisor, or employee of or otherwise have a direct or indirect interest in any person who may be engaged to render advice or services to the
company, and (b) receive compensation from that person as well as compensation as director, affiliate, officer, or otherwise from the company. None of these activities shall be deemed to conflict with his duties and powers as director, officer,
employee, or agent. Any director, affiliate, officer, employee, or agent of the company may engage with or for others in business activities of types conducted by the company and shall not have any obligation to present to the company any investment
opportunities which come to them other than in their capacities as directors, officers, employees, or agents, regardless of whether those opportunities are within the companys investment policies. Notwithstanding the foregoing, each director
must disclose to the company any interest he has in any investment opportunity presented to the company and any interest he knows to be held by any person of which he is an affiliate, and in the event of a conflict between the foregoing policy and
our Code of Business Conduct and Ethics described below, the code shall govern.



New Code of Business Conduct and Ethics



On March 22, 2004, our board of directors adopted a Code of Business Conduct and Ethics as required by the rules of the American Stock Exchange and the federal Sarbanes-Oxley Act. Our code is designed to deter wrongdoing and to promote:



| | (1) | honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | full, fair, accurate, timely and understandable disclosure in reports and documents that we file with, or submit to, the SEC and in other public communications we make;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | compliance with applicable governmental laws, rules and regulations;
| | --- | --------------------------------------------------------------------



| | (4) | the prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and
| | --- | -----------------------------------------------------------------------------------------------------------------------



| | (5) | accountability for adherence to the code.
| | --- | -----------------------------------------



We have posted a copy of the code on our corporate website,www.meredithreit.com.



Other Policies



We have authority to offer our securities and to repurchase and otherwise reacquire our securities, and we may engage in those activities in the future. We may also make
loans to joint ventures in which we participate to meet working capital needs. We have not engaged in trading, underwriting, agency distribution or sale of securities of other issuers, and we do not intend to do so. We intend to make investments in
a manner so that we will not be treated as an investment company under the Investment Company Act of 1940.



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At all times, we intend to make investments in a manner to be consistent with the requirements of the Internal Revenue
Code for us to qualify as a REIT unless, because of changing circumstances or changes in the Internal Revenue Code or in applicable regulations, the board of directors decides that it is no longer in our best interests to qualify as a REIT and
obtains the necessary approval of the holders of a majority in voting power of the outstanding shares of our capital stock at a meeting of stockholders called for that purpose.



Competition



The real estate business is highly competitive. Our properties compete for tenants with similar properties located in the same markets primarily on the basis of location,
rent charged, suitability, services provided and the design and condition of improvements. This competition could harm our ability to lease our properties and could negatively affect the rents we charge. We also compete with other real estate
investors for real estate investment opportunities. These real estate investors may include other REITs, life insurance companies, pension trusts, trust funds, partnerships and individual investors, many of whom have greater resources than we do.
This competition could negatively affect our ability to expand our property portfolio with desirable properties.



Employees



As of December 31, 2003, we had four full time employees. None of these employees is covered by any collective bargaining agreements.



Company Website



To view links to our current and periodic reports free of charge, please go to our website at www.meredithreit.com. We make these postings as soon as reasonably
practicable after our filings with the SEC.



Tax Status



We believe we are organized and operate so as to qualify as a real estate investment trust,
or REIT, under Sections 856-860 of the Internal Revenue Code of 1986, as amended. We have elected to be taxed as a REIT for federal income tax purposes, which requires, among a number of other organizational and operational requirements, that we
distribute at least 90% of our taxable income (excluding capital gains) to our stockholders. If we fail to qualify as a REIT, our taxable income may be subject to income tax at regular corporate rates.



Investment Properties



See Items 2, 7 and 8 in this annual report for a description of our individual properties and significant developments during the year with
respect to these properties. See Item 15 (d), Schedule III (Real Estate and Accumulated Depreciation), for additional information about our properties, including locations, cost and encumbrances.



Industry Segments



We have one reportable segment- real estate. We do not have foreign operations and our business is not seasonal. Statement of Financial
Accounting Standard No. 131 (SFAS No. 131) establishes standards for the way that public business enterprises report information about operating segments in annual financial statements and requires that those enterprises report selected
information about operating segments in interim financial reports issued to stockholders. See Notes to Consolidated Financial Statements which are part of this annual report, for further discussion.



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Insurance



We carry (or require our tenant to carry on our behalf) comprehensive general liability, fire, extended coverage and rental loss insurance on all of our properties, with
policy specifications, insured limits and deductibles customarily carried for similar properties. We intend to carry similar insurance with respect to our properties under construction, but with appropriate exceptions given the nature of these
properties.



The Terrorism Risk Insurance Act of 2002 was signed into law on
November 26, 2002. The law provides that losses resulting from certified acts of terrorism will be partially reimbursed by the United States after the insurance company providing coverage pays a statutory deductible. The law also requires that the
insurance company offer coverage for terrorist acts for an additional premium. Our policies in effect during 2002 and 2003 did not exclude coverage for terrorist acts and we paid no additional premium for coverage under the Terrorism Risk Insurance
Act of 2002, although we may pay additional amounts in the future for such coverage.



We believe that our properties are adequately covered by insurance. There are, however, some types of losses (such as losses arising from civil unrest or acts of war) that are not generally insured because they are either uninsurable or not
economically insurable. We do not carry flood and earthquake insurance for our properties, nor do we carry insurance coverage for environmental liabilities. If an uninsured loss or a loss in excess of insured limits occurs, we could lose our capital
invested in a property, as well as the anticipated future revenues from the property, and we would continue to be obligated on any mortgage indebtedness or other obligations related to the property. Any loss of that kind would adversely affect us.



RISK FACTORS THAT MAY AFFECT FUTURE RESULTS



Stockholders should carefully consider the risks described below. These risks are not the only ones we face. Additional risks not presently known to us or that we currently consider immaterial may also materially impair our business
operations and hinder financial performance, including our ability to pay dividends to our stockholders.



Risks Due to Investment in Real Estate



Decreased yields from an investment in real property may result from factors that may cause a decrease in revenues or values or an increase in operating expenses.



Real property investments are subject to varying degrees of risk. The yields available from
equity investments in real estate depend upon the amount of revenues generated and expenses incurred. If our properties do not generate revenues sufficient to meet operating expenses, debt service and capital expenditures, our results of operations
and ability to pay dividends to stockholders and to pay amounts due on our debt will be adversely affected. The performance of the economy in each of the areas in which the properties are located can affect occupancy, market rental rates and
expenses, which in turn can affect the revenues from the properties and their underlying values. The financial results of major local employers may also affect the revenues and value of some properties. Other factors include:



| |  | the general economic climate;
| | - | -----------------------------



| |  | local conditions in the areas in which properties are located, such as an oversupply of properties like ours or a reduction in the demand for properties like ours;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | the attractiveness of the properties to tenants; and
| | - | ----------------------------------------------------



| |  | competition from other properties like ours.
| | - | --------------------------------------------



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Our tenants may go bankrupt.



Our tenants may file for bankruptcy protection or become insolvent in the future. Currently, one of our tenants has filed for bankruptcy
protection. We cannot evict a tenant solely because of its bankruptcy. A court might authorize the tenant to reject and terminate its lease with us. The bankruptcy court rejected our lease with one tenant in our Fresno property and the tenant
vacated the premises in November 2003. When a lease is terminated by the bankruptcy court, our claim against the bankrupt tenant for unpaid, future rent would be subject to a statutory cap that might be substantially less than the remaining rent
actually owed under the lease, and, even so, our claim for unpaid rent would likely not be paid in full.



Our tenants may not renew their leases.



We cannot predict whether current tenants will renew their leases upon the expiration of their terms or whether current tenants will attempt to terminate their leases before they expire. Because the tenants in our Irvine and Tustin
properties are either subletting the property or not fully using the property for their operations, and they may be less likely to re-lease the properties when the leases expire or may re-lease a smaller space. Further, the lease for our two
Sacramento properties (717 and 721 West Del Paso Road) now expires in July 2004, and we do not expect our current tenant will renew the lease beyond July of 2004, if at all. If we are unable to promptly sell significant vacant properties or re-lease
or renew the leases for them, or if the rental rates upon such renewal or re-leasing are significantly lower than expected rates, then our ability to pay dividends to stockholders and to pay amounts due on our debt may be adversely affected.



We may be unable to lease vacant space in our properties.



To lease vacant space, we may need to pay substantial leasing commissions and renovation
costs. We may acquire properties that are not fully leased, and the cash flow from existing operations may be insufficient to pay the operating expenses and debt service associated with those properties until they are fully leased. Operating costs,
including real estate taxes, insurance and maintenance costs, and mortgage payments, if any, do not, in general, decline when circumstances cause a reduction in income from a property from a vacancy or other reason. In addition, many of our leases
are triple-net leases, i.e., the tenant is responsible for property taxes, insurance and maintenance. If the tenant no longer leases the property for any reason, we, and not the tenant, must bear those costs. We could sustain a loss as a
result of foreclosure on the property if a property is mortgaged to secure payment of indebtedness and we are unable to meet our mortgage payments. As a result, our ability to pay dividends to our stockholders could be adversely affected.



Investments in newly acquired properties may not perform as we expect.



In the normal course of business, we typically evaluate potential
acquisitions, enter into non-binding letters of intent, and may, at any time, enter into contracts to acquire and may acquire additional properties. We can give no assurance, however, that we will have the financial resources to make suitable
acquisitions or that properties that satisfy our investment policies will be available for acquisition. The acquisition of property entails risks that investments will fail to perform in accordance with expectations. Those risks may include
financing not being available on favorable terms or at all. Estimates of the costs of improvements to bring an acquired property up to standards established for the market position intended for that property might prove inaccurate. Although we
evaluate the physical condition of each new property before we acquire it, we may not detect some defects or necessary repairs until after we acquire the property. This could significantly increase our total acquisition cost, which could have a
material adverse effect on us and our ability to pay dividends to stockholders and to pay amounts due on our debt.



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The value of our property interests depends on conditions beyond our control.



General and local economic conditions, neighborhood values, competitive overbuilding,
weather, casualty losses and other factors beyond our control may adversely affect real property income and capital appreciation. We are unable to determine the precise effect, if any, the performance of the worldwide or U.S. economies will have on
us or on the value of our common stock.



The lack of liquidity of real
estate may reduce economic returns to investors.



Because real estate
investments are relatively illiquid, our ability to adjust our portfolio in response to changes in economic or other conditions is somewhat limited. Additionally, the Internal Revenue Code places certain limits on the number of properties a REIT may
sell without adverse tax consequences. To effect our current operating strategy, we will seek to raise funds, both through outside financing and through the orderly disposition of assets that no longer meet our investment criteria. Depending upon
interest rates, current acquisition opportunities and other factors, generally we will reinvest the proceeds in suburban office, retail shopping center and light industrial properties, although we may use those proceeds for other purposes.



We may be unable to reinvest in attractive properties, which may affect our
returns to stockholders.



In the markets we have targeted for future
acquisition of properties, there is considerable buying competition from other real estate companies, many of whom may have greater resources, experience or expertise than we do. In many cases, this competition for acquisition properties has
resulted in an increase in property prices and a corresponding decrease in property yields. We can give no assurances that we can reinvest the proceeds realized from the disposition of assets into new assets that will produce economic returns
comparable to those being realized from the properties disposed of, or that we will be able to acquire properties meeting our investment criteria. To the extent that we are unable to reinvest those proceeds, or if the properties we acquire with
those proceeds produce a lower rate of return than the properties we disposed, those results may have a material adverse effect on us.



If we are unable to reinvest sales or refinancing proceeds as quickly as we expect, our returns to stockholders may be adversely affected.



A delay in reinvestment of sales or refinancing proceeds may have a material adverse effect
on us. We may seek to structure future dispositions as tax-free exchanges, where appropriate, using the non-recognition provisions of Section 1031 of the Internal Revenue Code to defer income taxation on the disposition of the exchanged property.
For an exchange to qualify for tax-free treatment under Section 1031 of the Internal Revenue Code, we must meet certain technical requirements. Given the competition for properties meeting our investment criteria, it may be difficult for us to
identify suitable properties within the required time frames to meet the requirements of Section 1031.



Substantial competition among properties and real estate companies may adversely affect our rental revenues and acquisition opportunities.



All of our properties are located in developed areas where we face substantial competition from other properties and from other real estate
companies who may develop or renovate competing properties. The number of competitive properties and real estate companies could have a material adverse effect on our ability to rent our properties, the rents we charge and our acquisition
opportunities. The activities of



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these competitors could cause us to pay a higher price for a new property than we otherwise would have paid or may
prevent us from purchasing a desired property at all, which could have a material adverse effect on us and our ability to pay dividends to stockholders and to pay amounts due on our debt.



Our geographic concentration of properties in California and Georgia may adversely affect us.



Our portfolio is located entirely in California and Georgia. Economic conditions in, and
other factors relating to, California and Georgia, including supply and demand for properties, zoning and other regulatory conditions and competition from other properties, could adversely affect our performance. In that regard, these regions have
in the past experienced economic recessions and depressed conditions in the local real estate markets. To the extent general economic or social conditions in any of these areas deteriorate or any of these areas experiences natural disasters, the
value of the portfolio, our results of operations and our ability to pay dividends to stockholders and to pay amounts due on our debt could be materially adversely affected.



We depend on single tenants in many of our properties, and some of them represent a significant percentage of our revenues.



Many of our properties are leased to a single tenant, and some of these
single tenant properties are individually significant to our total revenue. In the year ended December 31, 2003, the tenant in our Tustin property, Safeguard Business Systems, Inc. accounted for nearly 9% of our total rental revenue, including
discontinued operations. Further, the California Independent System Operator Corporation, a tenant in our Folsom property directly accounted for over 6% of our total rental revenue, including discontinued operations. That tenant also subleases space
from another tenant in our Folsom property that accounted for another 3% of our total rental revenue, including discontinued operations. A tenant may attempt to terminate its lease before its scheduled term, or we may be unable to renew the lease
with the tenant. In that event, we may be unable to re-lease the space to another anchor tenant of similar or better quality upon expiration of the current lease on similar or better terms, and we could experience material adverse consequences such
as higher vacancy rates, re-leasing on less favorable economic terms and reduced net income. Similarly, if one or more of our single tenants goes bankrupt, we could experience material adverse consequences like those described above. There can be no
assurance that our sole tenants will renew their leases when they expire or will be willing to renew on similar economic terms.



Northlake Festival represents approximately 50% of our revenues.



The Northlake Festival property accounted for approximately 50% of our total rental revenues, including discontinued operations. If economic conditions in the area of
Northlake Festival become depressed and the performance of that center is adversely affected, our overall financial condition and results of operations will be adversely affected as well.



Construction and development risks could adversely affect our profitability.



We currently are renovating some of our properties and may in the future renovate or build
other properties, including tenant improvements required under leases. Further, in March 2003, we acquired undeveloped land and intend to build an approximately 30,000 square foot shopping center on the land. We may incur renovation or development
costs for a property that exceed our original estimates due to increased costs for materials or labor or other costs that are unexpected. We also may be unable to complete renovation or development of a property on schedule, which could result in
increased debt



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service expense or construction costs and loss of rents until the property is ready for occupancy. Additionally, the time
required to recoup our renovation and construction costs and to realize a return, if any, on such costs can often be lengthy.



We may be unable to implement our growth strategy and may fail to identify, acquire or integrate new acquisitions.



Our future growth will be dependent upon a number of factors, including our ability to
identify acceptable properties for acquisition, complete acquisitions on favorable terms, successfully integrate acquired properties and obtain financing to support expansion. We can give no assurances that we will be successful in implementing our
growth strategy, that growth will indeed occur at all or that any expansion will improve operating results. The failure to identify, acquire and integrate new properties effectively could have a material adverse affect on us and our ability to pay
dividends to stockholders and to pay amounts due on our debt. We intend to acquire properties that meet our investment criteria. Acquisitions of properties entail risks that investments will fail to perform in accordance with expectations. Estimates
of the costs of improvements to bring an acquired property up to standards established for the market position intended for that property may prove inaccurate.



We may suffer uninsured and underinsured losses, and our insurance coverage may be limited.



We carry (or require our tenants to carry on our behalf) liability, fire, extended coverage and rental loss insurance on our properties.
This insurance has policy specifications, limits and deductibles. We do not carry flood and earthquake insurance for our properties. In addition, some types of extraordinary losses (such as those resulting from civil unrest or acts of war) are not
generally insured (or fully insured against) because they are either uninsurable or not economically insurable. In addition, we do not carry insurance coverage for environmental liabilities. If an uninsured or underinsured loss occurs to a property,
we could be required to use our own funds for restoration or lose all or part of our investment in, and anticipated revenues from, the property and would continue to be obligated on any mortgage indebtedness on the property. Any loss of that nature
could have a material adverse effect on us and our ability to pay dividends to stockholders and pay amounts due on our debt.



Adverse changes in laws may affect our potential liability relating to the properties and our operations.



Increases in real estate taxes and income, service and transfer taxes cannot always be passed
through to tenants in the form of higher rents (or charges on triple-net leases), and may adversely affect our cash available for distribution and our ability to pay dividends to stockholders and to pay amounts due on our debt. Similarly, changes in
laws increasing the potential liability for environmental conditions existing on properties or increasing the restrictions on discharges or other conditions, as well as changes in laws affecting construction and safety requirements, may result in
significant unanticipated expenditures, which could have a material adverse effect on us and our ability to pay dividends to stockholders and pay amounts due on our debt.



Compliance with laws benefiting disabled persons may increase our costs and adversely affect our performance.



A number of federal, state and local laws (including the Americans with Disabilities Act) and
regulations may require modifications to existing buildings or restrict certain renovations by requiring improved access to such buildings by disabled persons and may require other structural features that add to the cost



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of buildings under construction. Legislation or regulations adopted in the future may impose further burdens or
restrictions on us with respect to improved access by disabled persons. The costs of compliance with these laws and regulations may be substantial, and restrictions on construction or completion of renovations may limit implementation of our
investment strategy in certain instances or reduce overall returns on our investments, which could have a material adverse effect on us and our ability to pay dividends to stockholders and to pay amounts due on our debt. We are a defendant in one
California civil lawsuit in which the plaintiffs have alleged violations of the Americans with Disabilities Act, and we cannot determine the likelihood of an unfavorable outcome or range of potential loss, if any.



We may have liability under environmental laws.



Under federal, state and local environmental laws, ordinances and regulations, we may be
required to investigate and clean up the effects of releases of hazardous or toxic substances or petroleum products at our properties, regardless of our knowledge or responsibility, simply because of our current or past ownership or operation of the
real estate. Thus, we may have liability with respect to properties we have already sold. If unidentified environmental problems arise, we may have to take extensive measures to remediate the problems, which could adversely affect our cash flow and
our ability to pay dividends to our stockholders because:



| |  | we may have to pay for property damage and for investigation and clean-up costs incurred in connection with the contamination;
| | - | ------------------------------------------------------------------------------------------------------------------------------



| |  | the law typically imposes clean-up responsibility and liability regardless of whether the owner or operator knew of or caused the contamination;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------



| |  | even if more than one person may be responsible for the contamination, each person who shares legal liability under the environmental laws may be held responsible for all of the
clean-up costs; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | governmental entities or other third parties may sue the owner or operator of a contaminated site for damages and costs.
| | - | ------------------------------------------------------------------------------------------------------------------------



These costs could be substantial and in extreme cases could exceed the value of the
contaminated property. The presence of hazardous or toxic substances or petroleum products and the failure to properly remediate that contamination may materially and adversely affect our ability to borrow against, sell or rent an affected property.
In addition, applicable environmental laws create liens on contaminated sites in favor of the government for damages and costs it incurs in connection with a contamination.



We face particular environmental risks related to asbestos.



Environmental laws also govern the presence, maintenance and removal of asbestos. Those laws require that owners or operators of buildings
containing asbestos:



| |  | properly manage and maintain the asbestos;
| | - | ------------------------------------------



| |  | notify and train those who may come into contact with asbestos; and
| | - | -------------------------------------------------------------------



| |  | undertake special precautions, including removal or other abatement, if asbestos would be disturbed during renovation or demolition of a building.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------



Those laws may impose fines and penalties on building owners or operators who fail to comply
with these requirements and may allow others to seek recovery from owners or operators for personal injury associated with exposure to asbestos fibers. Some of our properties are located in urban, industrial and previously developed areas where fill
or current or historic industrial uses of the areas may have caused site contamination.



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Recently, there has been an increasing number of lawsuits against owners and managers of properties alleging personal
injury and property damage caused by the presence of mold in real estate. Some of these lawsuits have resulted in substantial monetary judgments or settlements. Our insurance policy presently in effect does not exclude mold related claims; however,
we cannot assure you that we will be able to obtain coverage in the future for such claims or at a commercially reasonable price. The presence of significant mold could expose us to liability from tenants and others if property damage, health
concerns, or allegations thereof, arise.



Our environmental due diligence
may be inadequate.



Our policy is to retain independent environmental
consultants to conduct Phase I environmental site assessments and asbestos surveys of properties we intend to acquire. These assessments generally include a visual inspection of the properties and the surrounding areas, an examination of current and
historical uses of the properties and the surrounding areas and a review of relevant state, federal and historical documents, but they do not involve invasive techniques such as soil and ground water sampling. Where appropriate, on a
property-by-property basis, we may have these consultants conduct additional testing, including sampling for asbestos, for lead in drinking water, for soil contamination where underground storage tanks are or were located or where other past site
usages create a potential environmental problem, and for contamination in groundwater. Notwithstanding these environmental assessments, we still face the risk that:



| |  | the environmental assessments and updates did not identify all potential environmental liabilities;
| | - | ---------------------------------------------------------------------------------------------------



| |  | a prior owner created a material environmental condition that is not known to us or the independent consultants preparing the assessments;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------



| |  | new environmental liabilities have developed since the environmental assessments were conducted; or
| | - | ---------------------------------------------------------------------------------------------------



| |  | future uses or conditions, such as changes in applicable environmental laws and regulations, could result in environmental liability for us.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------



We may acquire properties that are subject to liabilities for which we have no recourse,
or only limited recourse, against the seller.



These liabilities can
include:



| |  | claims by tenants, vendors or other persons dealing with the former owners of the properties;
| | - | ---------------------------------------------------------------------------------------------



| |  | liabilities incurred in the ordinary course of business; and
| | - | ------------------------------------------------------------



| |  | claims for indemnification by directors, officers and others indemnified by the former owners of the properties.
| | - | ----------------------------------------------------------------------------------------------------------------



If we are required to spend time and money to deal with these claims, our intended returns
from the affected property may be materially reduced.



Risks Due to Real Estate Financing



We have a
significant amount of indebtedness. As of December 31, 2003, we had total assets of $57,377,365, total secured indebtedness of $38,486,516, total liabilities of $39,546,341 and a debt-to-total assets ratio of 69%, using amounts calculated on the
basis of generally accepted accounting principles. Because this calculation method reflects accumulated depreciation and does not reflect any appreciation of the properties beyond their cost, it may result in assets being valued at less than their
fair market values as determined by the board of directors. Further, this calculation excludes the effects, if any, of the ground lease on the Northlake Festival property.



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We anticipate that future acquisitions and properties we develop, if any, will be financed under a line of credit,
construction loans, other forms of secured or unsecured financing or through our issuing additional debt or equity. We expect to review periodically our financing options regarding the appropriate mix of debt and equity financing. Equity, rather
than debt, financing of future acquisitions could have a dilutive effect on the interests of our existing stockholders.



Increased debt and leverage can reduce cash available for distribution and cause losses.



Using debt, whether with recourse to us generally or only with respect to a particular property, to acquire properties creates an
opportunity for increased net income, but at the same time creates risks. We use debt to fund investments only when we believe it will enhance our risk-adjusted returns. We cannot be sure, however, that our use of leverage will prove to be
beneficial. Additional leverage may:



| |  | increase our vulnerability to general adverse economic and industry conditions,
| | - | -------------------------------------------------------------------------------



| |  | limit our flexibility in planning for, or reacting to, changes in our business and the REIT industry, which may place us at a competitive disadvantage compared to our competitors
that have less debt, and
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| |  | limit, along with the possible financial and other restrictive covenants in our indebtedness, our ability to borrow additional funds.
| | - | -------------------------------------------------------------------------------------------------------------------------------------



Any of the foregoing could have a material adverse effect on us and our ability to pay
dividends to stockholders and to pay amounts due on our debt.



We may be
unable to renew, repay or refinance our debt financing.



We are subject to
the normal risks associated with debt financing, including the risk that our cash flow will be insufficient to meet required payments of principal and interest, the risk that we will not be able to renew, repay or refinance our debt when it matures
or that the terms of any renewal or refinancing will not be as favorable as the existing terms of that debt. During 2004, four of our loans are scheduled to mature, totaling approximately $5,900,000. In many of the mortgage notes on our properties,
the mortgage payment terms do not fully amortize the loan balance, and a balloon payment of the balance will be due upon its maturity. If we are unable to refinance our indebtedness on acceptable terms, or at all, we might be forced to dispose of
one or more of the properties on disadvantageous terms, which might result in losses to us. Those losses could have a material adverse effect on us and our ability to pay dividends to stockholders and pay amounts due on our debt. Furthermore, if a
property is mortgaged to secure payment of indebtedness and we are unable to meet mortgage payments, the mortgagee could foreclose upon the property, appoint a receiver and receive an assignment of rents and leases or pursue other remedies, all with
a consequent loss of our revenues and asset value. Foreclosures could also create taxable income without accompanying cash proceeds, thereby hindering our ability to meet the REIT distribution requirements of the Internal Revenue Code.



The cost of our indebtedness may increase due to rising interest rates.



We have incurred and may in the future again incur debt that bears interest at a variable
rate. As of December 31, 2003, we have one note payable in the amount $1,500,000 that bears interest at a variable rate. If we are successful in obtaining a construction loan for the development and construction of our Garden Grove shopping center,
that loan may bear interest at a variable rate. Accordingly, increases in interest rates would increase our interest costs, which could have a material adverse effect on us and our ability to pay dividends to stockholders. In addition, an increase
in market interest rates may lead holders of our common shares to expect a higher dividend yield, which could adversely affect the market price of our common stock.



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We may incur additional debt and related debt service.



We intend to fund the acquisition of additional properties partially through borrowings and
from other sources such as sales of properties that no longer meet our investment criteria or the contribution of property to joint ventures or other financing methods. Unlike our previous certificate of incorporation and bylaws, our new
organizational documents do not limit the amount of debt that we may incur.



If we incur additional debt, the agreement governing our debt could contain various covenants that limit our discretion in the operation of our business.



Any additional debt we incur will be governed by an agreement with our lenders. Typically, these types of agreements contain various
provisions that could limit our discretion in the operation of our business by restricting our ability to:



| |  | incur additional debt and issue preferred stock;
| | - | ------------------------------------------------



| |  | pay dividends and make other distributions;
| | - | -------------------------------------------



| |  | make investments and other payments;
| | - | ------------------------------------



| |  | redeem or repurchase our capital stock;
| | - | ---------------------------------------



| |  | consolidate or merge;
| | - | ---------------------



| |  | create liens;
| | - | -------------



| |  | sell assets; or
| | - | ---------------



| |  | enter into certain transactions with our affiliates.
| | - | ----------------------------------------------------



Further, the loan documents from our August 5, 2002 refinancing contain cross-collateral provisions. If one of the loans is in default and the lender
forecloses on the property securing that loan, and the proceeds from the foreclosure are not sufficient to repay the defaulted loan in full, the lender can foreclose upon one or more of the other properties to recover the loan. Previously, we had no
such cross-collateral provisions in our loans. In addition, the land we hold for development also secures the loan on our Banco Popular property in Garden Grove.



If we are unable to pay our obligations to our secured lenders, they could proceed against any or all of the collateral securing our
indebtedness to them. In addition, a breach of the restrictions or covenants contained in our loan documents could cause an acceleration of our indebtedness. We may not have, or be able to obtain, sufficient funds to repay our indebtedness in full
upon acceleration.



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Risks Related to our Stock



The market value of our common stock could decrease based on our performance and market perception and conditions.



Our common stock has been listed on the American Stock Exchange since October 31, 2002.
Trading volumes to date have been relatively light, and the market price may not reflect the fair market value of our common stock at any particular moment. Stockholders are cautioned that prior sales data do not necessary indicate the prices at
which our common stock would trade in a more active market. The market value of our common stock may be based primarily upon the markets perception of our growth potential and current and future cash dividends, and may be secondarily based
upon the real estate market value of our underlying assets. The market price of our common stock can also be influenced by the dividend on our common stock relative to market interest rates. Rising interest rates may lead potential buyers of our
common stock to expect a higher dividend rate, which would adversely affect the market price of our common stock. In addition, the value of our common stock could be adversely affected by general market conditions or market conditions of real estate
companies in general.



We cannot assure stockholders that we will be able to
make future dividend payments at any particular rate, or at all.



While we
have declared quarterly dividends on our common stock regularly in the past, the declaration and payment of dividends is subject to the discretion of our board of directors. Any determination as to the payment of dividends, as well as the level of
those dividends, will depend on, among other items, our financial results and condition, general economic and business conditions, our strategic plans and contractual, legal and regulatory restrictions on our ability to pay dividends. During 2002
and the first six months of 2003, the total of dividends based on our quarterly dividend rate of $0.30 per share of common stock and scheduled principal amortization on notes payable exceeded our net cash provided by operating activities (excluding
changes in operating assets and liabilities). To address this shortfall, we used proceeds from sales of properties and existing cash balances. On September 30, 2003, our board of directors reduced the dividend for the quarter ended September 30,
2003 to $0.25 per share, and we have subsequently paid dividends at the $0.25 per share rate. We cannot assure stockholders that we will maintain this quarterly dividend level or that we will pay dividends in any future period.



We may change some of our policies without obtaining the approval of our stockholders.



Our board of directors determines some of our operating and financial
policies, including our policies with respect to acquisitions, growth, operations, leverage, capitalization and dividends. Accordingly, stockholders will have little direct control over these policies.



Additional issuances of equity securities may be dilutive to current stockholders.



The interests of our existing stockholders could be diluted if we issue
additional equity securities to finance future developments and acquisitions instead of incurring additional debt. Our ability to execute our business strategy depends on our access to an appropriate blend of debt financing, which could include a
line of credit and other forms of secured and unsecured debt, equity financing, including common and preferred equity, or joint ventures.



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Provisions that Could Limit a Change in Control or Deter a Takeover



Restrictions in our organizational documents and Delaware law could limit a change in
control or deter a takeover.



A number of the provisions in our certificate
of incorporation and bylaws have or may have the effect of deterring a takeover of the company. These provisions include:



| |  | REIT protective provisions that limit stock ownership to 5.0% for anyone other than Mr. Allen Meredith, our President, Chairman and Chief Executive Officer;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | a classified board of directors with staggered, three-year terms;
| | - | -----------------------------------------------------------------



| |  | provisions giving the board of directors sole power to set the number of directors;
| | - | -----------------------------------------------------------------------------------



| |  | provisions giving stockholders the right to remove directors only for cause and only by the affirmative vote of a majority of the total voting power of the outstanding shares;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | prohibition on stockholders from calling special meetings of stockholders; and
| | - | ------------------------------------------------------------------------------



| |  | establishment of advance notice requirements for stockholder proposals and nominations for election to the board of directors at stockholder meetings.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------



In addition, Section 203 of the Delaware General Corporation Law provides, in relevant part,
that the corporation shall not engage in any business combination for a period of three years following the time on which such stockholder first becomes an interested stockholder unless



| | (a) | before the stockholder first becomes an interested stockholder, the board of directors of the corporation approved either the business combination or the transaction
which resulted in the stockholder becoming an interested stockholder (the board of directors has approved Mr. Meredith becoming an interested stockholder),
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | upon becoming an interested stockholder, the stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced
(excluding certain shares) or
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | on or after the time on which the stockholder becomes an interested stockholder, the business combination is approved by the board of directors and authorized at an
annual or special meeting of stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



These provisions may prevent our stockholders from receiving the benefit from any premium to
the market price of our common stock offered by a bidder in a takeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stock if they are viewed as
discouraging takeover attempts in the future. These provisions may facilitate management entrenchment that may delay, defer or prevent a change in our control, which may not be in the best interests of our stockholders.



Change of control agreements could deter a change of control.



We have entered into change of control agreements with Mr. Meredith, our President, Chairman
and Chief Executive Officer and Mr. Wingard, our Chief Financial Officer providing for the payment of money to them upon the occurrence of a change of control, as defined in these agreements. If, within one year following a change of control, either
Mr. Meredith or Mr. Wingard resigns or is terminated, we will make a severance payment equal to a portion of the executives base salary, his average bonus over last three years and medical and other benefits. Based upon their current salaries
and benefit levels, this provision would result in payments totaling at least $200,000 to Mr. Meredith and $125,000 to Mr. Wingard. The agreements with Mr. Meredith and Mr. Wingard may deter changes of control because of the increased cost for a
third party to acquire control of us, thus limiting the opportunity for stockholders to receive a premium for our common stock over then-prevailing market prices.



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##### Table of Contents

Tax Risks



Although we believe we are organized and are operating so as to qualify as a REIT under the Internal Revenue Code, we cannot give assurances
that we have in fact operated or will be able to continue to operate in a manner so as to qualify or remain so qualified.



We may incur tax liabilities as a consequence of failure to qualify as a REIT.



Qualification as a REIT involves both the application of highly technical and complex Internal Revenue Code provisions for which there are
only limited judicial or administrative interpretations and the determination of various factual matters and circumstances not entirely within our control. For example, to qualify as a REIT in 2003, at least 95% of our taxable gross income in any
year must be derived from qualifying sources and we must pay dividends to stockholders aggregating annually at least 90% of our REIT taxable income (excluding net capital gains). Thus, to the extent revenues from non-qualifying sources represent
more than 5% of our gross income in any taxable year, we will not satisfy the 95% income test and may fail to qualify as a REIT, unless certain relief provisions apply. Even if those relief provisions apply, a tax would be imposed with respect to
excess net income, which could have a material adverse effect on us and our ability to pay dividends to stockholders and to pay amounts due on our debt. We cannot give assurances that new legislation, new regulations, administrative interpretations
or court decisions will not change the tax laws with respect to qualification as a REIT or the federal income tax consequences of such qualification. If we fail to qualify as a REIT, we will be subject to federal income tax (including any applicable
alternative minimum tax) on our taxable income at corporate rates, which would likely have a material adverse effect on us and our ability to pay dividends to stockholders and to pay amounts due on our debt. In addition, unless entitled to relief
under certain statutory provisions, we would also be disqualified from treatment as a REIT for the four taxable years following the year during which REIT qualification is lost. This treatment would reduce funds available for investment or
distributions to stockholders because of the additional tax liability to us for the year or years involved. In addition, we would no longer be required to make, and indeed may not make, distributions to stockholders. To the extent that distributions
to stockholders would have been made in anticipation of qualifying as a REIT, we might be required to borrow funds or to liquidate certain investments to pay the applicable tax. Further, to maintain our real estate investment trust status, we may
borrow funds on a short-term basis to meet the real estate investment trust distribution requirements, even if the then-prevailing market conditions are not favorable for these borrowings.



Gain on disposition of assets deemed held for sale in the ordinary course is subject to
100% tax.



We currently are attempting to sell four of our properties. If
we sell any of our properties, the Internal Revenue Service may determine that the sale is a disposition of an asset held primarily for sale to customers in the ordinary course of a trade or business. Gain from this kind of sale generally will be
subject to a 100% tax. Whether an asset is held primarily for sale to customers in the ordinary course of a trade or business depends on the particular facts and circumstances of the sale. Although we will attempt to comply with the
terms of safe-harbor provisions in the Internal Revenue Code prescribing when asset sales will not be so characterized, we cannot assure stockholders that we will be able to do so.



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##### Table of Contents

|ITEM 2. |  | PROPERTIES
|------- |  | ----------



General



In addition to the information
in this Item 2, additional information on our properties and encumbrances is contained in our financial statements under Item 3, Item 8 and in Schedule III (financial statement schedule) under Part IV, Item 15 (d) in this annual report. As of
December 31, 2003 and 2002, all of our properties were located in California and Georgia.



Since 2001, we have evaluated the properties in our portfolio on an ongoing basis to determine whether continued ownership of any specific property is consistent with our strategic plan, or we believed that future
appreciation prospects were limited relative to other opportunities. In addition, in some cases, we have sold properties that we have not previously designated as held for sale because we believed the sale would be advantageous in that specific
situation. As of January 2002, we designated seven properties held for sale: Fresno; Huntington Beach; Roseville; Riverside; Vacaville; and two Sacramento properties (717 and 721 West Del Paso Road). We sold the Huntington Beach property
in April 2002 and the Corona property in September 2002. We sold the Vacaville property in August 2003. On September 30, 2003, we designated the Chino property as held for sale and removed the Roseville property from the held for sale category. In
November 2003, we sold the Chino property. In December 2003, we sold the Cerritos property.



Based on appraisals and holding periods, we determined in conjunction with the Advisor, that the total expected future cash flows from operations and the ultimate disposition of six properties were less than their
carrying values at September 30, 2001. As a result, we recorded an impairment loss totaling $3,800,000, primarily related to the Riverside and Vacaville properties, in that quarter, measured as the amount by which the carrying amounts of the assets
exceeded their aggregate fair value.



Property taxes on our properties are
assessed on asset values based on the valuation method and tax rate used by the respective jurisdiction. During 2003, the rates were approximately 1.1%, and in many cases, those taxes were paid directly by the tenant, in accordance with the lease.



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##### Table of Contents

A summary of our properties follows:



Meredith Enterprises, Inc.

Summary of Properties Owned

December 31, 2003



|                                             |  |                     |  |                    |  |            |  |                                                    |  |           |   |  |                     
|-------------------------------------------- |  | ------------------- |  | ------------------ |  | ---------- |  | -------------------------------------------------- |  | --------- | - |  | --------------------
|Property                                     |  | Rentablesquare feet |  | Propertytype       |  | Leasetype* |  | Primary Tenant                                     |  | Occupancy |   |  | Next leaseexpiration
|Rental real estate:                          |  |                     |  |                    |  |            |  |                                                    |  |           |   |  |                     
|                                             |  |                     |  |                    |  |           
|Folsom                                       |  | 52,186              |  | SuburbanOffice     |  | Gross      |  | California Independent System Operator Corporation |  | 100       | % |  | Various;largely 2006
|                                             |  |                     |  |                    |  |           
|Garden Grove                                 |  | 4,880               |  | SuburbanOffice     |  | NNN        |  | Banco Popular North America                        |  | 100       | % |  | 5/1/11              
|                                             |  |                     |  |                    |  |           
|Irvine                                       |  | 63,225              |  | Lt.Industrial      |  | NNN        |  | Tycom Corporation                                  |  | 100       | % |  | 12/31/07            
|                                             |  |                     |  |                    |  |           
|Atlanta, Georgia                             |  | 321,621             |  | Retail             |  | Gross      |  | Various                                            |  | 97        | % |  | Various             
|                                             |  |                     |  |                    |  |           
|Ontario                                      |  | 40,000              |  | Lt.Industrial      |  | NNN        |  | Adelphia Communication Corp.                       |  | 100       | % |  | 8/14/13             
|                                             |  |                     |  |                    |  |           
|Roseville                                    |  | 5,133               |  | RestaurantFacility |  | NNN        |  | Knox & Associates, Inc.                            |  | 100       | % |  | 9/30/17             
|                                             |  |                     |  |                    |  |           
|Sacramento (Horn Road)                       |  | 48,000              |  | Lt.Industrial      |  | Gross      |  | Laufen International, Inc.                         |  | 100       | % |  | 3/31/04             
|                                             |  |                     |  |                    |  |           
|Tustin                                       |  | 37,740              |  | SuburbanOffice     |  | NNN        |  | Safegard Business Systems, Inc.                    |  | 100       | % |  | 9/30/05             
|                                             |  |                     |  |                    |  |           
|Rental real estate held for sale:            |  |                     |  |                    |  |            |  |                                                    |  |           |   |  |                     
|                                             |  |                     |  |                    |  |           
|Fresno                                       |  | 8,915               |  | Retail             |  | Gross      |  | International House of Tile, Inc.                  |  | 33        | % |  | 1/31/06             
|                                             |  |                     |  |                    |  |           
|Riverside                                    |  | 25,000              |  | Retail             |  | NNN        |  | Sanborn Theaters, Inc.                             |  | 100       | % |  | 9/30/05             
|                                             |  |                     |  |                    |  |           
|Sacramento (Java City 717 W. Del Paso Road) |  | 11,200              |  | Lt.Industrial      |  | NNN        |  | Cucina Holdings, Inc.                              |  | 100       | % |  | 3/31/04             
|                                             |  |                     |  |                    |  |           
|Sacramento (Java City- 721 W. Del Paso Road) |  | 8,600               |  | Lt.Industrial      |  | NNN        |  | Cucina Holdings, Inc.                              |  | 100       | % |  | 3/31/04             

---

|* | NNN represents a triple net lease where the tenant is responsible for taxes, insurance and maintenance; Gross represents a lease where we are responsible for
paying for those items, although we may be reimbursed, subject to limitations, by the tenant.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

A discussion of circumstances in specific properties follows:



Fresno



In January 2003, the tenant occupying 6,000 of the 8,915 square feet of the property, Wherehouse Entertainment, Inc. filed for bankruptcy
protection. Wherehouse vacated the premises in November 2003, and in the bankruptcy proceedings we have pursued claims for future rent owed, although there can be no assurance we will be successful. We are seeking a new tenant.



Ontario



Our tenant, Adelphia Communications, Inc. has filed for bankruptcy protection. Presently, the rent is current. Certain companies have
claimed amounts due for remodeling work and other work ordered by Adelphia on our property. These companies have filed mechanics liens on our property. We have not yet determined the validity of these liens, and there may be defenses to these
claims. If our lease with Adelphia is affirmed in the bankruptcy proceeding, then Adelphia would be responsible for the discharge of these claims. If our lease with Adelphia is not affirmed in the bankruptcy proceeding, and the bankruptcy
proceedings do not fully pay these creditors, then we would be responsible for these claims to the extent they are valid, if at all.



Riverside



The tenant has sublet the property and remains liable under the lease, which expires on September 30, 2005. We do not believe the current tenant will renew the lease upon expiration. If we are successful in obtaining
new tenant upon the expiration of the existing lease, we believe the rental payments are likely to be lower than under the current lease. In September 2001, we amended the lease to, among other items, accelerate the lease expiration to September 30,
2005 and to reduce the monthly payments. Further, we agreed to accept certain of the tenants assets in satisfaction of unpaid rent and late charges totaling approximately $287,000.



Sacramento (Horn Road)



In April 2003, we executed two new leases: one with the previous tenant, Laufen International, Inc., for approximately 32,000 square feet; and a separate lease with
Laufens previous subtenant. Under the previous lease, Laufen International, Inc., leased the entire 48,000 square feet and sublet approximately one-half the space.



Sacramento (717 and 721 W. Del Paso Road)



In 2003, we extended the term of the lease to March 31, 2004, and we have subsequently extended the term to July 31, 2004, when we expect the tenant to vacate the
premises.



Tustin



The tenant has sublet the entire property and remains liable under the lease.



Atlanta  Northlake Festival



We acquired the Northlake Festival Shopping Center in October 2002. It is currently
approximately 97% occupied. Tenants include Toys R Us, OfficeMax, PETsMART, Havertys and Bally Total Fitness. During 2003, we completed significant work to improve the property, including painting and new monument signage. Two
tenants, AMC Theaters and Michaels, which occupy 26,900 and 16,056 square feet of the property, respectively, have vacated the premises but continue to pay rent. In addition, we anticipate Kids R Us will vacate the 13,493 square
feet it leases, while remaining liable under the lease, on or before June 2004. The lease with AMC Theaters expires in May 2004, and we are evaluating various options to re-lease the space, including renovation for a different usage, and we
anticipate such a renovation would involve significant costs. The land is owned by an unrelated third party and is subject to a separate ground lease that extends through 2057. See Notes to Consolidated Financial Statements which are
part of this annual report, for further discussion of amounts due the ground lessor.



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##### Table of Contents

Significant Tenants



During 2003, no single tenant represented 10% or more of our total rental revenue including discontinued operations, although one tenant accounted for 9%. In 2002 and
2001, a portion of our rental revenue was earned from tenants whose individual rents represented more than 10% of our total rental revenue including discontinued operations. Tenants representing 10% or more of our total rental revenue (including
discontinued operations) for the year ended December 31, 2002 were as follows:



Safeguard (Tustin) accounted for 15% of our total rental revenue;

Tycom (Irvine) accounted for 13% of our
total rental revenue;

California Independent System Operator (Folsom) accounted for 12% of our total rental revenue; and

Adelphia Communications, Inc. (Ontario) accounted for 10% of our total rental revenue.



Tenants representing 10% or more of our total rental revenue (including discontinued operations) for the year ended December 31, 2001 were
as follows:



Safeguard (Tustin) accounted for 14% of our total
rental revenue; and

Tycom (Irvine) accounted for 12% of our total rental revenue.



Headquarters



We currently lease our 1,080 square foot headquarters at 3000 Sand Hill Road, Building 2, Suite 120, Menlo Park, California, 94025 under a
lease dated February 1, 2003 for a two-year period for approximately $7,000 per month. We previously subleased office space on a month-to-month basis for $2,000 per month. In addition, during 2001, the Advisor provided us office space and other
office services at 5933 West Century Blvd., Suite 900, Los Angeles, California, 90045 for $2,000 per month. We have continued to use this office space to the present at no cost after the Advisor terminated its advisory and management agreements with
us in March 2002.



|ITEM 3. |  | LEGAL PROCEEDINGS
|------- |  | -----------------



We are a defendant in a lawsuit entitled John Lonberg; Ruthee Goldkorn v. Sanborn Theaters, Inc. and So-Cal Cinema, Inc.; Salts, Troutman and Kaneshiro, Inc.; West Coast Realty Investors, Inc., in the U.S. District
Court for the Central District of California (Case #CV-97-6598AHM(JGx)). We were added as a defendant in the plaintiffs First Amended Complaint filed May 7, 1998.



The plaintiffs alleged violations of the federal Americans with Disabilities Act and the California Unruh Civil Rights Act with respect to
their movie-going experiences, including inadequate physical accommodations for individuals with disabilities and insensitive theater personnel. Sanborn Theaters, Inc (Sanborn) is the tenant and theater operator. Salts, Troutman and
Kaneshiro, Inc. is the architect who designed the theater and its interiors.



The plaintiffs seek actual damages of $1,000 for each violation of law; three times actual damages; and attorneys fees, expenses and costs. The plaintiffs also seek mandatory injunctive relief requiring the defendants to reconfigure
the theater.



The plaintiffs have agreed to dismiss their claims under the
Unruh Civil Rights Act.



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##### Table of Contents

The U.S. Department of Justice, Civil Rights Division (DOJ) filed a Motion to Intervene in the case on March
1, 1999. DOJ has sued Sanborn only, and preliminary discussions have been held between the DOJ and Sanborn. Sanborn intends to vigorously defend against the DOJ.



We cannot determine the likelihood of an unfavorable outcome or range of potential loss, if any. We believe we have complied with all
applicable provisions of law and intend to vigorously defend against the allegations contained in the lawsuit. We believe that the lawsuit will not have a material impact on our continuing operations or overall financial condition.



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



None.



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##### Table of Contents

PART II



|ITEM 5. |  | MARKET FOR THE REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
|------- |  | -------------------------------------------------------------------------



Our common stock was not listed on any stock exchange or over-the-counter market until May 2002 when our common stock was listed on the
Over-the-Counter Bulletin Board. On October 31, 2002, we listed our common stock on the American Stock Exchange under the symbol MPQ. As of March 12, 2004, there were 975,298 shares of our common stock outstanding and 644 recordholders.
The number of recordholders does not include shares held of record by a broker or clearing agency. As of March 12, 2004, the last reported sales price on the American Stock Exchange was $15.75. Stockholders are cautioned that prior sales data should
not be used to determine the value of our common stock nor should it be used to anticipate the prices at which our common stock might trade in an active market. All amounts shown are adjusted for our November 15, 2002 one-for-three reverse stock
split



|               |  |                          |       |             |   |       |  |   |       |   |  |   |       |  
|-------------- |  | ------------------------ | ----- | ----------- | - | ----- |  | - | ----- | - |  | - | ----- | -
|               |  | Years ended December 31, |      
|               |  | 2003                     |       | 2002        |  
|               |  | Stock Price              |       | Stock Price |  
|               |  | High                     |       | Low         |   | High  |  |   | Low   |  
|First quarter  |  | $                        | 13.11 |             | $ | 9.85  |  |   |      | * |  |   |      | *
|Second quarter |  | $                        | 11.50 |             | $ | 9.15  |  | $ | 16.50 |   |  | $ | 16.50 |  
|Third quarter  |  | $                        | 12.99 |             | $ | 10.74 |  |   |      | * |  |   |      | *
|Fourth quarter |  | $                        | 15.89 |             | $ | 11.80 |  | $ | 15.00 |   |  | $ | 13.00 |  

---

|* | No trades occurred during this period.
|- | --------------------------------------



During 2003, our board of directors declared and we paid the following dividends:



|                 |  |                   |  |                 |      |               |   |          
|---------------- |  | ----------------- |  | --------------- | ---- | ------------- | - | ---------
|Record Date      |  | OutstandingShares |  | AmountPer Share |      | TotalDividend
|January 10, 2003 |  | 975,298           |  | $               | 0.30 |               | $ | 292,589  
|April 25, 2003   |  | 975,298           |  |                 | 0.30 |               |   | 292,589  
|August 28, 2003  |  | 975,298           |  |                 | 0.30 |               |   | 292,589  
|October 27, 2003 |  | 975,298           |  |                 | 0.25 |               |   | 243,827  
|                 |  |                   |  |                 |      |               |   |          
|Total            |  |                   |  | $               | 1.15 |               | $ | 1,121,594
|                 |  |                   |  |                 |      |               |   |          



During 2002, our board of directors
declared and we paid the following dividends:



|                |  |                   |  |                  |      |               |   |        
|--------------- |  | ----------------- |  | ---------------- | ---- | ------------- | - | -------
|Record Date     |  | OutstandingShares |  | Amount Per Share |      | TotalDividend
|March 29, 2002  |  | 975,989           |  | $                | 0.30 |               | $ | 292,797
|July 5, 2002    |  | 975,989           |  |                  | 0.30 |               |   | 292,797
|October 3, 2002 |  | 975,989           |  |                  | 0.30 |               |   | 292,796
|                |  |                   |  |                  |      |               |   |        
|Total           |  |                   |  | $                | 0.90 |               | $ | 878,390
|                |  |                   |  |                  |      |               |   |        



Our board of directors has the
authority to pay dividends based on such considerations as the board of directors may deem necessary. As a REIT, we are required to distribute at least 90% of our taxable income (excluding capital gains) to our stockholders. Even if we determine to
pay a dividend or make a distribution on our common stock, there can be no assurance that we will generate sufficient cash flow to pay that dividend, or that we will maintain the current dividend payment levels.



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##### Table of Contents

|ITEM 6. |  | SELECTED FINANCIAL DATA
|------- |  | -----------------------



Please read the following selected financial data in conjunction with the financial statements and related notes and Item 7, Managements Discussion and Analysis of
Financial Condition and Results of Operations in this annual report. Certain reclassifications have been made to the prior years amounts to conform to the presentation of the current years financial statements. Also, please see Notes 3
and 11 to the Consolidated Financial Statements included in this annual report for information about discontinued operations, dispositions of properties and our acquisition in October 2002 of the Northlake Festival Shopping Center in Atlanta,
Georgia.



|                                                                            |  |      |            |   |      |   |            |      |  |   |            |   |  |      |             |   |  |   |             |  
|--------------------------------------------------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | ---- |  | - | ---------- | - |  | ---- | ----------- | - |  | - | ----------- | -
|                                                                            |  | 2003 |            |   | 2002 |   |            | 2001 |  |   | 2000       |   |  | 1999 |            
|Operating results:                                                          |  |      |            |   |      |   |            |      |  |   |            |   |  |      |             |   |  |   |             |  
|Rental revenue                                                              |  | $    | 7,700,407  |   |      | $ | 3,927,908  |      |  | $ | 2,839,442  |   |  | $    | 2,862,263   |   |  | $ | 2,567,271   |  
|Net gain on sale of rental real estate and rental real estate held for sale |  |      | 2,123,499  |   |      |   | 733,424    |      |  |   |           |   |  |      | 2,154,727   |   |  |   |            |  
|Net income (loss)                                                           |  |      | 2,442,604  |   |      |   | 1,058,306  |      |  |   | (2,522,159 | ) |  |      | 3,207,619   |   |  |   | 1,070,670   |  
|Net cash flows from operating activities                                    |  |      | 1,679,790  |   |      |   | 582,910    |      |  |   | 2,097,513  |   |  |      | 2,344,955   |   |  |   | 1,942,803   |  
|Net cash flows provided (used in) by investing activities                   |  |      | 2,917,580  |   |      |   | (905,461   | )    |  |   | (178,368   | ) |  |      | 7,998,984   |   |  |   | (10,625,918 | )
|Net cash flows (used in) provided by financing activities                   |  |      | (3,822,241 | ) |      |   | 3,122,647  |      |  |   | (2,043,653 | ) |  |      | (10,970,484 | ) |  |   | 5,963,408   |  
|Dividends                                                                   |  |      | 1,121,594  |   |      |   | 878,390    |      |  |   | 1,610,381  |   |  |      | 6,617,206   |   |  |   | 1,874,666   |  
|                                                                            |  |      |            |   |     
|                                                                            |  | 2003 |            |   | 2002 |   |            | 2001 |  |   | 2000       |   |  | 1999 |            
|Per share data  basic:                                                     |  |      |            |   |      |   |            |      |  |   |            |   |  |      |             |   |  |   |             |  
|Net income (loss) from operations                                           |  | $    | 0.20       |   |      | $ | (0.10      | )    |  | $ | 0.26       |   |  | $    | 0.60        |   |  | $ | (0.10       | )
|Gain on sale of rental real estate and rental real estate held for sale     |  | $    | 2.17       |   |      | $ | 0.75       |      |  |   |           |   |  | $    | 2.21        |   |  |   |            |  
|Income (loss) from discontinued operations                                  |  | $    | 0.13       |   |      | $ | 0.44       |      |  | $ | (2.85      | ) |  | $    | 0.48        |   |  | $ | 1.20        |  
|                                                                            |  |      |            |   |      |   |            |      |  |   |            |   |  |      |             |   |  |   |             |  
|Net income (loss)                                                           |  | $    | 2.50       |   |      | $ | 1.09       |      |  | $ | (2.59      | ) |  | $    | 3.29        |   |  | $ | 1.10        |  
|Dividends                                                                   |  | $    | 1.15       |   |      | $ | 0.90       |      |  | $ | 1.65       |   |  | $    | 6.78        |   |  | $ | 1.92        |  
|Weighted average shares outstanding                                         |  |      | 975,298    |   |      |   | 975,989    |      |  |   | 975,989    |   |  |      | 975,989     |   |  |   | 976,481     |  
|                                                                            |  |      |            |   |     
|Per share data  assuming dilution:                                         |  |      |            |   |      |   |            |      |  |   |            |   |  |      |             |   |  |   |             |  
|Net income (loss) from operations                                           |  | $    | 0.19       |   |      | $ | (0.10      | )    |  | $ | 0.26       |   |  | $    | 0.60        |   |  | $ | (0.10       | )
|Gain on sale of rental real estate and rental real estate held for sale     |  | $    | 2.12       |   |      | $ | 0.75       |      |  |   |           |   |  | $    | 2.21        |   |  |   |            |  
|Income (loss) from discontinued operations                                  |  | $    | 0.13       |   |      | $ | 0.44       |      |  | $ | (2.85      | ) |  | $    | 0.48        |   |  | $ | 1.20        |  
|                                                                            |  |      |            |   |      |   |            |      |  |   |            |   |  |      |             |   |  |   |             |  
|Net income (loss)                                                           |  | $    | 2.44       |   |      | $ | 1.09       |      |  | $ | (2.59      | ) |  | $    | 3.29        |   |  | $ | 1.10        |  
|Weighted average shares outstanding                                         |  |      | 1,002,167  |   |      |   | 975,989    |      |  |   | 975,989    |   |  |      | 975,989     |   |  |   | 976,481     |  
|                                                                            |  |      |            |   |     
|Financial position at December 31                                           |  |      |            |   |      |   |            |      |  |   |            |   |  |      |             |   |  |   |             |  
|Total assets                                                                |  | $    | 57,377,365 |   |      | $ | 59,038,125 |      |  | $ | 36,762,611 |   |  | $    | 41,229,750  |   |  | $ | 48,864,500  |  
|Notes payable                                                               |  | $    | 38,486,516 |   |      | $ | 41,169,539 |      |  | $ | 19,796,510 |   |  | $    | 20,263,273  |   |  | $ | 24,616,551  |  
|Stockholders equity                                                        |  | $    | 17,831,024 |   |      | $ | 16,510,014 |      |  | $ | 16,340,150 |   |  | $    | 20,302,288  |   |  | $ | 23,473,468  |  



---

##### Table of Contents

|ITEM 7. |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- |  | -------------------------------------------------------------------------------------



Overview



We are a real estate company engaged in acquiring, owning and managing suburban office, retail shopping center and light industrial properties. We have elected to be
taxed as a REIT for federal income tax purposes, which requires, among a number of other organizational and operational requirements, that we distribute at least 90% of our taxable income (excluding capital gains) to our stockholders. From inception
to March 31, 2002, we were advised and managed by the Advisor. Since March 31, 2002, we have been self-managed and self-administered.



At December 31, 2003, we had a real estate portfolio of 12 properties, including:



| |  | three light industrial properties totaling 151,225 square feet;
| | - | ---------------------------------------------------------------



| |  | one shopping center of 321,621 square feet;
| | - | -------------------------------------------



| |  | one restaurant facility of 5,133 square feet;
| | - | ---------------------------------------------



| |  | three suburban office properties representing 94,806 square feet; and
| | - | ---------------------------------------------------------------------



| |  | four properties held for sale totaling 53,715 square feet.
| | - | ----------------------------------------------------------



In addition to the above, we own a 2.5 acre parcel of undeveloped land in Garden Grove; we intend to construct a multi-tenant shopping center comprising approximately
30,000 square feet on this parcel. All of our properties are located in California except for one shopping center in Georgia. Until 2002, our business focus was the ownership and operation of suburban office properties and light industrial
buildings. We have broadened our focus to include large shopping centers and properties outside of California. We acquired an Atlanta, Georgia shopping center in October 2002 and may pursue other real estate opportunities. Many of our leases are
triple-net leases where the tenant is responsible for maintenance, taxes and insurance.



Other than our becoming self-managed and self-advised as noted above, the most significant factors affecting our historical financial results are as follows:



| |  | Sale of Cerritos Property. On December 19, 2003, we sold our property in Cerritos for a gross sales price of $3,740,000 and a gain of $1,264,614. During 2003, the direct
revenues in excess of direct expenses from the Cerritos property contributed approximately $50,000 to our net income excluding the gain on the sale.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Sale of Chino Property.On November 25, 2003, we sold our vacant property in Chino for a gross sales price of $2,300,000 and a gain of $452,157. During 2003, the direct
expenses in excess of direct revenues from the Chino property decreased our net income by approximately $160,000, excluding the gain on the sale.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Sale of Vacaville Property. On August 13, 2003, we sold our vacant Vacaville property for a gross sales price of $2,100,000 and a gain of $406,728. This gain incorporates a
significant write-down in the carrying value of the property made in 2001. During 2003, the direct expenses in excess of direct revenues from the Vacaville property decreased our net income by approximately $190,000, excluding the gain on the sale.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Acquisition of Northlake Festival Shopping Center.On October 15, 2002, we acquired the Northlake Festival Shopping Center, a 321,000 square foot shopping center on
approximately 38 acres of land in Atlanta, DeKalb County, in northeastern metropolitan Atlanta. Northlake Festival is currently approximately 97% leased to 47 tenants and accounts for approximately 50% of our revenues. We paid a total of
approximately $3,800,000 million in cash and assumed the mortgage of approximately $16,700,000 million on the property.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

| |  | Refinancing of four properties in August 2002. On August 5, 2002, we refinanced the four loans secured by our Folsom, Irvine, Sacramento (Horn Road), and Tustin properties.
The refinancing replaced approximately $8,500,000 of existing debt on four properties with approximately $15,020,000 of new debt, thus increasing the aggregate loan balance of these loans by approximately $6,500,000. The loans bear interest at a
fixed rate of 6.97% per annum. This refinancing increased our fixed debt payments by approximately $35,000 per month.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Sale of Corona property. On May 31, 2002, the lease expired on our Corona property. We sold this property in September 2002 to an unaffiliated buyer for $2,300,000, resulting
in a gain of approximately $500,000. This property generated approximately 5% our total gross rental income (including revenue from discontinued operations) before its lease expired.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Sale of Huntington Beach Property. On April 26, 2002, we sold our Huntington Beach property to an unaffiliated buyer for $1,500,000, resulting in a gain of approximately
$230,000. This property generated approximately 3% our total gross rental income (including revenue from discontinued operations) before its sale.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



We believe that the following factors and events will pose particular challenges for us in 2004 and beyond. The following statements are forward-looking statements
within the meaning of the federal securities laws, and these factors and others are addressed in more detail in Item 1, Business  Risk Factors That May Affect Future Results.



| |  | Existing and Anticipated Vacancies. At present, our portfolio is approximately 97% leased, although some tenants have vacated the lease premises and continue to pay rent. In
May 2004, our lease with AMC Theaters comprising 26,900 square feet in our Northlake Festival property expires. AMC Theaters has not occupied the space since 2002, and we do not expect to be able to lease the space to another theater operator. We
are exploring options to reconfigure the space to be suitable for other uses, and may incur significant costs to complete such a renovation, including the lack of income during a construction and lease up period. Another tenant has vacated 16,056
square feet but is liable under the lease through July 2005. Further, our lease on two Sacramento properties expires in 2004. We may incur significant costs to re-lease these spaces.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Loss of Revenues from Disposed Properties. During 2003, we sold three properties. Two of the three properties were vacant for all of 2003; however, we recorded approximately
$260,000 in revenues in 2003 for our Cerritos property, which we sold on December 19, 2003.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Development of Garden Grove Property. Part of our business plan and growth strategy involves divesting vacant and other select properties and redeploying the net cash
proceeds into new properties where we expect the yield and long-term growth to be greater. Consistent with that strategy, we have sold several properties as noted above, and we purchased a 2.5 acre parcel of undeveloped land in Garden Grove. We
intend to construct a multi-tenant shopping center comprising approximately 30,000 square feet on this parcel. We believe that our cash flow from operations will begin to improve as we finish our new property under development and complete the
leasing process.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Debt maturities.Four of our loans mature in 2004, with total balloon payments of approximately $5,900,000. In March 2004, we paid the loan secured by our Ontario property
and extended the term of our Garden Grove (Banco Popular) loan to June 2004. The loans on our Fresno and Riverside properties are due in August and November 2004, respectively.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Lease with Adelphia Communications, Inc. in our Ontario property.Adelphia has filed for bankruptcy protection, and although it is current in its lease payments with us, a
bankruptcy court
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

could terminate the lease. Further, various companies have filed liens against the property for
remodeling work ordered by Adelphia. If the bankruptcy court terminates our lease and the payments to the creditors from the bankruptcy proceedings are less than their claims and the liens are indeed valid, then we would be responsible for the
obligations.



As a result of property sales in 2003, the purchase of land held
for development in 2003, the August 2002 refinancing and the October 2002 purchase of Northlake Festival, as of December 31, 2003, we had total assets of $57,377,365, total secured indebtedness of $38,486,516, total liabilities of $39,546,341 and a
debt-to-total assets ratio of 69%, calculated on the basis of generally accepted accounting principles. Because this calculation method reflects accumulated depreciation and does not reflect any appreciation of the properties beyond their cost, it
may result in assets being valued at less than their fair market values as determined by the board of directors. Further, this calculation excludes the effects, if any, of the ground lease on the Northlake Festival property.



Results of Operations



2003 Compared to 2002



We adopted SFAS No. 144 as of January 1, 2002 and designated seven California properties as held for sale: Fresno; Huntington Beach;
Roseville; Riverside; Vacaville; and two Sacramento properties (717 and 721 West Del Paso Road). We sold the Huntington Beach property in April 2002 and the Corona property in September 2002. We sold the Vacaville property in August 2003. On
September 30, 2003, we designated the Chino property as held for sale and removed the Roseville property from the held for sale category. In November and December 2003 we sold our Chino and Cerritos properties, respectively. In accordance with SFAS
No. 144, we have restated the prior results of the properties designated as held for sale and the properties we sold as discontinued operations for all periods presented.



Operations for the years ended December 31, 2003 and 2002 represented full quarters of rental operations for all of our properties we
classify as continuing operations, except for the Northlake Festival, which we acquired in October 2002, and the Banco Popular property in Garden Grove, which we acquired in June 2003. The four properties designated as held for sale at December 31,
2003 and those properties sold in the three years then ended are included in the line items under discontinued operations- income from operations with revenues netted against expenses.



Rental revenue increased by $3,772,499 (96%) for the year ended December 31, 2003, as
compared to the year ended December 31, 2002, primarily due to the acquisition of the Northlake Festival property in October of 2002, and its results included for all of 2003 and only for part of 2002.



Interest income decreased by $30,729 (75%) for the year ended December 31, 2003, as compared
to the year ended December 31, 2002, due to lower average balances maintained in interest earning assets and lower interest rates.



Interest expense increased by $1,143,628 (77%) for the year ended December 31, 2003, as compared to the year ended December 31, 2002, due to:



| |  | the August 2002 refinancing of four notes payable to balances approximately $6,500,000 higher; the higher balances were outstanding for all of 2003 as compared with only a part of
2002;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | the addition of the note payable of approximately $16,500,000 secured by Northlake Festival for all of 2003 compared with only a part of 2002;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------



| |  | to a lesser extent, the replacement in the August 2002 refinancing of variable rate debt secured by our Folsom and Irvine properties by fixed rate debt bearing interest at higher
rates; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | the addition in June 2003 of $1,500,000 debt secured by the Garden Grove (Banco Popular) property.
| | - | --------------------------------------------------------------------------------------------------



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##### Table of Contents

General and administrative costs increased by $197,815 (16%) for the year ended December 31, 2003, as compared to the
year ended December 31, 2002. This increase was principally due to higher legal expenses (including amounts related to our defense of the claim by James Prock), the costs of relocating our corporate office and our hiring one new employee and
engaging a consultant to perform functions performed by the Advisor in 2002.



Depreciation expense increased by $515,064 (100%) for the year ended December 31, 2003, as compared to the year ended December 31, 2002, due largely to an entire year of depreciation on the Northlake Festival property in 2003 while on only
a part of 2002.



Ground rent increased by $686,774 (291%) for the year ended
December 31, 2003, as compared to the year ended December 31, 2002, due to an entire year of ground rent on the Northlake Festival property in 2003 while only a part of 2002.



Operating expenses increased by $596,580 (154%) in the year ended December 31, 2003, as compared to the year ended December 31, 2002, due
primarily to the addition of Northlake Festival property in October 2002 and including its operating costs for the all of 2003 and only a part of 2002.



Property tax expense increased $309,265 (162%) in the year ended December 31, 2003, as compared to the year ended December 31, 2002, primarily due to an entire year of
property tax expense in 2003 related to the Northlake Festival property and only a partial year in 2002.



Discontinued operations- gain on sale of rental real estate held for sale was $2,123,499 in the year ended December 31, 2003 from the sales of the Vacaville, Chino and Cerritos properties. During the year ended
December 31, 2002, we recognized a gain of $733,424 from the sales of the Huntington Beach and Corona properties.



Discontinued operations- income from operations decreased by $298,421 (70%) primarily due to a partial year of income for the Huntington Beach and Corona properties in
2002 and no income in 2003. Further, we recorded no income from the Chino property in 2003.



Net income for the year ended December 31, 2003 was $2,442,604, compared to $1,058,306 for the year ended December 31, 2002. This increase was due primarily to the higher gains on sale of properties in 2003, and
including the results of the Northlake Festival for all of 2003, and only part of 2002.



The diluted weighted average number of shares outstanding (after adjusting for the November 15, 2002 one-for-three reverse stock split) was 1,002,167 and 975,989 for years ended December 31, 2003 and 2002, respectively. For the reasons
explained in the preceding paragraph, net income per share assuming dilution increased to $2.44 for the year ended December 31, 2003 from net income per share of $1.09 for the year ended December 31, 2002.



2002 Compared to 2001



See our discussion above concerning our classification of properties as held for sale, as
restated pursuant to FAS 144.



Operations for the years ended December 31, 2002
and 2001 represented full quarters of rental operations for all of our properties we classify as continuing operations, except for the Northlake



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##### Table of Contents

Festival, which we acquired in October 2002. The four properties designated as held for sale during at December 31, 2003
and those properties sold in the three years then ended are included in the line items under discontinued operations with revenues netted against expenses.



Rental revenue increased by $1,088,466 (38%) for the year ended December 31, 2002, as compared to the year ended December 31, 2001,
primarily due to the acquisition of the Northlake Festival property in October 2002.



Interest income decreased by $12,090 (23%) for the year ended December 31, 2002, as compared to the year ended December 31, 2001, due to lower average balances maintained in interest earning assets and lower interest rates.



Interest expense increased by $509,364 (52%) for the year ended December 31, 2002, as
compared to the year ended December 31, 2001, due to:



| |  | the August 2002 refinancing of four notes payable to balances approximately $6,500,000 higher than in 2001,
| | - | -----------------------------------------------------------------------------------------------------------



| |  | the addition of the note payable secured by Northlake Festival and,
| | - | -------------------------------------------------------------------



| |  | to a lesser extent, the replacement in the August 2002 refinancing of variable rate debt secured by our Folsom and Irvine properties by fixed rate debt bearing interest at higher
rates.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



General and administrative costs increased by $555,792
(79%) principally due to our conversion to a self-advised and self-managed REIT, including the hiring of three employees, legal expenses related to two proxy statements, other general legal issues, securities filing fees and outsourcing functions
previously performed by the Advisor.



Depreciation expense increased by
$101,887 (25%) for the year ended December 31, 2002, as compared to the year ended December 31, 2001, due largely to the acquisition of the Northlake Festival property in October 2002.



Ground rent was $235,924 in 2002, due to the ground lease for Northlake Festival; there was no ground lease expense in 2001.



Operating expenses increased by $138,354 (55%) in the year ended December 31, 2002, as
compared to the year ended December 31, 2001, due the addition of Northlake Festival property in October 2002.



Property tax expense increased $100,836 (112%) in the year ended December 31, 2002, as compared to the year ended December 31, 2001, due the addition of Northlake Festival property in October 2002.



During the quarter ended September 30, 2001, we determined, in conjunction with the Advisor,
that the total expected future cash flows from operations and the ultimate disposition of one property was less than its carrying value. Accordingly, we recorded a loss of $371,772 to reduce the property to their fair values, based on current
appraisals. We recorded no impairment loss in 2002.



In March 2001, we received
$165,053 from Bankers Standard Insurance Company (Bankers Standard) in partial settlement of a lawsuit regarding Bankers Standards responsibility to defend us in the Market Place Cinema lawsuit. Bankers
Standard is also required to pay the subsequent legal costs of defending this action. We had previously expensed these legal costs, and as a result, we took the proceeds of the settlement into income in March 2001. We had no similar item in 2002.



Discontinued operations- gain on sale of rental real estate held for sale was
$733,424 from the sales of the Huntington Beach and Corona properties in 2002. We sold no properties in 2001.



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##### Table of Contents

Discontinued operations- impairment loss was $3,428,228 in 2001; we recorded no impairment loss in 2002. During the
quarter ended September 30, 2001, we determined, in conjunction with the Advisor, that the total expected future cash flows from operations and the ultimate disposition of five properties was less than their carrying values. Accordingly, we recorded
the impairment loss in 2001 to reduce the properties to their fair values, based on current appraisals.



Discontinued operations- income from operations decreased by $222,125 (34%) primarily due to full years of income for the Huntington Beach and Corona properties in 2001 and a partial year of income from the Vacaville
property in 2001. During 2002, we recorded no income from the Vacaville property and income for the partial year owned the Huntington Beach and Corona properties.



Net income for the year ended December 31, 2002 was $1,058,306, compared to a net loss of ($2,522,159) in year ended December 31, 2001. This
increase was due primarily to the gain on sale of the Huntington Beach and Corona properties in 2002 and the impairment loss recorded in 2001.



The weighted average number of shares outstanding (after adjusting for the November 15, 2002 one-for-three reverse stock split) was 975,989 and 975,989 for the years
ended December 31, 2002 and 2001, respectively. For the reasons explained in the preceding paragraph, net income per share assuming dilution increased to $1.09 in 2002 from a net loss per share of ($2.59) in 2001.



Inflation and changing prices have not had a material effect on our operations.



|Liquidity | and Capital Resources
|--------- | ---------------------



Our primary source of liquidity to fund distributions, principal payment on notes payable and minor capital expenditures is our cash flows from operating activities. To
qualify as a REIT for federal income tax purposes, among other requirements, we must distribute annually at least 90% of our REIT taxable income (excluding capital gains). Accordingly, we currently intend to continue to make, but have not
contractually bound ourselves to make, regular quarterly distributions to holders of our common stock. As a policy, we keep cash balances on hand for reserves for unexpected cash requirements. Our primary sources for liquidity to fund asset
acquisitions, major capital expenditures and balloon payments on notes payable are refinancing selected existing notes payable and the proceeds from selling selected properties. Further, we may attempt to obtain funding by issuing additional equity
either in the form of common stock or through joint ventures.



The following
table presents our contractual cash obligations as of December 31, 2003:



|                                                                                  |  |                        |            |                   |   |                   |  |                    |           |                |   |           |  |   |           
|--------------------------------------------------------------------------------- |  | ---------------------- | ---------- | ----------------- | - | ----------------- |  | ------------------ | --------- | -------------- | - | --------- |  | - | ----------
|                                                                                  |  | Payments Due by Period
|Contractual Obligations                                                           |  | Total                  |            | Less ThanOne year |   | One toThree Years |  | Three toFive Years |           | Over FiveYears
|Notes payable secured by rental real estate and real estate held for sale(1)      |  | $                      | 38,486,516 |                   | $ | 6,326,280         |  | $                  | 994,683   |                | $ | 2,321,006 |  | $ | 28,844,547
|Minimum payments due under the ground lease at the Northlake Festival property(2) |  |                        | 32,250,000 |                   |   | 600,000           |  |                    | 1,200,000 |                |   | 1,200,000 |  |   | 29,250,000
|Other                                                                             |  |                        | 98,000     |                   |   | 84,000            |  |                    | 14,000    |                |   |          |  |   |          
|                                                                                  |  |                        |            |                   |   |                   |  |                    |           |                |   |           |  |   |           
|Total Contractual Cash Obligations                                                |  | $                      | 70,834,516 |                   | $ | 7,010,280         |  | $                  | 2,208,683 |                | $ | 3,521,006 |  | $ | 58,094,547
|                                                                                  |  |                        |            |                   |   |                   |  |                    |           |                |   |           |  |   |           

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|(1) | See Note 6 Notes Payable of the notes to the financial statements included in this report for a detailed description of our notes payable.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------

|(2) | See Note 10 Commitments and Contingencies of the notes to the financial statements included in this report for a description of the terms of this ground lease.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

In addition to the payments due in the table above, we also have employment contracts with our two officers.



At December 31, 2003, our total investments in rental real estate and rental real estate
held for sale totaled $52,257,472 for the 12 properties we own. In addition, we own a parcel of land held for development valued at $2,691,331. Depending upon the availability and cost of external capital, we anticipate making additional investments
in suburban office, retail shopping center and light industrial properties, although we may make other types of investments. We intend to fund new investments from existing cash balances (subject to maintaining reasonable cash reserves), refinancing
of selected existing mortgage debt to higher balances and the proceeds from asset sales. We may consider other sources of possible funding, including joint ventures. To increase our financial flexibility, we may obtain a revolving line of credit,
although there can be no assurance we will be successful.



During 2004, four of
our loans are scheduled to mature, totaling approximately $5,900,000. We anticipate using a combination of existing cash balances, extension of the maturity date, refinancing (including borrowing on unencumbered properties) and or property sales to
meet the scheduled maturities. To date, we have paid the balance due on the loan secured by our Ontario property using existing cash balances, and extended the term of the loan secured by our Garden Grove (Banco Popular) property to June 2004 and
believe we will be able to extend the maturity date on that loan further. We cannot assure you we will be able to use existing cash balances, extension of the maturity date, refinancing (including borrowing on unencumbered properties) and or
property sales to meet the scheduled maturities on the remaining two loans. We do not believe we will be able to use our Ontario property as security for a loan until the bankruptcy court accepts our lease with the tenant (if the lease is accepted
at all), and we do not believe that a formal acceptance or rejection of the lease will occur by September 30, 2004. Further, we anticipate the following significant needs for cash during the remainder of 2004 and 2005:



| |  | We plan to build an approximate 30,000 square foot shopping center on our parcel of land in Garden Grove using a construction loan. We anticipate using a construction loan to fund
the construction costs.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | We may renovate the 26,900 square foot space vacated by AMC Theaters after the lease expires in May 2004 to a use other than a theater, at a significant cost.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------



We believe our liquidity and various sources of capital are
sufficient to fund operations including capital expenditures and leasing commissions, meet debt service and dividend requirements under the Internal Revenue Code for REIT status and finance future investments, although we cannot assure you we will
be successful in obtaining such capital. We believe our properties are in good condition without significant deferred maintenance obligations, and many are leased under triple-net leases, which reduce our risk pertaining to excessive
maintenance and operating costs. However, we anticipate we will continue to require outside sources of financing to meet our liquidity needs beyond 2003, such as scheduled debt repayments (including balloon payments on our debt) and property
acquisitions.



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##### Table of Contents

On September 24, 2002, our stockholders voted to amend and restate our bylaws to, among other items, eliminate the limit
on our leverage. Unlike our previous certificate of incorporation and bylaws, these new organizational documents do not limit the amount of debt that we may incur. We have adopted a policy that we shall not incur any additional liabilities if, after
giving effect to the additional liabilities, total liabilities would exceed 65% of what the board of directors believes is the fair market value of our portfolio. If we decide to change this policy to increase the percentage of debt we incur above
65% of our overall portfolio fair market value, we will implement the change only after we seek and obtain the approval of the holders of a majority in voting power of our outstanding shares.



Cash Flows in 2003



Our cash resources increased $775,129 during the year ended December 31, 2003. During 2003, cash provided by operating activities was
$1,679,790, primarily from net income adjusted for non-cash items such as depreciation and amortization. Investing activities in 2003 resulted in a $2,917,580 source of cash resources primarily from proceeds from the sale of the Vacaville, Chino and
Cerritos properties and offset in part by the acquisition of land held for development and related costs and the purchase of the Banco Popular property. For the year ended December 31, 2003 financing activities used $3,822,241, due largely to the
payoff of loans secured by properties sold and dividends paid.



Cash Flows
in 2002



Our cash resources increased $2,800,096 during the year ended
December 31, 2002. During 2002, cash provided by operating activities was $582,910 primarily from net income adjusted for non-cash items such as depreciation and amortization. Investing activities in 2002 resulted in a $905,461 use of cash resources
primarily for purchase of the Northlake Festival property and offset by proceeds from the sale of the Huntington Beach and Corona properties. For the year ended December 31, 2002 financing activities provided $3,122,647, due largely to the
refinancing of four loans and offset in part by the payoff of loans secured by properties sold, dividends, loan origination fees and principal payments on notes payable secured by rental real estate and notes payable secured by rental real estate
held for sale.



Cash Flows in 2001



Our cash resources decreased $124,508 during the year ended December 31, 2001. During 2001,
cash provided by operating activities was $2,097,513 primarily from net income adjusted for non-cash items such as depreciation and impairment loss. Investing activities in 2001 resulted in a $178,368 use of cash resources for capital expenditures
at our Cerritos and Corona properties. For the year ended December 31, 2001 financing activities used $2,043,653, due largely to dividends totaling $1,610,381 and principal payments on notes payable totaling $466,763.



Critical Accounting Policies



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 at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We
evaluate our estimates and assumptions on an ongoing basis based on a combination of historical information and various other assumptions that we believe are reasonable under the particular circumstances. Actual results may differ from these
estimates based on different assumptions or conditions. We define critical accounting policies as those that require managements most difficult, subjective or complex judgments. A summary of our critical accounting policies follows. Additional
discussion of accounting policies that we consider significant, including further discussion of the critical accounting policies described below, can be found in the notes to our consolidated financial statements.



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##### Table of Contents

Revenue Recognition. We recognize minimum rents on the straight-line method over the terms of the leases, as
required under Statement of Financial Accounting Standard No. 13. Certain of the leases also provide for additional revenue based on contingent percentage income which is recorded on an accrual basis once the specified target that triggers this type
of income is achieved. The leases also typically provide for tenant recoveries of common area maintenance, real estate taxes and other operating expenses. These recoveries are recognized as revenue in the period the applicable costs are incurred,
except for several tenants where the revenue is recognized when the revenue is billable to the tenant under the lease. Rents due, but not yet collected, are recognized to the extent determined by management to be collectible. We believe that the
likelihood of collection of amounts over six months past due is low. As of December 31, 2003 we had approximately $80,000 in receivables over six months old and we have provided approximately $80,000 for uncollectible receivables.



Real Estate. We record real estate assets at the lower of cost or fair value if
impaired. We evaluate the recoverability of our investment in real estate whenever events or changes in circumstances indicate that the carrying amount of an asset may be impaired. Our assessment of recoverability of our real estate assets includes,
but is not limited to recent operating results, expected cash flows and our plans for future operations.



Properties classified as held for sale are segregated from rental real estate in our financial statement presentation. We stop recording depreciation on a property once it is classified as held for sale.



On January 1, 2002, we adopted SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets which requires that the assets and liabilities and the results of operations of any properties which have been sold during 2002, or otherwise qualify as held for sale as of December 31, 2002, be
presented as discontinued operations in our consolidated financial statements in both current and prior periods presented. The property specific real estate classified as held for sale is stated at the lower of its carrying amount or estimated fair
value less disposal costs.



In accordance with SFAS No. 144, our investments in
real estate are carried at cost and are periodically evaluated for indicators of impairment. The evaluation of impairment and the determination of values are based on several factors, and future events could occur which would cause management to
conclude that indicators of impairment exist and a reduction in carrying value to estimated fair value is warranted.



Critical Accounting Estimates. We believe the critical accounting estimates we make relate to the valuation of our properties for impairment and legal and other
contingencies. We believe these estimates are judgmental and not subject to strict, quantifiable analysis. As appropriate, we engage counsel and other parties, to assist us in making these estimates.



New Accounting Pronouncements



On May 15, 2002, we adopted Statement of Financial Accounting Standards No. 145 (SFAS
No. 145), Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections as promulgated by the Financial Accounting Standards Board (FASB). SFAS No. 145 rescinds SFAS No.
4 and an amendment of that Statement, and SFAS No. 64. SFAS No. 145 also rescinds SFAS No. 44. SFAS No. 145 amends SFAS No. 13, to eliminate an inconsistency between the required accounting for certain lease modifications that have economic effects
that are similar to sale-leaseback transactions. SFAS No. 145 also amends other existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their applicability under changed conditions. The adoption of
SFAS No. 145 did not have a material effect on our financial position or results of operations.



On January 1, 2003, we adopted Statement of Financial Accounting Standards No. 146 (SFAS No. 146), Accounting for Costs Associated with Exit or Disposal Activities. SFAS No. 146 addresses
financial accounting and reporting for costs associated with exit or disposal activities and nullifies



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##### Table of Contents

Emerging Issues Task Force (EITF) Issue No. 94-3, Liability Recognition for Certain Employee Termination Benefits
and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring). The adoption of SFAS No. 146 did not have a material effect on our financial position or results of operations.



On January 1, 2003, we adopted FASB Interpretation No. 45 (FIN No. 45),
Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. FIN No. 45 expands on the accounting guidance of Statements No. 5, 57, and 107 and incorporates without
change the provisions of FASB Interpretation No. 34, which is being superseded. FIN No. 45 affects leasing transactions involving residual guarantees, vendor and manufacturer guarantees, and tax and environmental indemnities. All such guarantees
will need to be disclosed in the notes to the financial statements starting with the period ending after December 15, 2002. For guarantees issued after December 31, 2002, the fair value of the obligation must be reported on the balance sheet.
Existing guarantees will be grandfathered and no fair value of the obligation of them will be recognized on the balance sheet. The adoption of FIN No. 45 did not have impact on our financial position and results of operations.



In January 2003, the FASB issued FASB Interpretation No. 46 (FIN No. 46), Consolidation
of Variable Interest Entities, an interpretation of Accounting Research Bulletin No. 51, Consolidated Financial Statements. FIN No. 46 explains how to identify variable interest entities and how an enterprise assesses its interest
in a variable entity to decide whether to consolidate that entity. FIN No. 46 requires existing unconsolidated variable interest entities to be consolidated by their primary beneficiaries if the entities do not effectively disperse risks among
parties involved. FIN No. 46 is effective immediately for variable interest entities after January 31, 2003, and to variable interest entities in which an enterprise obtained an interest after that date. FIN No. 46 applies in the first fiscal year
or interim period beginning after June 15, 2003, to variable interest entities in which an enterprise holds a variable interest that it acquired before February 1, 2003. We are in the process of assessing the effect of FIN No. 46 and do not expect
the implementation of FIN No. 46 to have a material effect on our financial statements.



|ITEM 7A |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------- |  | ----------------------------------------------------------



As of December 31, 2003, only a $1,500,000 note payable carried a variable interest rate. As of December 31, 2002, all of our debt instruments had fixed rates, and we did
not have exposure to market risk for changes in interest rates until those loans mature. Unless and until we obtain other variable rate loans, changes in market interest rates will only affect the rate of that one variable rate loan. We have in the
past and may in the future, however, obtain loans that bear interest at a variable rate. In the past, we have borrowed to support general corporate purposes, including acquisitions, capital expenditures and working capital needs. We periodically
evaluate the level of variable rate debt with respect to total debt and other factors, including our assessment of the current and future economic environment. We did not have any derivative financial instruments at December 31, 2003 or 2002.



The fair values of our financial instruments (including such items in the
financial statement captions as cash, other assets and liabilities other than notes payable) approximate their carrying or contract values based on their nature, terms and interest rates that approximate current market rates. The fair value of notes
payable is estimated based on a discounted cash flow analysis with interest rates similar to that of current market borrowing arrangements. Under this analysis, the fair value of our notes payable exceeded their carrying value by approximately
$2,300,000 and $1,800,000 at December 31, 2003 and 2002, respectively.



We had
$1,500,000 and $0 in variable rate debt outstanding at December 31, 2003 and 2002, respectively. A hypothetical 10% increase in interest rates on our variable rate debt would be immaterial to our results of operations and cash flows for the years
ended December 31, 2003 and 2002. Further, many of our fixed rate loans have significant balloon payments that would need to be refinanced at maturity, possibly at unfavorable rates. We cannot predict the effect of adverse changes in interest rates
on our variable rate debt and, therefore, our exposure to market risk. We can give no assurances that fixed rate, long-term debt will be available to us at advantageous pricing. Consequently, our future results may differ materially from the
estimated adverse changes discussed above.



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##### Table of Contents

|ITEM 8. |  | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|------- |  | -------------------------------------------



|                                                                                                     |  |     
|---------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                     |  | Page
|                                                                                                     | 
|Report of Independent Certified Public Accountants                                                   |  | 40  
|                                                                                                     | 
|Consolidated Balance Sheets - December 31, 2003 and 2002                                             |  | 41  
|                                                                                                     | 
|Consolidated Statements of Income for the years ended December 31, 2003, 2002 and 2001               |  | 42  
|                                                                                                     | 
|Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2002 and 2001           |  | 43  
|                                                                                                     | 
|Consolidated Statements of Stockholders Equity for the years ended December 31, 2003, 2002 and 2001 |  | 44  
|                                                                                                     | 
|Summary of Accounting Policies                                                                       |  | 45  
|                                                                                                     | 
|Notes to Consolidated Financial Statements                                                           |  | 49  
|                                                                                                     | 
|Financial Statement Schedule Schedule IIIReal Estate and Accumulated Depreciation                   |  | 82  



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##### Table of Contents

Report of Independent Certified Public Accountants



Meredith Enterprises, Inc.

Menlo Park, California



We have audited the
accompanying consolidated balance sheets of Meredith Enterprises, Inc. (the Company, formerly West Coast Realty Investors, Inc.) as of December 31, 2003 and 2002 and the related consolidated statements of income, cash flows and
stockholders equity for each of the three years in the period ended December 31, 2003. We have also audited the schedule listed in the accompanying index. These consolidated financial statements and schedule are the responsibility of the
Companys management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.



We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the financial statements and schedule are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements
and schedule. 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 financial statements referred to above
present fairly, in all material respects, the financial position of Meredith Enterprises, Inc., at December 31, 2003 and 2002 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2003, in
conformity with accounting principles generally accepted in the United States of America.



Also, in our opinion, Schedule III presents fairly, in all material respects, the information set forth therein.



As discussed in Note 2 to the consolidated financial statements, the Company adopted Statement of Financial Accounting Standards No. 144 Accounting for the
Impairment of Disposal of Long-Lived Assets, on January 1, 2002.



/s/ BDO SEIDMAN, LLP



Menlo Park, California

February 9, 2004



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##### Table of Contents

MEREDITH ENTERPRISES, INC.



CONSOLIDATED BALANCE SHEETS



|                                                                                                                                  |  |              |            |   |      |   |             |  
|--------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ---------- | - | ---- | - | ----------- | -
|                                                                                                                                  |  | December 31, |           
|                                                                                                                                  |  | 2003         |            |   | 2002 |  
|Assets                                                                                                                            |  |              |            |   |      |   |             |  
|Rental real estate, less accumulated depreciation (Notes 2 and 4)                                                                 |  | $            | 43,957,479 |   |      | $ | 45,182,232  |  
|Rental real estate held for sale, net (Note 2)                                                                                    |  |              | 4,098,703  |   |      |   | 7,444,819   |  
|Land held for development (Note 2)                                                                                                |  |              | 2,691,331  |   |      |   |            |  
|Cash and cash equivalents                                                                                                         |  |              | 4,699,052  |   |      |   | 3,923,923   |  
|Deferred rent                                                                                                                     |  |              | 515,644    |   |      |   | 346,980     |  
|Accounts receivable                                                                                                               |  |              | 115,223    |   |      |   | 202,445     |  
|Loan origination fees, net of accumulated amortization of $130,001 and $45,929 in 2003 and 2002, respectively                     |  |              | 615,048    |   |      |   | 703,019     |  
|Other assets                                                                                                                      |  |              | 667,197    |   |      |   | 644,892     |  
|Other assets  rental real estate held for sale                                                                                   |  |              | 17,688     |   |      |   | 589,815     |  
|                                                                                                                                  |  |              |            |   |      |   |             |  
|Total assets                                                                                                                      |  | $            | 57,377,365 |   |      | $ | 59,038,125  |  
|                                                                                                                                  |  |              |            |   |      |   |             |  
|Liabilities and Stockholders Equity                                                                                              |  |              |            |   |      |   |             |  
|                                                                                                                                  |  |             
|Liabilities                                                                                                                       |  |              |            |   |      |   |             |  
|Accounts payable and accrued liabilities                                                                                          |  | $            | 805,887    |   |      | $ | 910,959     |  
|Due to related party (Note 5)                                                                                                     |  |              |           |   |      |   | 30,077      |  
|Security deposits and prepaid rent                                                                                                |  |              | 225,272    |   |      |   | 356,463     |  
|Other liabilities  rental real estate held for sale                                                                              |  |              | 28,666     |   |      |   | 61,073      |  
|Notes payable secured by rental real estate (Note 6)                                                                              |  |              | 36,878,369 |   |      |   | 36,528,453  |  
|Notes payable secured by rental real estate held for sale (Note 6)                                                                |  |              | 1,608,147  |   |      |   | 4,641,086   |  
|                                                                                                                                  |  |              |            |   |      |   |             |  
|Total liabilities                                                                                                                 |  |              | 39,546,341 |   |      |   | 42,528,111  |  
|                                                                                                                                  |  |              |            |   |      |   |             |  
|Commitments and contingencies (Note 10)                                                                                           |  |              |           |   |      |   |            |  
|                                                                                                                                  |  |             
|Stockholders equity                                                                                                              |  |              |            |   |      |   |             |  
|Common stock $.01 par value; 15,000,000 shares authorized; 975,298 shares issued and outstanding as of December 31, 2003 and
2002 |  |              | 9,753      |   |      |   | 9,753       |  
|Additional paid-in capital                                                                                                        |  |              | 27,157,247 |   |      |   | 27,157,247  |  
|Dividends in excess of retained earnings                                                                                          |  |              | (9,335,976 | ) |      |   | (10,656,986 | )
|                                                                                                                                  |  |              |            |   |      |   |             |  
|Total stockholders equity                                                                                                        |  |              | 17,831,024 |   |      |   | 16,510,014  |  
|                                                                                                                                  |  |              |            |   |      |   |             |  
|Total liabilities and stockholders equity                                                                                        |  | $            | 57,377,365 |   |      | $ | 59,038,125  |  
|                                                                                                                                  |  |              |            |   |      |   |             |  



See accompanying
summary of accounting policies and notes to consolidated financial statements.



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##### Table of Contents

MEREDITH ENTERPRISES, INC.



CONSOLIDATED STATEMENTS OF INCOME



|                                                                                        |  |                          |           |      |   |           |      |  |   |            |  
|--------------------------------------------------------------------------------------- |  | ------------------------ | --------- | ---- | - | --------- | ---- |  | - | ---------- | -
|                                                                                        |  | Years ended December 31, |          
|                                                                                        |  | 2003                     |           | 2002 |   |           | 2001 | 
|Revenues                                                                                |  |                          |           |      |   |           |      |  |   |            |  
|Rental (Notes 2 and 4)                                                                  |  | $                        | 7,700,407 |      | $ | 3,927,908 |      |  | $ | 2,839,442  |  
|Interest                                                                                |  |                          | 10,244    |      |   | 40,973    |      |  |   | 53,063     |  
|                                                                                        |  |                          |           |      |   |           |      |  |   |            |  
|                                                                                        |  |                          | 7,710,651 |      |   | 3,968,881 |      |  |   | 2,892,505  |  
|                                                                                        |  |                          |           |      |   |           |      |  |   |            |  
|Cost and expenses                                                                       |  |                          |           |      |   |           |      |  |   |            |  
|Interest                                                                                |  |                          | 2,624,149 |      |   | 1,480,521 |      |  |   | 971,157    |  
|General and administrative                                                              |  |                          | 1,458,872 |      |   | 1,261,057 |      |  |   | 705,265    |  
|Depreciation                                                                            |  |                          | 1,028,510 |      |   | 513,446   |      |  |   | 411,559    |  
|Ground rent (Note 10)                                                                   |  |                          | 922,698   |      |   | 235,924   |      |  |   |           |  
|Operating                                                                               |  |                          | 984,393   |      |   | 387,813   |      |  |   | 249,459    |  
|Property tax                                                                            |  |                          | 500,399   |      |   | 191,134   |      |  |   | 90,298     |  
|Impairment loss                                                                         |  |                          |          |      |   |          |      |  |   | 371,772    |  
|                                                                                        |  |                          |           |      |   |           |      |  |   |            |  
|                                                                                        |  |                          | 7,519,021 |      |   | 4,069,895 |      |  |   | 2,799,510  |  
|                                                                                        |  |                          |           |      |   |           |      |  |   |            |  
|Net income (loss) from operations                                                       |  |                          | 191,630   |      |   | (101,014  | )    |  |   | 92,995     |  
|Insurance recovery from lawsuit                                                         |  |                          |          |      |   |          |      |  |   | 165,053    |  
|                                                                                        |  |                          |           |      |   |           |      |  |   |            |  
|Net income (loss) before gain on sale of rental real estate and discontinued operations |  |                          | 191,630   |      |   | (101,014  | )    |  |   | 258,048    |  
|Discontinued operations (Note 3):                                                       |  |                          |           |      |   |           |      |  |   |            |  
|Gain on sale of rental real estate held for sale                                        |  |                          | 2,123,499 |      |   | 733,424   |      |  |   |           |  
|Impairment loss                                                                         |  |                          |          |      |   |          |      |  |   | (3,428,228 | )
|Income from operations                                                                  |  |                          | 127,475   |      |   | 425,896   |      |  |   | 648,021    |  
|                                                                                        |  |                          |           |      |   |           |      |  |   |            |  
|Net income (loss)                                                                       |  | $                        | 2,442,604 |      | $ | 1,058,306 |      |  | $ | (2,522,159 | )
|                                                                                        |  |                          |           |      |   |           |      |  |   |            |  
|Net income (loss) per sharebasic (Note 1):                                             |  |                          |           |      |   |           |      |  |   |            |  
|Net income (loss) before gain on sale of rental real estate and discontinued operations |  | $                        | 0.20      |      | $ | (0.10     | )    |  | $ | 0.26       |  
|Discontinued operations:                                                                |  |                          |           |      |   |           |      |  |   |            |  
|Gain on sale of rental real estate held for sale                                        |  | $                        | 2.17      |      | $ | 0.75      |      |  |   |           |  
|Other income (loss)                                                                     |  | $                        | 0.13      |      | $ | 0.44      |      |  | $ | (2.85      | )
|                                                                                        |  |                          |           |      |   |           |      |  |   |            |  
|Net income (loss) per share- Basic                                                      |  | $                        | 2.50      |      | $ | 1.09      |      |  | $ | (2.59      | )
|                                                                                        |  |                          |           |      |   |           |      |  |   |            |  
|Net income (loss) per share assuming dilution (Note 1):                                |  |                          |           |      |   |           |      |  |   |            |  
|Net income (loss) before gain on sale of rental real estate and discontinued operations |  | $                        | 0.19      |      | $ | (0.10     | )    |  | $ | 0.26       |  
|Discontinued operations:                                                                |  |                          |           |      |   |           |      |  |   |            |  
|Gain on sale of rental real estate held for sale                                        |  | $                        | 2.12      |      | $ | 0.75      |      |  |   |           |  
|Other income (loss)                                                                     |  | $                        | 0.13      |      | $ | 0.44      |      |  | $ | (2.85      | )
|                                                                                        |  |                          |           |      |   |           |      |  |   |            |  
|Net income (loss) per share- Basic                                                      |  | $                        | 2.44      |      | $ | 1.09      |      |  | $ | (2.59      | )
|                                                                                        |  |                          |           |      |   |           |      |  |   |            |  



See accompanying
summary of accounting policies and notes to consolidated financial statements.



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##### Table of Contents

MEREDITH ENTERPRISES, INC.



CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                                                         |  |                          |            |   |      |   |            |      |  |   |            |  
|---------------------------------------------------------------------------------------- |  | ------------------------ | ---------- | - | ---- | - | ---------- | ---- |  | - | ---------- | -
|                                                                                         |  | Years ended December 31, |           
|                                                                                         |  | 2003                     |            |   | 2002 |   |            | 2001 | 
|Cash flows from operating activities                                                     |  |                          |            |   |      |   |            |      |  |   |            |  
|Net income (loss)                                                                        |  | $                        | 2,442,604  |   |      | $ | 1,058,306  |      |  | $ | (2,522,159 | )
|Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |                          |            |   |      |   |            |      |  |   |            |  
|Depreciation expense                                                                     |  |                          | 1,085,458  |   |      |   | 603,594    |      |  |   | 675,935    |  
|Interest expense due to amortization of loan origination fees                            |  |                          | 87,849     |   |      |   | 51,473     |      |  |   | 41,410     |  
|Impairment loss                                                                          |  |                          |           |   |      |   |           |      |  |   | 2,628,576  |  
|Gain on sale of rental real estate held for sale                                         |  |                          | (2,123,499 | ) |      |   | (733,424   | )    |  |   |           |  
|Impairment loss - rental real estate held for sale                                       |  |                          |           |   |      |   |           |      |  |   | 1,171,424  |  
|Equity contribution by Affiliates through expense reimbursements                         |  |                          |           |   |      |   |           |      |  |   | 170,402    |  
|Increase (decrease) in cash flows from changes in operating assets and liabilities:      |  |                          |            |   |      |   |            |      |  |   |            |  
|Deferred rent                                                                            |  |                          | (24,448    | ) |      |   | 156,109    |      |  |   | (33,721    | )
|Accounts receivable                                                                      |  |                          | 87,222     |   |      |   | (188,099   | )    |  |   | (1,043     | )
|Other assets                                                                             |  |                          | (39,994    | ) |      |   | (596,256   | )    |  |   | (130,815   | )
|Other assets - rental real estate held for sale                                          |  |                          | 463,345    |   |      |   | (501,414   | )    |  |   | 135,742    |  
|Accounts payable and accrued liabilities                                                 |  |                          | (101,753   | ) |      |   | 679,776    |      |  |   | (24,119    | )
|Due to related party                                                                     |  |                          | (30,077    | ) |      |   | (7,400     | )    |  |   | (34,790    | )
|Security deposits and prepaid rent                                                       |  |                          | (119,336   | ) |      |   | 108,573    |      |  |   | (110,667   | )
|Other liabilities - rental real estate held for sale                                     |  |                          | (47,581    | ) |      |   | (48,328    | )    |  |   | 131,338    |  
|                                                                                         |  |                          |            |   |      |   |            |      |  |   |            |  
|Net cash provided by operating activities                                                |  |                          | 1,679,790  |   |      |   | 582,910    |      |  |   | 2,097,513  |  
|                                                                                         |  |                          |            |   |      |   |            |      |  |   |            |  
|Cash flows from investing activities                                                     |  |                          |            |   |      |   |            |      |  |   |            |  
|Capital expenditures on rental real estate                                               |  |                          | (491,216   | ) |      |   | (94,321    | )    |  |   | (117,189   | )
|Capital expenditures on rental real estate held for sale                                 |  |                          |           |   |      |   |           |      |  |   | (61,179    | )
|Purchase of rental real estate                                                           |  |                          | (1,505,988 | ) |      |   | (4,364,731 | )    |  |   |           |  
|Purchases of land held for development                                                   |  |                          | (2,691,331 | ) |      |   |           |      |  |   |           |  
|Proceeds from sale of rental real estate                                                 |  |                          | 7,606,115  |   |      |   | 3,553,591  |      |  |   |           |  
|                                                                                         |  |                          |            |   |      |   |            |      |  |   |            |  
|Net cash provided by (used in) investing activities                                      |  |                          | 2,917,580  |   |      |   | (905,461   | )    |  |   | (178,368   | )
|                                                                                         |  |                          |            |   |      |   |            |      |  |   |            |  
|Cash flows from financing activities                                                     |  |                          |            |   |      |   |            |      |  |   |            |  
|Dividends                                                                                |  |                          | (1,121,594 | ) |      |   | (878,390   | )    |  |   | (1,610,381 | )
|Cash paid in lieu of fractional shares                                                   |  |                          |           |   |      |   | (10,052    | )    |  |   |           |  
|Proceeds from notes payable                                                              |  |                          | 1,500,000  |   |      |   | 15,020,000 |      |  |   |           |  
|Payments on notes payable secured by rental real estate                                  |  |                          | (468,601   | ) |      |   | (8,845,971 | )    |  |   | (416,233   | )
|Payments on notes payable secured by rental real estate held for sale                    |  |                          | (3,714,422 | ) |      |   | (1,531,601 | )    |  |   | (50,530    | )
|(Increase) decrease in loan origination fees                                             |  |                          | (17,624    | ) |      |   | (631,339   | )    |  |   | 33,491     |  
|                                                                                         |  |                          |            |   |      |   |            |      |  |   |            |  
|Net cash provided by (used in) financing activities                                      |  |                          | (3,822,241 | ) |      |   | 3,122,647  |      |  |   | (2,043,653 | )
|                                                                                         |  |                          |            |   |      |   |            |      |  |   |            |  
|Net increase (decrease) in cash and cash equivalents                                     |  |                          | 775,129    |   |      |   | 2,800,096  |      |  |   | (124,508   | )
|Cash and cash equivalents, beginning of year                                             |  |                          | 3,923,923  |   |      |   | 1,123,827  |      |  |   | 1,248,335  |  
|                                                                                         |  |                          |            |   |      |   |            |      |  |   |            |  
|Cash and cash equivalents, end of year                                                   |  | $                        | 4,699,052  |   |      | $ | 3,923,923  |      |  | $ | 1,123,827  |  
|                                                                                         |  |                          |            |   |      |   |            |      |  |   |            |  



See accompanying
summary of accounting policies and notes to consolidated financial statements.



---

##### Table of Contents

MEREDITH ENTERPRISES, INC.



CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

Years Ended December 31, 2003, 2002 and 2001



|                                                                          |  |              |   |  |        |       |   |                            |   |            |                                          |  |   |             |   |  |   |            |  
|------------------------------------------------------------------------- |  | ------------ | - |  | ------ | ----- | - | -------------------------- | - | ---------- | ---------------------------------------- |  | - | ----------- | - |  | - | ---------- | -
|                                                                          |  |              |   |  |        |       |   | Additional Paid-In Capital |   |            | Dividends in Excess of Retained Earnings |  |   | Total       |  
|                                                                          |  |              |   | 
|                                                                          |  | Common Stock |   |  |        |      
|                                                                          |  | Shares       |   |  | Amount |       |   |                            |  
|Balance, December 31, 2000                                                |  | 975,989      |   |  | $      | 9,760 |   |                            | $ | 26,996,890 |                                          |  | $ | (6,704,362  | ) |  | $ | 20,302,288 |  
|Net (loss)                                                                |  |             |   |  |        |      |   |                            |   |           |                                          |  |   | (2,522,159  | ) |  |   | (2,522,159 | )
|Equity contribution by affiliates through expense reimbursements (Note 5) |  |             |   |  |        |      |   |                            |   | 170,402    |                                          |  |   |            |   |  |   | 170,402    |  
|Dividends declared ($1.65 per share) (Note 1)                             |  |             |   |  |        |      |   |                            |   |           |                                          |  |   | (1,610,381  | ) |  |   | (1,610,381 | )
|                                                                          |  |              |   |  |        |       |   |                            |   |            |                                          |  |   |             |   |  |   |            |  
|Balance, December 31, 2001                                                |  | 975,989      |   |  |        | 9,760 |   |                            |   | 27,167,292 |                                          |  |   | (10,836,902 | ) |  |   | 16,340,150 |  
|Net income                                                                |  |             |   |  |        |      |   |                            |   |           |                                          |  |   | 1,058,306   |   |  |   | 1,058,306  |  
|Dividends declared ($.90 per share) (Note 1)                              |  |             |   |  |        |      |   |                            |   |           |                                          |  |   | (878,390    | ) |  |   | (878,390   | )
|Cash paid in lieu of fractional shares                                    |  | (691         | ) |  |        | (7    | ) |                            |   | (10,045    | )                                        |  |   |            |   |  |   | (10,052    | )
|                                                                          |  |              |   |  |        |       |   |                            |   |            |                                          |  |   |             |   |  |   |            |  
|Balance, December 31, 2002                                                |  | 975,298      |   |  |        | 9,753 |   |                            |   | 27,157,247 |                                          |  |   | (10,656,986 | ) |  |   | 16,510,014 |  
|Net income                                                                |  |             |   |  |        |      |   |                            |   |           |                                          |  |   | 2,442,604   |   |  |   | 2,442,604  |  
|Dividends declared ($1.15 per share) (Note 1)                             |  |             |   |  |        |      |   |                            |   |           |                                          |  |   | (1,121,594  | ) |  |   | (1,121,594 | )
|                                                                          |  |              |   |  |        |       |   |                            |   |            |                                          |  |   |             |   |  |   |            |  
|Balance, December 31, 2003                                                |  | 975,298      |   |  | $      | 9,753 |   |                            | $ | 27,157,247 |                                          |  | $ | (9,335,976  | ) |  | $ | 17,831,024 |  
|                                                                          |  |              |   |  |        |       |   |                            |   |            |                                          |  |   |             |   |  |   |            |  



See accompanying
summary of accounting policies and notes to consolidated financial statements.



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##### Table of Contents

MEREDITH ENTERPRISES, INC.



SUMMARY OF ACCOUNTING POLICIES



Business



Meredith Enterprises, Inc. (formerly West Coast Realty Investors, Inc.) was originally
organized in October 1989 under the laws of the State of Delaware. We have elected tax status as a Real Estate Investment Trust (REIT) for federal and state income tax purposes since 1991. From inception to March 31, 2002, West Coast
Realty Advisors, Inc. (WCRA) advised us and West Coast Realty Management (WCRM) (collectively, the Advisor) managed our properties. Both WCRA and WCRM are wholly-owned subsidiaries of Associated Financial Group,
Inc. The Advisor managed and oversaw our investments, subject to the direction of the board of directors, until the Advisor terminated as advisor effective March 31, 2002. On January 15, 2002, our stockholders voted to amend our bylaws to allow us
to become self-managed upon the Advisors termination. On April 1, 2002, we became self-managed and self-administered upon the Advisors termination.



As of December 31, 2003, all of our properties were located in California and Georgia, and we did not own any residential properties. Most of our leases are
triple-net leases where the tenant is responsible for maintenance, taxes and insurance, either by directly paying such costs or reimbursing us for those costs through additional rental payments.



Rental Real Estate, Rental Real Estate Held for Sale and Depreciation



Assets are stated at lower of cost or net realizable value. Depreciation is computed using
the straight-line method over the assets estimated useful lives of 31.5 to 39 years for financial reporting purposes.



In the event that facts and circumstances indicate that the cost of an asset may be impaired, an evaluation of recoverability would be performed. If an evaluation is
required, the estimated future undiscounted cash flows associated with the asset would be compared to the carrying amount to determine if a write-down to fair value is required.



Real estate classified as held for sale is stated at the lower of its carrying amount or estimated fair value less disposal
costs. Depreciation is not recorded on assets classified as held for sale. If we determine that we should no longer classify an asset should as held for sale, we recompute depreciation such that the accumulated depreciation on the asset
at the time of the reclassification is the same as if it were never classified as held for sale.



In the normal course of business, we may receive offers for sale of our properties, either solicited or unsolicited. For those offers that are accepted, the prospective buyer will usually require a due diligence
period before consummation of the transaction. It is not unusual for matters to arise that result in the withdrawal or rejection of the offer during this process. As a result, real estate is not classified as held for sale until it is
likely, in the opinion of management, that a property will be disposed of in the near term, even if sales negotiations for such property are currently under way. Properties classified as held for sale are segregated from rental real estate in our
financial statement presentation. As of December 31, 2003, there were four properties classified as held for sale, as they were listed for sale with real estate brokers and we believed there was a high likelihood of sale in the near
term. There can be no assurance that the properties held for sale will be sold in the near term, at prices we consider acceptable, or at all.



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MEREDITH ENTERPRISES, INC.



SUMMARY OF ACCOUNTING POLICIES



Rental Income, Operating Expense and Capitalized Costs



Rental revenue is recognized on a straight-line basis to the extent that
rental revenue is deemed collectible. Percentage rents in the three years ended December 31, 2003 were immaterial, and recognized when received. Improvements and betterments that increase the value of the property or extend its useful life are
capitalized.



Acquisition Costs



We expense internal acquisition costs, including any acquisition costs paid
to the Advisor, in accordance with Emerging Issues Task Force 97-11, Accounting for Internal Costs Relating to Real Estate Property Acquisitions.



Loan Origination Fees



Loan origination fees are capitalized and amortized over the life of the loan and are included in interest expense.



Cash and Cash Equivalents



We consider cash in the bank, liquid money market funds and all highly
liquid certificates of deposit, with original maturities of three months of less, to be cash and cash equivalents. We place funds in creditworthy, high-quality financial institutions. Cash and cash equivalent balances are held with various financial
institutions and at times exceeds the Federal Deposit Insurance Corporation limit of $100,000.



Consolidation



The
accompanying consolidated financial statements include the accounts of Meredith Enterprises, Inc. and other subsidiaries that hold title to individual properties. All significant intercompany balances and transactions have been eliminated in
consolidation. Included in the accompanying consolidated financial statements are the assets of wholly owned entities whose assets are not available to satisfy debts and other obligations other than those incurred by such entities.



Use of Estimates



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



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MEREDITH ENTERPRISES, INC.



SUMMARY OF ACCOUNTING POLICIES



Net Income Per Share



We calculate net income per share by dividing the net income by the weighted average number of shares outstanding for the period, adjusted retroactively for the
one-for three reverse stock split of November 15, 2002. In 2003, we granted stock options, and their dilutive effect is included in our calculation of net income per shares. We did not have any potentially dilutive securities during the years ended
December 31, 2002 and 2001.



Comprehensive Income



Statement of Financial Accounting Standards No. 130, Reporting Comprehensive
Income, as promulgated by the Financial Accounting Standards Board (FASB), establishes standards for reporting and display of comprehensive income and its components in a full set of general-purpose financial statements.
Comprehensive income is comprised of net income and all changes to stockholders equity except those due to investments by owners and distributions to owners. We do not have any components of comprehensive income in any of the years ended
December 31, 2003, 2002 and 2001, other than net income.



Reclassifications



Certain reclassifications have been made to the prior years
financial statements to conform to the presentation of the current years financial statements.



Descriptive Information About Reportable Segments



Statement of Financial Accounting Standards No. 131, Disclosures about Segments of an Enterprise and Related Information requires certain descriptive information to be provided about an enterprises
reportable segments. We have determined that we have one operating and reportable segment, rental real estate and rental real estate held for sale, which comprised 88% and 89% of our total assets at December 31, 2003 and 2002, respectively and over
99% of our total revenues (including discontinued operations) for the three years ended December 31, 2003. All the rental real estate we own is located in California and Georgia. We do not use reporting by geographic region.



All revenues are from external customers, and there are no revenues from transactions with
other segments. See Note 2 for tenants that contributed 10% or more of our total revenues for the years ended December 31, 2003, 2002 and 2001. Interest expense on debt is not allocated to individual properties, even if such debt is secured by a
specific property. There is no provision for federal or state income taxes as we are organized as a REIT and as such, there is no tax due; see Note 7.



In August 2001, the FASB issued Statement of Financial Accounting Standards No. 144 (SFAS No. 144) which supersedes SFAS No. 121, Accounting for the
impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of and amends APB No. 30, Reporting the Results of Operations- Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions. Along with establishing a single accounting model, based on the framework established in SFAS No. 121, for Long-Lived assets to be disposed of by sale, SFAS No. 144 retains the basic provisions
of APB No. 30 for the presentation of discontinued operations in the income statement but broadens the presentation to include a component of an entity. SFAS No. 144 requires operating results of properties we consider held for sale, as well as
those sold, to be



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MEREDITH ENTERPRISES, INC.



SUMMARY OF ACCOUNTING POLICIES



included in discontinued operations in our consolidated statements of earnings prospectively from the date of
adoption, which was January 1, 2002. Although the adoption of SFAS No. 144 did not have a material impact on our financial position or results of operations for the year ended December 31, 2002, it did have a significant effect on the comparability
of amounts from year to year on the consolidated statements of income.



New
Accounting Pronouncements



On May 15, 2002, we adopted Statement of
Financial Accounting Standards No. 145 (SFAS No. 145), Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections as promulgated by the Financial Accounting Standards Board
(FASN). SFAS No. 145 rescinds SFAS No. 4 and an amendment of that Statement, and SFAS No. 64. This Statement also rescinds SFAS No. 44. SFAS No. 145 amends SFAS No. 13, to eliminate an inconsistency between the required accounting for
certain lease modifications that have economic effects that are similar to sale-leaseback transactions. SFAS No. 145 also amends other existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their
applicability under changed conditions. The adoption of SFAS No. 145 did not have a material effect on our financial position or results of operations.



On January 1, 2003, we adopted Statement of Financial Accounting Standards No. 146 (SFAS No. 146), Accounting for Costs Associated with Exit or Disposal
Activities. SFAS No. 146 addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring). The adoption of SFAS No. 146 did not have a material effect on our financial position or results of operations.



On January 1, 2003, we adopted FASB Interpretation No. 45 (FIN No. 45),
Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. FIN No. 45 expands on the accounting guidance of Statements No. 5, 57, and 107 and incorporates without
change the provisions of FASB Interpretation No. 34, which is being superseded. FIN No. 45 affects leasing transactions involving residual guarantees, vendor and manufacturer guarantees, and tax and environmental indemnities. All such guarantees
will need to be disclosed in the notes to the financial statements starting with the period ending after December 15, 2002. For guarantees issued after December 31, 2002, the fair value of the obligation must be reported on the balance sheet.
Existing guarantees will be grandfathered and no fair value of the obligation of them will be recognized on the balance sheet. The adoption of FIN No. 45 did not have impact on our financial position and results of operations.



In January 2003, the FASB issued FASB Interpretation No. 46 (FIN No. 46), Consolidation
of Variable Interest Entities, an interpretation of Accounting Research Bulletin No. 51, Consolidated Financial Statements. FIN No. 46 explains how to identify variable interest entities and how an enterprise assesses its interest
in a variable entity to decide whether to consolidate that entity. FIN No. 46 requires existing unconsolidated variable interest entities to be consolidated by their primary beneficiaries if the entities do not effectively disperse risks among
parties involved. FIN No. 46 is effective immediately for variable interest entities after January 31, 2003, and to variable interest entities in which an enterprise obtained an interest after that date. FIN No. 46 applies in the first fiscal year
or interim period beginning after June 15, 2003, to variable interest entities in which an enterprise holds a variable interest that it acquired before February 1, 2003. We are in the process of assessing the effect of FIN No. 46 and do not expect
the implementation of FIN No. 46 to have a material effect on our financial statements.



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##### Table of Contents

MEREDITH ENTERPRISES, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1NET
INCOME AND DIVIDENDS PER SHARE



Dividends are declared by the board of
directors and based on a variety of factors, including the previous quarters net (loss) income from operations before depreciation and amortization, cash requirements to meet REIT distribution tests, other cash requirements and other factors
as the board of directors deems appropriate.



On November 15, 2002, we filed
our restated certificate of incorporation with the Secretary of State of Delaware, which, among other items, provided for a one-for-three reverse stock split. All share and per share amounts have been adjusted to give effect to this split.



Net income per share was computed using the weighted average number of
outstanding shares of 1,002,167, 975,989 and 975,989 (split adjusted) for the years ended December 31, 2003, 2002 and 2001, respectively. In 2003, we granted options to purchase our common stock, and the dilutive effect is included in the weighted
average shares in 2003 used to compute net income per share. There were no dilutive securities in the years ended December 31, 2002 and 2001.



The 2002 Stock Incentive Plan provides for the issuance of incentive stock options, non-qualified stock options, restricted shares and other grants. The maximum number of
shares that may be issued under the plan is 150,000. The option price may not be less than the fair market value of a share on the date that the option is granted, and the options generally vest either immediately or over two years. Our stockholders
approved and adopted the 2002 Stock Incentive Plan in September 2002. Changes in options outstanding during the twelve months ended December 31, 2003 were as follows:



|                                                          |  |                   |         |                              |   |      
|--------------------------------------------------------- |  | ----------------- | ------- | ---------------------------- | - | -----
|                                                          |  | Sharesunderoption |         | Weightedaverageexerciseprice
|Balance at the beginning of The period                    |  |                   |        |                              |   |     
|Granted                                                   |  |                   | 91,669  |                              | $ | 10.25
|Exercised                                                 |  |                   |        |                              |   |     
|Cancelled                                                 |  |                   |        |                              |   |     
|                                                          |  |                   |         |                              |   |      
|Balance at end of period                                  |  |                   | 91,669  |                              | $ | 10.25
|                                                          |  |                   |         |                              |   |      
|Exercisable                                               |  |                   | 88,960  |                              | $ | 10.25
|                                                          |  |                   |         |                              |   |      
|Shares available for future grants (beginning of year)    |  |                   | 150,000 |                              |   |      
|                                                          |  |                   |         |                              |   |      
|Shares available for future grants (end of year)          |  |                   | 58,331  |                              |   |      
|                                                          |  |                   |         |                              |   |      
|Estimated fair value of options granted during the period |  | $                 | 29,059  |                              |   |      
|                                                          |  |                   |         |                              |   |      



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MEREDITH ENTERPRISES, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



At December 31, 2003, the exercise price of shares under option was $10.25. The exercise price of all options granted
in the year ended December 31, 2003 was equal to the market price on the date of grant. The options expire in 2013, and the weighted average remaining contractual life of these options is approximately 10 years.



Pro forma information regarding net income and earnings per share required by SFAS No. 148
was determined as if we had accounted for the employee and non-employee director stock options granted in the period ended December 31, 2003 under the fair value method of that Statement. The fair value for these options was estimated as of the date
of grant using a Black-Scholes option pricing model, with the following weighted average assumptions for the twelve months December 31, 2003:



|                             |  |          |  
|---------------------------- |  | -------- | -
|Risk-free interest rate      |  | 3.90     | %
|Dividend yield               |  | 10.80    | %
|Volatility                   |  | 22.00    | %
|Weighted average option life |  | 10 years |  



The Black-Scholes option-pricing model
was developed for use in estimating the fair market value of traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, including the expected
stock price volatility. Because the above stock option plans have characteristics significantly different from those of traded options, and because, in managements opinion, changes in the subjective input assumptions can materially affect the
fair value estimate, the existing models do not necessarily provide a reliable single measure of the fair value of the above stock option plans.



For purposes of pro forma disclosures, the estimated fair value of the options is amortized over the options vesting periods. Our pro forma information, as if we
had adopted SFAS No. 123 as discussed above, follows:



|                                                                                           |  |                                     |          
|------------------------------------------------------------------------------------------ |  | ----------------------------------- | ---------
|                                                                                           |  | Twelve monthsended December 31,2003
|Net income, as reported                                                                    |  | $                                   | 2,442,604
|Less  total stock-based compensation expense determined under the fair value based method |  |                                     | 29,059   
|                                                                                           |  |                                     |          
|Pro forma net income                                                                       |  | $                                   | 2,413,545
|                                                                                           |  |                                     |          
|Net income per share:                                                                      |  |                                     |          
|Basic-as reported                                                                          |  | $                                   | 2.50     
|                                                                                           |  |                                     |          
|Basic-proforma                                                                             |  | $                                   | 2.48     
|                                                                                           |  |                                     |          
|Dilutedas reported                                                                        |  | $                                   | 2.44     
|                                                                                           |  |                                     |          
|Diluted-proforma                                                                           |  | $                                   | 2.41     
|                                                                                           |  |                                     |          



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##### Table of Contents

MEREDITH ENTERPRISES, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



The following table sets forth the computation of basic and diluted earnings per share with respect to net income:



|                                                                                |  |                                  |           |      |   |           |      |  |   |            |  
|------------------------------------------------------------------------------- |  | -------------------------------- | --------- | ---- | - | --------- | ---- |  | - | ---------- | -
|                                                                                |  | Twelve months ended December 31, |          
|                                                                                |  | 2003                             |           | 2002 |   |           | 2001 | 
|Numerator:                                                                      |  |                                  |           |      |   |           |      |  |   |            |  
|Net income (loss) from continuing operations                                    |  | $                                | 191,630   |      | $ | (101,014  | )    |  | $ | 258,048    |  
|Net income (loss) from discontinued operations                                  |  |                                  | 127,475   |      |   | 425,896   |      |  |   | (2,780,207 | )
|Gain on sale of rental real estate held for sale                                |  |                                  | 2,123,499 |      |   | 733,424   |      |  |   |           |  
|                                                                                |  |                                  |           |      |   |           |      |  |   |            |  
|Net income (loss)                                                               |  | $                                | 2,442,604 |      | $ | 1,058,306 |      |  | $ | (2,522,159 | )
|                                                                                |  |                                  |           |      |   |           |      |  |   |            |  
|Denominator for basic earnings per shares  weighted average shares             |  |                                  | 975,298   |      |   | 975,989   |      |  |   | 975,989    |  
|Effect of dilutive securities  stock options                                   |  |                                  | 26,869    |      |   |          |      |  |   |           |  
|                                                                                |  |                                  |           |      |   |           |      |  |   |            |  
|Denominator for diluted earnings per share adjusted for weighted average shares |  |                                  | 1,002,167 |      |   | 975,989   |      |  |   | 975,989    |  
|                                                                                |  |                                  |           |      |   |           |      |  |   |            |  
|Basic earnings per share:                                                       |  |                                  |           |      |   |           |      |  |   |            |  
|Net income (loss) from continuing operations                                    |  | $                                | 0.20      |      | $ | (0.10     | )    |  | $ | 0.26       |  
|Income per share from gain on sale of rental real estate held for sale          |  | $                                | 2.17      |      | $ | 0.75      |      |  |   |           |  
|Net income (loss) per share from discontinued operations                        |  | $                                | 0.13      |      | $ | 0.44      |      |  | $ | (2.85      | )
|                                                                                |  |                                  |           |      |   |           |      |  |   |            |  
|Basic earnings per share                                                        |  | $                                | 2.50      |      | $ | 1.09      |      |  | $ | (2.59      | )
|                                                                                |  |                                  |           |      |   |           |      |  |   |            |  
|Diluted earnings per share:                                                     |  |                                  |           |      |   |           |      |  |   |            |  
|Net (loss) income from continuing operations                                    |  | $                                | 0.19      |      | $ | (0.10     | )    |  | $ | 0.26       |  
|Income per share from gain on sale of rental real estate held for sale          |  | $                                | 2.12      |      | $ | 0.75      |      |  |   |           |  
|Net (loss) income per share from discontinued operations                        |  | $                                | 0.13      |      | $ | 0.44      |      |  | $ | (2.85      | )
|                                                                                |  |                                  |           |      |   |           |      |  |   |            |  
|Diluted earnings per share                                                      |  | $                                | 2.44      |      | $ | 1.09      |      |  | $ | (2.59      | )
|                                                                                |  |                                  |           |      |   |           |      |  |   |            |  



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##### Table of Contents

MEREDITH ENTERPRISES, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



The tax status of dividends per share for the years ended December 31, 2003, 2002 and 2001 follows:



|                        |  |              |      |      |   |      |  |   |     
|----------------------- |  | ------------ | ---- | ---- | - | ---- |  | - | ----
|                        |  | December 31,
|                        |  | 2003         |      | 2002 |   | 2001
|Taxable ordinary income |  | $            | 0.08 |      | $ | 0.21 |  | $ | 1.20
|Taxable capital gains   |  |              | 0.86 |      |   | 0.39 |  |   |    
|Return of capital       |  |              | 0.21 |      |   | 0.30 |  |   | 0.45
|                        |  |              |      |      |   |      |  |   |     
|                        |  | $            | 1.15 |      | $ | 0.90 |  | $ | 1.65
|                        |  |              |      |      |   |      |  |   |     



NOTE 2RENTAL REAL ESTATE



Our major categories of rental real estate are:



|                              |  |              |            |   |      |   |            |  
|----------------------------- |  | ------------ | ---------- | - | ---- | - | ---------- | -
|                              |  | December 31, |           
|                              |  | 2003         |            |   | 2002 |  
|Land                          |  | $            | 8,319,091  |   |      | $ | 9,003,326  |  
|Buildings and improvements    |  |              | 39,009,131 |   |      |   | 38,642,304 |  
|                              |  |              |            |   |      |   |            |  
|                              |  |              | 47,328,222 |   |      |   | 47,645,630 |  
|Less accumulated depreciation |  |              | (3,370,743 | ) |      |   | (2,463,398 | )
|                              |  |              |            |   |      |   |            |  
|Net rental real estate        |  | $            | 43,957,479 |   |      | $ | 45,182,232 |  
|                              |  |              |            |   |      |   |            |  



Our major categories of rental real
estate held for sale are:



|                                     |  |              |           |   |      |   |            |  
|------------------------------------ |  | ------------ | --------- | - | ---- | - | ---------- | -
|                                     |  | December 31, |          
|                                     |  | 2003         |           |   | 2002 |  
|Land                                 |  | $            | 1,747,804 |   |      | $ | 2,548,473  |  
|Buildings and improvements           |  |              | 3,181,446 |   |      |   | 6,070,089  |  
|                                     |  |              |           |   |      |   |            |  
|                                     |  |              | 4,929,250 |   |      |   | 8,618,562  |  
|Less accumulated depreciation        |  |              | (830,547  | ) |      |   | (1,173,743 | )
|                                     |  |              |           |   |      |   |            |  
|Net rental real estate held for sale |  | $            | 4,098,703 |   |      | $ | 7,444,819  |  
|                                     |  |              |           |   |      |   |            |  



In addition, we own land we are
holding for future development, valued at its cost plus development expenditures, at December 31, 2003 of $2,691,331.



During 2003, no one tenant represented 10% or more of our total rental revenue including discontinued operations, although one tenant represented 9%. In 2002 and 2001, a
portion of our rental revenue was earned from tenants whose individual rents represented more than 10% of our total rental revenue including discontinued operations. Specifically:



Four tenants accounted for 15%, 13%, 12% and 10% in 2002.

Two tenants accounted for 14% and 12% in 2001; further, one tenant accounted for over 9%.



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##### Table of Contents

MEREDITH ENTERPRISES, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 3DISCONTINUED OPERATIONS



We adopted SFAS No. 144 as of January 1, 2002 and designated seven California properties as held for sale: Fresno; Huntington Beach;
Roseville; Riverside; Vacaville; and two Sacramento properties (717 and 721 West Del Paso Road). We sold the Huntington Beach property in April 2002 and the Corona property in September 2002. We sold the Vacaville property in August 2003. On
September 30, 2003, we designated the Chino property as held for sale and removed the Roseville property from the held for sale category. In November and December 2003, we sold the Chino and Cerritos properties, respectively. As of December 31,
2003, we have designated four properties as held for sale: Fresno; Riverside and two Sacramento properties (717 and 721 West Del Paso Road). In accordance with SFAS No.144, we have restated the prior results of the properties designated as held for
sale and the properties we sold as discontinued operations for all periods presented. The results of properties included in discontinued operations for the three years ended December 31, 2003 are as follows:



|                                                                          |  |                          |           |      |   |           |  |   |            |  
|------------------------------------------------------------------------- |  | ------------------------ | --------- | ---- | - | --------- |  | - | ---------- | -
|                                                                          |  | Years ended December 31, |          
|                                                                          |  | 2003                     |           | 2002 |   | 2001      | 
|Revenues                                                                  |  |                          |           |      |   |           |  |   |            |  
|Rental                                                                    |  | $                        | 905,116   |      | $ | 1,237,921 |  | $ | 1,730,242  |  
|                                                                          |  |                          |           |      |   |           |  |   |            |  
|                                                                          |  |                          | 905,116   |      |   | 1,237,921 |  |   | 1,730,242  |  
|                                                                          |  |                          |           |      |   |           |  |   |            |  
|Cost and expenses                                                         |  |                          |           |      |   |           |  |   |            |  
|Interest                                                                  |  |                          | 547,765   |      |   | 495,730   |  |   | 559,325    |  
|General and administrative                                                |  |                          | 193       |      |   | 2,330     |  |   |           |  
|Depreciation                                                              |  |                          | 56,948    |      |   | 90,148    |  |   | 264,376    |  
|Operating                                                                 |  |                          | 132,065   |      |   | 171,678   |  |   | 216,325    |  
|Property tax                                                              |  |                          | 40,670    |      |   | 52,139    |  |   | 42,195     |  
|Impairment loss                                                           |  |                          |          |      |   |          |  |   | 3,428,228  |  
|                                                                          |  |                          |           |      |   |           |  |   |            |  
|                                                                          |  |                          | 777,641   |      |   | 812,025   |  |   | 4,510,449  |  
|                                                                          |  |                          |           |      |   |           |  |   |            |  
|Net income (loss) before gain on sale of rental real estate held for sale |  |                          | 127,475   |      |   | 425,896   |  |   | (2,780,207 | )
|Gain on sale of real estate held for sale                                 |  |                          | 2,123,499 |      |   | 733,424   |  |   |           |  
|                                                                          |  |                          |           |      |   |           |  |   |            |  
|Net income (loss) from discontinued operations                            |  | $                        | 2,250,974 |      | $ | 1,159,320 |  | $ | (2,780,207 | )
|                                                                          |  |                          |           |      |   |           |  |   |            |  



In accordance with SFAS No. 144, net
income (loss) and gain on sale of real estate for properties sold or considered held for sale after December 31, 2001 are reflected in our consolidated statements of income as discontinued operations for all periods presented and those
properties sold or considered held for sale prior to December 31, 2001 remain in continuing operations. In addition, we have determined to separately reflect the assets and liabilities of properties held for sale or sold in the current
period as Rental real estate held for sale, Other assets-rental real estate held for sale, Notes payable secured by rental real estate held for sale and Other liabilities-rental real estate held for
sale in the balance sheets for all periods presented.



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MEREDITH ENTERPRISES, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Based on appraisals, estimated disposal costs and holding periods, we determined, in conjunction with the Advisor,
that the total expected future cash flows and the ultimate disposition of certain properties were less than their carrying values at September 30, 2001. As a result, in that quarter, we recorded an impairment loss totaling $3,800,000, primarily
related to the Riverside and Vacaville properties, measured as the amount by which the carrying amount of the asset exceeded its fair value.



As of December 31, 2003, we believe the Riverside property is properly valued in our accounts. However, this value is based on the value of the property itself and the
value of the future lease payments. The lease on this property expires in September 2005, thus without an increase in the value of the property itself or a new lease, the value of the property may decrease in the future as the value of the future
lease payments decrease as the expiration of the lease is closer.



In August,
November and December 2003, we sold our Vacaville, Chino and Cerritos properties, respectively, for a net gain of $2,123,499.



In April and September 2002, we sold the Huntington Beach (Blockbuster) and Corona properties, respectively, for a gain of $733,424.



In March 2001, we received $165,053 from Bankers Standard Insurance Company
(Bankers Standard) in partial settlement of a lawsuit regarding Bankers Standards responsibility to defend us in a lawsuit related to the Riverside property. See Note 10, below. Bankers Standard is also required
to pay the subsequent costs of this action. We had previously expensed these legal costs, and as a result, the proceeds of the settlement were taken into income in March 2001.



NOTE 4FUTURE MINIMUM RENTAL INCOME



As of December 31, 2003, future minimum rental income under the existing leases for rental real estate and rental real estate held for sale that have remaining
noncancelable terms in excess of one year are as follows:



|                          |  |        |           
|------------------------- |  | ------ | ----------
|Years ending December 31, |  | Amount
|2004                      |  | $      | 6,847,862 
|2005                      |  |        | 5,839,614 
|2006                      |  |        | 4,439,946 
|2007                      |  |        | 3,699,224 
|2008                      |  |        | 2,549,530 
|Thereafter                |  |        | 12,952,959
|                          |  |        |           
|Total                     |  | $      | 36,329,135
|                          |  |        |           



Future minimum rental income does not
include lease renewals or new leases that may result after a noncancelable-lease expires.



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MEREDITH ENTERPRISES, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 5RELATED PARTY TRANSACTIONS



We acquired 2.5 acres of land in March 2003 and intend to build an approximate 30,000 square foot shopping center on the land. The firm
owned by Mr. Gary Coursey, one of our directors, provides architectural services for this project. During 2003, we paid $134,698 to Mr. Courseys firm.



We acquired the Northlake Festival Shopping Center in Atlanta, Georgia in October 2002 and paid a fee of $150,000 to Leeward Investments, LLC, which assisted us in
negotiating the transaction. Mr. Eric P. Von der Porten, formerly a director, is the manager for Leeward Investments, LLC. He was not directly involved in the negotiations.



Also in conjunction with the purchase of the Northlake Festival Shopping Center, we paid in 2002, a real estate brokerage commission of
$100,000 to Isakson-Barnhart Properties, Inc. and we have retained Isakson-Barnhart Properties, Inc. as the property manager of that shopping center. Isakson-Barnhart Properties manages over 1.0 million square feet of retail and office space in
Georgia, North Carolina and Tennessee. Mr. E. Andrew Isakson, one of our directors, is president of Isakson-Barnhart Properties, Inc. Under the property management agreement, Isakson-Barnhart Properties manages, maintains and operates the shopping
center for us. In return for its services, we pay a monthly property management fee to Isakson-Barnhart Properties equal to the greater of (a) 3% of the gross income of the property actually collected for that month or (b) $2,500. In addition, we
pay Isakson-Barnhart Properties a leasing commission, in the range of $2.00 to $4.50 per square foot depending on the size of the space and whether there is a co-broker, on new leases or expansion of current leases. We also pay a construction
maintenance fee of 5% of the total cost of tenant improvements or other construction where Isakson-Barnhart Properties supervises the project. Under this agreement, we paid a total of $239,145 and $30,334, respectively, to Isakson-Barnhart
Properties in the years ended December 31, 2003 and 2002. The agreement is renewable annually, and either party is allowed to terminate the agreement upon 30 days prior written notice to the other. In addition, Mr. Isakson owns a 50% interest
in a retail shopping center that is located adjacent to the retail shopping center.



Until March 31, 2002, we had two agreements with the Advisor to provide advice on investments and to administer our the day-to-day operations including property management  the Amended and Restated Advisory Agreement dated July 1,
2001 and the Amended and Restated Property Management Agreement dated July 1, 1998. Both agreements were terminated effective March 31, 2002, and since April 1, 2002, we have been fully self-administered and self-managed. During 2001, we reimbursed
$24,000 in overhead expenses and expensed $170,402 in advisory fees earned by WCRA. WCRA waived the collection of these fees and that amount is included in additional paid in capital. In addition, WCRM earned $182,342 in management fees in 2001.



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MEREDITH ENTERPRISES, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



At December 31, 2003 and 2002, the Advisor and its affiliates owned 7,584 of our shares, less than 1% of our
outstanding shares. Two of our directors are also officers or directors of the Advisor or its affiliates. As of December 31, 2002, we had an account payable to a subsidiary of the Advisor for $30,077.



NOTE 6NOTES PAYABLE



Notes payable consist of the following:



|                                                                                                                                                                                                                                                                                                                                  |  |              |            |      |   |           
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ---------- | ---- | - | ----------
|                                                                                                                                                                                                                                                                                                                                  |  | December 31,
|                                                                                                                                                                                                                                                                                                                                  |  | 2003         |            | 2002
|Notes payable secured by rental real estate:                                                                                                                                                                                                                                                                                      |  |              |            |      |   |           
|                                                                                                                                                                                                                                                                                                                                  |  |             
|6.97% promissory note secured by our Folsom property, monthly principal and interest payments of $32,567 due September 1, 2009 with a balloon
payment of $4,479,793.                                                                                                                                                              |  | $            | 4,846,690  |      | $ | 4,897,784 
|Variable rate interest only promissory note secured by our Garden Grove property (Banco Popular) and land we hold for development in Garden
Grove. The note bears interest rate at prime plus 1.25% (5.25% At December 31, 2003) and is due in March 18, 2004. In March 2004, we extended the term of this note to June 18, 2004. |  |              | 1,500,000  |      |   |          
|6.97% promissory note secured by our Irvine property, monthly principal and interest payments of $25,105 due September 1, 2009 with a balloon
payment of $3,453,364.                                                                                                                                                              |  |              | 3,736,196  |      |   | 3,775,583 
|7.64% promissory note secured by our Atlanta, GA property (Northlake Festival Shopping Center), monthly principal and interest payments of
$124,753 fully amortizing with the final payment due December 1, 2027. Starting December 2010, year 13 of the note, the interest rate increases to a minimum of 9.64%.                 |  |              | 16,444,541 |      |   | 16,675,547



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MEREDITH ENTERPRISES, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 6 NOTES PAYABLE  continued



|                                                                                                                                                                                                                               |  |              |  |           
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------ |  | ----------
|                                                                                                                                                                                                                               |  | December 31,
|                                                                                                                                                                                                                               |  | 2003         |  | 2002      
|7.50% promissory note secured by a deed of trust on the Ontario property, monthly principal and interest payments are $22,390, due March 1,
2004. This loan was paid off in March 2004.                                        |  | 2,773,414    |  | 2,828,898 
|8.33% promissory note secured by a Deed of Trust on the Roseville property, monthly principal and interest payments are $11,510 due July 1,
2008. At December 31, 2002, we classified this property as held for sale.          |  | 1,334,083    |  |          
|6.97% promissory note secured by our Sacramento property (Horn Road), monthly principal and interest payments of $11,276 due September 1, 2009
with a balloon payment of $1,551,049.                                           |  | 1,678,080    |  | 1,695,770 
|6.97% promissory note secured by our Tustin property, monthly principal and interest payments of $30,677 due September 1, 2009 with a balloon
payment of $4,219,765.                                                           |  | 4,565,365    |  | 4,613,493 
|7.50% promissory note secured by a deed of trust on the Cerritos property, monthly principal and interest payments are $9,238, due April 1,
2011. We sold this property in December 2003.                                      |  |             |  | 1,178,062 
|7.50% promissory note secured by a Deed of Trust on the Chino property, monthly principal and interest payments are $6,836, due October 1,
2010. We sold this property in November 2003.                                       |  |             |  | 863,316   
|                                                                                                                                                                                                                               |  |              |  |           
|Subtotal  notes payable secured by rental real estate                                                                                                                                                                         |  | 36,878,369   |  | 36,528,453
|                                                                                                                                                                                                                               |  |              |  |           
|Notes payable secured by rental real estate held for sale:                                                                                                                                                                     |  |              |  |           
|                                                                                                                                                                                                                               |  |             
|8.25% promissory note secured by a Deed of Trust on the Fresno property, monthly principal and interest payments are $5,244 due August 1,
2004.                                                                                |  | 529,520      |  | 548,052   
|8.25% promissory note secured by a Deed of Trust on the Riverside property, monthly principal and interest payments are $9,116, due November
8, 2004.                                                                          |  | 1,078,627    |  | 1,096,970 
|8.00% promissory note secured by a Deed of Trust on the Sacramento property (Java City 721 West Del Paso Road), monthly principal and interest
payments are $3,126, due June 1, 2018. This loan was paid off in February 2003. |  |             |  | 329,503   



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MEREDITH ENTERPRISES, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 6 NOTES PAYABLE  continued



|                                                                                                                                                                                                                              |  |              |            |      |   |           
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ---------- | ---- | - | ----------
|                                                                                                                                                                                                                              |  | December 31,
|                                                                                                                                                                                                                              |  | 2003         |            | 2002
|7.50% promissory note secured by a Deed of Trust on the Vacaville property, monthly principal and interest payments are $10,346, due October
1, 2010. We sold this property in August 2003.                                   |  |              |           |      |   | 1,306,664 
|8.33% promissory note secured by a Deed of Trust on the Roseville property, monthly principal and interest payments are $11,510 due July 1,
2008. At December 31, 2003, we classified this property as an operating property. |  |              |           |      |   | 1,359,897 
|                                                                                                                                                                                                                              |  |              |            |      |   |           
|Subtotal  notes payable secured by rental real estate held for sale                                                                                                                                                          |  |              | 1,608,147  |      |   | 4,641,086 
|                                                                                                                                                                                                                              |  |              |            |      |   |           
|Total notes payable                                                                                                                                                                                                           |  | $            | 38,486,516 |      | $ | 41,169,539
|                                                                                                                                                                                                                              |  |              |            |      |   |           



The aggregate fair value of the notes
is approximately $40,800,000 and $43,000,000 for 2003 and 2002 respectively, based on current lending rates, which are the approximate industry lending rates on these types of properties and these locations.



Many of our notes payable contain significant penalties should we pay the loan prior to its
scheduled maturity. Some of these notes also contain cross collateral provisions where the note holder has security rights against properties other than the primary property securing the note.



The aggregate annual future maturities at December 31, 2003 of notes payable secured by
rental real estate and notes payable secured by rental real estate held for sale are as follows:



|                          |  |        |           
|------------------------- |  | ------ | ----------
|Years ending December 31, |  | Amount
|2004                      |  | $      | 6,326,280 
|2005                      |  |        | 478,922   
|2006                      |  |        | 515,761   
|2007                      |  |        | 555,443   
|2008                      |  |        | 1,765,563 
|Thereafter                |  |        | 28,844,547
|                          |  |        |           
|Total                     |  | $      | 38,486,516
|                          |  |        |           



NOTE 7TAXES ON INCOME



We have elected to be taxed as a REIT under Sections
856-860 of the Internal Revenue Code of 1986, as amended (the Code) for federal income tax purposes. This requires, among a number of other organizational and operational requirements, that we distribute at least 90% of our taxable
income (excluding capital gains) to our stockholders. In addition, California and Georgia, the states in which we



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MEREDITH ENTERPRISES, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



own and operate real estate properties have provisions equivalent to the federal REIT provisions. Accordingly, no
provision has been made for federal or state income taxes in the accompanying financial statements.



As of December 31, 2003, the gross basis in our assets for financial reporting purposes was approximately $3,300,000 lower than our basis for federal income tax purposes (unaudited).



NOTE 8SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION



A supplemental disclosure of cash flow information follows:



|                                                                                                        |  |                          |           |      |   |            |  |   |          
|------------------------------------------------------------------------------------------------------- |  | ------------------------ | --------- | ---- | - | ---------- |  | - | ---------
|                                                                                                        |  | Years ended December 31,
|                                                                                                        |  | 2003                     |           | 2002 |   | 2001      
|Cash paid during the period for interest                                                                |  | $                        | 3,086,935 |      | $ | 1,768,330  |  | $ | 1,513,085
|                                                                                                        |  |                          |           |      |   |            |  |   |          
|Supplemental disclosure of non-cash financing activities:                                               |  |                          |           |      |   |            |  |   |          
|Assumption of loan                                                                                      |  |                          |          |      | $ | 16,730,601 |  |   |         
|                                                                                                        |  |                          |           |      |   |            |  |   |          
|Equity contributed by an affiliate through expense reimbursement                                        |  |                          |          |      |   |           |  | $ | 170,402  
|                                                                                                        |  |                          |           |      |   |            |  |   |          
|Supplemental disclosure of non-cash investing activities:                                               |  |                          |           |      |   |            |  |   |          
|Transfer of assets to rental real estate held for sale                                                  |  | $                        | 4,036,290 |      |   |           |  | $ | 5,402,842
|                                                                                                        |  |                          |           |      |   |            |  |   |          
|Transfer of assets from rental real estate held for sale to rental real estate                          |  | $                        | 1,842,841 |      |   |           |  |   |         
|                                                                                                        |  |                          |           |      |   |            |  |   |          
|Transfer of assets to other assets -rental real estate held for sale                                    |  | $                        | 85,419    |      |   |           |  | $ | 88,401   
|                                                                                                        |  |                          |           |      |   |            |  |   |          
|Transfer of assets from other assets -rental real estate held for sale to other assets                  |  | $                        | 194,201   |      |   |           |  |   |         
|                                                                                                        |  |                          |           |      |   |            |  |   |          
|Transfer of liabilities to other liabilities -rental real estate held for sale                          |  | $                        | 38,947    |      |   |           |  | $ | 109,401  
|                                                                                                        |  |                          |           |      |   |            |  |   |          
|Transfer of liabilities from other liabilities -rental real estate held for sale to other liabilities   |  | $                        | 23,773    |      |   |           |  |   |         
|                                                                                                        |  |                          |           |      |   |            |  |   |          
|Transfer of liabilities to notes payable secured by rental real estate held for sale                    |  | $                        | 2,041,380 |      |   |           |  | $ | 3,556,260
|                                                                                                        |  |                          |           |      |   |            |  |   |          
|Transfer of liabilities from notes payable secured by rental real estate held for sale to notes payable |  | $                        | 1,359,897 |      |   |           |  |   |         
|                                                                                                        |  |                          |           |      |   |            |  |   |          
|Transfer of lessees assets to us in satisfaction of account receivable                                 |  |                          |          |      |   |           |  | $ | 287,036  
|                                                                                                        |  |                          |           |      |   |            |  |   |          



Reconciliation of cash used to
purchase the Northlake Festival Shopping Center in 2002 follows:



|                             |  |   |           
|---------------------------- |  | - | ----------
|Cash paid                    |  | $ | 4,364,731 
|Loan assumed                 |  |   | 16,730,601
|                             |  |   |           
|Balance at December 31, 2002 |  | $ | 21,095,332
|                             |  |   |           



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MEREDITH ENTERPRISES, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 9RETIREMENT PLAN



In 2003, we established a defined contribution retirement plan covering all employees with more than three months of continuous full-time
employment. In addition to employee elective deferrals, in 2003, we matched 100% of the employees deferral up to 3% of the employees compensation. The aggregate amount contributed and recognized as expense was $1,900 for the year ended
December 31, 2003.



NOTE 10COMMITMENTS AND CONTINGENCIES



We purchased the Northlake Festival Shopping Center in October 2002 and
assumed the existing ground lease. The ground lease expires in October 2057, and any improvements on the property revert back to the ground lessor. The ground lease provides for fixed rent and additional rent calculated on 7% of the gross rents
received from tenants. The fixed rent may escalate based on appraisals, with the following limitations:



|                             |  |                                                                                                                        
|---------------------------- |  | -----------------------------------------------------------------------------------------------------------------------
|January 2003  October 2007  |  | Fixed at $600,000 per year                                                                                             
|November 2007  October 2032 |  | Subject to appraisal, but not less than $600,000 per year, nor more than $1,200,000 per year                           
|November 2032  October 2057 |  | Subject to appraisal, but not less than nor more than twice amount payable for the period November 2007 to October 2032



We have entered into a employment
agreements with our President and Chief Executive Officer and Chief Financial Officer under which we would be obligated to make severance payments to either or both of them upon their termination or resignation for certain reasons, of one
years salary plus bonus, if any.



We are a defendant in a lawsuit
entitled John Lonberg & Ruthee Goldkorn v. Sanborn Theaters, Inc., a California Corporation Doing Business as Marketplace Cinema and So-Cal Cinema, Inc., a California Corporation; and Salts-Troutman-Kaneshiro, Inc., West Coast Realty Investors,
Inc., USDC Central District of California, Eastern Division Case No. CV-97-6598AHM (JGx). This is an Americans with Disabilities Act claim brought against the Market Place Cinema, our property located in Riverside. We own the theater and have leased
it to Sanborn Theaters, Inc., which operates it. Plaintiffs allege certain features of the theater discriminated against them and violated state and federal disabled access laws. Plaintiffs demand statutory damages, damages for emotional distress, a
lodestar multiplier, attorneys fees and punitive damages. Although Plaintiffs have not quantified their damages, we expect that Plaintiffs claims will exceed $300,000. The United States Department of Justice has intervened in this
suit. This case has now been stayed pending the outcome of a similar case filed against AMC Theaters. We cannot determine the likelihood of an unfavorable outcome or range of potential loss, if any. We believe we have complied with all applicable
provisions of law and intend to vigorously defend the allegations contained in the lawsuit. We believe that the lawsuit will not have a material impact on our continuing operations or overall financial condition.



The tenant in our Ontario property, Adelphia Communications, Inc. has filed for bankruptcy
protection. Presently, the rent is current. Certain companies have claimed amounts due for remodeling work and



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MEREDITH ENTERPRISES, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



other work ordered by Adelphia on our property. These companies have filed mechanics liens on our property. We have
not yet determined the validity of these liens, and there may be defenses to these claims. If our lease with Adelphia is affirmed in the bankruptcy proceeding, then Adelphia would be responsible for the discharge of these claims. If our lease with
Adelphia is not affirmed in the bankruptcy proceeding, and the bankruptcy proceedings do not fully pay these creditors, then we would be responsible for these claims to the extent they are valid, if at all. We believe that these liens will not have
a material impact on our continuing operations or overall financial condition.



NOTE 11UNAUDITED PRO FORMA FINANCIAL INFORMATION



The
following unaudited pro forma information is presented to illustrate the effect of the acquisition of the Northlake Festival Shopping Center in Atlanta, Georgia, as if the acquisition occurred on January 1stof 2001. Further incorporated into this pro forma financial information is the effect of the refinancing of four loans totaling approximately $8,500,000 into
four new loans totaling $15,020,000 to fund the excess of the Northlake Festival purchase price over the existing secured note payable we assumed. The unaudited pro forma information is not necessarily indicative of the results that would have been
obtained had the properties been acquired earlier, nor is it intended to be indicative of future results.



|                                                                                        |  |                          |           |      |   |           |  |   |            |  
|--------------------------------------------------------------------------------------- |  | ------------------------ | --------- | ---- | - | --------- |  | - | ---------- | -
|                                                                                        |  | Years ended December 31, |          
|                                                                                        |  | 2003                     |           | 2002 |   | 2001      | 
|Revenues                                                                                |  |                          |           |      |   |           |  |   |            |  
|Rental                                                                                  |  | $                        | 7,700,407 |      | $ | 7,325,106 |  | $ | 7,550,781  |  
|Interest                                                                                |  |                          | 10,244    |      |   | 40,973    |  |   | 53,063     |  
|                                                                                        |  |                          |           |      |   |           |  |   |            |  
|                                                                                        |  |                          | 7,710,651 |      |   | 7,366,079 |  |   | 7,603,844  |  
|                                                                                        |  |                          |           |      |   |           |  |   |            |  
|Cost and expenses                                                                       |  |                          |           |      |   |           |  |   |            |  
|Interest                                                                                |  |                          | 2,624,149 |      |   | 2,559,945 |  |   | 2,754,433  |  
|General and administrative                                                              |  |                          | 1,458,872 |      |   | 1,261,057 |  |   | 705,265    |  
|Depreciation                                                                            |  |                          | 1,028,510 |      |   | 905,561   |  |   | 934,380    |  
|Ground rent                                                                             |  |                          | 922,698   |      |   | 923,283   |  |   | 930,895    |  
|Operating                                                                               |  |                          | 984,393   |      |   | 923,812   |  |   | 1,002,511  |  
|Property tax                                                                            |  |                          | 500,399   |      |   | 489,845   |  |   | 470,044    |  
|Impairment loss                                                                         |  |                          |          |      |   |          |  |   | 371,772    |  
|                                                                                        |  |                          |           |      |   |           |  |   |            |  
|                                                                                        |  |                          | 7,519,021 |      |   | 7,063,503 |  |   | 7,169,300  |  
|                                                                                        |  |                          |           |      |   |           |  |   |            |  
|Net income (loss) from operations                                                       |  |                          | 191,630   |      |   | 302,576   |  |   | 434,544    |  
|Insurance recovery from lawsuit                                                         |  |                          |          |      |   |          |  |   | 165,053    |  
|                                                                                        |  |                          |           |      |   |           |  |   |            |  
|Net income (loss) before gain on sale of rental real estate and discontinued operations |  |                          | 191,630   |      |   | 302,576   |  |   | 599,597    |  
|Discontinued operations:                                                                |  |                          |           |      |   |           |  |   |            |  
|Gain on sale of rental real estate held for sale                                        |  |                          | 2,123,499 |      |   | 733,424   |  |   |           |  
|Impairment loss                                                                         |  |                          |          |      |   |          |  |   | (3,428,228 | )
|Income from operations                                                                  |  |                          | 127,475   |      |   | 425,896   |  |   | 648,021    |  
|                                                                                        |  |                          |           |      |   |           |  |   |            |  
|Net income (loss)                                                                       |  | $                        | 2,442,604 |      | $ | 1,461,896 |  | $ | (2,180,611 | )
|                                                                                        |  |                          |           |      |   |           |  |   |            |  
|Net income (loss) per sharebasic:                                                      |  |                          |           |      |   |           |  |   |            |  
|Net income (loss) before gain on sale of rental real estate and discontinued operations |  | $                        | 0.20      |      | $ | 0.31      |  | $ | 0.61       |  
|Discontinued operations:                                                                |  |                          |           |      |   |           |  |   |            |  
|Gain on sale of rental real estate held for sale                                        |  | $                        | 2.17      |      | $ | 0.75      |  |   |           |  
|Other income (loss)                                                                     |  | $                        | 0.13      |      | $ | 0.44      |  | $ | (2.85      | )
|                                                                                        |  |                          |           |      |   |           |  |   |            |  
|Net income (loss) per share                                                             |  | $                        | 2.50      |      | $ | 1.50      |  | $ | (2.24      | )
|                                                                                        |  |                          |           |      |   |           |  |   |            |  
|Net income (loss) per share assuming dilution:                                         |  |                          |           |      |   |           |  |   |            |  
|Net income (loss) before gain on sale of rental real estate and discontinued operations |  | $                        | 0.19      |      | $ | 0.31      |  | $ | 0.61       |  
|Discontinued operations:                                                                |  |                          |           |      |   |           |  |   |            |  
|Gain on sale of rental real estate held for sale                                        |  | $                        | 2.12      |      | $ | 0.75      |  |   |           |  
|Other income (loss)                                                                     |  | $                        | 0.13      |      | $ | 0.44      |  | $ | (2.85      | )
|                                                                                        |  |                          |           |      |   |           |  |   |            |  
|Net income (loss) per share                                                             |  | $                        | 2.44      |      | $ | 1.50      |  | $ | (2.24      | )
|                                                                                        |  |                          |           |      |   |           |  |   |            |  



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##### Table of Contents

MEREDITH ENTERPRISES, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 12QUARTERLY FINANCIAL DATA (UNAUDITED)



Quarterly summary financial information follows:



For the year ending December 31, 2003:

|                                               |  |             |           |   |             |   |             |  |   |             |   |  |   |           |  
|---------------------------------------------- |  | ----------- | --------- | - | ----------- | - | ----------- |  | - | ----------- | - |  | - | --------- | -
|                                               |  | 1st Quarter |           |   | 2nd Quarter |   | 3rd Quarter |  |   | 4th Quarter |  
|Total revenue                                  |  | $           | 1,884,363 |   |             | $ | 1,851,223   |  | $ | 1,862,964   |   |  | $ | 2,112,101 |  
|Net (loss) income                              |  | $           | (35,750   | ) |             | $ | 86,191      |  | $ | 347,595     |   |  | $ | 2,044,568 |  
|Net (loss) income per share, assuming dilution |  | $           | (0.04     | ) |             | $ | 0.08        |  | $ | 0.36        |   |  | $ | 2.04      |  
|                                               |  |             |           |  
|For the year ending December 31, 2002:         |  |             |           |   |             |   |             |  |   |             |   |  |   |           |  
|                                               |  | 1st Quarter |           |   | 2nd Quarter |   | 3rd Quarter |  |   | 4th Quarter |  
|Total revenue                                  |  | $           | 738,657   |   |             | $ | 709,596     |  | $ | 716,492     |   |  | $ | 1,804,136 |  
|Net income (loss)                              |  | $           | 281,571   |   |             | $ | 439,479     |  | $ | 343,464     |   |  | $ | (6,208    | )
|Net income per share, assuming dilution        |  | $           | 0.29      |   |             | $ | 0.45        |  | $ | 0.35        |   |  | $ | 0.00      |  
|                                               |  |             |           |  
|For the year ending December 31, 2001:         |  |             |           |   |             |   |             |  |   |             |   |  |   |           |  
|                                               |  | 1st Quarter |           |   | 2nd Quarter |   | 3rd Quarter |  |   | 4th Quarter |  
|Total revenue                                  |  | $           | 737,572   |   |             | $ | 724,959     |  | $ | 713,339     |   |  | $ | 716,635   |  
|Net income (loss)                              |  | $           | 478,471   |   |             | $ | 311,973     |  | $ | (3,454,975  | ) |  | $ | 142,372   |  
|Net income (loss) per share, assuming dilution |  | $           | 0.49      |   |             | $ | 0.32        |  | $ | (3.54       | ) |  | $ | 0.14      |  



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##### Table of Contents

MEREDITH ENTERPRISES, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 13  SUBSEQUENT EVENTS



On January 20, 2004, the board of directors declared a dividend of $0.25 per common share to holders of record on February 4, 2004, payable
on February 18, 2004.



On February 10, 2004, we granted options to purchase
53,335 shares of our common stock to employees and directors at the then market price of $16.00 per share.



On March 2, 2004, we paid the balance due of $2,764,432, pursuant to its terms on our loan secured by our Ontario property.



In March 2004, we extended the due date on the loan secured by our Banco Popular property for three months to June 18, 2004 at the same variable interest rate and
interest only payment schedule.



We have extended the term of the lease on the
two Sacramento properties (Java City) to July 31, 2004, under the same terms, when we expect the tenant to move out and stop paying rent.



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##### Table of Contents

|ITEM 9. |  | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|------- |  | ------------------------------------------------------------------------------------



None.



|ITEM 9A. |  | DISCLOSURE CONTROLS AND PROCEDURES
|-------- |  | ----------------------------------



As of December 31, 2003, the end of the fiscal year covered by this report, we carried out an evaluation, under the supervision and with the participation of our
management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as defined in the Exchange Act Rule 13a-15(e). Based on the foregoing, our Chief Executive Officer and
Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2003.



The design of any system of controls and procedures is based in part upon certain assumptions about the likelihood of future events. There can be no assurance that any
design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.



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##### Table of Contents

PART III



|ITEM 10. |  | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
|-------- |  | --------------------------------------------------



Our directors, their ages and their principal business occupation for the last five years are as follows:



|                                                                             |  |       |  |                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|---------------------------------------------------------------------------- |  | ----- |  | ------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Name                                                                         |  | Age * |  | Term                |  | Position and Experience                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Class II Directors - term expires on the 2004 Annual Meeting of Stockholders |  |      
|                                                                             |  |       | 
|James P. Moore                                                               |  | 48    |  | August 2001-Present |  | Director. In 2002, Mr. Moore founded Moore Associates, LLC, a Southern California based real estate investment and development firm. Prior to forming Moore Associates, Mr. Moore was an officer
of Banc One Capital Markets, Inc. (previously First Chicago) for 17 years. His most recent responsibilities were as Senior Vice President and Regional Manager, running the Western Division of the National  Large Corporate Department. As head
of the office, his responsibilities included managing the team responsible for all banking and investment banking products, advice and services for large corporations headquartered in the 11 Western states. Mr. Moore spent a total of 13 years of his
career in real estate financial services, including five years as the head of the Western Division of the Real Estate Department for First Chicago. Mr. Moore holds a B.S. in Business Administration (Finance and Real Estate) from the University of
Southern California.
|                                                                             |  |       | 
|Gary B. Coursey                                                              |  | 64    |  | June 2003-Present   |  | Director. Mr. Coursey has been the President of Gary B. Coursey and Associates, Inc. since its founding in 1971. He is a member of the American Institute of Architects and has over 30 years of
experience in architecture, interior design and space planning. Mr. Courseys work has been recognized with numerous awards. Mr. Coursey has a Bachelors degree in Architecture from the Georgia Institute of Technology and an A.S. in
Building Construction from Southern Polytechnic State University.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              



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|                                                                              |  |    |  |                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|----------------------------------------------------------------------------- |  | -- |  | ------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Class III Directors - term expires on the 2005 Annual Meeting of Stockholders |  |   
|                                                                              |  |    | 
|Allen K. Meredith                                                             |  | 54 |  | August 2001-Present |  | Mr. Meredith was appointed to his current positions of Chairman of the Board, President and Chief Executive Officer in August 2001. Prior to joining our company, Mr. Meredith had over 23 years
of experience in the real estate business. Since 1994, Mr. Meredith has served as President and Chief Executive officer of Meredith Partners, where he specialized in acquiring, rehabilitating and managing suburban office and industrial commercial
properties in California, including the recent acquisition and rehabilitation of the one million square-foot former Firestone Tire manufacturing facility in Los Angeles. From 1991 to 1994, Mr. Meredith was President and Chief Executive Officer of
the Northwest Region of Trammell Crow Company, a real estate development company, where he oversaw property development, acquisition and disposition, facility and construction management, and leasing and property management for 33.1 million square
feet of high-rise, office, shopping center and industrial properties. Mr. Meredith has an M.B.A. from Harvard University and a B.A. in Economics from Stanford University.
|                                                                              |  |    | 
|Patricia F. Meidell                                                           |  | 63 |  | August 2001-Present |  | Director. Ms. Meidell is the President of American Retirement Planners since 1996. She is a Certified Financial Planner and NASD Registered Principal with Associated Securities Corp. and a
Director of Associated Financial Group, Inc. She earned her first securities license in 1972 and has owned a financial services business since 1982. She received her B.S. from Idaho State University, an M.S. from the University of Arizona, and she
has done post-graduate work in counseling.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                              |  |    | 
|Neal E. Nakagiri                                                              |  | 49 |  | August 2001-Present |  | Director. Mr. Nakagiri was appointed Chief Executive Officer and President of Associated Financial Group, Inc. (AFG) in January 2000. Mr. Nakagiri is also a director of AFG. He is
President of two wholly owned subsidiaries of AFG  Associated Securities Corp., a general securities broker-dealer and SEC registered investment advisor, and Associated Planners Investment Advisory, Inc., an SEC-registered investment advisor.
He is a member of the State Bar of California and the Compliance and Legal Division of the Securities Industry Association. He is registered as a general securities, financial, options and municipal securities principal. Mr. Nakagiri serves on the
SIA Independent Firms committee and the NASD National Adjudicatory Council. Mr. Nakagiri has a B.A. degree in Economics from the University of California at Los Angeles and a J.D. from Loyola Law School of Los Angeles.                                                                                                                                                                                                                     



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|                                                                            |  |    |  |                        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--------------------------------------------------------------------------- |  | -- |  | ---------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Class I Directors - term expires on the 2006 Annual Meeting of Stockholders |  |   
|                                                                            |  |    | 
|E. Andrew Isakson                                                           |  | 51 |  | September 2002-Present |  | Director. Mr. Isakson has served as one of our directors since September 2002. Mr. Isakson has served as President of Isakson-Barnhart Properties, Inc. (and predecessor companies) since 1982 and
is General Partner of Isakson-Barnhart Development Co., LLC. He has over 25 years of experience in commercial real estate in Atlanta and the Southeast developing, owning and managing office and retail space. Currently, Isakson-Barnhart Properties
manages over 1.0 million square feet of retail and office space in Georgia, North Carolina and Tennessee. Isakson-Barnhart Development Co., LLC has developed over 2.2 million square feet of retail space its inception. Mr. Isakson has been a licensed
real estate broker since 1974 and received a B.A. from Vanderbilt University.
|                                                                            |  |    | 
|John H. Redmond                                                             |  | 62 |  | August 2001-Present    |  | Director. Mr. Redmond has been active as a real state advisor for over 30 years. From 1995 to the present, Mr. Redmond has served as President of John H. Redmond, Real Property Advisors, a real
estate consulting firm in San Francisco. Prior to 1995, Mr. Redmond was associated with Coldwell Banker & Company, Grubb & Ellis Real Estate Services and was a founder of The Rubicon Group. Mr. Redmond has a B.A. from the University of
Scranton and an M.S. from Boston University.                                                                                                                                                                                                                                                                                                       

---

|* | Age at March 12, 2004
|- | ---------------------



There are no family relationships among our directors or executive officers. All of our directors terms will expire at the Annual Meeting of Stockholders indicated, or upon their resignation or removal, if
earlier.



We have two executive officers: Allen K. Meredith, whose biographical
and business information is provided above, and Charles P. Wingard, our Chief Financial Officer, Vice President and Secretary.



Mr. Wingard, 46, was appointed to his current position as Secretary, Vice President and Chief Financial Officer of the Company in July 2002. From October 2001 to July
2002, he was Vice President and Acting Chief Financial Officer. From August 2000 to September 2001, Mr. Wingard served as senior vice president and Chief Financial Officer of VelocityHSI, Inc. a publicly traded provider of high-speed Internet
services to the apartment industry that was spun-off from BRE Properties, Inc. in August 2000. In August 2001, VelocityHSI, Inc. filed for protection under Chapter 7 of the U.S. Bankruptcy Code. From August 1996 to August 2000, Mr. Wingard was Vice
President and Director of Financial Reporting for BRE Properties, Inc., a publicly traded real estate investment trust with over $1.5 billion in assets, where he was responsible for securities filings and compliance, loan administration and
financial reporting. Mr. Wingard is a Certified Public Accountant and holds a B.S. in Accounting and Finance from the University of California, Berkeley.



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##### Table of Contents

Code of Business Conduct and Ethics



As described in Item 1, Business  Our Policies for Investment, Financing and Conflicts of Interest, we have adopted a Code of Business
Conduct and Ethics and have posted it on our corporate website, www.meredithreit.com.



Audit Committee



The audit committee of
our board of directors is composed of John H. Redmond (its chair), Patricia F. Meidell and James P. Moore. The board of directors has determined that Mr. Moore is an audit committee financial expert and is independent as that
term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act of 1934.



Section 16 Beneficial Ownership Reporting Compliance



Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers, and persons who own more than ten percent of a registered class of our equity securities, to file initial reports of
ownership and reports of changes in ownership of common stock and our other equity securities with the SEC and to provide us with copies of these filings. To our knowledge, based solely on a review of the copies of such reports furnished to us and
written representations that no other reports were required during the year ended December 31, 2003, each of our officers, directors and greater than ten percent beneficial owners who are obligated to file certain reports under Section 16(a) of the
1934 Act complied with the applicable filing requirements.



|ITEM 11. |  | EXECUTIVE COMPENSATION
|-------- |  | ----------------------



Summary Compensation Table



The following table summarizes the compensation paid to our Chief Executive Officer and our sole officer other than our Chief Executive Officer whose salary and bonus
exceeded $100,000 or would exceed $100,000 on an annualized basis. We refer to the executive officers listed below as the Named Executive Officers.



|                              |  |                     |  |              |  |             |  |            
|----------------------------- |  | ------------------- |  | ------------ |  | ----------- |  | -----------
|                              |  | Annual Compensation
|Name and Principal Position   |  | Year                |  | Salary($)(1) |  | Bonus($)(2) |  | Other($)(3)
|Allen K. Meredith             |  | 2003                |  | 200,000      |  | 30,000      |  | 1,000      
|President and Chief Executive |  | 2002                |  | 200,000      |  | 20,000      |  |           
|Officer                       |  | 2001                |  | 88,204       |  |            |  |           
|                              |  |                     |  |             
|Charles P. Wingard            |  | 2003                |  | 125,000      |  | 18,750      |  | 625        
|Vice President and Chief      |  | 2002                |  | 125,000      |  | 12,500      |  |           
|Financial Officer             |  | 2001                |  | 20,821       |  |            |  |           

---

|(1) | For 2001, represents salary from August 2001 for Mr. Meredith and October 2001 for Mr. Wingard. Also, for Mr. Meredith, includes $25,000 in consulting fees paid in 2002 for
consulting work prior to becoming an employee and for Mr. Wingard, includes $1,350 of income from consulting.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Paid in following year for prior year performance.
|--- | --------------------------------------------------

|(3) | Consists of our contribution to the retirement plan.
|--- | ----------------------------------------------------



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##### Table of Contents

Option Grants



The following table provides information concerning each grant of stock options to the named executive officers during the year ended December 31, 2003:



|                   |  |                                                   |  |                                                          |   |                           |                             |       |                |        |                  |   |       
|------------------ |  | ------------------------------------------------- |  | -------------------------------------------------------- | - | ------------------------- | --------------------------- | ----- | -------------- | ------ | ---------------- | - | ------
|                   |  | Option Grants in Last Fiscal Year                 |  |                                                         
|                   |  | Number of SecuritiesUnderlying OptionsGranted (#) |  | Percent ofTotal OptionsGranted toEmployees inFiscal Year |   |                           | Exercise orBase Price($/Sh) |       | ExpirationDate |        | Grand Date Value
|Name               |  |                                                   |  |                                                          |   | Grant DatePresent Value $
|                   |  |                                                   |  |                                                          |  
|Allen K. Meredith  |  | 66,667                                            |  | 78                                                       | % |                           | $                           | 10.25 |                | 3/3/13 |                  | $ | 21,133
|                   |  |                                                   |  |                                                          |  
|Charles P. Wingard |  | 16,667                                            |  | 20                                                       | % |                           | $                           | 10.25 |                | 3/3/13 |                  | $ | 5,283 



The following table provides
information regarding the exercisability of options and the number of options held by the named executive officers who have been granted stock options, as of December 31, 2003:



Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option Values



|                   |  |                               |  |                  |  |                                                                           |  |                                                                  |  |             |         |               |  
|------------------ |  | ----------------------------- |  | ---------------- |  | ------------------------------------------------------------------------- |  | ---------------------------------------------------------------- |  | ----------- | ------- | ------------- | -
|                   |  |                               |  |                 
|                   |  | SharesAcquired onExercise (#) |  | ValueRealized($) |  | Number of Securities Underlying Unexercised Optionsat Fiscal Year End (#) |  | Value of Unexercised In-the-Money Options at Fiscal Year End ($)
|Name               |  |                               |  |                  |  | Exercisable                                                               |  | Unexercisable                                                    |  | Exercisable |         | Unexercisable
|                   |  |                               |  |                  |  |                                                                          
|Allen K. Meredith  |  |                              |  |                 |  | 66,667                                                                    |  |                                                                 |  | $           | 283,335 |               | 
|                   |  |                               |  |                  |  |                                                                          
|Charles P. Wingard |  |                              |  |                 |  | 16,667                                                                    |  |                                                                 |  | $           | 70,835  |               | 



Employment Contracts and
Termination of Employment and Change in Control Arrangements



Mr. Allen K. Meredith



Effective August 22, 2001, and amended and restated on March 21, 2002, we entered into an employment agreement with Allen K. Meredith to serve as our Chairman of the
Board of Directors, President and Chief Executive Officer for an initial term of one year, with automatic renewal on a year-to-year basis thereafter unless terminated in accordance with its terms. Certain material terms of this agreement follows:



Base Salary. Mr. Meredith currently receives a base salary of
$200,000. The base salary will be subject to negotiation yearly.



Annual
Cash Bonus. Mr. Meredith shall be eligible to receive an annual cash bonus in an amount, if any, to be determined in the sole discretion of the board of directors.



Stock Options.Mr. Meredith shall be granted an option to purchase 66,667 shares of our common stock at an exercise price equal to
the fair market value per share on the date of grant. After one year of service, 33,334 of the shares subject to his option shall vest in full and the remaining 33,333 shares shall vest at a rate of 25% per quarter thereafter, provided Mr. Meredith
continues to provide services to us. These options were granted on March 3, 2003 with vesting dates calculated as if the options had been granted on August 22, 2001.



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##### Table of Contents

Certain Severance Benefits. If, at any time during any automatic one-year renewal period, the employment of Mr.
Meredith is terminated, he shall be entitled to receive the benefits described below.



Termination Other Than In Connection with a Change in Control:



Termination by Us Without Cause or by Mr. Meredith for Good Reason. If Mr. Meredith is terminated Without Cause or Mr. Meredith
terminates for Good Reason, he will a receive a lump sum payment equal to his then-annual base salary plus an amount equal to the average of his annual bonus over the most recent three years, if any.



Termination Due to Death or Disability.Upon
termination due to death or disability, Mr. Meredith or his estate will receive all salary accrued but unpaid to the date of termination.



Voluntary Termination or Termination for Cause. Mr. Meredith may resign at any time upon 30 days written notice. Upon voluntary
termination without Good Reason or if we terminate Mr. Meredith for Cause, no further compensation will be payable to Mr. Meredith



Termination Following a Change in Control.If Mr. Meredith is terminated or resigns within one year from a Change in Control, he will receive a lump sum payment
equal to his then base salary plus an amount equal to the average of his annual bonus over the most recent three years, if any.



Mr. Charles P. Wingard



Effective April 7, 2003, we entered into an employment agreement with Charles P. Wingard to serve as our Chief Financial Officer. Mr. Wingards agreement is substantially identical to Mr. Merediths
agreement other than Mr. Wingards salary is $125,000 per year and Mr. Wingard received 16,667 options to purchase our common stock



Audit Committee



The audit committee of our board of directors is composed of John H. Redmond (its chair), Patricia F. Meidell and James P. Moore. The board has determined that Mr. Moore is an audit committee financial
expert and is independent as that term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act of 1934.



Compensation Committee Interlocks and Insider Participation in Compensation Decisions



Directors John H. Redmond and James P. Moore serve as our compensation and stock option committee. Neither of them was during 2003, or at
any previous time, an officer or employee of Meredith Enterprises, Inc. Neither of them has engaged in any transaction required to be disclosed in Item 13, Certain Relationships and Related Transactions. In 2004, the independent directors evaluated
our 2003 performance.



Other Compensation-Related Information



We have established a 401(k) retirement plan in 2003. In addition, we did
not make any equity-based grants, such as options or SARs, in 2002, and no options were outstanding until our board of directors granted options to Mr. Meredith and Mr. Wingard on March 3, 2003 as described below.



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##### Table of Contents

Our independent directors receive $500 for each board meeting they attend in person, $200 for each telephonic meeting and
$200 for each committee meeting attended, except for Mr. Isakson and Mr. Coursey, who receive $500 per meeting due to the cost of travel from his business location. During 2003, we paid a total of $8,000 to our non-employee directors, exclusive of
reimbursements for expenses. Mr. Nakagiri and Ms. Meidell declined to accept fees for their service on the board of directors.



|ITEM 12. |  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|-------- |  | --------------------------------------------------------------



Equity Compensation Plan Information



The following table sets forth equity compensation plan information at December 31, 2003.



|                                                           |  |                                                                                          |  |                                                                          |       |                                                            |       
|---------------------------------------------------------- |  | ---------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------ | ----- | ---------------------------------------------------------- | ------
|Plan Category                                              |  | Number of securitiesto be issued upon exercise ofoutstanding options,warrants and rights |  | Weighted averageexercise price ofoutstanding options,warrants and rights |       | Number of securitiesremaining availablefor future issuance
|Equity compensation plans approved by security holders     |  | 91,669                                                                                   |  | $                                                                        | 10.25 |                                                            | 58,331
|                                                           |  |                                                                                          | 
|Equity compensation plans not approved by security holders |  | N/A                                                                                      |  |                                                                          | N/A   |                                                            | N/A   
|                                                           |  |                                                                                          |  |                                                                          |       |                                                            |       
|Total                                                      |  | 91,669                                                                                   |  | $                                                                        | 10.25 |                                                            | 58,331
|                                                           |  |                                                                                          |  |                                                                          |       |                                                            |       



The following table sets forth, as of
March 12, 2004 information regarding the shares of our common stock beneficially owned by each person who is known by the to own beneficially more than 5% of the common stock, by each director, by each named executive officer and by all directors
and executive officers as a group. The amounts shown are based on information provided by the individuals named.



|                                         |  |                                            |      |  |                                 |  
|---------------------------------------- |  | ------------------------------------------ | ---- |  | ------------------------------- | -
|Name and Address of Beneficial Owner (1) |  | Amount andNature ofBeneficialOwnership (2) |      |  | PercentageBeneficiallyOwned (2) |  
|Allen K. Meredith                        |  | 211,223                                    | (3)  |  | 20.1                            | %
|Kim. Meredith                            |  | 124,223                                    | (4)  |  | 12.7                            | %
|Meredith I LLC                           |  | 124,223                                    | (5)  |  | 12.7                            | %
|Gary B. Coursey                          |  | 1,667                                      | (6)  |  | *                               |  
|E. Andrew Isakson                        |  | 3,334                                      | (7)  |  | *                               |  
|Patricia F. Meidell                      |  | 2,166                                      | (8)  |  | *                               |  
|James P. Moore                           |  | 4,834                                      | (9)  |  | *                               |  
|Neal E. Nakagiri                         |  | 7,584                                      | (10) |  | *                               |  
|John H. Redmond                          |  | 3,334                                      | (7)  |  | *                               |  
|Charles P. Wingard                       |  | 19,167                                     | (11) |  | 1.9                             | %
|                                         |  |                                            |      |  |                                 |  
|Directors and officers as a group (12)   |  | 253,309                                    |      |  | 23.4                            | %
|                                         |  |                                            |      |  |                                 |  

---

|* | Less than 1%
|- | ------------



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##### Table of Contents

|(1) | The business address for each of these individuals is c/o Meredith Enterprises, Inc., 3000 Sand Hill Road, Building 2, Suite 120, Menlo Park, CA 94025.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | To our knowledge, the persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to
community property laws where applicable. Share amount and percentage figures are rounded to the nearest whole number. Percentage figures are based upon 975,298 shares of common stock outstanding as of March 12, 2004.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | For Mr. Meredith, includes 12,000 shares he owns directly, and 75,000 shares that may be purchased upon the exercise of stock options that are currently exercisable or that will
become exercisable on or before May 11, 2004 and 124,223 shares held by Meredith I LLC, where he is co-manager.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | For Mrs. Meredith, includes 124,223 shares held by Meredith I LLC, where she is co-manager.
|--- | -------------------------------------------------------------------------------------------

|(5) | For Meredith I LLC, includes 124,223 shares where Mr. and Mrs. Meredith are co-managers.
|--- | ----------------------------------------------------------------------------------------

|(6) | For Mr. Coursey, includes 1,667 shares that may be purchased upon the exercise of stock options that are currently exercisable or that will become exercisable on or before May 11,
2004.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | For Messers. Isakson and Redmond, includes 3,334 shares that may be purchased upon the exercise of stock options that are currently exercisable or that will become exercisable on or
before May 11, 2004.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | For Ms. Meidell, includes 499 shares she owns directly and 1,667 shares that may be purchased upon the exercise of stock options that are currently exercisable or that will become
exercisable on or before May 11, 2004.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(9) | For Mr. Moore, includes 1,500 shares he owns directly and 3,334 shares that may be purchased upon the exercise of stock options that are currently exercisable or that will become
exercisable on or before May 11, 2004.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10) | For Mr. Nakagiri, includes shares held by the Advisor and its affiliates. Mr. Nakagiri does not own any shares directly.
|---- | ------------------------------------------------------------------------------------------------------------------------

|(11) | For Mr. Wingard, includes 19,167 shares that may be purchased upon the exercise of stock options that are currently exercisable or that will become exercisable on or before May 11,
2004.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(12) | Includes 107,503 shares that may be purchased upon the exercise of stock options that are currently exercisable or that will become exercisable on or before May 11, 2004.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ITEM 13. |  | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
|-------- |  | ----------------------------------------------



We acquired 2.5 acres of land in March 2003 and intend to build an approximate 30,000 square foot shopping center on the land. Mr. Gary Coursey, one of our directors,
provides architectural services for this project and during 2003 and through March 12, 2004, we paid $183,967 to Mr. Courseys firm.



We have retained Isakson-Barnhart Properties, Inc. as the property manager of our Northlake Festival shopping center. Isakson-Barnhart Properties manages over 1.0 million
square feet of retail and office space in Georgia, North Carolina and Tennessee. Mr. E. Andrew Isakson, one of our directors, is president of Isakson-Barnhart Properties, Inc. Under the property management agreement, Isakson-Barnhart Properties
manages, maintains and operates the shopping center for us. In return for its services, we pay a monthly property management fee to Isakson-Barnhart Properties equal to the greater of (a) 3% of the gross income of the property actually collected for
that month or (b) $2,500. In addition, we pay Isakson-Barnhart Properties a leasing commission, in the range of $2.00 to $4.50 per square foot depending on the size of the space and whether there is a co-broker, on new leases or expansion of current
leases. We also pay a construction maintenance fee of 5% of the total cost of tenant improvements or other construction where Isakson-Barnhart Properties supervises the project. Under this agreement, we paid a total of $239,145 to Isakson-Barnhart
Properties in the year ended December 31, 2003 and $34,581 through March 12, 2004. The agreement is renewable annually, and either party is allowed to terminate the agreement upon 30 days prior written notice to the other. In addition, Mr.
Isakson owns a 50% interest in a retail shopping center that is located adjacent to the retail shopping center.



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##### Table of Contents

|ITEM 14. |  | PRINCIPAL ACCOUNTING FEES AND SERVICES
|-------- |  | --------------------------------------



Audit Fees. The aggregate fees billed by BDO Seidman, LLP for professional services rendered for the audit of our annual financial statements for the fiscal year
ended December 31, 2003, and for the reviews of the financial statements included in our Quarterly Reports on Form 10-Q for the first, second and third quarters of that fiscal year, were $103,160. For the year ended December 31, 2002, the aggregate
fees billed by BDO Seidman for professional services rendered for the audit of our annual financial statements for the fiscal year ended December 31, 2002, and for the reviews of the financial statements included in our Quarterly Reports on Form
10-Q for that fiscal year, were $78,635.



Audit Related Fees. BDO
Seidman billed no fees for professional services rendered that were reasonably related to the performance of the audit of our 2003 and 2002 financial statements, but which were not reported in the previous paragraph.



Tax Fees. For the fiscal year ended December 31, 2003, the aggregate fees billed by
BDO Seidman for professional services rendered related to tax compliance, tax advice and tax planning were $16,295. For the year ended December 31, 2002, the aggregate fees billed by BDO Seidman for professional services rendered related to tax
compliance, tax advice, and tax planning were $9,800. In each year, these tax-related fees were for preparing tax returns and providing tax advice for the classification of the dividend for reporting to stockholders.



All Other Fees. The aggregate fees billed by BDO Seidman for services rendered to us
for the fiscal year ended December 31, 2003, other than for the services described in the foregoing paragraphs, were $0. The aggregate fees billed by BDO Seidman for services rendered to us for the fiscal year ended December 31, 2002, other than for
the services described in the foregoing paragraphs were $6,000. These other fees relate primarily to audit activities related to properties we acquired in 2002.



Policy on Audit Committee Pre-Approval of Audit and Non-Audit Services of Independent Auditor



Our audit committee pre-approval guidelines with respect to pre-approval of audit and non-audit services are summarized below.



General. The audit committee is required to pre-approve the audit and non-audit
services performed by the independent auditor in order to assure that the provision of such services does not impair the auditors independence. Unless a type of service to be provided by the independent auditor has received general
pre-approval, it will require specific pre-approval by the audit committee. Any proposed services exceeding pre-approved cost levels requires specific pre-approval by the audit committee.



Audit Services. The annual audit services engagement terms and fees are subject to the specific pre-approval of the audit committee.
In addition to the annual audit services engagement specifically approved by the audit committee, the audit committee has granted general pre-approval for other audit services, which are those services that only the independent auditor reasonably
can provide.



Audit-related Services. Audit-related services are
assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and that are traditionally performed by the independent auditor. The audit committee believes that the provision of
audit-related services does not impair the independence of the auditor.



Tax
Services. The audit committee believes that the independent auditor can provide tax services to us, such as tax compliance, tax planning and tax advice without impairing the auditors independence. The audit committee will not permit the
retention of the independent auditor in connection with a transaction initially recommended by the independent auditor, the purpose of which may be tax avoidance and the tax treatment of which may not be supported in the Internal Revenue Code and
related regulations.



All Other Services. The audit committee has
granted pre-approval to those permissible non-audit services classified as all other services that it believes are routine and recurring services, and would not impair the independence of the auditor.



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##### Table of Contents

PART IV



|ITEM 15. |  | EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
|-------- |  | ---------------------------------------------------------------



|    |  |    |  |                                                                                                      |  |     
|--- |  | -- |  | ---------------------------------------------------------------------------------------------------- |  | ----
|(a) |  | 1. |  | FINANCIAL STATEMENTS                                                                                
|    |  |    |  | The following financial statements of Meredith Enterprises, Inc, are included in Part II, Item 8:    |  |     
|    |  |    | 
|    |  |    |  |                                                                                                      |  | Page
|    |  |    | 
|    |  |    |  | Report of Independent Certified Public Accountants                                                   |  | 40  
|    |  |    | 
|    |  |    |  | Consolidated Balance Sheets - December 31, 2003 and 2002                                             |  | 41  
|    |  |    | 
|    |  |    |  | Consolidated Statements of Income for the years ended December 31, 2003, 2002 and 2001               |  | 42  
|    |  |    | 
|    |  |    |  | Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2002 and 2001           |  | 43  
|    |  |    | 
|    |  |    |  | Consolidated Statements of Stockholders Equity for the years ended December 31, 2003, 2002 and 2001 |  | 44  
|    |  |    | 
|    |  |    |  | Summary of Accounting Policies                                                                       |  | 45  
|    |  |    | 
|    |  |    |  | Notes to Consolidated Financial Statements                                                           |  | 49  
|    |  |   
|    |  | 2. |  | FINANCIAL STATEMENT SCHEDULES                                                                       
|    |  |    | 
|    |  |    |  | Schedule IIIReal Estate and Accumulated Depreciation                                                |  | 82  



| |  | All other schedules have been omitted because they are either not required, not applicable or the information has been otherwise supplied.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------



|(b) | REPORTS ON FORM 8-K
|--- | -------------------



| |  | On October 1, 2003, we filed a Current Report on Form 8-K reporting under Item 5 concerning the status of a tenant that declared bankruptcy in our Fresno property. No financial
statements were filed.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | On October 1, 2003, we filed a Current Report on Form 8-K reporting under Item 5 concerning press release describing the dividend declared by our board of directors on September 30,
2003. No financial statements were filed.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | On November 12, 2003, we filed a Current Report on Form 8-K reporting under Item 5 concerning the status of a tenant in bankruptcy in our Ontario property and that the loan secured
by this property matures in March 2004. No financial statements were filed.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | On November 16 2003, we filed a Current Report on Form 8-K reporting under Item 5 concerning the sale of our Chino property. No financial statements were filed.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | On December 10, 2003 we filed a Current Report Form 8-K under Item 5 concerning the possible sale of our Cerritos property. No financial statements were filed.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | On December 30, 2003 we filed a Current Report Form 8-K under Item 5 concerning the sale of our Cerritos property. No financial statements were filed.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

|(c) | EXHIBITS
|--- | --------



INDEX TO EXHIBITS



|               |  |                                                                                                                                                                                                                                                                               
|-------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Description of Exhibit                                                                                                                                                                                                                                                        
|               | 
|3.1.1          |  | Restated Certificate of Incorporation (incorporated by reference to our Report on Form 10-K dated March, 31,2003).                                                                                                                                                            
|               | 
|3.1.2          |  | Certificate of Ownership and Merger merging Meredith Enterprises Inc. with and into West Coast Realty Investors, Inc. (incorporated by reference to our Report on Form 10-Q dated August 8,
2003).                                                                            
|               | 
|3.2            |  | Amended and Restated Bylaws dated November 15, 2002. (Incorporated by reference to Exhibit 3.2.6 to our Annual Report on Form 10-K for the year ended December 31, 2002).                                                                                                     
|               | 
|4.1            |  | Share Certificate (incorporated by reference to Exhibit 4.1 to our Report on Form 10-Q dated March 31, 2003).                                                                                                                                                                 
|               | 
|10.1.1         |  | Agreement to Purchase Property (6491 Edinger Avenue, Huntington Beach, California) incorporated by reference to our registration Statement on Form S-11, File No. 33-32466).                                                                                                  
|               | 
|10.1.2         |  | Lease Re: Property (6491 Edinger Avenue, Huntington Beach, California) incorporated by reference to our Registration Statement on Form S-11, File No. 33-32466).                                                                                                              
|               | 
|10.1.3         |  | Internal Revenue Service Ruling (6491 Edinger Avenue, Huntington Beach, California) incorporated by reference to our Registration Statement on Form S-11, File No. 33-32466).                                                                                                 
|               | 
|10.2.1         |  | Real Estate Purchase Agreement between K & I Associates and West Coast Realty Investors, Inc. dated March 1, 1993. (Incorporated by reference to Exhibit 10.13 to our Current Report on
Form 8-K dated May 5, 1994).                                                          
|               | 
|10.2.2         |  | Leases re: Fresno Property. (Incorporated by reference to Exhibit 10.13.1 to our Current Report on Form 8-K dated May 5, 1994).                                                                                                                                               
|               | 
|10.3.1         |  | Agreement of Purchase and Sale of Real Property and Escrow Instructions Between Birtcher Riverside Market Place Properties, Ltd. and West Coast Realty Investors, Inc. (Incorporated by
reference to Exhibit 10.14 to our Current Report on Form 8-K dated November 29, 1994).



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##### Table of Contents

|               |  |                                                                                                                                                                                                                                                                                                   
|-------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Description of Exhibit                                                                                                                                                                                                                                                                            
|               | 
|10.3.2         |  | Riverside Market Place Lease and Assignment thereof (Incorporated by reference to Exhibit 10.14.1 to our Current Report on Form 8-K dated November 29, 1994).                                                                                                                                     
|               | 
|10.3.3         |  | Exhibits to Agreement of Purchase and Sale of Real Property and Escrow Instructions Between Birtcher Riverside Market Place Properties and West Coast Realty Investors, Inc. (Incorporated by
reference to Exhibit 10.14.2 to our Current Report on Form 8-K dated November 29, 1994, as amended).
|               | 
|10.3.4         |  | Appraisal for Riverside Market Place Property. (Incorporated by reference to Exhibit 10.14.2 to Our Current Report on Form 8-K dated November 29, 1994, as amended).                                                                                                                              
|               | 
|10.4.1         |  | Purchase and Sale Contract between BRS-Tustin Safeguard Associates and West Coast Realty Investors, Inc. (Incorporated by reference to Exhibit 10.15 to Our Current Report on Form 8-K dated
May 22, 1995).                                                                                       
|               | 
|10.4.2         |  | Standard Industrial Lease - Net between BRS-Tustin Safeguard Associates and Safeguard Business Systems, Inc. (Incorporated by reference to Exhibit 10.15.1 to Our Current Report on Form 8-K
dated May 22, 1995).                                                                                 
|               | 
|10.4.3         |  | Loan Assignment and Assumption Agreement between BRS-Tustin Safeguard Associates, West Coast Realty Investors, Inc. and Businessmens Assurance Company of America (Incorporated by
reference to Exhibit 10.15.2 to Our Current Report on Form 8-K dated May 22, 1995).                           
|               | 
|10.4.4         |  | Appraisal of Safeguard Business Systems Property (Incorporated by reference to Exhibit 10.15.3 to Our Current Report on Form 8-K dated May 22, 1995).                                                                                                                                             
|               | 
|10.5.1         |  | Agreement of Purchase and Sale and Joint Escrow Instructions for 717 and 721 West Del Paso Road (with exhibits) (Incorporated by reference to Exhibit 1 to Our Current Report on Post-effective
Amendment No. 1 dated October 1, 1996).                                                           
|               | 
|10.5.2         |  | Standard Industrial Lease-Net dated April 10, 1989 (as amended) on 717 West Del Paso Road (Incorporated by reference to Exhibit 1 to Our Current Report on Post-effective Amendment No. 1 dated
October 1, 1996).                                                                                 
|               | 
|10.5.3         |  | Guarantee of a portion of the Rent on 717 West Del Paso Road (Incorporated by reference to Exhibit 2 to Our Current Report on Post-effective Amendment No. 1 dated October 1,
1996).                                                                                                              
|               | 
|10.5.4         |  | An Appraisal of An Office/Industrial Facility at 717 and 721 West Del Paso Road, Sacramento, California, dated June 5, 1996 (Incorporated by reference to Exhibit 3 to Our Current Report on
Post-effective Amendment No. 1 dated October 1, 1996).                                               
|               | 
|10.6.1         |  | Purchase and Sale Contract dated November 18, 1996 between West Coast Realty Investors and Shidler West Investment Corporation (Incorporated by reference to Exhibit 1 to Our Current Report on
Form 8-K dated January 17, 1997).                                                                 



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##### Table of Contents

|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Description of Exhibit                                                                                                                                                                                                                                                                                                                                                                                                          
|               | 
|10.6.2         |  | Appraisal Report for an Office/Industrial Facility at 17862 Fitch Street, Irvine, California. (Incorporated by reference to Exhibit 2 to Our Current Report on Form 8-K dated January 17,
1997).                                                                                                                                                                                                                                
|               | 
|10.6.3         |  | Commercial lease between Tycom Corporation and Shidler West Investment Corporation dated December 18, 1996. (Incorporated by reference to Exhibit 3 to Our Current Report on Form 8-K dated
January 17, 1997).                                                                                                                                                                                                                  
|               | 
|10.6.4         |  | Promissory note secured by deed of trust dated January 9, 1997, including Rider to Promissory Note, secured by deed of trust on property at 17862 Fitch Street, Irvine. (Incorporated by
reference to Exhibit 4 to Our Current Report on Form 8-K dated January 17, 1997).                                                                                                                                                      
|               | 
|10.7           |  | Amended and Restated Advisory Agreement dated July 1, 2001 (incorporated by reference to our proxy statement dated September 11, 2001).                                                                                                                                                                                                                                                                                         
|               | 
|10.8           |  | Employment Agreement dated August 22, 2001 as revised March 21, 2002 between the Company and Allen K. Meredith (incorporated by reference to our Report on Form 10-K dated December 31, 2001).
(1)                                                                                                                                                                                                                              
|               | 
|10.9           |  | Form of indemnification agreement (incorporated by reference to our Report on Form 10-Q dated June 30, 2002).                                                                                                                                                                                                                                                                                                                   
|               | 
|10.10          |  | Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing for the Folsom Property (incorporated by reference to our Report on Form 10-Q dated September 30, 2002).
(2)                                                                                                                                                                                                                               
|               | 
|10.11          |  | Deed of Trust Note for the Folsom Property (incorporated by reference to our Report on Form 10-Q dated September 30, 2002). (2)                                                                                                                                                                                                                                                                                                 
|               | 
|10.12          |  | Schedule of material terms of Loans secured by the Irvine, Sacramento (Horn Road) and Tustin properties in the Form of Exhibits 10.15 and 10.16 (incorporated by reference to our Report on
Form 10-Q dated September 30, 2002). (2)                                                                                                                                                                                            
|               | 
|10.13          |  | Leasehold Deed to Secure Debt and Security Agreement between BSRT/M&J Northlake Limited Partnership and General Electric Capital Corporation dated November 12, 1997, Loan Agreement
between General Electric Capital Corporation and BSRT/M&J Northlake Limited Partnership dated November 12, 1997 and Promissory Noted dated November 12, 1997(incorporated by reference to our Report on Form 10-K dated December 31,
2002).



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##### Table of Contents

|               |  |                                                                                                                                                                                                                                                                                                                                                                                               
|-------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Description of Exhibit                                                                                                                                                                                                                                                                                                                                                                        
|               | 
|10.14          |  | Ground Lease Agreement between Cox Communications, Inc. and Crow-Atlanta Retail, LTD. dated October 4, 1982, Amendment to Ground Lease Agreement dated April 27, 1983, Second amendment to
Ground Lease Agreement dated December 24, 1983 and Third amendment to Ground Lease Agreement dated October 15, 2002 (incorporated by reference to our Report on Form 10-K dated December 31, 2002).
|               | 
|10.15          |  | Lease dated February 1, 2003 between Ford Land Company, LLC and West Coast Realty Investors, Inc. (incorporated by reference to our Report on Form 10-Q dated March 31, 2003).                                                                                                                                                                                                                
|               | 
|10.16          |  | Employment Agreement dated April 7, 2003 between the Company and Charles P. Wingard (incorporated by reference to our Report on Form 10-Q dated June 30, 2003). (1)                                                                                                                                                                                                                           
|               | 
|10.17          |  | Meredith Enterprises, Inc. 2002 Stock Incentive Plan (amended and restated June 3, 2003) (incorporated by reference to our Report on Form 10-Q dated June 30, 2003).                                                                                                                                                                                                                          
|               | 
|21             |  | Subsidiaries of the Registrant                                                                                                                                                                                                                                                                                                                                                                
|               | 
|23.1           |  | Consent of BDO SEIDMAN, LLP                                                                                                                                                                                                                                                                                                                                                                   
|               | 
|31.1           |  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes- Oxley Act of 2002                                                                                                                                                                                                                                                                                           
|               | 
|31.2           |  | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes- Oxley Act of 2002                                                                                                                                                                                                                                                                                           
|               | 
|32.1           |  | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes- Oxley Act of 2002                                                                                                                                                                                                                                                                                           
|               | 
|32.2           |  | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes- Oxley Act of 2002                                                                                                                                                                                                                                                                                           

---

|(1) | Compensation arrangement.
|--- | -------------------------

|(2) | Pursuant to Item 601(b)(2) of Regulation S-K, the registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the Commission upon request.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



---

##### Table of Contents

SIGNATURES



Pursuant to the
requirements of the 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.



|                     |  |  |  |                                             
|-------------------- |  |  |  | --------------------------------------------
|Date: March 25, 2004 |  |  |  | Meredith Enterprises, Inc.                  
|                     |  |  |  | (formerly West Coast Realty Investors, Inc.)



By:

/s/ Allen K. Meredith(Chairman of the Board of Directors, President and Chief Executive Officer




POWER OF
ATTORNEY



KNOW ALL PERSONS BY THESE PRESENTS, that each
person whose signature appears below constitutes and appoints jointly and severally, Allen K. Meredith and Charles P. Wingard, and each one of them, his attorneys-in-fact, each with the power of substitution, for him in any and all capacities, to
sign any and all amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each said
attorney-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.



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



|                     |  |                                                                                          
|-------------------- |  | -----------------------------------------------------------------------------------------
|Date: March 25, 2004 |  | /s/ Allen K. Meredith                                                                    
|                     |  | ALLEN K. MEREDITH                                                                        
|                     |  | (Chairman of the Board of Directors, President and Chief Executive Officer)              
|                     | 
|Date: March 25, 2004 |  | /s/ Charles P. Wingard                                                                   
|                     |  | CHARLES P. WINGARD                                                                       
|                     |  | (Vice President/ Treasurer, Principal Financial Officer and Principal Accounting Officer)
|                     | 
|Date: March 25, 2004 |  | /s/ E. Andrew Isakson                                                                    
|                     |  | E. ANDREW ISAKSON (Director)                                                             
|                     | 
|Date: March 25, 2004 |  | /s/ Gary B. Coursey                                                                      
|                     |  | GARY B. COURSEY (Director)                                                               



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##### Table of Contents

|                     |  |                               
|-------------------- |  | ------------------------------
|Date: March 25, 2004 |  | /s/ Patricia F. Meidell       
|                     |  | PATRICIA F. MEIDELL (Director)
|                     | 
|Date: March 25, 2004 |  | /s/ James P. Moore            
|                     |  | JAMES P. MOORE (Director)     
|                     | 
|Date: March 25, 2004 |  | /s/ Neal E. Nakagiri          
|                     |  | NEAL E. NAKAGIRI (Director)   
|                     | 
|Date: March 25, 2004 |  | /s/ John H Redmond            
|                     |  | JOHN H. REDMOND (Director)    



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##### Table of Contents

MEREDITH ENTERPRISES, INC.



|SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | DECEMBER 31, 2003
|------------------------------------------------------- | -----------------



|                                                                    |  |              |            |              |   |                                         |  |                                               |            |            |                          |                         |  |   |                     |  |              |            |                                             |   |            |  |   |            |   |  |      |  |       |  |     
|------------------------------------------------------------------- |  | ------------ | ---------- | ------------ | - | --------------------------------------- |  | --------------------------------------------- | ---------- | ---------- | ------------------------ | ----------------------- |  | - | ------------------- |  | ------------ | ---------- | ------------------------------------------- | - | ---------- |  | - | ---------- | - |  | ---- |  | ----- |  | ----
|                                                                    |  |              |            | Initial Cost |   | Costcapitalizedsubsequentto acquisition |  | Gross Amount at whichcarried at end of period |            | Total Cost |                          | AccumulatedDepreciation |  |   | Date ofConstruction |  | DateAcquired |            | Life (years)on whichdepreciationis computed
|Description                                                         |  | Encumbrances |            | Land         |   | Building andImprovements                |  |                                               | Land       |            | Building andImprovements |                         |  |   |                     | 
|Rental real estate:                                                 |  |              |            |              |   |                                         |  |                                               |            |            |                          |                         |  |   |                     |  |              |            |                                             |   |            |  |   |            |   |  |      |  |       |  |     
|Light Industrial Bldg., Folsom                                      |  | $            | 4,846,690  |              | $ | 1,105,977                               |  | $                                             | 4,904,978  |            |                          |                         |  | $ | 1,105,977           |  | $            | 4,904,978  |                                             | $ | 6,010,955  |  | $ | (565,945   | ) |  | 1984 |  | 5/99  |  | 39.0
|Office Building, Garden Grove                                       |  |              | 1,500,000  |              |   | 440,000                                 |  |                                               | 1,065,988  |            |                          |                         |  |   | 440,000             |  |              | 1,065,988  |                                             |   | 1,505,988  |  |   | (13.666    | ) |  | 1967 |  | 6/03  |  | 39.0
|Light Industrial Bldg., Irvine                                      |  |              | 3,736,196  |              |   | 1,570,000                               |  |                                               | 3,337,441  |            |                          |                         |  |   | 1,570,000           |  |              | 3,337,441  |                                             |   | 4,907,441  |  |   | (693,341   | ) |  | 1978 |  | 1/97  |  | 39.0
|Retail Shopping Center, Atlanta, Georgia                            |  |              | 16,444,541 |              |   |                                        |  |                                               | 21,095,322 |            | $                        | 424,371                 |  |   |                    |  |              | 21,519,693 |                                             |   | 21,519,693 |  |   | (676,138   | ) |  | 1982 |  | 10/02 |  | 39.0
|Light Industrial Bldg., Ontario                                     |  |              | 2,773,414  |              |   | 2,636,728                               |  |                                               | 1,978,236  |            |                          |                         |  |   | 2,636,728           |  |              | 1,978,236  |                                             |   | 4,614,964  |  |   | (228,253   | ) |  | 1997 |  | 1/99  |  | 39.0
|Restaurant Facility, Roseville                                      |  |              | 1,334,083  |              |   | 594,025                                 |  |                                               | 1,382,459  |            |                          |                         |  |   | 594,025             |  |              | 1,382,459  |                                             |   | 1,976,484  |  |   | (213,401   | ) |  | 1997 |  | 10/97 |  | 39.0
|Light Industrial Bldg., (Horn Road) Sacramento *                    |  |              | 1,678,080  |              |   | 1,068,000                               |  |                                               | 1,073,200  |            |                          | 161,175                 |  |   | 882,565             |  |              | 1,048,038  |                                             |   | 1,930,603  |  |   | (149,792   | ) |  | 1976 |  | 1/98  |  | 39.0
|Office Building, Tustin                                             |  |              | 4,565,365  |              |   | 1,089,796                               |  |                                               | 3,772,298  |            |                          |                         |  |   | 1,089,796           |  |              | 3,772,298  |                                             |   | 4,862,094  |  |   | (830,207   | ) |  | 1986 |  | 5/95  |  | 39.0
|                                                                    |  |              |            |              |   |                                         |  |                                               |            |            |                          |                         |  |   |                     |  |              |            |                                             |   |            |  |   |            |   |  |      |  |       |  |     
|Subtotal - Rental real estate                                       |  | $            | 36,878,369 |              | $ | 8,504,536                               |  | $                                             | 38,609,922 |            | $                        | 585,546                 |  | $ | 8,319,091           |  | $            | 39,009,131 |                                             | $ | 47,328,222 |  | $ | (3,370,743 | ) |  |      |  |       |  |     
|                                                                    |  |              |            |              |   |                                         |  |                                               |            |            |                          |                         |  |   |                     |  |              |            |                                             |   |            |  |   |            |   |  |      |  |       |  |     
|Rental real estate held for sale:                                   |  |              |            |              |   |                                         |  |                                               |            |            |                          |                         |  |   |                     |  |              |            |                                             |   |            |  |   |            |   |  |      |  |       |  |     
|Retail Bldg., Shopping Center, Fresno *                             |  | $            | 529,520    |              | $ | 553,648                                 |  | $                                             | 861,245    |            |                          |                         |  | $ | 164,931             |  | $            | 560,014    |                                             | $ | 724,945    |  | $ | (184,945   | ) |  | 1993 |  | 5/93  |  | 39.0
|Entertainment Center, Riverside*                                    |  |              | 1,078,627  |              |   | 768,667                                 |  |                                               | 2,886,833  |            | $                        | 287,036                 |  |   | 768,667             |  |              | 1,607,138  |                                             |   | 2,375,805  |  |   | (505,805   | ) |  | 1994 |  | 11/94 |  | 39.0
|Light Industrial Bldg., (Java City 717 W. Del Paso Road) Sacramento |  |              |           |              |   | 489,182                                 |  |                                               | 609,397    |            |                          |                         |  |   | 489,182             |  |              | 609,397    |                                             |   | 1,098,579  |  |   | (83,993    | ) |  | 1988 |  | 8/96  |  | 39.0
|Light Industrial Bldg., (Java City 721 W. Del Paso Road) Sacramento |  |              |           |              |   | 325,024                                 |  |                                               | 404,897    |            |                          |                         |  |   | 325,024             |  |              | 404,897    |                                             |   | 729,921    |  |   | (55,804    | ) |  | 1988 |  | 8/96  |  | 39.0
|                                                                    |  |              |            |              |   |                                         |  |                                               |            |            |                          |                         |  |   |                     |  |              |            |                                             |   |            |  |   |            |   |  |      |  |       |  |     
|Subtotal  Rental real estate held for sale                         |  |              | 1,608,147  |              |   | 2,136,521                               |  |                                               | 4,762,372  |            |                          | 287,036                 |  |   | 1,747,804           |  |              | 3,181,446  |                                             |   | 4,929,250  |  |   | (830,547   | ) |  |      |  |       |  |     
|                                                                    |  |              |            |              |   |                                         |  |                                               |            |            |                          |                         |  |   |                     |  |              |            |                                             |   |            |  |   |            |   |  |      |  |       |  |     
|Grand Total**                                                       |  | $            | 38,486,516 |              | $ | 10,641,047                              |  | $                                             | 43,372,294 |            | $                        | 872,582                 |  | $ | 10,066,895          |  | $            | 42,190,577 |                                             | $ | 52,257,472 |  | $ | (4,201,290 | ) |  |      |  |       |  |     
|                                                                    |  |              |            |              |   |                                         |  |                                               |            |            |                          |                         |  |   |                     |  |              |            |                                             |   |            |  |   |            |   |  |      |  |       |  |     

---

|* | Amount shown is net of write-downs totaling $2,628,450 on these assets in total. The write-downs were based on appraisals and allocated prorata to land and improvements absent other
indication of value
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|** | The federal income tax basis totals approximately $55,500,000 before accumulated depreciation.
|-- | ----------------------------------------------------------------------------------------------



---

##### Table of Contents

MEREDITH ENTERPRISES, INC.



SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)



The activity in rental real estate, rental real estate held for sale and related depreciation for the three years ended December 31, 2003 is
as follows:



A reconciliation of rental real estate and rental real estate
held for sale for the years ending December 31, 2001, 2002 and 2003 follows:



|                                             |  |                    |            |   |                                 |   |            |       |  |   |            |  
|-------------------------------------------- |  | ------------------ | ---------- | - | ------------------------------- | - | ---------- | ----- |  | - | ---------- | -
|                                             |  | Rental real estate |            |   | Rental real estateheld for sale |   |            | Total | 
|Balance at December 31, 2000                 |  | $                  | 35,133,648 |   |                                 | $ | 6,468,260  |       |  | $ | 41,601,908 |  
|2001 Additions                               |  |                    | 404,224    |   |                                 |   | 61,179     |       |  |   | 465,403    |  
|2001 Impairment a loss                       |  |                    | (2,628,576 | ) |                                 |   | (1,171,424 | )     |  |   | (3,800,000 | )
|Transfer to held for sale                    |  |                    | (6,453,319 | ) |                                 |   | 6,453,319  |       |  |   |           |  
|                                             |  |                    |            |   |                                 |   |            |       |  |   |            |  
|Balance at December 31, 2001                 |  |                    | 26,455,977 |   |                                 |   | 11,811,334 |       |  |   | 38,267,311 |  
|2002 Additions                               |  |                    | 21,189,653 |   |                                 |   |           |       |  |   | 21,189,653 |  
|2002 Dispositions                            |  |                    |           |   |                                 |   | (3,192,772 | )     |  |   | (3,192,772 | )
|                                             |  |                    |            |   |                                 |   |            |       |  |   |            |  
|Balance at December 31, 2002                 |  |                    | 47,645,630 |   |                                 |   | 8,618,562  |       |  |   | 56,264,192 |  
|2003 Additions                               |  |                    | 1,997,204  |   |                                 |   |           |       |  |   | 1,997,204  |  
|Transfer to rental real estate held for sale |  |                    | (4,291,096 | ) |                                 |   | 4,291,096  |       |  |   |           |  
|Transfer to rental real estate               |  |                    | 1,976,484  |   |                                 |   | (1,976,484 | )     |  |   |           |  
|2003 Dispositions                            |  |                    |           |   |                                 |   | (6,003,924 | )     |  |   | (6,003,924 | )
|                                             |  |                    |            |   |                                 |   |            |       |  |   |            |  
|Balance at December 31, 2003                 |  | $                  | 47,328,222 |   |                                 | $ | 4,929,250  |       |  | $ | 52,257,472 |  
|                                             |  |                    |            |   |                                 |   |            |       |  |   |            |  



A reconciliation of accumulated
depreciation of rental real estate and rental real estate held for sale for the years ending December 31, 2001, 2002 and 2003 follows:



|                                             |  |                    |            |   |                                 |   |           |       |  |   |           |  
|-------------------------------------------- |  | ------------------ | ---------- | - | ------------------------------- | - | --------- | ----- |  | - | --------- | -
|                                             |  | Rental real estate |            |   | Rental real estateheld for sale |   |           | Total | 
|Balance at December 31, 2000                 |  | $                  | 2,369,839  |   |                                 | $ | 360,378   |       |  | $ | 2,730,217 |  
|2001 Depreciation expense                    |  |                    | 564,421    |   |                                 |   | 111,514   |       |  |   | 675,935   |  
|Transfer to held for sale                    |  |                    | (1,050,477 | ) |                                 |   | 1,050,477 |       |  |   |          |  
|                                             |  |                    |            |   |                                 |   |           |       |  |   |           |  
|Balance at December 31, 2001                 |  |                    | 1,883,783  |   |                                 |   | 1,522,369 |       |  |   | 3,406,152 |  
|2002 Depreciation expense                    |  |                    | 579,615    |   |                                 |   | 23,979    |       |  |   | 603,594   |  
|2002 Dispositions                            |  |                    |           |   |                                 |   | (372,605  | )     |  |   | (372,605  | )
|                                             |  |                    |            |   |                                 |   |           |       |  |   |           |  
|Balance at December 31, 2002                 |  |                    | 2,463,398  |   |                                 |   | 1,173,743 |       |  |   | 3,637,141 |  
|2003 Depreciation expense                    |  |                    | 1,028,510  |   |                                 |   | 56,948    |       |  |   | 1,085,458 |  
|Transfer to rental real estate held for sale |  |                    | (254,808   | ) |                                 |   | 254,808   |       |  |   |          |  
|Transfer to rental real estate               |  |                    | 133,643    |   |                                 |   | (133,643  | )     |  |   |          |  
|2003 Dispositions                            |  |                    |           |   |                                 |   | (521,309  | )     |  |   | (521,309  | )
|                                             |  |                    |            |   |                                 |   |           |       |  |   |           |  
|Balance at December 31, 2003                 |  | $                  | 3,370,743  |   |                                 | $ | 830,547   |       |  | $ | 4,201,290 |  
|                                             |  |                    |            |   |                                 |   |           |       |  |   |           |