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

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

       For the fiscal year ended                           December 31, 1999
                                ---------------------------------------------
                                                        OR

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

       For the transition period from                                      to

       Commission file number    1-10641

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

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

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

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

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

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

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

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

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

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

       The aggregate market value of the voting stock held by  non-affiliates of
the  Registrant,  computed  by  reference  to the average bid and asked price on
March 17, 2000, was  approximately  $3.00 for the Common Stock and $2.63 for the
$.78 Convertible Series A Preferred Stock.

       As of March 17, 2000,  4,943,633 shares of the Registrant's  Common Stock
were outstanding and 16,423 shares of the Registrant's $.78 Convertible Series A
Preferred Stock were outstanding.

                                        DOCUMENTS INCORPORATED BY REFERENCE

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

Registrant's 2000 Proxy Statement to be filed           Part III
with the Commission no later than April 30, 2000


<PAGE>




                                                 TABLE OF CONTENTS


                                                      PART I


Item 1.        Business . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 2.        Description of Property . . . . . . . . . . . . . . . . . . .12
Item 3.        Legal Proceedings . . . . . . . . . . . . . . . . . . . . . .16
Item 4.        Submission of Matters to a Vote of Security Holders . . . . .16


                                                      PART II

Item 5.        Market for Registrant's Common Stock and Related
               Stockholder Matters . . . . . . . . . . . . . . . . . . . . .17
Item 6.        Selected Financial Data . . . . . . . . . . . . . . . . . . .19
Item 7.        Management's Discussion and Analysis of Financial
               Condition and Results of Operations . . . . . . . . . . . . .20
Item 7A.       Quantitative and Qualitative Disclosures about Market Risk . 24
Item 8.        Financial Statements and Supplementary Disclosure . . . . . .25
Item 9.        Changes in and Disagreements with Accountants on
               Accounting and Financial Disclosure . . . . . . . . . . . . .25


                                                     PART III

Item 10.       Directors and Executive Officers of the Registrant . . . . . 26
Item 11.       Executive Compensation . . . . . . . . . . . . . . . . . . . 26
Item 12.       Security Ownership of Certain Beneficial Owners
               and Management . . . . . . . . . . . . . . . . . . . . . . . 26
Item 13.       Certain Relationships and Related Transactions . . . . . . . 26


                                                      PART IV

Item 14.       Exhibits, Financial Statement Schedule and Reports
               on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . .27


SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31

Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . .F-1




<PAGE>



                                                      PART I

This Annual  Report on Form 10-K for the year ended  December  31, 1999 filed by
Milestone Properties,  Inc.  ("Milestone") contains or incorporates by reference
certain  forward-looking  statements  within the  meaning of Section  27A of the
Securities  Act of 1933 and Section 21E of the  Securities  Exchange Act of 1934
and  Milestone  intends that such  forward-looking  statements be subject to the
safe harbors created thereby. Such forward-looking  statements involve risks and
uncertainties and include,  but are not limited to, statements  regarding future
events  and its plans,  goals and  objectives.  Such  statements  are  generally
accompanied  by words such as  "intend,"  "anticipate,"  "believe,"  "estimate,"
"expect" or similar terms. Milestone's actual results may differ materially from
such  statements.  Factors that could cause or  contribute  to such  differences
include,   without  limitation,   the  following:  (i)  its  plans,  strategies,
objectives, expectations and intentions are subject to change at any time at its
discretion;  (ii) general  economic and business  conditions,  which may,  among
other  things,  affect  the  demand  for  retail  space or  retails  goods,  the
availability and creditworthiness of prospective  tenants,  rental terms and the
terms and  availability of financing,  are subject to change at any time;  (iii)
adverse  changes  in  real  estate  markets   including,   among  other  things,
competition  with  other  companies;  (iv)  adverse  changes  in the  properties
Milestone  owns which could require the  expenditure of funds to fix or maintain
such  properties;   (v)  the  general  risks  of  real  estate  development  and
acquisitions,  such  as  changes  in  demographics,  construction  delays,  cost
overruns,  work stoppages and slowdowns,  the cost and  availability  of skilled
labor and weather conditions; (vi) governmental actions and initiatives, such as
seizures of property,  condemnation  and  construction of alternative  roadways;
(vii)  environmental and safety  conditions and hazards;  and (viii) other risks
and  uncertainties  indicated from time to time in Milestone's  filings with the
Securities and Exchange  Commission and in the documents  incorporated herein by
reference.  Although  Milestone  believes that the  assumptions  underlying  its
forward-looking  statements are reasonable,  any of the assumptions  could prove
inaccurate and, therefore, Milestone cannot make any assurances that the results
contemplated in such forward- looking statements will be realized. The inclusion
of such  forward-looking  information should not be regarded as a representation
by Milestone or any other person that the future events,  plans or  expectations
contemplated by Milestone will be achieved. Furthermore, past performance is not
necessarily an indicator of future performance.

Item 1.        Business.

Introduction

         Milestone  Properties,  Inc.,  directly  and through  its wholly  owned
subsidiaries,  is  engaged  in the  business  of  owning,  acquiring,  managing,
developing  and  investing  in  commercial  real estate and real estate  related
assets. Milestone, together with its subsidiaries, is hereinafter referred to as
the "Company." The Company is primarily engaged in the ownership,  operation and
management  of  interests  in  commercial  real  estate  properties,   currently
consisting of (i) 10 properties  owned in fee (the "Fee  Properties"),  (ii) the
ownership of wraparound notes (the "Wraparound Notes") and wraparound  mortgages
(the "Wraparound  Mortgages" and,  together with the Wraparound Notes, the "Wrap
Debt")  which are secured by 10  commercial  real  properties  (the  "Underlying
Properties" and,  together with the Fee Properties,  the "Properties") and (iii)
the  operation  and  management  of the  Properties.  At December 31, 1999,  the
Properties included shopping centers, strip malls and single

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tenant properties and have an aggregate gross leasable area ("GLA") of 1,551,640
square  feet,  of  which  435,386  square  feet  are in the Fee  Properties  and
1,116,254 square feet are in the Underlying  Properties.  Additional information
regarding  the  Properties  is set forth in Table 1. Summary of  Properties  and
Underlying Debt located in Item 2. Description of Property of this Report.

         The Company's  objectives are to realize upon, maintain and improve the
value of its real estate holdings and to generate cash flow. To accomplish these
objectives, the Company may (i) continue to manage the Properties,  (ii) acquire
additional  commercial  properties to develop and/or hold for investment,  (iii)
expand, improve or redevelop the Properties or properties owned by affiliates of
the Company or third parties through the acquisition and development of adjacent
parcels, (iv) engage in management services for affiliates of the Company and/or
others,  (v) invest in real estate  backed or related  securities,  (vi) acquire
related businesses and/or (vii) engage in such other activities or businesses as
are consistent  with the Company's  overall  objectives.  In connection with its
activities,  the  Company  may  also  consider  selling  one or  more of its Fee
Properties  and/or  financing or  refinancing  one or more of the  Properties or
additional  properties  acquired  by the  Company in order to fund its  business
activities.  In  addition,  the  Company  may enter into joint  ventures  and/or
similar  arrangements  with  developers  or owners of shopping  centers or other
commercial  properties.  These  ventures  may take the form of joint  ownership,
participation in general or limited partnerships,  or other forms of investment,
and may  provide  for the  payment  of  preferential  distributions,  guaranteed
returns and/or fees for services.  The Company may also make secured real estate
mortgage  loans,   including   mortgages   junior  to   institutional  or  other
indebtedness, in connection with the acquisition, development,  redevelopment or
improvement of properties, either to affiliated or unaffiliated parties.

         The  Company's  business is operated as a single  segment for financial
reporting  purposes.  For  financial  information  regarding the Company for the
fiscal  years ended  December  31,  1999,  1998 and 1997,  see the  Consolidated
Financial  Statements  of the Company and the notes thereto in Part IV, Item 14.
Exhibits, Financial Statement Schedule and Reports on Form 8-K of this Report.

Background

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

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

                                                         2

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The Wrap Debt

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

         The Wrap Debt was issued to  affiliates  of Concord by certain  limited
partnerships  (the  "Partnerships")  sponsored by Concord.  Such  affiliates  of
Concord were formed for the purposes of (i) acquiring the Underlying Properties,
(ii) selling such  properties to the  Partnerships  in exchange for cash and the
Wrap Debt and (iii) leasing the Underlying Properties back from the Partnerships
pursuant to master leases (the "Master Leases"). The payment of the Wrap Debt is
secured by the  Underlying  Properties.  Certain  directors  and officers of the
Company are also directors, officers and controlling stockholders of the general
partner of each of the Partnerships (the "General  Partners").  In October 1995,
as part of the  Acquisition,  the Company  acquired certain of the Wrap Debt and
became the lessee under the Master Leases.

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

         At December 31, 1999, a description  of the balances,  interest  rates,
monthly  payments of principal and  interest,  prepayment  provisions,  maturity
dates and amount of any balloon  payments with respect to the Underlying Debt is
set forth in Table 1 in Item 2. Description of Property.

         The Wraparound Notes

         The Company is currently the holder of 16 Wraparound  Notes relating to
the Underlying Properties. The maturity dates of the Wraparound Notes range from
2000 to 2015.  A  discussion  regarding  the  Wraparound  Notes which are due to
mature  in  2000  is  included  at the end of the  section  entitled  Wraparound
Mortgages.  Each of the  Wraparound  Notes is a  non-recourse  obligation of the
issuing  Partnership  and includes the obligation to satisfy the Underlying Debt
for the corresponding  Underlying Property.  The Underlying Debt associated with
an  Underlying  Property  in some  instances  consists  of  multiple  notes  and
mortgages  which may have different  priorities in relation to one another,  but
all of which are  superior in right to the  Wraparound  Note and the  Wraparound
Mortgage relating to such Underlying  Property. A Wraparound Note may be prepaid
by the Partnership issuing such note by (i) the payment of the excess of (a) the
outstanding balance

                                                         3

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of such Wraparound  Note,  including  accrued  interest and any discount element
over (b) the then aggregate outstanding balance,  including accrued interest, of
the Underlying Debt associated with the particular Underlying Property, and (ii)
the assumption of the  borrower's  obligations  pursuant to the Underlying  Debt
associated with the particular Underlying Property. The wraparound  mortgagor's,
i.e., the  Partnership  owning the Underlying  Property,  source of debt service
payments on the  Wraparound  Note is the rent it  receives  as lessor  under the
Master  Leases.  Additionally,  any percentage  rent payable to the  Partnership
pursuant  to a Master  Lease  will be paid to the  Company  as the holder of the
Wraparound Note on the relevant  Underlying Property as partial prepayment under
such Wraparound Note.

         At December 31, 1999, a description of the current  balances,  interest
rates,  annual debt service,  maturity dates and amounts of any balloon payments
with  respect  to the  Wraparound  Notes  is set  forth  in  Table  2 in Item 2.
Description of Property.

         The Wraparound Mortgages

          The maturity  dates of the 16 Wraparound  Mortgages  currently held by
the Company  range from 2000 to 2015.  A  discussion  regarding  the  Wraparound
Mortgages  which  are  due to  mature  in 2000  is  included  at the end of this
section.  The Wraparound  Mortgages provide that the Company,  as the wraparound
mortgagee,  will pay, or cause to be paid, on a non-recourse basis, all payments
required by the Underlying Debt so long as the wraparound  mortgagor,  i.e., the
Partnership that owns the related Underlying Property,  makes all payments under
the  Wraparound  Notes to the Company.  If the Company fails to make any payment
required to be made by it within 30 days after the due date of such payment, the
wraparound mortgagor may make such payment and deduct the amount of such payment
from the next succeeding payments required to be made under the Wraparound Note.
The Partnerships, as wraparound mortgagors, are obligated under the terms of the
Wraparound  Mortgages not to perform any act which would  constitute a breach of
the underlying mortgage(s) securing the applicable Underlying Debt.

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

         Pursuant  to the terms of the  Wraparound  Mortgages,  the  outstanding
balance of each  corresponding  Wraparound Note becomes due and payable upon the
occurrence  of  certain  specified  events,  subject to grace  periods  and cure
rights,  including,  without  limitation,  (i)  the  failure  of the  wraparound
mortgagor to make any payment or perform any covenant required under the related
Wraparound  Mortgage,  (ii) the  commencement  of any  action or  proceeding  to
foreclose any lien

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senior  to  the  lien  created  by  such  Wraparound   Mortgage  and  (iii)  the
Partnerships,  as wraparound mortgagors,  becoming the debtor in a bankruptcy or
insolvency  proceeding.  In  addition,  after  any  default  by  the  wraparound
mortgagor under a Wraparound Mortgage, the Company, as the wraparound mortgagee,
may exercise  certain  rights of the  wraparound  mortgagor  with respect to the
management of the related Underlying Property.

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

         Subsequent  to December 31, 1999,  several  dispositions  have occurred
causing  differences  between Table 2 in Item 2. Description of Property and the
Wraparound  Notes  and  Wraparound  Mortgages  which are  currently  held by the
Company.  These dispositions also affect the Master Leases.  Table 2. Summary of
Wraparound  Notes at  December  31, 1999 is  footnoted  detailing  the  property
dispositions   described  in  detail  in  Item  1.  Business,   Acquisition  and
Disposition of Real Estate and Real Estate Related Assets.

         The maturity dates of the 16 Wraparound Notes and Wraparound  Mortgages
currently  held by the Company  range from June 2000 to December  2015, of which
seven  Wraparound  Notes and  Wraparound  Mortgages will mature on June 30, 2000
(the "Maturing Wrap Debt"). The Maturing Wrap Debt was due to expire on December
31,  1999;  however,  the Company  granted a six month  extension  to allow each
applicable  Partnership  of the  respective  Maturing  Wrap Debt  issued by such
Partnership  to make payment.  In order for each such  Partnership  to make such
payment, one of the following events may occur: (i) the Partnership may sell the
Underlying  Property  securing  the  respective  Maturing  Wrap  Debt,  (ii) the
Company,  as the holder of the Maturing Wrap Debt,  may obtain  ownership of the
Underlying  Property  securing the Maturing  Wrap Debt in lieu of payment on the
Maturing Wrap Debt via  foreclosure  sale or (iii) the Company has the option to
extend the Maturing Wrap Debt for subsequent six month periods.

The Master Leases

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

         The Company is currently the master lessee under nine individual leases
on each of the Underlying Properties.  The expiration dates of the Master Leases
range from 2000 to 2015. A discussion  regarding the Master Leases which are due
to expire in 2000 is included at the end of this section.  As the master lessee,
the Company leases an entire Underlying Property (i.e., a shopping

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center or single tenant  commercial  property) from the owner of such Underlying
Property and releases it under Operating Leases to the tenant(s) who occupy such
property.

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

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

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

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

         Pursuant  to each Master  Lease,  the  Company,  as master  lessee,  is
responsible  for compliance  with all  applicable  laws and  regulations  and is
required to keep the Underlying  Property  insured at certain minimum levels for
certain specified losses. The Company's  management believes that the Properties
are adequately  insured.  The Master Leases also have termination and assignment
provisions.

         The expiration dates of nine of the Master Leases currently held by the
Company range from June 2000 to December 2015, of which six Master Leases expire
on June 30, 2000 (the "Expiring Master Leases"). The Expiring Master Leases were
due to expire on December 31, 1999; however,

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a six month  extension was granted.  As a result of the Expiring  Master Leases,
the Company, as the tenant under such Expiring Master Leases, may (i) assign all
of its rights,  title and interests in the Underlying  Properties subject to the
respective  Expiring  Master Leases to the  applicable  Partnership  that is the
landlord under the Expiring Master Leases and such Partnership may assume all of
the Company's related obligations under the respective Expiring Master Leases or
(ii) has the option to extend such  Expiring  Master Leases for  subsequent  six
month periods.

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

Acquisition and Disposition of Real Estate and Real Estate Related Assets

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

         On February 15, 2000, a wraparound note held by the Company on a 91,800
square foot single tenant commercial  building located in Palatka,  Florida (the
"Palatka Property"), was paid as a result of the sale of the Palatka Property by
its owner, an affiliate of the Company (the  partnership  that owned the Palatka
Property),  to an unrelated  third  party.  In  connection  with the sale of the
Palatka  Property,  the Company,  as the master  lessee on a Master Lease on the
Palatka  Property,  canceled the subject  Master Lease.  Of the gross  proceeds,
$1,067,000  was used to satisfy  the  underlying  mortgage  debt on the  Palatka
Property. As a result of the payment of the wraparound note and the satisfaction
of the  underlying  mortgage  debt,  the Company  realized net cash  proceeds of
approximately  $911,000 and will record a book gain of approximately $645,000 in
the first quarter of 2000.

         On February 3, 2000, a wraparound  note held by the Company on a 43,200
square foot single tenant commercial  building located in Warsaw,  Virginia (the
"Warsaw  Property"),  was paid as a result of the sale of the Warsaw Property by
its owner,  an affiliate of the Company (the  partnership  that owned the Warsaw
Property),  to an unrelated  third  party.  In  connection  with the sale of the
Warsaw  Property,  the  Company,  as the master  lessee on a Master Lease on the
Warsaw  Property,  canceled the subject  Master  Lease.  Of the gross  proceeds,
$768,000  was  used to  satisfy  the  underlying  mortgage  debt  on the  Warsaw
Property. As a result of the payment of the wraparound note and the satisfaction
of the  underlying  mortgage  debt,  the Company  realized net cash  proceeds of
approximately  $519,000 and will record a book gain of approximately $321,000 in
the first quarter of 2000.

         On January 13, 2000, a wraparound  note held by the Company on a 43,200
square foot single tenant commercial building located in Hamilton, New York (the
"Hamilton Property"),  was paid as a result of the sale of the Hamilton Property
by its owner,  an  affiliate  of the  Company  (the  partnership  that owned the
Hamilton Property), to an unrelated third party. In connection with the

                                                         7

<PAGE>



sale of the Hamilton  Property,  the Company,  as the master  lessee on a Master
Lease on the Hamilton Property,  canceled the subject Master Lease. Of the gross
proceeds,  $774,000  was used to satisfy  the  underlying  mortgage  debt on the
Hamilton  Property.  As a result of the payment of the  wraparound  note and the
satisfaction  of the underlying  mortgage  debt,  the Company  realized net cash
proceeds of approximately  $521,000 and will record a book gain of approximately
$352,000 in the first quarter of 2000.

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

         On January 7, 2000, a  wraparound  note held by the Company on a 46,400
single-tenant commercial building located in Savannah,  Tennessee (the "Savannah
Property"),  was paid as a result of the sale of the  Savannah  Property  by its
owner,  an  affiliate of the Company  (the  partnership  that owned the Savannah
Property)  to an  unrelated  third party.  In  conjunction  with the sale of the
Savannah  Property,  the Company,  as the master lessee on a Master Lease on the
Savannah Property, canceled the subject Master Lease. As a result of the payment
of the wraparound  note, the Company realized net cash proceeds of approximately
$173,000  and will  record a book gain of  approximately  $120,000  in the first
quarter of 2000.

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

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



                                                         8

<PAGE>



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

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

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

         During 1998, an agreement, (the "SGSC Agreement") was in effect between
the Company and certain of its  affiliates,  on one hand,  and Societe  Generale
Securities Corporation ("SGSC") on the other hand, pursuant to which the Company
and some affiliates had retained SGSC to act as financial  advisor in connection
with a transaction  involving the sale of a number of shopping center properties
owned by such  affiliates and two retail  properties  owned by the Company.  The
SGSC Agreement was terminated, by the Company and certain of its affiliates, via
written  notice on March 29, 1999.  Pursuant to the terms of the SGSC  Agreement
upon certain  dispositions of the properties covered by the SGSC Agreement prior
to  March  29,  2000,  to  persons  or  entities  to whom  SGSC had  shown  such
properties,  the Company and or such affiliates would be obligated to pay SGSC a
fee based on the sale price of such  properties.  No fee has been paid or is due
on any of the property sales noted herein.

         From  time to time  the  Company  sells,  or may take  action  to sell,
certain  real  estate  assets  which it does not  believe to be  material to the
overall business or financial condition of the Company.

                                                         9

<PAGE>



Investment in Land Ventures ("Ventures")

         On  May  1,  1999  and  August  27,  1999,  the  Company  made  initial
investments  of $262,469 and $46,762,  respectively,  in the  Ventures,  and the
Ventures assumed contracts to purchase certain land parcels in the South Florida
area. The land purchase contracts contain options to extend the closing date for
an additional fee.  Subsequent to the initial  investment,  the Company has made
additional capital contributions of $2,693,224 to the Ventures. The consolidated
financial  statements  of the  Company  include  the  operating  results for the
Ventures from the date of the Company's investments.

         On December 29, 1999,  the Ventures  completed the purchase of a parcel
of land located in Miami,  Florida  (Miami-Dade  County) from an unrelated third
party for  $3,512,000.  In  connection  with the  purchase,  a $2,000,000  first
mortgage  was  obtained  which bears  interest  equal to 9.5% per annum which is
effective for the initial year of the term of the note.  Interest on the subject
note  is  payable  during  the  initial  year  in  twelve  consecutive   monthly
installments;  thereafter,  the note requires  twenty-three  monthly payments of
principal and interest  beginning in the thirteenth month of the note based upon
a 25 year amortization schedule. The note also requires a rate adjustment on the
anniversary  date of the note equal to the base rate (prime  rate)  announced by
Citibank, N.A., New York, from time-to-time, plus one percent. A balloon payment
of  approximately  $1,974,000  is  required  at the  end of  year  three  of the
mortgage.

         The  investments  included in the  Ventures  at December  31, 1999 also
include  deposits  of  $700,000  which will be applied to the  purchase  of land
parcels in the South  Florida  area.  Additional  capital  contributions  may be
required by the  Company to service  the costs  associated  with  extending  the
expiration dates of certain land purchase  contracts.  The cost of extending the
land  purchase  contracts  will be expensed  if they  expire  before the land is
purchased.

Investment Policy

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

Real Estate Revenue

         For the years ended December 31, 1999,  1998 and 1997, no tenant at any
individual  property accounted for more than 10% of the Company's total revenue.
However,  the total  revenue  from K- Mart  Corporation's  nine  leases with the
Company  accounted  for  approximately  30%, 29% and 32%,  respectively,  of the
Company's aggregate rent revenue.

Potential Environmental Risks

     Under various federal,  state and local environmental laws,  ordinances and
regulations, the
                                                        10

<PAGE>



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

Competition

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

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



                                                        11

<PAGE>



Employees

         The  Company  currently  employs 23 people.  The  Company is party to a
management agreement (the "Management Agreement") with Concord pursuant to which
the Company provides management  services,  assists in the management of Concord
properties  and provides  certain  personnel and office space and general office
services  to Concord  and for which the  Company  receives  reimbursements  from
Concord.  The Management  Agreement is renewable  annually.  Except for services
provided by certain  employees to Concord pursuant to the Management  Agreement,
all of the  employees  are employed on a full time basis to provide  services to
the Company.

Impact of Year 2000

         Year 2000  compliance  programs and information  systems  modifications
were  initiated  by the Company in 1998 in an effort to ensure that its business
was not  interrupted  by the Year 2000  problem.  The  objective was achieved by
modifying present systems using internal and external programming  resources and
by installing new hardware and software,  and by monitoring supplier,  customer,
and other  third party  readiness.  Such  modifications  were  completed  by the
Company by September  1999. The total cost of the Company's Year 2000 compliance
program was approximately  $52,500 which included a new AS400 computer which has
been  leased on a  long-term  basis.  At this time,  neither the Company nor any
external  companies  that conduct  business  with the Company have  incurred any
required  modifications  to its  information  technology or embedded  technology
systems which will have a material  adverse  effect on the  financial  position,
results of operations or liquidity of the Company.


Item 2.        Description of Property.

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

         The Company is currently  engaged in the  ownership and operation of 20
commercial real estate properties  consisting of shopping  centers,  strip malls
and free standing department stores. The following tables describe and summarize
certain  data  for  each  such  property.  See  also  Item  1.  Business,  for a
description  of additional  terms  relating to the  Properties and the Company's
investment policies.

         Table 1.    Summary of Properties and Underlying Debt.

         Table 2.    Summary of Wraparound Notes.


                                                        12

<PAGE>



Table 1. Summary of Properties and Underlying Debt at December 31, 1999

<TABLE>
<CAPTION>

                                                                                                         Monthly
                                                                              Underlying  Interest     Payments of
                                                       GLA      Occupancy      Debt at      Rate       Principal &
Location             Property                         (Sq Ft)    Rate (%)      12/31/99      (%)        Interest
===================  =============================  ========== ============  ============ ========= =================
<S>                  <S>                               <C>             <C>     <C>           <C>           <C>
Deland, FL           Deland Plaza   (1), (6)            68,337          100     $ 739,548     8.875         $  14,016
Rochester, NY        Ridgemont Plaza   (1), (6)         84,181          100       970,664     9.250            15,992
Janesville, WI       Blackhawk Village (4)              88,500           86       816,349      9.00            14,060
                                                                                  101,359      9.00             1,529
No. Canton, OH       Kmart Corporation   (1), (6)       84,181          100     1,969,876      9.00            21,669
Quincy, IL           Harrison Street Plaza   (4), (7)  149,954           99     2,883,642      7.75            27,912
Natchez, MS          Morgantown Plaza (4)               92,646          100     2,172,151      7.59            15,519

Sandy, PA            Sandy Plaza   (1), (4)             34,019          100     1,285,000      7.00               (3)

Montgomery, AL       Chisolm Shopping Center (4)        39,075          100     1,142,177      8.75            14,500
Paris, TN            Paris Plaza (4)                   102,453           98       530,168     13.50             8,859
                                                                                  308,905      9.25             8,467
Savannah, TN         Savannah Plaza (4), (7)            46,400          100       216,258      9.50             6,612
-------------------  -----------------------------  ---------- ------------  ------------ --------- -----------------
</TABLE>


                                                                   Balance at
                                                                    Maturity
                                                    Maturity      (Assuming no
Location               Prepayment Provision             Date        Prepayment)
===================  ============================= ===========  ================

Deland, FL           1% premium                         4/1/03         $ 343,437
Rochester, NY        1% premium                         1/1/02           747,266
Janesville, WI       none                              7/31/02           540,492
                     none                               8/1/07                 0
No. Canton, OH       Pre-payable at a discount         9/30/12                 0
Quincy, IL           Pre-payable at par                 7/1/98         2,992,016
Natchez, MS          None until 2004; then 1%           5/1/08         1,951,900
                     premium
Sandy, PA            None until 2004; then 3%          12/1/06                 0
                     declining 1% annually
Montgomery, AL       2% premium                         4/1/07           396,073
Paris, TN            1% premium                         4/1/08                 0
                     Pre-payable at par                 7/1/03                 0
Savannah, TN         none                              1/31/03                 0
-------------------  ----------------------------- -----------  ----------------
                                                            13

<PAGE>

<TABLE>
<CAPTION>

Table 1.  Summary of Properties and Underlying Debt at December 31, 1999 - continued

                                                                                                         Monthly
                                                                              Underlying  Interest     Payments of
                                                       GLA      Occupancy      Debt at      Rate       Principal &
Location             Property                         (Sq Ft)    Rate (%)      12/31/99      (%)        Interest
----------------     -----------------------------  ---------- ------------  ------------ --------- -----------------
<S>                  <S>                               <C>             <C>       <C>         <C>               <C>
Danville, IL         Holiday Square (4)                 50,978          100       320,886     9.625             9,663
Warsaw, VA           Richmond Plaza   (1), (6), (7)     43,200          100       751,724    13.125            11,373

Walpole, NH          Kendiana Plaza   (1) , (6), (7)    32,400          100       732,029     11.50  9,857 in advance
Sunrise, FL          Pine Oak Plaza   (2), (5)          16,994          100     1,145,613      7.48             8,095
Jacksonville, FL     Regency Walk   (2), (5)            34,436           92     1,818,281      7.87            13,335
Orange Park, FL      Orange Park   (2), (5)             21,509           95     1,282,722      7.39             8,992
Boca Raton, FL       Teeca Plaza   (2), (5)             22,589           97     1,779,809      7.39            12,450
W. Palm Beach, FL    Country Grove Plaza   (2), (5)     16,642           96       871,636      7.51             6,159
Jacksonville, FL     Mandarin Central   (2), (5)        63,346           99     3,918,660      8.00            28,984
Ft. Lauderdale, FL   Pine Crest   (2), (5)              40,408           97     2,373,511      7.00            15,967
Davie, FL            Lincoln Park   (2), (5)            46,190           97     3,193,271      7.58            22,684
Miami, FL            Miami-Dade County Land Parcel         n/a          n/a     2,000,000       9.5               (8)
Palatka, FL          Walmart Corporation   (1), (6),    91,840          100     1,054,535     12.00            17,247
                     (7)
Columbus, NE         Cottonwood Plaza   (1), (6)        64,890          100     1,263,326     12.00            17,201
                                                                                   58,900      9.50               697
Hamilton, NY         Alexander Plaza   (1), (6), (7)    43,200          100       757,923    13.125            11,373

Zanesville, OH       Sunrise Shopping Center  (2), (4) 130,072           55     1,740,268      8.16            13,693
Blackstone, VA       Family Dollar (2), (4)             43,200           21             0       n/a               n/a
-------------------  -----------------------------  ---------- ------------  ------------ --------- -----------------
</TABLE>


                                                                 Balance at
                                                                  Maturity
                                                  Maturity      (Assuming no
Location             Prepayment Provision             Date        Prepayment)
----------------    ----------------------------- -----------  ----------------
Danville, IL        1% premium                         9/1/02            64,250
Warsaw, VA          4% in 1999, declining 1%          10/1/09                 0
                    annually to a 2% minimum
Walpole, NH         1% premium                         9/1/09                 0
Sunrise, FL         none                               5/1/08         1,027,700
Jacksonville, FL    none                               5/1/08         1,643,700
Orange Park, FL     none                               4/1/08         1,147,600
Boca Raton, FL      none                               7/1/08         1,591,000
W. Palm Beach, FL   none                               9/1/08           780,150
Jacksonville, FL    none                              10/1/08         3,542,000
Ft. Lauderdale, FL  none                             11/11/08         2,063,000
Davie, FL           5% premium                        11/1/08         2,854,000
Miami, FL           none                             12/29/02         1,974,482
Palatka, FL         2% premium                        11/1/07                 0

Columbus, NE        none                               9/1/10             9,274
                    none                               7/1/11                 0
Hamilton, NY        5% in 1999 declining 1%           12/1/09                 0
                    annually to a 2% minimum
Zanesville, OH      3% premium                         6/1/09         1,471,500
Blackstone, VA      n/a                                   n/a               n/a
------------------- ----------------------------- -----------  ----------------




(1)      Annual real estate taxes are the responsibility of the tenant.
(2)      Represents a Fee Property.
(3)  Principal  and  interest  are paid semi  annually  in  accordance  with the
     respective bond documents.
(4)      Represents a shopping center.
(5)      Represents a strip mall.
(6)     Represents a free standing department store.
(7)     Property disposed of subsequent to December 31, 1999.
(8)  Interest  payments  only for year 2000.  Monthly  payments of principal and
     interest of  approximately  $17,500 in year 2001 and 2002  dependant upon a
     floating interest rate of bank prime plus 14 one percent.

                                   14
<PAGE>



Table 2. Summary of Wraparound Notes at December 31, 1999

<TABLE>
<CAPTION>

                                 Carrying      Face Amount    Annual                     Balance at        Annual
                     Interest    Amount of         of       Payments of    Final          Maturity         Master         Master
                       Rate     Wraparound     Wraparound   Principal &  Maturity       (Assuming no        Lease         Lease
     Location          (%)         Notes          Notes      Interest      Date         Prepayment)        Payment     Termination
===================  ========  ============= ============= ============ =========  ================  ============= ==============
<S>                      <C>     <C>         <C>            <C>           <C>         <C>              <C>                <C>
Deland, FL               9.70    $ 1,386,963 $   1,904,659  $   198,018   6/30/00     $   1,884,837    $   198,018        6/30/00
Rochester, NY            9.70      1,426,983     1,708,137      220,906  12/31/14                 0        220,906       12/31/14
                        10.00        130,625       183,567            0  12/31/14           910,735              0            n/a
Janesville, WI          10.25      1,361,406     2,100,380      268,502  12/31/15                 0        268,502       12/31/15
                        11.00         15,000        16,584            0  12/31/15           106,688              0            n/a
No Canton, OH            9.11      2,080,901     2,747,434      333,272  12/31/14                 0        333,272       12/31/14
                        11.00         26,575        37,589            0  12/31/14           216,478              0            n/a
                        11.00         25,650        32,385            0  12/31/14           186,725              0            n/a
Quincy, IL        (1)   10.00      1,156,057     4,903,590      920,890  12/31/98         4,904,387        920,890            n/a
Natchez, MS             10.00        840,595     3,091,460      516,210  05/01/08         3,097,127        516,210            n/a
Sandy, PA               10.00        811,425     2,387,007      207,726   6/30/00         1,994,603        207,726        6/30/00
Montgomery, AL           9.75        802,335     2,112,637      236,100   6/30/00         2,015,635        236,100        6/30/00
Savannah, TN   (1)       9.88        352,116     1,079,560      197,500  12/31/99           993,627        197,500       12/31/99
Danville, IL             9.75        704,196     1,668,565      202,772   6/30/00         1,539,365        202,772        6/30/00
Warsaw, VA     (1)       9.75        981,167     1,338,084      175,974  12/31/99         1,298,565        175,974       12/31/99
Paris, TN               10.00      1,122,807     2,935,475      288,924   6/30/00         2,679,715        288,924        6/30/00
                        11.00         51,016        74,163            0   6/30/00            78,242              0            n/a
Walpole, NH    (1)       9.75        897,379     1,311,402      196,750  12/31/99         1,248,385        196,750       12/31/99
Palatka, FL       (1)    9.75      1,432,915     2,114,078      407,745  12/31/99         1,921,922        407,745       12/31/99
                        11.00         24,650        27,687            0  12/31/99            30,891              0            n/a
Columbus, NE             9.75      2,044,449     2,309,380      227,124   6/30/00         2,233,342        227,124        6/30/00
Hamilton, NY   (1)       9.75        966,643     1,370,885      210,745  12/31/99         1,300,000        210,745       12/31/99
-------------------  --------  ------------- ------------- ------------ ---------  ----------------  ------------- --------------
</TABLE>

(1) Property disposed of subsequent to December 31, 1999.



                                                        15

<PAGE>



Item 3.        Legal Proceedings.

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

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

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

         No matters were  submitted to a vote of the security  holders,  through
the  solicitation  of proxies  or  otherwise,  during the fourth  quarter of the
fiscal year ended December 31, 1999.



                                                        16

<PAGE>



                                                      PART II

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

         The Common  Stock and the Series A  Preferred  Stock  traded on the New
York  Stock   Exchange   (the  "NYSE")   under  symbols  "MPI"  and  "MPI  PRA",
respectively,  from January 29, 1991 through  July 3, 1998.  The NYSE  suspended
trading in shares of the Common Stock and Series A Preferred  Stock prior to the
market  opening on July 6, 1998 because it had  determined  that  Milestone  had
fallen below certain of the NYSE's continued  listing  criteria  relating to net
income and market value of publicly held shares of the Common Stock and Series A
Preferred Stock. Effective as of the opening of the trading session on September
11, 1998,  the Common Stock and Series A Preferred  Stock were delisted from the
NYSE.  On or about  July 6,  1998,  a market  began to be made for shares of the
Common Stock and Series A Preferred  Stock on the  Over-The-Counter  (the "OTC")
Bulletin Board with the ticker symbols"MPRP"and "MPRPP", respectively.

         The  following  tables set forth the high and low sales  prices for the
Common Stock and the Series A Preferred  Stock, as reported on the NYSE, for the
partial 1998 fiscal year  (January 1, 1998  through July 3, 1998).  In addition,
the table also sets forth the high and low bid  quotations  for the Common Stock
and the Series A Preferred Stock, as reported on the OTC Bulletin Board, for the
period from July 6, 1998 through December 31, 1998 and for the 1999 fiscal year.
The high and low bid  quotations  for the Common  Stock and  Series A  Preferred
Stock  represent  prices  between  broker-dealers,  and  do not  include  retail
mark-ups  or  mark-downs  or any  commission  to the  broker-dealer  and may not
represent actual transactions.

<TABLE>
<CAPTION>

Common Stock                                                                     High            Low
======================================================================= =============  =============
1999
<S>                                                                               <C>        <C>
First Quarter                                                                     $ 2        $ 13/16
Second Quarter                                                                 3-9/16          1-1/2
Third Quarter                                                                   3-4/5          3-1/4
Fourth Quarter                                                                  3-1/2          2-3/4
1998
First Quarter                                                               $ 1-13/16          $ 5/8
Second Quarter                                                                1-13/16          11/16
Third Quarter
     NYSE (July 1, 1998 through July 3, 1998)                                     3/4          11/16
     OTC Bulletin Board (July 6, 1998 through September 30, 1998)               1-1/2           7/16
Fourth Quarter                                                                    7/8            3/4
</TABLE>




                                                        17

<PAGE>

<TABLE>
<CAPTION>



Series A Preferred Stock                                                          High            Low
======================================================================= ==============  =============
1999
<S>                                                                           <C>                 <C>
First Quarter                                                                 $ 2-9/10            $ 2
Second Quarter                                                                   2-3/4          2-3/4
Third Quarter                                                                    3-1/4          2-5/8
Fourth Quarter                                                                    No reported trading
1998
First Quarter                                                                $  1- 3/4     $   1- 1/4
Second Quarter                                                                  1- 3/8        1- 5/16
Third Quarter
      NYSE (July 1, 1998 through July 3, 1998)                                  1- 1/2        1- 7/16
      OTC Bulletin Board (July 6, 1998 through September 30, 1998)              2- 1/2            7/8
Fourth Quarter                                                                  2- 1/2              2
</TABLE>

         On March 17, 2000,  the average bid and asked price of the Common Stock
was $3.00.  There has been no reported  trading on the Series A Preferred  Stock
since July 15, 1999 when the  average bid and ask price was $2.63.  On March 17,
2000, there were approximately 1,774 record holders of the Common Stock and five
record holders of the Series A Preferred Stock.

Dividend Policy

         Common Stock

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

         Series A Preferred Stock

         Milestone's Board of Directors  determined not to declare any dividends
on the Series A Preferred  Stock during the years ended December 31, 1999,  1998
and 1997.  The last  dividend  declared by Milestone  was for the quarter  ended
December  31,  1995 and was paid on  February  15,  1996 at $0.195  per share of
Series A Preferred Stock.

         Since September 30, 1995,  holders of the Series A Preferred Stock have
not been entitled to receive  dividends on a cumulative  basis.  Pursuant to the
Certificate of Designations of the Series A Preferred Stock, after such date, no
cash dividend may be paid on the Common Stock unless full


                                                        18

<PAGE>



dividends of $0.195 on all  outstanding  shares of Series A Preferred  Stock for
the then  current  quarterly  dividend  period are  declared  and either paid or
sufficient  sums  for  the  payment  thereof  are  set  apart.  As a  result  of
Milestone's  Board  Directors'  determination  not to declare a dividend for the
quarter ended June 30, 1997, which was the sixth  consecutive  quarter for which
no dividend was declared,  the number of persons  entitled to serve as directors
on Milestone's  Board of Directors has been increased by one, and the holders of
the Series A Preferred Stock, who are otherwise  entitled to elect one member of
the Board of Directors, became entitled to elect a second member of the Board of
Directors to fill such newly created directorship. Any decision as to the future
payment of dividends on the Series A Preferred  Stock will depend on the results
of operations and the financial  condition of the Company and such other factors
as Milestone's Board of Directors,  in its discretion,  deems relevant. See Item
7.  Management's  Discussion and Analysis of Financial  Condition and Results of
Operation - Liquidity and Capital Resources.

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

Item 6.        Selected Financial Data.
<TABLE>
<CAPTION>
                                                        (Amounts in thousands, except per share information)

                                                                1999         1998          1997           1996         1995
================================================== ================= ============  ============ ============== ============
<S>                                                         <C>          <C>           <C>            <C>          <C>
Total revenues                                              $ 19,632     $ 25,515      $ 30,092       $ 33,722     $ 25,768
Total expenses                                                20,185       32,693        34,244         35,843       26,261
Loss before income taxes and minority interest                 (553)      (7,178)       (4,152)        (2,121)        (493)
(Benefit) provision for income taxes                         (2,012)        1,253         (721)            366          317
Net income (loss) before minority interest                     1,459      (8,431)       (3,431)        (2,487)        (810)
Minority interest in net loss of consolidated
subsidiary                                                       664            0             0              0            0
Distributions on preferred stock                                   0           0              0             0       (2,732)
                                                      -------------- ------------  ------------- -------------     --------
Income (loss) attributable to common stockholders       $     2,123     $ (8,431)     $ (3,431)      $ (2,487)    $ (3,542)
                                                        ============    =========     =========      =========    =========
Income (loss) per common share, basic                    $      0.50     $ (1.99)    $   (0.82)     $   (0.65)   $   (2.13)
                                                        ============     ========    ==========     ==========   ==========
Weighted average common shares outstanding,              $    4,260        4,235         4,207          3,846        1,665
                                                         ===========    =========    ==========    ===========   =========
basic
Total assets                                              $  63,278     $ 86,922      $112,223      $ 182,095    $ 198,413
                                                          ==========    =========     =========     ==========   =========
Mortgages and notes payable                               $  38,199     $ 47,977    $   67,740     $   71,563   $   79,278
                                                          ==========    =========   ===========    ===========  ===========

-------------------------------------------------- ----------------- ------------  ------------ -------------- ------------
</TABLE>




                                                         19

<PAGE>



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

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

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

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

Recent Developments

     For a description of "Acquisitions and Dispositions of Real Estate and Real
Estate Related Assets", see Item 1. Business.

         The  settlement  of the Winston  Actions  became  effective on March 5,
1999, and, pursuant to the settlement,  Milestone canceled and retired 2,983,284
shares  of  Series A  Preferred  Stock,  representing  more than 99% of the then
outstanding  shares of Series A Preferred Stock.  See Item 3. Legal  Proceedings
for a cross-reference to a description of the Winston Actions and the settlement
thereof. Also see "Results of Operations",  below, for a discussion of the costs
associated with the settlement of the Winston Actions.

         Effective  as of the opening of the trading  session on  September  10,
1998, the Common Stock and Series A Preferred Stock were delisted from the NYSE.
See Item 5.  Market  for  Registrant's  Common  Stock  and  Related  Stockholder
Matters.

Results of Operations

         Calendar Year 1999 Compared to Calendar Year 1998

         For the year ended December 31, 1999,  the Company  reported net income
of $2,123,119 on total revenues of $19,632,289, or $0.50 per common share, basic
computation. The 1999 results included a nonrecurring reversal by the Company of
a previously  recorded  income tax payable accrual of  approximately  $2,800,000
which the  Company no longer  believes is a  necessary  liability.  For the year
ended December 31, 1998, the Company reported a net loss of $8,431,112, or $1.99
per common share,  on total  revenues of  $25,515,391.  These results  include a
nonrecurring charge of approximately $7,084,000 related to the settlement of the
Winston Actions. See Part I-Item 3. Legal Proceedings for a cross-reference to a
description of the settlement.

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




                                                         20

<PAGE>



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

         Interest  income  decreased  $3,475,761,  or 42%,  for the  year  ended
December 31, 1999 compared to the year ended December 31, 1998. This decrease is
primarily due to: (1 ) a decrease of approximately $2,754,000 in interest income
as a result of the Company  receiving  payment on wraparound  notes, held by the
Company as a result of the sales of the Underlying  Properties by its owners and
(2) a decrease of approximately  $515,000 in interest income as a result of less
cash on hand during 1999 due to the cash expended to settle the Winston Actions.

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

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

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

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

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

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

         Depreciation  and amortization for the year ended December 31, 1999 was
$865,102, a decrease of $48,425 or 5%, from $913,527 for the year ended December
31,  1998.  Such  decrease  was  primarily  due  to  property  dispositions,  as
previously  described,  which is offset by  property  purchases,  as  previously
described.




                                                         21

<PAGE>



         Income tax benefit for the year ended  December 31, 1999 was $2,012,216
as compared to an income tax expense of $1,253,056  for the year ended  December
31, 1998 due  primarily to the Company  reversing a previously  recorded  income
taxes payable accrual of  approximately  $2,800,000  which the Company no longer
believes is a necessary liability.

         Calendar Year 1998 Compared to Calendar Year 1997

         For the year ended December 31, 1998,  the Company  reported a net loss
of  $8,431,112,  or $1.99 per common share,  on total  revenues of  $25,515,391.
These results include a nonrecurring charge of approximately  $7,084,000 related
to the settlement of the Winston Actions.  See Part I-Item 3. Legal  Proceedings
for a cross  reference to a description  of the  settlement.  For the year ended
December  31,  1997,  the  Company  reported a net loss of  $3,430,731  on total
revenues of $30,091,911,  or $0.82 per common share. The 1997 results included a
charge of approximately  $2,590,000  related to the fair value adjustment of the
wraparound notes.

         Total revenues for the year ended  December 31, 1998 were  $25,515,391,
as compared to $30,091,911,  for the year ended December 31, 1997, a decrease of
$4,576,520, or 15%, due to the following:

         Rent decreased $532,575, or 5%, in 1998 compared to 1997. This decrease
is primarily due to the net of: (1) property  sales,  as  previously  described,
which caused a decrease in rent  revenue of  approximately  $1,539,000  which is
offset by (2) the property purchases,  as previously described,  which caused an
increase in rent revenue of approximately $1,006,000.

         Interest  income  decreased  $5,164,478,  or 39%,  for the  year  ended
December 31, 1998 compared to the year ended December 31, 1997. This decrease is
primarily  due to: (1) the sale,  by the Company,  of all four of its  remaining
mortgage  backed  securities  during  1997 which  caused a decrease  in interest
income  of  approximately   $3,655,000  and  (2)  a  decrease  of  approximately
$1,436,000 in interest  income as a result of the Company  receiving  payment on
wraparound  notes, as previously  described,  held by the Company as a result of
the sales of the Underlying Properties by its owners.

         For the year ended  December 31, 1998 the Company had gains on the sale
of real estate and real estate related assets of $5,617,844 as compared to gains
on the sale of real estate and real estate  related  assets of $316,061  for the
year ended December 31, 1997.

         During the year ended  December 31, 1998,  the Company did not have any
available-for-sale   securities   or   U.S.   Treasury   Notes.   All   of   the
available-for-sale securities and U.S. Treasury Notes were sold during 1997 as a
result  of the  Company  selling  all  four  of its  remaining  mortgage  backed
securities during 1997 which resulted in a net gain of approximately  $3,195,000
for the  year  ended  December  31,  1997 and no such  gain  for the year  ended
December 31, 1998.

         Master Lease expenses decreased  $1,427,752,  or 10%, due to a decrease
in the  number of  properties  leased by the  Company as a result of the sale of
some of the Underlying Properties by their owners.




                                                         22

<PAGE>



         Salaries,  general and administrative expenses decreased $1,081,952, or
27%, primarily due to (1) a decrease in salary expense of approximately $999,000
as the result of a decrease  in bonuses for  several  executive  officers of the
Company  for the year  ended  December  31,  1998 and (2) a  decrease  in rental
expense of approximately  $563,000 for the corporate  offices for the year ended
December 31, 1998 compared to the same period in 1997.

         Professional  fees  increased  $352,161,  or 38%, due primarily to fees
associated with the Winston Actions and the Winston Settlement.  See Part I-Item
3. Legal  Proceedings  for a  cross-reference  to a  description  of the Winston
Actions and the Winston Settlement.

         Interest expense for the year ended December 31, 1998 was $5,474,451, a
decrease of $3,645,103,  or 40%, from $9,119,554 for the year ended December 31,
1997. Such decrease was primarily due to: (1) a decrease in interest  expense of
approximately $2,365,000 due to U.S. Treasury Note(s) short positions which were
closed  simultaneously  with the disposition during 1997, by the Company, of all
four of the remaining  mortgage  backed  securities then held by the Company and
(2) a net  decrease  in  interest  expense of  approximately  $1,063,000  on the
underlying  debt as a result of the property  sales,  as  previously  described,
which were offset by the property  purchases,  as previously  described,  during
1998.

         Depreciation  and amortization for the year ended December 31, 1998 was
$913,527,  an  increase  of  $66,142  or 8%,  from  $847,385  for the year ended
December 31, 1997.  Such increase was primarily  due to property  purchases,  as
previously  described,  and property improvements during 1998 which is offset by
property dispositions, as previously described.

         Income tax expense for the year ended  December 31, 1998 was $1,253,056
as compared to an income tax benefit of $721,234 for the year ended December 31,
1997 due to 1998 gains on the sale of real estate and real estate related assets
and an increase in the valuation allowance for deferred taxes in 1998.

Cash Flows

         For the year ended December 31, 1999, cash used in operating activities
was $15,310,660,  cash provided by investing activities was $22,908,711 and cash
used in financing  activities was  $11,329,094.  The primary uses of these funds
were  payments  associated  with the Winton  Settlement  and payments to satisfy
underlying mortgage debt as a result of property sales of the related Underlying
Property,  by its owner, an affiliate of the Company (i.e., the Partnership that
owned the Underlying Property) as previously discussed in Item 1. Business.  The
primary  source  of the  funds  was  payments  received  by the  Company  on its
wraparound notes, as previously described.

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





                                                         23

<PAGE>



Liquidity and Capital Resources

         During  1999 and  1998,  the  Company  generated  cash as a  result  of
payments  received  by  the  Company  on its  wraparound  notes,  as  previously
described,  as a result of the sale of the related Underlying  Property,  by its
owner,  an  affiliate  of the  Company  (i.e.,  the  Partnership  that owned the
Underlying Property).  This trend will continue during the first quarter of year
2000 and may continue throughout the year.

         The Company's total current  investment of $3,002,455 in land Ventures,
as previously discussed, also includes deposits of $700,000 at December 31, 1999
to  purchase  land  parcels  in  the  South  Florida  area.  Additional  capital
contributions  may be required  by the  Company to service the costs  associated
with extending the expiration dates of certain land parcel  contracts.  The cost
of extending the land purchase  contracts will be expensed if they expire before
the land is purchased.

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

         The  Company  has  invested  available  funds  in  secure,  short-term,
interest  bearing  investments.  The Company believes that its levels of working
capital,  liquidity and funds from  operations are sufficient to support present
operations.

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

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

         The Company, in its normal course of business, is theoretically exposed
to interest rate changes as they relate to real estate  mortgages and the effect
of such  mortgage  rate  changes on the value of real estate.  However,  for the
Company,  most of its mortgage debt is at fixed rates, is for extended terms, is
not assumable  and would be  unaffected by any sudden change in interest  rates.
The Company's  possible risk is from increases in long-term real estate mortgage
rates that may occur over a decade or more,  as this may  decrease  the  overall
value of real  estate.  Since the  Company  has the intent to hold its  existing
mortgages to maturity (or until the sale of a Property), there is believed to be
no interest  rate  market risk on the  Company's  results of  operations  or its
working capital position.  The Company estimates the fair value of its long term
fixed rate mortgage loans generally using discounted cash flow analysis based on
the Company's current borrowing rates for similar types of debt. At December 31,
1999,  the fair value of the  mortgage  loans was  estimated  to be  $37,251,323
compared to a carrying value amount of $38,199,191.

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






                                                         24

<PAGE>



Item 8.        Financial Statements and Supplementary Disclosure.

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

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

         On October 28, 1998, the Company  terminated its relationship  with the
accounting  firm of  Deloitte  & Touche  LLP as the  independent  auditor of the
Company's  financial  statements.  The  termination  of  the  relationship  with
Deloitte  & Touche  LLP was not the  result  of any  disagreements  between  the
Company  and  Deloitte & Touche LLP on any matter of  accounting  principles  or
practices,  financial statement disclosure,  or auditing scope or procedure.  On
November 2, 1998, the Company  retained the accounting  firm of Ahearn,  Jasco +
Company,  P.A. as its new independent  auditor to audit the Company's  financial
statements  for the fiscal year ended  December 31, 1998. The decision to change
accounting  firms as the  Company's  independent  auditor to audit the Company's
financial  statements was approved by the Audit Committee of the Company's Board
of Directors on October 27, 1998.





                                                         25

<PAGE>



                                                      PART III

         Certain  information  required by Part III is omitted  from this report
since the Company plans to file with the  Securities  and Exchange  Commission a
definitive  proxy  statement for its 2000 Annual  Meeting of  Stockholders  (the
"Proxy  Statement")  no later  than 120 days  after the end of the  fiscal  year
covered by this Report, and certain information included therein is incorporated
herein by reference.

Item 10.       Directors and Executive Officers of the Registrant.

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

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

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

Item 11.       Executive Compensation.

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

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

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

Item 13.       Certain Relationships and Related Transactions.

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


                                                         26

<PAGE>



                                                      PART IV

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

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

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

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

Independent Auditors' Report of Deloitte & Touche, LLP           F-2

Consolidated Balance Sheets - December 31, 1999 and 1998         F-3

Consolidated Statements of Revenues and Expenses -
            Years Ended December 31, 1999, 1998 and 1997         F-4

Consolidated Statement of Comprehensive Loss -
            Year Ended December 31, 1997                         F-5

Consolidated Statements of Stockholders' Equity -
            Years Ended December 31, 1999, 1998 and 1997         F-6

Consolidated Statements of Cash Flows -
            Years Ended December 31, 1999, 1998 and 1997         F-7

Notes to Consolidated Financial Statements                       F-9

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

               This financial  statement schedule of the Company for each of the
               years ended December 31, 1999,  1998 and 1997 is filed as part of
               this  Form  10-K  and  should  be read in  conjunction  with  the
               Consolidated Financial Statements,  and related notes thereto, of
               the Company.  All other financial  statement  schedules have been
               omitted  because the required  information  is not present or not
               present  in  amounts  sufficient  to  require  submission  of the
               schedule or because the  information  required is included in the
               consolidated financial statements or notes thereto.

(a)(3)         Exhibits.

               The exhibits to this report are listed below:







                                                         27

<PAGE>



Exhibit        Description

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

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

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

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

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

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

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

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

10.2 Second amended and restated management and reimbursement  agreement between
     the Company and Concord  (incorporated  by reference to Exhibit 19.3 to the
     Company's Form 10-KSB filed with the Commission on March 30, 1993).

10.3 Purchase  money  promissory  note  purchase  money  mortgage  and  security
     agreement  with The  Benderson  85-1  Trust  for the  Tonawanda,  New York,
     property (incorporated by referenced to Exhibit 10.33 to the Company's Form
     10-QSB filed with the Commission on August 14, 1993).

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

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


                                                         28

<PAGE>


Exhibit   Description


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

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

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

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

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

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

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

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

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

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

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




                                                         29

<PAGE>



Exhibit  Description

21   Subsidiaries of the Company (filed herewith).

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

(b)            Reports on Form 8-K.

               On November 3, 1999, a Current  Report on Form 8-K was filed with
               the   Commission   reporting   the  sale  of  the  five  separate
               single-tenant commercial buildings to unrelated third parties.




                                                         30

<PAGE>



                                                     SIGNATURES

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

                                          MILESTONE PROPERTIES, INC.

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

                                          Date:     March 24, 2000

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

Signature and Title                                                Date

/s/ Leonard S. Mandor                                             March 24, 2000
---------------------
Leonard S. Mandor
Chairman of the Board and Chief Executive Officer

/s/ Robert A. Mandor                                              March 24, 2000
--------------------
Robert A. Mandor
President, Chief Financial Officer and Director

/s/ Joseph P. Otto                                                March 24, 2000
------------------
Joseph P. Otto
Vice President and Director

/s/ Patrick S. Kirse                                              March 24, 2000
--------------------
Patrick S. Kirse
Vice President of Accounting
(Principal Accounting Officer)

/s/ Geoffrey Aaronson                                             March 24, 2000
Geoffrey Aaronson
Director

/s/ Harvey Jacobson                                               March 24, 2000
Harvey Jacobson
Director

/s/ Gregory McMahon                                               March 24, 2000
Gregory McMahon
Director

                                             31
<PAGE>


INDEPENDENT AUDITORS' REPORT


Milestone Properties, Inc.:

We have  audited  the  accompanying  consolidated  balance  sheets of  Milestone
Properties,  Inc. and  subsidiaries  (the "Company") as of December 31, 1999 and
1998,  and  the  related  consolidated  statements  of  revenues  and  expenses,
stockholders'  equity and cash flows for the years then  ended.  Our audits also
included the information  pertaining to 1999 and 1998 contained in the financial
statement   schedule  of  real  estate  and  accumulated   depreciation.   These
consolidated  financial  statements and the financial statement schedule of real
estate and  accumulated  depreciation  are the  responsibility  of the Company's
management.  Our  responsibility  is to express  an opinion on the  consolidated
financial  statements  and the financial  statement  schedule of real estate and
accumulated depreciation based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
Milestone  Properties,  Inc. and  subsidiaries as of December 31, 1999 and 1998,
and the  results of their  operations  and their cash flows for the years  ended
December 31, 1999 and 1998, in conformity  with  generally  accepted  accounting
principles.  Also, in our opinion,  the information  pertaining to 1999 and 1998
contained in the  financial  statement  schedule of real estate and  accumulated
depreciation,  when  considered in relation to the basic  financial  statements,
presents fairly, in all material respects, the information set forth therein.


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

March 17, 2000


                                                        F-1

<PAGE>


INDEPENDENT AUDITORS' REPORT


Milestone Properties, Inc.:

We have  audited  the  accompanying  consolidated  statements  of  revenues  and
expenses,  comprehensive loss,  stockholders' equity and cash flows for the year
ended  December 31, 1997 of Milestone  Properties,  Inc. and  subsidiaries  (the
"Company"). Our audit also included the information pertaining to 1997 contained
in the financial statement schedule of real estate and accumulated depreciation.
These consolidated financial statements and financial statement schedule are the
responsibility of the Company's management.  Our responsibility is to express an
opinion  on  the  consolidated  financial  statements  and  financial  statement
schedule information based on our audit.

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

In our opinion,  such consolidated  financial  statements present fairly, in all
material  respects,  the results of operations and cash flows of the Company for
the  year  ended  December  31,  1997  in  conformity  with  generally  accepted
accounting principles.  Also, in our opinion, the information pertaining to 1997
contained in such financial statement  schedule,  when considered in relation to
the  basic  financial  statements  taken as a  whole,  presents  fairly,  in all
material respects, the information set forth therein.


/s/ Deloitte & Touche, LLP
New York, New York

March 20, 1998




                                                        F-2

<PAGE>

<TABLE>
<CAPTION>


                                    MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
                                            CONSOLIDATED BALANCE SHEETS

                                                                       December 31, 1999         December 31, 1998
ASSETS
Current Assets:
<S>                                                                    <C>                          <C>
    Cash and cash equivalents                                          $ 8,032,257                  $   11,826,301
    Restricted cash                                                       222,000                          222,000
    Restricted cash for settlement                                      1,614,156                                0
    Loans receivable                                                    1,370,471                        1,444,442
    Accounts receivable                                                   567,112                          812,555
    Accrued interest receivable                                         2,694,289                        5,185,432
    Due from related party                                                762,102                          843,085
    Prepaid expenses and other                                            723,397                        1,200,978
    Deposits to purchase land                                             700,000                                0
                                                                       -------------          --------------------
         Total current assets                                          16,685,784                       21,534,793

    Property, improvements and equipment, net                          24,884,220                      21,517,884
    Wraparound notes, net                                              18,641,853                      39,529,787
    Deferred income tax asset, net                                      2,293,167                       2,994,070
    Investments in preferred stock                                              0                         445,500
    Management contract rights, net                                       117,875                         193,600
    Debt financing costs and other, net                                   655,393                         706,562
                                                                       -------------              ----------------
         Total assets                                                 $ 63,278,292                 $   86,922,196
                                                                       ============                 ==============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
    Accounts payable and accrued expenses                              $2,547,866                  $    2,466,590
    Accrued litigation payable                                          1,614,156                       9,692,454
    Accrued interest payable                                              148,173                         306,846
    Master Lease payable                                                3,916,308                       8,933,202
    Current portion of mortgages and notes payable                      4,203,029                       5,782,950
    Income taxes payable                                                   20,000                       2,836,496
                                                                       -------------                  -----------
         Total current liabilities                                     12,449,532                      30,018,538

    Mortgages and notes payable                                        33,996,162                      42,194,179
                                                                       ----------                      ----------

         Total liabilities                                             46,445,694                      72,212,717
                                                                       ----------                      ----------


Commitments and Contingencies

Stockholders' equity:
    Common stock ($.01 par value, 10,000,000 shares
       authorized, 4,943,633 shares issued and outstanding,
        655,091 and  692,591 shares in treasury
       in 1999 and 1998, respectively)                                     49,436                         49,436
    Preferred stock (Series A $.01 par value, $10 liquidation
       preference, 1,000,000 and 10,000,000 shares authorized,
       16,423 and 2,999,707 shares issued and outstanding in
       1999 and 1998, respectively)                                           164                          29,997
    Additional paid in surplus                                         45,340,638                      45,497,180
    Accumulated deficit                                                (25,303,597)                   (27,426,716)
    Shares held in treasury - at cost                                  (3,254,043)                     (3,440,418)
                                                                   ---------------                     -----------

       Total stockholders' equity                                       16,832,598                      14,709,479
                                                                       --------------                   ----------

       Total liabilities and stockholders' equity                      $ 63,278,292                 $   86,922,196
                                                                       ============                 ==============

                            See Accompanying Notes to Consolidated Financial Statements

</TABLE>

                                                        F-3

<PAGE>

                   MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF REVENUES AND EXPENSES
              For the Years Ended December 31, 1999, 1998 and 1997

<TABLE>
<CAPTION>


                                                         December 31, 1999      December 31, 1998       December 31, 1997
                                                         -----------------      -----------------       -----------------

REVENUES
<S>                                                         <C>                    <C>                    <C>
   Rent                                                     $   7,301,926          $   9,747,973          $   10,280,548
   Interest income                                              4,715,610              8,191,371              13,355,849
   Revenue from management company operations                     664,264                457,546                 512,303
   Tenant reimbursements                                        1,060,451              1,002,691               1,261,217
   Management and reimbursement income                             49,978                 83,091                 407,286
   Percentage rent                                                332,243                414,875                 450,423
   Gain on sale of real estate and real estate related assets   5,507,817              5,617,844                 316,061
   Net gain on securities transactions                                  0                      0               3,508,224
                                                        -----------------        ---------------               ---------

       Total revenues                                          19,632,289             25,515,391              30,091,911
                                                               ----------             ----------              ----------

EXPENSES
   Master Lease expense                                         6,212,544             12,359,713              13,787,465
   Interest expense                                             3,711,436              5,474,451               9,119,554
   Depreciation and amortization                                  865,102                913,527                 847,385
   Valuation allowance on wraparound notes                              0                      0               2,590,132
   Salaries, general and administrative                         4,416,536              2,873,482               3,955,434
   Property expenses                                            1,881,872              1,682,791               1,718,346
   Expired extensions to land purchase contracts                1,232,659                      0                       0
   Expenses for management company operations                     940,828              1,031,690               1,304,166
   Professional fees                                              924,371              1,273,555                 921,394
   Settlement fees                                                      0              7,084,238                       0
                                                        ------------------             ---------        ----------------

       Total expenses                                          20,185,348             32,693,447              34,243,876
                                                               ----------             ----------              -----------

Loss before income taxes and minority interest                   (553,059)            (7,178,056)             (4,151,965)

(Benefit) provision for income taxes                           (2,012,216)             1,253,056                (721,234)
                                                              -----------            ------------            ------------

Net income (loss) before minority interest                  $   1,459,157       $     (8,431,112)         $   (3,430,731)

Minority interest in net loss of consolidated subsidiary          663,962                      0                       0
                                                             -------------      ----------------        ----------------

Net income (loss) attributable to common stockholders      $    2,123,119       $     (8,431,112)        $    (3,430,731)
                                                              ============          =============          ==============

Income (loss) per common share, basic                      $         0.50    $              (1.99)  $            (0.82)
                                                          =================      ==================   ==================

Weighted average common shares outstanding, basic               4,260,417              4,235,245               4,206,550
                                                             ============         ==============           =============

Income (loss) per common share, diluted                 $            0.43   $              (1.99)     $            (0.82)
                                                         =================     ==================      ==================

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


                                See Accompanying Notes to Consolidated Financial Statements
</TABLE>


                                                            F-4

<PAGE>



                   MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
                      For the Year Ended December 31, 1997




                                                        December 31, 1997

Net loss attributable to common stockholders                $ (3,430,731)
                                                               ---------

Other comprehensive loss, net of tax:
   Unrealized gain on securities:
       Unrealized gain arising during period
               [net of tax provision of $1,404,624]            3,511,560
       Less:   Reclassification adjustment for gain
               included in net income [net of tax
               benefit of $1,404,624]                         (3,511,560)
                                                               ---------

Other comprehensive loss                                               0

Comprehensive loss                                          $ (3,430,731)
                                                              ===========



           See Accompanying Notes to Consolidated Financial Statements


                                                            F-5

<PAGE>

                   MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
              For the Years Ended December 31, 1999, 1998 and 1997

<TABLE>
<CAPTION>


                                                 Common Stock           Preferred Stock            Treasury Stock

                                                           Cost                      Cost                     Cost

                                                   Shares       Cost        Shares        Cost      Shares          Cost
==========================================       =========== ========== ============== ========== ===========  =============
<S>                                               <C>          <C>          <C>          <C>       <C>         <C>
Balance, December 31, 1996                        4,743,155    $47,433      3,182,184    $31,822   (692,591)   $(3,440,418)
Conversion of preferred stock into common           162,804      1,627      (148,189)    (1,481)
stock
Net loss for the year ended December 31, 1997
Realization of unrealized holding loss -
available-for-sale securities
Balance, December 31, 1997                        4,905,959     49,060      3,033,995     30,341   (692,591)    (3,440,418)
                                                ----------- ---------- -------------- ---------- -----------  -------------
Conversion of preferred stock into common            37,674        376       (34,288)      (344)
stock
Reserve for preferred stock settlement repurchase
Net loss for the year ended December 31, 1998
Balance, December 31, 1998                        4,943,633    $49,436      2,999,707     29,997   (692,591)    (3,440,418)
                                                ----------- ---------- -------------- ---------- -----------  -------------
Cancellation of Series A Preferred Stock                                  (2,983,284)   (29,833)
Issuance of Treasury Stock                                                                            37,500        186,375
Net income for the year ended December 31,
1999
Balance, December 31, 1999                        4,943,633    $49,436         16,423      $ 164   (655,091)   $(3,254,043)
                                                =========== ========== ============== ========== ===========  =============
</TABLE>


<TABLE>
<CAPTION>
                                                  Additional    Unrealized holding
                                                     paid in      gain (loss) on    Accumulated    Stockholders'
                                                     Surplus     available-for-sale   deficit          equity
==========================================        ============== ================= ==============  ==============
<S>                                                  <C>                <C>         <C>               <C>
Balance, December 31, 1996                           $48,105,575        $(220,396)  $(15,564,873)     $28,959,143
Conversion of preferred stock into common                  (146)                                                0
stock
Net loss for the year ended December 31, 1997                                          (3,430,731)     (3,430,731)
Realization of unrealized holding loss -
available-for-sale securities                                              220,396                        220,396
Balance, December 31, 1997                            48,105,428                 0   (18,995,604)      25,748,807
                                                  -------------- ----------------- --------------  --------------
Conversion of preferred stock into common                   (32)                                                0
stock
Reserve for preferred stock settlement repurchase    (2,608,216)                                      (2,608,216)
Net loss for the year ended December 31, 1998                                         (8,431,112)     (8,431,112)
Balance, December 31, 1998                            45,497,180                 0   (27,426,716)      14,709,479
                                                  -------------- ----------------- --------------  --------------
Cancellation of Series A Preferred Stock                  29,833                                                0
Issuance of Treasury Stock                             (186,375)                 0                              0
Net income for the year ended December 31,                                              2,123,119       2,123,119
1999
Balance, December 31, 1999                          $ 45,340,638              $  0  $(25,303,597)    $ 16,832,598
                                                  ============== ================= ==============  ==============



                                See Accompanying Notes to Consolidated Financial Statements
</TABLE>
                                                            F-6

<PAGE>



                   MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              For the Years Ended December 31, 1999, 1998 and 1997

<TABLE>
<CAPTION>
                                                        December 31, 1999      December 31, 1998        December 31, 1997
                                                       -------------------     -----------------  -----------------------
CASH FLOW FROM OPERATING ACTIVITIES

<S>                                                          <C>                  <C>                       <C>
   Net income (loss)                                         $ 2,123,119          $   (8,431,112)           $ (3,430,731)
   Adjustments to reconcile net income (loss) to
         net cash used in operating activities:
   Depreciation and amortization                                 865,102                 913,527                 847,385
   Deferred taxes                                                700,903               1,064,288                (785,479)
   Litigation and settlement fees                                      0               7,084,238                       0
   Valuation allowance on wraparound notes                             0                       0               2,590,132
   Net gain on securities transactions                                 0                       0              (3,508,224)
   Gain on sale of real estate related assets                 (5,507,817)             (5,617,844)               (316,061)
   Changes in operating assets and liabilities
         Decrease in accounts receivable                         245,443                 453,070                  94,996
         Decrease (increase) in due from related party            80,983                (451,234)                207,242
         Decrease in accrued interest receivable               2,491,143               3,280,096               1,181,358
         Decrease (increase) in prepaid expenses and other       379,548                (671,355)               (760,071)
         Increase in deposits to purchase land                  (700,000)                      0                       0
         Increase (decrease) in accrued expenses                  81,276                 450,648                 (15,571)
         Decrease in accrued litigation payable               (8,078,298)                      0                       0
         (Decrease) increase in accrued interest payable        (158,673)                 47,730                (880,825)
         Decrease in Master Lease payable                     (5,016,894)             (4,704,362)               (807,787)
         (Decrease) increase in income taxes payable          (2,816,496)                 14,377                (428,625)
         Decrease in due to related party                              0                       0                 (61,688)
                                                      ------------------         ---------------            -------------

         Net cash used in operating activities               (15,310,661)             (6,567,933)             (6,073,949)
                                                              ----------              -----------             -----------

CASH FLOW FROM INVESTING ACTIVITIES

   Principal repayments on loans receivable                       73,971                  68,302                 171,841
   Principal repayments on wraparound notes                    3,850,399               5,190,630               4,578,169
   Investment in wraparound notes                                      0                (108,838)                (81,934)
   Purchase of building and land                              (3,511,669)            (18,515,000)             (1,100,000)
   Purchase of leasehold improvements                           (635,057)               (484,209)               (263,153)
   Proceeds from realization of real estate related assets, net22,685,567             19,407,819               5,258,708
   Proceeds from the sale of real estate assets                        0              17,379,628                       0
   Proceeds from sale of available-for-sale securities                 0                       0              36,360,354
   Proceeds from redemption of investments in preferred stock    445,500               1,783,100               1,730,833
   Proceeds from redemption of reverse repurchase agreements           0                       0              35,035,636
   Purchase of treasury notes                                          0                       0             (34,269,233)
                                                     -------------------       ------------------            ------------

         Net cash provided by investing activities            22,908,711              24,721,432              47,421,221
                                                             -----------             ------------           ------------

</TABLE>

                                                            F-7
<PAGE>


                   MILESTONE PROPERTIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (continued)
              For the Years Ended December 31, 1999, 1998 and 1997

<TABLE>
<CAPTION>
                                                        December 31, 1999       December 31, 1998       December 31, 1997
                                                        -----------------       -----------------       -----------------

CASH FLOW FROM FINANCING ACTIVITIES

<S>                                                            <C>                    <C>                              <C>
   Proceeds from mortgages and notes payable                   3,750,000              18,749,000                       0
   Principal payments on mortgages and notes payable         (13,527,938)            (38,511,435)             (6,685,652)
   Principal payments on loans payable                                 0                       0             (23,829,335)
   Amounts paid received on treasury notes payable                     0                       0                (316,887)
   Amounts in restricted cash                                 (1,614,156)                      0                (222,000)
                                                            -------------       -----------------         ---------------

         Net cash used in financing activities               (11,392,094)            (19,762,435)            (31,053,874)
                                                              -----------            ------------            ------------


NET (DECREASE) INCREASE IN
         CASH AND CASH EQUIVALENTS                            (3,794,044)             (1,608,936)             10,293,398

CASH AND CASH EQUIVALENTS,
         BEGINNING OF PERIOD                                  11,826,301             13,435,237                3,141,839
                                                            ------------             ----------                ---------

CASH AND CASH EQUIVALENTS,
         END OF PERIOD                                   $     8,032,257         $   11,826,301           $   13,435,237
                                                           =============          =============            =============

SUPPLEMENTAL DISCLOSURE OF
         CASH FLOW INFORMATION


         Cash paid during the period for interest        $     3,870,109        $     5,426,721           $   10,000,379
                                                           ==============        ==============            =============


         Cash paid during the period for income taxes   $        100,272       $        174,396         $        854,429
                                                          ==============        ===============          ===============

</TABLE>


SUPPLEMENTAL DISCLOSURE OF NON-CASH
         FINANCING AND INVESTING ACTIVITIES


At the close of business  on March 5, 1999,  the  Company  canceled  and retired
2,983,284  shares of Series A Preferred  Stock,  $.01 par value,  resulting in a
reduction of Preferred  Stock and an increase in  Additional  Paid In Surplus of
$29,833.  This  transaction  occurred  pursuant to the terms of a court approved
settlement as discussed in Note 15. Legal  Proceedings.  Also,  37,500 shares of
Treasury Stock were issued at a cost of $4.97 per share to certain  Non-Employee
Directors  pursuant to the Company's  1999 Stock  Incentive  Plan resulting in a
reduction in Treasury  Stock and  Additional  Paid In Surplus of  $186,375.  The
transaction is described in detail in Note 10. Capital Stock.





           See Accompanying Notes to Consolidated Financial Statements



                                                        F-8

<PAGE>



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

1.     Organization and Basis of Presentation

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

Milestone was  incorporated  on November 30, 1989 under the laws of the state of
Delaware. On December 18, 1990, the Concord Milestone Income Fund, L.P. ("CMIF")
and  Concord  Milestone  Income Fund II, L.P.  ("CMIF  II")  (collectively,  the
"Predecessor  Partnerships") were merged with and into the Company.  The Company
succeeded to the business and operations of the Predecessor Partnerships and the
partnership interests in the Predecessor Partnerships were converted into shares
of Milestone's  common stock and preferred  stock.  In October 1995, the Company
entered into various agreements with affiliates of Concord Assets Group, Inc., a
New York Corporation ("Concord"), pursuant to which the Company acquired certain
real estate related assets for cash and approximately 2,545,000 shares of common
stock. See note 13 for a description of related party transactions with Concord.

2.     Summary of Significant Accounting Policies

Business

The Company is primarily engaged in a single business industry,  commercial real
estate,  which involves the ownership,  operation and management of 26 interests
in commercial  real estate  properties at December 31, 1999  consisting of (i)10
fee interests (the "Fee  Properties") and (ii) wraparound notes (the "Wraparound
Notes") and wraparound mortgages (the "Wraparound  Mortgages" and, together with
the Wraparound  Notes,  the "Wrap Debt") which are secured by 16 commercial real
properties (the "Underlying  Properties" and,  together with the Fee Properties,
the  "Properties").  The Company is also the master lessee (the "Master Lessee")
under  individual  leases  (the  "Master  Leases")  on  each  of the  Underlying
Properties.  The Properties  are located in 12 states.  The Company also invests
directly in real estate and real estate related assets.

Principles of Consolidation and Minority Interest in Consolidated Subsidiary

The  consolidated   financial  statements  include  the  accounts  of  Milestone
Properties,  Inc. and its subsidiaries.  Inter-company accounts and transactions
have been eliminated in the consolidated  financial statements.  On May 1, 1999,
the Company began investing in joint venture partnerships ("JVs") with unrelated
third parties.  The JVs  contracted  for the  acquisition of land parcels in the
South Florida area.  Minority  investors owned  approximately  12% of the JVs at
December 31, 1999. The ownership  percentages  changed throughout the investment
periods  as  additional  capital  was  contributed.   The  minority   investors'
proportionate  share in the JVs after-tax  results is shown in the  accompanying
statements of revenues and  expenses.  The minority  investors'  interest in the
consolidated subsidiary is insignificant at year end.



                                                        F-9

<PAGE>



Basis of Accounting, Fiscal Year

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

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

Cash and Cash Equivalents

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

The  Company  has  restricted  cash of  $222,000  at  December  31,  1999,  as a
compensating  balance  for  a  Letter  of  Credit  related  to  a  guarantee  of
performance  associated  with  the  lease  of  office  space  for the  Company's
corporate  offices.  Restricted cash is held in an interest  bearing account and
becomes available for general operating  purposes of the Company on December 31,
2000. Currently, no amounts are outstanding on the Letter of Credit. See note 15
for a description of the restricted cash for settlement at December 31, 1999.

Available-for-Sale Securities

Gains and losses  relating to  available-for-sale  securities  are excluded from
earning and reported as a separate component of stockholders' equity, net of tax
effect,  until such amounts are realized  through the sale or  redemption of the
securities.

Property, Improvements and Equipment and Related Depreciation and Amortization

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

Investment Allowances and Impairments

The  Company  assesses  at least  annually  the  probability  that  the  amounts
collectible  under the  contractual  terms of each Wraparound Note will equal or
exceed the carrying  amount of such Wraparound  Note.  When management  believes
that a Wraparound Note has been impaired,  the Company measures impairment based
on the  estimated  fair  value  of the  underlying  properties,  using  internal
analysis and independent appraisals when necessary. For the years ended December
31, 1999,  1998 and 1997, the Company  provided a valuation  allowance of $0, $0
and $2,590,132, respectively.


                                                       F-10

<PAGE>



The  Company  individually  reviews  each of the  Fee  Properties  for  possible
impairment at least  annually,  and more  frequently if  circumstances  warrant.
Impairment is determined to exist when  estimated  amounts  recoverable  through
future cash flows from  operations  on an  un-discounted  basis is less than the
property's  carrying  value.  If a property is determined to be impaired,  it is
written down to its estimated fair value to the extent that the carrying  amount
exceeds  the fair  value of the  property.  No write  downs  for  impairment  of
property investments were recorded in 1999, 1998 and 1997.

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

Management Contract Rights and Debt Financing Costs

Management  contract rights are being amortized over a period of twenty-five and
thirty years.  The  amortization  for the  management  contract  rights has been
accelerated for those  agreements that are terminated prior to the expiration of
the initial lease term.  Debt financing  costs are being amortized over the life
of each respective loan.

Income Taxes

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

Income (loss) per Common Share

SFAS No. 128,  "Earnings per Share,"  requires  companies  with complex  capital
structures  or common  stock  equivalents  to  present  both  basic and  diluted
earnings  per share  ("EPS") on the face of the income  statement.  Basic EPS is
calculated as income  available to common  stockholders  divided by the weighted
average number of common shares  outstanding  during the period.  Diluted EPS is
calculated  using the "if converted"  method for convertible  securities and the
treasury stock method for options prescribed by APB15,  "Earnings per Share." In
certain circumstances,  the conversion of stock options and Convertible Series A
Preferred Stock are excluded from diluted EPS if the effect of such inclusion is
anti-dilutive.  The  numerators  of  EPS  computations  are as  reported  in the
consolidated  statements of revenues and expenses;  the denominators include the
effects of common share equivalents of outstanding stock options and Convertible
Series A  Preferred  Stock  which  totals  4,990,970,  7,845,326  and  7,810,901
respectively, in 1999, 1998 and 1997.


                                                       F-11

<PAGE>



Comprehensive Income (Loss)

A statement of  comprehensive  income (loss) has not been  presented for 1998 or
1999 as there are no items of other comprehensive income (loss) in those years.

Recent Accounting Pronouncements

In June 1997,  the  Financial  Accounting  Standards  Board issued SFAS No. 131,
"Disclosures  about  Segments of an Enterprise and Related  Information,"  which
establishes annual and interim reporting standards for an enterprise's operating
segments and related disclosures about its products, services,  geographic areas
and major customers. The Company's operations are within one reportable segment.

In June 1998,  the  Financial  Accounting  Standards  Board issued SFAS No. 133,
"Accounting   for  Derivative   Instruments  and  Hedging   Activities,"   which
establishes  accounting and reporting  standards for derivative  instruments and
hedging  activities.  It requires that an entity  recognize all  derivatives  as
either assets or liabilities in the balance sheet and measure those  instruments
at fair  value.  We do not  believe  this  will  have a  material  effect on our
operations, when adopted.

Reclassifications

Certain  prior year  amounts  have been  reclassified  to conform  with the 1999
financial presentation.



                                                       F-12

<PAGE>



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

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

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

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

On April 27, 1999, a wraparound note held by the Company on a 52,700 square foot
shopping  center  property  located in Baton Rouge,  Louisiana (the "Baton Rouge
Property"),  was paid as a result of the sale of the Baton Rouge Property by its
owner, an affiliate of the Company (the  partnership  that owned the Baton Rouge
Property), to an unrelated third party. In connection with the sale of the Baton
Rouge Property, the Company, as the master lessee on a Master Lease on the Baton
Rouge  Property,  canceled  the subject  Master  Lease.  Of the gross  proceeds,
$1,896,208 was used to satisfy the  underlying  mortgage debt on the Baton Rouge
Property. As a result of the payment of the wraparound note and the satisfaction
of the  underlying  mortgage  debt,  the Company  realized net cash  proceeds of
approximately  $2,043,000 and recorded a book gain of approximately  $306,000 in
the second quarter of 1999.

On April 6, 1999, a wraparound note held by the Company on a 125,803 square foot
shopping center property  located in Pascagoula,  Mississippi  (the  "Pascagoula
Property"),  was paid as a result of the sale of the Pascagoula  Property by its
owner,  an affiliate of the Company (the  partnership  that owned the Pascagoula
Property),  to an unrelated  third  party.  In  connection  with the sale of the
Pascagoula Property,  the Company, as the master lessee on a Master Lease on the
Pascagoula  Property,  canceled  the subject  Master  Lease.  As a result of the
payment of the  wraparound  note,  the  Company  realized  net cash  proceeds of
approximately  $2,315,000 and recorded a book gain of approximately  $845,000 in
the second quarter of 1999.


                                                       F-13

<PAGE>



On November  10, 1998,  the Company  completed  the purchase of Lincoln  Park, a
46,190 square foot strip mall located in Davie,  Florida (Broward County),  from
an unrelated  third party for $3,840,000.  In connection with the purchase,  the
Company obtained a $3,219,000 first mortgage loan which bears interest at a rate
of 7.58% per annum.  Such first mortgage requires monthly principal and interest
payments of $22,684 based upon a 30 year self liquidating amortization schedule,
with a balloon payment of approximately $2,854,000 due November 1, 2008.

On October 27, 1998, the Company  completed the purchase of Pine Crest Square, a
40,408  square  foot strip mall  located in Fort  Lauderdale,  Florida  (Broward
County),  from an unrelated third party for  $3,200,000.  In connection with the
purchase,  the Company  obtained a $2,400,000  first  mortgage  loan which bears
interest  at a rate of 7.0% per annum.  Such  first  mortgage  requires  monthly
principal and interest payments of $15,967 based upon a 30 year self liquidating
amortization  schedule,  with a balloon payment of approximately  $2,063,000 due
November 11, 2008.

On October 13, 1998, the Company completed the purchase of Mandarin  Central,  a
63,346 square foot strip mall located in  Jacksonville,  Florida (Duval County),
from an unrelated third party for  $4,650,000.  In connection with the purchase,
the Company  obtained a $3,950,000 first mortgage loan which bears interest at a
rate of 8.0% per annum.  Such first  mortgage  requires  monthly  principal  and
interest payments of $28,984 based upon a 30 year self liquidating  amortization
schedule,  with a balloon  payment of  approximately  $3,542,000  due October 1,
2008.

On October 1, 1998,  a wraparound  note held by the Company on a 285,655  square
foot shopping center property located in South Williamson,  Kentucky (the "South
Williamson Property"),  was paid as a result of the sale of the South Williamson
Property by its owner, an affiliate of the Company (i.e.,  the Partnership  that
owned the South Williamson Property), to an unrelated third party. In connection
with the sale of the South  Williamson  Property,  the  Company,  as the  master
lessee on a Master Lease on the South Williamson Property,  canceled such Master
Lease.  The  negotiated  sales  price  of  the  South  Williamson  Property  was
approximately  $14,874,000 which included  acquiring the property subject to the
$14,773,655  remaining  balance  of the  underlying  mortgage  debt on the South
Williamson  Property  (which  represented  approximately  21% of Company's total
liabilities at such time). The wraparound note on the South Williamson  Property
represented  approximately  13% of the Company's total assets at such time. As a
result  of the  sale  of the  South  Williamson  Property,  the  payment  of the
wraparound  note and the  satisfaction  of the  underlying  mortgage  debt,  the
Company  realized  approximately  $100,000  in cash and  recorded a book gain of
approximately $4,197,000.

On September 21, 1998, a wraparound  note held by the Company on a 35,496 square
foot shopping center property located in Vestivia Hills,  Alabama (the "Vestivia
Hills  Property"),  was  paid as a  result  of the  sale of the  Vestivia  Hills
Property by its owner, an affiliate of the Company (i.e.,  the Partnership  that
owned the Vestivia Hills  Property),  to an unrelated third party. In connection
with the sale of the Vestivia Hills Property,  the Company, as the master lessee
on a Master Lease on the Vestivia  Hills  Property,  canceled such Master Lease.
The  negotiated  sale price of the Vestivia  Hills  Property  was  approximately
$1,640,000.  Of the gross proceeds,  $722,638 was used to satisfy the underlying
mortgage debt on the Vestivia Hills Property (which represented approximately 1%
of the Company's  total  liabilities at such time).  The wraparound  note on the
Vestivia  Hills Property  represented  approximately  3% of the Company's  total
assets at such time. As a result of the sale of the Vestivia Hills Property, the
payment of the wraparound note and the  satisfaction of the underlying  mortgage
debt,  the Company  realized  net cash  proceeds of  approximately  $875,000 and
recorded a book gain of approximately $338,000.


                                                       F-14

<PAGE>



On  September  11, 1998,  the Company  completed  the purchase of Country  Grove
Plaza, a 16,642 square foot strip mall located in West Palm Beach, Florida (Palm
Beach County), from an unrelated third party for $1,100,000.  In connection with
the purchase,  the Company  obtained a $880,000  first mortgage loan which bears
interest  at a rate of 7.51% per annum.  Such first  mortgage  requires  monthly
principal and interest  payments of $6,159 based upon a 30 year self liquidating
amortization  schedule,  with a balloon  payment of  approximately  $780,150 due
September 1, 2008.

On July 15, 1998,  the Company  completed the purchase of Teeca Plaza,  a 22,589
square foot strip mall located in Boca Raton, Florida (Palm Beach County),  from
an unrelated  third party for $2,075,000.  In connection with the purchase,  the
Company obtained a $1,800,000 first mortgage loan which bears interest at a rate
of 7.39% per annum.  Such first mortgage requires monthly principal and interest
payments of $12,450 based upon a 30 year self liquidating amortization schedule,
with a balloon payment of approximately $1,591,000 due July 1, 2008.

On July 7,  1998,  the  Company  completed  the sale of its  Mountain  View Mall
property  located in Bend,  Oregon (the "Bend  Property") to an unrelated  third
party for approximately $17,750,000. The Company realized cash net proceeds from
the  sale  of  approximately  $319,200,  after  paying  off the  balance  of the
underlying first mortgage of $17,065,000 (which represented approximately 23% of
the Company's  total  liabilities  at such time) and used a portion of the funds
for  closing  costs and net credits to the buyer.  At the time of the sale,  the
Bend Property represented approximately 17% of the Company's total assets with a
carrying value, net of accumulated depreciation,  of approximately  $16,482,000.
As a result of the  sale,  the  Company  recorded  a book gain of  approximately
$1,001,000.

On April 17, 1998,  the Company  completed  the purchase of Orange Park Shopping
Center,  a 21,509  square foot strip mall located in Orange Park,  Florida (Clay
County),  from an unrelated third party for  $1,500,000.  In connection with the
purchase,  the Company  obtained a $1,300,000  first  mortgage  loan which bears
interest  at a rate of 7.39% per annum.  Such first  mortgage  requires  monthly
principal and interest  payments of $8,992 based upon a 30 year self liquidating
amortization  schedule,  with a balloon payment of approximately  $1,147,600 due
April 1, 2008.

On April 1, 1998,  the Company  completed  the purchase of Regency Walk Shopping
Center, a 34,436 square foot strip mall located in Jacksonville,  Florida (Duval
County),  from an unrelated third party for  $2,150,000.  In connection with the
purchase,  the Company  obtained a $1,840,000  first  mortgage  loan which bears
interest  at a rate of 7.87% per annum.  Such first  mortgage  requires  monthly
principal and interest payments of $13,335 based upon a 30 year self liquidating
amortization  schedule,  with a balloon payment of approximately  $1,643,700 due
May 1, 2008.

On February 9, 1998, a wraparound  note held by the Company on a 128,864  square
foot shopping center property located in Chili, New York (the "Chili Property"),
was assigned to an unrelated third party for $75,000. The Company, as the master
lessee on a Master Lease on the Chili Property,  terminated such Master Lease on
April 30, 1996. The  assignment of the  wraparound  note relieved the Company of
its  responsibility to make any payments on the underlying  mortgage debt on the
Chili  Property.  As a result of the  assignment of the  wraparound  note on the
Chili  Property and the relief of the  Company's  obligation  to the  underlying
mortgage debt, the Company realized net cash proceeds of  approximately  $75,000
and recorded a book gain of approximately $82,000.

From time to time the Company  sells,  or may take action to sell,  certain real
estate  assets which it does not believe to be material to the overall  business
or financial condition of the Company.


                                                       F-15

<PAGE>



4.     Investment in Land Ventures ("Ventures")

       On May 1, 1999 and August 27, 1999, the Company made initial  investments
of $262,469 and $46,762, respectively, in the Ventures, and the Ventures assumed
contracts to purchase  certain land parcels in the South Florida area.  The land
purchase  contracts contain options to extend the closing date for an additional
fee.  Subsequent  to the initial  investment,  the  Company has made  additional
capital contributions of $2,693,224 to the Ventures.  The consolidated financial
statements of the Company  include the  operating  results for the Ventures from
the date of the Company's investments.

       On December 29, 1999, the Ventures  completed the purchase of a parcel of
land located in Miami, Florida (Miami-Dade County) from an unrelated third party
for $3,512,000. In connection with the purchase, a $2,000,000 first mortgage was
obtained which bears interest equal to 9.5% per annum which is effective for the
initial  year of the term of the note.  Interest on the subject  note is payable
during the initial year in twelve consecutive monthly installments;  thereafter,
the note  requires  twenty-three  monthly  payments of  principal  and  interest
beginning in the thirteenth month of the note based upon a 25 year  amortization
schedule.  The note also requires a rate adjustment on the  anniversary  date of
the note equal to the base rate (prime rate)  announced by Citibank,  N.A.,  New
York, from  time-to-time,  plus one percent.  A balloon payment of approximately
$1,974,000 is required at the end of year three of the mortgage.

       The  investments  included  in the  Ventures  at  December  31, 1999 also
include  deposits  of  $700,000  which will be applied to the  purchase  of land
parcels in the South  Florida  area.  Additional  capital  contributions  may be
required by the  Company to service  the costs  associated  with  extending  the
expiration dates of certain land purchase  contracts.  The cost of extending the
land  purchase  contracts  will be expensed  if they  expire  before the land is
purchased.

5.     Property, Improvements and Equipment

Property,  improvements and equipment at December 31, 1999 and 1998 consisted of
the following:

<TABLE>
<CAPTION>


                                                     December 31, 1999        December 31, 1998
============================================  ======================== ========================
<S>                                                     <C>                       <C>
Land                                                    $    5,473,169            $   1,961,500
Building                                                    20,978,628               20,978,628
Leasehold improvements and equipment                         1,330,885                1,015,162
                                                           -----------                ---------
Total, at cost                                              27,782,682               23,955,290
Less: Accumulated depreciation                             (2,898,462)              (2,437,406)
                                                          ------------               ---------
Total, net                                               $ 24,884,220             $  21,517,884
                                                         =============            =============
--------------------------------------------  ------------------------ ------------------------
</TABLE>

6.     Investment in Wraparound Notes

Investment  in  Wraparound  Notes   represents   obligations  due  from  limited
partnerships (the "Partnerships"). Certain directors and officers of the Company
are also directors, officers and controlling stockholders of the general partner
of  each  of the  Partnerships.  The  original  formation  of  the  Partnerships
typically  involved the purchase of a property by the  Partnership  for cash and
certain non-recourse promissory notes (the "Wraparound Notes"), payment of which
was secured by the purchased property (the "Underlying  Property").  The related
Wraparound Notes were subordinate to the Underlying  Property Mortgage Debt (the
"Underlying Debt"). The property was


                                                       F-16

<PAGE>



then leased back (the "Master  Leases") from the  Partnership for a fixed annual
rental fee. The  Partnerships  are obligated to make fixed payments of principal
and interest on certain  Wraparound Notes. Such payments  approximate the Master
Lease  obligations.  The  Company  is  entitled  to all rents  under the  tenant
operating leases and is required to satisfy all other landlord obligations.  The
payments  received by the  Company  from the tenants are used to make the Master
Lease payments to the Partnerships.

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

Each of the Wraparound Notes gives the Company a lien on the Underlying Property
as well as the Partnership's  interest in the Master Lease. The Wraparound Notes
are  subordinate to the Underlying  Debt. The Wraparound  Notes have  maturities
ranging from 2000 to 2015.  The scheduled  principal  receipts of the Wraparound
Notes are as follows (dollar amounts in thousands):


     Year Ending December 31st:
=====================================
       2000                   $13,736
       2001                       178
       2002                       196
       2003                       215
       2004                       237
  Thereafter (a)                4,080
                    -----------------
      Total                   $18,642
                    =================

a - Excludes $7,575 of the original issue discount.

The following  schedule  depicts  Wraparound  Notes which are subordinate to the
Underlying Debt on such properties:
<TABLE>
<CAPTION>
                                                                    Face Amount
                          Closing     Interest        Final         of Mortgage         Carrying Amount of     Interest Due
      Location             Date       Rate (%)    Maturity Date        Loans              Mortgage Loans        and Accrued
=====================  ============= ===========  ==============  =============== ==== =====================  ===============
<S>                         <C>             <C>          <C>           <C>                        <C>                <C>
Deland, FL                  10/23/95        9.70         6/30/00       $1,904,659                 $1,386,963         $193,192
Rochester, NY               10/23/95        9.70        12/31/14        1,708,137                  1,426,983          174,192
                                           10.00        12/31/14          183,567                    130,625                0
Janesville, WI              10/23/95       10.25        12/31/15        2,100,380                  1,361,406          225,760
                            02/11/98       11.00        12/31/15           16,584                     15,000                0
No. Canton, OH              10/23/95        9.11        12/31/14        2,747,434                  2,080,901          260,968
                            10/23/95       11.00        12/31/14           37,589                     26,575                0
                            10/15/96       11.00        12/01/14           32,385                     25,650                0
Quincy, IL                  10/23/95       10.00        12/31/98        4,903,590    a             1,156,057                0
Natchez, MS                 10/23/95       10.00        05/01/08        3,091,460    a               840,595           89,495
Sandy, PA                   10/23/95       10.00         6/30/00        2,387,007    a               811,425           85,028
Montgomery, AL              10/23/95        9.75         6/30/00        2,112,637                    802,335          215,444
Paris, TN                   10/23/95       10.00         6/30/00        2,935,475                  1,122,807          307,388
                            10/23/95       11.00         6/30/00           74,163                     51,016                0
Savannah, TN                10/23/95        9.88        12/31/99        1,079,560                    352,116          111,572
Danville, IL                10/23/95        9.75         6/30/00        1,668,565                    704,196          170,154
Warsaw, VA                  10/23/95        9.75        12/31/99        1,338,084                    981,167          136,460
Walpole, NH                 10/23/95        9.75        12/31/99        1,311,402                    897,379          133,731
Palatka, FL                 10/23/95        9.75        12/31/99        2,114,078                  1,432,915          215,597
                            12/09/98       11.00        12/31/99           27,687                     24,650                0
Columbus, NE                10/23/95        9.75         6/30/00        2,309,380                  2,044,449          235,507
Hamilton, NY                10/23/95        9.75        12/31/99        1,370,885                    966,643          139,801
                                                                        ---------                    -------          -------
                                                          Totals      $35,454,708                $18,641,853       $2,694,289
                                                                       ==========                 ==========        =========
---------------------  ------------- -----------  --------------  --------------- ---- ---------------------  ---------------
</TABLE>

a - Includes discount elements totaling in aggregate $7,575,000.

                              F-17
<PAGE>

The following  schedule  represents a roll forward of  Wraparound  Notes for the
years ended December 31, 1999 and 1998:


                                      1999                      1998
=================================== ================= =========================
Beginning balance                        $ 39,529,787             $  59,402,931
Investment in wraparound notes                      0                   108,838
Principal repayments                      (3,782,763)               (5,190,630)
Notes satisfied from property sales      (17,105,171)              (14,791,352)
Valuation allowance                                 0                         0
                                   ------------------      --------------------
Ending balance                          $ 18,641,853              $ 39,529,787
                                        =============             =============
----------------------------------------------------- -------------------------

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

The maturity dates of the remaining  Wraparound  Notes and Wraparound  Mortgages
currently  held by the  company  range  through  December  2015,  of which seven
Wraparound  Notes and  Wraparound  Mortgages  will  mature on June 30, 2000 (the
"Maturing Wrap Debt").  The Maturing Wrap Debt was due to expire on December 31,
1999,  however,  the  Company  granted  a six  month  extension  to  allow  each
applicable  Partnership  of the  respective  Maturing  Wrap Debt  issued by such
Partnership  to make payment.  In order for each such  Partnership  to make such
payment, one of the following events may occur: (i) the Partnership may sell the
Underlying  Property  securing  the  respective  Maturing  Wrap  Debt,  (ii) the
Company,  as the holder of the Maturing Wrap Debt,  may obtain  ownership of the
Underlying  Property  securing  Maturing  Wrap  Debt in lieu of  payment  on the
Maturing Wrap Debt via  foreclosure  sale or (iii) the Company has the option to
extend the Maturing Wrap Debt to a for subsequent six month periods.


                                                       F-18

<PAGE>

7.     Investment in Preferred Stock

In connection  with a February 1997 merger between Union  Properties  Investors,
Inc. and a wholly owned  subsidiary  of Kranzco  Realty  Trust,  a Maryland real
estate  investment  trust  ("Kranzco"),  the Company became the owner of 356,400
shares  of  Kranzco's  Series C  Cumulative  Redeemable  Preferred  Shares  (the
"Kranzco Series C Shares").

The  Company,  as the holder of 44,550  unredeemed  shares of  Kranzco  Series C
Shares as of December 31, 1998,  was entitled to receive from the  redemption of
such  shares,  in  one  installment,  an  aggregate  amount  of  cash  equal  to
approximately  $445,500,  plus  interest  at the  rate  of 8% per  annum  on the
applicable  outstanding  balance of such shares.  Such final redemption payment,
made in February  1999,  liquidated  the Company's  holdings of Kranzco Series C
Shares.

8.     Leases

As Lessor

The  Properties  have a gross  leaseable  area of  approximately  1,551,640  and
2,218,645  square  feet of  which  approximately  94% and 96% was  leased  as of
December 31, 1999 and 1998, respectively.

Minimum  base  rental  income  under  tenant  lease  agreements  relating to the
Properties having remaining lease terms ranging from one to 32 years at December
31, 1999 is as follows (dollars amounts in thousands):


Year Ending December 31st:
====================================
      2000                 $   5,289
      2001                     4,174
      2002                     3,143
      2003                     2,148
      2004                     1,630
   Thereafter                  3,842
                          ----------
      Total                 $ 20,226
                            ========
----------------- ------------------

For the  years  ended  December  31,  1999,  1998 and  1997,  no  tenant  at any
individual  property accounted for more than 10% of the Company's total revenue.
However,  the total  revenue  from K- mart  Corporation's  nine  leases with the
Company  accounted  for  approximately  30%, 29% and 32%,  respectively,  of the
Company's aggregate rent revenue.

As Lessee

Minimum  rental  expense under the Master  Leases,  having  original lease terms
ranging from 2000 to 2016, at December 31, 1999 is as follows (dollar amounts in
thousands):


Year Ending December 31st:
====================================
      2000                 $   1,503
      2001                       823
      2002                       823
      2003                       823
      2004                       823
   Thereafter                  8,806
                           ---------
      Total                 $ 13,601
                            ========
----------------- ------------------

                         F-19
<PAGE>

Although the Company's  lease  payments are not  contingent  upon receiving rent
from the  Properties,  such  payments are expected to be made from such receipts
and the receipt of interest and principal payments from the Wraparound Notes.

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

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

The  expiration  dates of the nine Master Leases  currently  held by the Company
range from June 2000 to December 2015, of which six Master Leases expire on June
30, 2000 (the "Expiring Master Leases").  The Expiring Master Leases were due to
expire on December 31, 1999,  however,  a six month extension was granted.  As a
result of the Expiring  Master  Leases,  the  Company,  as the tenant under such
Expiring Master Leases, may (i) assign all of its rights, title and interests in
the Underlying  Properties  subject to the respective  Expiring Master Leases to
the applicable Partnership that is the landlord under the Expiring Master Leases
and such Partnership may assume all of the Company's  related  obligations under
the  respective  Expiring  Master  Leases or (ii) has the option to extend  such
Expiring Master Leases for subsequent six month periods.

9.     Mortgages and Notes Payable

The  mortgages  and  notes  payable  are  non-recourse  to the  Company  and are
collateralized  by the  Properties.  The  scheduled  principal  payments  of the
mortgages and notes payable at December 31, 1999 are as follows  (dollar amounts
in thousands):


Year Ending December 31st:
====================================
      2000                 $   4,203
      2001                     2,420
      2002                     3,788
      2003                     1,535
      2004                     1,181
   Thereafter                 25,072
                            --------
      Total                 $ 38,199
                            ========
----------------- ------------------

The interest rates on the mortgages and notes payable range from 7.00% to 13.5%.
The  mortgage and notes  payable and related  terms at December 31, 1999 for the
Properties are  summarized as follows  (dollar  amounts in thousands,  except as
noted):

                                                       F-20
<PAGE>
<TABLE>
<CAPTION>

                        Underlying                    Monthly Payment
                         Debt at        Interest     Provisions (Actual   Maturity
      Location           12/31/99       Rate (%)          Dollars)        Date (2)
====================  ============== =============== ================== =============
<S>                             <C>            <C>              <C>            <C>
Deland, FL                      $740           8.875            $14,016        4/1/03
Rochester, NY                    971           9.250             15,992        1/1/02
Janesville, WI                   816            9.00             14,060       7/31/02
                                 101            9.00              1,529        8/1/07
No. Canton, OH                 1,970            9.00             21,669       9/30/12
Quincy, IL                     2,883            7.75             27,912 (4)    7/1/98
Natchez, MS                    2,172            7.59             15,519        5/1/08
Sandy, PA                      1,285            7.00                (1)       12/1/06
Montgomery, AL                 1,142            8.75             14,500        4/1/07
Paris, TN                        530           13.50              8,859        4/1/08
                                 309            9.25              8,467        7/1/03
Savannah, TN                     216            9.50              6,612       1/31/03
Danville, IL                     321           9.625              9,663        9/1/02
Warsaw, VA                       752          13.125             11,373       10/1/09
Walpole, NH                      732           11.50              9,857        9/1/09
Sunrise, FL                    1,146            7.48              8,095        5/1/08
Jacksonville, FL               1,818            7.87             13,335        5/1/08
Orange Park, FL                1,283            7.39              8,992        4/1/08
Boca Raton, FL                 1,780            7.39             12,450        7/1/08
West Palm Beach,                 872            7.51              6,159        9/1/08
FL
Jacksonville, FL               3,919            8.00             28,984       10/1/08
Ft. Lauderdale, FL             2,373            7.00             15,967      11/11/08
Davie, FL                      3,193            7.58             22,684       11/1/08
Miami, FL                      2,000            9.50                (3)       12/1/02
Palatka, FL                    1,055           12.00             17,247       11/1/07
Columbus, NE                   1,263           12.00             17,201        9/1/10
                                  59            9.50                697        7/1/11
Hamilton, NY                     758          13.125             11,373       12/1/09
Zanesville, OH                 1,740            8.16             13,693        6/1/09
                             -------
Total                       $ 38,199
                            ========
</TABLE>


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

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

       (3)  Interest only during year 2000,  monthly  payments of  approximately
            $17,500 in year 2001 and 2002 dependant on a floating  interest rate
            of bank prime plus one percent.

       (4) The  mortgage was  terminated  as a result of a  foreclosure  sale on
       February 25, 2000. See Note 16 Subsequent Events.



                                                       F-21

<PAGE>



The Company  estimates the fair value of its long term fixed rate mortgage loans
generally  using  discounted  cash flow analysis based on the Company's  current
borrowing  rates for similar types of debt. At December 31, 1999, the fair value
of the mortgage  loans was  estimated to be  $37,251,323  compared to a carrying
value amount of $38,199,191.

The following  schedule  represents a reconciliation  of the mortgages and notes
payable for the years ended December 31, 1999 and 1998:



                                           1999                1998
=================================== =================== ==================
Balance at January 1st                   $   47,977,129      $  67,739,564
Principal repayments                       (13,527,938)       (38,511,435)
Proceeds from loans                           3,750,000         18,749,000
                                          -------------         ----------
Balance at December 31st                  $ 38,199,191       $ 47,977,129
                                          =============      =============
----------------------------------- ------------------- ------------------


10.    Capital Stock

Common and Preferred Stock

The  authorized  capital stock of the Company  consists of 10,000,000  shares of
Common Stock at December 31, 1999 and 1998 and 1,000,000 and  10,000,000  shares
of Series A Preferred Stock at December 31, 1999 and 1998.

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

At the  close of  business  on March 5,  1999,  Milestone  canceled  and  retire
2,983,284 shares of its Series A Preferred Stock,  representing greater than 99%
of the then  outstanding  shares of Series A  Preferred  Stock,  pursuant to the
terms of a court approved  settlement of a purported class action and derivative
lawsuit  brought against  Milestone,  certain of its past and present members of
its Board of Directors and executive officers,  and Concord.  See Note 15, Legal
Proceedings.

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

After  September  30,  1995,  holders of the Series A Preferred  Stock  having a
liquidation  preference of $10.00 per share,  were no longer entitled to receive
dividends on a cumulative basis.  Pursuant to the Certificate of Designations of
the Series A Preferred  Stock,  after such date, no cash dividend may be paid on
the Common  Stock unless full  dividends of $0.195 per share on all  outstanding
shares  of Series A  Preferred  Stock for the then  current  quarterly  dividend
period are declared and


                                                       F-22

<PAGE>



either  paid or  sufficient  sums for the payment  thereof  are set apart.  As a
result  of  Milestone's  Board of  Directors'  determination  not to  declare  a
dividend for the quarter  ended June 30, 1997,  which was the sixth  consecutive
quarter for which no dividend was  declared,  the number of persons  entitled to
serve as directors on  Milestone's  Board of Directors was increased by one, and
the holders of the Series A Preferred Stock, who, at that date, only elected one
member of the Board of Directors,  were entitled to elect a second member of the
Board of Directors to fill such newly created  directorship.  Any decision as to
the future  payment of dividends on the Series A Preferred  Stock will depend on
the results of operations  and the  financial  condition of the Company and such
other  factors as  Milestone's  Board of  Directors,  in its  discretion,  deems
relevant.

Milestone's  Board of Directors  determined  not to declare any dividends on the
Series A Preferred  Stock for the years ended  December  31, 1999 and 1998.  The
last  dividend  declared by the Company was for the quarter  ended  December 31,
1995 and was paid on February 15, 1996 at $0.195 per share of Series A Preferred
Stock.

Stock Options

In May 1994, the Common Stockholders  approved the adoption of the 1993 Employee
Stock Option Plan (the "Employee Stock Option Plan"). The total number of shares
of Common Stock which may be issued  pursuant to the exercise of options granted
under the Employee Stock Option Plan is 300,000.  The Compensation  Committee of
the Board of Directors  (the  "Compensation  Committee")  made initial grants in
December 1993 under such plan  totaling  146,000  options (the "Initial  Grant")
which  are  exercisable  for  146,000  shares of  Common  Stock at a per  option
exercise price of $4.75. In June 1997, the Compensation  Committee  canceled the
Original Issue and reissued  146,000  options which are  exercisable for 146,000
share of Common Stock at a per option exercise price of $0.50. At the same time,
the  Compensation  Committee  granted  154,000 options which are exercisable for
154,000 shares of Common Stock at a per option  exercise price of $0.50.  During
June 1999, the Company  repurchased  222,200  options to purchase  shares of the
Company's common stock, par value $.01 per share from certain  executives of the
Company  for  approximately  $650,000,  representing  the excess of the  current
market price of the Common Stock over the exercise price of the options. Options
granted under the Employee Stock Option Plan expire on the tenth  anniversary of
the date of their grant,  or upon  termination of the grantee's  employment with
the Company.  During the years ended December 31, 1999,  1998,  1997, zero, zero
and  23,800  such  options  were  canceled  upon  resignation  of  an  employee,
respectively.

In May 1994,  the Common  Stockholders  also  approved  the adoption of the 1993
Non-Employee Director Stock Option Plan (the "Non-Employee Director Stock Option
Plan").  Options granted under such plan expire on the tenth  anniversary of the
date of their grant, or upon the grantee's removal or resignation from the Board
of Directors.  The exercise price for each option granted under the Non-Employee
Director  Stock Option Plan is  determined by averaging the high and low trading
prices of the Common  Stock as  reported  on either the New York Stock  Exchange
(through September 10, 1998) or the  Over-The-Counter  Bulletin Board (effective
September 11, 1998) on the date of such options. Under the Non-Employee Director
Stock  Option  Plan,  the Company  granted  2,500  options to each  non-employee
director in each of 1993 (upon adoption of the plan), 1994, 1995, 1996 and 1997,
at a per option  exercise  price of $4.75,  $4.375,  $1.375,  $1.6875 and $0.50,
respectively.   During  1999,   Milestone's  Board  of  Directors  approved  the
cancellation  of the options to purchase  12,500  shares of Common Stock held by
each Non-Employee Director. The cancellation


                                                       F-23

<PAGE>



of the 12,500 options coincided with Milestone's Board of Directors  approval of
the  granting  of  12,500  shares of  Common  Stock to each of the  Non-Employee
Directors pursuant to the Company's 1999 Stock Incentive Plan. The 12,500 shares
of Common  Stock  issued to each  Non-Employee  Director  were  issued  from the
Company's Treasury Stock.

Statement of Financial Accounting Standards No. 123, "Accounting for Stock Based
Compensation"  ("SFAS" No. 123"),  requires  expanded  disclosure of stock based
compensation  arrangements with employees, and encourages,  but does not require
compensation  cost be measured based on the fair value of the equity  instrument
awarded.  Companies  are  permitted to continue to apply  Accounting  Principles
Board Opinion No. 25 ("APB 25"), which recognizes compensation cost based on the
intrinsic value of the equity  instrument  awarded.  The Company uses APB 25 for
its stock based compensation awards.  Accordingly, no compensation costs related
to  employee  options  have  been  recognized  in  the  consolidated   financial
statements of the Company.

No options were  exercised  and no  additional  options were granted  during the
years ended  December  31,  1999 and 1998.  During  1999,  37,500  options  were
canceled, so as of December 31, 1999, 54,000 options remain outstanding. The pro
forma  disclosure  provisions  of SFAS No. 123 for the year ended  December  31,
1999, 1998 and 1997 are as follows:

<TABLE>
<CAPTION>

                                                        1999                  1998                  1997
============================ ================= ======================  ==================  ======================
<S>                          <S>                           <C>               <C>                   <C>
Net Income (loss)            As Reported                   $2,123,119        $(8,431,112)          $  (3,430,731)
                             Pro Forma                      2,092,403         (8,460,946)             (3,443,748)
Income (loss) per            As Reported                        $0.50         $    (1.99)       $          (0.82)
Common Share, basic          Pro Forma                           0.49              (1.93)                  (0.79)
---------------------------- ----------------- ----------------------  ------------------  ----------------------
</TABLE>


For the purposes of providing pro forma  disclosures,  the fair value of options
granted in 1997 were  estimated  using the Black Scholes  options  pricing model
with the following weighted average assumption; (i) a risk free interest rate of
5.24%, (ii) an expected life of one year, (iii) volatility of 52.20% and (iv) no
dividends. The estimated fair value compensation cost of the related options was
amortized to expense over the options' vesting period.

Certain information relating to the options under the Employee Stock Option Plan
and the Non- Employee Director Stock Option Plan during the years ended December
31, 1999, 1998 and 1997 are as follows:


                                                       F-24

<PAGE>

<TABLE>
<CAPTION>



                                                 1999                             1998                            1997
                                    ==============================  ================================ ==============================
                                        Number        Weighted         Number          Weighted          Number        Weighted
                                          of           Average           of            Average             of           Average
                                       Options        Exercise         Options      Exercise Price      Options        Exercise
                                                        Price                                                            Price
=================================== ============== ===============  ============= ================== ============== ===============
<S>                                        <C>          <C>             <C>               <C>             <C>            <C>
Outstanding at January 1st                 313,700      $   0.74        313,700           $   0.74        176,000        $   4.46
Granted                                          0           n/a              0                n/a        307,500            0.50
Exercised                                        0           n/a              0                n/a              0             n/a
Repurchased                              (222,200)           n/a              0                n/a              0             n/a
Canceled                                  (37,500)           n/a              0                n/a              0             n/a
Forfeited                                        0           n/a              0                n/a      (169,800)            4.15
                                    --------------                 ------------                        ----------
Outstanding at December 31st                54,000        $ 0.50        313,700             $ 0.74       313,700           $ 0.74
                                        ==========                      =======                        ==========
Options exercised at December 31st               0                            0                                 0
----------------------------------- -------------- -------------  ------------- ------------------ -------------- ---------------
</TABLE>


11.    Income Taxes

The provision for income taxes for the years ended  December 31, 1999,  1998 and
1997 are as follows:

<TABLE>
<CAPTION>

                                                       1999              1998              1997
=============================================== ================== ================= ================
Current Tax:
<S>                                                  <C>                       <C>              <C>
Federal                                              $ (2,822,856)             $   0            $   0
State and Other                                            109,740           188,768           64,245
                                                      ------------        ----------         --------
Total Current Tax                                      (2,713,116)           188,768           64,245
Deferred Tax:
Federal                                                    595,765           904,645        (667,657)
State and Other                                            105,135           159,643        (117,822)
                                                      ------------        ----------        ---------
Total Deferred Tax                                         700,900         1,064,288        (785,479)
                                                        ----------         ---------        ---------
Total (benefit) provision for income taxes           $ (2,012,216)       $ 1,253,056    $   (721,234)
                                                     =============       ===========    =============
----------------------------------------------- ------------------ ----------------- ----------------
</TABLE>

Temporary differences between the amount reported in the consolidated  financial
statements and the tax basis of assets and liabilities result in deferred taxes.
There was an increase in the  valuation  allowance for deferred tax assets of $0
and $ 4,953,862  for the years ended  December 31, 1999 and 1998,  respectively.
Realization  of the  deferred tax asset is  dependent,  in part,  on  generating
sufficient  taxable  income in the  future.  Although  such  realization  is not
assured,  the Company believes that it is more likely than not that the deferred
tax asset not allowanced will be recognized.  Should estimates of future taxable
income be reduced the deferred tax asset  valuation  allowance would be adjusted
accordingly.  The Company has a federal tax net operating  loss carry forward of
approximately  $12,602,000  at  December  31,  1999.  Deferred  tax  assets  and
liabilities at December 31, 1999, 1998 and 1997 are as follows:

                                                       F-25

<PAGE>
<TABLE>
<CAPTION>

                                                                     1999              1998              1997
============================================================== ================= ================= =================
Deferred Tax Assets:
<S>                                                                 <C>                <C>             <C>
Acquisition Costs                                                   $    329,492       $   880,345     $   1,025,222
Principal amortization on Wraparound Notes                             3,229,583         1,408,957         2,000,385
Allowance on Wraparound Notes                                            529,967         1,380,811         1,380,811
Net Operating Loss Carryforward                                        4,369,331         4,953,862                 0
Other                                                                      5,468          613,697            880,897
                                                                    ------------          --------           -------
Gross Deferred Tax Assets                                              8,463,841         9,237,672         5,287,315
Less: Valuation Allowance                                            (5,968,862)       (5,968,862)       (1,015,000)
                                                                      ---------        ----------        -----------
Deferred Tax Asset, net of valuation allowance                         2,494,979        3,268,810          4,272,315
                                                                       ---------        ----------         ---------


Deferred Tax Liabilities:
Accelerated depreciation                                                201,812            274,740           213,957
                                                                      ----------       -----------          --------
Gross deferred tax liabilities                                           201,812           274,740           213,957
                                                                       ---------       -----------           -------
Net deferred tax asset                                              $ 2,293,167        $ 2,994,070       $ 4,058,358
                                                                      ==========        ==========        ==========
-------------------------------------------------------------- ----------------- ----------------- -----------------
</TABLE>

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

<TABLE>
<CAPTION>

                                                                            1999            1998          1997
====================================================================== ===============  =============  ===========
<S>                                                                            <C>            <C>          <C>
Statutory rate (benefit) on pre-tax loss                                       (35.0)%        (35.0)%      (35.0)%
Increase (decrease) in taxes:
From State and other taxes net of Federal tax benefit                             15.7            2.4          2.1
Valuation allowance                                                                  0           69.0         15.5
Decrease (Increase) of NOL                                                       141.8         (34.0)          0.0
Basis difference on asset dispositions                                            34.6           14.0          0.0
Reversal of prior year provision                                               (512.1)            0.0          0.0
Tax/book depreciation and other                                                  (8.8)           1.1           0.0
                                                                               -------         ------       -------
Total                                                                         (363.8)%        17.5%          (17.4)%
                                                                              ========        =======        =======
---------------------------------------------------------------------- ---------------  -------------  -----------
</TABLE>


During 1999,  the  wraparound  notes held by the Company on the nine  properties
sold during the year as  described  in note 3 were  satisfied.  Relating to such
wraparound notes, the Company had previously  recorded deferred tax assets.  The
realization of the deferred tax assets  relating to the  wraparound  notes was a
non-cash tax adjustment.  Also, in prior years, the Company  recorded  currently
payable  income  taxes  which the  Company  no longer  believes  is a  necessary
liability, and it reversed these accruals, amounting to approximately $2,800,000
in the fourth quarter of 1999.  The reversal of these accruals  reduced the 1999
income tax provision,  but did not affect cash or liquidity. As a consequence of
the  above,  the  Company's   effective  tax  rate  for  December  31,  1999  is
significantly different from the expected federal tax benefit rate of 35%.

12.    Fair Value of Financial Instruments

The  following  estimated  fair values  were  determined  by the  Company  using
available market information and valuation methodologies  considered appropriate
by management. However,

                                                       F-26

<PAGE>



considerable  judgement  is  necessary  to  interpret  and apply  market data to
develop specific fair value estimates for given financial  instruments,  and the
use of different market assumptions and/or estimation methodologies could have a
material  effect on reported  fair value  amounts.  Accordingly,  the  estimates
presented  herein are not  necessarily  indicative  of the amounts that could be
realized upon disposition of the Company's financial instruments.

Cash and cash  equivalents,  accounts and loan  receivables and accounts payable
and accrued expenses are reflected in the consolidated balance sheets at amounts
considered by management to reasonably approximate fair value due to their short
term nature.  The Company  estimates  the fair value of its long term fixed rate
mortgage  loans  generally  using  discounted  cash flow  analysis  based on the
Company's  current  borrowing  rates for similar  types of debt. At December 31,
1999 and 1998, the aggregate  carrying value of the notes and mortgages  payable
as  compared  to  the  aggregate  fair  value  of  such   instruments   was  not
significantly different.

The fair value of the Wraparound Notes has been estimated by management based on
the estimated fair value of the Underlying Properties.  At December 31, 1999 and
1998, the fair value of the Wraparound Notes was estimated to be $35,454,708 and
$62,802,981, compared to a carrying value amount of $18,641,853 and $39,529,787,
respectively.

The fair value estimates presented herein are based on information  available as
of December 31, 1999 and 1998.  Although  management is not aware of any factors
that  would   significantly   affect  the  estimated  fair  value   amounts,   a
comprehensive  re-evaluation of all of the Properties has not been performed for
purposes of these financial statement disclosures.

13.    Related Party Transactions

The Company is party to a management agreement (the "Management Agreement") with
Concord pursuant to which the Company provides management  services,  assists in
the  management of Concord  properties,  provides  certain  personnel and office
space  and  general  office  services  to  Concord  which the  Company  receives
reimbursements from Concord. The Management Agreement is renewable annually. For
the years ended  December 31,  1999,  1998 and 1997  reimbursed  expenses to the
Company were $54,547, $215,684 and $338,394, respectively.

As of December  31, 1999 and 1998,  the Company had  recorded  receivables  from
Concord of $520,669 and  $598,765,  respectively.  Such  receivables  consist of
management  fees due to the Company and expenses for general office  services as
well as salary reimbursements.

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

Concord  beneficially owns 2,901,098 shares of Common Stock at December 31, 1999
and 1998. The wholly owned subsidiaries of Concord own 2,698,765 shares, and the
two limited  partnerships,  whose sole  general  partners  are the wholly  owned
subsidiaries of Concord, own 202,333 shares at December 31, 1999 and 1998.




                                                       F-27

<PAGE>



The  Company  sublet a portion of its  leased  office  space and shares  certain
overhead expenses with Tristone Partners,  Inc.  ("Tristone")  Leonard S. Mandor
and Robert A. Mandor, both of whom may be deemed to beneficially own more than a
majority of the voting stock of the Company, are majority owners of Tristone. At
December 31, 1999 and 1998, the Company had recorded  receivables  from Tristone
of $103,018 and $25,500, respectively.

In addition, the Company received property management fees of $128,904, $132,388
and $107,725 during 1999, 1998 and 1997, respectively,  from a partnership whose
general partner is an affiliate of the Company.

14.    Commitments and Contingent Liabilities

The  Company's  office  facility  in  Boca  Raton,   Florida  is  subject  to  a
noncancellable  five year operating lease agreement  commencing  January 1, 1998
and expiring  December 31, 2002.  Aggregate  annual rental payments for the year
ended December 31, 1999,  1998 and 1997 for the Company were $183,479,  $176,374
and  $758,193,   respectively.   Future  minimum   annual   payments  under  the
noncancellable  operating  lease  agreement,  as of December  31,  1999,  are as
follows:


Year Ending December 31st:
=====================================
       2000                   190,805
       2001                   198,421
       2002                   206,358
                              -------
      Total                 $ 595,584
                            =========
------------------  -----------------

The  Company  has  accrued  performance  related  bonuses to  certain  executive
officers in the amount of $1,187,038  and $486,041 for the years ended  December
31, 1999 and 1998, respectively.

As of December 31,  1998,  the Company had accrued for  litigation  expenses and
settlement  fees  relating  to a class  action and  derivative  lawsuit  brought
against the Company.  Such  settlement  required,  among other  things,  (i) the
payment  of  $3.00  in cash in  exchange  for each  eligible  share of  Series A
Preferred  Stock required to be surrendered as of the close of business on March
5, 1999 and (ii) the plaintiffs  attorney fees not to exceed $750,000.  See note
15. Legal Proceedings for additional  information regarding the class action and
derivative lawsuit.

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


                                                       F-28

<PAGE>



costs, as well as certain other costs, including governmental fines and injuries
to persons or properties.  To date,  the Company,  has not incurred any costs of
removal or  remediation  of such  hazardous or toxic  substances.  However,  the
presence,  with or  without  the  Company's  knowledge,  of  hazardous  or toxic
substances  at any  property  held or operated by the Company,  could  adversely
affect the Company's business,  operating results and financial  condition.  The
Company is not aware of any  environmental  conditions at any of the  properties
that it owns or in which it has an investment.

15.     Legal Proceedings

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

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


                                                       F-29

<PAGE>



(subject to the insurance coverage litigation described below).

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

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

16.      Subsequent Events

         On  February  25,  2000,  a  wraparound  note held by the  Company on a
138,954  square foot shopping  center  located in Quincy,  Illinois (the "Quincy
Property"),  was  terminated as a result of a foreclosure  sale by the bank (the
holder of the  Underlying  Debt) to an unrelated  third  party.  The Company had
previously  terminated,  by written notice, the Master Lease associated with the
Quincy Property as of December 31, 1998. As a result of the foreclosure  sale by
the bank of the Quincy  Property and the  termination of the Wraparound Note and
the Underlying Debt, the Company will


                                                       F-30

<PAGE>



record a book gain of approximately  $1,727,000 in the first quarter of 2000 but
received no cash proceeds.

         On February 15, 2000, a wraparound note held by the Company on a 91,800
square foot single tenant commercial  building located in Palatka,  Florida (the
"Palatka Property"), was paid as a result of the sale of the Palatka Property by
its owner, an affiliate of the Company (the  partnership  that owned the Palatka
Property),  to an unrelated  third  party.  In  connection  with the sale of the
Palatka  Property,  the Company,  as the master  lessee on a Master Lease on the
Palatka  Property,  canceled the subject  Master Lease.  Of the gross  proceeds,
$1,067,000  was used to satisfy  the  underlying  mortgage  debt on the  Palatka
Property. As a result of the payment of the wraparound note and the satisfaction
of the  underlying  mortgage  debt,  the Company  realized net cash  proceeds of
approximately  $911,000 and will record a book gain of approximately $645,000 in
the first quarter of 2000.

         On February 3, 2000, a wraparound  note held by the Company on a 43,200
square foot single tenant commercial  building located in Warsaw,  Virginia (the
"Warsaw  Property"),  was paid as a result of the sale of the Warsaw Property by
its owner,  an affiliate of the Company (the  partnership  that owned the Warsaw
Property),  to an unrelated  third  party.  In  connection  with the sale of the
Warsaw  Property,  the  Company,  as the master  lessee on a Master Lease on the
Warsaw  Property,  canceled the subject  Master  Lease.  Of the gross  proceeds,
$768,000  was  used to  satisfy  the  underlying  mortgage  debt  on the  Warsaw
Property. As a result of the payment of the wraparound note and the satisfaction
of the  underlying  mortgage  debt,  the Company  realized net cash  proceeds of
approximately  $519,000 and will record a book gain of approximately $321,000 in
the first quarter of 2000.

         On January 13, 2000, a wraparound  note held by the Company on a 43,200
square foot single tenant commercial building located in Hamilton, New York (the
"Hamilton Property"),  was paid as a result of the sale of the Hamilton Property
by its owner,  an  affiliate  of the  Company  (the  partnership  that owned the
Hamilton Property),  to an unrelated third party. In connection with the sale of
the Hamilton  Property,  the Company,  as the master lessee on a Master Lease on
the Hamilton Property, canceled the subject Master Lease. Of the gross proceeds,
$774,000  was used to  satisfy  the  underlying  mortgage  debt on the  Hamilton
Property. As a result of the payment of the wraparound note and the satisfaction
of the  underlying  mortgage  debt,  the Company  realized net cash  proceeds of
approximately  $521,000 and will record a book gain of approximately $352,000 in
the first quarter of 2000.

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

         On January 7, 2000, a  wraparound  note held by the Company on a 46,400
single-tenant commercial building located in Savannah,  Tennessee (the "Savannah
Property"),  was paid as a result of the sale of the  Savannah  Property  by its
owner,  an  affiliate of the Company  (the  partnership  that owned the Savannah
Property)  to an  unrelated  third party.  In  conjunction  with the sale of the
Savannah  Property,  the Company,  as the master lessee on a Master Lease on the
Savannah Property,


                                                       F-31

<PAGE>



canceled the subject Master Lease.  As a result of the payment of the wraparound
note, the Company realized net cash proceeds of approximately  $173,000 and will
record a book gain of approximately $120,000 in the first quarter of 2000.

17.      Consolidated Quarterly Summary of Operations (unaudited)

The  following  is a  summary  of  financial  information  with  respect  to the
Company's  operations for the four fiscal  quarters  during fiscal year 1999 and
1998:

<TABLE>
<CAPTION>

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

</TABLE>

<TABLE>
<CAPTION>


                                                        Fourth                Third            Second            First
                                1998                   Quarter               Quarter          Quarter           Quarter
================================================= ================= ===  ===============  ================  ===============
<S>                                                     <C>                  <C>               <C>              <C>
Total revenues                                          $ 8,094,090          $ 6,331,620       $ 5,429,905      $ 5,659,776
Total expenses                                         12,719,360     b       6,327,988         6,964,991        6,681,108
                                                       ------------           ----------     -------------     -----------
(Loss) income before income taxes                       (4,625,270)                3,632       (1,535,086)      (1,021,332)
Benefit for income taxes                                (2,606,499)             (367,821)        (498,584)        (487,038)
                                                       ------------          -----------    --------------     ------------
Net  (loss) income                                    $(7,231,769)             $371,453       $(1,036,502)      $ (534,294)
                                                     ==============           ==========     =============     ============
Net (loss) income per common share, basic                  $(1 .71)         $      0.09    $          (.25)   $      (0.13)
                                                  =================        =============  =================  ==============
------------------------------------------------- ----------------- ---  ---------------  ----------------  ---------------
</TABLE>

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

b    Includes  approximately  $7,084,000 of accrued  litigation expense directly
     related to the Winston  Settlement.  See Note 15 for a  description  of the
     Winston Actions and the Winston Settlement.


                                                        F-32

<PAGE>



                   MILESTONE PROPERTIES, INC. AND SUBSIDIARIES

                                  SCHEDULE III
                    Real Estate and Accumulated Depreciation
                                December 31, 1999

<TABLE>
<CAPTION>

                                                                     Cost of                Accumulated     Date    Depreciation
           Location       Encumbrances      Land       Building  Improvements    Total     Depreciation   Acquired      Life
======================== =============  =========== ============ ============ =========== ============= =========  ============
Pine Oak Plaza,
<S>                      <C>            <C>          <C>           <C>         <C>         <C>            <C>  <C>           <C>
Sunrise, FL              $   1,145,613  $   110,000  $   990,000   $   49,845  $1,149,845  $   (66,745)   9/24/97            50
Regency Walk,
Jacksonville, FL             1,818,281      215,000    1,935,000      161,934   2,311,934     (118,764)   4/01/98            50
Orange Park,
Orange Park, FL              1,282,722      150,000    1,350,000        4,930   1,504,930      (48,236)   4/17/98            50
Teeca Plaza,
Boca Raton, FL               1,779,809      207,500    1,867,500      139,184   2,214,184     (107,918)   7/15/98            50
Country Grove Plaza,
W. Palm Beach, FL              871,636      110,000      990,000        7,600   1,107,600      (27,920)   9/11/98            50
Mandarin Central,
Jacksonville, FL             3,918,660      465,000    4,185,000       31,228   4,681,228     (110,871)  10/13/98            50
Pine Crest,
Ft. Lauderdale, FL           2,373,571      320,000    2,880,000       13,503   3,213,503      (74,701)  10/27/98            50
Lincoln Park,
Davie, FL                    3,193,271      384,000    3,456,000       10,475   3,850,475      (82,735)  11/10/98            50
Sunrise Shopping Center
Zanesville, OH               1,740,268            0    2,530,219      314,950   2,845,169   (1,215,795)  10/23/95            50
Family Dollar Stores,
Blackstone, VA                       0            0      794,909        8,607     803,516     (626,841)  10/23/95         26.65
Land Parcel
Miami, FL                    2,000,000    3,511,669            0            0   3,511,669             0  12/29/99           n/a
------------------------ -------------  ----------- ------------ ------------ ----------- ------------- ---------  ------------
Totals                    $ 20,123,831  $ 5,473,169 $ 20,978,628    $ 742,256 $27,194,053 $ (2,480,526)
                          ============  =========== ============    ========= =========== =============
------------------------------  ------------------  ---------------  ---------------- ------------------ ---------------- ----------

</TABLE>

                                                        S-1

<PAGE>
                   MILESTONE PROPERTIES, INC. AND SUBSIDIARIES

                                  SCHEDULE III
                    Real Estate and Accumulated Depreciation
                                December 31, 1999


Reconciliation of Property and Improvements:


                          1999              1998              1997
=================== ================= ================= =================
Beginning Balance        $ 23,291,713       $25,546,306       $24,268,310
Acquisitions                3,511,669        18,515,000         1,100,000
Improvements                  390,671           351,585           177,996
Dispositions                        0       (21,121,178)                0
                    --------------------   ------------ -----------------
Ending Balance           $ 27,194,053     $23,291,713         $25,546,306
                         ============     =============       ===========
------------------- ----------------- ----------------- -----------------


Reconciliation of Accumulated Depreciation:


                             1999              1998              1997
====================== ================= ================= =================
Beginning Balance            $ 1,879,050        $6,065,951        $5,545,018
Depreciation expense             601,476           492,686           520,933
Dispositions                            0      (4,679,587)                 0
                       ------------------      ----------- -----------------
Ending Balance               $ 2,480,526       $1,879,050         $6,065,951
                             ===========       ===========        ==========
---------------------- ----------------- ----------------- -----------------


At  December  31,  1999,  the tax basis of the  Company's  owned real estate was
approximately $25,707,669.


                                                        S-2