SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                 --------------

                                    FORM 10-K

                        FOR ANNUAL AND TRANSITION REPORTS
                     PURSUANT TO SECTIONS 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                                   (Mark one)
 X            ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 2000
                                       OR

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

For the transition period from ________ to ________Commission file number 1-9360

                            AMERICAN LAND LEASE, INC.

             (Exact Name of Registrant as Specified in Its Charter)

                Delaware                                    84-1500244
    (State or Other Jurisdiction of                      (I.R.S. Employer
     Incorporation or Organization)                    Identification No.)

          2637 McCormick Drive                                33759
          Clearwater, Florida                               (Zip Code)
(Address of Principal Executive Offices)

       Registrant's telephone number, including area code: (727) 726-8868

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

  Title of Each Class                Name of Each Exchange on Which Registered
     Common Stock,                         New York Stock Exchange, Inc.
par value $.01 per share

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

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 registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X ]

As of March 19, 2001, 8,510,567 shares of common stock were outstanding, and the
aggregate market value of the shares (based upon the closing price of the common
stock on that date as  reported  on the New York Stock  Exchange,  Inc.) held by
non-affiliates was approximately $59,000,000.

<PAGE>



                            AMERICAN LAND LEASE, INC.

                                Table of Contents
                           Annual Report on Form 10-K
                   For the Fiscal Year Ended December 31, 2000
<TABLE>
<CAPTION>


Item                                                                                                        Page

                                     PART I
<S>      <C>                                                                                                <C>
1.       Business.........................................................................................   1
              Company Background..........................................................................   1
              2000 Developments...........................................................................   2
              Industry Background.........................................................................   3
              Financial Information about Industry Segments...............................................   4
              Growth and Operating Strategies.............................................................   4
              Competition.................................................................................   7
              Taxation of the Company.....................................................................   7
              Regulation..................................................................................   8
              Insurance...................................................................................   9
              Capital Resources...........................................................................   9
              Restrictions on and Redemptions of Common Stock.............................................   9
              Employees...................................................................................  10
2.       Properties.......................................................................................  10
3.       Legal Proceedings................................................................................  12
4.      Submission of Matters to a Vote of Security Holders...............................................  12

                                     PART II

5.      Market For Registrant's Common Equity and Related Stockholder Matters.............................  13
6.       Selected Financial Data..........................................................................  14
7.       Management's Discussion and Analysis of Financial Condition and Results of Operations............  15
              Results of Operations.......................................................................  15
              Liquidity and Capital Resources.............................................................  21
              Funds From Operations.......................................................................  22
7a.     Quantitative and Qualitative Disclosures About Market Risk........................................  23
8.       Financial Statements and Supplementary Data......................................................  24
9.       Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.............  24

                                    PART III

10.      Directors and Executive Officers of the Registrant...............................................  25
11.      Executive Compensation...........................................................................  27
12.      Security Ownership of Certain Beneficial Owners and Management...................................  33
13.     Certain Relationships and Related Transactions....................................................  33

                                     PART IV

14.     Exhibits, Financial Statement Schedules, and Reports on Form 8-K..................................  36

</TABLE>


                                      (i)

<PAGE>





                                     PART I

Introduction

The Private  Securities  Litigation  Reform Act of 1995 provides a "safe harbor"
for  forward-looking  statements in certain  circumstances.  Certain information
included in this report,  our Annual Report to Stockholders and our filings with
the  Securities  and Exchange  Commission  under the  Securities Act of 1933, as
amended,  and the  Securities  Exchange  Act of  1934,  as  amended,  as well as
information  communicated  orally or in  writing  between  the dates of such SEC
filings,  constitute  "forward-looking  statements"  within  the  meaning of the
Private  Securities  Litigation  Reform Act of 1995. Such statements may include
projections  relating to our cash flow,  dividends,  anticipated returns on real
estate  investments and opportunities to acquire  additional  communities.  Such
forward-looking  statements  involve known and unknown risks,  uncertainties and
other factors that may cause our actual results,  performance or achievements to
be materially  different from any future  results,  performance or  achievements
expressed or implied by the  forward-looking  statements.  Such factors include:
general economic and business conditions;  interest rate changes;  financing and
refinancing  risks; risks inherent in owning real estate or debt secured by real
estate; future development rate of homesites;  competition;  the availability of
real estate assets at prices which meet our investment criteria;  our ability to
reduce expense levels,  implement rent  increases,  use leverage and other risks
set forth in our SEC filings.

In this report,  the words "the  Company,"  "we," "our," "ALL" and "us" refer to
American Land Lease,  Inc., our  predecessor,  Asset  Investors  Corporation,  a
Delaware corporation and, where appropriate, our subsidiaries.

Item 1.  Business.

Company Background

We have been a Delaware corporation since May 25, 1999. Prior to this, we were a
Maryland  corporation that was formed in 1986. We have elected to be treated for
United States federal income tax purposes as a real estate  investment  trust or
"REIT." We are a self-administered  and self-managed  company in the business of
owning,  acquiring,  developing  and  managing  manufactured  home  communities.
Effective  August 11, 2000, we consummated  our merger with  Commercial  Assets,
Inc.,  a  publicly-traded  REIT that was listed on the American  Stock  Exchange
under the symbol "CAX." As of December 31, 2000,  we held  interests as owner or
ground lessee in 33 manufactured  home communities and one recreational  vehicle
park with a total of 6,350  operational  homesites,  1,291 developed  homesites,
1,761 undeveloped  homesites and 129 recreational vehicle sites. In addition, we
manage two communities for  third-party  owners.  Our shares of common stock are
listed on the New York Stock Exchange ("NYSE") under the symbol "ANL".

We conduct  substantially all of our business through Asset Investors  Operating
Partnership,  L.P. and where  appropriate  its  subsidiary  companies  (which we
collectively refer to as the Operating Partnership). As of December 31, 2000, we
owned 87% of the  Operating  Partnership.  Our principal  executive  offices are
located at 2637  McCormick  Drive,  Clearwater,  Florida 33759 and our telephone
number is (727)  726-8868.

                                     - 1 -
<PAGE>

2000  Developments

Merger  with  Commercial  Assets

Effective  August 11, 2000, the Company and Commercial  Assets merged.  Prior to
the merger, the Company owned 2,761,000 shares of Commercial Assets representing
approximately 27% of Commercial Assets' issued and outstanding shares.  Pursuant
to the  amended  merger  agreement,  Commercial  Assets  stockholders,  with the
exception  of the Company and its officers  and  directors  and the officers and
directors of Commercial Assets,  were provided an election to receive either (1)
$5.75 in cash per share of  Commercial  Assets common stock or (2) 0.4075 shares
of our common stock per share of Commercial Assets common stock.

As a result of the merger,  we  effectively  acquired  the  remaining  shares of
Commercial Assets by paying $20,418,000 in cash for 3,551,000  Commercial Assets
shares and issuing  1,664,000 shares of our Common Stock with a trading value of
$20,067,000 for 4,085,000  Commercial Assets shares.  The merger with Commercial
Assets was  recorded  using the purchase  method of  accounting.  The  aggregate
purchase price of $97,372,000  (including the Company's  previous  investment in
Commercial Assets of $18,875,000,  assumed  liabilities and minority interest of
$34,020,000  and  transaction  costs of  3,992,000)  was recorded as follows (in
thousands):

         Real Estate                                          $ 60,477
         Investment in real estate joint ventures                1,764
         Cash and cash equivalents                              11,860
         Short term investments                                 10,618
         Investment in home sales                                2,718
         Other assets                                            9,935
         Secured long-term notes payable                       (29,412)
         Accounts payable and accrued liabilities               (4,054)
         Minority interest                                        (554)

The  allocation  of the  purchase  price of  Commercial  Assets  is  based  upon
preliminary estimates and is subject to final determination based upon estimates
and other evaluations of fair value. Therefore,  the allocations reflected above
may differ from amounts ultimately determined.

Investment in Home Sales Company

Effective  January 1, 2000, a  consolidated  subsidiary  ("Sales  Corp.") of the
Company acquired all of the manufactured  home inventory  located at communities
owned by the Company or Commercial  Assets for $8,452,000.  From January through
July 2000,  the Company owned 65% of the nonvoting  common stock of Sales Corp.,
Commercial  Assets owned the remaining 35% of the nonvoting common stock and, in
order to comply  with tax laws  relating  to REIT's,  certain  of the  Company's
officers  owned all of Sales  Corp's  voting  common  stock.  As a result of the
Company's  acquisition of Commercial Assets on August 11, 2000, the Company owns
all of the nonvoting  common stock of Sales Corp.  The amounts and components of
the purchase price were a follows (in thousands):

     Assumption of secured short-term financing                         $4,594
     Cancellation of participating mortgages and notes receivable        1,805
     Assumption of notes payable                                           403
     Assumption of accounts payable and accrued liabilities, net
       of other assets received                                            649
     Contribution by Commercial Assets                                   1,001
                                                                        ------
                                                                        $8,452
                                                                        ======

                                     - 2 -
<PAGE>

Property Sales

On January 5, 2000, we sold a manufactured housing community to a third party in
Largo, Florida for $2.5 million in cash and recorded a gain on sale of $107,000.

On December 14, 2000, we sold our interest in the recreational vehicle park to a
third party for total consideration of $3.96 million and recorded a gain on sale
of  $286,000.  We  retained  an  indirect  preferred  minority  position  in the
acquiring  entity  totaling  $400,000.  Our  retained  interest  receives  a 10%
preferred  return,  payable  monthly.  We  have a  continuing  right  to put our
preferred position to the buyer beginning December 14, 2005.

Debt Financings

During the year ended  December 31, 2000,  the Company  issued $16.6  million of
long-term fixed rate, fully amortizing  non-recourse mortgage notes payable with
a weighted  average  interest rate of 8.05%.  Each note is individually  secured
with no cross-collateralization.  The net proceeds of $16.2 million were used to
repay existing debt and to continue  development  of the Company's  manufactured
home communities.

Acquisition of CADC

Effective  January  1, 2000,  we  purchased  four  communities  and  undeveloped
homesites at three other communities from entities in which Mr. Gaynor, our Vice
President of Development and General Counsel,  owns 31% (the "CADC Properties").
During 1999, we held participating mortgages secured by the CADC properties. The
purchase price for the CADC Properties was $36,816,000 and was paid as follows:

o    Issuance of 44,572  Operating  Partnership  Units at an  assigned  value of
     $496,000,
o    Cancellation of $24,851,000 in loans from us involving the CADC Properties,
o    Assumption of $10,704,000 in third-party debt, and
o    $765,000 cash.

Industry Background

A manufactured home community is a residential subdivision designed and improved
with sites for the placement of manufactured homes and related  improvements and
amenities.  Manufactured  homes  are  detached,  single-family  homes  which are
produced  off-site by manufacturers and installed on sites within the community.
Manufactured  homes are  available  in a variety  of  designs  and floor  plans,
offering many amenities and custom options.

Modern   manufactured  home  communities  are  similar  to  typical  residential
subdivisions containing centralized entrances,  paved streets, curbs and gutters
and  parkways.  The  communities  frequently  provide  a  clubhouse  for  social
activities and recreation and other  amenities,  which may include golf courses,
swimming  pools,  shuffleboard  courts and  laundry  facilities.  Utilities  are
provided by or arranged for by the owner of the community. Community lifestyles,
primarily  promoted  by  resident  managers,  include a wide  variety  of social
activities  that promote a sense of  neighborhood.  The  communities  provide an
attractive and affordable  housing  alternative for retirees,  empty nesters and
start-up or single-parent families.  Manufactured home communities are primarily
characterized  as "all  age"  communities  and  "adult"  communities.  In  adult


                                     - 3 -
<PAGE>

communities,  as least 80% of the tenants  must be at least 55 years old, and in
all age communities there is no age restriction on tenants.

The owner of a home in our communities leases from us the site on which the home
is located. Typically, the leases are on a month-to-month or year-to-year basis,
renewable upon the consent of both parties or, in some instances, as provided by
statute. In some circumstances,  we offer a 99-year lease to tenants in order to
enable the tenant to have some benefits of an owner of real property,  including
creditor  protection  laws  in  some  states.  These  leases  can be  cancelled,
depending on state law, for  non-payment of rent,  violation of community  rules
and regulations or other specified  defaults.  Generally,  rental rate increases
are made on an annual  basis.  The size of these rental rate  increases  depends
upon the policies  that are in place at each  community.  The Company may, as an
inducement to new home buyers,  make rent  concessions.  Rental increases may be
based on fixed dollar amounts,  percentage  amounts,  inflation indexes, or they
may  depend  entirely  on  local  market  conditions.  We own  interests  in the
underlying land, utility connections,  streets, lighting, driveways, common area
amenities and other capital  improvements and are responsible for enforcement of
community  guidelines and  maintenance.  Each homeowner  within the manufactured
home  communities  is  responsible  for the  maintenance  of his or her home and
leased site, including lawn care in some communities.

The ownership of manufactured home communities, once fully occupied, tends to be
a stable,  predictable asset class. The cost and effort involved in relocating a
home to another  manufactured home community  generally  encourages the owner of
the home to resell it within the community.

Financial Information about Industry Segments

We operate in one industry segment, the ownership and management of manufactured
housing communities.  See the consolidated  financial statements including their
notes in Item 8 of this report on Form 10-K.

Growth and Operating Strategies

We measure our economic  profitability  based on Funds From Operations  ("FFO"),
less an  annual  capital  replacement  reserve  of at  least  $50 per  developed
homesite.  This reserve is  management's  estimate  based on its  experience  in
owning,  operating and managing  manufactured home communities.  We believe that
the  presentation  of FFO, when considered with the financial data determined in
accordance  with generally  accepted  accounting  principles,  provides a useful
measure of our performance. However, FFO does not represent cash flow and is not
necessarily  indicative of cash flow or liquidity available to us, nor should it
be  considered  as an  alternative  to net income as an  indicator  of operating
performance.  The Board of Governors of the National  Association of Real Estate
Investment  Trusts  (also  known as NAREIT)  defines  FFO as net income  (loss),
computed in accordance with generally accepted accounting principles,  excluding
gains and losses from debt restructuring and sales of property, plus real estate
related  depreciation  and  amortization  (excluding  amortization  of financing
costs),  and  after  adjustments  for  unconsolidated   partnerships  and  joint
ventures.  We calculate FFO  beginning  with the NAREIT  definition  and include
adjustments for:

o    the minority  interest in the Operating  Partnership owned by persons other
     than us,
o    costs we incurred in order to become self-managed,
o    amortization of property and investment management contracts, and
o    nonrecurring income, net.

                                     - 4 -
<PAGE>

We believe that the  presentation  of FFO provides  investors with  measurements
which help facilitate an understanding of our ability to make required  dividend
payments, capital expenditures and principal payments on our debt. Since FFO may
exclude unusual and nonrecurring expenses as well as depreciation and other real
estate  related  expenses,  FFO may be  materially  different  from net  income.
Therefore,  FFO should not be considered as an  alternative to net income or net
cash flows from operating activities, as calculated in accordance with generally
accepted accounting principles, as an indication of our operating performance or
liquidity.

FFO is not  necessarily  indicative  of cash  available  to fund our cash needs,
including  our  ability  to  make  distributions.  We use FFO in  measuring  our
operating  performance  because  we  believe  that the  items  that  result in a
difference  between  FFO and net  income do not  impact  the  ongoing  operating
performance  of a real estate  company.  Also, we believe that other real estate
companies,  analysts and investors  utilize FFO in analyzing the results of real
estate companies.  Our basis of computing FFO is not necessarily comparable with
that of other REITs.

Our primary objective is to maximize  stockholder value by increasing the amount
and predictability of FFO less a reserve for capital replacements on a per share
basis. We seek to achieve this objective primarily by:

o    improving net operating income from our existing  portfolio of manufactured
     home communities;
o    acquiring  additional  communities  at values that are  accretive  on a per
     share basis; and
o    leasing  unoccupied  sites in our development  portfolio;  through our home
     sales division.

Company Policies

Management  has  adopted  specific  policies  to  accomplish  our  objective  of
increasing the amount and predictability of our FFO on a per share basis, less a
reserve for capital replacements. These policies include:

o    selectively  acquiring  manufactured  home  communities that have potential
     long-term   appreciation  of  value  through,   among  other  things,  rent
     increases, expense efficiencies and in-community homesite development;
o    developing  and  maintaining  resident  satisfaction  and a reputation  for
     quality  communities  through  maintenance of the physical condition of our
     communities and providing activities that improve the community lifestyle;
o    improving  the   profitability  of  our  communities   through   aggressive
     management of occupancy,  community development and maintenance and expense
     controls;
o    using debt leverage to increase our financial returns;
o    using  our  home  sales  division  to  help  reduce  vacancy  rates  in our
     communities;
o    reducing our exposure to interest rate fluctuations by utilizing long-term,
     fixed-rate, fully-amortizing debt to pay off higher cost, short term debt;
o    ensuring  the  continued  maintenance  of our  communities  by  providing a
     minimum of $50 per homesite per year for capital replacements;
o    seeking to reduce our exposure to downturns in regional real estate markets
     by diversifying the location of our portfolio of communities. Currently 77%
     of our  properties  are in Florida and 21% are in  Arizona,  based on total
     homesites; and
o    recruiting and retaining capable community management personnel.

                                     - 5 -
<PAGE>

Future Acquisitions

Our acquisition of interests in manufactured  home communities takes many forms.
In many  cases we  acquire  fee title to the  community.  Alternatively,  when a
community  has a  significant  number of  unleased  homesites,  we seek a stable
return from the community  during the  development and lease-up phase while also
seeking  to  participate  in future  increased  earnings  after  development  is
completed and the sites are leased.  The Company may undertake these  activities
itself or seek to accomplish this goal by making loans to development  companies
in return for participating mortgages that are non-recourse to the borrowers and
secured by the property. In general, these participating mortgages earn interest
at fixed rates and, in  addition,  participate  in profits or revenues  from the
community.

We believe that acquisition  opportunities for manufactured home communities are
attractive at this time because of:

o    the increasing acceptability of and demand for manufactured homes, as shown
     by the number of individuals living in manufactured home communities; and
o    the  continued   constraints  on  development  of  new  manufactured   home
     communities.

We are actively seeking to acquire  additional  communities and we are currently
engaged in various stages of negotiations  relating to the possible  acquisition
of  a  number  of  communities.  The  acquisition  of  interests  in  additional
communities could result in our becoming increasingly leveraged as we incur debt
in connection with these transactions.

When evaluating potential acquisitions, we consider such factors as:

o    the location and type of property;
o    the value of the homes located on the leased land;
o    the improvements, such as golf courses and swimming pools, at the property;
o    the  current and  projected  cash flow of the  property  and our ability to
     increase cash flow;
o    the potential for capital appreciation of the property;
o    the terms of tenant leases, including the potential for rent increases;
o    the tax and  regulatory  environment of the community in which the property
     is located;
o    the potential for expansion of the physical  layout of the property and the
     number of sites;
o    the occupancy  and demand by residents for  properties of a similar type in
     the vicinity;
o    the credit of the residents in a community;
o    the prospects for liquidity  through sale,  financing or refinancing of the
     property;
o    the competition from existing manufactured home communities;
o    the potential for the construction of new communities in the area; and
o    the replacement cost of the property.

Fees and Earnings from Commercial Assets

Prior to the merger, we managed Commercial Assets and owned approximately 27% of
Commercial  Assets' common stock.  Under the terms of our  management  agreement
with Commercial Assets, we received the following fees:

o    Acquisition  Fees  equal  to 0.5% of the cost of each  real  estate-related
     asset acquired by Commercial Assets;


                                     - 6 -
<PAGE>

o    Base Fees equal to 1% per year of the net book value of Commercial  Assets'
     real estate-related assets; and
o    Incentive Fees equal to 20% of the amount by which Commercial  Assets' FFO,
     less an annual  capital  replacement  reserve of at least $50 per developed
     homesite,  exceeded (a) Commercial Assets' average net worth, multiplied by
     (b) 1% over the ten year United States Treasury rate.

In the third quarter of 1998,  Commercial  Assets entered the manufactured  home
community   business  and  began  acquiring   interests  in  manufactured   home
communities  identified  by us. As of December 31, 1999,  Commercial  Assets had
acquired  interests  in 12  communities  at a  cost  of $70  million  (including
participating mortgages and real estate joint ventures).  Commercial Assets paid
us $456,862 in Base Fees and $0 in  Acquisition  Fees during  2000,  $565,000 in
Base Fees and $205,000 in Acquisition Fees during 1999, and $87,000 in Base Fees
and  $124,000  in  Acquisition  Fees in 1998.  No  Incentive  Fees  were paid by
Commercial Assets during 2000, 1999 or 1998.

Expansion of Existing Communities

We will seek to  increase  the number of  homesites  and the amount of  earnings
generated from our existing  portfolio of manufactured home communities  through
marketing campaigns aimed at increasing  occupancy.  We will also seek expansion
through future acquisitions and expansion of the number of sites available to be
leased to residents if justified  by local market  conditions  and  permitted by
zoning and other  applicable laws. As of December 31, 2000, we held interests in
33 communities with approximately 6,350 operational  homesites,  1,291 developed
homesites 1,761 undeveloped homesites and 129 recreational vehicle sites.

Competition

There are numerous housing  alternatives that compete with our manufactured home
communities in attracting  residents.  Our properties compete for residents with
other  manufactured  home communities,  multifamily  rental  apartments,  single
family homes and  condominiums.  The number of competitors in a particular  area
could have a material  effect on our ability to attract and  maintain  residents
and on the rents we are able to charge for homesites.  In acquiring  assets,  we
compete  with  other  REITs,  pension  funds,  insurance  companies,  and  other
investors, many of which have greater financial resources than we do.

Taxation of the Company

We have elected to be taxed as a REIT under the  Internal  Revenue Code of 1986,
as amended (the  "Code"),  and we intend to operate in a manner which will allow
us to avail ourselves of the beneficial tax provisions  applicable to REITs. Our
qualification as a REIT depends on our ability to meet the various  requirements
imposed  by the  Code,  such as  specifications  relating  to  actual  operating
results,  distribution levels and diversity of stock ownership. In addition, our
ability to qualify as a REIT  depends in part upon the actions of third  parties
over which we have no control,  or only limited  influence.  For  instance,  our
qualification  depends upon the conduct of certain entities with which we have a
direct or indirect relationship,  in our capacity as a lender, lessor, or holder
of non-controlling equity interests.

If we  qualify  for  taxation  as a REIT,  we will  generally  not be subject to
Federal corporate income tax on our net income that is currently  distributed to
stockholders.  This treatment substantially eliminates the "double taxation" (at
the corporate and stockholder  levels) that generally results from investment in
a  corporation.  If we fail to qualify as a REIT in any taxable year, we will be
subject to Federal income tax at regular  corporate  rates on our taxable income


                                     - 7 -
<PAGE>

(including any applicable alternative minimum tax). We have a net operating loss
("NOL")  carryover of approximately  $95 million and a capital loss carryover of
approximately  $413,000 which may, subject to some restrictions and limitations,
be used to offset taxable income in the event that we fail to qualify as a REIT.
The NOL  carryover is scheduled to expire  between 2007 and 2009 and the capital
loss carryover is scheduled to expire in 2001. Additionally,  even if we qualify
as a REIT,  we may be subject to certain state and local income and other taxes,
and to Federal income and excise taxes on our undistributed income.

If in any taxable year we fail to qualify as a REIT and as a result, incur a tax
liability,  we might need to borrow funds or liquidate  certain  investments  in
order to pay the applicable tax. In this situation, we would not be compelled to
make distributions as required for entities claiming REIT status under the Code.
Moreover,  unless  we  would be  entitled  to  relief  under  certain  statutory
provisions,  we  would be  disqualified  from  treatment  as a REIT for the four
taxable years following the year during which qualification is lost. Although we
currently  intend to operate in a manner  designed  to qualify as a REIT,  it is
possible that future economic,  market,  legal, tax or other  considerations may
cause us to fail to qualify as a REIT,  or may cause the Board of  Directors  to
revoke the REIT election.

We and our  stockholders  may be subject to state or local  taxation  in various
state  or local  jurisdictions,  including  those  in which we or they  transact
business or reside. The state and local tax treatment  conferred upon us and our
stockholders may not conform to the Federal income tax treatment.

Regulation

General

Manufactured home communities,  like other housing alternatives,  are subject to
various laws,  ordinances and  regulations,  including  regulations  relating to
recreational  facilities  such as swimming  pools,  clubhouses  and other common
areas.  We believe that we have obtained the necessary  permits and approvals to
operate each of our properties in conformity with these laws.

Americans with Disabilities Act

Our current  properties and any newly acquired  communities must comply with the
Americans with  Disabilities  Act (the "ADA").  The ADA generally  requires that
public  facilities,  such as clubhouses,  swimming pools and recreation areas be
made accessible to people with disabilities. Many of our communities have public
facilities.  In  order  to  comply  with  the ADA  requirements,  we  have  made
improvements  at our  communities in order to remove  barriers to access.  If we
should ever fail to comply with ADA regulations we could be fined or we could be
forced to pay damages to private litigants.  We have made those changes which we
believe  are  appropriate  and  required  by the ADA  and we  believe  that  our
properties are in compliance with the requirements of the ADA. In the event that
we incur any further costs related to ADA  compliance we believe these costs can
be recovered from cash flow from the individual  properties  without causing any
material adverse effect.  If ongoing changes involve a greater  expenditure than
we currently  anticipate,  or if the changes must be made on a more  accelerated
basis than we anticipate,  our ability to make expected  distributions  could be
adversely affected.

Rent Control Legislation

State and local laws might limit our  ability to  increase  rents on some of our
properties,  and  thereby,  limit our ability to recover  increases in operating
expenses and the costs of capital  improvements.  Enactment of rent control laws


                                     - 8 -
<PAGE>

has been considered from time to time in jurisdictions  in which we operate.  We
presently  expect to maintain  manufactured  home  communities  and may purchase
additional properties in markets that are either subject to rent control laws or
in which such legislation may be enacted.

Insurance

We believe that our properties are covered by adequate fire,  flood and property
insurance  policies.  It is our policy to  purchase  insurance  policies,  which
contain commercially  reasonable deductibles and limits from reputable insurers.
We also believe that we have obtained adequate title insurance policies insuring
fee title to  properties  we have  acquired.  During 2000,  we procured  certain
insurance coverages jointly with Brandywine Financial Service Corporation.

Capital Resources

We have used our available  cash  balances,  our cash flow and our long-term and
short-term  financing  arrangements  to provide  working  capital to support our
operations,  to pay dividends and to acquire assets. Future acquisitions will be
financed  by the most  appropriate  sources of  capital,  which may  include our
available cash balances; undistributed FFO; long-term, secured debt; short-term,
secured  debt;  or the  issuance  of  additional  equity  securities,  including
interests in the Operating Partnership. This flexibility allows us to offer more
choices of  "acquisition  currency" to potential  sellers of  manufactured  home
communities,  including the ability to defer some or all of the tax consequences
of a sale.  We believe that this  flexibility  may offer sellers an incentive to
enter into transactions with us on favorable terms.

Without  further  stockholder  approval,  we  are  authorized  to  issue  up  to
13,000,000  shares of capital stock. As of March 19, 2001,  8,510,567  shares of
common stock were  outstanding.  The Board of Directors is  authorized  to issue
additional  classes of stock  (including  preferred  stock) without  stockholder
approval.  Depending  upon  the  terms  set  by  the  Board  of  Directors,  the
authorization  and  issuance  of  preferred  stock or other new classes of stock
could adversely  affect  existing  stockholders.  Future  offerings of stock may
result in the reduction of the net tangible book value per outstanding share and
a reduction  in the market  price of the stock.  We are unable to  estimate  the
amount,  timing or nature of such future  offerings as any such  offerings  will
depend on general market  conditions or other factors.  As of March 19, 2001, we
have not authorized or issued additional classes of stock.

Restrictions on and Redemptions of Common Stock

To  qualify  to be  taxed  as a REIT,  we must  comply  with  certain  ownership
limitations  with  respect to shares of our Common  Stock.  Our  Certificate  of
Incorporation  provides that no person is permitted to acquire or own,  directly
or indirectly,  more than 5% of the aggregate value of the outstanding shares of
any  class of our  stock  unless  this  restriction  is  waived  by our board of
directors.  If any unpermitted transfer of shares of our stock would result in a
person owning greater than 5% of the aggregate value of the  outstanding  shares
of any class of our stock, all shares that are in excess of the 5% limit will be
transferred in trust for the benefit of a charitable beneficiary. Within 90 days
of receiving  notice from us that shares of stock have been  transferred  to the
trust,  the  trustee  of the  trust  shall  sell the  shares  held in trust  and
distribute the proceeds from the sale of the shares in the following manner:

o    the  prohibited  owner  whose  shares  were  transferred  to the trust will
     receive  the lesser of the amount  that the  prohibited  owner paid for the
     shares or the amount the trustee receives for shares; and


                                     - 9 -
<PAGE>

o    any amounts  remaining  from the sale will be  transferred  to a charitable
     beneficiary.

At the end of each  year,  every  owner of more  than a  prescribed  percentage,
generally 5%, of the outstanding shares of our stock will be required to provide
us with written notice stating the name and address of the owner,  the number of
shares held and a description of the manner of ownership.

Effective August 11, 2000, the Company's Board of Directors  authorized  waivers
for certain  stockholders,  including the Operating  Partnership (which acquired
stock of the Company in connection with its merger with  Commercial  Assets) and
Mr. Terry Considine,  from the 5% ownership limitations that generally apply. In
the case of Mr. Considine,  a special limitation restricts his maximum ownership
to 34% of the Company's outstanding Common Stock, reduced, as necessary,  to the
extent that limited  waivers are granted to other  stockholders,  except for the
Operating Partnership.

Employees

Our employees  perform various  acquisition and management  functions.  Prior to
January 1, 2000, we retained Brandywine  Financial Services  Corporation and its
affiliates to provide our properties  with  employees  that  performed  property
management,  maintenance  and  sales  services.  Mr.  Bruce  Moore was the Chief
Executive  Officer of  Brandywine  prior to  becoming  our  President  and Chief
Operating  Officer in February  1998.  As of December 31, 2000,  we employed 223
persons that devoted their full-time attention to our communities.  During 2000,
certain  administrative   functions  were  performed  on  a  shared  basis  with
Brandywine Financial Services Corporation. We reimburse Brandywine for the costs
of these employees and certain overhead costs.  During 2000, we paid $544,000 to
Brandywine as reimbursement  for  administrative  functions and certain overhead
costs.  None of our  employees  are  represented  by a union,  and we have never
experienced a work stoppage. We believe that we maintain satisfactory  relations
with our employees.

Item 2.  Properties.

The  manufactured  home  communities  in which we have  interests  are primarily
located  in  Florida  and  Arizona  and  are  concentrated  in  or  around  four
metropolitan  areas. We hold interests in each of these communities in different
forms,  including as owner or ground lessee.  The following table sets forth the
states in which the  communities  in which we held an interest  on December  31,
2000 are located.

<TABLE>
<CAPTION>

                                                                        Number of Sites
                                           --------------------------------------------------------------------------
                           Number of         Operational      Developed           Undeveloped          Recreational
                          Communities         Homesites       Homesites            Homesites          Vehicle Sites
                      -------------------- ---------------- ---------------     ----------------     ----------------
<S>                           <C>                <C>            <C>                <C>
Florida                       20                 4,445          1,082              1,761                  --
Arizona                       11                 1,787            209                 --                 129
New Jersey                     1                    90             --                 --                  --
Pennsylvania                   1                    28             --                 --                  --
                         ----------           ------------    -------------    -----------          ----------

   Total                      33                 6,350          1,291              1,761                 129
                              ==                 =====          =====              =====                ====

</TABLE>

                                     - 10 -
<PAGE>




The following  table sets forth  information  as of December 31, 2000  regarding
each  manufactured  home  community  in  which  we held an  interest  and  those
manufactured home communities which we manage for others:

<TABLE>
<CAPTION>

                                                                     Average
                                            Operational              Monthly     RV    Undeveloped  Developed   Year(s) First
   Community                Location         Homesites   Occupancy    Rent     Sites    Homesites   Homesites     Developed
 --------------------------------------------------------------------------------------------------------------------------------
   Owned Communities
<S>                   <C>                        <C>        <C>        <C>        <C>        <C>      <C>        <C>
   Blue Heron Pines   Punta Gorda, FL            154        100%       $274        --        79       178        1983/1999
   Blue Star          Apache Junction, AZ         22         91         239       129        --        --            1955
   Brentwood          Hudson, FL                  75         92         221        --        --        71            1984
   Brentwood West     Mesa, AZ                   350         97         362        --        --        --         1972/1987
   Caribbean Cove     Orlando, FL                259         99         298        --        --        26            1984
   Casa Encanta       Mesa, AZ                   110         75         380        --        --        --            1970
   Cypress Greens     Lakeland, FL               100        100         190        --        --        164           1986
   Desert Harbor      Apache Junction, AZ        103         95         316        --        --        103           1997
   Fiesta Village     Mesa, AZ                   170         65         304        --        --        --            1962
   Forest View        Homosassa, FL              186        100         272        --        --        123        1987/1997
   Gulfstream Harbor  Orlando, FL                376        100         354        --        --         7            1980
   Gulfstream HarborIIOrlando, FL                292        100         343        --        --        22            1988
   La Casa Blanca     Apache Junction, AZ        198         95         315        --        --        --            1993
   Lakeshore Villas   Tampa, FL                  280         99         350        --        --        --            1972
   Lost Dutchman      Apache Junction, AZ        154        100         266        --        --        106      1971/1979/1999
   Mullica Woods      Egg Harbor City, NJ         90         99         445        --        --        --            1985
   New Era            Tucson & Marana, AZ         38        100         288        --        --        --            1998
   Park Royale        Pinellas Park, FL          258         97         374        --        --        51            1971
   Pinewood           St. Petersburg, FL         220         94         313        --        --        --            1976
   Pleasant Living    Riverview, FL              244        100         290        --        --         2            1979
   Rancho Mirage      Apache Junction, AZ        312         99         332        --        --        --            1994
   Riverside GCC      Ruskin, FL                 225        100         426        --       717        19            1981
   Royal Palm         Haines City, FL            233        100         245        --       165        26            1971
   Salem Farm         Bensalem, PA                28        100         430        --        --        --            1988
   Savanna Club       Port St. Lucie, FL         183         53         158        --       800        150           1999
   Serendipity        Ft. Myers, FL              338         96         289        --        --        --         1971/1974
   Southern Palms     Mesa, AZ                    62         95         224        --        --        --            1961
   Stonebrook         Homosassa, FL              124        100         261        --                  95         1987/1997
   Sun Lake           Grand Island, FL           253        100         315        --                  148           1980
   Sun Valley         Tarpon Springs, FL         261         99         359        --        --        --            1972
   Sun Valley         Apache Junction, AZ        268         98         262        --        --        --            1984
   Westwind I 1       Dunedin, FL                195         98         355        --        --        --            1970
   Westwind II 1      Dunedin, FL                189         99         364        --        --        --            1972
                      -----------------------------------------------------------------------------------------------------------

   Total Communities  33                       6,350         97%       $316       129     1,761       1,291
                                               =====         ===       ====       ===     =====       =====


   Joint Ventures
   Cannery Village 1  Newport Beach, CA           --         --%     $   --        --        30
   White Sands        Apache Junction, AZ         57         96         208        12        --
                                                  --         --         ---        --        --
         Subtotal                                 57         96         208        12        30
                                                  --         --         ---        --        --
   Total communities
   Managed for others                            436         88          --        --        48
                                                 ---         --          --        --        --

                                                 493        184         208        12        78
                                                 ===        ===         ===        ==        ==


<FN>


1        We are the ground lessee of these communities.
</FN>
</TABLE>




                                     - 11 -
<PAGE>




Owned  Properties.   At  December  31,  2000,  we  owned  33  manufactured  home
communities and one  recreational  vehicle park containing  approximately  6,350
operational  homesites,  1,291 developed homesites,  1,761 undeveloped homesites
and 129 recreational  vehicle sites. These properties contain,  on average,  289
sites,  with the largest property  containing 1,133 homesites.  These properties
offer residents a range of amenities, including swimming pools, clubhouses, golf
courses and tennis courts.

At  December  31,  2000,  23 of these  properties  are  encumbered  by  mortgage
indebtedness  totaling  $97,564,000.  These properties  represent  approximately
86.1% of our  developed  homesites.  The 23  properties  securing  our  mortgage
indebtedness  have a combined net book value of  approximately  $179,500,000 and
the indebtedness has a weighted  average  effective  interest rate of 7.8% and a
weighted  average  maturity of 13.87 years.  As of December 31, 2000, 92% of our
outstanding  debt was long-term (over one year) and 8% was short-term (less than
one year).  See the financial  statements  included  elsewhere in this report on
Form 10-K for additional information about our indebtedness.

Properties  Involving  Participating  Mortgages.  At December 31, 1999,  we held
$22,475,000  in a  participating  mortgage  involving  seven  manufactured  home
communities  containing 535 developed homesites and 2,183 undeveloped homesites.
The  participating  mortgage bore  interest at 10% and matures in 2018.  Through
2002, interest was payable based on the net cash flow of the secured properties.
As additional compensation, we received 50% of both (a) any profits and net cash
flows from the properties in excess of the stated  interest rate and (b) any net
sales  proceeds  from the  properties  in excess of the amount of the  mortgage.
Effective  January 1, 2000, we purchased all of the  properties  securing  these
mortgages in exchange for the  cancellation of $24,851,000 of the  participating
mortgage and other loans, the payment of $765,000,  the issuance of 44,572 units
of limited partnership interests in our Operating Partnership valued at $496,000
and the assumption of $10,704,000 of third-party debt.

Item 3.  Legal Proceedings.

The  Company is party to various  legal  actions  resulting  from its  operating
activities.  These actions are routine litigation and administrative proceedings
arising  in the  ordinary  course  of  business,  some of which are  covered  by
liability  insurance,  and none of which are expected to have a material adverse
effect on the consolidated  financial  condition or results of operations of the
Company and its subsidiaries taken as a whole.

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

The Company's  annual meeting of stockholders  was held on December 20, 2000. At
the meeting, the following matters were approved by stockholders:

<TABLE>
<CAPTION>

                                                                        Number of Votes Cast
                                                                        --------------------

                                                     "For"        "Against"        "Abstentions and Non-Votes"
                                                     -----        ---------        ---------------------------
<S>                                               <C>              <C>
Election of directors:  Todd Sheets               6,280,523        123,361                     ---
Reduction of  the Company's authorized capital
stock from 50,000,000 to 13,000,000 shares        3,797,536        628,251                  1,978,097

</TABLE>




                                     - 12 -
<PAGE>




                                     PART II

Item 5. Market for Registrant's Common Equity and Related  Stockholder  Matters.
Our  common  stock is listed on the NYSE under the  symbol  "ANL."  Prior to our
merger  with  Commercial  Assets,  we were  listed on the NYSE  under the symbol
"AIC." The high and low closing  sales  prices of the shares of common  stock as
reported on the NYSE Composite  Tape and certain  dividend  information  for the
periods indicated were as follows:

<TABLE>
<CAPTION>

                                                 High                          Low                      Dividends
                                             ---------------               -------------               -------------
    2000
<S>                                           <C>                           <C>                          <C>
    First Quarter                             $   12-1/16                   $   10-3/4                   $  .25
    Second Quarter                              11-15/16                        10-7/8                      .25
    Third Quarter                                 12-1/16                     11-5/16                       .25
    Fourth Quarter                                11-9/16                       9-9/16                      .25

    1999
    First Quarter                             $   15-1/16                   $       12                   $  .25
    Second Quarter                                15-5/16                      12-1/16                      .25
    Third Quarter                                14-15/16                       12-1/2                      .25
    Fourth Quarter                                13-5/16                     10-11/16                      .25

    1998
    First Quarter                             $    20-7/8                   $       16                   $   --
    Second Quarter                                19-5/16                       15-7/8                      .25
    Third Quarter                                 17-5/16                      13-5/16                      .25
    Fourth Quarter                               14-15/16                       12-1/8                      .25

</TABLE>

As of March  19,  2001,  8,510,567  shares  of  common  stock  were  issued  and
outstanding  and were held by 2,658  stockholders  of record.  We estimate  that
there were an additional 10,000 beneficial owners on that date whose shares were
held by banks, brokers or other nominees.

As a REIT, we are required  annually to distribute to  stockholders at least 95%
(90% beginning in 2001) of our "REIT taxable  income,"  which, as defined by the
Code and Treasury  regulations,  is generally equivalent to net taxable ordinary
income. We measure economic profitability and intend to pay regular dividends to
our stockholders  based on FFO, less an annual reserve for capital  replacements
of at least $50 per developed  homesite,  during the relevant period. The future
payment  of  dividends,  however,  will be at the  discretion  of the  Board  of
Directors  and  will  depend  on  numerous  factors  including,   our  financial
condition, capital requirements,  the annual distribution requirements under the
provisions of the Code applicable to REITs,  and such other factors as the Board
of Directors deems relevant.

In April 2000,  6,900 shares of common  stock were issued to three  non-employee
directors  in  lieu  of  annual  director  fees as a  private  placement  of our
securities. In addition, two non-employee directors received compensation in the
same amount that was applied  against notes  receivable  held by the Company for
common  stock  purchases.  The $11.00 per share  value was equal to the  closing
stock price on April 18, 2000.

                                     - 13 -
<PAGE>

Item 6.  Selected Financial Data.

Our selected  financial data set forth below has been derived from and should be
read in conjunction with our audited consolidated financial statements including
their notes.  Financial  data as of December 31, 2000 and 1999,  and for each of
the three years in the period ended December 31, 2000, is included  elsewhere in
this report on Form 10-K.

Operating and Balance Sheet Data (in thousands, except per share data):

<TABLE>
<CAPTION>

RENTAL PROPERTY OPERATIONS                                       2000         1999         1998          1997        1996
                                                      --------------------------------------------------------------------
<S>                                                          <C>           <C>          <C>           <C>             <C>
Rental and other property revenues                           $ 20,578      $14,987      $10,479       $ 3,104         $-
Revenue  on participating mortgages and leases                    612        2,976        3,174             -          -
Equity in earnings of rental property joint ventures                -            -            -           466          -
Property operating expenses                                   (8,331)      (5,262)      (4,039)       (1,398)          -
Depreciation                                                  (5,681)      (3,870)      (2,685)         (693)          -
                                                      --------------------------------------------------------------------
Income from rental property operations                          7,178        8,831        6,929         1,479          -
                                                      --------------------------------------------------------------------

Sales operations
Home sales revenues                                            12,655            -            -             -          -
Cost of home sales                                           (10,430)            -            -             -          -
Selling and marketing expenses                                (3,206)            -            -             -          -
Interest expense allocation                                     (251)            -            -             -          -
Minority interest in sales operations                             272            -            -             -          -
                                                      --------------------------------------------------------------------
Loss from sales operations                                      (960)            -            -             -          -
                                                      --------------------------------------------------------------------

Service Operations
Property management income, net                                   157          207          156            69          -
Commercial Assets management fees                                 335          564          155             -          -
Amortization of management contracts                           (1,866)      (2,757)      (2,894)         (744)         -
                                                      --------------------------------------------------------------------
Loss from service operations                                   (1,374)      (1,986)      (2,583)         (675)          -

Equity in earnings of Commercial Assets                           686          872          975         3,663      1,875
General and administrative expenses                            (1,798)      (1,530)      (1,393)       (1,612)    (2,938)
Interest and other income                                         960          306          921         4,774     11,649
Interest expense                                               (3,948)      (3,846)      (2,485)         (368)       (88)
Income tax benefit                                                  -          400            -             -          -
Loss from early extinguishment of debt                              -          (75)           -             -          -
Reincorporation expenses                                            -         (120)           -             -          -
Costs incurred to acquire management contract                       -            -       (2,092)       (6,553)         -
Elimination of dividend equivalent rights                           -            -            -             -       (825)
Gain on sale of real estate                                       393            -            -             -          -
Gain on sale of bonds                                               -            -            -         6,484          -
                                                      --------------------------------------------------------------------

          Income before minority interest in Operating          1,137        2,852          272          7192      9,673
                                           Partnership
            Minority interest in Operating Partnership           (163)        (446)         (60)           62         --
                                                                -----       ------         ----        ------     ------

                                            Net income           $974       $2,406         $212        $7,254     $9,673
                                                                 ====       ======         ====        ======     ======
                                    Per share amounts:
                                        Basic earnings          $0.16        $0.43        $0.04         $1.44      $1.97
                                                                =====        =====        =====         =====      =====
                                      Diluted earnings           $016        $0.43        $0.04         $1.43      $1.95
                                                                =====        =====        =====         =====      =====
                                        Dividends paid          $1.00        $1.00        $0.75         $1.45      $1.85
                                                                =====        =====        =====         =====      =====

           Weighted -average common shares outstanding          6,244        5,538        5,094         5,022      4,919
                                                                =====        =====        =====         =====      =====
       Weighted-average common shares and common share
                               equivalents outstanding          6,244        5,544        5,113         5,061      4,966
                                                                =====        =====        =====         =====      =====

</TABLE>




                                     - 14 -
<PAGE>



<TABLE>
<CAPTION>


   BALANCE SHEET DATA                               2000            1999          1998          1997          1996
                                                 -----------     -----------    ----------    ---------     ---------

<S>                                               <C>             <C>            <C>            <C>         <C>
   Real estate, before accumulated                $209,207        $115,993       $101,941       $ 41,419    $     --
        depreciation
   Real estate, net of accumulated                 196,969         108,745         98,563       40,726            --
      depreciation
   Investments in participating mortgages
        and joint ventures                              --          22,475         27,604       25,415            --
   Investment in Commercial Assets                      --          19,486         20,706       20,866        19,361
   Total assets                                    216,302         159,093        158,226      119,161        90,344

   Secured long-term notes payable                  89,697          53,994         40,506       10,677            --
   Secured short-term financing                      7,867           2,610         10,500           --            --
   Minority interest in Operating                   15,387          15,236         25,649       22,362            --
        Partnership and other entities
   Stockholders' equity                             97,535          83,852         78,636       83,515        86,365

</TABLE>


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

                          RESULTS OF OPERATIONS FOR THE
                  YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

The following  discussion and analysis of consolidated results of operations and
financial  condition  should  be  read  in  conjunction  with  our  consolidated
financial  statements  included elsewhere in this report. In 1997, we decided to
change our business from the ownership of high-risk,  residential collateralized
mortgage-backed  securities  to  the  ownership,  acquisition,  development  and
management  of  manufactured  home  communities.  Since May  1997,  we have been
focused on the investment of our capital in the acquisition of manufactured home
communities.

Inflation

We do not believe that changes in inflation rates would have a material  adverse
effect on our business. In fact, we believe that inflation may positively impact
our business,  in light of the fact that manufactured home communities represent
a more  affordable  housing  choice  for many  people  than  other  alternatives
available,  increased  inflation  rates may allow us to demand  increased  rents
without losing tenants.

                                     - 15 -
<PAGE>

Comparison of 2000 to 1999

Rental Property Operations

Rental and other property revenues from our owned properties totaled $20,578,000
in 2000 compared to $14,987,000 in 1999, an increase of $5,591,000 or 37.3%. The
total increase consisted of:

                                                  2000                1999
                                              -------------       -------------
                                                       (in thousands)
 1999 acquisitions                               $  1,596            $    542
 2000 acquisitions                                  4,498                  --
 2000 disposals                                       862               1,215
 "Same store" properties                           13,622              13,230
                                              -------------       -------------
 Total                                           $ 20,578            $ 14,987
                                              =============       =============

We refer to  properties  which we owned  throughout  both 1999 and 2000 as "same
store" properties.

The revenue  increase  achieved  across the entire  portfolio for all properties
which  were  either  owned by the  Company,  Commercial  Assets or  subject to a
participating mortgage throughout 1999 and 2000 was 5.0%. The increase consisted
of (in thousands):

<TABLE>
<CAPTION>

                                                                        2000                 1999
                                                                    --------------       -------------
<S>                                                                      <C>                 <C>
     Owned by the Company                                                $ 13,622            $ 13,230
     Owned by Commercial Assets                                             1,342               1,287
     Subject to participating mortgage                                      1,747               1,400
                                                                    --------------       -------------
          Total                                                          $ 16,711            $ 15,917
                                                                    ==============       =============
</TABLE>

Property operating expenses from our owned properties totaled $8,331,000 in 2000
compared  to  $5,262,000  in 1999,  an  increase of  $3,069,000,  or 58.3%.  The
increase consisted of:

<TABLE>
<CAPTION>

                                                           2000             1999
                                                       -------------    -------------
                                                               (in thousands)
<S>                                                     <C>              <C>
        1999 acquisitions                               $    455         $     98
        2000 acquisitions                                  2,508               --
        2000 disposals                                       793              874
        "Same store" properties                            4,575            4,290
                                                     -------------    -------------
        Total                                           $  8,331         $  5,262
                                                     =============    =============

</TABLE>

The expense  increase  achieved  across the entire  portfolio for all properties
which  were  either  owned by the  Company,  Commercial  Assets or  subject to a
participating   mortgage  throughout  1999  and  2000  was  8.9%.  The  increase
consistent of (in thousands):

<TABLE>
<CAPTION>

                                                                          2000                1999
                                                                    -----------------    ----------------
<S>                                                                          <C>                 <C>
     Owned by the Company                                                    $ 4,575             $ 4,290
     Owned by Commercial Assets                                                  484                 314
     Subject to participating mortgage                                           785                 760
                                                                    -----------------    ----------------
          Total                                                              $ 5,844             $ 5,364
                                                                    =================    ================

</TABLE>

                                     - 16 -
<PAGE>

Revenue on  participating  mortgages and leases was $612,000 in 2000 compared to
$2,976,000  in 1999.  The  $2,364,000  decrease  was related to our  purchase on
January 1, 2000 of seven  communities  for which a portion of the  consideration
paid was the cancellation of participating mortgages totaling $24,851,000.

Depreciation expense increased from $3,870,000 in 1999 to $5,681,000 in 2000 due
to  acquisitions  of  manufactured  home  communities  during  2000,   continued
investment in our developing properties, and our acquisitions as a result of our
merger with Commercial Assets.

Sales Operations

Effective January 1, 2000, we acquired Brandywine Home Sales Corporation,  which
previously  conducted home sales activities at our properties.  We now engage in
this business  through our home sales subsidiary in order to accelerate the rate
of absorption  at our  development  properties  through the  origination  of new
ground leases.  Through the date of our merger with Commercial  Assets, we owned
65% of the home sales business with the balance owned by Commercial  Assets.  In
2000, our home sales business  resulted in an additional 180 new homesites being
leased across the total portfolio compared to 147 in 1999, a 22% increase.

We report the results for our home sales activity in accordance  with accounting
principles  generally  accepted  in the  United  States.  As a  result,  we have
reported  a loss from our home  sales  operation  in 2000  equal to  $1,232,000,
including the minority  interest owned by Commercial  Assets through the date of
the merger.

We view our home sales  results as an  investment in future cash flow streams to
be generated by ground leases of land held for development within our portfolio.
We evaluate the home sales  activities  on the same return on  investment  basis
that we use for acquiring other stabilized properties.  The leases originated in
2000 by our home sales subsidiary are estimated to result in a first year return
on investment of 9.95%, as shown below:

<TABLE>
<CAPTION>

<S>                                                                                      <C>
      Sites Leased                                                                       180
      Estimated first year annualized profit on leases originated                   $477,654
      Development costs of sites leased                                           $3,568,996
      Loss from home sales business                                               $1,232,000
      Total Costs incurred to originate leases                                    $4,800,996
      Estimated first year annualized return on investment                              9.95%

</TABLE>

Service Operations During 2000, we earned $157,000 in property management income
as compared  to $207,000  during  1999.  The $50,000  decrease is as a result of
several management contracts that were not renewed in 2000.

Fee revenue from managing Commercial Assets was $335,000 in 2000 and $564,000 in
1999.  The  decrease is due to our merger with  Commercial  Assets on August 11,
2000, at which time we ceased earning fee revenue.

Amortization  of management  contracts  decreased  from  $2,757,000  for 1999 to
$1,866,000  for 2000.  Coincident  with our merger with  Commercial  Assets,  we
amortized the remaining  cost of $638,000 of our contracts to manage  Commercial
Assets.

                                     - 17 -
<PAGE>

Equity in Earnings of Commercial Assets

Income from our 27%  interest in  Commercial  Assets  until our merger in August
2000 was $686,000 for 2000,  compared to $872,000 for 1999.  Our interest in the
earnings of Commercial Assets terminated with the merger on August 11, 2000. Due
to our 27%  interest  in  Commercial  Assets  until our  merger in August  2000,
however,  during 2000 and 1999,  $124,000  and  $205,000,  respectively,  of the
management  fees paid by  Commercial  Assets to us have been  reported  by us as
equity in earnings of Commercial  Assets in accordance  with generally  accepted
accounting principles.

General and Administrative Expenses

Our general and  administrative  expenses were $1,798,000 in 2000 and $1,530,000
in 1999.  The $268,000  increase is  primarily  due to the merger of the Company
with Commercial  Assets,  increased  franchises taxes and the incremental  costs
associated with consolidating corporate offices to Florida from Denver, Colorado
and Chadds Ford, Pennsylvania.

Interest and Other Income

Interest  and other  income was $960,000 in 2000 and $306,000 in 1999. A portion
of the increase  relates to earnings  from other  assets  acquired in our merger
with  Commercial  Assets,  which totaled  $176,000.  The  remaining  increase is
accounted for by  nonrecurring  income during the 2000 year comprised  primarily
of:

o    $265,000 of income due to a change in estimate of accrued liabilities,
o    $50,000  of  income  resulting  from a  forfeited  deposit  by a  potential
     purchase of one of our communities, and
o    $102,000  interest  income on notes  receivable due from officers for stock
     purchases.

Interest Expense

Interest  expense was $4,199,000  (including  interest  expense  related to home
sales activities)  during 2000 and $3,846,000 during 1999. The $353,000 increase
is primarily due to higher outstanding balances in the 2000 period,  interest on
debt  assumed  in  connection  with the CADC  acquisition  and the  merger  with
Commercial  Assets,  increased  interest  rates  on  short-term  borrowing,  and
increased interest expense related to the sales operations.

Income Tax Benefit

A subsidiary  recorded a loss for income tax purposes in 1999.  As a result,  it
carried back the tax loss for a refund of income taxes paid by the subsidiary in
1997.  This is  reflected  as a benefit  totaling  $400,000 in 1999 for which no
corresponding benefits were generated in 2000.

Loss from Early Extinguishment of Debt

In 1999,  we prepaid a $2.2 million  note payable and paid a $75,000  prepayment
penalty. There was no such activity in 2000.

                                     - 18 -
<PAGE>

Reincorporation  Expenses

In  1999,  we  incurred  $120,000  of  nonrecurring   expenses  related  to  our
reincorporation in Delaware. There was no such activity in 2000.

Comparison of 1999 to 1998

Rental Property Operations

Rental and other property revenues from our owned properties totaled $14,987,000
in 1999 compared to $10,479,000  in 1998, an increase of  $4,508,000,  or 43.0%.
The total increase consisted of:

                                                     1999             1998
                                                 -------------    -------------
                                                        (in thousands)
    1998 acquisitions                               $  7,079         $  3,477
    1999 acquisitions                                    542               --
    "Same store" properties                            7,366            7,002
                                                 -------------    -------------
                                                 =============    =============
    Total                                           $ 14,987         $ 10,479
                                                 =============    =============

Property operating expenses from our owned properties totaled $5,262,000 in 1999
compared  to  $4,039,000  in 1998,  an  increase of  $1,223,000,  or 30.3%.  The
increase consisted of:

                                                      1999             1998
                                                  -------------    -------------
                                                         (in thousands)
     1998 acquisitions                               $  2,028         $    941
     1999 acquisitions                                     98               --
     "Same store" properties                            3,136            3,098
                                                  -------------    -------------
     Total                                           $  5,262         $  4,039
                                                  =============    =============

We refer to  properties  which we owned  throughout  both 1998 and 1999 as "same
store" properties.

Revenue on participating mortgages and leases was $2,976,000 in 1999 compared to
$3,174,000 in 1998. The $198,000 decrease was primarily due to a decrease in the
amount invested in these mortgages during 1999.

Service Operations

During 1999,  we earned  $207,000 in property  management  income as compared to
$156,000  during 1998.  The $51,000  increase is primarily due to an increase in
the number of properties that we managed for Commercial Assets.

Fee revenue from managing Commercial Assets was $564,000 in 1999 and $155,000 in
1998.  The  $409,000  increase  is  due to  Commercial  Assets'  investments  in
communities beginning in August 1998. We do not earn fees on cash and short-term
investments held by Commercial  Assets which is what Commercial Assets primarily
held in 1998.

                                     - 19 -
<PAGE>

Amortization  of management  contracts  decreased  from  $2,894,000  for 1998 to
$2,757,00 for 1999 due to our  acquisition  in February 1998 of two  communities
which we previously managed.

Equity in Earnings of Commercial Assets

Income from our 27%  interest in  Commercial  Assets was  $872,000  for 1999 and
$975,000  for 1998.  Commercial  Assets  reported to us that its 1999 net income
decreased by $917,000  from 1998  primarily due to: (1)  $1,229,000  increase in
depreciation on acquired manufactured home communities, (2) $559,000 increase in
management  fees paid to us and (3)  $500,000 of  nonrecurring  expenses in 1998
related to its decision to not invest in marinas;  partially  offset by $120,000
of nonrecurring expenses in 1999 related to its reincorporation.  Due to our 27%
interest in  Commercial  Assets,  however,  during 1999 and 1998,  $205,000  and
$56,000,  respectively,  of the management fees paid by Commercial  Assets to us
have  been  reported  by us as  equity  in  earnings  of  Commercial  Assets  in
accordance with generally accepted accounting principles.

General and Administrative Expenses

Our general and administrative  expenses were $1,530,000 for 1999 and $1,393,000
for 1998.  The $137,000  increase is primarily due to increases in the number of
personnel.

Interest and Other Income

Interest  and other  income  was  $306,000  in 1999 and  $921,000  in 1998.  The
$615,000  decrease  occurred  primarily  because  prior to June 1998, we had $20
million in cash which we had invested in manufactured  home  communities by June
30, 1998.

Interest Expense

Interest  expense was  $3,846,000  during 1999 and  $2,485,000  during 1998. The
$1,361,000 increase is primarily due to borrowings used to acquire  manufactured
home communities after June 1998.

Income Tax Benefit

A subsidiary  recorded a loss for income tax purposes in 1999.  As a result,  it
carried back the tax loss for a refund of income taxes paid by the subsidiary in
1997. There was no such activity for 1998.

Loss from Early Extinguishment of Debt

In 1999,  we prepaid a $2.2 million  note payable and paid a $75,000  prepayment
penalty.  Reincorporation Expenses In 1999, we incurred $120,000 of nonrecurring
expenses related to our reincorporation in Delaware.

Costs Incurred to Acquire Management Contract

In 1998, we issued  120,000 OP Units to our former  manager  because we achieved
certain  returns from our  investments  in  manufactured  home  communities.  We
expensed in 1998 the $2,092,000  value assigned to the OP Units. We did not have
these costs in 1999.

                                     - 20 -
<PAGE>

NOL and Capital Loss Carryovers

At  December  31,  2000,   our  NOL   carryover  for  income  tax  purposes  was
approximately $95,000,000 and our capital loss carryover for income tax purposes
was approximately $413,000.  Subject to some limitations,  the NOL carryover may
be used to offset all or a portion of our REIT taxable income,  and as a result,
to  reduce  the  amount  of  income  that  we  are  required  to  distribute  to
stockholders to maintain our status as a REIT. The NOL carryover is scheduled to
expire  between  2007 and 2009 and the capital  loss  carryover  is scheduled to
expire in 2001.

Dividend Distributions

During 2000, we  distributed  $7,075,000  ($1.00 per share) to holders of common
stock and OP Units  compared  to 1999  distributions  of  $6,591,000  ($1.00 per
share) to holders of common stock and OP Units  compared and 1998  distributions
of  $4,916,000  ($0.75 per  share).  Fifty-one  percent  of the 2000  dividends,
sixty-eighty  percent of 1999  dividends,  and eighty  percent of 1998 dividends
constituted return of capital  distributions for federal income tax purposes and
are not  taxable to the  stockholders  to the extent of their tax basis in their
stock.

                         LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2000, we had cash and cash  equivalents  of  $1,217,000.  Our
principal   activities  that  demand  liquidity  include  our  normal  operating
activities, payments of principal and interest on outstanding debt, acquisitions
of  or  additional   investments  in   properties,   payments  of  dividends  to
stockholders  and  distributions  made  to  limited  partners  in the  Operating
Partnership.

Our net cash  provided  by  operating  activities  was  $6,468,000  during  2000
compared to  $5,764,000  during 1999.  The $704,000  increase was  primarily the
result  of  a  $1.3  million  net  decrease  in  inventory,   other  assets  and
liabilities,  a $0.4  million  gain on sale of real  estate;  and a $0.2 million
reduction in our equity in earnings of Commercial  Assets offset  partially by a
$0.5 million  decrease in accrued interest on  participating  mortgages,  and an
$0.8 million  decrease in income  before  depreciation,  amortization,  minority
interest.

In 2000, the net cash used in investing activities was $4,681,000, compared with
$5,410,000  in 1999.  The  decrease  in net cash  used is  primarily  due to the
proceeds from the sale of real estate in the 2000 period of $3.9 million; offset
by items related to the merger with Commercial  Assets resulting in a net use of
$1.6  million  and uses for  purchase  of real  estate in 2000 of $1.8  million.
Additional   decreases  relate  to  the  excess  of  capital   replacements  and
improvements in 2000 over amounts advanced under participating mortgages for the
underlying properties in 1999.

Net cash used by financing  activities was $1,140,000 in 2000 compared with 1999
in which $1,210,000 was used by financing  activities.  The changes between 2000
and 1999 relate to a $1.3 million  decrease in refinancing net proceeds,  a $0.5
million increase in dividends and  distributions,  offset by  contributions  for
minority interest in subsidiary of $1.8 million in the 2000 period.

We have a $15 million line of credit with a bank which matures in May 2001.  The
line of credit is secured by real estate  owned by the Company with a book value
of  $19,911,000  at December 31, 2000.  Advances  under this line of credit bear
interest  based upon the bank's  reference  rate.  At December  31,  2000,  $7.9
million was outstanding on this line of credit bearing interest at 9.5%.

                                     - 21 -
<PAGE>

As of December 31, 2000, 91% of our real estate and 83% of our total assets were
encumbered by debt. We had total outstanding  indebtedness of $97.6 million, all
of  which  was  secured  by  various  manufactured  home  communities.   Of  our
indebtedness,  $89.7 million,  or 92%, was secured  long-term  notes payable and
$7.9 million, or 8%, was secured short-term financing.  As of December 31, 2000,
$4.9 million of the secured  long-term  notes payable bears interest at variable
rates  based on the Bank's  "Reference"  Rate.  The  weighted-average  effective
interest rate on our secured  long-term  notes payable was 7.62% at December 31,
2000. The weighted-average interest rate on our secured short-term financing was
9.50% at December 31, 2000. Our secured  long-term  notes payable had a weighted
average maturity of 15.05 years at December 31, 2000.

We expect to meet our long-term  liquidity  requirements  in excess of 12 months
through long-term and short-term  secured  borrowings,  the issuance of OP Units
and other equity securities and cash generated by operations.

                              FUNDS FROM OPERATIONS

We measure  our  economic  profitability  based on FFO,  less an annual  capital
replacement reserve of at least $50 per developed homesite.  We believe that the
presentation  of FFO,  when  considered  with the financial  data  determined in
accordance  with generally  accepted  accounting  principles,  provides a useful
measure of our performance. However, FFO does not represent cash flow and is not
necessarily  indicative of cash flow or liquidity available to us, nor should it
be  considered  as an  alternative  to net income as an  indicator  of operating
performance.  The Board of Governors of NAREIT defines FFO as net income (loss),
computed in accordance with generally accepted accounting principles,  excluding
gains and losses from debt restructuring and sales of property, plus real estate
related  depreciation  and  amortization  (excluding  amortization  of financing
costs),  and  after  adjustments  for  unconsolidated   partnerships  and  joint
ventures.  We calculate FFO  beginning  with the NAREIT  definition  and include
adjustments for:

o the minority interest in the Operating Partnership owned by persons other than
us, o costs we  incurred  in order to become  self-managed,  o  amortization  of
property and investment management contracts, and o nonrecurring income, net.

We believe that the  presentation  of FFO provides  investors with  measurements
which help facilitate an understanding of our ability to make required  dividend
payments,  capital  expenditures  and principal  payments on our debt. Since FFO
excludes  depreciation  and  other  real  estate  related  expenses,  FFO may be
materially different from net income. Therefore, FFO should not be considered as
an  alternative to net income or net cash flows from  operating  activities,  as
calculated in accordance with generally accepted  accounting  principles,  as an
indication of our operating performance or liquidity.

FFO is not  necessarily  indicative  of cash  available  to fund our cash needs,
including  our  ability  to  make  distributions.  We use FFO in  measuring  our
operating  performance  because  we  believe  that the  items  that  result in a
difference  between  FFO and net  income do not  impact  the  ongoing  operating
performance  of a real  estate  company.  Also,  we believe  other  real  estate
companies,  analysts and investors  utilize FFO in analyzing the results of real
estate companies.  Our basis of computing FFO is not necessarily comparable with
that of other REITs.

                                     - 22 -
<PAGE>

For 2000, 1999, and 1998, our FFO was as follows (in thousands):

<TABLE>
<CAPTION>

                                                                   2000            1999                 1998
                                                               ------------     ----------           ----------
      Income before minority interest in Operating
<S>                                                             <C>              <C>                  <C>
      Partnership                                               $  1,137         $  2,852             $    272
           Real estate depreciation, including joint
               ventures                                            5,681            3,870                2,685
           Amortization of management contracts                    1,866            2,757                2,894
           Costs incurred to acquire management
               contract                                               --               --                2,092
           Gain on sale of real estate                              (393)              --                   --
           Nonrecurring income, net                                   (7)             (63)                  --
           Equity in Commercial Assets' adjustments for FFO          316              340                  146
                                                                  ------           --------             -------
           Funds From Operations (FFO)                            $8,600           $  9,756             $ 8,089
                                                                  ======           ========             =======

     Weighted average common shares and OP Units outstanding       7,290              6,565               6,540
                                                                  ======           ========             =======
</TABLE>


For 2000, 1999, and 1998, our net cash flows were as follows (in thousands):

<TABLE>
<CAPTION>


                                                                  2000             1999                 1998
                                                               -----------      -----------          ------------
<S>                                                            <C>              <C>                  <C>
           Cash provided by operating activities               $  6,468         $   5,764            $   6,841
           Cash used in investing activities                     (4,681)           (5,410)             (58,897)
           Cash provided by (used in) financing activities
                                                                 (1,140)           (1,210)              31,680

</TABLE>

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

Our  principal  exposure to market risk is through our various debt  instruments
and borrowings and through changes in interest rates. The following is a list of
these debt instruments and borrowing arrangements.

We have $64.7 million of fixed rate,  fully  amortizing,  non-recourse,  secured
long-term  notes  payable.  We do not  have  significant  exposure  to  changing
interest  rates on these  notes as the  rates  are fixed and the notes are fully
amortizing.

We have a $3.9 million, fully amortizing,  recourse note issued at a discount of
7.0%. We do not have  significant  exposure to changing  interest  rates on this
note.

We have $16.1 million of fixed rate, partially amortizing, non-recourse, secured
long-term  notes  payable.  We do not have  significant  exposure  to changes in
interest rates since the interest rates are fixed.

We have a $4.9 million recourse, secured note payable that bears interest at the
30-day London  Interbank  Offered Rate ("LIBOR")  plus 2.0%. If LIBOR  increased
immediately  by 1%, our annual net  income  and cash  flows  would  decrease  by
$49,000 due to an increase in interest  expense on this note  payable,  based on
the outstanding balance at December 31, 2000.

                                     - 23 -
<PAGE>

As of December 31,  2000,  the  scheduled  principal  amortization  and maturity
payments for the Company's  secured notes payable and secured long-term debt are
as follows (in thousands):

<TABLE>
<CAPTION>

             Year                      Amortization                  Maturities                      Total
             ----                      ------------                  ----------                      -----
<S>      <C>                               <C>                          <C>                        <C>
         2001                              $2,245                       $1,795                     $ 4,040
         2002                               2,270                        6,594                       8,864
         2003                               2,280                           --                       2,280
         2004                               2,441                           --                       2,441
         2005                               2,622                           --                       2,622
         Thereafter                                                                                 69,450
                                                                                                   -------
                                                                                                   $89,697
                                                                                                   =======
</TABLE>


We have a recourse,  secured  line of credit  that bears  interest at the Bank's
"Reference"  rate.  As of December 31, 2000,  the  outstanding  balance was $7.9
million.  If the Bank's  "Reference" rate increased  immediately by 1%, then our
annual net income and cash flows would decrease by $79,000 due to an increase in
interest  expense on this line of credit,  based on the  outstanding  balance at
December 31, 2000.

Item 8.  Financial Statements and Supplementary Data.

The  report of  independent  auditors,  consolidated  financial  statements  and
schedules listed in the accompanying  index are filed as part of this report and
incorporated  herein by reference.  See "Index to Financial  Statements" on page
F-1 .

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

None




                                     - 24 -
<PAGE>




                                    PART III

Item 10.  Directors and Executive Officers of the Registrant.

Information  with respect to our directors and executive  officers appears below
and was furnished in part by each such person.

Each of our  executive  officers  serves for a term of one year and until his or
her successor is elected and  qualified or until his or her earlier  resignation
or removal by the Board of Directors. Each of our directors serves for a term of
three years.  There are no family  relationships  among any of our directors and
executive officers.

<TABLE>
<CAPTION>

          Name            Age    First Elected                    Position(s) Held with the Company
---------------------------------------------------------------------------------------------------------------------
<S>                       <C>                     <C>
Terry Considine           53  September 1996      Chairman of the Board of Directors (Class II)
                                                  and Chief Executive Officer
Thomas L. Rhodes          61  September 1996      Vice Chairman of the Board of Directors and Independent Director
                                                  (Class III) and Member of the Compensation Committee and the
                                                  Audit Committee.
Bruce E. Moore            58  February 1998       Director (Class III), President
Bruce D. Benson           62  October 1996        Independent Director (Class II) Chairman of the Compensation
                                                  Committee and Member of the Audit Committee
Todd W. Sheets            42  December 2000       Independent Director (Class I), Chairman of the Audit Committee
                                                  and Member of Compensation Committee
Robert G. Blatz           39  February 1999       Chief Operating Officer, Secretary
Joseph W. Gaynor          55  January 2000        Vice President-Development, General Counsel
Shannon E. Smith          35  October 2000        Chief Financial Officer, Treasurer

</TABLE>


Terry  Considine  has been our  Chairman  of the  Board of  Directors  and Chief
Executive  Officer  since April 1998.  From  September  1996 to April 1998,  Mr.
Considine served as Co-Chairman of the Board of Directors and Co-Chief Executive
Officer of the Company.  Mr.  Considine  also served as Chairman of the Board of
Directors and Chief Executive Officer of Commercial  Assets,  Inc. ("CAX") until
its  merger  with the  Company  on  August  11,  2000.  He is the sole  owner of
Considine  Investment  Co.  and has  also  been  the  Chairman  of the  Board of
Directors and Chief  Executive  Officer of Apartment  Investment  and Management
Company ("AIMCO"), a NYSE listed Real Estate Investment Trust, since July 1994.

Thomas L.  Rhodes has been our Vice  Chairman of the Board of  Directors  of the
Company since April 1998.  From  September 1996 to April 1998, Mr. Rhodes served
as Co-Chairman of the Board of Directors and Co-Chief  Executive  Officer of the
Company.  Mr.  Rhodes also served as Vice  Chairman of the Board of Directors of
CAX until its merger with the Company on August 11, 2000. Mr. Rhodes serves as a
member of the Audit  Committee and the  Compensation  Committee.  Mr. Rhodes has
also been a Director  of AIMCO,  since July 1994.  Mr.  Rhodes has served as the
President and a Director of National  Review  magazine since 1992.  From 1976 to
1992,  he held  various  positions  at  Goldman,  Sachs & Co. and was  elected a
General Partner in 1986. He currently  serves as a Director of Delphi  Financial
Group, Inc. and its subsidiaries, Delphi International, Ltd., Oracle Reinsurance
and The Lynde and Harry Bradley Foundation.

Bruce E.  Moore was  appointed  our  President  and Chief  Operating  Officer in
February 1998. Mr. Moore resigned from his position as Chief Operating  Officer,
Secretary  and  Treasurer  of the  Company in November  2000.  He also served as


                                     - 25 -
<PAGE>

President and Chief Operating Officer of Commercial Assets until its merger with
the  Company.  Mr. Moore is the founder and was the Chief  Executive  Officer of
Brandywine  Financial  Services  Corporation and its affiliates,  a private real
estate  firm  specializing  in  various  aspects  of the real  estate  industry,
including  asset  management,  consulting,   development,  property  management,
brokerage and capital formation.  He is a certified public  accountant,  holds a
Masters in  Accounting  and a Bachelor of Science in Economics  from the Wharton
School of the  University  of  Pennsylvania.  Mr.  Moore is a director  and past
president of the Media Youth Center,  and a past  advisory-board  member for the
Department of Recreation  and  Intercollegiate  Athletics for the  University of
Pennsylvania.  In addition, Mr. Moore is a member of the National Association of
Real Estate Investment Trusts and the International Council of Shopping Centers.

Bruce D. Benson has served as a Director of the  Company and  Commercial  Assets
since  October  1996 and  previously  served as a Director of the  Company  from
February 1992 through  November  1993. In February  1998,  Mr. Benson became the
Chairman of the Company's Compensation Committee.  For the past 36 years, he has
been President and owner of Benson  Mineral Group,  Inc., a domestic oil and gas
production  company  located in Denver,  Colorado.  He is also  Chairman,  Chief
Executive Officer and President of United States  Exploration,  Inc., an oil and
gas  exploration  company  listed on the American Stock  Exchange.  He serves on
numerous  Boards of Trustees and Boards of Directors,  including  Past Chairman,
Denver Zoological  Foundation;  Past Chairman and Past President,  Boy Scouts of
America,  Denver Area Council;  Trustee Emeritus and Past President of the Board
of Trustees,  Berkshire School,  Sheffield,  Massachusetts;  Past Trustee, Smith
College,  Northampton,  Massachusetts;  Past  Chairman,  Colorado  Commission on
Higher Education;  and past member,  Board of Directors,  University of Colorado
Foundation; and Chairman of the Total Learning Environmental Capital Campaign of
the  University  of Colorado.  In 1994,  he was the  Republican  nominee for the
Governor of Colorado.

Todd W. Sheets has served as a director  since November 2000 and is the Chairman
of the Audit  Committee and a member of the  Compensation  Committee.  Since May
2000,  Mr.  Sheets has  served as the  Managing  Director  of  Pinehill  Capital
Partners,  Inc. From 1985 through 2000,  Mr. Sheets was an investment  banker at
Raymond James &  Associates,  Inc.,  where he was Managing  Director of the real
estate  department.  Mr. Sheets initiated and led Raymond James' practice in the
area of publicly traded real estate  companies  including the completion of over
$8 billion in public equity offerings,  private equity  financings,  and mergers
and acquisition activities. In the late 1980's, he was President and Director of
the firm's  "Recovering  Markets  Program",  which ultimately  acquired over $80
million  of  apartment   properties  in  the  Southeastern  United  States  from
distressed   sellers.  He  also  served  on  Raymond  James'  Investment  Policy
Committee,  which provides asset allocation  advice to investment  clients.  Mr.
Sheets began his career as a CPA with Arthur  Anderson & Company.  He received a
B.A. in  accounting  from the  University of Iowa in 1981 and was an Elijah Watt
Sells award winner for his scores on the 1981 CPA exam.

Robert G. Blatz was appointed Chief Operating  Officer and Secretary in November
2000. Mr. Blatz has  functioned as our Executive  Vice President  since February
1999 and was appointed to his current position in September 1999. From June 1998
until joining the Company he served as a Senior  Associate for Coopers & Lybrand
(predecessor  to  PricewaterhouseCoopers)  as a consultant  for  management  and
financial  systems.  From  May  1993 to June  1998,  he was  with  the  Heritage
Foundation,  a public policy  organization,  most recently as its Vice President
and Chief Financial Officer.  From May 1983 to May 1993, he served as an officer
in the United States Army, in a variety of positions and assignments.  Mr. Blatz
received a BS from the United States Military Academy and an MBA from The George
Washington University.

                                     - 26 -
<PAGE>

Joseph W. Gaynor joined the Company as Vice  President of Development in January
2000.  From January 1986 through  December  1999,  Mr.  Gaynor served as General
Counsel to Brandywine Corporation and its affiliates  ("Brandywine"),  a private
real estate firm  specializing in various  aspects of the real estate  industry,
including development and property management of retail centers and manufactured
home  communities.  In 1995,  Mr. Gaynor became the President of an affiliate of
Brandywine  in  charge  of new  development.  In May  1997,  Mr.  Gaynor  became
President of Community  Acquisition  and Development  Corporation,  the managing
member of several limited liability  companies which owned,  leased and operated
manufactured  home communities in which either the Company or Commercial  Assets
had interests in. Prior to 1995, Mr. Gaynor was a senior partner in the law firm
of Gaynor,  Decker & Young,  P.A. and  specialized in the  development of retail
shopping centers, hotels, marinas and manufactured home communities.  Mr. Gaynor
received his B.S.  with honors from  Rutgers  University,  earned his J.D.  from
Stetson  University  College of Law and was admitted to the Florida Bar in 1971.
He is a past Chairman of St.  Petersburg  Downtown  Redevelopment  Committee and
Port  Authority,  a past Chairman of the Board of Operation PAR, Inc.  (Parental
Awareness and Responsibility), a past Chairman of the Tampa Bay Area Partnership
for a Drug Free Florida,  and a past Chairman of the Pinellas  Partnership for a
Drug-Fee Workplace.

Shannon E. Smith was appointed  Chief  Financial  Officer in February  2001. Mr.
Smith  joined the  Company  in  October  2000 as Chief  Accounting  Officer  and
Treasurer.  From March 1997 to October 2000,  Mr. Smith served as vice president
and  chief  financial  officer  of  Jemison-Demsey  Holding  Company,  and other
entities  controlled  by  Jemison  Investment  Company.  Jemison-Demsey  Holding
Company manages  interests in the flat-rolled  steel service center business and
metal building component  manufacturing  business.  From March 1991 to September
1996, Mr. Smith served as the chief  financial  officer and Director for Schuler
Industries,  Inc. Schuler Industries was a diversified company with interests in
multi-family and commercial real estate assets,  capital equipment leasing,  the
manufacture of environmental service equipment and steel fabrication.  Mr. Smith
began his  career as a CPA with  Ernst and Young in 1987.  He is a  graduate  of
Birmingham-Southern College and is a Certified Public Accountant.

There  are no  arrangements  or  understandings  pursuant  to  which  any of our
directors or executive  officers were selected as directors or officers.  Except
as  described  above,  none of our  directors or  executive  officers  have been
involved in any legal  proceedings  during the past five years that are material
to an evaluation of the ability or integrity of such persons.

Compliance With Section 16(a) of the Exchange Act

Our executive  officers and directors,  and persons who own more than 10% of the
Company's common stock,  are required under the Securities  Exchange Act of 1934
to file reports of  ownership  and changes in  ownership  of  securities  of the
Company  with the  Securities  and  Exchange  Commission  and the New York Stock
Exchange,  Inc.  Copies of those  reports  also must be  furnished  to us. Based
solely upon a review of the copies of reports  furnished  to us, we believe that
for the year ended December 31, 2000, all filing requirements were timely met by
our executive officers, directors and beneficial owners of more than ten percent
of our stock.

Item 11.  Executive Compensation.

In 2000,  neither Mr. Considine nor Mr. Moore received any cash  compensation in
their  capacities as Chief Executive  Officer and President,  respectively.  Mr.
Blatz  received  total  salary and bonus in 2000 of $178,000 as Chief  Operating
Officer.  Mr. Gaynor received total salary and bonus in 2000 of $150,000 as Vice


                                     - 27 -
<PAGE>

President and General  Counsel.  Mr. Gaynor also received  $84,000 in connection
with mortgage refinancing services. Mr. Becker served as Chief Financial Officer
until his resignation  effective October 1, 2000. His salary earned prior to his
termination  was $112,500.  Shannon Smith joined the Company in October 2000 and
was appointed Chief Financial Officer in February 2001.

In his capacity as an executive officer,  Mr. Gaynor received options to acquire
shares of our common stock. Neither Messrs. Considine,  Moore, Becker nor Blatz,
each of whom is a  stockholder  of the  Company,  was at any time on or prior to
December  31, 2000 granted  options to acquire  shares of our common stock other
than in their capacities as executive officers.

The following tables sets forth, in summary form, the  compensation  paid by the
Company to each individual who served as its Chief Executive Officer, President,
and three  executive  officers of the Company during 2000 whose salary  exceeded
$100,000 (the "Named Executive Officers"):

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>

                                                                                                     Long Term
                                                                           Annual                   Compensation
                                                                        Compensation                   Awards
                                                                     ---------------------      ---------------------
                                                                                                     Securities
                                                                                                     Underlying
Name and Principal Positions                           Year               Salary ($)                Options (#)
---------------------------------------------      -------------     ---------------------      ---------------------
<S>                                                    <C>                  <C>                      <C>
Terry Considine                                        2000                   -                          -
Chief Executive Officer                                1999                   -                          -
                                                       1998                   -                        300,000

Bruce E. Moore                                         2000                   -                          -
President                                              1999                   -                         25,000
                                                       1998                   -                        250,000

Robert G. Blatz                                        2000                178,000                       -
Chief Operating Officer                                1999                101,000                      80,000
                                                       1998                   -                          -

Joseph W. Gaynor(1)                                    2000                150,000                     80,000
Vice President and General Counsel                     1999                   -                          -
                                                       1998                   -                          -

David M. Becker(2)                                     2000                112,500                       -
Chief Financial Officer                                1999                150,000                      10,000
                                                       1998                150,000                      40,000
<FN>


(1)      Mr. Gaynor joined the Company in January 2000.
(2)      Mr. Becker left the Company effective October 1, 2000.
</FN>
</TABLE>




                                     - 28 -
<PAGE>





The  following  tables set forth  certain  information  regarding  stock options
granted to the Named Executive Officers during 2000:

                        OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>


                                                                                              Potential Realizable
                        ---------------------------------------------------------------        Value at Assumed
                           Number of       % of Total                                        Annual Rates of Stock
                          Securities         Options                                        Price Appreciation for
                          Underlying       Granted to                                             Option Term
                           Options        Employees in       Exercise      Expiration      --------------------------
         Name             Granted (#)     Fiscal Year     Price ($/sh)(2)     Date            5% ($)       10% ($)
      -----------       ---------------  --------------   ---------------  ------------    --------------------------
<S>                         <C>               <C>             <C>             <C>                <C>        <C>
Terry Considine                 --               --%               --             --               --            --
Bruce E. Moore                  --               --%               --             --               --            --
Robert G. Blatz                 --               --%               --             --               --            --
Joseph W. Gaynor            80,000 (1)        100.0%          11.0000          04/18/10          553,600     1,402,400
David Becker                    --               --%               --             --               --            --

<FN>

 (1)   During 2000, Mr. Gaynor received options constituting  nonqualified stock
       options to purchase  80,000  shares of common  stock under the 1998 Stock
       Incentive  Plan.  One-half  of these  options  were vested on the date of
       grant and the remainder vest in equal installments on each of the each of
       the first three anniversaries after the respective date of grant.
(2)    The exercise price is equal to the fair  market value of the common stock
       on the date of grant.
</FN>
</TABLE>


                 AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                        AND FISCAL YEAR END OPTION VALUES

<TABLE>
<CAPTION>

                                                                                                  Value of
                                                                  Number of Securities          Unexercised In-
                                                                 Underlying Unexercised            the-Money
                                                                    Options at Fiscal          Options at Fiscal
                                Shares            Value               Year-end (#)                 Year-end ($)
                               Acquired         Realized              Exercisable/                 Exercisable/
          Name             On Exercise (#)       ($)(1)               Unexercisable             Unexercisable (2)
          ----             ---------------       ------               -------------             ------------------
<S>                             <C>                <C>              <C>                                 <C>
Terry Considine                   --               --               226,093(3)/99,990                   $0
Bruce E. Moore                    --               --                166,667/108,333                     0
Robert G. Blatz                   --               --                 13,333/26,667                      0
Joseph W. Gaynor                40,000             --                  0/40,000                          0
David Becker                      --               --               20,000(4)/ 30,000                    0

<FN>

(1)    Represents  the  product of (A) the  difference  between  (i) the closing
       price of the common stock on the NYSE on the  exercise  date and (ii) the
       option  exercise price and (B) the number of securities  underlying  such
       options.
(2)    The  value  of   unexercised   in-the-money   options  is  calculated  by
       multiplying  (A) the number of securities  underlying such options by (B)
       the  difference  between  (i) the  closing  price of the common  stock at
       December 31, 2000 and (ii) the option exercise price. All exercise prices
       were in excess of the closing  price at  December  31,  2000;  therefore,
       there is no value.
(3)    Includes 5,754  Commercial  Assets, Inc. options  converted  into options
       to acquire  shares of the Company's  Common Stock on August 11, 2000 as a
       result of the merger.
(4)    The 20,000 options exercisable were not exercised and therefore expired.
</FN>
</TABLE>

                                     - 29 -
<PAGE>

Director Compensation

Under the existing  1998 Stock  Incentive  Plan,  on the date of the 2000 annual
stockholders  meeting,  all of our non-employee  directors received an automatic
grant of options to acquire 2,800 shares of the  Company's  Common Stock with an
exercise price equal to the closing price of the Company's  Common Stock on such
date. Such options were immediately exercisable and have a term of 10 years.

Under the 1998 Stock  Incentive  Plan,  all of our  non-employee  directors will
automatically  receive  annual grants of  market-price  options to acquire 2,800
shares of the  Company's  Common  Stock on the date of each annual  stockholders
meeting.  These options will be  immediately  exercisable  upon grant and have a
term of ten years.

Compensation Committee Interlocks and Insider Participation

During 2000,  Messrs.  Benson,  Sheets,  and Rhodes  served on the  compensation
committee.  Mr.  Considine  served as Chairman of the Board and Chief  Executive
Officer of the Company and Commercial Assets, Mr. Rhodes served as Vice Chairman
of the Board of the  Company  and  Commercial  Assets and Mr.  Benson  served on
Commercial  Assets'  Compensation  Committee.  Mr.  Considine is Chairman of the
Board and Chief Executive Officer of Apartment Investment and Management Company
("AIMCO") and Mr. Rhodes serves on the compensation committee of AIMCO.

Compensation Committee Report on Executive Compensation

The  three   directors  who  are  not  members  of  management   constitute  the
Compensation Committee. The Compensation Committee:

o    determines the compensation of the Chief Executive Officer;
o    reviews and approves the  compensation of other corporate  officers holding
     executive positions;
o    reviews the general compensation and benefit practices of the Company; and
o    administers our compensation and stock incentive plans.

The Compensation Committee considers various factors including:

o    recruitment, motivation and retention of our management team;
o    alignment of management  financial rewards with stockholder  objectives for
     total return (dividend income plus share price appreciation); and
o    reasonability in  consideration  of all the facts,  including total return,
     the size and  complexity  of the  Company and the  practices  of other real
     estate investment  trusts.

Compensation   of  senior   management   is  comprised  of  Base   Compensation,
Discretionary  Compensation  and  Incentive  Compensation.  The  policy  of  the
compensation  committee is to set Base  Compensation at or below the median paid
by comparable companies to executive officers with comparable  responsibilities,
to utilize  Discretionary  Compensation,  generally  cash and not more than Base
Compensation,  to reward specific achievements,  and to make the chief financial
reward  Incentive  Compensation  which  is  tied  directly  to the  creation  of
stockholder value.

BASE COMPENSATION.  The compensation committee determined 2000 Base Compensation
for the Chief Executive  Officer,  reviewed and approved 2000 Base  Compensation
for other senior management based upon the recommendation of the Chief Executive
Officer and considered such 2000 Base Compensation reasonable. Base Compensation


                                     - 30 -
<PAGE>

for the Chief  Executive  Officer for 1998-2000  consists of options to purchase
300,000 shares of the Company's Common Stock at $19.375 per share.

DISCRETIONARY  COMPENSATION.  For 2000, the Compensation  Committee  considered,
among other things:

o    the  achievement  of the 2000 objective for per share FFO, less $50 reserve
     per home site;
o    our growth in size and complexity during 2000;
o    the number and size of 2000  acquisitions  by  Commercial  Assets and their
     financings;
o    the achievement of a proposed merger agreement with Commercial  Assets; and
o    our total return for 2000 as compared to the Morgan Stanley REIT Index.

Discretionary  Compensation  was awarded to Robert G. Blatz during 2000 equal to
$48,000.

INCENTIVE COMPENSATION.  The Compensation Committee bases Incentive Compensation
primarily by reference to "Excess  Value Added,"  calculated  as the amount,  if
any, by which our total  return  exceeds  total  returns  achieved by other real
estate  investment  trusts  (as  measured  by the  Morgan  Stanley  REIT  Index)
multiplied  by the  weighted  average  market  value of our  stock  and OP Units
outstanding during the measurement period.

In 2000,  our total  return was a negative 3% which was less than the 27 % Total
Return of the Morgan Stanley REIT Index. Accordingly, the Compensation Committee
awarded no Incentive  Compensation  in 2000 to the Chief  Executive  Officer and
approved no awards to other senior management except with respect to Mr. Gaynor.

CHIEF EXECUTIVE OFFICER. In determining the compensation for the Chief Executive
Officer,  the Compensation  Committee  considered,  among other things, our 2000
financial performance:

o    Total Return for 2000 of a negative 3%;
o    completion of the merger with Commercial Assets; and
o    increase in leasing of previously  unleased  homesites from 44 in 1998, 147
     in 1999, to 184 in 2000.

EQUITY TRANSACTIONS IN SUPPORT OF COMPENSATION OBJECTIVES

The  Compensation  Committee  has  determined  that we are  well  served  by the
alignment of interest that occurs when senior  management has the same financial
interests  as do other  stockholders.  To  promote  this end,  the  Compensation
Committee and the Board of Directors have:

o    structured Board annual compensation to be paid in stock options and annual
     director's fees paid in stock with meeting fees paid in cash;
o    structured Base  Compensation of Chief Executive  Officer and President for
     1998-2000 entirely in options to acquire stock at 19.375 a share.


     Date:  March 19, 2001                         BRUCE BENSON (CHAIRMAN)
                                                   TODD W. SHEETS
                                                   THOMAS L. RHODES

                                     - 31 -
<PAGE>

Performance Graph

The following  graph compares the change in the  cumulative  total return of the
Company's  Common  Stock  for the  period  from  March 31,  1997,  which was the
quarter-end  immediately  prior  to the  date we made our  first  investment  in
manufactured  home  communities,   through  December  31,  2000,  with  (1)  the
cumulative  total return of the Standard & Poor's 500 Stock Index and (2) a peer
group  consisting  of Chateau  Communities,  Inc.,  Sun  Communities,  Inc.  and
Manufactured  Home  Communities,  Inc., each a company in the manufactured  home
community business.

The  following  graph was prepared  based on the following  assumptions:  (1) an
initial  investment  of $100 was  invested  at the close of business on March 1,
1997 in (a)  Common  Stock of the  Company;  (b) stock of the  companies  in the
Standard & Poor's 500 Index;  and (c) stock of the  companies  in our peer group
index;  and  (2)  All  dividends  received  were  reinvested.  The  stock  price
performance shown on the following graph is not necessarily indicative of future
price performance.

[OBJECT OMITTED]

<TABLE>
<CAPTION>

Name                                                3/31/97     12/31/97     12/31/98    12/31/99     12/31/00
----                                                -------     --------     --------    --------     --------

<S>                                                  <C>           <C>         <C>         <C>          <C>
Company                                              $100          $120        $ 76        $ 67         $ 60
S&P 500                                              $100          $128        $165        $200         $180
Peer Group                                           $100          $125        $125        $117         $136

</TABLE>




                                     - 32 -
<PAGE>




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

The table below sets forth,  as of March 19,  2001,  the number of shares of our
common  stock  beneficially  owned  by  (1)  each  person  known  by  us to be a
beneficial  owner  of  more  than 5% of our  common  stock;  (2) all  directors,
individually,   and  each  executive   officer  that  holds  our  common  stock,
individually;  and (3) all of our directors  and executive  officers as a group,
which information was furnished in part by each such person.

<TABLE>
<CAPTION>

                                                                     Amount and Nature   Shares and OP Units
                                                                      of Beneficial          Percent of
        Name of Beneficial Owner (1)                                    Ownership            Class (2)
       -----------------------------                                    ---------            ---------
<S>                                                                        <C>                   <C>
Terry Considine (3)                                                        907,497               10.7%
Thomas L. Rhodes (4)                                                       349,937                4.1%
Bruce E. Moore (5)                                                         328,146                3.9%
Bruce D. Benson (6)                                                        203,893                2.4%
Robert G. Blatz (7)                                                         53,333                *
Joseph W. Gaynor (8)                                                        61,747                *
Shannon E. Smith                                                            40,000                *
Todd W. Sheets (9)                                                           2,800                *
The Wilder Corporation of Delaware (10)                                    601,891                7.1%
Artisan Partners Limited Partnership                                       496,900                5.8%
All directors and executive officers as a group (8 persons)              1,947,353               22.9%

<FN>

*    Denotes  ownership  of  less  than  1% of  the  outstanding  shares  of the
     Company's common stock.

(1)  Includes,  where  applicable,  shares owned by such person's minor children
     and spouse and by other related individuals and entities.  Unless otherwise
     indicated,  such  person  has sole  voting and  investment  power as to the
     shares  listed  and  such  person's   address  is  2637  McCormick   Drive,
     Clearwater,  Florida 33759.  Excludes units of limited partnership of Asset
     Investors Operating Partnership ("OP Units") that are not redeemable within
     60 days.
(2)  All shares  which a person  had the right to  acquire  within 60 days after
     March 19, 2001 were deemed to be  outstanding  for the purpose of computing
     the  "Percent  of Class"  owned by such  person  but were not  deemed to be
     outstanding  for the purpose of  computing  the "Percent of Class" owned by
     any other person. At March 19, 2001, 8,510,567 shares were outstanding.
(3)  Includes 222,189 shares held by family  partnerships in which Mr. Considine
     serves as a general  partner.  Includes  326,083  options  exercisable  and
     266,130 OP Units redeemable within 60 days.
(4)  Includes 113,831 options exercisable and 168,037 OP Units redeemable within
     60 days.
(5)  Includes 8,721 shares held by Brandywine  Real Estate  Management  Services
     Corporation,  an entity in which Mr. Moore owns a 50% interest, and 265,000
     options exercisable and 25,355 OP Units redeemable within 60 days.
(6)  Includes 52,363 options  exercisable and 75,160 OP Units redeemable  within
     60 days.
(7)  Includes 13,333 options exercisable within 60 days.
(8)  Includes  2,600 shares held by the Joseph William Gaynor Family Trust dated
     10-28-83 of which Mr. Gaynor is the sole trustee.
(9)  Includes 2,800 options exercisable within 60 days.
(10) Includes 56,960 OP Units redeemable within 60 days and 544,931 shares.

</FN>
</TABLE>

Item 13.  Certain Relationships and Related Transactions.

Transactions  involving  Messrs.  Moore and Gaynor.  During  1999,  two property
management companies (collectively, "AIC Property Management") received property
management and accounting  fees of $672,000 from  communities in which we own an
interest and  $172,000  from  communities  in which  Commercial  Assets owned an
interest.  We owned 50% of AIC  Property  Management  and  Community  Management
Investors  Corporation ("CMIC") owned 50% of AIC Property Management.  Mr. Moore
owned 35% and Mr. Gaynor owned 20% of CMIC. In order for AIC Property Management


                                     - 33 -
<PAGE>

to provide  the above  services,  AIC  Property  Management  utilized  staff and
resources  of  Brandywine  Financial  Services  Corporation  and its  affiliates
("Brandywine").  Mr. Moore is the founder and was the Chief Executive Officer of
Brandywine  prior  to his  appointment  as our  President  and  Chief  Operating
Officer. Effective January 1, 2000, we purchased,  through a subsidiary,  CMIC's
50% interest in AIC Property  Management for a $2,120,000  promissory  note that
was  scheduled to mature  January 2001. We prepaid the note in full in September
2000 and paid $126,000 in interest on the note in 2000.

Prior to the  merger  with  Commercial  Assets,  the  Company,  through  certain
partially owned subsidiaries (the "Management Subsidiaries"),  held its interest
in AIC Property  Management  and  provided  management  and related  services to
Commercial  Assets  and  others.  The  Company  owned  non-voting  stock  of the
Management  Subsidiaries,  and in order to allow us to maintain  our REIT status
for federal  income tax  purposes,  Messrs.  Considine  and Rhodes  directly and
indirectly held the voting stock.  In September  2000, the Company  acquired the
interests of Messrs.  Considine and Rhodes in the  Management  Subsidiaries  for
consideration in the amount of approximately $24,500 each. The consideration was
paid in the form of cancellation of notes payable, including accrued interest.

Brandywine  Commercial Services Corporation  ("Services Corp."), an affiliate of
Brandywine, provided maintenance services to both our communities and Commercial
Assets communities.  Mr. Moore owned 50% of Services Corp. during 1999. Services
Corp.  received  fees of  $1,725,000  from our  communities  and  $658,000  from
Commercial  Assets  communities for maintenance  services  provided during 1999.
Effective  January 1, 2000,  we purchased  100% of Services  Corp.'s  assets and
operations  for  $30,000  and the  assumption  of  leases on  equipment  used by
Services Corp.

Brandywine Home Sales Corporation  ("Homes Corp."),  an affiliate of Brandywine,
provided  real estate  brokerage  services  for both new home sales and existing
home resales in our communities.  During 1999, Sales Corp. received  commissions
from us, Commercial Assets or the homeowner depending on the circumstances.  Mr.
Moore  owned  50% of  Homes  Corp.  during  1999.  Homes  Corp.  received  sales
commissions during 1999 as follows:

           From our communities                                $  45,000
           From Commercial Assets communities                     46,000
           From homeowners                                       293,000

Effective January 1, 2000, we acquired,  through a subsidiary  substantially all
of  Homes  Corp.'s  activities  and  its  inventory  of  homes  located  at  our
communities  for (a)  $100,000  cash,  (b) the  assumption  of  $493,000  in the
third-party debt, and (c) the cancellation of $64,000 in loans from us. In order
to allow us to maintain our REIT status for federal income tax purposes, Messrs.
Considine and Rhodes owned the voting common stock of the subsidiary.

During  2000,  Brandywine  Financial  Services  Corporation,   an  affiliate  of
Brandywine,  provided  back  office  support  to both  our  communities  and our
corporate office located in Florida. Mr. Moore owned 50% of Brandywine Financial
Services during 2000.  Brandywine  Financial  Services received fees of $544,000
from us for services provided in 2000.

                                     - 34 -
<PAGE>

Effective  January  1, 2000,  we  purchased  four  communities  and  undeveloped
homesites at three other  communities  from entities in which Mr.  Gaynor,  Vice
President of Development and General Counsel,  owns 31% (the "CADC Properties").
During 1999, we held participating mortgages secured by the CADC properties. The
purchase price for the CADC Properties was $36,816,000 and was paid as follows:

o    Issuance of 44,572 OP Units at an assigned value of $496,000,
o    Cancellation of $24,851,000 in loans from us involving the CADC Properties,
o    Assumption of $10,704,000 in third-party debt, and
o    $765,000 cash.

We have owned and leased a  recreational  vehicle park and golf courses which we
would not otherwise be permitted to operate under the tax rules  governing REITs
to AIC RV Management Corp. ("AIC RV Management") and CR Golf Course  Management,
LLC  ("CR  Golf"),  entities  that  are  owned  equally  by  Messrs.   Considine
(indirectly)  and  Rhodes.  During  2000 and  1999,  AIC RV  Management  paid us
aggregate lease payments of $354,000 and $366,000, respectively. During 2000, we
earned $264,000 on the leases with CR Golf.

On December 14, 2000, we sold our interest in the recreational vehicle park to a
third party for total consideration of $3,960,000 and recorded a gain on sale of
$286,000.  We retained an indirect  preferred minority position in the acquiring
entity totaling $400,000. Our retained interest receives a 10% preferred return,
payable monthly. We have a continuing right to put our preferred position to the
buyer beginning December 14, 2005.

In conjunction with the sale of the recreational vehicle park, we terminated our
ground lease with AIC RV Management  that  originally was scheduled to expire in
2022 and paid a lease termination fee of $186,000 to AIC RV Management.

On  April  18,  2000,  the  Company  loaned  $440,000  to Mr.  Gaynor,  our Vice
President-Development  and General  Counsel,  which he used to exercise  certain
stock options  granted to him by the Company in 1999. The loan bears interest at
7.5% and matures April 18, 2010.

Formation of Taxable REIT Subsidiary

During 2000,  certain  subsidiaries of the company and other entities engaged in
activities and received fees that would not otherwise be permitted under the tax
rules governing REITs during the year. In order to allow us to maintain our REIT
status for federal  income tax purposes,  including  activities  related to home
sales, golf course,  and certain  utilities  operations,  Messrs.  Considine and
Rhodes, directly or indirectly,  equally owned the outstanding voting securities
issued by these entities. We own all of the outstanding  non-voting common stock
of certain of these entities.

H.R. 1180, the Work  Incentives  Improvement Act of 1999 (the "Act") was enacted
on  December  17,  1999  and  contained  several  provisions  known  as the REIT
Modernization  Act. Among other provisions,  the Act allowed a REIT to own up to
100% of the stock of a Taxable REIT Subsidiary ("TRS") that can provide services
to REIT tenants and others without  disqualifying the rents that a REIT receives
from its tenants. The Act was effective beginning in 2001.

After the  enactment of the Act, the Company is permitted to own voting  control
of Taxable REIT  Subsidiaries  which provide  certain  services  which cannot be
provided  directly by the  Company.  As a result and as of January 1, 2001,  the


                                     - 35 -
<PAGE>

Company has agreed to buy, and Messrs. Considine and Rhodes have agreed to sell,
their entire  interest,  which  included  voting  control in these  entities and
"preferred stock  subsidiaries,"  for  consideration  including  cancellation or
assumption of amounts due under lease agreements.

                                     PART IV

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

(a)(1)   The financial statements listed in the Index to Financial Statements on
         Page F-1 of this report are filed as part of this report.

(a)(2)   The  financial  statement  schedules  listed in the Index to  Financial
         Statements on Page F-1 of this report are filed as part of this report.
         All other  schedules  are omitted  since they are not  applicable,  not
         required,  or the  information  required  to be set  forth  therein  is
         included in the financial statements, or in notes thereto.

(a)(3)   The Exhibit Index is included on page 37 of this report.

(b)      Reports on Form 8-K for the quarter ended December 31, 2000

         No current  reports on Form 8-K were  filed by the  Company  during the
fourth quarter of 2000






                                     - 36 -
<PAGE>








                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
AMERICAN LAND LEASE, INC.                                                                                 Page

Financial Statements:

<S>                                                                                                           <C>
         Report of Independent Auditors.................................................................    F-2
         Consolidated Balance Sheets as of December 31, 2000 and 1999...................................    F-3
         Consolidated Statements of Income for the years ended December 31, 2000, 1999 and 1998.........    F-4
         Consolidated Statements of Stockholders' Equity for the years ended December 31, 2000, 1999
             and 1998...................................................................................    F-5
         Consolidated Statements of Cash Flows for the years ended December 31, 2000, 1999 and 1998.....    F-6
         Notes to Consolidated Financial Statements.....................................................    F-7

Financial Statement Schedules:

         Schedule III -- Real Estate and Accumulated Depreciation.......................................    F-22
         Schedule IV -- Mortgage Loans on Real Estate...................................................    F-24


</TABLE>




                                     F - 1
<PAGE>




                         REPORT OF INDEPENDENT AUDITORS



Board of Directors and Stockholders
American Land Lease, Inc.


         We  have  audited  the  accompanying  consolidated  balance  sheets  of
American Land Lease, Inc. and subsidiaries as of December 31, 2000 and 1999, and
the related  consolidated  statements of income,  stockholders'  equity and cash
flows for each of the three years in the period ended  December  31,  2000.  Our
audits also included the consolidated  financial  statement  schedules listed in
the  accompanying  index.  These  financial  statements  and  schedules  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements and schedules based on our audits.

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

         In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
American Land Lease and  subsidiaries  as of December 31, 2000 and 1999, and the
consolidated  results of their  operations  and their cash flows for each of the
three years in the period ended December 31, 2000 in conformity  with accounting
principles  generally accepted in the United States.  Also, in our opinion,  the
related financial statement schedules,  when considered in relation to the basic
consolidated  financial  statements  taken as a whole,  present  fairly,  in all
material respects the information set forth therein.

                                                            /s/Ernst & Young LLP

Denver, Colorado
February 21, 2001 (except for Note T, as to which
      the date is March 9, 2001)




                                     F - 2
<PAGE>





                   AMERICAN LAND LEASE, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      (in thousands, except per share data)
<TABLE>
<CAPTION>

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

ASSETS
<S>                                                                                   <C>                 <C>
Real estate, net of accumulated depreciation of $12,238 and $7,248                      $  196,969            $  108,745
Investments in participating mortgages                                                          --                22,475
Cash and cash equivalents                                                                    1,217                   570
Investment in Commercial Assets                                                                 --                19,486
Inventory                                                                                    6,476                    --
Other assets, net                                                                           11,640                 7,817
                                                                                            ------                 -----
       Total Assets                                                                       $216,302            $  159,093
                                                                                          ========            ==========

LIABILITIES
Secured long-term notes payable                                                           $ 89,697  $             53,994
Secured short-term financing                                                                 7,867                 2,610
Accounts payable and accrued liabilities                                                     5,816                 3,401
                                                                                             -----                 -----
                                                                                           103,380                60,005
                                                                                           -------                ------

COMMITMENTS AND CONTINGENCIES                                                                   --                    --

MINORITY INTEREST IN OPERATING PARTNERSHIP                                                  14,811                15,197
MINORITY INTEREST IN OTHER ENTITIES                                                            576                    39

STOCKHOLDERS' EQUITY
Preferred stock, par value $.01 per share, 1000 shares authorized, no
   shares issued or outstanding                                                                 --                    --
Common stock, par value $.01 per share; 12,000 shares authorized;
   8,355 and 5,633 shares issued; 7,222 and 5,603 shares outstanding
   (excluding treasury stock), respectively                                                     84                    56
Additional paid-in capital                                                                 277,455               239,381
Notes receivable on common stock purchases                                                    (964)                 (588)
Dividends in excess of accumulated earnings                                               (159,603)             (154,547)
Treasury stock, 1,133 and 30 shares at cost, respectively                                  (19,437)                 (450)
                                                                                          --------                 -----
                                                                                            97,535                83,852
                                                                                          --------                ------
       Total Liabilities and Stockholders' Equity                                       $  216,302            $  159,093
                                                                                        ==========            ==========

</TABLE>

                See Notes to Consolidated Financial Statements.

                                     F - 3
<PAGE>




                   AMERICAN LAND LEASE, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                      (in thousands, except per share data)
<TABLE>
<CAPTION>

                                                                            For the Years Ended December 31,
                                                                            --------------------------------
                                                                         2000           1999             1998
                                                                         ----           ----             ----
   RENTAL PROPERTY OPERATIONS
<S>                                                                  <C>              <C>              <C>
   Rental and other property revenues                                $  20,578        $  14,987        $  10,479
   Revenue on participating mortgages and leases                           612            2,976            3,174
   Property operating expenses                                          (8,331)          (5,262)          (4,039)
   Depreciation                                                         (5,681)          (3,870)          (2,685)
                                                                     ---------        ---------        ---------
   Income from rental property operations                                7,178            8,831            6,929


    SALES OPERATIONS
    Home sales revenue                                                  12,655               --               --
      Cost of home sales                                               (10,430)              --               --
      Selling and marketing expenses                                    (3,206)              --               --
      Interest expense allocation                                         (251)              --               --
      Minority interest in sales operations                                272               --               --
                                                                     ---------        ---------        ---------
      Loss from sales operations                                          (960)              --               --


   SERVICE OPERATIONS
   Property management income, net                                         157              207              156
   Commercial Assets management fees                                       335              564              155
   Amortization of management contracts                                 (1,866)          (2,757)          (2,894)
                                                               ---------------- ---------------- ----------------
   Loss from service operations                                         (1,374)          (1,986)          (2,583)

   Equity in earnings of Commercial Assets                                 686              872              975
   General and administrative expenses                                  (1,798)          (1,530)          (1,393)
   Interest and other income                                               960              306              921
   Interest expense                                                     (3,948)          (3,846)          (2,485)
   Costs incurred to acquire management contract                            --               --           (2,092)
   Income tax benefit                                                       --              400               --
   Reincorporation expenses                                                 --             (120)              --
   Gain on Sale of real estate                                             393               --               --
   Loss from early extinguishment of debt                                   --              (75)              --
                                                               ---------------  ---------------- ---------------

   Income before minority interest                                       1,137            2,852              272
   Minority interest in Operating Partnership                             (163)            (446)             (60)
                                                               ---------------- ---------------- ----------------

   Net income                                                        $     974        $   2,406        $     212
                                                                     =========        =========        =========

   Basic earnings per share                                          $    0.16        $    0.43        $    0.04
                                                                     =========        =========        =========
   Diluted earnings per share                                        $    0.16        $    0.43        $    0.04
                                                                     =========        =========        =========

   Weighted average common shares outstanding                            6,244            5,538            5,094
                                                                     =========        =========        =========
   Weighted average common shares and common share equivalents
     outstanding                                                         6,244            5,544            5,113
                                                                     =========        =========        =========

   Dividends paid per share                                          $    1.00        $    1.00        $    0.75
                                                                     =========        =========        =========

</TABLE>


                See Notes to Consolidated Financial Statements.

                                     F - 4
<PAGE>


                   AMERICAN LAND LEASE, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                                   Notes        Dividends In
                                                                   Additional   Receivable on     Excess of                Total
                                                Common Stock        Paid-In      Common Stock    Accumulated  Treasury Stockholders'
                                             Shares      Amount     Capital      Purchases        Earnings      Stock     Equity
                                             ------      ------     -------      ---------        --------      -----     ------

<S>                                            <C>       <C>        <C>        <C>               <C>           <C>        <C>
BALANCES - DECEMBER 31, 1997                   5,108     $  51      $231,221   $       --        $(147,757)    $    --    $83,515

   Issuance of Common Stock                       29        --           434           --               --          --        434
   Repurchase of Common Stock                   (121)       (1)       (1,707)          --               --          --     (1,708)
   Net income                                     --        --            --           --              212          --        212
   Dividends                                      --        --            --           --           (3,817)         --     (3,817)
                                            --------     -----    ----------   ----------      -----------     -------   --------
BALANCES - DECEMBER 31, 1998                   5,016        50       229,948           --         (151,362)         --     78,636

   Net proceeds from issuance of Common
     Stock                                       617         6         9,433         (588)              --          --      8,851
   Purchases of treasury stock                    --        --            --           --               --        (450)      (450)
   Net income                                     --        --            --           --            2,406          --      2,406
   Dividends                                      --        --            --           --           (5,591)         --     (5,591)
                                            --------     -----    ----------   ----------      -----------     -------   --------
BALANCES - DECEMBER 31, 1999                   5,633        56       239,381         (588)        (154,547)       (450)    83,852
                                            --------     -----    ----------   -----------     ------------    --------  --------

   Common Stock issued as consideration
     for Commercial Assets common stock        2,675        27        37,559           --               --     (18,875)    18,711
   Common Stock issued for services
     rendered                                      7        --            76           --               --          --         76
   Purchase of stock by officers                  40         1           439         (440)              --          --         --
   Purchases of treasury stock                    --        --            --           --               --        (112)      (112)
   Repayment of notes receivable from
     officers                                     --        --            --           64               --          --         64
   Net income                                     --        --            --           --              974          --        974
   Dividends                                      --        --            --           --           (6,030)         --     (6,030)
                                            --------     -----    ----------   ----------      ------------   --------    ---------
BALANCES - DECEMBER 31, 2000                   8,355     $  84    $  277,455   $     (964)     $  (159,603)   $(19,437)   $  97,535
                                            ========     =====    ==========   ==========      ============   ========    =========

</TABLE>


                See Notes to Consolidated Financial Statements.

                                     F - 5
<PAGE>


                   AMERICAN LAND LEASE, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                                 For the Years Ended December 31,
                                                                                 --------------------------------
                                                                                2000        1999              1998
                                                                                ----        ----              ----
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                           <C>        <C>               <C>
   Net income                                                                 $   974    $   2,406         $     212
   Adjustments to reconcile net income to net cash flows provided
     by operating activities:
     Depreciation and amortization                                              8,016        6,792             5,962
     Minority interest in Operating Partnership and sales                        (207)         446                60
       operations
     Equity in earnings of Commercial Assets                                     (476)        (666)             (917)
     Gain on sale of real estate                                                 (393)          --                --
     Costs incurred to acquire management contract                                 --           --             2,073
     Accrued interest on participating mortgages and other                       (708)      (1,179)             (566)
     Decrease in inventory                                                        863           --                --
     Net (increase) decrease in operating assets and liabilities               (1,601)      (2,035)               17
                                                                                -----       ------           -------
       Net cash provided by operating activities                                6,468        5,764             6,841
                                                                                -----       ------           -------
CASH FLOWS FROM INVESTING ACTIVITIES
   Purchases of real estate                                                    (1,769)        (858)          (57,832)
   Notes receivable advances                                                      (51)          --                --
   Investments in participating mortgages, net                                     --       (5,500)           (1,611)
   Proceeds from sale of short-term investments                                10,618           --                --
   Capital replacements and improvements                                       (6,856)        (488)             (531)
   Dividends from Commercial Assets                                             1,077        1,436             1,077
   Principal collections and indemnifications on non-agency MBS                   618           --                --
   Distributions from real estate joint ventures                                   26           --                --
   Proceeds from the sale of assets                                             3,920           --                --
   Cash received in connection with Acquisitions                               11,860           --                --
   Cash paid for merger related costs                                          (3,706)          --                --
   Purchase of Commercial Asset stock                                         (20,418)          --                --
     Net cash used in investing activities                                     (4,681)      (5,410)          (58,897)
CASH FLOWS FROM FINANCING ACTIVITIES
   Payment of Common Stock dividends                                           (6,030)      (5,591)           (3,817)
   Payment of distributions to minority interest in Operating                  (1,045)      (1,000)
   Proceeds from secured short-term financing                                      --           --            10,500
   Principal paydowns on secured short-term financing                          (1,457)      (1,690)               --
   Proceeds from secured long-term notes payable borrowings                    30,351       10,925            30,280
   Collections of notes receivable on Common Stock Purchases                       39          134                --
   Contributions for minority interest in subsidiary                            1,782           --                --
   Payment of loan costs, including costs from interest rate hedges              (620)        (385)           (2,060)
   Principal paydowns on secured long-term notes payable                      (24,160)      (3,637)             (451)
   Repurchase of Common Stock                                                      --           --            (1,708)
   Proceeds from the issuance of Common Stock, net of costs                        --           34                35
                                                                              -------       ------           -------
     Net cash provided by (used in) financing activities                       (1,140)      (1,210)           31,680
                                                                              -------       ------           -------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                                                                                  647         (856)          (20,376)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
                                                                                  570        1,426            21,802
                                                                              -------       ------           -------
CASH AND CASH EQUIVALENTS AT END OF YEAR                                      $ 1,217       $  570           $ 1,426
                                                                              =======       ======           =======
</TABLE>


                See Notes to Consolidated Financial Statements.

                                     F - 6
<PAGE>



                            AMERICAN LAND LEASE, INC.
             (formally Asset Investors Corporation) AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2000

A.       The Company

American  Land Lease,  Inc.  ("ALL" and,  together  with its  subsidiaries,  the
"Company")   formerly  Asset  Investors   Corporation   ("AIC")  is  a  Delaware
corporation that owns and operates manufactured home communities and has elected
to be taxed as a real estate  investment trust ("REIT").  Prior to May 25, 1999,
ALL  was a  Maryland  corporation.  Effective  May  25,  1999,  Asset  Investors
Corporation ("AIC") stockholders approved its reincorporation in Delaware. ALL's
Common Stock,  par value $.01 per share ("Common  Stock"),  is listed on the New
York Stock Exchange under the symbol "ANL." In May 1997, ALL contributed its net
assets  to  Asset  Investors   Operating   Partnership,   L.P.  (the  "Operating
Partnership") in exchange for the sole general partner interest in the Operating
Partnership  and  substantially  all  of  the  Operating  Partnership's  initial
capital.

Interests in the Operating  Partnership  held by limited partners other than ALL
are referred to as "OP Units". The Operating  Partnership's  income is allocated
to  holders  of OP  Units  based  on the  weighted  average  number  of OP Units
outstanding during the period. The Operating Partnership records the issuance of
OP Units and the assets  acquired in purchase  transactions  based on the market
price of the Company's common stock at the date of the execution of the purchase
contract. The holders of the OP Units receive  distributions,  prorated from the
date of issuance,  in an amount  equivalent to the dividends  paid to holders of
common  stock.  After  holding  the OP Units for one year the  limited  partners
generally have the right to redeem their OP Units for cash. Notwithstanding that
right,  the  Operating  Partnership  may elect to acquire  some or all of the OP
Units  tendered for redemption in exchange for shares of common stock in lieu of
cash.  At December 31, 2000,  the Operating  Partnership  had 1,045,000 OP units
outstanding,  excluding  those  owned by ALL.  ALL  owned  87% of the  Operating
Partnership as of December 31, 2000.

Prior to 1997,  the Company owned debt  interests in  residential  mortgage loan
securitizations   collateralized   by   pools  of   non-conforming   (non-agency
guaranteed)  single-family  mortgage loans ("non-agency MBS bonds"). In February
1997, the Company decided to resecuritize  the Company's asset base and redeploy
its assets in an attempt to both  reduce  risks  associated  with the  Company's
non-agency  MBS  bonds  and  maximize   long-term,   risk-adjusted   returns  to
stockholders.  In 1997, the Company received  $67,671,000 cash proceeds from the
resecuritization  of the non-agency MBS bonds and has invested these proceeds in
manufactured home communities.

B.       Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated  financial  statements include the accounts of the Company, the
Operating Partnership and all majority owned subsidiaries. The minority interest
in the Operating Partnership represents the OP Units which are redeemable at the
option of the holder.  All significant  intercompany  balances and  transactions
have been eliminated in  consolidation.  The Company's  investment in Commercial
Assets,  Inc.  prior to its merger with American  Land Lease,  Inc. was recorded
under the equity method.

                                     F - 7
<PAGE>

Rental Properties and Depreciation

Rental  properties are recorded at cost less  accumulated  depreciation,  unless
considered  impaired.  If events or  circumstances  indicate  that the  carrying
amount of a property may be impaired, the Company will make an assessment of its
recoverability  by  estimating  the future  undiscounted  cash flows,  excluding
interest charges, of the property.  If the carrying amount exceeds the aggregate
future cash flows,  the Company would recognize an impairment loss to the extent
the carrying  amount exceeds the fair value of the property.  As of December 31,
2000,  management  believes that no impairments exist based on periodic reviews.
No impairment losses were recognized for 2000, 1999 and 1998.

Depreciation is computed using the straight line method over an estimated useful
life of 25  years  for land  improvements  and  buildings  and  five  years  for
furniture and other equipment.  Significant renovations and improvements,  which
improve or extend the useful life of the asset,  are capitalized and depreciated
over the remaining  estimated life. In addition,  the Company capitalizes direct
and indirect  costs  (including  interest,  taxes and other costs) in connection
with the  development  of  additional  homesites  within its  manufactured  home
communities.  Maintenance,  repairs  and  minor  improvements  are  expensed  as
incurred.

Investments in Participating Mortgages

The  Company  had loans in 1999  secured by real  estate  which  provide  for an
interest  rate  return  plus up to 50% of net  profits,  cash  flows  and  sales
proceeds  from  the  secured  real  estate.   The  Company  accounts  for  these
investments  as loans  when (a) the  Company  does not have an  interest  in the
borrower and either (b) the borrower has a substantial  equity investment in the
real estate  collateral  or (c) the Company  has  recourse to other  substantial
tangible assets of the borrower.  As such, the Company  records  interest income
based on the rate  provided  for in the loan and  records  its  share of any net
profits or gains from the sale of the underlying  real estate when realized.  If
the above  requirements are not met, then the loan is accounted for as an equity
investment in real estate under the equity method of accounting.

Amortization

Included in other assets is the cost related to the  acquisition  of  management
contracts,  which  was  being  amortized  over  a  period  of  three  years.  In
conjunction with our merger with Commercial  Assets,  the remaining  unamortized
cost of the contracts were expensed.

Revenue Recognition

The Company derives its income from the rental of homesites.  The leases entered
into by residents  for the rental of the site are generally for terms not longer
than one year and the rental revenues  associated with the leases are recognized
when earned and due from residents.  Property  management  revenues for services
provided to communities not owned by the Company are recognized when earned.

Interest on participating  mortgages is recorded based upon outstanding balances
and interest  rates per the terms of the  mortgages.  In  addition,  the Company
evaluates the  collectibility  of any unpaid  interest and provides  reserves as
necessary.

Sales of manufactured  homes by the Company are recorded upon the closing of the
home sale transaction and passing title to the purchaser.

                                     F - 8
<PAGE>

Deferred Financing Costs

Fees and costs incurred in obtaining  financing are capitalized.  Such costs are
amortized  over the terms of the related  loan  agreements  using the  effective
interest method and are charged to interest expense.

Income Taxes

ALL has elected to be taxed as a REIT as defined under the Internal Revenue Code
of 1986, as amended (the "Code").  In order for ALL to qualify as a REIT,  among
other requirements,  specified percentages of its income and assets must consist
of certain qualifying  categories.  The activities of consolidated  subsidiaries
that  (a)  owned  interests  in  property  management  contracts,   (b)  managed
Commercial  Assets and (c) sell homes  might not  qualify if  conducted  by ALL,
although ALL's share of dividend income  received from these entities  generally
would qualify for these purposes.

As a REIT,  ALL  generally  will not be subject to federal  income  taxes at the
corporate level if it distributes at least 95% of its REIT taxable income to its
stockholders  (or 90% beginning in 2001).  REITs are also subject to a number of
other organizational and operational requirements.  If ALL fails to qualify as a
REIT in any taxable year,  its taxable  income will be subject to federal income
tax at regular  corporate rates  (including any applicable  alternative  minimum
tax).  Even if ALL  qualifies as a REIT,  it may be subject to certain state and
local income taxes and to federal  income and excise taxes on its  undistributed
income.

At  December  31,  2000,   ALL's  net  operating  loss  ("NOL")   carryover  was
approximately  $95,000,000  and its capital  loss  carryover  was  approximately
$413,000. The NOL carryover may be used to offset all or a portion of ALL's REIT
income, and as a result, to reduce the amount that ALL is required to distribute
to stockholders to maintain its status as a REIT. The NOL carryover is scheduled
to expire  between 2007 and 2009, and the capital loss carryover is scheduled to
expire in 2001.

Earnings Per Share

Basic earnings per share are based upon the weighted-average number of shares of
Common Stock  outstanding  during each year.  Diluted earnings per share reflect
the effect of dilutive, unexercised stock options of 1,000, 6,000 and 19,000 for
2000,  1999  and  1998,  respectively.  Stock  options  and  shares  issued  for
non-recourse notes receivable of 775,000, 339,000 and 108,000 for 2000, 1999 and
1998, respectively,  have been excluded from diluted earnings per share as their
effect would be anti-dilutive.

Capitalized Interest

Interest  is   capitalized  on  sites  under   development   during  periods  of
construction or development.  During 2000, 1999, and 1998,  capitalized interest
was $2,236,000, $94,000 and $32,000, respectively.

Treasury Stock

Prior to August 2000, the Company owned  approximately 27% of Commercial Assets'
common  stock.  In  connection  with the August  2000  merger of the Company and
Commercial  Assets,  these  shares of  Commercial  Assets  were  converted  into
1,125,000  shares of the  Company's  Common  Stock at the date of the merger and
have been  recorded  as treasury  stock for  accounting  purposes  (see Note C).
During 1999,  Commercial Assets purchased 114,000 shares of the Company's Common
Stock. Consequently,  the Company had an interest in approximately 30,000 shares
of its Common  Stock and had  recorded  this as treasury  stock.  These  114,000
shares of the Company's  Common Stock were  cancelled in August 2000 as a result
of the Company's merger with Commercial Assets.

                                     F - 9
<PAGE>

Statements of Cash Flows

The Company  considers cash maintained in bank accounts,  money market funds and
highly-liquid investments with an initial maturity of three months or less to be
cash and cash  equivalents.  The Company made interest  payments of  $5,751,000,
$3,631,000, and $1,975,000 for 2000, 1999, and 1998 respectively.

Non-cash operating, investing and financing  activities for 2000, 1999  and 1998
were as follows (in thousands):

<TABLE>
<CAPTION>

                                                                                        2000          1999       1998
                                                                                        ----          ----       ----
Issuance of Common Stock for:
<S>                                                                                    <C>      <C>           <C>
     Conversion of OP Units                                                            $  --    $    8,668    $    --
     Services                                                                             76           150        120
     Notes receivable                                                                    440           588        278
Real estate and other assets acquired in merger with Commercial Assets:
     By assumption of notes payable                                                   29,412            --         --
     By assumption of accounts payable and accrued
        liabilities                                                                    4,054            --         --
     By assumption of minority interest                                                  554            --         --
     By issuance of common stock, net of treasury stock                               20,067            --         --
     Reclassification of investment in Commercial Assets to
        treasury stock                                                                18,875            --         --
Investments in participating mortgages:
     For other assets                                                                     --           165         --
     By issuance of OP Units                                                              --            --         17
Real estate acquired:
     By cancellation of participating mortgages and assumption of payables            23,333        12,734         --
     From earn-out agreements                                                             --            --         52
     For issuance of OP Units                                                            496            --      2,145
     By assumption of notes payable                                                    4,904            --         --
     By assumption of accounts payable and accrued liabilities, net of other
         assets received                                                               2,186            --         --
     For issuance of note payable                                                      1,740            --         --
Receivables from minority interest in subsidiaries                                         4            --        319
Inventory acquired
     By assumption of short-term financing                                             4,594            --         --
     By cancellation of participating mortgages                                        1,063            --         --
     By assumption of accounts payable and accrued liabilities, net of other
         assets received                                                                 311            --         --
     By minority interest in subsidiary                                                1,404            --         --
Purchase of minority interest in subsidiaries by cancellation of receivables              41           351         --
Purchase of property management contracts for note receivable                            380            --         --
Reclassification of investment in Commercial Assets to treasury stock                     --           450         --
Cancellation of intercompany balances as a result of the merger                        4,426            --         --
Other assets, net of liabilities assumed, for minority interest in subsidiary             97            --         --
Cancellation of notes receivable for services                                             52            --         --
Long-term debt assumed by purchaser of real estate                                     2,800            --         --
Escrow of long-term debt proceeds                                                        400            --         --
Acquisition of treasury stock by cancellation of note receivable                         112            --         --
Preferred minority interest in real estate sold                                          400            --         --
Short-term financing extended to long-term debt                                           --         6,200         --

</TABLE>

                                     F - 10
<PAGE>

Use of Estimates

The  preparation  of the  financial  statements in  conformity  with  accounting
principles  generally accepted in the United States requires  management to make
estimates  and  assumptions  that affect the amounts  reported in the  financial
statements  and  accompanying  notes.  Actual  results  could  differ from those
estimates.

Reclassifications

Certain  reclassifications  have  been  made in the 1999  and 1998  consolidated
financial statements to conform to the classifications used in the current year.
Such  reclassifications  have no material  effect on the  amounts as  originally
presented.

Non-agency MBS Bonds

The Company's  non-agency  MBS bonds were acquired at a significant  discount to
par  value.  The  amortized  cost of the  non-agency  MBS bonds was equal to the
outstanding  principal  amount net of  unamortized  discount and  allowances for
credit losses. Earnings from non-agency MBS bonds were recognized based upon the
relationship  of cash flows  received  during the period and estimates of future
cash flows to be received over the life of the bonds. The Company classified its
non-agency  MBS  bonds  as  available-for-sale,  carried  at fair  value  in the
financial statements.  Unrealized holding gains on available-for-sale securities
were are excluded  from  earnings and reported as a net amount in  stockholders'
equity until realized

C.       Merger with Commercial Assets

Effective August 11, 2000, the Company and Commercial Assets, Inc. merged. Prior
to the merger,  the Company owned 2,761,000  shares  (approximately  27%) of the
common stock of Commercial  Assets.  Pursuant to the amended  merger  agreement,
Commercial  Assets  shareholders,  with the  exception  of the  Company  and its
officers and directors and the officers and directors of Commercial Assets, were
provided an election to receive either (1) $5.75 in cash per share of Commercial
Assets  common  stock or (2)  0.4075  shares  of ALL  common  stock per share of
Commercial Assets common stock.

As a result  of the  merger,  the  Company  acquired  the  remaining  shares  of
Commercial Assets by paying $20,418,000 in cash for 3,551,000  Commercial Assets
shares and issuing  1,664,000  shares of ALL Common Stock valued at  $20,067,000
for 4,085,000  Commercial  Assets shares.  The merger with Commercial Assets was
recorded using the purchase method of accounting.  The aggregate  purchase price
of $97,372,000 (including the Company's previous investment in Commercial Assets
of $18,875,000  assumption of liabilities  and minority  interest of $34,020,000
and transaction costs of $3,992,000) was recorded as follows (in thousands):

Real Estate                                                   $ 60,477
Investment in real estate joint venture                          1,764
Cash and cash equivalents                                       11,860
Short term investments                                          10,618
Investment in home sales                                         2,718
Other assets                                                     9,935
Secured long-term notes payable                                (29,412)
Accounts payable and accrued liabilities                        (4,054)
Minority interest                                                 (554)

                                     F - 11
<PAGE>

The  allocation  of the  purchase  price of  Commercial  Assets  is  based  upon
preliminary estimates and is subject to final determination based upon estimates
and other evaluations of fair value. Therefore,  the allocations reflected above
may differ from the amounts ultimately determined.

The  unaudited pro forma  condensed  consolidated  statements of operations  for
twelve  months  ended  December  31, 2000 and 1999 have been  prepared as if the
merger  had  occurred  on  January 1,  1999.  The pro forma  information  is not
necessarily  indicative of what the Company's  results of operations  would have
been assuming the completion of the described  transactions  at the beginning of
the periods  indicated,  nor does it purport to project the Company's results of
operations for any future period.

Pro Forma Condensed Consolidated Statement of Operations:
(In thousands, except per share data)

<TABLE>
<CAPTION>

                                                                                         Year Ended December 31,
                                                                                                (Unaudited)
                                                                                      --------------------------------
                                                                                            2000              1999
                                                                                         -----------       -------
<S>                                                                                        <C>               <C>
Income from property operations                                                            $8,455            $8,794
Net Income before minority interest in operating partnership                                3,566             3,480
Net income                                                                                  3,112             3,028
Basic and diluted earnings per share                                                       $ 0.43            $ 0.42
Weighted average common shares and common share equivalents
outstanding                                                                                 7,170             7,186


</TABLE>

Summarized financial  information of Commercial Assets as reported by Commercial
Assets as of and for the years  ended  December  31, 1999 and 1998 is as follows
(in thousands):

<TABLE>
<CAPTION>

Balance Sheets                                                                                   December 31,
--------------                                                                                   ------------
                                                                                            1999              1998
                                                                                            ----              ----
<S>                                                                                     <C>               <C>
Cash and cash equivalents                                                               $   4,664         $   3,292
Short-term investments                                                                     12,502            45,066
Real estate, net (including joint ventures)                                                66,205            13,908
Investments in participating mortgages                                                      2,148             9,328
Investment in Asset Investors                                                               1,396                --
Other assets                                                                               10,168             6,640
                                                                                        ---------         ---------
Total assets                                                                            $  97,083         $  78,234
                                                                                        =========         =========

Secured long-term notes payable                                                         $  20,442         $      --
Other liabilities                                                                           1,945               980
Minority interest in subsidiaries                                                             615                --
Stockholders' equity                                                                       74,081            77,254
                                                                                        ---------         ---------
Total liabilities and stockholders' equity                                              $  97,083         $  78,234
                                                                                        =========         =========

</TABLE>

                                     F - 12
<PAGE>



<TABLE>
<CAPTION>



Statement of Income                                                                              December 31,
                                                                                       ----------------------------------
                                                                                             1999              1998
                                                                                           ---------         ---------
<S>                                                                                       <C>                <C>
Rental and other property revenues                                                        $  2,538           $    --
Income from participating mortgages and leases                                               1,971               587
Property operating expenses                                                                 (1,114)               --
Depreciation                                                                                (1,279)              (50)
                                                                                          --------          --------
Income from rental property operations                                                       2,116               537
                                                                                          --------          --------
Interest and other income                                                                    1,913             3,874
CMBS bonds revenue                                                                             154               161
Equity in earnings of Asset Investors                                                           23                --
General and administrative expenses                                                           (519)             (420)
Related-party management fees                                                                 (565)              (87)
Interest expense                                                                              (273)               --
Related-party acquisition fees                                                                (205)             (124)
Reincorporation expenses                                                                      (120)               --
Costs related to previously considered investments                                              --              (500)
Gain on sale of bonds                                                                           --                --
                                                                                          --------          --------
Net income                                                                                $  2,524          $  3,441
                                                                                          ========          ========

</TABLE>

D.       Real Estate

Real estate at December 31, 2000 and 1999 is as follows (in thousands):

<TABLE>
<CAPTION>

                                                                                              2000           1999
                                                                                           ----------     ------------
<S>                                                                                   <C>                 <C>
Land                                                                                  $        38,514     $   13,260
Land improvements and buildings                                                               170,215        102,291
Furniture and other equipment                                                                     478            442
                                                                                                  ---     ----------
                                                                                              209,207        115,993
Less accumulated depreciation                                                                 (12,238)        (7,248)
                                                                                             --------  -------------
Real estate, net                                                                             $196,969     $  108,745
                                                                                             ========     ==========

</TABLE>

Land  improvements and buildings  consist  primarily of  infrastructure,  roads,
landscaping, clubhouses, maintenance buildings and common amenities. We continue
to develop our 1,760 undeveloped homesites.

During  2000,  the  Company  merged  with  Commercial  Assets  resulting  in  an
acquisition  of $60.5  million  in real  estate  assets.  See Note C.  Effective
January  1,  2000,  the  Company  purchased  four  communities  and  undeveloped
homesites at three other communities for $36.8 million. See Note E.

During 1999, the Company  purchased two  manufactured  home  communities and one
recreational  vehicle  park  with  450  developed  homesites,   100  undeveloped
homesites and 120 recreational  vehicle sites.  Total investment was $13,592,000
consisting  of  $11,973,000  by the  cancellation  of  participating  mortgages,
$858,000 cash and $761,000 of assumed  liabilities and other costs. During 1998,
the Company acquired seven  manufactured  home  communities  with  approximately
1,730  developed  sites and 230  undeveloped  homesites.  Total  investment  was
$59,977,000 consisting of $57,832,000 cash and $2,145,000 of OP Units.

On January 5, 2000, we sold a manufactured housing community to a third party in
Largo, Florida for $2.5 million in cash and recorded a gain on sale of $107,000.

                                     F - 13
<PAGE>

On December 14, 2000, we sold our interest in the recreational vehicle park to a
third party for total consideration of $3.96 million and recorded a gain on sale
of  $286,000.  We  retained  an  indirect  preferred  minority  position  in the
acquiring  entity  totaling  $400,000.  Our  retained  interest  receives  a 10%
preferred  return,  payable  monthly.  We  have a  continuing  right  to put our
preferred position to the buyer beginning December 14, 2005.

E.       Investments in Participating Mortgages

As of December 31, 1999, the Company had participating mortgage notes receivable
of  $22,475,000.  The notes  accrued 10%  interest  and matured in 20 years.  In
addition,  the Company received  additional interest up to 50% of the borrower's
profit  from such  communities.  In January  2000,  the  Company  purchased  for
$36,816,000 the four manufactured home communities and the undeveloped homesites
at three additional  manufactured  home communities  which secured the Company's
participating mortgage. The purchase price was paid as follows:

<TABLE>
<CAPTION>

                                                                                 (in thousands)
<S>                                                                                  <C>
Cancellation of participating mortgages and loans                                    $24,851
Assumption of debt                                                                    10,704
Issuance of 44,572 OP Units                                                              496
Cash                                                                                     765
                                                                                   ---------
                                                                                     $36,816
</TABLE>

The following  table presents  unaudited  summary  financial  information of the
borrower  with  respect to the above  participating  mortgage  as of and for the
years ended December 31, 1999 and 1998 (in thousands):

<TABLE>
<CAPTION>

                                                                                       1999                 1998
                                                                                  ----------------     ----------------
                                                                                              (unaudited)
<S>                                                                                 <C>                  <C>
Rental and other property revenues                                                  $     1,757          $    1,783
Property operation expenses                                                              (1,200)             (1,018)
Depreciation                                                                               (373)               (419)
                                                                                    -----------          ----------
Income from rental property operations                                                      184                 346
                                                                                    -----------          ----------

Net loss                                                                                 (2,096)             (1,069)

Real estate, net of accumulated depreciation                                             24,708              20,421
Total assets                                                                             33,873              26,921
Secured notes payable                                                                    31,466              26,757
Partners' deficit                                                                        (2,729)             (1,334)
Total liabilities and partners' deficit                                                  33,873              26,921
</TABLE>

In  addition,  the  Company  had  non-recourse  mortgage  loans  secured  by two
manufactured home communities and one recreational  vehicle park in Arizona. The
mortgage  loans  earned  interest at rates  ranging from 10% to 15%. The Company
received additional interest of 3% of gross revenues, increasing to 11% of gross
revenues in the event of a refinancing of the debt on the  communities,  and 50%
of net proceeds from a sale or refinancing of the  communities.  In August 1999,
the Company  purchased the  manufactured  home  communities and the recreational
vehicle park in exchange for the payment of $858,000,  the  cancellation  of the
three  loans with a  carrying  amount of  $11,973,000  and  $761,000  of assumed
liabilities and other costs.

During 2000, 1999 and 1998, the Company had earnings of $612,000, $2,976,000 and
$3,174,000 from the participating mortgages.

                                     F - 14
<PAGE>

F.  Secured Long-Term Notes Payable

The following table summarizes the Company's secured long-term notes payable (in
thousands):

<TABLE>
<CAPTION>

                                                                                                 December 31,
                                                                                         -----------------------------
                                                                                             2000            1999
                                                                                         -------------    ------------
Fixed rate, ranging from 6.5% to 8.75%, fully amortizing, non-recourse notes maturing
<S>                                                                                       <C>               <C>
    at various dates from 2018 through 2020.                                              $ 64,730          $ 37,790
Fixed rate, ranging from 7.5% to 8.3%, partially amortizing, non-recourse notes
    maturing at October 2000                                                                    --             7,605
Recourse, fully-amortizing note discounted at 7.0%, maturing in 2002                         3,930                --
Fixed rate, ranging from 7.4% to 8.2%, partially amortizing, non-recourse
    notes maturing at various dates from 2007 through 2011.                                 16,117             2,528
Floating rate equal to LIBOR plus 2.5% (8.72% at December 31, 2000),  partially
    amortizing, recourse note maturing at August 2002.                                       4,920             6,071
                                                                                           -------           -------
                                                                                           $89,697           $53,994
                                                                                           =======           =======
</TABLE>

Real estate assets which secure the long-term notes payable had a net book value
of  $159,611,000  at December 31, 2000.  The Company had $1,344,000 in escrow on
the  long-term  notes payable at December 31, 2000,  including  amounts for real
estate taxes and certain capital  expenditures on the long-term notes payable at
December 31, 2000.

Scheduled  principal  payments after December 31, 2000 for the secured long-term
notes payable are (in thousands):

       Year                Amortization           Maturities          Total
       ----                ------------           ----------          -----
       2001                $2,245                 $1,795             $ 4,040
       2002                2,270                  6,594                8,864
       2003                2,280                  --                   2,280
       2004                2,441                  --                   2,441
       2005                2,622                  --                   2,622
       Thereafter                                                     69,450
                                                                     -------
                                                                     $89,697
                                                                     =======

G.       Secured Short-Term Financing

The Company has a  revolving  line of credit with a bank that bears  interest at
the Bank's  "Reference  Rate" (9.5% at December 31, 2000). The line of credit is
secured by real property and improvements located in Martin County,  Florida and
Maricopa County, Arizona with a net book value of $19,911,000 and matures in May
2001. As of December 31, 2000,  the limit was  $15,000,000  and  $7,867,000  was
outstanding on this line of credit.

H.       Commitments and Contingencies

The  Company is party to various  legal  actions  resulting  from its  operating
activities.  These actions are routine litigation and administrative proceedings
arising  in the  ordinary  course  of  business,  some of which are  covered  by
liability  insurance,  and none of which are expected to have a material adverse
effect on the consolidated  financial  condition or results of operations of the
Company and its subsidiaries taken as a whole.

                                     F - 15
<PAGE>

In connection with the Company's  merger with Commercial  Assets in August 2000,
the Company  became  subject to an earn-out  agreement  on a  manufactured  home
community  with respect to 170  unoccupied  homesites.  The Company  advances an
additional  $17,000  pursuant to the earnout  agreement for each newly  occupied
homesite.  At December 31, 2000, there were 153 unoccupied  homesites subject to
the earnout. The Company advanced $103,000 in cash for newly occupied homesites.

In connection with the acquisition of a manufactured home community, the Company
entered into an earn-out agreement with respect to 142 unoccupied homesites. The
Company advances an additional  $17,000  pursuant to the earn-out  agreement for
each  newly  occupied  homesite  either in the form of cash or 946 OP Units,  as
determined  by the  borrower.  At December 31, 2000,  there were 104  unoccupied
homesites subject to the earnout. The Company has advanced the following in cash
and OP Units for newly occupied homesites (in thousands).

                                               Year Ended December 31,
                                      ------------------------------------------
                                         2000            1999            1998
                                      -----------      ----------      ---------
    Cash                                $  215           $ 265           $ 116
    OP Units                                --              --              17
                                        ------           -----           -----
                                        $  215           $ 265           $ 133
                                        ======           =====           =====

I.       Operating Segments

Investments in manufactured home communities constitute substantially all of the
Company's  portfolio,  and as  such,  management  of the  Company  assesses  the
performance of the Company as one operating segment.

J.       Fair Value of Financial Instruments

The following  methods and  assumptions  were used to estimate the fair value of
each  type of  financial  instrument.  The  estimates  of fair  value  have been
determined  by the Company  using  available  market  information  and valuation
methodologies.

o     Cash and cash equivalents,  accounts payable and accrued liabilities,  and
      secured short-term financing - the carrying amounts approximate fair value
      because of the short maturity of these instruments.
o     Secured  long-term  notes payable - based upon borrowing  rates  currently
      available to the Company,  the carrying value of secured  long-term  notes
      payable approximates their fair value.

The carrying  values and fair values of the  Company's  investment in Commercial
Assets at December 31, 1999 and 1998 are as follows (in thousands):
<TABLE>
<CAPTION>


                                                           1999                                  1998
                                            ---------------------------------     ---------------------------------
                                              Carrying Value       Fair Value      Carrying Value      Fair Value
                                              --------------       ----------      --------------      ----------
<S>                                             <C>                 <C>               <C>                <C>
Investment in Commercial Assets                 $ 19,486            $ 12,770          $ 20,706           $ 16,739
                                                ========            ========          ========           ========
</TABLE>

                                     F - 16
<PAGE>

K.       Common Stock and Dividends

The Company paid dividends to stockholders  and  distributions  to holders of OP
Units as follows (in thousands):

<TABLE>
<CAPTION>

                                                                               Year Ended December 31,
                                                                               -----------------------
                                                                        2000             1999              1998
                                                                        ----             ----              ----
<S>                                                                   <C>              <C>               <C>
Dividends                                                             $  6,030         $  5,591          $  3,817
Distributions                                                            1,045            1,000             1,099
                                                                      --------         --------          --------
  Total                                                               $  7,075         $  6,591          $  4,916
                                                                      ========         ========          ========

Percentage of dividends constituting return of capital for
   income tax purposes                                                      51%              68%               80%

</TABLE>

The Company's  Certificate  of  Incorporation  permits the Board of Directors to
issue  classes  of  preferred  and  common  stock  without  further  stockholder
approval.  As of December  31,  2000,  the Company has not issued any classes of
stock other than Common Stock.

L.       Non-agency MBS Bonds

In March 1997, the Company  resecuritized its portfolio of retained interests in
prior  securitizations  that  are  in  the  form  of  non-agency  MBS  bonds  by
transferring  them to a trust in which it retained  the  residual  interest  and
having the trust sell non-recourse debt securities representing senior interests
in the trust's  assets.  The Company  realized net proceeds of  $67,671,000  and
recorded a net gain of $5,287,000 from the sale. The Company's retained residual
interest in the trust  represents  the  first-loss  class of the portfolio  and,
accordingly,  no carrying  value was assigned to it because it was not practical
to estimate its fair value given the high risk and  unpredictable  nature of the
future cash flow expected to be attributed to the retained  residual  interests.
As of  December  31, 1998 and 1997,  the  Company did not believe  that it would
receive any  incremental,  material  cash flows.  Given that  circumstance,  the
Company estimated the fair value of its retained  residual  interests at zero at
those subsequent reporting dates.  Consistent with those estimates,  the Company
has not received  any material  cash flows from the  resecuritized  assets.  The
trustee has notified the Company  that its retained  residual  interest has been
eliminated  because of the extent of allocated realized losses on the underlying
assets of the trust (non-agency MBS bonds). Therefore, the value of the retained
residual interest was determined to be zero at December 31, 2000 and 1999.

M.       Income Tax Benefit

In connection with the Company's  resecuritization  of its former bond portfolio
in 1997, a  consolidated  corporate  subsidiary  incurred  income taxes from the
resecuritization.  These taxes were  netted  against the gain from sale in 1997.
The subsidiary recorded a loss for tax purposes during 1999 and carried back the
tax loss for a refund of taxes  incurred in 1997.  Accordingly,  the Company has
recorded an income tax benefit of $400,000 in 1999.

N.       Stock Option Plan

The Company has a Stock Incentive Plan (the "Stock Plan") for the issuance of up
to 3,000,000  qualified  and  non-qualified  stock  options and shares of Common
Stock to its directors,  officers, employees and consultants. As of December 31,
2000 and 1999,  982,000 and 902,000  respectively,  related to outstanding stock
options.  The exercise  price for stock options may not be less than 100% of the
fair  market  value of the  shares of Common  Stock at the date of grant.  Stock
options  granted  through  December 31, 1997 have 5-year terms and stock options


                                     F - 17
<PAGE>

granted  after 1997 have  10-year  terms.  All  outstanding  stock  options  are
non-qualified stock options.

Presented  below is a summary of the changes in stock options for the four years
ended December 31, 2000.

<TABLE>
c
                                                                      Weighted Average
                                                                       Exercise Price                Shares
                                                                       --------------                ------
Outstanding-December 31, 1997                                               14.44                    152,000

<S>                                                                        <C>                      <C>
      Granted                                                              19.31                    704,000
       Exercised                                                            13.85                    (23,000)
                                                                         --------                -----------

Outstanding-December 31, 1998                                               18.57                    833,000

     Granted                                                                14.02                    129,000
     Exercised                                                              11.43                    (60,000)
                                                                         --------                -----------

Outstanding-December 31, 1999                                               18.40                    902,000

     Granted                                                                10.89                     89,000
     Assumed in connection with acquisitions                               15.30                     100,000
     Exercised                                                              11.00                    (40,000)
     Expired                                                                16.72                    (69,000)
                                                                         --------                -----------

Outstanding-December 31, 2000                                               17.83                    982,000

</TABLE>

As of December  31,  2000,  outstanding  options  have the  following  ranges of
exercise prices and weighted average remaining lives:

<TABLE>
<CAPTION>

                                                           Ranges of Exercise Prices
                                            ------------------------------------------------------
                                            $9.88 to $15.33    $15.63 to $15.95    $16.26 to 19.38     All Ranges
                                            ---------------    ----------------    ---------------     ----------
Outstanding stock options:
<S>                                             <C>                  <C>                <C>               <C>
  Number of options                             181,000              79,000             722,000           982,000
  Weighted average exercise price                $13.45             $15.75               $19.15            $17.83
  Weighted average remaining life             6.36 years          3.36 years         6.74 years        6.39 years
Exercisable stock options:
    Number of options                            90,000             78,000              505,000           673,000
    Weighted average exercise price              $14.10             $15.75               $19.06            $18.01
    Weighted average remaining life           3.88 years          3.36 years         6.52 years        5.80 years
</TABLE>

Options  granted  to date vest over  various  periods  up to five  years.  As of
December 31, 2000, 1999 and 1998, 673,000, 374,000 and 151,000, respectively, of
the outstanding options were exercisable. As of December 31, 2000, 1999 and 1998
the weighted  average exercise price of exercisable  options was $18.01,  $18.06
and $14.95, respectively.

The Company has elected to follow  Accounting  Principles  Board Opinion No. 25,
"Accounting for Stock Issued to Employees" (APB 25) and related  Interpretations
in accounting for its employee stock options  rather than the  alternative  fair
value  accounting  provided for under SFAS No. 123,  "Accounting for Stock-Based
Compensation."  Under  APB 25,  because  the  exercise  price  of the  Company's
employee stock options  equals the market price of the  underlying  stock on the
date of grant, no compensation expense is recognized.

                                     F - 18
<PAGE>

Pro forma information regarding net income and earnings per share is required by
SFAS 123,  and has been  determined  as if the  Company  had  accounted  for its
employee stock options under the fair value method of that  Statement.  The fair
value for options  issued by the  Company  were  estimated  at the date of grant
using the  Black-Scholes  valuation  model with the following  weighted  average
assumptions:

<TABLE>
<CAPTION>

                                                              2000               1999              1998
                                                       ------------------ ----------------- -----------------
<S>                                                    <C>                <C>               <C>
Range of risk free interest rates                      5.9% to 6.0%       6.0% to 6.5%      5.7% to 6.0%
Expected dividend yield                                     9.09%               7.4%              6.3%
Volatility factor of the expected market price of
   the Company's common stock                              0.313               0.309             0.309
Weighted average expected life of options                 10.0 years         10.0 years        10.0 years

</TABLE>


Option  valuation  models  require  the input of highly  subjective  assumptions
including  the expected  stock price  volatility.  Because the  Company's  stock
options  have  characteristics  significantly  different  from  those of  traded
options,  and because changes in the subjective input assumptions can materially
affect the fair value estimate,  in management's opinion, the existing models do
not  necessarily  provide a  reliable  single  measure  of the fair value of its
employee stock options.

For 2000, 1999 and 1998, the estimated weighted-average grant-date fair value of
options  granted  was $1.16 per  option,  $2.08 per option and $3.59 per option,
respectively.  The  Company  assumed  lives of five to ten years  and  risk-free
interest  rates equal to the Five- or Ten-Year U.S.  Treasury  rates on the date
the options were granted  depending  on option term.  In addition,  the expected
stock price  volatility and dividends rates were estimated based upon historical
experience over the forty-eight months ended December 31, 2000.

For purposes of pro forma  disclosures,  the estimated fair value of the options
is amortized to expense over the options'  vesting  period.  The  Company's  pro
forma information follows (in thousands except for per share data):

<TABLE>
<CAPTION>

                                                                              2000            1999            1998
                                                                          ------------    ------------    -----------
<S>                                                                         <C>             <C>             <C>
Pro forma net income                                                        $  881          $1,506          $  147
Pro forma earnings per share:
    Basic                                                                   $  0.14         $ 0.27          $ 0.03
    Diluted                                                                 $  0.14         $ 0.27          $ 0.03
</TABLE>

O.       Savings Plan

The Company  has a 401(k)  defined-contribution  employee  savings  plan,  which
provides  substantially  all employees the  opportunity to accumulate  funds for
retirement.  The  Company  may,  at  its  discretion,  match  a  portion  of the
contributions  from  participating  employees.  During 2000,  1999 and 1998, the
Company  matched  $16,000,  $19,000  and  $17,000,   respectively,  of  employee
contributions.

P.       Home Sales Business

Effective  January 1, 2000, a  consolidated  subsidiary  ("Sales  Corp.") of the
Company acquired all of the manufactured  home inventory  located at communities
owned by the Company or Commercial  Assets for $8,452,000.  From January through
July 2000,  the Company owned 65% of the nonvoting  common stock of Sales Corp.,
Commercial  Assets owned the  remaining  35% of the  nonvoting  common stock and
certain of the Company's officers owned all of Sales Corp's voting common stock.


                                     F - 19
<PAGE>

As a result of the Company's acquisition of Commercial Assets on August 1, 2000,
the Company owns all of the  nonvoting  common stock of Sales Corp.  The amounts
and components of the purchase price were a follows:
<TABLE>
<CAPTION>

<S>                                                                                    <C>
          Assumption of secured short-term financing                                   $4,594
          Cancellation of participating mortgages and notes receivable
                                                                                        1,805
          Assumption of notes payable                                                     403
          Assumption of accounts payable and accrued liabilities, net
            of other assets received                                                      649
          Contribution by Commercial Assets                                             1,001
                                                                                       -------
                                                                                       $8,452
</TABLE>

The Company  views the home sales  results as an  investment in future cash flow
streams to be generated by ground leases of land held for development within our
portfolio.  In 2000, home sales operations were a loss of $1,232,000,  including
the minority interest owned by Commercial Assets through the date of the merger.
The Company evaluates the home sales activities on the same return on investment
basis  that is used  for  acquiring  other  stabilized  properties.  The  leases
originated  in 2000 by the home sales  subsidiary  are  estimated to result in a
first year return on  investment  as follows  (unaudited  and based on pro forma
information):

<TABLE>
<CAPTION>

<S>                                                                                         <C>
          Sites leased                                                                      180
          Estimated first year annualized profit on leases originated                  $477,654
          Development costs of sites leased                                          $3,568,996
          Loss from home sales business                                              $1,232,000
          Total costs incurred to originate leases                                   $4,800,996
          Estimated first year annualized return on investment                            9.95%
</TABLE>

Q.       Recent Accounting Developments

In June 1998,  Statement of Financial  Accounting  Standards No. 133, Accounting
for Derivative  Instruments and Hedging Activities ("Statement 133") was issued.
In June 2000,  Statement of Financial  Accounting Standards No. 138, "Accounting
for Certain Derivative Instruments and Hedging Activities,  an amendment of FASB
Statement  No.  133"("SFAS  138)" was issued.  SFAS 133 and SFAS 138 address the
accounting for derivative instruments,  including certain derivative instruments
embedded in other contracts, and hedging activities.  The Company is required to
adopt  SFAS  133  and  SFAS  138 in the  first  quarter  of  2001.  The  Company
anticipates  that the  adoption  of SFAS 133 and SFAS 138 as of  January 1, 2001
will  not have a  material  effect  on its  financial  position  or  results  of
operations.

In  September  2000,  Statement  of  Financial  Accounting  Standards  No.  140,
"Accounting for Transfers and Servicing of Financial Assets and  Extinguishments
of  Liabilities"  ("SFAS  140") was issued.  SFAS 140  provides  accounting  and
reporting  standards  for  transfers  and  servicing  of  financial  assets  and
extinguishments  of  liabilities.  SFAS 140 is  effective  for  recognition  and
reclassification  of collateral and for disclosures  relating to  securitization
transactions  and collateral for fiscal years ending after December 15, 2000 and
is effective for transfers and servicing of financial assets and extinguishments
of liabilities  occurring after March 31, 2001. The Company anticipates that the
adoption of SFAS 140 will not have a material  effect on its financial  position
or results of operations.

In December  1999, the  Securities  and Exchange  Commission  (SEC) issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB
101").  SAB 101  summarizes  certain of the SEC's  views in  applying  generally
accepted accounting  principles to revenue recognition in financial  statements.
SAB 101 is  effective  for the fourth  quarter of fiscal years  beginning  after
December 1999. The Company believes that it is in compliance with the guidelines
set forth in SAB 101.

                                     F - 20
<PAGE>

R.       Transactions with Related Parties

Commercial Assets

During  2000  (prior to the  merger),  1999 and 1998,  the  Company  earned  the
following  management fees under the Commercial Assets Management Agreement (net
of  elimination  for the  Company's  27%  ownership  of  Commercial  Assets) (in
thousands):

                                          2000           1999       1998
                                       ----------     ---------- ----------
      Base fees                          $  335         $  414     $   64
      Acquisition fees                       --            150         91
      Incentive fees                         --             --         --
                                         ------         ------     ------
                                         $  335         $  564     $  155
                                         ======         ======     ======

Transactions involving Messrs. Moore and Gaynor

During 1999,  two property  management  companies  (collectively,  "AIC Property
Management")  received property  management and accounting fees of $672,000 from
communities in which the Company owns an interest and $172,000 from  communities
in which  Commercial  Assets  owned an  interest.  We owned 50% of AIC  Property
Management and Community Management Investors  Corporation ("CMIC") owned 50% of
AIC Property Management.  Mr. Moore, the Company's President,  owned 35% and Mr.
Gaynor,  the  Company's  Vice  President,  owned  20% of CMIC.  In order for AIC
Property  Management  to provide the above  services,  AIC  Property  Management
utilized staff and resources of Brandywine  Financial  Services  Corporation and
its  affiliates  ("Brandywine").  Mr.  Moore is the  founder  and was the  Chief
Executive  Officer  of  Brandywine  prior to his  appointment  as the  Company's
President and Chief Operating  Officer.  Effective  January 1, 2000, the Company
purchased  CMIC's 50%  interest  in AIC  Property  Management  for a  $2,120,000
promissory  note that was scheduled to mature  January 2001. We prepaid the note
in full in September 2000 and paid $126,000 in interest on the note in 2000.

Brandywine  Commercial Services Corporation  ("Services Corp."), an affiliate of
Brandywine,  provided maintenance services to both the Company's communities and
Commercial  Assets  communities.  Mr. Moore owned 50% of Services  Corp.  during
1999. Services Corp. received fees of $1,725,000 from the Company's  communities
and  $658,000  from  Commercial  Assets  communities  for  maintenance  services
provided during 1999.  Effective  January 1, 2000, we purchased 100% of Services
Corp.'s  assets and  operations  for  $30,000  and the  assumption  of leases on
equipment used by Services Corp.

Brandywine Home Sales Corporation  ("Sales Corp."),  an affiliate of Brandywine,
provided real estate  brokerage  services in both the Company's  communities and
Commercial  Assets  communities.  Sales  Corp.  received  commissions  from  the
Company, Commercial Assets or the homeowner depending on the circumstances.  Mr.
Moore  owned  50% of  Sales  Corp.  during  1999.  Sales  Corp.  received  sales
commissions during 1999 as follows:

           From the Company's communities                           $  45,000
           From Commercial Assets communities                          46,000
           From homeowners                                            293,000

Effective January 1, 2000, the Company  acquired,  through a subsidiary in which
we held non-voting stock and Messrs. Considine, the Company's Chairman and Chief
Executive Officer,  and Rhodes, a director of the Company, own the voting common
stock,  substantially all of Sales Corp.'s activities and its inventory of homes


                                     F - 21
<PAGE>

located at the Company's  communities  for (a) $100,000 cash, (b) the assumption
of $493,000 in the  third-party  debt,  and (c) the  cancellation  of $64,000 in
loans from us.

During  2000,  Brandywine  Financial  Services  Corporation,   an  affiliate  of
Brandywine,  provided back office support to both the Company's  communities and
the  Company's  corporate  office  located in  Florida.  Mr.  Moore owned 50% of
Brandywine  Financial  Services  during  2000.   Brandywine  Financial  Services
received  fees of $544,000  from the Company for services  provided in 2000.  In
addition,  during 2000, the Company procured certain insurance coverages jointly
with Brandywine Financial Services.

Effective   January  1,  2000,  the  Company   purchased  four  communities  and
undeveloped  homesites  at three other  communities  from  entities in which Mr.
Gaynor,  Vice President of Development and General Counsel,  owns 31% (the "CADC
Properties").  During 1999, the Company held participating  mortgages secured by
the CADC Properties.  The purchase price for the CADC Properties was $36,816,000
and was paid as follows:

o    Issuance of 44,572 OP Units at an assigned value of $496,000,
o    Cancellation of $24,851,000 in loans from us involving the CADC Properties,
o    Assumption of $10,704,000 in third-party debt, and
o    $765,000 cash.

On April 18, 2000,  the Company  loaned  $440,000 to Mr. Gaynor which he used to
exercise  certain stock options  granted to him by the Company in 1999. The loan
bears interest at 7.5% and matures April 18, 2010.

Transactions involving Messrs. Considine and Rhodes

Prior to the  merger  with  Commercial  Assets,  the  Company,  through  certain
partially  owned   subsidiaries   (the  "Management   Subsidiaries"),   provided
management  and related  services to Commercial  Assets and others.  The Company
owned non-voting stock of the Management Subsidiaries, and Messrs. Considine and
Rhodes directly and indirectly  held the voting stock.  In September,  2000, the
Company acquired the interests of Messrs. Considine and Rhodes in the Management
Subsidiaries for consideration in the amount of approximately  $24,500 each. The
consideration  was paid in the form of cancellation of notes payable,  including
accrued interest.

The Company has owned and leased a  recreational  vehicle  park and golf courses
which it would  not  otherwise  be  permitted  to  operate  under  the tax rules
governing REITs to AIC RV Management  Corp.  ("AIC RV  Management")  and CR Golf
Course Management,  LLC ("CR Golf"),  entities that are owned equally by Messrs.
Considine  (indirectly) and Rhodes. During 2000 and 1999, AIC RV Management paid
us aggregate lease payments of $354,000 and $366,000, respectively. During 2000,
we earned $264,000 on the leases with CR Golf.

On December 14, 2000, the Company sold its interest in the recreational  vehicle
park to a third party for total  consideration of $3,960,000 and recorded a gain
on sale of  $286,000.  The  Company  retained  an  indirect  preferred  minority
position in the acquiring  entity  totaling  $400,000.  The  Company's  retained
interest  receives a 10% preferred  return,  payable monthly.  The Company has a
continuing right to put our preferred  position to the buyer beginning  December
14, 2005.

In conjunction with the sale of the recreational vehicle park, we terminated our
ground lease with AIC RV Management  that  originally was scheduled to expire in
2022 and paid a lease termination fee of $186,000 to AIC RV Management.

                                     F - 22
<PAGE>

Formation of Taxable REIT Subsidiary

During 2000,  certain  subsidiaries of the company and other entities engaged in
activities and received fees that would not otherwise be permitted under the tax
rules governing REITs during the year. In order to allow the Company to maintain
its REIT status for federal income tax purposes, including activities related to
home sales, golf course, and certain utilities operations, Messrs. Considine and
Rhodes, directly or indirectly,  equally owned the outstanding voting securities
issued by these  entities.  The Company owns all of the  outstanding  non-voting
common stock of certain of these entities.

H.R. 1180, the Work  Incentives  Improvement Act of 1999 (the "Act") was enacted
on  December  17,  1999  and  contained  several  provisions  known  as the REIT
Modernization  Act. Among other provisions,  the Act allowed a REIT to own up to
100% of the stock of a Taxable REIT Subsidiary ("TRS") that can provide services
to REIT tenants and others without  disqualifying the rents that a REIT receives
from its tenants. The Act was effective beginning in 2001.

After the  enactment of the Act, the Company is permitted to own voting  control
of Taxable REIT  Subsidiaries  which provide  certain  services  which cannot be
provided  directly by the  Company.  As a result and as of January 1, 2001,  the
Company has agreed to buy, and Messrs. Considine and Rhodes have agreed to sell,
their entire  interest,  which  included  voting  control in these  entities and
"preferred stock  subsidiaries,"  for  consideration  including  cancellation of
amounts due under lease agreements.

S.       Selected Quarterly Financial Data (Unaudited)

Presented  below  is  selected  quarterly  financial  data for 2000 and 1999 (in
thousands, except per share data).

<TABLE>
<CAPTION>

                                                                          Three Months Ended
                                                 --------------------------------------------------------------------
2000                                              December 31,      September 30,        June 30,         March 31,
------------------------------------------------ ---------------- ----------------- ---------------- ----------------
<S>                                                  <C>              <C>               <C>              <C>
Income from rental property operations               $  1,610         $  1,742          $  1,450         $  2,376
Net income (loss)                                         270             (200)              184              720
Basic and diluted earnings(loss) per share               0.04            (0.03)             0.03             0.13

Weighted average common shares outstanding              7,167            6,637             5,586            5,572
Weighted average common shares and common
   shares equivalents outstanding                       7,167            6,637             5,586            5,572

                                                                          Three Months Ended
                                                 --------------------------------------------------------------------
1999                                               December 31,    September 30,        June 30,         March 31,
------------------------------------------------ ---------------- ---------------- ----------------- ----------------
Income from rental property operations               $  2,272         $  2,186         $  2,244          $  2,129
Net income                                                584              593              687               542
Basic and diluted earnings  per share                    0.10             0.11             0.12              0.10

Weighted average common shares outstanding              5,572            5,559            5,567             5,453
Weighted average common shares and common
   shares equivalents outstanding                       5,573            5,563            5,573             5,464

</TABLE>

                                     F - 23
<PAGE>

The Company recorded certain  adjustments in the fourth quarter of 2000 relating
to accounting for property tax expense and certain  amounts passed on to tenants
that  resulted in a reduction in fourth  quarter  reported  earnings of $245,000
that was attributable to prior quarters.

T.  Subsequent events

On  February 8, 2001,  the  Company  sold for  $5,870,000,  Pinewood  Estates of
Pinellas, LLC located in Pinellas County,  Florida,  resulting in a gain. A part
of the  consideration  received was the assumption of $4.5 million,  fixed rate,
fully amortizing debt maturing in November 2010.

On February  19,  2001,  the Company  entered into  financing  arrangements  for
proceeds  in the  aggregate  amount  of  $11.3  million.  The  notes  are  fully
amortizing,  non-recourse  notes  with  an  average  term of 18  years,  bearing
interest at 8.9%.  The proceeds were used to liquidate the remaining  short term
debt as of the date of closing and to fund ongoing  development of the Company's
manufactured housing communities.

On March 9, 2001,  the Company  sold for $9 million,  Westwind I and Westwind II
Manufactured Housing Communities located in Pinellas County, Florida,  resulting
in a gain. In  conjunction  with the sale,  the Company  retired $4.9 million in
partially amortizing, recourse term debt maturing in August 2002.





                                     F - 24
<PAGE>




                        AMERICAN LAND LEASE INCORPORATED
                                  SCHEDULE III
                    Real Estate and Accumulated Depreciation
                                December 31, 2000
                         (In Thousands Except Site Data)

<TABLE>
<CAPTION>

                                                                                                     December 31, 2000
                                                                                       ---------------------------------------------
                                                           Initial Cost
                                                         ----------------    Cost           Total Cost       Total Cost
                                                                Buildings Capitalized       Buildings         Net of
                  Date                  Year    Number            and     Subsequent          and              Accum.  Accum.
Property Name   Acquired  Location   Developed Of Sites  Land Improvements Acquisition Land Improvements Total Deprec. Deprec.Encum.
------------------------------------------------------------------------------------------------------------------------------------
<S>               <C>                 <C>          <C>   <C>     <C>     <C>     <C>     <C>     <C>      <C>   <C>          <C>
Blue Heron Pines  2000 Punta Gorda,FL 1983/1999    411   $3,026  $2,356  $1,187  $3,169  $3,400  $6,569   $112  $ 6,457      $191
Blue Star         1999 Apache
                       Junction,AZ       1955      151      453   1,029      13     453   1,042   1,495     57    1,438         -
Brentwood         2000 Hudson,FL         1984      146      446   1,037     226     446   1,263   1,709     43    1,666         -
Brentwood West    1998 Mesa,AZ        1972/1987    350    1,050  12,768     633   1,050  13,401  14,451  1,341   13,110     7,012
Caribbean Cove    1998 Orlando,FL        1984      285      858   7,952     462     858   8,414   9,272    812    8,460     4,722
Casa Commercial   2000 Mesa,AZ            -          -      304       6       -     304       6     310      -      310         -
Casa Encanta      2000 Mesa,AZ           1970      110      283   1,050       -     283   1,050   1,333     17    1,316         -
Cypress Greens    2000 Lakeland,FL       1986      264      216   1,649     258     216   1,907   2,123     29    2,094         -
Desert Harbor     2000 Apache
                       Junction,AZ       1997      206      952   5,980     173     952   6,153   7,105     96    7,009     3,930
Fiesta Village    2000 Mesa, AZ          1962      170    2,698   4,034     146   2,698   4,180   6,878     61    6,817     2,925
Forest View       2000 Homosassa,FL   1987/1997    309      927   1,950   1,976   1,320   3,533   4,853    371    4,482     1,874
Gulfstream HarborI1998 Orlando,FL        1980      383    1,740  11,793     574   1,740  12,367  14,107  1,172   12,935     7,695
Gulfstream Harbor 1998 Orlando,FL        1988      314      924   9,183     312     924   9,495  10,419    914    9,505     5,072
La Casa Blanca    2000 Apache
                       Junction,AZ       1993      198      534   6,080      47     534   6,127   6,661    102    6,559     3,772
La Casa Mini      2000 Apache
Storage                Junction,AZ         -         -      446     267     154     446     421     867      4      863         -
Lakeshore Villas  2000 Tampa,FL          1972      280      762   6,081      34     762   6,115   6,877    105    6,772     4,668
Lost Dutchman     1999 Apache
                       Junction,AZ  1971/1979/1999 260      777   4,885     224     777   5,109   5,886    269    5,617       787
Mullica Woods     1998 Egg Harbor
                       City,NJ           1985       90      270   3,399      99     270   3,498   3,768    393    3,375     2,493
New Era           2000 Tucson &
                       Marana,AZ           -        38      211      59   1,015   1,132     153   1,285      1    1,284         -
Park Royale       2000 Pinellas Park,
                       FL                1971      309      927   5,221     612   1,029   5,731   6,760    806    5,954     6,200
Pinewood          1997 St.
                       Petersburg,FL     1976      220      660   4,534     185     660   4,719   5,379    583    4,796     4,500
Pleasant Living   1997 Riverview,FL      1979      246      726   5,079     320     726   5,399   6,125    663    5,462     3,073
Rancho Mirage     2000 Apache
                       Junction,AZ       1994      312      837   9,924      32     837   9,956  10,793    166   10,627     6,158
Riverside         2000 Ruskin,FL         1984      961    3,202   8,167     524   3,202   8,691  11,893    124   11,769     5,341
Royal Palm        2000 Haines City,FL    1971      424    1,244   2,874      51   1,244   2,925   4,169     47    4,122     2,246
Salem Farms       1998 Bensalem,PA       1988       28       84   1,307       -      84   1,307   1,391    148    1,243         -
Savanna Club      2000 Port St.
                       Lucie,FL          1999    1,133    6,945   4,643   2,925   7,061   7,452  14,513    219   14,294     7,080
Serendipity       1998 Ft. Myers,FL   1971/1974    338    1,014   7,635     303   1,014   7,938   8,952    804    8,148     4,645
Southern Palms    2000 Mesa,AZ           1961       62      170     937       -     170     937   1,107     16    1,091         -
Stonebrook        2000 Homosassa,FL   1987/1997    219      654   1,483   1,176     854   2,459   3,313    280    3,033     1,198
Sun Valley        1999 Apache
                       Junction,AZ       1984      268      804   5,644       4     804   5,648   6,452    310    6,142         -
Sun Valley        1997 Tarpon
                       Springs,FL        1972      261      783   5,974      15     783   5,989   6,772    894    5,878     4,540
Sunlake           2000 Grand Island,
                       FL                1980      401    1,712   6,522     857   1,712   7,379   9,091    277    8,814     2,522
Westwind I        1997 Dunedin,FL        1970      195        -   3,226      41       -   3,267   3,267    502    2,765     2,460
Westwind II       1997 Dunedin,FL        1972      189        -   3,210      52       -   3,262   3,262    500    2,762     2,460
                                                   ---            -----      --   -----   -----   -----    ---    -----     -----
                                                  9,531 $36,639 $157,938 $14,630 $38,514 $170,693 $209,207 $12,238$196,969 $97,564
                                                  ===== ======= ======== ======= ======= ======== ======== =============== =======
</TABLE>



                                     F - 25
<PAGE>





                            AMERICAN LAND LEASE, INC.
                                  SCHEDULE III
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
              For the Years Ended December 31, 2000, 1999 and 1998
                                 (in thousands)

<TABLE>
<CAPTION>

                                                                        2000             1999              1998
                                                                      ------           --------          ------
Real Estate
<S>                                                                  <C>              <C>               <C>
    Balance at beginning of year                                     $  115,993       $  101,941        $   41,419
    Additions during the year:
       Real estate acquisitions                                          87,104           13,592            59,977
       Additions                                                         13,553              487               583
       Dispositions                                                      (7,443)             (27)              (38)
                                                                     ----------       ----------        ----------
    Balance at end of year                                           $  209,207       $  115,993        $  101,941
                                                                     ==========       ==========        ==========


Accumulated Depreciation
    Balance at beginning of year                                     $   (7,248)      $   (3,378)       $     (693)
    Additions during the year:
       Depreciation                                                      (5,681)          (3,870)           (2,685)
       Dispositions                                                         691               --                --
                                                                     ----------       ----------        ----------
    Balance at end of year                                           $  (12,238)      $   (7,248)       $   (3,378)
                                                                     ==========       ==========        ==========

</TABLE>




                                     F - 26
<PAGE>



                            AMERICAN LAND LEASE, INC.
                                   SCHEDULE IV
                          MORTGAGE LOANS ON REAL ESTATE
              For the Years Ended December 31, 2000, 1999 and 1998
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                           2000              1999             1998
                                                                         --------          --------         --------

<S>                                                                      <C>               <C>             <C>
    Balance at beginning of period                                       $22,475           $27,604         $      --

    Additions during period:
       Investments in participating mortgages                                  0             6,295             5,072
       Accrued interest                                                        0             2,842             3,204
       Restructure of investment in and notes receivable from real
          estate joint ventures                                               --                --            25,415
    Deductions during period:
       Collections of principal                                                0              (630)           (3,450)
       Collections of interest                                                 0            (1,784)           (2,458)
       Amortization of loan costs                                              0               (28)              (30)
       Reserve for uncollected interest                                        0               149              (149)
       Cancellation of debt in connection with purchase of property      (22,475)          (11,973)               --
                                                                         -------           -------           -------

    Balance at close of period                                           $     0           $22,475           $27,604
                                                                         =======           =======           =======

</TABLE>



                                     F - 27
<PAGE>






                                  EXHIBIT INDEX

<TABLE>
<CAPTION>

Exhibit No.                                             Description


<S>               <C>
2.1               Second Amended and Restated  Agreement and Plan of Merger,  dated as of June 2, 2000, by and between
                  the Registrant  and  Commercial  Assets,  Inc.  (incorporated  herein by reference to Annex A to the
                  Registrant's  Joint Proxy  Statement/Prospectus  dated June 13, 2000,  Commission  File No.  1-9360,
                  filed on June 13, 2000).

2.2               Assignment  of  Agreement  of Sale dated as of June 1, 1998,  between  Community  Acquisition  Joint
                  Venture and Asset  Investors  Operating  Partnership,  L.P.  (incorporated  herein by  reference  to
                  Exhibit 2.6(b) to the  Registrant's  Current Report on Form 8-K dated May 29, 1998,  Commission File
                  No. 1-9360, filed on June 12, 1998).

2.3               Contribution  Agreement  dated  effective  as of  January  1,  2000,  by and among  Asset  Investors
                  Operating  Partnership,  L.P.,  CADC  Holding  L.L.C.  and  Community  Acquisition  and  Development
                  Corporation  (incorporated  herein by reference to Exhibit 2.8 to the Registrant's Current Report on
                  Form 8-K dated January 31, 2000, Commission File No. 1-9360, filed on February 15, 2000).

2.4               Purchase and Sale Agreement  dated  effective as of January 1, 2000, by and between Asset  Investors
                  Operating  Partnership,  L.P. and Community  Acquisition and Development  Corporation  (incorporated
                  herein by reference to Exhibit 2.8(a) to the  Registrant's  Current Report on Form 8-K dated January
                  31, 2000, Commission File No. 1-9360, filed on February 15, 2000).

2.5               Purchase  and Sale  Agreement  dated  effective as of January 1, 2000,  by and between  Prime Forest
                  Partners and Community Acquisition and Development Corporation  (incorporated herein by reference to
                  Exhibit 2.8(b) to the  Registrant's  Current  Report on Form 8-K dated January 31, 2000,  Commission
                  File No. 1-9360, filed on February 15, 2000).

2.6               Purchase and Sale Agreement  dated  effective as of January 1, 2000, by and between Asset  Investors
                  Operating  Partnership,  L.P. and Community  Acquisition and Development  Corporation  (incorporated
                  herein by reference to Exhibit 2.8(c) to the  Registrant's  Current Report on Form 8-K dated January
                  31, 2000, Commission File No. 1-9360, filed on February 15, 2000).

2.7               Asset Purchase  Agreement  dated effective as of January 1, 2000, by and between AIC Homesales Corp.
                  and Community Acquisition and Development  Corporation  (incorporated herein by reference to Exhibit
                  2.8(d) to the  Registrant's  Current Report on Form 8-K dated January 31, 2000,  Commission File No.
                  1-9360, filed on February 15, 2000).

2.8               Acquisition Agreement,  dated effective as of January 1, 2000, by and among AIC Community Management
                  Holding  Corp.,  AIC  Management  Holdings,  LLC  and  Community  Management  Investors  Corporation
                  (incorporated  herein by reference to Exhibit 10.0 to the  Registrant's  Current  Report on Form 8-K
                  dated January 19, 2000, Commission File No. 1-9360, filed on January 31, 2000).

                                     - 37 -
<PAGE>

2.9               Promissory  Note,  dated  January 1,  2000,  by and among AIC  Community  Management  Holding,  LLC,
                  Manufactured Housing Corp. and Community Management  Investors  Corporation  (incorporated herein by
                  reference to Exhibit 10.1(a) to the Registrant's  Current Report on Form 8-K dated January 19, 2000,
                  Commission File No. 1-9360, filed on January 31, 2000).

3.1               Second  Amended and Restated  Certificate  of  Incorporation  of American  Land Lease,  Inc.  (filed
                  herewith.)

3.2               Second Amended and Restated By-laws of American Land Lease, Inc (filed herewith).

4.1               Waiver  regarding  stock  ownership  restrictions  between the Registrant and Terry  Considine dated
                  August 11, 2000(filed herewith).

4.2               Waiver regarding stock ownership  restrictions  between the Registrant and Asset Investors Operating
                  Partnership, L.P. dated August 11, 2000(filed herewith).

10.1*             Form of  Indemnification  Agreement  between the  Registrant  and each  Director  of the  Registrant
                  (incorporated  herein  by  reference  to  Appendix  A to the  Proxy  Statement  of  the  Registrant,
                  Commission File No. 1-9360, dated May 18, 1987).

10.2*             1998 Stock  Incentive  Plan of the Registrant  (incorporated  herein by reference to Exhibit 10.3 to
                  the Quarterly Report on Form 10-Q of the Registrant for the quarter ended June 30, 1998,  Commission
                  File No. 1-9360, filed on August 14, 1998).

10.3              Trust Agreement  dated as of March 26, 1997,  among the  Registrant,  as depositor,  Asset Investors
                  Secured Financing  Corporation and Wilmington Trust Company, as Owner Trustee  (incorporated  herein
                  by reference  to Exhibit  10.5(a) to the  Quarterly  Report on Form 10-Q of the  Registrant  for the
                  quarter ended March 31, 1997, Commission File No. 1-9360, filed on May 14, 1997).

10.4              Pooled  Certificate  Transfer Agreement between the Registrant and Asset Investors Secured Financing
                  Corporation dated as of March 26, 1997  (incorporated  herein by reference to Exhibit 10.5(b) to the
                  Quarterly  Report on Form 10-Q of the  Registrant  for the quarter ended March 31, 1997,  Commission
                  File No. 1-9360, filed on May 14, 1997).

10.5              Indenture,  dated as of March 27, 1997,  between  Structured  Mortgage Trust 1997-1 and State Street
                  Bank and Trust Company  (incorporated herein by reference to Exhibit 10.5(c) to the Quarterly Report
                  on Form 10-Q of the  Registrant  for the quarter ended March 31, 1997,  Commission  File No. 1-9360,
                  filed on May 14, 1997).

10.6              Note Purchase Agreement,  dated as of March 26, 1997, among Structured Mortgage Trust 1997-1,  Asset
                  Investors  Secured  Financing  Corporation  and Bear,  Stearns & Co.  Inc.  (incorporated  herein by
                  reference to Exhibit 10.5(d) to the Quarterly  Report on Form 10-Q of the Registrant for the quarter
                  ended March 31, 1997, Commission File No. 1-9360, filed on May 14, 1997).

10.7              Trust Certificate issued to Asset Investors Secured Financing  Corporation  evidencing its ownership
                  of the Structured Mortgage Trust 1997-1  (incorporated herein by reference to Exhibit 10.5(e) to the
                  Quarterly  Report on Form 10-Q of the  Registrant  for the quarter ended March 31, 1997,  Commission
                  File No. 1-9360, filed on May 14, 1997).

                                     - 38 -
<PAGE>

10.8              Trust Agreement,  dated as of November 3, 1997, between CAX DTR Securitization  Corp. and Wilmington
                  Trust  Company  (incorporated  herein by  reference  to Exhibit 10.9 to  Commercial  Assets,  Inc.'s
                  Current Report on Form 8-K dated  November 3, 1997,  Commission  File No. 1-2262,  filed on November
                  14, 1997).

10.9              Note Purchase  Agreement,  dated as of November 3, 1997, among Structured Mortgage Trust 1997-2, CAX
                  DTR Securitization Corp., and Painewebber  Incorporated Company (incorporated herein by reference to
                  Exhibit  10.9(a) to Commercial  Assets,  Inc.'s  Current  Report on Form 8-K dated November 3, 1997,
                  Commission File No. 1-2262, filed on November 14, 1997)

10.10             Trust Indenture and Security  Agreement,  dated as of November 3, 1997, between Structured  Mortgage
                  Trust  1997-2 and LaSalle  National  Bank,  as Indenture  Trustee  Company  (incorporated  herein by
                  reference to Exhibit 10.9(b) to Commercial Assets,  Inc.'s Current Report on Form 8-K dated November
                  3, 1997, Commission File No. 1-2262, filed on November 14, 1997).

10.11             Contribution  Agreement,  dated as of November 3, 1997, between Commercial Assets,  Inc. and CAX DTR
                  Securitization  Corp.  Company  (incorporated  herein by reference to Exhibit  10.9(c) to Commercial
                  Assets,  Inc.'s Current Report on Form 8-K dated November 3, 1997.  Commission File No 1-2262, filed
                  on November 14, 1997).

10.12             Securitization  Cooperation  Agreement,  dated as of November 3, 1997, among CAX DTR  Securitization
                  Corp.,  Commercial Assets, Inc., 1997-2, and Painewebber  Incorporated Company  (incorporated herein
                  by reference to Exhibit 10.9 to Commercial  Assets,  Inc.'s dated November 3, 1997,  Commission File
                  No. 1-2262, filed on November 3, 1997, Commission File No, 1-2262, filed on November 14, 1997).

10.13             Securities  Purchase  Agreement,  dated as of March 26, 1998,  between Registrant and Westrec Marina
                  Management,  Inc.  (incorporated  herein by reference to Exhibit 10.1 to Commercial  Assets,  Inc.'s
                  Quarterly  Report on Form 10-Q dated March 31, 1998,  Commission  File No. 1-2262,  filed on May 14,
                  1998).

10.14             Put and Call  Agreement  dated as of November 30, 1998,  between the  Registrant  and Westrec Marina
                  Management,  Inc. and Michael M. Sachs  (incorporated  herein by  reference  to Exhibit  10.10(a) to
                  Commercial  Assets,  Inc.'s Annual Report on Form 10-K dated December 31, 1998,  Commission File No.
                  1-2262, filed on March 25, 1999).

10.15             Secured  Promissory Note dated as of November 30, 1998,  between the Registrant and Michael M. Sachs
                  (incorporated  herein by reference to Exhibit 10.10 (a) to Commercial  Assets,  Inc.'s Annual Report
                  on Form 10-K dated December 31, 1998, Commission File No. 1-2262, filed on March 25, 1999).

10.16             Secured  Promissory  Note dated  September  13,  1999  between  Robert G. Blatz and Asset  Investors
                  Operating  Partnership,  L.P. (incorporated herein by reference to Exhibit 10.11 to the Registrant's
                  Annual Report on Form 10-K dated December 31, 1999,  Commission File No. 1-2262,  filed on March 28,
                  2000).

                                     - 39 -
<PAGE>

10.18             Assignment of Agreement dated May 6, 1999,  between  Community  Acquisition & Development  Corp. and
                  CAX  Rancho  Mirage,  L.L.C.  (incorporated  herein  by  reference  to  Exhibit  10.13  (a)  to  the
                  Registrant's Current Report on Form 8-K dated May 7, 1999,  Commission File No. 1-2262, filed on May
                  18, 1999).

10.19             Agreement of Sale date May 6, 1999,  between five  Whites,  L.L.C.  and  Community  Acquisition  and
                  Development  Corporation  (incorporated  herein by  reference to Exhibit  10.14 to the  Registrant's
                  Current Report on Form 8-K dated June 30, 1999, Commission file No, 1-2262, filed on July 14, 1999).

10.20             Agreement of Sale date May 6, 1999,  between  White Gregg,  L.L.C.  and  Community  Acquisition  and
                  Development  Corporation  (incorporated  herein by  reference to Exhibit  10.14 to the  Registrant's
                  Current Report on Form 8-K dated June 30, 1999, Commission file No, 1-2262, filed on July 14, 1999).

10.21             Assignment of Agreement of Sale dated June 28, 1999,  between Community  Acquisition and Development
                  Corporation and CAX La Casa Blanca, LLC.  (incorporated  herein by reference to Exhibit 10.14 to the
                  Registrant's  Current Report on Form 8-K dated June 30, 1999,  Commission File No. 1-2262,  filed on
                  July 14, 1999).

10.22             Assignment of Agreement of Sale dated June 28, 1999,  between Community  Acquisition and Development
                  Corporation and CAX La Casa Blanca East, LLC.  (incorporated herein by reference to Exhibit 10.14 to
                  the Registrant's  Current Report on Form 8-K dated June 30, 1999,  Commission File No. 1-2262, filed
                  on July 14, 1999).

10.23             Promissory Note dated June 30, 1999 between CAX La Casa Blanca East, L.L.C. and White Gregg,  L.L.C.
                  (incorporated  herein by reference to Exhibit 10.14 to Commercial  Assets,  Inc.'s Current Report on
                  Form 8-K dated June 30, 1999, Commission File No, 1-2262, filed on July 14, 1999).

10.24             Receipt,  Release and Settlement  Agreement,  dated as of August 13, 1999,  between the  Registrant,
                  Casa  Encanta  MHP,  L.L.C.,  Southern  Palms MHP,  L.L.C.,  Norman  Andrus,  and the Norman  Andrus
                  Irrevocable  Trust  (incorporated  herein by  reference  to  Exhibit  10.11 (b) to the  Registrant's
                  Current Report on Form 8-K dated August 13, 1999,  Commission  File No, 1-2262,  filed on August 30,
                  1999).

10.25             Form of  Assignment  and  Assumption  of Membership  Interest  (incorporated  herein by reference to
                  Exhibit 10.11 (c) to the Registrant's  Current Report on Form 8-K dated August 13, 1999,  Commission
                  File No. 1-2262, filed on August 30, 1999).

21.1              List of Subsidiaries

23.1              Consent of Independent Auditors - Ernst & Young LLP.

<FN>

*    Management contract or compensatory plan or arrangement.
</FN>
</TABLE>




                                     - 40 -
<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.

                                       AMERICAN LAND LEASE, INC.
                                       (Registrant)

Date: April 2, 2001                    By   /s/Terry Considine
                                            ------------------------------------
                                            Terry Considine
                                            Chairman and Chief Executive Officer


Date: April 2, 2001                    By   /s/Bruce E. Moore
                                            ------------------------------------
                                            Bruce E. Moore
                                            President


Date: April 2, 2001                    By   /s/Robert G. Blatz
                                            ------------------------------------
                                            Robert G. Blatz
                                            Chief Operating Officer


Date: April 2, 2001                    By   /s/Shannon E. Smith
                                            ------------------------------------
                                            Shannon E. Smith
                                            Chief Financial Officer

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

              Name                       Capacity                     Date
              ----                       --------                     ----

 /s/Thomas L. Rhodes                     Director and Vice        March 19, 2001
-----------------------------            Chairman
    Thomas L. Rhodes

 /s/Bruce D. Benson                      Director                 March 19, 2001
-----------------------------
    Bruce D. Benson

 /s/Todd W. Sheets                       Director                 March 19, 2001
-----------------------------
   Todd W. Sheets



                                     - 41 -