<PAGE>
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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                                   FORM 10-K
 
    /X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
        ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 OR
 
    / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
        EXCHANGE ACT OF 1934
 
                            ------------------------
 
                         COMMISSION FILE NUMBER 1-9663
 
                      MID-AMERICA REALTY INVESTMENTS, INC.
             (Exact name of registrant as specified in its charter)
 
               MARYLAND                                47-0700007
       (State of incorporation)           (I.R.S. Employee Identification No.)
 
            11506 NICHOLAS STREET, SUITE 100, OMAHA, NEBRASKA 68154
              (Address of principal executive offices) (Zip Code)
 
                                 (402) 496-3300
              (Registrant's telephone number, including area code)
 
          SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
 
  COMMON STOCK, PAR VALUE $0.01 PER
                SHARE                           NEW YORK STOCK EXCHANGE
        (Title of Each Class)            (Name of Exchange on which registered)
 
          SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
 
                                      None
 
    Indicate  by check mark if disclosure  of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will  not  be contained,  to  the best  of  the registrant's  knowledge,  in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to Form 10-K. /X/
 
    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 _
 
    The  number of shares  of common stock  outstanding as of  March 1, 1996 was
8,281,007 shares. The aggregate market value  of the 8,231,405 shares of  common
stock held by non-affiliates on such date was $65,851,240.
 
    The  following documents are  incorporated into this  report by reference: a
portion of  the  Company's  proxy  statement for  its  1996  Annual  Meeting  of
Shareholders ("1996 Proxy Statement") is incorporated by reference in Part III.
                                                                 Total Pages: 54
                                                       Exhibit Index on Page: 50
 
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<PAGE>
                      MID-AMERICA REALTY INVESTMENTS, INC.
                        1995 ANNUAL REPORT ON FORM 10-K
                               TABLE OF CONTENTS
                                     PART I
 
<TABLE>
<CAPTION>
                                                                           PAGE
                                                                           -----
<S>         <C>                                                            <C>
Item 1.     Business....................................................     3
Item 2.     Properties..................................................     5
Item 3.     Legal Proceedings...........................................     7
Item 4.     Submission of Matters to a Vote of Security Holders.........     7
 
                                    PART II
 
Item 5.     Market for the Company's Common Stock and Related
             Shareholder Matters........................................     7
Item 6.     Selected Financial Data.....................................     7
Item 7.     Management's Discussion and Analysis of Financial Condition
             and Results of Operations..................................     9
Item 8.     Financial Statements and Supplementary Data.................    15
Item 9.     Changes in and Disagreements With Accountants on Accounting
             and Financial Disclosure...................................    15
 
                                    PART III
 
Item 10.    Directors and Executive Officers of the Registrant..........    15
Item 11.    Executive Compensation......................................    15
Item 12.    Security Ownership of Certain Beneficial Owners and
             Management.................................................    15
Item 13.    Certain Transactions and Relationships......................    15
 
                                    PART IV
 
Item 14.    Exhibits, Financial Statement Schedules and Reports on Form
             8-K........................................................    15
</TABLE>
<PAGE>
                                     PART I
 
ITEM 1.  BUSINESS
 
GENERAL DESCRIPTION OF BUSINESS
 
    Mid-America  Realty Investments, Inc. (the "Company") is a self-administered
real  estate  investment  trust  ("REIT")  which  owns,  manages  and   operates
income-producing   commercial   real  estate,   primarily  enclosed   malls  and
neighborhood shopping centers. The  Company was incorporated  under the laws  of
Maryland in October 1986. The Company owned at December 31, 1995 19 neighborhood
shopping  centers and four  enclosed malls located  in Nebraska, Iowa, Illinois,
South Dakota,  Minnesota, Michigan,  Wisconsin, Indiana,  Arkansas, Georgia  and
Tennessee.  Additionally, the  Company is  a 50%  partner in  Mid-America Bethal
Limited Partnership ("Mid-America Bethal") which owns two neighborhood  shopping
centers  and one enclosed mall.  Most of the properties  are situated in middle-
sized communities and,  in many cases,  represent the major  retail facility  in
their trade areas.
 
    The  Company's investment objectives are  to own and manage income-producing
commercial  real  estate  that  will  provide  cash  for  distribution  to   its
shareholders on a quarterly basis and preserve investor capital, while providing
potential   for  capital  appreciation.  The  Company's  policy  is  to  acquire
commercial properties  that  are capable  of  generating income  through  active
management, leasing, re-leasing or development of additional tenant space.
 
DEVELOPMENTS DURING 1995
 
    PROPERTY TRANSACTIONS
 
    TWIN OAKS CENTRE -- On April 19, 1995, the Company entered into a settlement
agreement with the Twin Oaks Centre Limited Partnership (the "Partnership"). The
Partnership  was in default on  a mortgage loan to  the Company. Pursuant to the
settlement, the  Company  took  ownership of  the  underlying  collateral  which
consisted  of the Twin  Oaks Centre, a 95,000  square foot neighborhood shopping
center in  Silvis,  Illinois and  tax  increment financing  bonds  payable  from
incremental  sales and  real estate taxes  generated by the  shopping center and
adjacent properties. All litigation against the Company was dismissed as part of
the settlement.
 
    MOORLAND SQUARE -- In April 1995, a 10,000 square foot expansion at Moorland
Square in New Berlin, Wisconsin was  completed at a total cost of  approximately
$785,000,  including tenant improvements  of $139,000. Cash  paid for the twelve
months ended December 31,  1995 was approximately $600,000.  The balance of  the
project cost was paid in 1994.
 
    LAKEWOOD  MALL  --  In  September 1995,  the  Company  contracted  with G.R.
Herberger's, Inc. to expand its department  store at Lakewood Mall in  Aberdeen,
South  Dakota  by  approximately  25,000 square  feet.  The  expansion  began in
September and Herberger's is expected to begin operating in the expanded area in
March 1996. Total  project costs were  $515,000, of which  $187,000 was paid  in
1995 and the remaining balance will be paid in 1996.
 
    OUTLOT  SALES -- During 1995, the Company  sold two outlot parcels for total
proceeds of  approximately  $469,000,  resulting  in  a  gain  of  approximately
$189,000.
 
    YIELD  MAINTENANCE  AGREEMENT --  During  1995, the  Company  received total
proceeds of $1,027,000  under its  Yield Maintenance Agreement  with the  former
related  parties. See Note M to the Company's Consolidated Financial Statements.
These funds were used to reduce the Company's bank line debt.
 
RECENT EVENTS
 
    At the regular  board of directors  meeting held January  29, 1996, Gary  R.
Hawkins  was appointed as director to serve the remainder of the term vacated by
E. Stanley Kroenke's resignation in October 1995.
 
                                       3
<PAGE>
PROPERTY MANAGEMENT AND LEASING
 
    The Company is a  fully integrated real estate  company and manages its  own
properties  through Mid-America Centers Corp. (formerly Dial Enterprises Corp.),
its wholly-owned subsidiary.  The management  and leasing of  the properties  is
"hands  on" and conducted  by experienced professionals  with knowledge of local
markets and relationships with local and national retailers.
 
INDUSTRY AND GEOGRAPHIC FACTORS
 
    The Company  is  subject to  various  risks typically  associated  with  the
ownership  of real estate, such as  defaults or non-renewal of leases, increased
operating costs or costs  resulting from leveraging,  changes in interest  rates
and  the  availability  of favorable  financing  which  may render  the  sale or
refinancing of  properties difficult  or unattractive,  environmental  problems,
problems attributable to the location of properties, changes in general or local
economic  conditions, changes in  real estate and zoning  laws, and increases in
real property  tax rates.  Real  estate investments  tend  to be  illiquid  and,
consequently, the Company would have difficulty responding to adverse changes in
any  of the aforementioned  factors or similar  factors (particularly if adverse
changes occur in Nebraska  and the greater Midwest  where most of the  Company's
properties are located).
 
CERTAIN SIGNIFICANT TENANTS
 
    The  continued success of  the Company's anchor tenants  is important to the
success of the Company's  properties because such  anchor tenants attract  other
tenants  and  customers to  the shopping  center. Wal-Mart,  Herberger's, Hy-Vee
grocery stores, Kmart, J.C. Penney,  Walgreens, Target and/or Shopko anchored  a
total  of 18 of  the Company's properties  either as tenants  or as occupants of
buildings adjacent to the  properties and lease  in the aggregate  approximately
34% of the total leasable space in the Company's properties.
 
    Additionally,  Kmart, Hy-Vee  grocery stores,  Walgreens, Herberger's and/or
Wal-Mart anchored  all Mid-America  Bethal properties  as either  tenants or  as
occupants  of buildings  adjacent to the  properties and lease  in the aggregate
approximately 41%  of  the  total  leasable  space  in  the  Mid-America  Bethal
properties.
 
    The  only tenant that occupies more than  10% of the gross leasable space of
the properties owned by the Company at December 31, 1995 is Wal-Mart, whose five
stores at properties  owned by  the Company  occupy approximately  14% of  total
gross  leasable  area. Wal-Mart  also operates  stores adjacent  to five  of the
Company's properties and to one of Mid-America Bethal's properties.
 
ENVIRONMENTAL MATTERS
 
    Pursuant to the terms of the Company's leases with its tenants, the  Company
does  not have control over the operational  activities of its tenants, nor does
it monitor  its tenants  with  respect to  environmental matters.  Although  the
Company  is not aware of any environmental liabilities in connection with any of
its properties, the owner of real property with latent hazardous waste  problems
may  be liable for  such problems even if  such problems were  not caused by the
current landowner. Liability for  such problems under federal  and state law  is
generally strict, joint and several.
 
COMPETITION
 
    The  Company competes for acquisitions of  real property with a wide variety
of investors,  including  insurance  companies,  pension  funds,  corporate  and
individual  real estate developers,  other REITs and  syndicators, many of which
have investment objectives similar to those of the Company and may have  greater
financial  resources, larger staffs and longer operating histories than those of
the Company. In  addition, the  Company competes  with other  owners of  similar
properties  for tenants  on the basis  of location, rental  rates, amenities and
other factors.
 
INSURANCE
 
    The Company considers  its insurance  coverage to be  adequate. The  Company
carries  comprehensive general liability coverage with limits of liability of no
less than $5,000,000 per occurrence to
 
                                       4
<PAGE>
insure against liability claims and provide for the cost of defense.  Similarly,
the  Company is insured  against the risk  of direct physical  damage in amounts
structured to reimburse  the Company  on a  replacement cost  basis for  amounts
incurred  to repair  or rebuild each  property, including loss  of rental income
during the  period of  repair or  reconstruction. When  considered prudent,  the
Company  insures  against  losses  from earthquakes,  which  coverage  has  a 5%
deductible. The Company carries flood insurance  for the properties that are  in
designated 100-year flood plains.
 
EMPLOYEES
 
    The  Company  and  its subsidiary  had  89  employees (62  full-time  and 27
part-time) at December 31, 1995. The corporate office in Omaha had 21  employees
at December 31, 1995.
 
TAXATION OF THE COMPANY AND ITS SHAREHOLDERS
 
    The  Company was organized  and intends to  conduct its operations  so as to
continue to  qualify  for taxation  as  a REIT  under  Sections 856-860  of  the
Internal  Revenue  Code of  1986. A  REIT  generally is  not subject  to federal
corporate income  tax on  its net  income if  certain requirements  are met.  To
qualify  as a REIT, the Company is required, among other things, to meet certain
stock ownership, income, asset and distribution rules and tests. As a REIT,  the
Company  distributes to its shareholders substantially all of its cash flow from
operations and, in any event, at least  95% of its real estate investment  trust
taxable income.
 
CERTAIN RESTRICTIONS ON TRANSFER OF COMMON STOCK
 
    Provisions of the Company's Articles of Incorporation, primarily intended to
enable the Company to maintain its status as a REIT, authorize the Company i) to
refuse  to transfer common stock to,  or prohibit exercise of shareholder rights
by, any person who as a result would beneficially own, directly or indirectly by
attribution, common stock  in excess of  9.8% of the  total outstanding  capital
stock of the Company ("Excess Shares") and ii) to redeem Excess Shares of common
stock, the accumulation of which would jeopardize the status of the Company as a
REIT.
 
ITEM 2.  PROPERTIES
 
    The following tables set forth information concerning each of the properties
that  the Company owns directly or has an equity interest in through Mid-America
Bethal as of December 31, 1995.
 
<TABLE>
<CAPTION>
                                                          DATE        GROSS     LEASED RATE AT YEAR
                                                        ACQUIRED    LEASABLE          END (1)
                                                           OR       AREA (SQ.   --------------------    1996 BASE
                                                       COMPLETED      FT.)        1995       1994        RENT (2)
                                                       ----------  -----------  ---------  ---------  --------------
<S>                                                    <C>         <C>          <C>        <C>        <C>
                                                                                                       (THOUSANDS)
COMPANY PROPERTIES:
ENCLOSED MALLS:
Delta Plaza -- Escanaba, Michigan....................    12/30/86      188,000        93%        92%    $      760
Lakewood Mall -- Aberdeen, South Dakota..............    08/28/92      227,000        83%        83%         1,300
Monument Mall -- Scottsbluff, Nebraska...............    12/30/86      192,000        93%        96%         1,119
Thunderbird Mall -- Virginia, Minnesota..............    12/30/86      256,000        98%        98%         1,407
                                                                   -----------  ---------  ---------  --------------
                                                                       863,000        92%        92%         4,586
NEIGHBORHOOD SHOPPING CENTERS:
Bishop Heights -- Lincoln, Nebraska..................    12/30/86       26,000       100%       100%           154
Cornhusker Plaza -- South Sioux City, Nebraska.......    06/27/91       63,000        91%        77%           429
Eastville Plaza -- Fremont, Nebraska.................    12/30/86       68,000       100%       100%           397
Edgewood Shopping Center -- Lincoln, Nebraska
  Phase I............................................    06/01/87       72,000        96%        98%           519
  Phase II...........................................    06/26/91      100,000        99%       100%           749
Fairacres Shopping Center -- Oshkosh, Wisconsin......    12/22/92       74,000        93%        93%           594
</TABLE>
 
                                       5
<PAGE>
<TABLE>
<CAPTION>
                                                          DATE        GROSS     LEASED RATE AT YEAR
                                                        ACQUIRED    LEASABLE          END (1)
                                                           OR       AREA (SQ.   --------------------    1996 BASE
                                                       COMPLETED      FT.)        1995       1994        RENT (2)
                                                       ----------  -----------  ---------  ---------  --------------
                                                                                                       (THOUSANDS)
<S>                                                    <C>         <C>          <C>        <C>        <C>
Fitchburg Ridge Shopping Center -- Fitchburg,
 Wisconsin...........................................    08/31/94       50,000       100%       100%           282
Germantown Shopping Center -- Jasper, Indiana........    12/21/88      203,000        95%        97%           962
Ile de Grand -- Grand Island, Nebraska...............    04/09/87       82,000        98%       100%           475
Kimberly West Shopping Center -- Davenport, Iowa.....    12/14/92       97,000        85%        94%           567
Macon County Plaza -- Lafayette, Tennessee...........    12/21/88       87,000        79%        80%           227
Meadows Shopping Center -- Lincoln, Nebraska.........    06/01/88       68,000       100%       100%           481
Miracle Hills Park Shopping Center -- Omaha,
 Nebraska............................................    07/05/88       71,000        96%       100%           775
Moorland Square -- New Berlin, Wisconsin.............    11/23/92       81,000       100%       100%           614
Rivergate Shopping Center -- Shelbyville, Indiana....    12/21/88      108,000       100%       100%           522
Shenandoah Plaza -- Newnan, Georgia..................    12/21/88      141,000       100%       100%           689
Southport Centre -- Apple Valley, Minnesota..........    01/01/94      125,000       100%        98%         1,460
Town West Center -- Paragould, Arkansas..............    12/21/88      143,000        98%        99%           466
Twin Oaks Centre -- Silvis, Illinois.................    04/19/95       95,000        91%     --               612
Westview Plaza -- McCook, Nebraska...................    12/30/86       17,000        88%        94%            66
                                                                   -----------  ---------  ---------  --------------
                                                                                      96%        97%        11,040
                                                                                ---------  ---------  --------------
Total Enclosed Malls and Neighborhood Centers........                2,634,000        95%        95%    $   15,626
                                                                   -----------  ---------  ---------  --------------
                                                                   -----------  ---------  ---------  --------------
MID-AMERICA BETHAL LIMITED PARTNERSHIP PROPERTIES
 (3):
ENCLOSED MALLS:
Imperial Mall -- Hastings, Nebraska..................    12/01/87      324,000        81%        90%    $    1,513
 
NEIGHBORHOOD SHOPPING CENTERS:
Stockyards -- Omaha, Nebraska
  Plaza (Phase I)....................................    06/01/89      103,000        98%        92%           677
  Theaters (Phase II)................................    07/17/90       26,000       100%       100%           232
Taylor Heights Shopping Center -- Sheboygan,
 Wisconsin...........................................    07/30/90       85,000       100%       100%           817
                                                                   -----------  ---------  ---------  --------------
                                                                       214,000        99%        96%         1,726
                                                                   -----------  ---------  ---------  --------------
Total Enclosed Malls and Neighborhood Centers........                  538,000        88%        92%    $    3,239
                                                                   -----------  ---------  ---------  --------------
                                                                   -----------  ---------  ---------  --------------
</TABLE>
 
------------------------
(1) Leased rate represents the percentage of gross leasable area which is leased
    to third-party tenants.
 
(2) Amounts are based on  the 1996 lease terms  of existing tenants at  December
    31, 1995.
 
(3)  The Company owns  a 50% partnership interest  in Mid-America Bethal Limited
    Partnership. All information presented is for the entire center.
 
                                       6
<PAGE>
ITEM 3.  LEGAL PROCEEDINGS
 
    The Company  is subject  to a  number  of lawsuits  and claims  for  various
amounts  which arise  out of the  normal course  of business. In  the opinion of
management, the disposition of claims currently pending will not have a material
adverse effect on the Company's financial position or results of operations.
 
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
    No matters were submitted to a vote of the Company's security holders during
the fourth quarter of 1995.
 
                                    PART II
 
ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
       SHAREHOLDER MATTERS
 
    The Company's Common Stock  is traded on the  New York Stock Exchange  under
the  symbol MDI. The following table sets forth  the high and low sale prices of
the Common Stock, as reported on the New York Stock Exchange Composite Tape  and
the  dividends  declared per  share  of Common  Stock  by the  Company  for each
calendar quarter in  the periods  indicated. Dividends declared  for a  calendar
quarter  were paid in the next calendar quarter. The stock price at the close of
business on December 29, 1995 was $7.75.
 
<TABLE>
<CAPTION>
                                                                 DIVIDENDS
                                            HIGH        LOW      DECLARED
                                           -------    -------    ---------
 
<S>                                        <C>        <C>        <C>
1994:
  First Quarter.........................   $10 5/8    $ 9 1/2     .2$2
  Second Quarter........................   $10 1/8    $ 8 7/8     .2$2
  Third Quarter.........................   $ 9 7/8    $ 8 7/8     .2$2
  Fourth Quarter........................   $ 9 3/8    $ 6 7/8     .2$2
1995:
  First Quarter.........................   $ 8        $ 6 1/2     .2$2
  Second Quarter........................   $ 9        $ 7 1/8     .2$2
  Third Quarter.........................   $ 8        $ 7 3/4     .2$2
  Fourth Quarter........................   $ 8 1/8    $ 7 1/4     .2$2
</TABLE>
 
    At December 31, 1995,  there were 8,280,524 shares  of common shares  issued
and  outstanding which were held by  approximately 2,090 shareholders of record.
The shareholders of record do not reflect the persons or entities who held their
stock in nominee or "street" name.
 
ITEM 6.  SELECTED FINANCIAL DATA
 
    Certain  reclassifications,  as  described  in  the  Notes  to  Consolidated
Financial  Statements, have been made to prior year financial data to conform to
those classifications used in 1995.
 
                                       7
<PAGE>
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
 
<TABLE>
<CAPTION>
                                                               FOR THE YEAR ENDED DECEMBER 31,
                                               ---------------------------------------------------------------
                                                  1995         1994         1993         1992         1991
                                               -----------  -----------  -----------  -----------  -----------
<S>                                            <C>          <C>          <C>          <C>          <C>
Total Revenues...............................  $    22,333  $    21,152  $    18,433  $    16,510  $    14,684
Net Income (Loss)............................        3,384  $      (128) $     2,196  $     1,221  $     1,952
Dividends Declared:
  Ordinary Income............................          414  $     2,650  $     3,222  $     1,369  $     5,265
  Return of Capital..........................        6,872        4,637        4,051        4,843        3,054
                                               -----------  -----------  -----------  -----------  -----------
                                               $     7,286  $     7,287  $     7,273  $     6,212  $     8,319
Per Share Amounts:
  Net Income (Loss)..........................  $       .41  $      (.02) $       .27  $       .23  $       .37
  Dividends Declared:
    Ordinary Income..........................  $       .05  $       .32  $       .39  $       .26  $      1.00
    Return of Capital........................          .83          .56          .49          .92          .58
                                               -----------  -----------  -----------  -----------  -----------
                                               $       .88  $       .88  $       .88  $      1.18  $      1.58
Weighted Average Number of Shares
 Outstanding.................................    8,280,051    8,280,052    8,092,024    5,264,627    5,264,786
OTHER DATA
Funds From Operations (1)(2).................  $     8,824  $     8,018  $     7,629  $     5,978  $     5,548
</TABLE>
 
------------------------
(1) Persons formerly related to the Company are obligated to pay certain amounts
    to  the  Company  as  described  in  the  Notes  to  Consolidated  Financial
    Statements. Such amounts are not included in the Funds From Operations shown
    above.
 
(2)  Management considers Funds From Operations  to be an appropriate measure of
    the performance  of  an  equity  REIT. The  Company  calculates  Funds  From
    Operations  based upon the definition adopted by the National Association of
    Real Estate Investment Trusts ("NAREIT").  Funds From Operations is  defined
    as  net income before gains/losses from property sales adjusted for non-cash
    items in the income statement, such as depreciation and amortization.  Funds
    From  Operations should not be considered by the reader as an alternative to
    net income as an indicator of the Company's operating performance or to cash
    flows as a measure of liquidity.
 
    The Funds  From Operations  reported above  do not  reflect  recommendations
    contained  in the Funds From Operations  White Paper (the "FFO White Paper")
    recently adopted by NAREIT to standardize financial reporting by real estate
    investment trusts. The FFO  White Paper is  suggested for reporting  periods
    beginning in 1996.
 
<TABLE>
<CAPTION>
                                                                        DECEMBER 31,
                                               ---------------------------------------------------------------
                                                  1995         1994         1993         1992         1991
                                               -----------  -----------  -----------  -----------  -----------
<S>                                            <C>          <C>          <C>          <C>          <C>
Real Estate Investments:
  Property, net..............................  $   127,765  $   127,261  $   116,439  $   119,866  $    86,921
  Investment in Mid-America Bethal...........       15,597       16,367       16,522       15,732       15,084
  Interest in Twin Oaks Centre, net..........      --             2,953        5,697        5,276      --
  Investment in Valley Park Centre...........      --           --             2,889        3,498        4,328
  Construction and Other Loan Agreements.....      --           --           --           --            16,003
                                               -----------  -----------  -----------  -----------  -----------
                                               $   143,362  $   146,581  $   141,547  $   144,372  $   122,336
 
Total Assets.................................  $   150,339  $   151,442  $   147,178  $   151,049  $   126,789
Mortgages and Notes Payable..................  $    65,592  $    63,486  $    51,868  $    78,105  $    48,278
Shareholders' Equity.........................  $    82,916  $    86,813  $    94,081  $    72,381  $    77,372
Shares Outstanding...........................    8,280,524    8,279,892    8,264,627    5,264,627    5,264,627
</TABLE>
 
                                       8
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS
 
    The  Company was organized in October 1986 as a real estate investment trust
and first issued shares of  its common stock to the  public in December 1986  to
finance  the acquisition  of seven  properties. Since  that time,  19 additional
properties (or equity interests therein)  have been acquired through cash,  debt
financing  and/or in exchange for common  stock. The following discussion should
be read  in conjunction  with the  Consolidated Financial  Statements and  Notes
thereto.
 
    Certain  reclassifications,  as  described  in  the  Notes  to  Consolidated
Financial Statements, have been made to prior year financial data to conform  to
those classifications used in 1995.
 
CAPITAL RESOURCES AND LIQUIDITY
 
    The  Company's  primary  sources  of  funds  are  (i)  cash  generated  from
operations which includes  dividends from Mid-America  Bethal, (ii)  borrowings,
(iii)  sales of real estate, and  (iv) principal repayments on notes receivable.
Management anticipates that these sources  will provide the necessary funds  for
its  operating expenses, interest expense on outstanding indebtedness, recurring
capital expenditures  and  dividends to  shareholders  in accordance  with  REIT
requirements,  during the next  twelve months. Management  also believes that it
has capital,  and the  access to  capital resources,  sufficient to  expand  and
develop its business in accordance with its strategy for growth. In general, the
Company  intends to  acquire and finance  additional real  estate properties and
investments, to the extent possible, in such a manner as to maintain the ability
to make regular distributions to  shareholders. However, the future issuance  of
debt or equity securities by the Company or the acquisition of new properties or
investments could affect the yield to shareholders.
 
    At  December 31,  1995, the  Company had  invested approximately  95% of its
assets in  enclosed  malls  and neighborhood  shopping  centers,  including  the
Company's  investment  in Mid-America  Bethal.  The remainder  of  the Company's
assets primarily consisted of accounts and notes receivable.
 
    Net cash flows  from investing  activities were ($424,000).  Net cash  flows
provided  during  1995  from  the  sales of  real  estate  totaled  $469,000. In
addition, net proceeds from the  Company's Yield Maintenance Agreement with  the
former  related  parties totaled  approximately  $1,027,000 for  the  year ended
December  31,  1995.  Also  during  1995,  the  Company  invested  approximately
$1,850,000   in  expansion  projects,  tenant  improvements  and  other  capital
expenditures.
 
    Net cash flows from financing  activities were ($8,432,000). Dividends  paid
for  the year ended December 31, 1995 were  $.88 per share or $7,286,000. At the
present time, the  Company has sufficient  funds to support  operations and  the
payment of the dividend in accordance with the Company's dividend policy.
 
    At  December 31, 1995, the  Company had a debt-to-equity  ratio of .79 to 1,
compared to .73 to 1 at December 31, 1994, based upon the ratio of mortgages and
notes payable to  total shareholders'  equity. The  increase in  the ratio  from
December  31,  1994  resulted  primarily from  the  Company  assuming  the first
mortgage on the Twin Oaks Centre at  the time the Company took ownership of  the
property   in  April  1995.  The  Company's   ratio  of  debt  to  total  market
capitalization was 51% at both December 31, 1995 and December 31, 1994.
 
    During 1996, principal payments of approximately $10,405,000 under  mortgage
and revolving credit agreements will mature. The mortgages collateralized by the
Twin  Oaks Centre ($3,692,000 at 8.25%) are expected to be extended for a period
of  three  years  by  the  existing  lender.  The  acquisition  line  of  credit
collateralized  by Thunderbird  Mall, Delta Plaza,  Macon County  Plaza and Town
West Center matures in  July 1996 ($5,559,000 at  9.00%). Management intends  to
seek permanent financing on one or more of the Company's unencumbered properties
with the proceeds used to pay down the maturing acquisition line of credit.
 
                                       9
<PAGE>
RESULTS OF OPERATIONS -- YEARS ENDED DECEMBER 31, 1995 AND 1994
 
    Net  income for the year ended December 31, 1995 was $3,384,000, or $.41 per
share, which included net gains on sales of real estate of $189,000, or $.02 per
share. These results compare to a net loss for the year ended December 31,  1994
of  $128,000  or $.02  per share,  which included  a provision  for loss  on the
Company's interest in Twin Oaks Centre of  $3,150,000 or $.38 per share and  net
gains on sales of real estate of $690,000 or $.08 per share.
 
    The  increase in net income for the year ended December 31, 1995 compared to
the year  ended  December 31,  1994  was primarily  due  to increased  base  and
percentage  rents and the impact of the Company's expense reduction initiatives.
In addition,  as described  above, the  year ended  December 31,  1994  included
$3,150,000 for the loss provision related to the Company's interest in Twin Oaks
Centre. The Company also experienced an increase of $1,181,000 in total revenues
and  a $60,000  increase from  the Company's  equity in  earnings of Mid-America
Bethal.
 
    RENTAL INCOME
 
    Rental income for the year ended December 31, 1995 was $16,564,000  compared
to  $15,615,000 for the year ended December 31, 1994, an increase of $949,000 or
6%. Rental income recorded during the year ended December 31, 1995 from the Twin
Oaks Centre (acquired April 1995) was $368,000. Also impacting the 1995 increase
in rental income  was the full  year impact of  Fitchburg Ridge Shopping  Center
(acquired  August 1994). Fitchburg  rental income was  $305,000 and $105,000 for
the years ended December 31, 1995  and 1994, respectively. The remainder of  the
increase reflects the effect of new leases and rent increases.
 
    REIMBURSEMENT INCOME
 
    Reimbursement  income for  the year ended  December 31,  1995 was $4,834,000
compared to $4,366,000  for the  year ended December  31, 1994,  an increase  of
$468,000  or 11%. Reimbursement  income recorded during  the year ended December
31, 1995 from the Twin Oaks Centre  was $23,000. Also impacting the increase  in
reimbursement   income  was   the  full   year  effect   of  1994  acquisitions.
Specifically, reimbursement income for Southport Centre (acquired January  1994)
and Fitchburg Ridge Shopping Center (acquired August 1994) together was $809,000
and  $532,000, respectively, for  the twelve months ended  December 31, 1995 and
1994, respectively. The  remainder of the  increase reflects the  effect of  new
leases.
 
    PROPERTY MANAGEMENT INCOME
 
    Property  management income, which primarily  consists of lease and property
management fees from properties managed for Mid-America Bethal, was $200,000 for
the year  ended  December 31,  1995  compared to  $211,000  for the  year  ended
December  31, 1994, a decrease of $11,000 or 5%. The decrease is attributable to
fewer new leases at properties owned by Mid-America Bethal during 1995  compared
to 1994.
 
    OTHER INCOME
 
    Other  income for the year ended December  31, 1995 was $735,000 compared to
$960,000 for the year ended  December 31, 1994, a  decrease of $225,000 or  23%.
The  decrease is  primarily attributable  to approximately  $300,000 of interest
income in 1994 related to the Company's investment in Twin Oaks Centre. In April
1995, the Company entered into a Settlement Agreement with the Twin Oaks  Centre
Limited  Partnership resulting in the Company  taking ownership of the Twin Oaks
Centre. See Note D to the Company's Consolidated Financial Statements.
 
    REAL ESTATE TAXES
 
    Real estate  taxes for  the year  ended December  31, 1995  were  $3,063,000
compared  to $2,815,000  for the  year ended December  31, 1994,  an increase of
$248,000 or 9%. The increase is due  primarily to the full year impact of  prior
year   acquisitions  and  the  acquisition  of   the  Twin  Oaks  Centre  during
 
                                       10
<PAGE>
1995. Real estate  taxes related  to the  Southport Centre  and Fitchburg  Ridge
Shopping  Center recorded during the year ended  December 31, 1995 and 1994 were
$605,000 and $410,000, respectively. Real estate taxes related to the Twin  Oaks
Centre recorded during the year ended December 31, 1995 were $33,000.
 
    OTHER PROPERTY COSTS
 
    Other  property costs for  the year ended December  31, 1995 were $3,674,000
compared to $3,651,000  for the  year ended December  31, 1994,  an increase  of
$23,000  or 1%. Other property costs recorded during the year ended December 31,
1995 and  1994 related  to the  Southport Centre  and Fitchburg  Ridge  Shopping
Center  together were $201,000 and  $132,000, respectively. Other property costs
recorded at Twin Oaks for the year  ended December 31, 1995 were $40,000.  These
increased  costs were somewhat mitigated by  a decrease in weather related costs
(i.e., snow removal, utilities, etc.).
 
    INTEREST EXPENSE
 
    Interest expense  for  the  year  ended December  31,  1995  was  $5,965,000
compared  to $5,389,000  for the  year ended December  31, 1994,  an increase of
$576,000 or 11%. The increase is due primarily to the increase in average  total
debt  in  1995 over  1994 and  an increase  in  the average  cost of  funds. The
Company's average  total  debt  was  $65,113,000 for  the  twelve  months  ended
December  31, 1995 compared to $61,014,000  for the twelve months ended December
31, 1994. In addition,  the average cost  of funds for  the twelve months  ended
December 31, 1995 was 9.17% compared to 8.77% during the same period in 1994.
 
    ADMINISTRATIVE EXPENSES
 
    Administrative expenses for the year ended December 31, 1995 were $1,458,000
compared  to $1,540,000  for the  year ended  December 31,  1994, a  decrease of
$82,000 or 5%.  This decrease  reflects the full  year impact  of improved  cost
control throughout the Company initiated during 1994.
 
    PROPERTY MANAGEMENT EXPENSES
 
    Property  management  expenses for  the year  ended  December 31,  1995 were
$812,000 compared to $1,277,000 for the year ended December 31, 1994, a decrease
of $465,000 or 36%. This decrease reflects the full year impact of improved cost
control throughout  the  Company initiated  during  1994. The  most  significant
impact of these cost controls was a reduction in the number of personnel.
 
    DEPRECIATION AND AMORTIZATION
 
    Depreciation  and amortization expense for the  year ended December 31, 1995
was $5,125,000 compared to $5,047,000 for  the year ended December 31, 1994,  an
increase  of $78,000 or 2%. Depreciation and amortization expense related to the
Twin Oaks Centre recorded during the  year ended December 31, 1995 was  $62,000.
The  remainder of  the increase  related primarily  to renovation  and expansion
projects and tenant finish projects which were completed during 1995.
 
    PROVISION FOR LOSS ON INTEREST IN TWIN OAKS CENTRE
 
    The Company recorded a  loss reserve relating to  its interest in Twin  Oaks
Centre for the year ended December 31, 1994 of $3,150,000. This amount reflected
charges  to reduce  the recorded value  of the  Company's loan to  the Twin Oaks
Centre Limited  Partnership  ("the  Partnership")  (which  is  recorded  on  the
Consolidated  Balance Sheet as "Interest in Twin Oaks Centre") to the fair value
of the  underlying collateral.  The collateral  for the  Company's loan  to  the
Partnership  included the Twin  Oaks Centre (the  "Centre") a 95,000 square-foot
neighborhood shopping center  in Silvis, Illinois,  and tax increment  financing
bonds  issued in connection with the Centre. Walgreens, a major anchor tenant of
the Centre, vacated in the second quarter of 1994. Although Walgreens  continued
to  pay rent, management  reviewed the adverse  effect of the  Walgreens exit on
property lease-up and  cash flows  from the  tax increment  financing bonds  and
provided  additional loss  reserves with  respect to  the Company's  loan on the
property in the second quarter of 1994.  On April 19, 1995, the Company  entered
into a settlement agreement with the Partnership. The Partnership was in default
on  a mortgage loan to the Company. Pursuant to the settlement, the Company took
ownership of the
 
                                       11
<PAGE>
underlying collateral  which  consisted of  the  Centre and  the  tax  increment
financing bonds. All litigation against the Company was dismissed as part of the
settlement. See Note D to the Company's Consolidated Financial Statements.
 
    EQUITY IN EARNINGS OF MID-AMERICA BETHAL LIMITED PARTNERSHIP
 
    The  Company's equity in earnings  of Mid-America Bethal Limited Partnership
for the year ended December 31, 1995  was $959,000 compared to $899,000 for  the
year  ended December 31, 1994, an increase of $60,000 or 7%. The increase is the
result of the net impact  of lease up of vacant  space during 1995 and the  full
year  impact of 1994 leases. Also impacting  this increase was a decrease in bad
debt expense during the twelve months ended December 31, 1995 as compared to the
same period of 1994.
 
RESULTS OF OPERATIONS -- YEARS ENDED DECEMBER 31, 1994 AND 1993
 
    The net loss for the year ended December 31, 1994 was $128,000, or $.02  per
share,  which included a  provision for loss  on the Company's  interest in Twin
Oaks Centre of $3,150,000,  or $.38 per  share, and net gains  on sales of  real
estate  of $690,000, or $.08 per share.  These results compare to net income for
the year ended December 31, 1993 of $2,196,000 or $.27 per share.
 
    The decrease in net income for the year ended December 31, 1994 compared  to
the  year  ended December  31,  1993 was  primarily  due to  the  following: the
provision for loss on the Company's interest in Twin Oaks Centre of  $3,150,000,
an  increase of $734,000  in interest expense,  an increase of  $797,000 in real
estate taxes and other property costs,  an increase of $525,000 in  depreciation
and  amortization  and  an  increase  of  $662,000  in  property  management and
administrative expenses. The Company also experienced an increase of  $2,719,000
in total revenues, a $672,000 increase from gains on sales of real estate, and a
$153,000 increase from the Company's equity in Mid-America Bethal.
 
    RENTAL INCOME
 
    Rental  income for the year ended December 31, 1994 was $15,615,000 compared
to $13,336,000 for the year ended  December 31, 1993, an increase of  $2,279,000
or  17%. Rental income recorded during the year ended December 31, 1994 from the
Southport Centre (acquired  January 1994)  and Fitchburg  Ridge Shopping  Center
(acquired  August 1994) was $1,624,000 and $105,000, respectively. The remainder
of the increase reflects the effect of new leases and rent increases.
 
    REIMBURSEMENT INCOME
 
    Reimbursement income for  the year  ended December 31,  1994 was  $4,366,000
compared  to $3,694,000  for the  year ended December  31, 1993,  an increase of
$672,000 or 18%. Reimbursement  income recorded during  the year ended  December
31,  1994  from the  Southport Centre  and Fitchburg  Ridge Shopping  Center was
$498,000 and $34,000, respectively. The  remainder of the increase reflects  the
effect of new leases.
 
    PROPERTY MANAGEMENT INCOME
 
    Property  management income, which primarily  consists of lease and property
management fees from properties managed for Mid-America Bethal, was $211,000 for
the year  ended  December 31,  1994  compared to  $222,000  for the  year  ended
December 31, 1993, a decrease of $11,000 or 5%. The decrease was attributable to
fewer  new leases at properties owned by Mid-America Bethal during 1994 compared
to 1993.
 
    OTHER INCOME
 
    Other income for the year ended  December 31, 1994 was $960,000 compared  to
$1,181,000  for the year ended December 31, 1993, a decrease of $221,000 or 19%.
The decrease  was primarily  attributable  to a  $130,000 decrease  in  interest
income  related  to  the  Company's  interest  in  Twin  Oaks  Centre  and notes
receivable.
 
                                       12
<PAGE>
    REAL ESTATE TAXES
 
    Real  estate  taxes for  the year  ended December  31, 1994  were $2,815,000
compared to $2,424,000  for the  year ended December  31, 1993,  an increase  of
$391,000 or 16%. Real estate taxes related to the Southport Centre and Fitchburg
Ridge  Shopping Center  recorded during  the year  ended December  31, 1994 were
$410,000.
 
    OTHER PROPERTY COSTS
 
    Other property costs for  the year ended December  31, 1994 were  $3,651,000
compared  to $3,245,000  for the  year ended December  31, 1993,  an increase of
$406,000 or 13%. Other  property costs recorded during  the year ended  December
31,  1994 related  to the Southport  Centre and Fitchburg  Ridge Shopping Center
were $132,000. The remainder of the increase related primarily to higher general
liability and property insurance costs and repairs and maintenance.
 
    INTEREST EXPENSE
 
    Interest expense  for  the  year  ended December  31,  1994  was  $5,389,000
compared  to $4,655,000  for the  year ended December  31, 1993,  an increase of
$734,000 or 16%. Interest expense related to the Southport Centre and  Fitchburg
Ridge  Shopping  Center recorded  during the  year ended  December 31,  1994 was
$1,018,000 and $57,000, respectively. These  increases in interest expense  were
offset  by the full  year impact of the  reduction of debt  by proceeds from the
January 1993 issuance of common stock.
 
    ADMINISTRATIVE EXPENSES
 
    Administrative expenses for the year ended December 31, 1994 were $1,540,000
compared to $1,299,000  for the  year ended December  31, 1993,  an increase  of
$241,000  or  19%. The  increase  related primarily  to  a $150,000  increase in
personnel, legal and  consulting costs  and a  $50,000 increase  related to  the
Company's name change.
 
    PROPERTY MANAGEMENT EXPENSES
 
    Property  management  expenses for  the year  ended  December 31,  1994 were
$1,277,000 compared  to  $856,000 for  the  year  ended December  31,  1993,  an
increase  of $421,000  or 49%.  The increase  related primarily  to an increased
number of acquisition, leasing and marketing personnel.
 
    DEPRECIATION AND AMORTIZATION
 
    Depreciation and amortization expense for  the year ended December 31,  1994
was  $5,047,000 compared to $4,522,000 for the  year ended December 31, 1993, an
increase of $525,000 or  12%. Depreciation and  amortization expense related  to
the  Southport  Centre  and Fitchburg  Ridge  Shopping Center  was  $292,000 and
$16,000, respectively.  The  remainder  of the  increase  related  primarily  to
renovation  and  expansion  projects  and  tenant  finish  projects  which  were
completed in the fourth quarter of 1993 and the first quarter of 1994.
 
    PROVISION FOR LOSS ON INTEREST IN TWIN OAKS CENTRE
 
    See "Results of  Operations --  Years Ended December  31, 1995  and 1994  --
Provision for Loss on Interest in Twin Oaks Centre".
 
    EQUITY IN EARNINGS OF MID-AMERICA BETHAL LIMITED PARTNERSHIP
 
    The  Company's equity in earnings  of Mid-America Bethal Limited Partnership
for the year ended December 31, 1994  was $899,000 compared to $746,000 for  the
year  ended December 31, 1993, an increase  of $153,000 or 21%. The increase was
the result  of  leasable space  at  one  of Bethal's  properties  increasing  by
approximately  50,000 square  feet through the  construction of  a 91,000 square
foot Kmart. The store  opened for business and  commenced paying annual rent  of
$461,000 in November 1993.
 
FUNDS FROM OPERATIONS
 
    Management  considers Funds From Operations to  be an appropriate measure of
the performance of an equity REIT. The Company defines Funds From Operations  as
net income before gains/losses
 
                                       13
<PAGE>
from property sales adjusted for non-cash items in the income statement, such as
depreciation and amortization. Funds From Operations should not be considered by
the  reader as  an alternative to  net income  as an indicator  of the Company's
operating performance or to cash flows as a measure of liquidity.
 
    Funds From Operations were $8,824,000 for  the year ended December 31,  1995
compared  to $8,018,000 for  the year ended  December 31, 1994.  The increase of
$806,000 was attributable to the full year impact of the August 1994 acquisition
of Fitchburg Ridge  Shopping Center,  the April  1995 acquisition  of Twin  Oaks
Centre  and, to a lesser degree, increased base and percentage rents and reduced
property management expenses resulting from the Company's cost reduction program
initiated in the fourth quarter of 1994.
 
    Funds From Operations is computed as follows:
 
<TABLE>
<CAPTION>
                                                                               YEAR ENDED DECEMBER 31,
                                                                           -------------------------------
                                                                             1995       1994       1993
                                                                           ---------  ---------  ---------
                                                                                   (IN THOUSANDS)
<S>                                                                        <C>        <C>        <C>
Net Income (Loss)........................................................  $   3,384  $    (128) $   2,196
Accruals for "straight-line" rents.......................................        (96)      (139)       (45)
Depreciation and Amortization (1)........................................      5,125      5,047      4,522
Provision for loss on Interest in Twin Oaks Centre.......................     --          3,150     --
Gains on Sales of Real Estate, net (2)...................................       (189)      (690)       (18)
Investment in Mid-America Bethal:
  Equity in Earnings.....................................................       (959)      (899)      (746)
  Equity in Funds From Operations (3)....................................      1,559      1,493      1,303
Investment in Valley Park Centre:
  Equity in Loss.........................................................     --             53         66
  Equity in Funds From Operations........................................     --            122        342
Other....................................................................     --              9          9
                                                                           ---------  ---------  ---------
Funds From Operations (4)................................................  $   8,824  $   8,018  $   7,629
                                                                           ---------  ---------  ---------
                                                                           ---------  ---------  ---------
</TABLE>
 
The  Funds  From  Operations  reported  above  do  not  reflect  recommendations
contained  in  the Funds  From Operations  White Paper  (the "FFO  White Paper")
recently adopted by the National Association of Real Estate Investment Trusts to
standardize financial  reporting  by  real estate  investment  trusts.  Had  the
Company adopted the recommendations prescribed in the FFO White Paper, (which is
suggested  for reporting periods  beginning in 1996),  Funds From Operations for
the twelve months  ended December 31,  1995 and 1994,  respectively, would  have
been approximately $193,000 and $172,000 lower than reported.
------------------------
(1) Depreciation and amortization for the year ended December 31, 1995 and 1994,
    respectively,  consisted  of real  property  depreciation of  $4,389,000 and
    $4,299,000,  other   depreciation  of   $61,000  and   $73,000,  lease   fee
    amortization of $366,000 and $343,000, loan fee amortization of $207,000 and
    $278,000,  and intangible amortization of  $102,000 and $54,000. Repairs and
    maintenance expensed as "Property Costs"  totaled $895,000 and $948,000  for
    the years ended December 31, 1995 and 1994, respectively.
 
(2) Gains on sales of real estate for the year ended December 31, 1995 consisted
    of  a $189,000 gain from  the sale of two outlot  parcels. Gains on sales of
    real estate for the year ended  December 31, 1994 consisted of a  $1,260,000
    gain  from the payoff of the Valley Park Centre loan, gains of $220,000 from
    the sale of two outlots and a $790,000 loss on the sale of Village Square.
 
(3) Equity in Funds From  Operations of Mid-America Bethal  for the years  ended
    December   31,  1995   and  1994,   respectively,  included   real  property
    depreciation of  $542,000 and  $548,000, other  depreciation of  $6,000  and
    $13,000, and lease fee amortization of $39,000 and $25,000.
 
                                       14
<PAGE>
(4) Beginning with the quarter ended March 31, 1994, the Company began reporting
    Funds From Operations without the impact of amounts owed by persons formerly
    related  to the Company as described  in the Notes to Consolidated Financial
    Statements. Such amounts are not included  in Funds From Operations for  any
    year presented above.
 
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
    The  financial  statements  required  by this  item  appear  in  the audited
consolidated financial statements  and schedules included  herein and listed  in
the  index on page  17 of this  report. The supplementary  data required by this
item appears at footnote M entitled "Quarterly Information (Unaudited)" on  page
35 of this report.
 
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE
 
    There has been no change in the Company's independent accountants during the
two most recent fiscal years.
 
                                    PART III
 
ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 
    The  information required by  this Item is incorporated  by reference to the
Sections entitled "Persons Nominated for  Election as Directors" and  "Executive
Officers of the Company" in the 1996 Proxy Statement.
 
ITEM 11.  EXECUTIVE COMPENSATION
 
    The  information required by  this Item is incorporated  by reference to the
Sections entitled "Director  Meetings and  Compensation", "Summary  Compensation
Table",  "Option Grants in 1995", "Option  Exercises in 1995 and Year-End Values
Table", and "Employment Agreements" in the 1996 Proxy Statement.
 
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
    The information required by  this Item is incorporated  by reference to  the
Sections  entitled "Ownership of Shares by Directors and Executive Officers" and
"Ownership of Certain Beneficial Owners" in the 1996 Proxy Statement.
 
ITEM 13.  CERTAIN TRANSACTIONS AND RELATIONSHIPS
 
    The Company has no transactions or relationships reportable pursuant to this
Item.
 
                                    PART IV
 
ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
 
(A) THE FOLLOWING DOCUMENTS ARE FILED AS PART OF THIS REPORT:
 
    (1) Financial Statements:
 
        The  audited  Consolidated   Financial  Statements   and  Schedules   of
        Mid-America  Realty Investments, Inc. are  included herein and listed on
        the index on page 17 of this report.
 
    (2) Financial Statement Schedules:
 
        Certain financial statement schedules of Mid-America Realty Investments,
        Inc. are included  herein and listed  on the  index on page  17 of  this
        report.
 
    (3) Exhibits:
 
        The Exhibit Index, set forth below, is incorporated herein by reference.
 
                                       15
<PAGE>
(B) REPORTS ON FORM 8-K
 
    The  Company did not file any reports on Form 8-K during the last quarter of
the fiscal year ended December 31, 1995.
 
(C) EXHIBITS
 
    See Item 14(a)(3) above.
 
(D) FINANCIAL STATEMENTS REQUIRED BY REGULATIONS S-X WHICH ARE EXCLUDED FROM THE
    ANNUAL REPORT BY RULE 14A-3(B)
 
    The  financial  statements  and  schedules  of  Mid-America  Bethal  Limited
Partnership  (financial statements  of significant subsidiary,  pursuant to Rule
3-09) are filed as part of this report.
 
                                       16
<PAGE>
                      MID-AMERICA REALTY INVESTMENTS, INC.
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                 AND CONSOLIDATED FINANCIAL STATEMENT SCHEDULE
 
    The  following  Consolidated  Financial  Statements  of  Mid-America  Realty
Investments, Inc. and the related  Independent Auditors' Report are included  in
Item 8 and Item 14(a)(1):
 
<TABLE>
<CAPTION>
                                                                                         PAGE
                                                                                       ---------
<S>                                                                                    <C>
Report of Management.................................................................     18
Independent Auditors' Report.........................................................     19
Consolidated Balance Sheets at December 31, 1995 and 1994............................     20
Consolidated Statements of Operations for the Years Ended December 31, 1995, 1994 and
 1993................................................................................     21
Consolidated Statements of Shareholders' Equity for the Years Ended December 31,
 1995, 1994 and 1993.................................................................     22
Consolidated Statements of Cash Flows for the Years Ended December 31, 1995, 1994 and
 1993................................................................................     23
Notes to Consolidated Financial Statements...........................................     25
</TABLE>
 
    The  following  Consolidated  Financial  Statement  Schedule  of Mid-America
Realty Investments, Inc. is included in Item 14(a)(2):
 
<TABLE>
<S>                                                                   <C>
Schedule III -- Real Estate and Accumulated Depreciation............     36
</TABLE>
 
    All other schedules have been omitted because they are not applicable or not
required, or  because the  required  information is  shown in  the  consolidated
financial statements or notes thereto.
 
                                       17
<PAGE>
                              REPORT OF MANAGEMENT
 
    The  management of Mid-America Realty Investments,  Inc. has prepared and is
responsible for  the  consolidated  financial  statements  and  other  financial
information included in this Form 10-K Annual Report. The consolidated financial
statements  have been prepared in  conformity with generally accepted accounting
principles and  include  amounts that  are  based upon  informed  judgments  and
estimates  by management. The other financial  information in this annual report
is consistent with the consolidated financial statements.
 
    The Company maintains a system  of internal accounting controls.  Management
believes  the  internal accounting  controls  provide reasonable  assurance that
transactions are executed  and recorded  in accordance with  Company policy  and
procedures  and that  the accounting  records may  be relied  on as  a basis for
preparation  of  the  consolidated  financial  statements  and  other  financial
information.
 
    The Audit Committee of the Board of Directors, composed of directors who are
not  employees  of  the  Company, meets  periodically  with  management  and the
independent auditors to discuss the adequacy of internal accounting controls and
the quality of financial reporting. The independent auditors have full and  free
access to the Audit Committee.
 
[SIG]                                           [SIG]
 
<TABLE>
<S>                                            <C>
Jerome L. Heinrichs                            Dennis G. Gethmann
CHAIRMAN AND CHIEF EXECUTIVE OFFICER           PRESIDENT AND CHIEF OPERATING OFFICER
</TABLE>
 
                                       18
<PAGE>
                          INDEPENDENT AUDITORS' REPORT
 
The Board of Directors and Shareholders
Mid-America Realty Investments, Inc.
 
    We  have audited the accompanying consolidated balance sheets of Mid-America
Realty Investments, Inc. and  subsidiary as of December  31, 1995 and 1994,  and
the  related consolidated  statements of  operations, shareholders'  equity, and
cash flows for each of  the three years in the  period ended December 31,  1995.
Our audits also included the financial statement schedule listed in the Index at
Item  14(a)(2). These financial statements  and financial statement schedule are
the responsibility of the Company's management. Our responsibility is to express
an opinion on the financial statements and financial statement schedule based on
our audits.
 
    We conducted  our  audits in  accordance  with generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the 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,  such consolidated financial  statements present fairly,  in
all material respects, the financial position of Mid-America Realty Investments,
Inc.  and subsidiary as of December 31, 1995  and 1994, and the results of their
operations and their cash flows for each of the three years in the period  ended
December  31, 1995 in conformity  with generally accepted accounting principles.
Also, in  our opinion,  such financial  statement schedule,  when considered  in
relation  to  the  basic consolidated  financial  statements taken  as  a whole,
presents fairly in all material respects the information set forth therein.
 
DELOITTE & TOUCHE LLP
 
February 1, 1996
Omaha, Nebraska
 
                                       19
<PAGE>
              MID-AMERICA REALTY INVESTMENTS, INC. AND SUBSIDIARY
                          CONSOLIDATED BALANCE SHEETS
                        (COLUMNAR DOLLARS IN THOUSANDS)
                                     ASSETS
 
<TABLE>
<CAPTION>
                                                                                                DECEMBER 31,
                                                                                          ------------------------
                                                                                             1995         1994
                                                                                          -----------  -----------
<S>                                                                                       <C>          <C>
Cash....................................................................................  $   --       $   --
Accounts receivable, net of allowance of $175,000 and $161,000..........................        1,497        1,345
Notes receivable, net of allowance of $160,000..........................................          742          866
Property:
  Land and land improvements............................................................       37,567       36,812
  Buildings.............................................................................      113,602      109,356
  Equipment and fixtures................................................................          559          559
  Construction-in-progress..............................................................          287          334
                                                                                          -----------  -----------
                                                                                              152,015      147,061
  Less: Accumulated depreciation........................................................      (24,250)     (19,800)
                                                                                          -----------  -----------
                                                                                              127,765      127,261
Interest in Twin Oaks Centre, net of allowances of $0 and $4,900,000....................      --             2,953
Investment in Mid-America Bethal Limited Partnership....................................       15,597       16,367
Intangible assets, less accumulated amortization of $2,948,000 and $3,503,000...........        2,042        2,463
Other assets............................................................................        2,696          187
                                                                                          -----------  -----------
                                                                                          $   150,339  $   151,442
                                                                                          -----------  -----------
                                                                                          -----------  -----------
 
                                       LIABILITIES AND SHAREHOLDERS' EQUITY
 
Mortgages and notes payable.............................................................  $    65,592  $    63,486
Accrued liabilities.....................................................................        1,831        1,143
                                                                                          -----------  -----------
    Total Liabilities...................................................................       67,423       64,629
 
Commitments and Contingencies
 
Shareholders' Equity:
  Common stock, $.01 par value; authorized 25,000,000 shares; issued and outstanding
   8,280,524 and 8,279,892 shares.......................................................           83           83
  Capital in excess of par value........................................................      119,682      119,677
  Distributions in excess of net income.................................................      (36,849)     (32,947)
                                                                                          -----------  -----------
    Total Shareholders' Equity..........................................................       82,916       86,813
                                                                                          -----------  -----------
                                                                                          $   150,339  $   151,442
                                                                                          -----------  -----------
                                                                                          -----------  -----------
</TABLE>
 
                See notes to consolidated financial statements.
 
                                       20
<PAGE>
              MID-AMERICA REALTY INVESTMENTS, INC. AND SUBSIDIARY
                     CONSOLIDATED STATEMENTS OF OPERATIONS
             (COLUMNAR DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
 
<TABLE>
<CAPTION>
                                                                                  YEAR ENDED DECEMBER 31,
                                                                           -------------------------------------
                                                                              1995         1994         1993
                                                                           -----------  -----------  -----------
<S>                                                                        <C>          <C>          <C>
REVENUES
  Rental income..........................................................  $    16,564  $    15,615  $    13,336
  Reimbursement income...................................................        4,834        4,366        3,694
  Property management and leasing income.................................          200          211          222
  Other income...........................................................          735          960        1,181
                                                                           -----------  -----------  -----------
    Total Revenues.......................................................       22,333       21,152       18,433
 
EXPENSES
  Real estate taxes......................................................        3,063        2,815        2,424
  Other property costs...................................................        3,674        3,651        3,245
  Interest expense.......................................................        5,965        5,389        4,655
  Administrative expenses................................................        1,458        1,540        1,299
  Property management and leasing expenses...............................          812        1,277          856
  Depreciation and amortization..........................................        5,125        5,047        4,522
  Provision for loss on interest in Twin Oaks Centre.....................      --             3,150      --
                                                                           -----------  -----------  -----------
  Total Expenses.........................................................       20,097       22,869       17,001
                                                                           -----------  -----------  -----------
Income (Loss) Before Equity in Earnings of Mid-America Bethal Limited
 Partnership and Gains on Sales of Real Estate, net......................        2,236       (1,717)       1,432
Equity in Earnings of Mid-America Bethal Limited Partnership.............          959          899          746
                                                                           -----------  -----------  -----------
INCOME (LOSS) FROM OPERATIONS............................................        3,195         (818)       2,178
Gains on Sales of Real Estate, net.......................................          189          690           18
                                                                           -----------  -----------  -----------
NET INCOME (LOSS)........................................................  $     3,384  $      (128) $     2,196
                                                                           -----------  -----------  -----------
                                                                           -----------  -----------  -----------
Weighted Average Shares Outstanding During Period........................    8,280,051    8,280,052    8,092,024
                                                                           -----------  -----------  -----------
                                                                           -----------  -----------  -----------
NET INCOME (LOSS) PER COMMON SHARE.......................................  $       .41  $      (.02) $       .27
                                                                           -----------  -----------  -----------
                                                                           -----------  -----------  -----------
</TABLE>
 
                See notes to consolidated financial statements.
 
                                       21
<PAGE>
              MID-AMERICA REALTY INVESTMENTS, INC. AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                        (COLUMNAR DOLLARS IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                               CAPITAL IN   DISTRIBUTIONS
                                                                    COMMON      EXCESS OF   IN EXCESS OF
                                                                     STOCK      PAR VALUE    NET INCOME     TOTAL
                                                                  -----------  -----------  ------------  ---------
<S>                                                               <C>          <C>          <C>           <C>
BALANCE, JANUARY 1, 1993........................................   $      53   $    92,783   $  (20,455)  $  72,381
  Issuance of shares (net of costs of $1,723,000)...............          30        26,747       --          26,777
  Net income....................................................      --           --             2,196       2,196
  Dividends declared and paid -- $.88 per share.................      --           --            (7,273 )    (7,273)
                                                                         ---   -----------  ------------  ---------
BALANCE, DECEMBER 31, 1993......................................          83       119,530      (25,532 )    94,081
  Issuance of shares............................................      --               150      --              150
  Repurchase of shares..........................................      --                (3)     --               (3)
  Net loss......................................................      --           --              (128 )      (128)
  Dividends declared and paid -- $.88 per share.................      --           --            (7,287 )    (7,287)
                                                                         ---   -----------  ------------  ---------
BALANCE, DECEMBER 31, 1994......................................          83       119,677      (32,947 )    86,813
  Issuance of shares............................................      --                 5      --                5
  Net income....................................................      --           --             3,384       3,384
  Dividends declared and paid -- $.88 per share.................      --           --            (7,286 )    (7,286)
                                                                         ---   -----------  ------------  ---------
BALANCE, DECEMBER 31, 1995......................................  $       83   $   119,682  $   (36,849 ) $  82,916
                                                                         ---   -----------  ------------  ---------
                                                                         ---   -----------  ------------  ---------
</TABLE>
 
                See notes to consolidated financial statements.
 
                                       22
<PAGE>
              MID-AMERICA REALTY INVESTMENTS, INC. AND SUBSIDIARY
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                        (COLUMNAR DOLLARS IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                                   YEAR ENDED DECEMBER 31,
                                                                              ----------------------------------
                                                                                 1995        1994        1993
                                                                              ----------  ----------  ----------
<S>                                                                           <C>         <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net Income (Loss).........................................................  $    3,384  $     (128) $    2,196
  Adjustments:
    Depreciation and amortization...........................................       5,125       5,047       4,522
    Provision for loss on interest in Twin Oaks Centre......................      --           3,150      --
    Investment in Mid-America Bethal Limited Partnership:
      Equity in earnings....................................................        (959)       (899)       (746)
      Distributions received................................................       1,500       1,050       1,300
    Gains on sales of real estate, net......................................        (189)       (690)        (18)
    Increase (decrease) in related liabilities..............................         537         (84)         40
    (Increase) decrease in related assets...................................        (549)        324         102
    Other...................................................................           7      --             292
                                                                              ----------  ----------  ----------
  Net Cash Flows From Operating Activities..................................       8,856       7,770       7,688
 
CASH FLOWS FROM INVESTING ACTIVITIES
  Proceeds from sales of real estate........................................         469       1,224       2,188
  Principal repayments of notes receivable..................................         123         131         235
  Interest in Twin Oaks Centre..............................................      --            (406)       (309)
  Investment in Mid-America Bethal Limited Partnership......................      --          --          (1,300)
  Payments from Valley Park Centre..........................................      --           3,974         200
  Additions to property:
    Purchase of new properties..............................................      --         (14,636)     --
    Expansion projects & other capital expenditures.........................      (1,184)     (1,303)     (1,739)
    Tenant improvements.....................................................        (667)       (563)     (1,105)
  Cash paid for leasing fees................................................        (263)       (237)       (322)
  Payments from Yield Maintenance Agreement.................................       1,027         106          95
  Principal repayments of Tax Increment Financing Bonds.....................          71      --          --
  Cash paid for intangibles and other assets................................      --            (442)       (184)
                                                                              ----------  ----------  ----------
  Net Cash Flows From Investing Activities..................................        (424)    (12,152)     (2,241)
 
CASH FLOWS FROM FINANCING ACTIVITIES
  (Payments) proceeds on short-term debt, net...............................      (2,147)     12,139      (8,350)
  Proceeds of mortgages payable.............................................      14,500      --          --
  Scheduled principal payments on mortgages.................................     (13,279)       (521)    (16,966)
  Cash paid for loan fees...................................................        (220)       (131)       (143)
  Proceeds from sale of common stock........................................      --          --          28,500
  Cash paid for costs of public offering....................................      --          --          (1,684)
  Dividends paid............................................................      (7,286)     (7,287)     (7,273)
                                                                              ----------  ----------  ----------
  Net Cash Flows From Financing Activities..................................      (8,432)      4,200      (5,916)
                                                                              ----------  ----------  ----------
NET CHANGE IN CASH..........................................................      --            (182)       (469)
 
CASH, BEGINNING OF YEAR.....................................................      --             182         651
                                                                              ----------  ----------  ----------
CASH, END OF YEAR...........................................................  $   --      $   --      $      182
                                                                              ----------  ----------  ----------
                                                                              ----------  ----------  ----------
</TABLE>
 
                See notes to consolidated financial statements.
 
                                       23
<PAGE>
              MID-AMERICA REALTY INVESTMENTS, INC. AND SUBSIDIARY
               CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
 
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
 
<TABLE>
<S>        <C>        <C>
1995:      (A)        Both of the Company's acquisition lines of credit were extended, one to July  1996
                      and the other to July 1997.
           (B)        The Company extended its working line of credit two years to July 1997.
           (C)        The  Company extended the  Lakewood Mall mortgage  loan for three  years to August
                      1998.
           (D)        The Company  assumed the  Twin  Oaks Centre  loan. See  Note  D to  the  Company's
                      Consolidated Financial Statements.
 
1994:      (A)        In  connection with the acquisition of Southport Centre, the Company issued 15,585
                      shares of common stock to the seller.
           (B)        The Company obtained a $5,000,000 working  capital line of credit and allowed  its
                      existing working line of credit to expire.
           (C)        Both  of the Company's acquisition lines of  credit were extended one year to July
                      1995.
           (D)        The Company's adjustable-rate mortgage on Fairacres Shopping Center was reduced by
                      $2,000,000 and extended to July 1995. The $2,000,000 was funded through one of the
                      Company's acquisition lines of credit.
 
1993:                 None
</TABLE>
 
                See notes to consolidated financial statements.
 
                                       24
<PAGE>
              MID-AMERICA REALTY INVESTMENTS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
     (COLUMNAR DOLLARS IN FOOTNOTES ARE IN THOUSANDS EXCEPT PER SHARE DATA)
 
A.  SUMMARY OF SIGNIFICANT ACCOUNT POLICIES:
 
    NATURE   OF  OPERATIONS   --  Mid-America  Realty   Investments,  Inc.  (the
"Company"),  a   Maryland  corporation,   owns  and   manages   income-producing
properties,  primarily  enclosed malls  and  neighborhood shopping  centers. The
Company has  qualified as  a real  estate investment  trust ("REIT")  under  the
provisions of the Internal Revenue Code.
 
    At December 31, 1995, the Company owned 19 neighborhood shopping centers and
four  enclosed malls located  as follows: nine in  Nebraska, three in Wisconsin,
two each in Indiana and Minnesota, and one each in Arkansas, Georgia,  Illinois,
Iowa,  Michigan, South Dakota and Tennessee.  Additionally, the Company is a 50%
partner in Mid-America Bethal  Limited Partnership ("Mid-America Bethal")  which
owns  two  neighborhood  shopping  centers in  Nebraska  and  Wisconsin  and one
enclosed mall in Nebraska.
 
    USE OF ESTIMATES  -- In  preparing financial statements  in conformity  with
generally  accepted  accounting  principles,  management  is  required  to  make
estimates and  assumptions  that  affect  the reported  amounts  of  assets  and
liabilities  and the disclosure of contingent assets and liabilities at the date
of the  financial statements  and  revenues and  expenses during  the  reporting
period. Actual results could differ from those estimates.
 
    PRINCIPLES  OF CONSOLIDATION  -- The  consolidated financial  statements are
prepared on an accrual  basis and include  the accounts of  the Company and  its
wholly-owned  subsidiary, Mid-America Centers Corp. All significant intercompany
balances and transactions have  been eliminated. Certain reclassifications  have
been  made  to  the 1993  and  1994  financial statements  to  conform  to those
classifications used in 1995.
 
    CASH AND CASH  EQUIVALENTS -- The  Company considers short-term  investments
with a maturity at acquisition of three months or less as cash equivalents.
 
    INVESTMENT  IN MID-AMERICA BETHAL  LIMITED PARTNERSHIP --  The Company's 50%
investment in Mid-America Bethal is accounted for using the equity method.
 
    PROPERTY --  Property is  stated at  the lower  of depreciated  cost or  the
amount  estimated  to be  recoverable through  future  cash flows  from property
operations and  dispositions. Assets  are  depreciated using  the  straight-line
method  over the following lives: land improvements -- 15 years; buildings -- 40
years; tenant improvements -- shorter of the term of the lease or the  estimated
useful  life of the improvement; and equipment and  fixtures -- 5 to 7 years. In
March 1995,  the  Financial  Accounting  Standards  Board  issued  Statement  of
Financial  Accounting  Standards  No.  121, "Accounting  for  the  Impairment of
Long-Lived Assets and for  Long-Lived Assets to be  Disposed Of", effective  for
fiscal  years beginning after December 15,  1995. The adoption of the provisions
of this statement is  not expected to  have a material  impact on the  Company's
financial condition or results of operations.
 
    INTANGIBLE  ASSETS --  Fees paid for  leasing commissions on  new or renewed
leases are amortized  using the straight-line  method over the  initial term  or
extension of the lease. Costs incurred to obtain mortgages and notes payable are
being  amortized over the term of  the obligation or agreement. Other intangible
assets, primarily from the acquisition  of Mid-America Centers Corp., are  being
amortized using the straight-line method over periods of 60-120 months.
 
    LEASES -- All leases with tenants are classified as operating leases.
 
    REVENUE  RECOGNITION --  Minimum rents  from tenants  are recognized monthly
based upon total fixed cash flow over  the initial term of the lease, using  the
straight-line method. Percentage rents are
 
                                       25
<PAGE>
              MID-AMERICA REALTY INVESTMENTS, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
     (COLUMNAR DOLLARS IN FOOTNOTES ARE IN THOUSANDS EXCEPT PER SHARE DATA)
 
A.  SUMMARY OF SIGNIFICANT ACCOUNT POLICIES: (CONTINUED)
based  upon tenant sales levels for  a specified period. Reimbursed expenses for
real estate taxes, common area  maintenance, utilities, janitorial and  building
maintenance  are recognized  in the period  in which the  expenses are incurred,
based upon the provisions of the tenant's lease.
 
    FEDERAL INCOME  TAXES --  The Company  has  qualified as  a REIT  under  the
Internal  Revenue Code and,  accordingly, will not be  subject to federal income
taxes on amounts distributed to  shareholders provided certain requirements  are
met,  including the provision  that at least  95% of its  real estate investment
trust taxable income is distributed by March 15 of the following year.
 
    The dividends  paid  during  1995,  1994 and  1993  were  allocated  between
ordinary  income and non-taxable  return of capital as  follows (amounts are per
share):
 
<TABLE>
<CAPTION>
                                                       1995       1994       1993
                                                     ---------  ---------  ---------
<S>                                                  <C>        <C>        <C>
Ordinary income....................................  $     .05  $     .32  $     .39
Return of capital..................................        .83        .56        .49
                                                           ---        ---        ---
                                                     $     .88  $     .88  $     .88
                                                           ---        ---        ---
                                                           ---        ---        ---
</TABLE>
 
    A portion of previously recorded  book losses associated with the  Company's
interest in Twin Oaks Centre were utilized in 1995 for income tax purposes. As a
result  of the settlement described in footnote B below, these losses affect the
taxation of  dividends paid  during 1995  by increasing  the return  of  capital
portion and decreasing the ordinary income portion.
 
    REPURCHASE  OF COMMON STOCK -- Under the  laws of the state of Maryland, all
shares of common stock reacquired by the Company must be retired.
 
    EARNINGS PER SHARE --  The computation of earnings  per share is based  upon
the weighted average number of shares outstanding during the period.
 
B.  PROPERTY TRANSACTIONS
 
    OUTLOT  SALES -- During 1995, the Company  sold two outlot parcels for total
proceeds of $469,000, resulting in a gain of $189,000.
 
    TWIN OAKS CENTRE -- On April 19, 1995, the Company entered into a settlement
agreement with the Twin Oaks Centre Limited Partnership (the "Partnership"). The
Partnership was in default on  a mortgage loan to  the Company. Pursuant to  the
settlement,  the  Company  took  ownership of  the  underlying  collateral which
consisted of the Twin  Oaks Centre, a 95,000  square foot neighborhood  shopping
center  in  Silvis,  Illinois and  tax  increment financing  bonds  payable from
incremental sales and  real estate taxes  generated by the  shopping center  and
adjacent properties. All litigation against the Company was dismissed as part of
the settlement. For the year ended December 31, 1995, the Company recorded total
revenues  and  expenses  for the  Twin  Oaks  Centre of  $390,000  and $156,000,
respectively. See Note D to the Company's consolidated financial statements  for
further discussion of the Twin Oaks property transaction.
 
    VILLAGE  SQUARE -- On December  15, 1994, the Company  completed the sale of
Village Square in  Inver Grove  Heights, Minnesota.  The gross  sales price  was
$810,000 resulting in a loss of approximately $790,000.
 
    FITCHBURG RIDGE SHOPPING CENTER -- On August 31, 1994, the Company completed
the  acquisition of Fitchburg Ridge Shopping  Center in Fitchburg, Wisconsin for
$2,071,000, including acquisition
 
                                       26
<PAGE>
              MID-AMERICA REALTY INVESTMENTS, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
     (COLUMNAR DOLLARS IN FOOTNOTES ARE IN THOUSANDS EXCEPT PER SHARE DATA)
 
B.  PROPERTY TRANSACTIONS (CONTINUED)
costs. For the year ended December  31, 1994, Fitchburg Ridge Shopping  Center's
total  revenues  and expenses  (excluding interest  on  related debt)  which are
included in the accompanying Consolidated Statements of Operations were $139,000
and $58,000, respectively, compared to $443,000 and $209,000, respectively,  for
the twelve months ended December 31, 1995.
 
    SOUTHPORT  CENTRE  --  On  January  13,  1994,  the  Company  completed  the
acquisition of Southport Centre in Apple Valley, Minnesota. The purchase  price,
including  acquisition costs, was $12,985,000 with  $12,835,000 paid in cash and
$150,000 paid through  the issuance  of 15,585  shares of  the Company's  common
stock.  The acquisition was effective January  1, 1994 using the purchase method
of accounting. For the  year ended December 31,  1994, Southport Centre's  total
revenues  and expenses (excluding interest on  related debt) were $2,157,000 and
$891,000, respectively, compared to $2,314,000 and $1,056,000, respectively, for
the year ended December 31, 1995.
 
C.  NOTES RECEIVABLE
    Notes receivable  consists  of four  separate  notes from  parties  formerly
related to the Company. The notes carry interest rates from 9% to 12%, mature in
varying  amounts through 2004 and are collateralized by specific tangible assets
and/or personal guarantees.
 
D.  TWIN OAKS CENTRE
    In December 1989, the  Company entered into a  mortgage loan with Twin  Oaks
Centre Limited Partnership (the "Partnership") for the construction of Twin Oaks
Centre ("TOC") in Silvis, Illinois. The loan was secured by the Twin Oaks Centre
and tax increment financing bonds payable from incremental sales and real estate
taxes  to be generated by the shopping center and adjacent properties, which are
currently undeveloped.
 
    The Company considered the Partnership loan impaired and therefore  recorded
charges in the second quarter of 1994 to reduce the recorded balance of the loan
to  the estimated value  of the underlying collateral.  Provisions were based on
management's estimate of  value of  the collateral considering  the current  and
anticipated future operating conditions. Walgreens, a major anchor tenant of the
Twin  Oaks Centre,  vacated in  the second  quarter of  1994. Although Walgreens
continued to pay rent, management reviewed  the adverse effect of the  Walgreens
exit  on  property  lease-up  and  cash flows  from  the  related  tax increment
financing bonds and provided additional loss reserves in 1994 of $3,150,000.
 
    On April 19,  1995, the  Company entered  into a  settlement agreement  (the
"Settlement") with the Twin Oaks Centre Limited Partnership. The Partnership was
in  default on a mortgage  loan to the Company.  Pursuant to the Settlement, the
Company took ownership of the underlying  collateral which consisted of the  TOC
and  tax increment  financing bonds (the  "TIF Bonds")  payable from incremental
sales and  real estate  taxes  generated by  the  shopping center  and  adjacent
properties.  During 1995, the  Company received approximately  $310,000 from the
City of Silvis, Illinois related to the TIF Bonds; approximately $71,000 of this
payment was recorded by the Company as principal reduction.
 
    The TOC is  a 95,000  square foot  neighborhood shopping  center in  Silvis,
Illinois.  At April  19, 1995 the  TOC was 86%  leased and 73%  occupied, and at
December 31, 1995 the TOC was 91% leased and 74% occupied. Walgreens vacated  in
the second quarter of 1994 but continues to pay annual rent of $119,000.
 
                                       27
<PAGE>
              MID-AMERICA REALTY INVESTMENTS, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
     (COLUMNAR DOLLARS IN FOOTNOTES ARE IN THOUSANDS EXCEPT PER SHARE DATA)
 
D.  TWIN OAKS CENTRE (CONTINUED)
    In  conjunction with the Settlement,  the Company transferred from "Interest
in Twin Oaks Centre" on the  Consolidated Balance Sheet, the estimated value  of
the  TOC  ($4,163,000)  to "Property",  the  estimated  value of  the  TIF Bonds
($2,000,000) to "Other Assets",  and the balance of  a first mortgage (the  "TOC
Loan"),  which was assumed by the Company, to "Mortgages and Notes Payable". The
TOC Loan had a balance of $3,033,000 on April 19, 1995.
 
    For the period  from April  19, 1995  to December  31, 1995,  the Twin  Oaks
Centre's  total revenues and expenses, excluding interest on related debt, which
are included  in the  accompanying Consolidated  Statement of  Operations,  were
$390,000 and $156,000, respectively.
 
E.  INVESTMENT IN MID-AMERICA BETHAL LIMITED PARTNERSHIP
    The  Company has a 50% general partnership interest in Mid-America Bethal, a
Nebraska limited partnership.  The Company  is the managing  general partner  of
Mid-America  Bethal and a European investor  is the limited partner. Mid-America
Bethal owns  and operates  two neighborhood  shopping centers  and one  enclosed
mall.
 
    Summarized financial information on Mid-America Bethal is as follows:
 
<TABLE>
<CAPTION>
                                                                                                 DECEMBER 31,
                                                                                             --------------------
                                                                                               1995       1994
                                                                                             ---------  ---------
<S>                                                                                          <C>        <C>
BALANCE SHEETS
  Assets:
    Cash and cash equivalents..............................................................  $     817  $     829
    Property, net of accumulated depreciation of $6,278,000 and $5,188,000.................     29,940     30,918
    Other assets...........................................................................        454        561
                                                                                             ---------  ---------
                                                                                             $  31,211  $  32,308
                                                                                             ---------  ---------
                                                                                             ---------  ---------
 
  Liabilities and Partners' Capital:
    Accrued liabilities....................................................................  $      18  $      33
    Partners' capital......................................................................     31,193     32,275
                                                                                             ---------  ---------
                                                                                             $  31,211  $  32,308
                                                                                             ---------  ---------
                                                                                             ---------  ---------
</TABLE>
 
<TABLE>
<CAPTION>
                                                                                     YEAR ENDED DECEMBER 31,
                                                                                 -------------------------------
                                                                                   1995       1994       1993
                                                                                 ---------  ---------  ---------
<S>                                                                              <C>        <C>        <C>
STATEMENTS OF OPERATIONS
  Total Revenues...............................................................  $   4,330  $   4,264  $   3,904
                                                                                 ---------  ---------  ---------
                                                                                 ---------  ---------  ---------
  Net Income...................................................................  $   1,918  $   1,798  $   1,492
                                                                                 ---------  ---------  ---------
                                                                                 ---------  ---------  ---------
EQUITY IN EARNINGS OF MID-AMERICA BETHAL RECORDED BY THE COMPANY...............  $     959  $     899  $     746
                                                                                 ---------  ---------  ---------
                                                                                 ---------  ---------  ---------
</TABLE>
 
    Mid-America  Centers Corp.  has agreements  with Mid-America  Bethal for the
management and leasing of properties owned by Mid-America Bethal. For the  years
ended  December  31,  1995,  1994 and  1993,  Mid-America  Bethal  paid property
management fees of $172,000, $172,000, and $158,000, respectively, and  incurred
and   capitalized  leasing   commissions  of  $28,000,   $39,000,  and  $52,000,
 
                                       28
<PAGE>
              MID-AMERICA REALTY INVESTMENTS, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
     (COLUMNAR DOLLARS IN FOOTNOTES ARE IN THOUSANDS EXCEPT PER SHARE DATA)
 
E.  INVESTMENT IN MID-AMERICA BETHAL LIMITED PARTNERSHIP (CONTINUED)
respectively. In addition, the Company administers the day-to-day activities  of
Mid-America  Bethal. For  these services  during each  of the  three years ended
December 31, 1995,  the Company  received administrative  fees from  Mid-America
Bethal of $20,000.
 
F.  INVESTMENT IN VALLEY PARK CENTRE
    The  Company had  a loan agreement  with Valley Park  Limited Partnership, a
party formerly related to the Company, to facilitate the construction of  Valley
Park  Centre in Russelville,  Arkansas. At December 31,  1993, the amount funded
under this agreement was $4,049,000. Because  the Company was entitled to  share
in  the net cash generated  from the operation and from  the sale of Valley Park
Centre, the loan  was accounted for  as a  real estate investment.  On April  9,
1994,  the loan  was paid  in full  resulting in  a gain  of $1,260,000,  net of
transaction costs.
 
                                       29
<PAGE>
              MID-AMERICA REALTY INVESTMENTS, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
     (COLUMNAR DOLLARS IN FOOTNOTES ARE IN THOUSANDS EXCEPT PER SHARE DATA)
 
G.  MORTGAGES AND NOTES PAYABLE
    Mortgages and notes payable are comprised of the following:
 
<TABLE>
<CAPTION>
                                                                                                    DECEMBER 31,
                                                MAXIMUM   INTEREST     ANNUAL       MATURITY    --------------------
                                               AVAILABLE    RATE       PAYMENT        DATE        1995       1994
                                               ---------  ---------  -----------  ------------  ---------  ---------
<S>                                            <C>        <C>        <C>          <C>           <C>        <C>
Fixed-Rate Mortgage Debt:
  Mortgages and Notes Payable:
    Cornhusker Plaza.........................                 9.75%   $     396      June 1995  $  --      $   3,712
    Twin Oaks Centre.........................                 8.25%   $      84      Apr. 1996        718        743
    Twin Oaks Centre (See Note D)............                 8.25%   $     342      Apr. 1996      2,974     --
    Miracle Hills Park.......................                 9.00%   $     352      Aug. 1997      3,355      3,403
    Lakewood Mall............................                 8.50%   $     768      Aug. 1998      7,446      7,761
    Meadows S.C..............................                 9.88%   $     346      Nov. 1998      3,048      3,091
    Bishop Heights...........................                 9.00%   $      98      Nov. 2000        679        714
    Eastville Plaza..........................                 9.25%   $     292      Feb. 2001      2,945      2,966
    Rivergate S.C............................                10.00%   $     336      Jan. 2002      3,119      3,143
    Shenandoah Plaza.........................                10.00%   $     456      Jan. 2002      4,191      4,223
    Edgewood S.C.............................                 9.08%   $     590      Feb. 2002      6,500     --
    Southport Centre.........................                 9.20%   $     736      Apr. 2002      8,000     --
    Moorland Square..........................                 9.00%   $     384      Nov. 2002      3,656      3,707
    Kimberly West............................                 8.00%   $     403      Dec. 2002      4,165      4,231
                                                                                                ---------  ---------
                                                                                                   50,796     37,694
  Other Notes and Obligations................                11.00%                                --             26
                                                                                                ---------  ---------
  Total Fixed-Rate Mortgage Debt.............                                                      50,796     37,720
Adjustable-Rate Debt:
  Revolving Credit Agreements:
    Working Line of Credit...................  $   5,000     7.875%                  July 1997        663        138
    Lines of Credit for Acquisitions.........  $  10,000     8.375%                  July 1997      8,574      4,056
                                               $  15,000      9.00%                  July 1996      5,559     12,750
                                                                                                ---------  ---------
                                                                                                   14,796     16,944
 
  Mortgage Loans:
    Edgewood S.C. -- Phase II................  $   5,000      9.00%                  July 1995          0      5,000
    Fairacres S.C............................  $   3,822      9.50%                  July 1995          0      3,822
                                                                                                ---------  ---------
                                                                                                        0      8,822
                                                                                                ---------  ---------
  Total Adjustable-Rate Debt.................                                                      14,796     25,766
                                                                                                ---------  ---------
Total Mortgages and Notes Payable............                                                   $  65,592  $  63,486
                                                                                                ---------  ---------
                                                                                                ---------  ---------
</TABLE>
 
    In July 1995,  the Company  renewed its  revolving credit  agreement with  a
local  bank, which consisted  of the $5,000,000  working capital and $10,000,000
acquisitions line of  credit. This agreement  was extended to  July 1997 for  an
extension  fee of $17,500. The $5,000,000 working  capital line is priced at 200
basis points above the London International Banking Offering Rate (LIBOR), while
the $10,000,000 acquisitions line is priced at 250 basis points above LIBOR. The
interest rate on the working capital line and the acquisitions line is fixed  at
7.875% and 8.375% respectively, through
 
                                       30
<PAGE>
              MID-AMERICA REALTY INVESTMENTS, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
     (COLUMNAR DOLLARS IN FOOTNOTES ARE IN THOUSANDS EXCEPT PER SHARE DATA)
 
G.  MORTGAGES AND NOTES PAYABLE (CONTINUED)
January  31, 1996. Both  the $5,000,000 and $10,000,000  lines require an annual
unused commitment fee  of 25  basis points.  The revolving  credit agreement  is
collateralized by Monument Mall, Germantown Shopping Center and Ile de Grand.
 
    The  $15,000,000 acquisitions  line of credit  was extended  until July 1996
with the interest rate remaining variable  at 50 basis points over the  national
prime  and the  non-use fee  of 25  basis points  was eliminated.  The revolving
credit agreement  is  collateralized by  Thunderbird  Mall, Delta  Plaza,  Macon
County Plaza and Town West Center.
 
    In March 1995, the Company finalized an $8,000,000, 9.2% fixed rate mortgage
loan secured by the Southport Centre and a $6,500,000, 9.08% fixed rate mortgage
loan secured by the Edgewood Shopping Centers. The net proceeds from these loans
were  primarily used to  repay the maturing  $5,000,000 adjustable rate mortgage
loan secured by Phase I of the  Edgewood Shopping Centers and to repay  variable
rate  acquisition line debt. Both of these loans have seven-year terms requiring
interest only payments for the first five years, with subsequent payments  based
upon a 25-year amortization.
 
    As described in Note D to the Consolidated Financial Statements, the Company
assumed  the TOC loan which requires  monthly principal and interest payments of
$28,000, based upon a fixed interest  rate of 8.25% and a 15-year  amortization,
and  matures in April 1996. The Company intends to extend this loan for a period
of three years with the existing lender.
 
    During 1995, the Company used the proceeds from the $10,000,000  acquisition
line  to repay mortgage loans on  Cornhusker Plaza and Fairacres Shopping Center
which had balances prior to being  repaid of $3,697,000 and $3,783,000 and  were
priced at 9.75% and 100 basis points over prime, respectively.
 
    The  Company also completed the extension of the Lakewood Mall mortgage loan
in 1995. The $7,500,000 loan has been extended for three years, to August  1998,
with  an interest rate of 8.5%. As part  of the extension, the Company paid down
$193,000 on the loan and paid an extension fee of $37,500.
 
    Principal maturities  of total  mortgages and  notes payable,  after  giving
effect  to  the commitments  described above,  for  the next  five years  are as
follows: 1996 -- $10,405,000; 1997 -- $12,351,000; 1998 -- $10,403,000; 1999  --
$326,000; 2000 -- $917,000; 2001 and thereafter -- $31,191,000.
 
    Substantially  all of the Company's properties serve as collateral on one or
more of the above-mentioned obligations. The Company was in compliance with  all
debt  covenants at December 31, 1995  which require, among other covenants, that
the Company's total debt will not exceed 50% of total assets.
 
H. COMMITMENTS AND CONTINGENCIES
 
    YIELD MAINTENANCE AGREEMENT  -- In  June 1992,  the Company  entered into  a
Yield  Maintenance  Agreement,  as  amended (the  "YMA")  with  parties formerly
related to the Company. Under the YMA, the formerly related parties guarantee  a
10%  return from June  1, 1992 to  December 31, 1996,  calculated on a quarterly
basis, to the Company based upon the amount of the Company's Investment Base for
five specific properties purchased from the formerly related parties. If the net
operating income of the properties after debt service on a quarterly basis  does
not exceed the required 10%
 
                                       31
<PAGE>
              MID-AMERICA REALTY INVESTMENTS, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
     (COLUMNAR DOLLARS IN FOOTNOTES ARE IN THOUSANDS EXCEPT PER SHARE DATA)
 
H. COMMITMENTS AND CONTINGENCIES (CONTINUED)
return,  the difference (defined as  the "Arrearage" in the  YMA) is owed to the
Company by the formerly related parties.  The formerly related parties have  the
option  of paying the Arrearage in cash every  quarter or having it added to the
Investment Base.
 
    Under the YMA, the market value of these properties will be determined as of
December 31,  1996.  The determined  market  value will  be  based on  a  10.25%
capitalization  rate applied to net operating income for the year ended December
31, 1996. If the determined market value of the properties is different than the
Company's adjusted acquisition cost, the difference  will be paid by or owed  to
the Company, subject to certain limits.
 
    Under  the YMA, the Company  has an assignment of  a 50% interest in Kearney
Mall Associates, Ltd., Limited Partnership, whose limited partners were formerly
related to  the Company,  which  owns Hilltop  Mall  in Kearney,  Nebraska.  The
obligations  of  the  formerly related  parties  under  the YMA  are  limited to
$2,800,000 and  are  secured  by  promissory notes.  The  promissory  notes  are
personally  guaranteed by the formerly related parties and are collateralized by
specific tangible collateral. Cumulative  amounts received under this  agreement
totaled $1,228,000 through December 31, 1995.
 
    At December 31, 1995, accumulated YMA arrearages (which are not reflected in
the consolidated financial statements) exceeded the guaranteed limits.
 
    LITIGATION  -- The Company is subject to a number of lawsuits and claims for
various amounts which arise out of the normal course of business. In the opinion
of management,  the disposition  of claims  currently pending  will not  have  a
material  adverse  effect  on the  Company's  financial position  or  results of
operations.
 
I.  SHAREHOLDERS' EQUITY
    On January 22,  1993, the  Company completed  the public  sale of  3,000,000
shares of common stock and received net proceeds of $26,777,000 (after placement
agent  fees and out-of-pocket expenses). The proceeds from the sale were used to
retire debt and provide funds for expansion projects.
 
J.  EMPLOYEE BENEFIT AND STOCK PLANS
 
    RETIREMENT SAVINGS  PLAN --  In 1994,  the Company  established a  qualified
savings 401(k) plan covering substantially all full-time employees. Participants
may  contribute up to  15% of their  pre-tax base pay  with the Company matching
contributions equal  to  25%  of  the first  4%  of  participant  contributions.
Participants vest in Company contributions over five years. Contribution expense
for  the  years  ended December  31,  1995  and 1994  was  $14,000  and $19,000,
respectively.
 
    STOCK PLANS -- Pursuant to the Amended Stock Option Plan which was  approved
by shareholders in 1992 and the 1995 Stock Plan approved by stockholders in 1995
(collectively,  the  "Plans"),  the  Compensation  Committee  of  the  Board  of
Directors is authorized to issue options  to purchase shares of common stock  at
the then current market price of such shares and other stock awards to employees
of  the Company and  Mid-America Centers Corp.  Stock options became exercisable
over discretionary periods not  to exceed 10  years from the  date of grant.  At
December  31, 1995, approximately 200,000 shares remained available for issuance
under the Plans.
 
                                       32
<PAGE>
              MID-AMERICA REALTY INVESTMENTS, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
     (COLUMNAR DOLLARS IN FOOTNOTES ARE IN THOUSANDS EXCEPT PER SHARE DATA)
 
J.  EMPLOYEE BENEFIT AND STOCK PLANS (CONTINUED)
    Following is a summary of the option activity under the Plans:
 
<TABLE>
<CAPTION>
                                                                      SHARES
                                                                   UNDER OPTION   OPTION PRICE PER SHARE
                                                                   -------------  ----------------------
<S>                                                                <C>            <C>
Outstanding January 1, 1992......................................       --                  --
Granted..........................................................       108,000     $10.375 to $25.375
                                                                   -------------
Outstanding December 31, 1992....................................       108,000     $10.375 to $25.375
Granted..........................................................       140,000           $10.75
Canceled.........................................................      (108,000)    $10.375 to $25.375
                                                                   -------------
Outstanding December 31, 1993....................................       140,000           $10.75
Forfeited........................................................       (15,000)          $10.75
                                                                   -------------
Outstanding at December 31, 1994.................................       125,000           $10.75
Granted..........................................................       100,000           $8.00
Forfeited........................................................       (10,000)          $10.75
                                                                   -------------
Outstanding at December 31, 1995.................................       215,000      $8.00 to $10.75
                                                                   -------------
                                                                   -------------
</TABLE>
 
At December 31, 1995, 76,667 stock options were exercisable.
 
    In October 1995, the Financial  Accounting Standards Board issued  Statement
of   Financial  Accounting  Standards  No.  123,  "Accounting  for  Stock  Based
Compensation" (FAS 123), effective for fiscal years beginning after December 15,
1995. The statement encourages, but does not require, employers to adopt a  fair
value  method of accounting  for employee stock  based compensation and requires
increased stock based compensation disclosures  in lieu of expense  recognition.
The  Company does not intend to elect expense recognition for stock options and,
therefore, FAS 123 will not have an impact on the Company.
 
K. DISCLOSURE OF FAIR VALUE
    The  following  disclosure  of  the   estimated  fair  value  of   financial
instruments  is  made  in  accordance  with  the  requirements  of  Statement of
Financial Accounting  Standards  No.  107,  "Disclosures  about  Fair  Value  of
Financial Instruments." The estimated fair value amounts have been determined by
the  Company,  using  available  market  information  and  appropriate valuation
methodologies.  However,  considerable  judgment  is  necessarily  required   in
interpreting  market data to  develop the estimates  of fair value. Accordingly,
the estimates presented  herein are  not necessarily indicative  of the  amounts
that  the  Company  could realize  in  a  current market  exchange.  The  use of
different market assumptions and/or estimation methodologies may have a material
effect on the estimated fair value amounts.
 
    The fair value estimates presented herein are based on pertinent information
available to management  as of  December 31,  1995. Although  management is  not
aware  of any factors  that would significantly affect  the estimated fair value
amounts, such amounts  have not  been comprehensively revalued  for purposes  of
these  financial statements since that date, and current estimates of fair value
may differ significantly from the amounts presented herein.
 
    CASH, ACCOUNTS RECEIVABLE AND ACCOUNTS PAYABLE:
 
    The carrying amounts of these items are a reasonable estimate of their  fair
value.
 
                                       33
<PAGE>
              MID-AMERICA REALTY INVESTMENTS, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
     (COLUMNAR DOLLARS IN FOOTNOTES ARE IN THOUSANDS EXCEPT PER SHARE DATA)
 
K. DISCLOSURE OF FAIR VALUE (CONTINUED)
    NOTES RECEIVABLE:
 
    The  carrying  amounts of  these  items represent  the  Company's reasonable
estimate of their fair value.
 
    MORTGAGES AND NOTES PAYABLE -- FIXED RATE MORTGAGE DEBT:
 
    At December 31,  1995, the carrying  amount was $50,796,000  compared to  an
estimated  fair market value  of approximately $50,351,000.  Interest rates that
are currently  available to  the  Company for  the  issuance of  mortgages  with
similar terms and remaining maturities were used to estimate fair value of these
mortgages.
 
L.  LEASING ACTIVITIES
    Spaces  in the Company's  properties are leased  under operating leases with
initial terms  ranging from  one to  40  years. Certain  of the  leases  contain
options  to renew.  Leases generally  provide for  minimum rents  and percentage
rents plus reimbursement of certain operating expenses. The majority of  tenants
pay reimbursements for their pro rata share of certain operating expenses.
 
    Rent  income  in  excess of  base  rent  from tenants  with  percentage rent
provisions (based upon tenant sales levels for a specified period) for the years
ended December 31,  1995, 1994 and  1993 was $536,000,  $366,000, and  $387,000,
respectively.
 
    Wal-Mart,  Herberger's,  Hy-Vee  grocery  stores,  Kmart,  Walgreens, Target
and/or Shopko and J.C. Penney anchored a total of 18 of the Company's properties
either as tenants or  as occupants of buildings  adjacent to the properties  and
lease  in the  aggregate approximately  34% of the  total leasable  space in the
Company's properties.
 
    Additionally, Kmart,  Hy-Vee  grocery stores,  Herberger's  and/or  Wal-Mart
anchored  all Mid-America Bethal properties as either tenants or as occupants of
buildings adjacent to the  properties and lease approximately  14% of the  total
leasable space in the Mid-America Bethal properties.
 
    The  only tenant that occupies more than  10% of the gross leasable space of
the properties owned by the Company at December 31, 1995 is Wal-Mart, whose five
stores at properties  owned by  the Company  occupy approximately  14% of  total
gross  leasable  area. Wal-Mart  also operates  stores adjacent  to five  of the
Company's properties and to one of Mid-America Bethal's properties.
 
    Future base rents under non-cancelable operating leases on properties  owned
solely by the Company at December 31, 1995 are as follows:
 
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,                      WAL-MART   OTHER TENANTS     TOTAL
--------------------------------------------  ---------  -------------  -----------
<S>                                           <C>        <C>            <C>
1996........................................  $   1,225   $    14,401   $    15,626
1997........................................      1,225        12,636        13,861
1998........................................      1,225        11,283        12,508
1999........................................      1,225        10,300        11,525
2000........................................      1,225         9,302        10,527
Thereafter..................................      6,884        66,984        73,868
                                              ---------  -------------  -----------
                                              $  13,009   $   124,906   $   137,915
                                              ---------  -------------  -----------
                                              ---------  -------------  -----------
</TABLE>
 
The  Company had no  tenant which in any  of the three  years ended December 31,
1995 provided 10% or more of the Company's rental income or total revenues.
 
                                       34
<PAGE>
              MID-AMERICA REALTY INVESTMENTS, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
     (COLUMNAR DOLLARS IN FOOTNOTES ARE IN THOUSANDS EXCEPT PER SHARE DATA)
 
M. QUARTERLY INFORMATION (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                  FIRST        SECOND        THIRD         FOURTH
                                                 QUARTER       QUARTER      QUARTER       QUARTER        TOTAL
                                               ------------  -----------  ------------  ------------  -----------
<S>                                            <C>           <C>          <C>           <C>           <C>
Year Ended December 31, 1995:
  Total revenues.............................     $   5,593    $   5,488     $   5,517     $   5,735    $  22,333
  Net income.................................     $     889    $     844     $     823     $     828    $   3,384
  Net income per share.......................     $     .11    $     .10     $     .10     $     .10    $     .41
  Dividends declared per share...............     $     .22    $     .22     $     .22     $     .22    $     .88
  Weighted average number of shares
   outstanding...............................     8,279,892    8,279,892     8,279,892     8,280,524    8,280,051
 
Year Ended December 31, 1994:
  Total revenues.............................  $      5,275  $     5,286  $      5,140  $      5,451  $    21,152
  Net income (loss) (1)......................  $        575  $    (1,285) $        512  $         70  $      (128)
  Net income (loss) per share................  $        .07  $      (.16) $        .06  $        .01  $      (.02)
  Dividends declared per share...............  $        .22  $       .22  $        .22  $        .22  $       .88
  Weighted average number of shares
   outstanding...............................     8,280,212    8,280,212     8,279,892     8,279,892    8,280,052
</TABLE>
 
------------------------
(1) The variation in income (loss) noted  in the second quarter of 1994 was  due
    to  the $3,150,000 loss  reserve relating to the  Company's interest in Twin
    Oaks Centre  for the  year ended  December 31,  1994. This  amount  reflects
    charges  to reduce the recorded value of the Company's loan to the Twin Oaks
    Centre L.P. to the fair value of the underlying collateral. During 1995, the
    Company took ownership of the Twin Oaks Centre. See Note D to the  Company's
    Consolidated Financial Statements for further discussion.
 
N.  SUBSEQUENT EVENT
    On January 29, 1996, the Company declared a cash dividend of $.22 per common
share  payable on February  26, 1996 to  stockholders of record  on February 12,
1996.
 
                                       35
<PAGE>
              MID-AMERICA REALTY INVESTMENTS, INC. AND SUBSIDIARY
            SCHEDULE III -- REAL ESTATE AND ACCUMULATED DEPRECIATION
                        (COLUMNAR DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                                   GROSS AMOUNT AT WHICH
                                                                      ADDITIONAL                  CARRIED AT DECEMBER 31,
                                            INITIAL COST TO COMPANY      COSTS      REDUCTIONS              1995
                                            ------------------------  SUBSEQUENT   FROM RECEIPTS  ------------------------
                                                       BUILDINGS AND      TO       SUBSEQUENT TO             BUILDINGS AND
     DESCRIPTION          ENCUMBRANCES        LAND     IMPROVEMENTS   ACQUISITION   ACQUISITION     LAND     IMPROVEMENTS
---------------------  -------------------  ---------  -------------  -----------  -------------  ---------  -------------
<S>                    <C>                  <C>        <C>            <C>          <C>            <C>        <C>
Monument Mall,
 Scottsbluff, NE       Line of Credit (2)   $     420    $   9,691     $   2,774     $  (1,612)   $     353    $  10,920
Delta Plaza,
 Escanaba, MI          Line of Credit (2)         527        6,949         4,591          (311  )     1,096       10,660
Thunderbird Mall,
 Virginia, MN          Line of Credit (2)         305        6,027         3,409       --               305        9,436
Eastville Plaza,
 Fremont, NE           $        2,945             706        3,529           621          (403  )       633        3,820
Bishop Heights,
 Lincoln, NE           $          679             710          723           151       --               710          874
Westview Plaza,
 McCook, NE                   None                 90        1,010            24          (142  )        78          904
Ile de Grand,
 Grand Island, NE      Line of Credit (2)         690        2,880           953       --               690        3,833
Edgewood-Phase I,      (
 Lincoln, NE           (                        1,396        1,993         1,353       --             1,396        3,346
                           (    $6,500
Edgewood-Phase II,     (
 Lincoln, NE           (                        1,387        4,327           737       --             1,387        5,064
The Meadows,
 Lincoln, NE           $        3,048           1,179        3,121            19       --             1,179        3,140
Miracle Hills Park,
 Omaha, NE             $        3,355           2,250        4,972           426          (330  )     2,147        5,171
Macon County,
 Lafayette, TN         Line of Credit (2)         228        3,021            51           (40  )       225        3,035
Town West Center,
 Paragould, AR         Line of Credit (2)         366        4,263            48       --               366        4,311
 
<CAPTION>
 
                                   ACCUMULATED                   DATE OF
                                  DEPRECIATION    COMPLETION   ACQUISITION
                                   AT DECEMBER     DATE FOR        OR
     DESCRIPTION         TOTAL      31, 1995     CONSTRUCTION  COMPLETION
---------------------  ---------  -------------  ------------  -----------
<S>                    <C>        <C>            <C>           <C>
Monument Mall,
 Scottsbluff, NE       $  11,273    $  (3,022)       08/1986     12/30/86
Delta Plaza,
 Escanaba, MI             11,756       (2,426  )     09/1971     12/30/86
Thunderbird Mall,
 Virginia, MN              9,741       (2,077  )     09/1971     12/30/86
Eastville Plaza,
 Fremont, NE               4,453       (1,130  )     08/1986     12/30/86
Bishop Heights,
 Lincoln, NE               1,584         (268  )     09/1971     12/30/86
Westview Plaza,
 McCook, NE                  982         (266  )     12/1985     12/30/86
Ile de Grand,
 Grand Island, NE          4,523         (982  )     07/1977     04/09/87
Edgewood-Phase I,
 Lincoln, NE               4,742         (993  )     09/1980     06/01/87
 
Edgewood-Phase II,
 Lincoln, NE               6,451         (754  )     06/1991     06/26/91
The Meadows,
 Lincoln, NE               4,319         (783  )     12/1987     06/01/88
Miracle Hills Park,
 Omaha, NE                 7,318       (1,383  )     03/1987     07/05/88
Macon County,
 Lafayette, TN             3,260         (731  )     12/1985     12/21/88
Town West Center,
 Paragould, AR             4,677         (958  )     04/1987     12/21/88
</TABLE>
 
                                       36
<PAGE>
              MID-AMERICA REALTY INVESTMENTS, INC. AND SUBSIDIARY
      SCHEDULE III -- REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED)
                        (COLUMNAR DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                                   GROSS AMOUNT AT WHICH
                                                                      ADDITIONAL                  CARRIED AT DECEMBER 31,
                                            INITIAL COST TO COMPANY      COSTS      REDUCTIONS              1995
                                            ------------------------  SUBSEQUENT   FROM RECEIPTS  ------------------------
                                                       BUILDINGS AND      TO       SUBSEQUENT TO             BUILDINGS AND
     DESCRIPTION          ENCUMBRANCES        LAND     IMPROVEMENTS   ACQUISITION   ACQUISITION     LAND     IMPROVEMENTS
---------------------  -------------------  ---------  -------------  -----------  -------------  ---------  -------------
<S>                    <C>                  <C>        <C>            <C>          <C>            <C>        <C>
Rivergate,
 Shelbyville, IN            $   3,119             163        4,058           281           (25)         162        4,315
Germantown,
 Jasper, IN            Line of Credit (2)         488        8,766           429           (15)         540        9,128
Shenandoah Plaza,
 Newnan, GA                 $   4,191             485        5,281            96        --              485        5,377
Cornhusker Plaza,
 South Sioux City, NE  Line of Credit (2)       1,185        3,169            58           (26  )     1,185        3,201
Lakewood Mall,
 Aberdeen, SD          $        7,446             600       13,890           992          (784  )     1,003       13,695
Kimberly West,
 Davenport, IA         $        4,165           1,700        4,653           159       --             1,790        4,722
Moorland Square,
 New Berlin, WI        $        3,656           1,550        3,750         1,084       --             1,725        4,659
Fairacres,
 Oshkosh, WI           Line of Credit (2)       1,500        3,310           341       --             1,550        3,601
Southport Centre,
 Apple Valley, MN      $        8,000           3,675        8,946           305       --             3,675        9,251
Fitchburg Ridge,
 Fitchburg, WI                None                500        1,545            42       --               500        1,587
Twin Oaks Centre
 Silvis, IL            $        3,692           1,075        3,062            46          (244  )     1,019        2,920
                                            ---------  -------------  -----------  -------------  ---------  -------------
                                            $  23,175  $   112,936    $   18,990   $    (3,932  ) $  24,199  $   126,970
                                            ---------  -------------  -----------  -------------  ---------  -------------
                                            ---------  -------------  -----------  -------------  ---------  -------------
 
<CAPTION>
 
                                   ACCUMULATED                   DATE OF
                                  DEPRECIATION    COMPLETION   ACQUISITION
                                   AT DECEMBER     DATE FOR        OR
     DESCRIPTION         TOTAL      31, 1995     CONSTRUCTION  COMPLETION
---------------------  ---------  -------------  ------------  -----------
<S>                    <C>        <C>            <C>           <C>
Rivergate,
 Shelbyville, IN           4,477         (927)       03/1986     12/21/88
Germantown,
 Jasper, IN                9,668       (1,879)       12/1985     12/21/88
Shenandoah Plaza,
 Newnan, GA                5,862       (1,226)       02/1988     12/21/88
Cornhusker Plaza,
 South Sioux City, NE      4,386         (468  )     02/1990     06/27/91
Lakewood Mall,
 Aberdeen, SD             14,698       (1,654  )     08/1990     08/28/92
Kimberly West,
 Davenport, IA             6,512         (511  )     01/1989     12/14/92
Moorland Square,
 New Berlin, WI            6,384         (373  )     02/1990     11/23/92
Fairacres,
 Oshkosh, WI               5,151         (409  )     05/1992     12/22/92
Southport Centre,
 Apple Valley, MN         12,926         (511  )     01/1992     01/01/94
Fitchburg Ridge,
 Fitchburg, WI             2,087          (52  )     12/1980     08/31/94
Twin Oaks Centre
 Silvis, IL                3,939          (61  )     01/1992     04/19/95
                       ---------  -------------
                       $ 151,169  $    23,844
                       ---------  -------------
                       ---------  -------------
</TABLE>
 
------------------------------
(1)  The  aggregate cost for federal income tax purposes for these properties is
     approximately $151,169,000.
 
(2)  Revolving credit agreements totaled $14,796,000 at December 31, 1995.
 
                                       37
<PAGE>
              MID-AMERICA REALTY INVESTMENTS, INC. AND SUBSIDIARY
      SCHEDULE III -- REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED)
                        (COLUMNAR DOLLARS IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                             BUILDINGS AND
                                                LAND AND        TENANT      EQUIPMENT AND  CONSTRUCTION-
                                     LAND     IMPROVEMENTS   IMPROVEMENTS     FIXTURES      IN-PROGRESS     TOTAL
                                   ---------  -------------  -------------  -------------  -------------  ---------
<S>                                <C>        <C>            <C>            <C>            <C>            <C>
REAL ESTATE
Balance, January 31, 1993........  $  18,555    $  12,490      $  96,567      $     399      $     491    $ 128,502
  Additions at cost..............          1          133          1,391            114          1,039        2,678
  Retirements....................         (9)      --               (115)           (22)        --             (146)
  Transfer of assets when placed
   into service..................     --           --              1,224         --             (1,224)      --
                                   ---------  -------------  -------------  -------------  -------------  ---------
Balance, December 31, 1993.......     18,547       12,623         99,067            491            306      131,034
  Additions at cost..............      4,175          891         11,219             76            523       16,884
  Retirements....................       (268)        (171)        (1,425)            (8)        --           (1,872)
  Reclassification of outlots
   held for sale to land.........      1,015       --             --             --             --            1,015
  Transfer of assets when placed
   into service..................     --           --                495         --               (495)      --
                                   ---------  -------------  -------------  -------------  -------------  ---------
Balance, December 31, 1994.......     23,469       13,343        109,356            559            334      147,061
  Additions at cost..............      1,075           22          5,181         --                599        6,877
  Retirements....................       (250)      --             --             --             --             (250)
  Reductions for receipts under
   Yield Maintenance Agreement...        (92)      --               (935)        --             --           (1,027)
  Transfer of assets when placed
   into service..................     --           --             --             --               (646)        (646)
                                   ---------  -------------  -------------  -------------  -------------  ---------
Balance, December 31, 1995.......  $  24,202    $  13,365      $ 113,602      $     559      $     287    $ 152,015
                                   ---------  -------------  -------------  -------------  -------------  ---------
                                   ---------  -------------  -------------  -------------  -------------  ---------
 
ACCUMULATED DEPRECIATION
Balance, January 1, 1993.........  $  --        $   2,999      $   8,879      $     218      $  --        $  12,096
  Additions charged to costs and
   expenses......................     --              843          2,887             81         --            3,811(A)
  Retirements....................     --           --             --                (22)        --              (22)
                                   ---------  -------------  -------------  -------------  -------------  ---------
Balance, December 31, 1993.......     --            3,842         11,766            277         --           15,885
  Additions charged to costs and
   expenses......................     --              894          3,327             73         --            4,294(B)
  Retirements....................     --              (89)          (284)            (6)        --             (379)
                                   ---------  -------------  -------------  -------------  -------------  ---------
Balance, December 31, 1994.......     --            4,647         14,809            344         --           19,800
  Additions charged to costs and
   expenses......................     --              884          3,506             60         --            4,450
                                   ---------  -------------  -------------  -------------  -------------  ---------
Balance, December 31, 1995.......  $  --        $   5,531      $  18,315      $     404      $  --        $  24,250
                                   ---------  -------------  -------------  -------------  -------------  ---------
                                   ---------  -------------  -------------  -------------  -------------  ---------
</TABLE>
 
------------------------------
(A)  Depreciation expense for the year ended December 31, 1993 of $3,968,000  is
     comprised  of depreciation  on the  Company's properties  of $3,811,000 (as
     shown above)  plus $157,000  of depreciation  recognized on  the  Company's
     interest in Twin Oaks Centre.
 
(B)  Depreciation  expense for the year ended December 31, 1994 of $4,372,000 is
     comprised of depreciation  on the  Company's properties  of $4,294,000  (as
     shown  above)  plus $78,000  of  depreciation recognized  on  the Company's
     interest in Twin Oaks Centre.
 
                                       38
<PAGE>
                     MID-AMERICA BETHAL LIMITED PARTNERSHIP
                         INDEX TO FINANCIAL STATEMENTS
                        AND FINANCIAL STATEMENT SCHEDULE
 
    The following Financial Statements of Mid-America Bethal Limited Partnership
and  the  related Independent  Auditors' Report  are included  in Item  14(d) of
Mid-America Realty Investments, Inc.'s Form 10-K:
 
<TABLE>
<CAPTION>
                                                                                            PAGE
                                                                                            -----
<S>                                                                                      <C>
Independent Auditors' Report...........................................................          40
Balance Sheets at December 31, 1995 and 1994...........................................          41
Statements of Operations for the Years Ended December 31, 1995, 1994 and 1993..........          42
Statements of Partners' Capital for the Years Ended December 31, 1995, 1994 and 1993...          43
Statements of Cash Flows for the Years Ended December 31, 1995, 1994 and 1993..........          44
Notes to Financial Statements..........................................................          45
</TABLE>
 
    The following  Financial Statement  Schedule of  Mid-America Bethal  Limited
Partnership is furnished pursuant to Rule 3-09:
 
<TABLE>
<S>                                                                     <C>
Schedule III -- Real Estate and Accumulated Amortization..............          47
</TABLE>
 
    All other schedules have been omitted because they are not applicable or not
required  or  because  the  required  information  is  shown  in  the  financial
statements or notes thereto.
 
                                       39
<PAGE>
                          INDEPENDENT AUDITORS' REPORT
 
The Partners
Mid-America Bethal Limited Partnership
Omaha, Nebraska
 
    We have  audited  the  accompanying balance  sheets  of  Mid-America  Bethal
Limited Partnership as of December 31, 1995 and 1994, and the related statements
of  operations, partners' capital and cash flows  for each of the three years in
the period  ended December  31, 1995.  Our audits  also included  the  financial
statement  schedule listed in  the Index on page  38. These financial statements
and financial statement  schedule are  the responsibility  of the  Partnership's
management.  Our  responsibility  is  to express  an  opinion  on  the financial
statements and financial statement schedule based on our audits.
 
    We conducted  our  audits in  accordance  with generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the 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, such  financial statements present  fairly, in all  material
respects, the financial position of Mid-America Bethal Limited Partnership as of
December 31, 1995 and 1994, and the results of its operations and its cash flows
for  each of the three years in the period ended December 31, 1995 in conformity
with generally  accepted  accounting  principles. Also,  in  our  opinion,  such
financial statement schedule, when considered in relation to the basic financial
statements  taken  as a  whole,  presents fairly  in  all material  respects the
information set forth therein.
 
DELOITTE & TOUCHE LLP
 
February 1, 1996
Omaha, Nebraska
 
                                       40
<PAGE>
                     MID-AMERICA BETHAL LIMITED PARTNERSHIP
                                 BALANCE SHEETS
                                     ASSETS
 
<TABLE>
<CAPTION>
                                                                                            DECEMBER 31,
                                                                                   ------------------------------
                                                                                        1995            1994
                                                                                   --------------  --------------
<S>                                                                                <C>             <C>
Cash.............................................................................  $      817,304  $      829,516
Accounts receivable, net of allowances of $57,000 and $101,000...................         236,810         294,156
Property:
  Land and land improvements.....................................................       6,497,545       6,489,085
  Buildings......................................................................      29,488,830      29,384,934
  Equipment and fixtures.........................................................         231,353         231,353
                                                                                   --------------  --------------
                                                                                       36,217,728      36,105,372
  Less: Accumulated depreciation.................................................      (6,278,088)     (5,187,711)
                                                                                   --------------  --------------
                                                                                       29,939,640      30,917,661
Intangible assets, less accumulated amortization of $211,391 and $134,322........         213,088         262,611
Other assets.....................................................................           4,236           4,233
                                                                                   --------------  --------------
                                                                                   $   31,211,078  $   32,308,177
                                                                                   --------------  --------------
                                                                                   --------------  --------------
 
                                        LIABILITIES AND PARTNERS' CAPITAL
 
Accrued liabilities..............................................................  $       18,000  $       33,599
Partners' capital................................................................      31,193,078      32,274,578
                                                                                   --------------  --------------
                                                                                   $   31,211,078  $   32,308,177
                                                                                   --------------  --------------
                                                                                   --------------  --------------
</TABLE>
 
                       See notes to financial statements
 
                                       41
<PAGE>
                     MID-AMERICA BETHAL LIMITED PARTNERSHIP
                            STATEMENTS OF OPERATIONS
 
<TABLE>
<CAPTION>
                                                                                 YEAR ENDED DECEMBER 31,
                                                                       -------------------------------------------
                                                                           1995           1994           1993
                                                                       -------------  -------------  -------------
<S>                                                                    <C>            <C>            <C>
REVENUES
  Rental income......................................................  $   3,480,916  $   3,451,278  $   3,058,639
  Reimbursement income...............................................        739,796        757,982        804,272
  Other income.......................................................        109,233         54,363         40,986
                                                                       -------------  -------------  -------------
    Total Revenues...................................................      4,329,945      4,263,623      3,903,897
 
EXPENSES
  Real estate taxes..................................................        319,972        337,674        336,376
  Management fees....................................................        172,086        172,609        157,583
  Other property costs...............................................        708,426        767,845        787,713
  Administrative expenses............................................         42,394         15,418         32,339
  Depreciation and amortization......................................      1,168,567      1,172,243      1,098,353
                                                                       -------------  -------------  -------------
    Total Expenses...................................................      2,411,445      2,465,789      2,412,364
                                                                       -------------  -------------  -------------
NET INCOME...........................................................  $   1,918,500  $   1,797,834  $   1,491,533
                                                                       -------------  -------------  -------------
                                                                       -------------  -------------  -------------
</TABLE>
 
                       See notes to financial statements
 
                                       42
<PAGE>
                     MID-AMERICA BETHAL LIMITED PARTNERSHIP
                        STATEMENTS OF PARTNERS' CAPITAL
 
<TABLE>
<CAPTION>
                                                                                       ALBETH
                                                               MID-AMERICA REALTY   INVESTMENTS,
                                                               INVESTMENTS, INC.        L.P.           TOTAL
                                                               ------------------  --------------  --------------
<S>                                                            <C>                 <C>             <C>
BALANCE, JANUARY 1, 1993.....................................   $     15,542,605   $   15,542,606  $   31,085,211
Partner contributions:
  Imperial Mall improvements.................................          1,300,000        1,300,000       2,600,000
Allocation of net income.....................................            745,767          745,766       1,491,533
Distributions paid...........................................         (1,300,000)      (1,300,000)     (2,600,000)
                                                               ------------------  --------------  --------------
BALANCE, DECEMBER 31, 1993...................................         16,288,372       16,288,372      32,576,744
Allocation of net income.....................................            898,917          898,917       1,797,834
Distributions paid...........................................         (1,050,000)      (1,050,000)     (2,100,000)
                                                               ------------------  --------------  --------------
BALANCE, DECEMBER 31, 1994...................................         16,137,289       16,137,289      32,274,578
Allocation of net income.....................................            959,250          959,250       1,918,500
Distributions paid...........................................         (1,500,000)      (1,500,000)     (3,000,000)
                                                               ------------------  --------------  --------------
BALANCE, DECEMBER 31, 1995...................................   $     15,596,539   $   15,596,539  $   31,193,078
                                                               ------------------  --------------  --------------
                                                               ------------------  --------------  --------------
</TABLE>
 
                       See notes to financial statements
 
                                       43
<PAGE>
                     MID-AMERICA BETHAL LIMITED PARTNERSHIP
                            STATEMENTS OF CASH FLOWS
 
<TABLE>
<CAPTION>
                                                                               YEAR ENDED DECEMBER 31,
                                                                    ----------------------------------------------
                                                                         1995            1994            1993
                                                                    --------------  --------------  --------------
<S>                                                                 <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net Income......................................................  $    1,918,500  $    1,797,834  $    1,491,533
  Adjustments:
    Depreciation and amortization.................................       1,168,567       1,172,243       1,098,353
    (Decrease) increase in related liabilities....................         (15,599)             80          (1,239)
    Decrease in related assets....................................          57,255         112,429         112,986
                                                                    --------------  --------------  --------------
  Net Cash Flows From Operating Activities........................       3,128,723       3,082,586       2,701,633
 
CASH FLOWS FROM INVESTING ACTIVITIES
  Additions to property:
    Renovation and expansion projects.............................        --              --            (3,305,577)
    Tenant improvements...........................................         (27,227)        (31,607)       (136,989)
    Other capital expenditures....................................         (85,129)        (89,051)       --
  Cash paid for leasing fees......................................         (28,579)        (37,808)       (113,696)
  Other receipts and payments.....................................        --              --                17,277
                                                                    --------------  --------------  --------------
  Net Cash Flows From Investing Activities........................        (140,935)       (158,466)     (3,538,985)
 
CASH FLOWS FROM FINANCING ACTIVITIES
  Distributions made to partners..................................      (3,000,000)     (2,100,000)     (2,600,000)
  Contributions by partners.......................................        --              --             2,600,000
                                                                    --------------  --------------  --------------
  Net Cash Flows From Financing Activities........................      (3,000,000)     (2,100,000)       --
                                                                    --------------  --------------  --------------
NET CHANGE IN CASH................................................         (12,212)        824,120        (837,352)
CASH, BEGINNING OF YEAR...........................................         829,516           5,396         842,748
                                                                    --------------  --------------  --------------
CASH, END OF YEAR.................................................  $      817,304  $      829,516  $        5,396
                                                                    --------------  --------------  --------------
                                                                    --------------  --------------  --------------
</TABLE>
 
                       See notes to financial statements
 
                                       44
<PAGE>
                     MID-AMERICA BETHAL LIMITED PARTNERSHIP
                         NOTES TO FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
 
A.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
    NATURE OF  OPERATIONS --  Mid-America Bethal  Limited Partnership,  formerly
Dial  Bethal  Limited  Partnership  (Mid-America  Bethal),  a  Nebraska  limited
partnership, was formed on June 1, 1989 between Mid-America Realty  Investments,
Inc.  (Mid-America Realty)  and Albeth  Investments, L.P.  (Albeth), pursuant to
provisions of an  Amended and Restated  Partnership Agreement (the  "Partnership
Agreement"). Mid-America Realty holds a 50% interest and is the managing general
partner and Albeth holds a 50% limited partner interest.
 
    On  October 31, 1994, Dial Bethal  Limited Partnership filed an amendment to
the Certificate of Limited Partnership  changing its name to Mid-America  Bethal
Limited Partnership.
 
    CASH  AND  CASH  EQUIVALENTS  --  Mid-America  Bethal  considers  short-term
investments with  a maturity  at acquisition  of three  months or  less as  cash
equivalents.
 
    USE  OF ESTIMATES  -- In preparing  financial statements  in conformity with
generally  accepted  accounting  principles,  management  is  required  to  make
estimates  and  assumptions  that  affect the  reported  amounts  of  assets and
liabilities and the disclosure of contingent assets and liabilities at the  date
of  the  financial statements  and revenues  and  expenses during  the reporting
period. Actual results could differ from those estimates.
 
    PROPERTY --  Property is  stated at  the lower  of depreciated  cost or  the
amount  estimated to be recoverable through  future cash flows from the property
operations and  dispositions. Assets  are  depreciated using  the  straight-line
method  over the following lives: land improvements -- 15 years; buildings -- 40
years; tenant improvements -- shorter of the lease term or the estimated life of
the improvement; and equipment and fixtures -- 5 to 7 years.
 
    INTANGIBLE ASSETS  --  Costs incurred  in  the organization  of  Mid-America
Bethal are amortized using the straight-line method over a 60-month period. Fees
paid  for leasing commissions on  new or renewed leases  are amortized using the
straight-line method over the initial term or extension of the lease.
 
    LEASES -- All leases with tenants are classified as operating leases.
 
    REVENUE RECOGNITION --  Minimum rents  from tenants  are recognized  monthly
based  upon total fixed cash flow over the  initial term of the lease, using the
straight-line method. Percentage rents are based upon tenant sales levels for  a
specified  period.  Reimbursed  expenses  for  real  estate  taxes,  common area
maintenance, utilities, janitorial  and building maintenance  are recognized  in
the  period in which the expenses are incurred, based upon the provisions of the
tenant's lease.
 
    INCOME TAXES -- The  financial statements do not  include any provision  for
income   taxes  on  Mid-America   Bethal's  earnings  as   such  taxes  are  the
responsibility of the individual partners.
 
    ACCOUNTING STANDARDS --  In March 1995,  the Financial Accounting  Standards
Board  issued Statement of  Financial Accounting Standards  No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of". This statement is effective for  fiscal years beginning after December  15,
1995. The adoption of the provisions of this statement is not expected to have a
material  impact  on  Mid-America  Bethal's financial  condition  or  results of
operations.
 
    RECLASSIFICATIONS -- Certain  reclassifications have been  made to the  1993
and 1994 financial statements to conform to those classifications used in 1995.
 
                                       45
<PAGE>
                     MID-AMERICA BETHAL LIMITED PARTNERSHIP
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
 
B.  RELATED PARTY TRANSACTIONS
 
    ADMINISTRATION   OF  MID-AMERICA  BETHAL  --  Pursuant  to  the  Partnership
Agreement, Mid-America Realty provides  administrative services and manages  the
day-to-day  affairs of Mid-America Bethal as managing general partner. For these
services during  each of  the years  ended December  31, 1995,  1994, and  1993,
Mid-America Bethal paid $20,000.
 
    PROPERTY  MANAGEMENT  AND LEASING  --  Mid-America Bethal  has  entered into
property management  agreements  with Mid-America  Centers  Corp.  ("Mid-America
Centers"),   a  wholly-owned  subsidiary  of  Mid-America  Realty.  Under  these
agreements, Mid-America Centers is responsible for the day-to-day operations  of
all  the properties,  including leasing,  rent collections  and maintenance. For
these services,  Mid-America  Bethal  pays  a management  fee  of  4%  of  gross
revenues.  Mid-America  Centers  also  receives  leasing  commissions  upon  the
obtaining of new tenant leases, the renegotiation of existing tenant leases  and
the  renewal of  existing tenant leases  if the  tenants did not  have a renewal
option in the original lease.  For the years ended  December 31, 1995, 1994  and
1993, $172,086, $172,609 and $157,583, respectively, was incurred for management
fees   and  $28,579,  $39,222  and   $52,373,  respectively,  was  incurred  and
capitalized as leasing fee commissions.
 
C.  LEASING ACTIVITIES
    Space in the properties is leased under operating leases with initial  terms
ranging  from one year to thirty years. Certain of the leases contain options to
renew. Leases  generally provide  for minimum  rents and  percentage rents  plus
reimbursement  of  certain  operating  expenses.  The  majority  of  tenants pay
reimbursements for their pro rata share of certain operating expenses.
 
    Rent income  in  excess  of  base rent  for  tenants  with  percentage  rent
provisions  (based upon  tenants sales  levels for  a specified  period) for the
years ended December 31, 1995, 1994 and 1993 was $48,901, $122,619 and $102,878,
respectively.
 
    Future base rents under non-cancelable operating leases at December 31, 1995
are as follows:
 
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,                                                            AMOUNT
------------------------------------------------------------------------------  --------------
<S>                                                                             <C>
1996..........................................................................  $    3,239,004
1997..........................................................................       3,062,064
1998..........................................................................       2,855,090
1999..........................................................................       2,578,736
2000..........................................................................       2,352,291
Thereafter....................................................................      18,687,175
                                                                                --------------
                                                                                $   32,774,360
                                                                                --------------
                                                                                --------------
</TABLE>
 
                                       46
<PAGE>
                     MID-AMERICA BETHAL LIMITED PARTNERSHIP
            SCHEDULE III -- REAL ESTATE AND ACCUMULATED DEPRECIATION
<TABLE>
<CAPTION>
                                                                           REDUCTIONS      GROSS AMOUNT AT WHICH CARRIED AT
                                                             ADDITIONAL   FROM MASTER
                                  INITIAL COST TO COMPANY       COSTS      LEASE AND              DECEMBER 31, 1995
                                 --------------------------  SUBSEQUENT      INCOME     --------------------------------------
                       ENCUM-                 BUILDINGS AND      TO        GUARANTEE                BUILDINGS AND
    DESCRIPTION        BRANCES      LAND      IMPROVEMENTS   ACQUISITION    PAYMENTS       LAND     IMPROVEMENTS    TOTAL(1)
--------------------  ---------  -----------  -------------  -----------  ------------  ----------  -------------  -----------
<S>                   <C>        <C>          <C>            <C>          <C>           <C>         <C>            <C>
Imperial Mall,
 Hastings, NE           None     $   677,826   $11,851,303   $ 6,682,779   $   --       $  834,020   $18,377,888   $19,211,908
Stockyards Plaza,
 Omaha, NE              None         944,111     6,602,742       479,272     (372,877)   1,041,577     6,611,671     7,653,248
Stockyards Theatres,
 Omaha, NE              None         251,645     1,849,242       --            --          251,645     1,849,242     2,100,887
Taylor Heights
 Shopping Center,
 Sheboygan, WI          None       1,029,223     5,697,723       293,385       --        1,034,231     5,986,100     7,020,331
                                 -----------  -------------  -----------  ------------  ----------  -------------  -----------
                                 $ 2,902,805   $26,001,010   $ 7,455,436   $ (372,877)  $3,161,473   $32,824,901   $35,986,374
                                 -----------  -------------  -----------  ------------  ----------  -------------  -----------
                                 -----------  -------------  -----------  ------------  ----------  -------------  -----------
 
<CAPTION>
 
                      ACCUMULATED                    DATE OF
                      DEPRECIATION   COMPLETION    ACQUISITION
                      AT DECEMBER     DATE FOR         OR
    DESCRIPTION         31, 1995    CONSTRUCTION   COMPLETION
--------------------  ------------  -------------  -----------
<S>                   <C>           <C>            <C>
Imperial Mall,
 Hastings, NE          $(3,110,947)     09/1970      12/01/87
Stockyards Plaza,
 Omaha, NE             (1,491,769)      08/1988      06/01/89
Stockyards Theatres,
 Omaha, NE               (377,267)      06/1990      07/17/90
Taylor Heights
 Shopping Center,
 Sheboygan, WI         (1,080,358)      02/1989      07/30/90
                      ------------
                       $(6,060,341)
                      ------------
                      ------------
</TABLE>
 
------------------------------
(1)  The  aggregate cost for federal income tax purposes for these properties is
     approximately $35,986,000.
 
                                       47
<PAGE>
                     MID-AMERICA BETHAL LIMITED PARTNERSHIP
      SCHEDULE III -- REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED)
<TABLE>
<CAPTION>
                                                                                                      BUILDINGS AND
                                                                                           LAND          TENANT       EQUIPMENT
                                                                              LAND     IMPROVEMENTS   IMPROVEMENTS   AND FIXTURES
                                                                           ----------  -------------  -------------  ------------
<S>                                                                        <C>         <C>            <C>            <C>
REAL ESTATE
Balance, January 1, 1993                                                   $3,161,473   $ 3,296,005    $25,036,391    $  231,353
  Additions at cost                                                            --           --             170,270        --
  Retirements                                                                  --           --             --             --
  Transfer of assets when placed into service                                  --           --           4,089,222        --
                                                                           ----------  -------------  -------------  ------------
Balance, December 31, 1993                                                  3,161,473     3,296,005     29,295,883       231,353
  Additions at cost                                                            --            31,607         89,051        --
  Retirements                                                                  --           --             --             --
                                                                           ----------  -------------  -------------  ------------
Balance, December 31, 1994                                                  3,161,473     3,327,612     29,384,934       231,353
  Additions at cost                                                            --             8,460        103,896        --
  Retirements                                                                  --           --             --             --
                                                                           ----------  -------------  -------------  ------------
Balance, December 31, 1995                                                 $3,161,473   $ 3,336,072    $29,488,830    $  231,353
                                                                           ----------  -------------  -------------  ------------
                                                                           ----------  -------------  -------------  ------------
ACCUMULATED DEPRECIATION
Balance, January 1, 1993                                                   $   --       $   704,268    $ 2,163,973    $  132,799
  Additions charged to costs and expenses                                      --           218,287        799,265        42,594
  Retirements                                                                  --           --             --             --
                                                                           ----------  -------------  -------------  ------------
Balance, December 31, 1993                                                     --           922,555      2,963,238       175,393
  Additions charged to costs and expenses                                      --           221,949        874,382        30,194
  Retirements                                                                  --           --             --             --
                                                                           ----------  -------------  -------------  ------------
Balance, December 31, 1994                                                     --         1,144,504      3,837,620       205,587
  Additions charged to costs and expenses                                      --           221,879        856,338        12,160
  Retirements                                                                  --           --             --             --
                                                                           ----------  -------------  -------------  ------------
Balance, December 31, 1995                                                 $   --       $ 1,366,383    $ 4,693,958    $  217,747
                                                                           ----------  -------------  -------------  ------------
                                                                           ----------  -------------  -------------  ------------
 
<CAPTION>
 
                                                                           CONSTRUCTION-
                                                                            IN-PROGRESS      TOTAL
                                                                           -------------  -----------
<S>                                                                        <C>            <C>
REAL ESTATE
Balance, January 1, 1993                                                    $   816,927   $32,542,149
  Additions at cost                                                           3,272,295     3,442,565
  Retirements                                                                   --            --
  Transfer of assets when placed into service                                (4,089,222)      --
                                                                           -------------  -----------
Balance, December 31, 1993                                                      --         35,984,714
  Additions at cost                                                             --            120,658
  Retirements                                                                   --            --
                                                                           -------------  -----------
Balance, December 31, 1994                                                      --         36,105,372
  Additions at cost                                                             --            112,356
  Retirements                                                                   --            --
                                                                           -------------  -----------
Balance, December 31, 1995                                                  $   --        $36,217,728
                                                                           -------------  -----------
                                                                           -------------  -----------
ACCUMULATED DEPRECIATION
Balance, January 1, 1993                                                    $   --        $ 3,001,040
  Additions charged to costs and expenses                                       --          1,060,146
  Retirements                                                                   --            --
                                                                           -------------  -----------
Balance, December 31, 1993                                                      --          4,061,186
  Additions charged to costs and expenses                                       --          1,126,525
  Retirements                                                                   --            --
                                                                           -------------  -----------
Balance, December 31, 1994                                                      --          5,187,711
  Additions charged to costs and expenses                                       --          1,090,377
  Retirements                                                                   --            --
                                                                           -------------  -----------
Balance, December 31, 1995                                                  $   --        $ 6,278,088
                                                                           -------------  -----------
                                                                           -------------  -----------
</TABLE>
 
                                       48
<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
behalf by the undersigned, thereunto duly authorized.
 
MID-AMERICA REALTY INVESTMENTS, INC.
 
<TABLE>
<C>                                             <S>
      by:        /s/ JEROME L. HEINRICHS
    -----------------------------------------
      Jerome L. Heinrichs, Chairman and         March 1, 1996
           Chief Executive Officer
</TABLE>
 
    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.
 
<TABLE>
<C>                                             <S>
                 /s/ JEROME L. HEINRICHS
---------------------------------------------
      Jerome L. Heinrichs, Director and         March 1, 1996
           Chief Executive Officer
 
                  /s/ MICHAEL F. LAWLER
---------------------------------------------   March 1, 1996
         Michael F. Lawler, Director
 
                 /s/ DANIEL A. BURKHARDT
---------------------------------------------   March 1, 1996
        Daniel A. Burkhardt, Director
 
                   /s/ GARY R. HAWKINS
---------------------------------------------   March 1, 1996
          Gary R. Hawkins, Director
 
                   /s/ JOHN L. MAGINN
---------------------------------------------   March 1, 1996
           John L. Maginn, Director
 
                 /s/ DENNIS G. GETHMANN
---------------------------------------------
   Dennis G. Gethmann, President and Chief      March 1, 1996
  Operating Officer (Principal Financial and
             Accounting Officer)
</TABLE>
 
                                       49
<PAGE>
                                 EXHIBIT INDEX
 
<TABLE>
<CAPTION>
  EXHIBIT                                               DESCRIPTION                                                PAGE
-----------  --------------------------------------------------------------------------------------------------  ---------
<C>          <C>        <S>                                                                                      <C>
        3.   Articles of Incorporation and By-Laws
                  3.1   Articles of Incorporation of the Company, as amended, incorporated by reference to
                         Exhibit 3.1 of the Company's Form 10-Q for the quarter ended March 31, 1994.
                  3.2   By-Laws of the Company, as amended, incorporated by reference to the Company's
                         Registration Statement on Form S-2 (Reg. No. 33-54878) filed on November 24, 1992.
       10.                                                                                Material Contracts
                  10.1  Purchase and Sale Agreement dated June 1, 1992 by and between the Company, Lakewood
                         Associates Limited Partnership, Twin Oaks Centre Limited Partnership, Kimberly West
                         Shopping Center Limited Partnership, Donald F. Day, Christopher R. Held, Terry L.
                         Clauff and James M. Thorburn incorporated by reference to Exhibit 10.1 on the
                         Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1992.
                  10.2  Yield Maintenance Agreement dated June 1, 1992 by and between the Company, Lakewood
                         Associates Limited Partnership, Twin Oaks Centre Limited Partnership, Kimberly West
                         Shopping Center Limited Partnership, Donald F. Day, Christopher R. Held, Terry L.
                         Clauff and James M. Thorburn incorporated by reference to Exhibit 10.2 on the
                         Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1992.
                  10.3  Letter dated August 28, 1992 amending the Yield Maintenance Agreement dated June 1,
                         1992 by and between the Company and Lakewood Associates Limited Partnership, Kimberly
                         West Shopping Center Limited Partnership, Donald F. Day, Christopher R. Held, Terry L.
                         Clauff and James M. Thorburn incorporated by reference to Exhibit 10.3 on the
                         Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1992.
                  10.4  First Amendment to the Yield Maintenance Agreement dated April 19, 1995 incorporated by
                         reference to Exhibit 10.2 of the Company's Quarterly Report on Form 10-Q for the
                         quarter ended March 31, 1995.
                  10.5  Settlement Agreement dated April 19, 1995 among inter alia Twin Oaks Centre Limited
                         Partnership and Mid-America Realty Investments, Inc. incorporated by reference to
                         Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q for the quarter ended
                         March 31, 1995.
                  10.6  Company Stock Option Plan (as amended and restated June 1994), incorporated by
                         reference to Exhibit 10.10 on the Company's Annual Report on Form 10-K for the year
                         ended December 31, 1994.
                  10.7  Company 1995 Stock Plan, incorporated by reference to Exhibit 10.3 of the Company's
                         Quarterly Report on Form 10-Q for the quarter ended March 31, 1995.
                  10.8  Employment Agreement dated April 13, 1992 by and between Jerome L. Heinrichs and the
                         Company incorporated by reference to Exhibit 10.23 of the Company's Quarterly Report
                         on Form 10-Q for the quarter ended September 30, 1992.
</TABLE>
 
                                       50
<PAGE>
<TABLE>
<CAPTION>
  EXHIBIT                                               DESCRIPTION                                                PAGE
-----------  --------------------------------------------------------------------------------------------------  ---------
                 10.9   Employment Agreement dated January 20, 1994 by and between Dennis G. Gethmann and the
                         Company filed as Exhibit 10.12 to the 1993 Form 10-K and incorporated by reference
                         herein.
<C>          <C>        <S>                                                                                      <C>
                 10.10  Company's Executive Death Benefit Plan incorporated by reference to Exhibit 10.1 of the
                         Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1994.
                 10.11  Company's Executive Deferred Compensation Plan incorporated by reference Exhibit 10.2
                         of the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1994.
       21.   Subsidiaries of the registrant.................................................................            52
        23.  Consent of Experts and Counsel.
                  23.1  Consent of Deloitte & Touche LLP.......................................................         53
        27.  Financial Data Schedule...........................................................................         54
</TABLE>
 
    Pursuant  to Item  601(b) (4)  of Regulation  S-K, certain  instruments with
respect to the Company's long-term debt obligations are not filed with this Form
10-K. The Company will furnish  a copy of any  such long-term debt agreement  to
the Securities and Exchange Commission upon request.
 
    Management  contracts and compensatory plans are  set forth as Exhibits 10.6
through 10.11.
 
                                       51