<PAGE>
 
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                            -----------------------
                                  FORM 10-K/A

(Mark One)
[X]             ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934
                For the fiscal year ended December 31, 1997

                                       OR

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

            For the transaction period from _____________ to _____________

                         COMMISSION FILE NUMBER 1-12566
                             ---------------------            
                              G & L REALTY CORP.
            (Exact name of Registrant as specified in its charter)
 
            Maryland                                       95-4449388
(State or other jurisdiction of                         (I.R.S. Employer
incorporation or organization)                         Identification No.)
 
         439 N. BEDFORD DRIVE
       BEVERLY HILLS, CALIFORNIA                              90210
(Address of Principal Executive Offices)                    (Zip Code)


       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (310) 273-9930
                            -----------------------           
          SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                                               NAME OF EACH EXCHANGE
          TITLE OF EACH CLASS                   ON WHICH REGISTERED
          -------------------                 -----------------------
      Common Stock, $.01 par value             New York Stock Exchange
Series A Preferred Stock, $.01 par value       New York Stock Exchange
Series B Preferred Stock, $.01 par value       New York Stock Exchange


          SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                                      None
<PAGE>
 
   This Annual Report on Form 10-K/A is being filed by G & L Realty Corp. (the
"Company") to (i) correct the "Ratio of total debt to total market
capitalization" as shown in the table of Consolidated Selected Financial Data
included in Part II, Item 6 for the years ended December 31, 1996, 1995, 1994
and 1993 (this page 28 supercedes and replaces page 28 of the Company's Annual
Report on Form 10-K for the year ended December 31, 1997 (the "Form 10-K)); and
(ii) correct the number of options exercisable and the weighted-average exercise
price based upon market value at the grant date as of December 31, 1997 included
in Note 14 of the "Notes to Consolidated Financial Statements" (pages F-19 and
F-20 included herewith, supercede and replace pages F-19 and F-20  of the Form
10-K).
<PAGE>
 
<TABLE>
<CAPTION>
                                                                          At or for the Year ended December 31,
                                                         ----------------------------------------------------------------
                                                           1997         1996          1995          1994           1993
                                                         --------     --------      --------      --------       --------
                                                                      (In thousands, except per share amounts)
<S>                                                      <C>          <C>           <C>           <C>            <C>
Funds From Operations (1):
-------------------------
Operating Partnership funds from operations............  $  8,366     $  8,028      $  7,397      $  7,042
Minority interest in consolidated partnership..........      (917)        (847)         (747)         (700)         --
                                                         --------     --------      --------      --------       --------
Funds from operations..................................  $  7,449     $  7,181      $  6,650      $  6,342          --
                                                         ========     ========      ========      ========       ========
Dividends paid.........................................  $  5,953     $  5,525      $  5,067      $  6,821          --
                                                         ========     ========      ========      ========       ========
Payout ratio...........................................      79.9%        76.9%         76.2%        107.6%         --

Common shares and units outstanding:
   Weighted average shares.............................     4,049        4,063         4,091         4,159          --
   Weighted average shares and units...................     4,547        4,542         4,550         4,618          --

Dividends/distributions declared per share/unit........  $   1.47     $   1.36      $   1.24      $   1.64      $   0.07

Cash Flow Data:
--------------
Net cash provided by operating activities..............  $  9,045     $  5,726      $  7,862      $  7,632      $  2,094
Net cash used in investing activities..................   (49,534)     (23,413)      (37,037)      (31,552)      (17,724)
Net cash provided by financing activities..............    58,833       17,283        28,675        21,849        18,871

Balance Sheet Data:
------------------
Land, buildings and improvements,
   net.................................................  $138,782     $ 93,231      $ 92,147      $ 92,715      $ 51,908
Mortgage loans and bonds receivable, net...............    14,098       34,576        33,634          --          12,200
Total investments......................................   152,880      127,807       125,781        92,715        64,108
Total assets...........................................   189,380      135,996       133,347        98,384        71,840
Total debt.............................................    95,172      109,025       111,627        74,018        45,500
Total stockholders' equity.............................    88,924       22,448        18,267        21,311        25,038

Other Data:
----------
Ratio of earnings to fixed charges and preferred
   dividends (2).......................................      1.36x        1.59x         1.61x         1.83x         --
Ratio of funds from operations to fixed
   charges and preferred dividends (3).................      1.77x        1.88x         2.09x         2.66x         --
Ratio of total debt to total market
   capitalization (4)..................................      35.9%        63.8%         79.0%         62.4%         36.9%
Number of properties...................................      25           15            12            12             7
</TABLE>
______________________________

1)  Funds from operations ("FFO") represents net income (computed in accordance
    with generally accepted accounting principles, consistently applied
    ("GAAP")), excluding gains (or losses) from debt restructuring and sales of
    property, plus depreciation of real property, less preferred stock dividends
    paid to holders of preferred stock during the period and after adjustments
    for consolidated and unconsolidated entities in which the Company holds a
    partial interest. FFO is computed in accordance with the definition adopted
    by the National Association of Real Estate Investment Trusts ("NAREIT"). FFO
    should not be considered as an alternative to net income or any other
    indicator developed in compliance with GAAP, including measures of liquidity
    such as cash flows from operations, investing and financing activities. FFO
    is helpful in evaluating the performance of a real estate portfolio
    considering the fact that historical cost accounting assumes that the value
    of real estate diminishes predictably over time. FFO is only one of a range
    of indicators which should be considered in determining a company's
    operating performance. The methods of calculating FFO among different
    companies are subject to variation, and FFO therefore may be an invalid
    measure for purposes of comparing companies. Also, the elimination of
    depreciation and gains and losses on sales of property may not be a true
    indication of an entity's ability to recover its investment in properties.
    The Company implemented the new method of calculating FFO effective as of
    the NAREIT-suggested adoption date of January 1, 1996. FFO has been restated
    for all prior periods under the new method.

2)  For purposes of these computations, earnings consist of net income plus
    fixed charges. Fixed charges and preferred dividends consist of interest
    expense, capitalized interest, amortization of deferred financing costs and
    preferred dividends paid to preferred stock holders during the period.

3)  For purposes of these computations, ratio of funds from operations to fixed
    charges consists of FFO as defined in note (1) plus fixed charges and
    preferred dividends paid to preferred stock holders during the period. Fixed
    charges and preferred dividends consist of interest expense, capitalized
    interest, amortization of deferred financing costs and preferred dividends
    paid to preferred stock holders during the period.

4)  Total market capitalization as of the dates presented is long-term debt plus
    the aggregate market value of the Company's Common Stock and Operating
    Partnership Units not owned by the Company, assuming one Unit is equivalent
    in value to one share of Common Stock plus the liquidation value of the
    Preferred Stock outstanding.



                                     - 28 -
<PAGE>
 
   In December 1995, the Company canceled outstanding options for 218,800 shares
of Common Stock which were originally issued at the time of the Company's
initial public offering at an average exercise price of $18.25 per share.
Concurrently, the Company issued new unvested options for the same aggregate
amount with exercise prices of $9.625 per share, the market price on the date
the new options were granted.

   A summary of the status of the Company's stock incentive plan as of December
31, 1997, 1996, 1995, and changes during the years ending on those dates is
presented in the following table.  The average price presented below represents
the weighted average exercise price based upon the market value at the grant
date.
<TABLE>
<CAPTION>
                                         1997                    1996                1995
                                  -------------------    ------------------    ------------------
                                             Average               Average                Average
                                   Shares     Price      Shares     Price      Shares      Price
                                  ---------------------------------------------------------------
<S>                               <C>        <C>         <C>       <C>         <C>        <C>
Outstanding
      beginning of year            367,000     $11.95    257,000     $10.10     238,000    $18.20
   Granted                          59,500      18.75    143,000      15.00     242,000      9.65
   Exercised                      (134,000)      9.65     (1,000)      9.15       --         --
   Forfeited or canceled           (49,000)     15.00    (32,000)     10.70    (223,000)   $18.25
                                  --------    -------    -------    -------    --------  --------
Outstanding,
      end of year                  243,000     $14.25    367,000     $11.95     257,000    $10.10
                                  ========    =======    =======    =======    ========  ========
Options exercisable
      at year-end                   57,000     $14.60     89,000     $10.80      21,000    $15.50
Weighted-average fair
      value of options
      granted during
      the year                       $2.25                 $2.50                  $1.30
</TABLE>

   The following table summarizes information relating to the Company's stock
incentive plan as of December 31, 1997:
<TABLE>
<CAPTION>
                                 Options Outstanding
                        ------------------------------------------
                                                       Average
                                                    Remaining life             Number
    Exercise Price              Number               (in months)            Exercisable
=========================================================================================
<C>                             <C>                 <C>                    <C>
      $  9.15                    2,000                     89                  2,000
         9.65                   72,000                     96                  3,000
        10.00                    2,000                     90                  2,000
        10.40                    3,000                     95                  3,000
        13.65                   37,000                    100                 14,000
        13.75                   20,000                    102                  7,000
        15.65                    1,000                    105                   --
        15.75                   21,000                    113                   --
        16.75                    8,000                    117                  2,000
        17.00                   35,000                    108                 12,000
        17.65                   12,000                     72                 12,000
        20.15                   30,000                    120                   --
                           ----------------                              ----------------
                               243,000                                        57,000
                           ================                              ================
</TABLE>


                                      F-19
<PAGE>
   Fair value of the plan- As of December 31, 1997 the Company estimated the
fair value of all options granted to be $717,618, calculated based on the
following assumptions:

        Weighted average grant price of stock............     $14.25
        Risk-free interest rate...........................      5.77%
        Expected life of the option......................     3 years
        Expected volatility of stock.....................      21.00%
        Expected dividends...............................     $ 1.56

   The Company assumes that the equivalent risk-free interest rate is the
closing market rate, on the last trading day of the year, for ten-year treasury
bills.

   The Company's stock incentive plan was introduced in conjunction with its
initial public offering on December 16, 1993.  Based upon the number of options
exercised and cancelled since the inception of the plan, the Company assumes the
estimated life of the outstanding option agreements, to be three years.

   The Company uses the treasury stock method for purposes of determining the
number of shares to be issued to in conjunction with the Company's stock
incentive plan.  At a weighted-average exercise price of $14.25 and a market
price of $21.20 per share as of December 31, 1997, the number of shares to be
issued is 80,000.


15.  CONCENTRATION OF CREDIT RISK

   The Company is subject to the all risks associated with leasing property,
including but not limited to, the risk that upon the expiration of leases for
space located in the Company's properties, the leases may not be renewed, the
space may not be relet or the terms of renewal or releasing (including any cost
of required renovations or concessions to tenants) may be less favorable than
current lease terms.  If the Company is unable to promptly relet or renew leases
for a significant portion of its space or if the rental rates upon renewal or
reletting are significantly lower than expected, the Company's earnings and the
ability to make distributions to stockholders may be adversely affected.  Most
of the tenants in the Company's healthcare properties provide specialized health
care services.  The ability of the tenants to honor the terms of their
respective leases is dependent upon the economic, regulatory and social factors
affecting the communities and industry in which the tenants operate.

   Many of the Company's medical office properties are in close proximity to one
or more local hospitals.  Relocation or closure of a local hospital could make
the Company's nearby properties (particularly those outside of the Beverly Hills
area) less desirable to doctors and healthcare providers affiliated with the
hospital and affect the Company's ability to collect rent due under existing
leases, renew leases and attract new business.

   A substantial portion of the Company's assets are invested in debt
instruments secured by long-term senior care or skilled nursing facilities.  The
ability of the facility owners to pay their obligations as they come due, as
well as their ability to obtain other permanent financing through the sale of
bonds or other forms of long-term financing is dependent upon their ability to
attract patients who are able to pay for the services they require.  These
facilities have complex licensing requirements as do the professionals they
employ.  The majority of the services rendered are paid by various federal,
state and local agencies.  Each of these facilities function in a complex
environment of changing government regulations which have a significant impact
on economic viability.

   The Company leases the six New Jersey primary care facilities to one tenant,
PHP Healthcare Corporation, a NYSE listed company ("PHP").  The annualized rent
paid to the Company by PHP is approximately $2.7 million or 13.3% of the $20.3
million in rental revenues recognized by the Company in 1997.  The Company
believes that the current management of PHP is experienced and that PHP will be
able to pay its obligations under the lease as they become due.  Not
withstanding management's belief, however, the financial position of the
Company, and its ability

                                      F-20
<PAGE>
 
                                   SIGNATURES

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

                                    G & L REALTY CORP.


Date: April 22, 1998         By:    /s/ Quentin Thompson
                                    ------------------------------------------
                                    Quentin Thompson
                                    Principal Financial and Accounting Officer,
                                    Treasurer and Secretary