<PAGE>
 
                   UNITED STATES 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
                              (NO FEE REQUIRED)

             For the transition period from _________ to __________

                         Commission file number 1-12560

                                JP REALTY, INC.
            ______________________________________________________
            (Exact Name of Registrant as Specified in Its Charter)

               MARYLAND                          87-0515088
            ____________________________________________________
       (State of Incorporation)                (IRS Employer
                                           Identification Number)

               35 CENTURY PARK-WAY, SALT LAKE CITY, UTAH 84115
          __________________________________________________________
         (Address of Principal Executive Offices, Including Zip Code)

      Registrant's Telephone Number, Including Area Code  (801) 486-3911
                                                          --------------
       Securities registered pursuant to Section 12(b) of the Act:


           TITLE OF EACH CLASS                      Name of each exchange
Common Stock, par value $.0001 per share            on which registered
                                                   ---------------------
                                                    New York Stock Exchange

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

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

      The aggregate market value of the voting stock held by non-affiliates of
the Registrant was $433,271,925 as of March 10, 1998. The aggregate market value
has been computed based on a price of $25 per share, the closing price of the
stock on the New York Stock Exchange on March 10, 1998. Shares Outstanding at
March 10, 1998 17,416,952 Shares of Common Stock, par value $.0001 per share.
200,000 Shares of Price Group Stock, par value $.0001 per share.

                      DOCUMENTS INCORPORATED BY REFERENCE

                                     None
<PAGE>
 
   Certain matters discussed under the captions "Business and Properties" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and elsewhere in this Annual Report of Form 10-K/A may constitute
forward-looking statements for purposes of Section 21E of the Securities
Exchange Act of 1934, as amended, and as such may involve known and unknown
risks, uncertainties and other factors which may cause the actual results,
performance and achievements of JP Realty, Inc. to be materially different from
future results, performance or achievements expressed or implied by such 
forward-looking statements.


                                        PART I

ITEMS 1 AND 2.  BUSINESS AND PROPERTIES

      General

      JP  Realty,  Inc.  (together  with  its subsidiaries, the "Company"), the
sole general  partner  of  Price  Development  Company,   Limited  Partnership
(the"Operating  Partnership"), is a fully integrated, self-administered and
self-managed real estate investment trust ("REIT") primarily engaged in the
business of owning, leasing, managing, operating, developing, redeveloping and
acquiring malls, community  centers  and  other commercial and retail properties
in Utah, Idaho, Colorado, Arizona, Nevada,  New  Mexico  and  Wyoming (the
"Intermountain Region"), as well as in Oregon, Washington and California.   The
Company was formed on September 8, 1993 to continue and expand the business,
commenced in 1957, of certain companies (the "Predecessor Companies") affliated
with John Price, Chairman of the Board and Chief Executive Officer of the
Company.  As of December 31, 1997,  the  Company,  through  the  Operating
Partnership,  held a portfolio consisting of 48 properties ("Properties"),
including 15 enclosed regional malls, 25 community centers and two free-
standing retail properties located in ten states and six mixed-use commercial
properties located primarily in the Salt Lake City, Utah metropolitan area.
Since 1976, the Company and the Predecessor Companies have been responsible for
developing more retail malls in the Intermountain Region than any other
developer having constructed, developed or redeveloped 11 malls in the region
(as well as three other  malls  in Oregon and Washington).


      Based on gross leasable area (Company-owned leasable area plus any
tenant-owned leasable area within the Company's properties or "Total GLA"), the
Company owns and operates the largest retail property portfolio in each of the
states of Utah, Idaho and Wyoming, and is the leading owner and operator of
retail shopping center properties throughout the Intermountain Region.  As of
December 31, 1997, the Company's retail portfolio contained an aggregate of
10,909,652 square feet of Total GLA and its commercial portfolio contained an
aggregate of 1,417,667 square feet of gross leasable area (Company-owned
leasable area within the Company's properties or "GLA").  Based on Total GLA,
the Company's retail properties were approximately 94% leased as of December 31,
1997, and, based on GLA, its commercial properties were approximately
92% leased as of that date.  For the year ended December 31, 1997, the retail
properites and the commerical properities contributed approximately 90.5% and
9.5%, respectively, to the Company's consolidated net operating income.

      The Company's strategy is to extend its dominant market position in the
Intermountain Region, and to continue to achieve cash flow growth and enhance
the value of the Properties by increasing their rental income and net operating
income over time.  The Company expects to achieve rental income and net
operating income growth through (i) contractual rent increases, which are
included in substantially all existing leases for the Properties, (ii) re-
leasing available space at higher rent levels and (iii) selectively renovating,
expanding and redeveloping the Properties.  In order to extend its market
position, the Company expects to concentrate its acquisition and other
development activities in the Western States.

      In January, 1994, the Company completed a series of transactions intended
to  allow  it  to  reorganize  and  continue  the  business  of the Predecessor
Companies  through  the Operating Partnership.  As part of these  transactions,
the Company issued 13,029,500  shares  of  common  stock  ("Common Stock") in a
public offering (the "Offering"), issued 200,000 shares of Price Group Stock to
Fairfax  Realty,  Inc.  ("Fairfax"),  a company controlled by John  Price,  and
incurred $95 million in fixed rate mortgage debt (the "Mortgage Debt") together
with $9 million in additional mortgage  debt  (the "Additional Mortgage Debt").
Net proceeds of the sale of Common Stock were used  by  the Company to purchase
its  general  partner  interest  in the Operating Partnership,  which  in  turn
utilized such proceeds, together with  the  net proceeds from the Mortgage Debt
and the Additional Mortgage Debt, to (i) retire  substantially  all of the then
existing  mortgage  debt encumbering 38 of the Properties and other  borrowings
relating to such Properties,  (ii)  purchase  the  equity interests held by two
partners in Cottonwood Mall and (iii) invest an additional  $4  million  in the
development   project  for  the  regional  mall  being  developed  in  Spokane,
Washington.

                                       2
<PAGE>
 
      In August, 1995, the Company completed an additional public offering (the
"1995 Offering")  raising approximately $56.4 million in gross proceeds through
the sale of 2,750,000  shares  of  Common  Stock.   The  Company  used  the net
proceeds  raised  in  the  1995 Offering to purchase additional general partner
interest ("OP Units") in the Operating Partnership.   The Operating Partnership
utilized $47 million of these funds to repay borrowings under a credit facility,
which borrowings  were  incurred  to fund the June 1995 acquisitions of the
Eastridge Mall and Animas Valley Mall.

     On  January  28,  1997, JP Realty, Inc. completed a public offering  of
1,500,000 shares of Common  Stock,  raising  approximately $38.8 million in
net proceeds.  The Operating Partnership, which  received  the net proceeds
from  JP  Realty,  Inc.,  in  exchange for OP Units, used such proceeds  to
reduce outstanding borrowings under the credit facilities.

     On  October  16,  1997, the Company  entered  into  a  $150.0  million
unsecured credit facility  (the "1997 Credit Facility") with a syndicate of
banks.  The Company used borrowings  under the 1997 Credit Facility to
repay  $67.1  million  outstanding  under   its  two  then-existing  credit
facilities, a $40.0 million credit facility (the  "1996  Credit  Facility")
and  a  $50.0  million  credit  facility (the "1995 Credit Facility").   On
December 18, 1997, the Company increased  the  total amount available under
the 1997 Credit Facility to $200.0 million.  The 1997 Credit Facility bears
interest,  at  the  option  of  the Operating Partnership,  at  one,  or  a
combination, of (i) the higher of  the  Federal  Funds  Rate  plus 50 basis
points  or  the  prime  rate,  (ii) LIBOR plus a spread of 70 to 130  basis
points  based on the credit rating  of  the  Operating  Partnership  (which
resulted  in  a  spread  of 90 basis points at  December 31, 1997) or (iii)
LIBOR plus a spread as offered  by  the  participating banks under a one to
three month bid rate auction option.  The  1997  Credit Facility has a term
of  three years and provides for monthly payments of  interest  only.   The
weighted  average  interest  rate  paid  on  1997 borrowings under the 1997
Credit Facility was 6.75%, and the balance outstanding at December 31, 1997
was  $127.0 million.  The 1997 Credit Facility  is  available  for  general
corporate   purposes,   including   development,  working  capital,  equity
investments, repayment of indebtedness and/or amortization payments.

     Each of the Company's regional malls  is the premier and dominant mall
and, in some cases, the only mall within its  trade  area  and is generally
considered  to  be  the financial, economic and social center for  a  given
geographic area.  The  trade  areas  surrounding the Company's malls have a
drawing radius, depending on the mall, ranging from five to over 150 miles.
The malls have attracted as anchor tenants some of the leading national and
regional retail companies such as JCPenney,  Nordstrom,  Wal-Mart,  The Bon
Marche,  Sears, Dillard's, Mervyn's and ZCMI.  The 15 regional malls in  the
portfolio  contain  and aggregate of approximately 7,745,000 square feet of
Total GLA and range in  size  from  approximately 296,000 to 876,000 square
feet  of  Total  GLA.   The  community  center  portfolio  consists  of  25
Properties in seven states containing over 3,159,000  square feet of Total
GLA.    The   two  freestanding  retail  properties  contain  a  total   of
approximately 5,000  square  feet  of GLA.  The commercial portfolio, which
includes 40 commercial buildings containing  approximately 1,418,000 square
feet of GLA, is primarily located in the Salt  Lake  City,  Utah area where
the Company's headquarters are located.

                                       3
<PAGE>
 
Properties

The following tables set forth certain  information relating to the Properties,
all of which (except as otherwise indicated)  are  100%  owned by the Operating
Partnership.   The  Company  believes that all such Properties  are  adequately
covered by insurance.

<TABLE>
<CAPTION>
                                                Retail Properties
                                                  Occupancy As Of
                                                    12/31/97
                                                ---------------
                               Free                                                 Based
                             Standing   Tenant            Total          Tenant      On    Based  Tenant  Owner-
                    Property Stores(2) Shops(3) Anchors  GLA(4)  GLA(5)  Owned      Total   On     Shop    Ship
Property  Location  Type (1) (Sq. Ft.)(Sq. Ft.)(Sq. Ft) (Sq.Ft.) (Sq.Ft) (Sq.Ft.)    GLA    GLA    Space  Type(6)   Anchors
--------  --------  -------- -------- -------- -------- ------- -------  -------   ------  ------ ------- --------  -------
<S>        <C>        <C>    <C>      <C>      <C>      <C>     <C>      <C>        <C>    <C>    <C>     <C>       <C>
Utah
----
Bank One   Nephi      FR        3,590       --       --   3,590   3,590       --     100.0% 100.0%    --    Fee     None

Cache
Valley
Mall(7)    Logan      RM       30,120   96,839  182,889 309,848 307,348    2,500      95.2%  95.2%  84.7%   Fee     JCPenney,
                                                                                                                    ZCMI,
                                                                                                                    Lamonts
Cottonwood
Mall(7)    Salt Lake
           City       RM       53,300  321,314  379,508 754,122 754,122       --      93.5%  93.5%  84.7% Fee/GL(8) JCPenney,
                                                                                                                    ZCMI
Cottonwood
Square     Salt Lake
           City       CC           --   35,371   41,612  76,983  76,983       --      93.3%  93.3%  85.4%   Fee/GL  Albertsons

Fort Union
Plaza      Salt Lake
           City       CC       29,240       --       --  29,240  29,240       --     100.0% 100.0%    --     GL     None

Gateway
Crossing   Bountiful  CC       35,620   65,932  174,047 275,599 145,639  129,960(9)  100.0% 100.0% 100.0%   Fee     Ernst
                                                                                                                    Home
                                                                                                                    Center(10),
                                                                                                                    ShopKo,
                                                                                                                    TJ Maxx
North
Temple
Shops      Salt Lake
           City       CC           --   10,085       --  10,085  10,085       --(11) 100.0% 100.0% 100.0%   Fee     Albertsons,
                                                                                                                    Payless Drug
Orem
Plaza-
Center
St.        Orem       CC       15,491   18,814   62,420  96,725  91,125    5,600     100.0% 100.0% 100.0%   Fee     Savers,
                                                                                                                   Showbiz Pizza
Orem
Plaza-
State
St.        Orem       CC        8,045   19,057       --  27,102  27,102       --(12)  89.3%  89.3%  84.8%   Fee     Payless Drug

Plaza
9400       Sandy      CC       34,510   55,445  136,745 226,700 226,700       --     100.0% 100.0% 100.0%    GL     Albertsons,
                                                                                                                    Fred Meyer,
                                                                                                                    Pep Boys
Red
Cliffs
Mall(7)    St. George RM       12,500   90,872  203,338 306,710 192,439  114,271(13)  97.4%  95.8%  91.2%   Fee     JCPenney,
                                                                                                                    ZCMI,
                                                                                                                    Wal-Mart
Red
Cliffs
Plaza      St. George CC        9,327       --   46,626  55,953  46,626    9,327      16.7%    --      --   Fee     Ernst
                                                                                                                    Home
                                                                                                                    Center(14)
River
Pointe
Plaza     West Jordan CC       18,522   56,120  135,707 210,349  56,120  154,229(15)  98.5%  94.3%  94.3%   Fee     Albertsons,
                                                                                                                    ShopKo
</TABLE>

                                       4
<PAGE>
 
<TABLE>
<CAPTION>
                                                Retail Properties - (continued)
                                                         Occupancy As Of
                                                             12/31/97
                                                         ---------------
                               Free                                                 Based
                             Standing   Tenant            Total          Tenant      on    Based  Tenant  Owner-
                    Property Stores(2) Shops(3) Anchors  GLA(4)  GLA(5)  Owned      Total   on     Shop    Ship
Property  Location  Type (1) (Sq. Ft.)(Sq. Ft.)(Sq. Ftq (Sq.Ft) (Sq.Ft) (Sq.Ft.)     GLA    GLA    Space  Type(6)   Anchors
--------  --------  -------- -------- -------- -------- ------- -------  -------   ------  ------ ------- --------  -------
<S>        <C>        <C>    <C>      <C>      <C>      <C>     <C>      <C>        <C>    <C>    <C>     <C>       <C>
Utah
----
(continued)
---------
Riverside
Plaza      Provo      CC       10,050   11,363  156,454 177,867 174,867    3,000      65.7%  65.1%  84.8% Fee       Best
                                                                                                                    Products(16)
                                                                                                                    Payless Drug,
                                                                                                                    McFrugals,
                                                                                                                    Mini World
University
Crossing   Orem       CC       33,401   38,551  128,091 200,043 199,143      900     100.0% 100.0% 100.0% Fee       Burlington
                                                                                                                    Coat(17),
                                                                                                                    Office Max(18),
                                                                                                                    CompUSA
Idaho
-----
Alameda
Plaza      Pocatello  CC       19,049   27,346  143,946 190,341 190,341       --     100.0% 100.0% 100.0% Fee       Albertsons,
                                                                                                                    Fred Meyer

Baskin
Robbins
17th
Street     Idaho
           Falls      FR        1,761       --       --   1,761   1,761       --     100.0% 100.0%     -- Fee       None

Boise
Towne
Square(7)  Boise      RM       84,418  339,050  452,037 875,505 480,368  395,137(19)  98.0%  96.4%  94.9% Fee/GL(20)JCPenney,
                                                                                                                    Sears, The
                                                                                                                    Bon Marche,
Boise
Plaza      Boise      CC           --       --  108,464 108,464 108,464       --     100.0% 100.0%     -- PI(21)    Burlington
                                                                                                                    Coat(17),
                                                                                                                    Albertsons
Boise
Towne
Plaza      Boise      CC           --       --   76,414  76,414  76,414       --     100.0% 100.0%     -- Fee       Circuit City,
                                                                                                                    Linens' n
                                                                                                                    Things
Grand
Teton
Mall       Idaho
           Falls      RM       29,089  172,056  323,925 525,070 519,450    5,620      94.1%  94.0%  81.9% Fee       JCPenney,
                                                                                                                    Sears, ZCMI,
                                                                                                                    The Bon
                                                                                                                    Marche
Pine
Ridge
Mall(7)    Pocatello  RM       25,818  148,976  436,528 611,322 499,822  111,500(9)   96.1%  95.2%  84.0% Fee/GL(22)JCPenney,
                                                                                                                    ZCMI,
                                                                                                                    The Bon Marche,
                                                                                                                    Sears, ShopKo
Silver
Lake
Mall(7)    Coeur
           d'Alene    RM       20,090   97,164  217,493 334,747 327,811    6,936      99.1%  99.1%  96.9% Fee       JCPenney,
                                                                                                                    Sears,
                                                                                                                    Emporium,
                                                                                                                    Lamonts
Twin
Falls
Crossing   Twin
           Falls      CC           --       --   37,680  37,680  37,680       --     100.0% 100.0%     -- Fee       None(23)

Yellow-
stone
Square     Idaho
           Falls      CC       16,865   38,950  166,733 222,548 220,748    1,800      87.6%  87.5%  59.5% PI(24)   Albertsons,
                                                                                                                   Fred Meyer
Washington
----------
Spokane
Valley
Mall(7)    Spokane    RM       46,125  273,673  369,184 688,982 447,405  241,577(25)  89.0%  83.1%  72.4% Fee       JCPenney,
                                                                                                                    Sears,
                                                                                                                    The Bon
                                                                                                                    Marche
</TABLE>

                                       5
<PAGE>
 
<TABLE>
<CAPTION>
                                                             Retail Properties - (contained)
                                                              Occupancy as of
                                                                  12/31/97
                                                              ---------------
                               Free                                                 Based
                             Standing   Tenant           Total          Tenant       on    Based  Tenant  Owner-
                    Property Stores(2) Shops(3) Anchors  GLA(4)  GLA(5)  Owned      Total   on     Shop    Ship
Property  Location  Type (1) (Sq. Ft.)(Sq. Ft.)(Sq. Ft) (Sq.Ft) (Sq.Ft) (Sq.Ft.)     GLA    GLA    Space  Type(6)   Anchors
--------  --------  -------- -------- -------- -------- ------- -------  -------   ------  ------ ------- --------  -------
<S>        <C>        <C>    <C>      <C>      <C>      <C>     <C>      <C>        <C>    <C>    <C>     <C>       <C>
Washington
(Continued)
----------
Three
Rivers
Mall(7)    Kelso      RM      199,623  126,674  188,076 514,373 345,566  168,807(26)  97.3%  96.0%  89.1% Fee       JCPenney,
                                                                                                                    Sears,
                                                                                                                    The Bon Marche,
                                                                                                                    Emporium
Oregon
------
Bailey
Hills
Plaza      Eugene     CC       12,000   11,895  155,000 178,895  11,895  167,000(27) 100.0% 100.0% 100.0% Fee       Safeway,
                                                                                                                    ShopKo

Division
Crossing   Portland   CC        2,589   24,091   67,960  94,640  92,051    2,589      91.5%  91.3%  66.6% Fee       United Grocers,
                                                                                                                    Payless Drug

Halsey
Crossing   Gresham    CC        9,000   23,071   52,764  84,835   84,835      --      95.3%  95.3%  82.8%  GL       Safeway

Salem
Center     Salem      RM       45,000  167,500  438,000 650,500  212,500 438,000      96.8%  90.2%  87.6% Fee/GL(28)Nordstrom,
                                                                                                                    Meier & Frank
                                                                                                                    JCPenney
Wyoming
-------
Eastridge
Mall       Casper     RM       17,500  264,388  289,796 571,684  495,801  75,883(29)  90.9%  89.5%  80.3% Fee       Target, Sears,
                                                                                                                    JCPenney,
                                                                                                                    The Bon Marche
White
Mountain
Mall(7)    Rock
           Springs    RM       26,025  105,962  208,452 340,439  340,439      --      76.4%  76.4%  75.4% Fee       JCPenney,
                                                                                                                    Herbergers,
                                                                                                                    Wal-Mart
New Mexico
----------
Animas
Valley
Mall       Farmington RM       33,000  221,936  271,155 526,091  466,753  59,338(30)  78.5%  75.8%  71.7% Fee       JCPenney,
                                                                                                                    Sears,
                                                                                                                    Dillard's,
                                                                                                                    Beall's,
                                                                                                                    Best Products
North
Plains
Mall(7)    Clovis     RM       19,076   81,407  195,431 295,914  196,937  98,977(13)  96.3%  94.4%  86.6% Fee       JCPenney,
                                                                                                                    Sears,
                                                                                                                    Wal-Mart,
                                                                                                                    Beall's
Nevada
------
Fremont
Plaza      Las Vegas  CC        6,542   19,643   77,348 103,533  103,533      --     100.0% 100.0% 100.0%  GL       Smith's Food
                                                                                                                    & Drug,
                                                                                                                    Sav-On Drug

Plaza 800  Sparks     CC        5,985   21,846  139,607 167,438  167,438      --      95.7%  95.7%  67.0%  GL       Albertsons,
                                                                                                                    ShopKo
</TABLE>

                                       6
<PAGE>
 
<TABLE>
<CAPTION>
                                                       Retail Properties - (continued)
                                                              Occupancy as of
                                                                  12/31/97
                                                              ---------------
                               Free                                                          Based
                             Standing   Tenant              Total                Tenant       on     Based  Tenant  Owner-
                    Property Stores(2) Shops(3)  Anchors    GLA(4)     GLA(5)    Owned       Total    on     Shops   Ship
Property  Location  Type (1)(Sq. Ft.) (Sq. Ft.) (Sq. Ft)   (Sq.Ft)    (Sq.Ft)   (Sq.Ft.)      GLA     GLA    Space  Type(6) Anchors
--------  --------  -------- -------- --------  --------  ---------- --------- -----------   ------  ------ ------- ------  -------
<S>        <C>        <C>    <C>      <C>       <C>       <C>        <C>       <C>           <C>    <C>     <C>     <C>    <C>
Colorado
--------
Austin
Bluffs
Plaza      Colorado
           Springs      CC       9,447     35,859    71,543    116,849    78,902    37,947(31) 100.0%  100.0% 100.0%  Fee   Albert-
                                                                                                                            sons,
                                                                                                                            Longs
                                                                                                                            Drug
Arizona
-------
Fry's
Shopping
Plaza      Glendale    CC       8,564     38,781    71,919    119,264   119,264        --       98.0%   98.0%  93.8%  Fee   Fry's

Woodlands
Village    Flagstaff   CC       4,020     43,380   146,898    194,298    91,858   102,440(13)  100.0%  100.0% 100.0%  Fee   Bashas',
                                                                                                                            Wal-Mart

California
----------
Anaheim
Plaza      Anaheim     CC      10,000         --    67,433     77,433    77,433        --      100.0%  100.0%     --  PI(32)(33)

Visalia
Mall       Visalia    RM       8,510    174,206   257,000    439,716   439,716         --       97.8%   97.8%  94.5%  Fee   JC-
           -------  --------- --------- ---------- ---------  ---------     ------- -------  -------  ------- ------        Penney
                                                                                                                            Gotts-
                                                                                                                            chalk's
                             953,812  3,277,617 6,678,223 10,909,652 8,576,314  2,333,338     93.66%  91.94%  85.68%
                             =======  ========= ========= ========== =========  =========     ====== ======= =======
</TABLE>
------------------------
(1) Property  type  definitions  are  as  follows: Regional Mall--RM, Community
    Centers--CC, Freestanding Retail Properties--FR.
(2) Freestanding stores means leasable buildings or other structures located on
    a property which are not physically attached to a mall or community center.
(3) Tenant shops means non-anchor retail stores  located in a mall or community
    center.
(4) Represents  Operating  Partnership-owned  leasable  area  and  tenant-owned
    leasable area within the Properties.
(5) Represents Operating Partnership-owned leasable area within the Properties.
(6) Ownership  type  definitions  are  as  follows:   Fee,  Groundlease-GL  and
    Partnership Interest-PI.
(7) Secured Property as of December 31, 1997.
(8) The Operating Partnership owns a ground lease on one-half acre.
(9) Tenant owned space at this Property includes ShopKo.
(10)Ernst  Home  Center  has  filed  for protection  under  the  United  States
    Bankruptcy Code ("Bankruptcy Code")  but  continues  to  be responsible for
    lease payments and at December 31, 1997 was still paying rent  pursuant  to
    the terms of the lease and the Bankruptcy Code.
(11)Tenant-owned space at this Property includes Albertsons and Payless Drug.
(12)Tenant-owned space at this Property includes Payless Drug.
(13)Tenant-owned space at this Property includes Wal-Mart.
(14)Ernst  Home Center has filed for protection under the Bankruptcy Code.  The
    trustee  in  bankruptcy has rejected the terms of the lease and the Company
    is currently in the process of re-leasing the space.
(15)Tenant-owned space at this Property includes Albertsons and ShopKo.
(16)Best Products  has  filed  for  protection  under the Bankruptcy Code.  The
    trustee in bankruptcy has rejected the terms  of this lease and the Company
    is currently in the process of re-leasing the space.
(17)The Operating Partnership's lease is with Fred  Meyer  which  subleases the
    Property space to Burlington Coat.
(18)The  Operating  Partnership's lease is with Fred Meyer which subleases  the
    space to Burlington Coat.  33.6% of the space represented by the Burlington
    Coat sublease is further subleased to Office Max.
(19)Tenant-owned space at this Property includes JCPenney, Sears and Mervyn's.
(20)The Operating Partnership owns a ground lease on two acres.

                                       7
<PAGE>
 
                               Retail Properties - (Continued)

(21)The  Operating  Partnership's   ownership  represents  a  73.3  partnership
    interest in the current fee holder of the property.
(22)The Operating Partnership owns two  ground  leases  on  7.3  acres  and 1.2
    acres.
(23)The  Operating  Partnership's lease subleases the Property to several other
    retailers.
(24)The  Operating  Partnership's  ownership  represents  a  83.5%  partnership
    interest in the current fee holder of the Property.
(25)Tenant-owned space at this property includes Sears and The Bon Marche.
(26)Tenant-owned space at this Property includes Target and Top Foods.
(27)Tenant-owned space at this Property includes Safeway and ShopKo.
(28)The Operating Partnership  owns  seven  ground leases comprising a total of
    1.58 acres and 2.35 acres in fee.
(29)Tenant-owned space at this Property includes Target.
(30)Tenant-owned space at this Property includes  property  owned  by  a  third
    party which leases its space to Best Products.
(31)Tenant-owned space at this Property includes Longs Drugs.
(32)The Operating Partnership's ownership interest represents a 50% partnership
    interest in the current ground lease holder of the Property.
(33)Anchor space is vacant as of December 31, 1997.

                                       8
<PAGE>
 
<TABLE>
<CAPTION>                                COMMERCIAL PROPERTIES

                                                               Occupancy
                                         Property      GLA     Based on     Ownership
Property                Location         Type(1)     (Sq.Ft)      GLA         Type
--------                --------------   --------   ---------- -----------  ---------
<S>                     <C>              <C>        <C>        <C>          <C>
UTAH
----
Price Business Center-
Pioneer Square          Salt Lake City    BP           530,484      97.52%   Fee

Price Business Center-
South Main              Salt Lake City    BP           144,554      96.41%   Fee

Price Business Center-
Timesquare              Salt Lake City    BP           289,423      84.07%   Fee

Sears-Eastbay           Provo             CP            48,880     100.00%   Fee

Price Business Center-
Commerce Park           West Valley City  BP           393,268      89.74%   Fee

IDAHO
-----
Boise/FSB Plaza         Boise             CP            11,058      38.55%   Fee
                                                     ---------  ----------
                                                     1,417,667      92.13%
                                                     =========  ==========
</TABLE>
___________________

(1)  Property  type  definitions are as follows:  Business Park--BP, Commercial
Property--CP.


Significant Properties

     Boise Towne Square contributed in excess of 10% of the Company's total
aggregate gross revenue for the year ended December 31, 1997.  Additionally,
Spokane Valley Mall, comprised in excess of 10% of the Company's assets
the year ended December 31, 1997.   Certain additional information relating to
these Properties is set forth below.

                                       9
<PAGE>
 
Boise Towne Square

      Boise Towne Square is centrally located in Boise, Idaho adjacent to the
main thoroughfare of the city.   Boise Towne Square was opened by the
Predecessor Companies in October of 1988.  Boise Towne Square is the dominant
regional mall in its trade area, with several community centers as its major
competition.  The  real  estate tax rate on the improvements for the year ended
December 31, 1997 was 1.9%, amounting to a total tax of $764,000 for the year.

      The  Company  leases  approximately  two  acres  which  is  utilized  for
perimeter parking and landscaping from Union Pacific Railroad Company on a year-
to-year basis from December 1  to  November  30  at  a  current rental rate of
$21,000  per year.  Boise Towne Square is part of the collateral  securing  the
Mortgage Debt  and the Company believes it is adequately insured.  Depreciation
is taken utilizing  a  straight line method over 40 years with a net book basis
of approximately $31,301,000,  $32,543,000 and  $33,687,000  at  December 31,
1997,  1996  and  1995,  respectively.   It is the Company's policy to renovate,
expand and upgrade as warranted by market conditions.

     The Company is currently constructing a 273,000  square foot expansion
at  the  Boise Towne Square which upon completion will include  new  anchor
tenant space  for a fifth anchor tenant, additional anchor tenant space for
an existing anchor  tenant  and  additional shop tenant space.  The project
will add approximately 180,000 square  feet  of  Total  GLA  for  Dillards,
30,000  square  feet  of GLA for the expansion of The Bon Marche department
store and approximately 63,000 square feet of GLA for additional shops.
                                                                         
    As of December 31, 1997, 1996 and 1995, Boise  Towne  Square was 98%, 99%
and 98% occupied, respectively, with an average annual rent per  square foot of
$15.00, $14.80 and $14.65 for the years ended on those respective  dates.   Its
major  tenants occupying 10% or more of Total GLA are all department stores and
include  JCPenney,  Sears,  The  Bon  Marche and Mervyn's.  JCPenney, Sears and
Mervyn's own their own land and buildings  and  are  subject to a Construction,
Operation and Reciprocal Easement Agreement that expires in 2078, while The Bon
Marche's lease is for a term of 20 years, expiring in  2008,  with  two 20-year
extension  options.   Boise  Towne Square's leases will expire on the following
schedule:
<TABLE>
<CAPTION>
                                                                 Average
                                                Annualized  Annualized Base      Percentage Of GLA
                                                   Base     Rent Per Square Represented by Expiring Leases
                           Number   Approximate  Rent Under    Foot Under   Assuming No    Assuming Full
Lease Expiration          of Leases    GLA       Expiring      Expiring      Exercise of     Exercise of
Year Ending December 31,  Expiring  Square Feet   Leases        Leases(1)  Renewal Options Renewal Options
------------------------  --------  ----------- ------------  -----------  --------------- ---------------
<S>                       <C>       <C>         <C>           <C>          <C>             <C>
1998                          41         50,723  $ 1,107,101   $    21.83       10.56%           8.03%
1999                          27         72,434    1,253,000        17.30       15.08            7.94
2000                          28         60,650    1,132,938        18.68       12.63            9.69
2001                          14         43,144      798,535        18.51        8.98            8.84
2002                           8         14,492      228,181        15.75        3.02            1.65
2003                          14         25,795      588,623        22.82        5.37            5.14
2004                           3         10,625      212,214        19.97        2.21            1.93
2005                           1          3,710       68,635        18.50        0.77            0.77
2006                           5         13,525      240,281        17.77        2.82            1.56
2007                           4          9,185      227,900        24.81        1.91            1.91
2008 and thereafter            7        143,287    1,049,756         7.33       29.83            0.41
                           -----     ----------  -----------               ----------       ---------
   Total                     152        447,570                                93.18%          47.87%
                           =====     ==========                            ==========       =========
</TABLE>

(1) Excludes tenants paying percentage rents in lieu of minimum rents.

                                      10
<PAGE>
 
Spokane Valley Mall

     On August 13, 1997, the Company held the grand opening of its  Spokane
Valley Mall, a two-level, 688,982 square foot regional mall, located  on an
85  acre  parcel  of  land overlooking the Spokane River and the Centennial
Trail in Spokane, Washington.   The  mall was 72% leased on August 13, 1997
and was 89% leased on December 31, 1997.   Its  major tenants occupying 10%
or more of Total GLA are department stores and include  JCPenney, Sears and
The Bon Marche.  Sears and The Bon Marche own their own land  and buildings
and  are  subject  to  a  Construction,  Operation  and Reciprocal Easement
Agreement that expires in 2046, while JCPenney's  lease is for a term of 20
years, expiring in 2017, with six, five-year extension options.

Spokane Valley Mall's leases will expire on the following schedule:

<TABLE>
<CAPTION>
                                                                 Average
                                                 Annualized  Annualized Base     Percentage of GLA
                                                    Base     Rent Per Square Represented by Expiring Leases
                            Number   Approximate  Rent Under    Foot Under     Assuming No Assuming Full
Lease Expiration           of Leases    GLA       Expiring      Expiring        Exercise of  Exercise of
Year Ending December 31,   Expiring  Square Feet   Leases       Leases(1)    Renewal Options Renewal Options
------------------------   -------- ------------ ----------- --------------- --------------- ---------------
<S>                        <C>      <C>          <C>         <C>
1999                          1            120    $   15,600  $    130.00            0.03%        0.03%
2000                          9          5,295       159,317        30.09            1.18         1.18
2001                          1            120        14,400       120.00            0.03         0.03
2002                         12         18,971       378,627        19.96            4.24         4.24
2003                          2          1,740        36,656        21.07            0.39         0.39
2004                          2          1,780        43,807        24.61            0.40         0.40
2005                          1            899        22,475        25.00            0.20         0.20
2006                         --             --            --           --              --           --
2007                         30         44,993     1,480,507        32.91           10.06        10.06
2008 and thereafter          17        207,053     1,832,536         8.85           46.28         7.45
                        -------      ---------                               -------------   ----------
   Total                     75        280,971                                      62.81%       23.98%
                         =======      =========                               ============   ==========
</TABLE>

(1) Excludes tenants paying percentage rents in lieu of minimum rents.

THE COMPANY'S LARGEST TENANTS

     Large stores (over 20,000 square feet per store) occupy  63.5%  of the
Total  GLA  of  the  Company's  regional  malls and community centers.  The
Company's  largest  tenants   include JCPenney,  ZCMI,  Wal-Mart,  The  Bon
Marche,  Sears,  Meier  &  Frank, Mervyn's  and  Gottschalk's.   No  tenant
represented more than 10% of  the  Company's  total  rental  revenues (I.E.
minimum rents plus percentage rents) for the year ended December 31, 1997.

     ANCHORS

     Regional malls and community centers usually contain one or more large
retail companies known as "anchors."  Anchors, which include traditional
department stores, general  merchandise  stores,  large  fashion  specialty
stores,  value  oriented  specialty  stores  and  discount  stores, usually
inventory a broad range of products that appeal to many shoppers.   Anchors
either  own their own stores (and sufficient parking) or lease their stores
from the  owner of the mall or center.  Although the rent and other charges
paid by anchors are usually much less (on a per square foot basis) than the
rent and other  charges  paid  by  other  tenants, their presence typically
attracts  many  shoppers and enhances the value  of  a  mall  or  community
center.

                                      11
<PAGE>
 
     Anchor tenants  in  the  regional  malls are JCPenney, ZCMI, Nordstrom,
Wal-Mart,  The  Bon  Marche,  Sears, Gottschalk's,  ShopKo,  The  Emporium,
Lamonts, Mervyn's, Meier & Frank,  Target  and  Dillard's.  Anchors in the
regional  malls  occupy  57.0%  of  Total GLA of the regional  malls.   The
following table summaries the Total GLA owned and leased as of December 31,
1997 by these anchors:

<TABLE>
<CAPTION>
                                                          Anchor                Company-Owned
                  Number of  Company-owned Anchor-Owned Total GLA   Percent     Anchors as
Anchors         Anchor Stores Square Feet  Square Feet Square Feet Total GLA   % Of Revenue(1)
-------         ------------- -----------  ------------ ----------- ---------- ---------------
<S>             <C>           <C>          <C>          <C>         <C>        <C>
JCPenney                15         913,188      243,591   1,156,779      9.38%       3.52%

Sears                    9         471,669      227,780     699,499      5.67%       3.10%

The Bon Marche           6         354,794      120,420     475,215      3.85%       3.15%

ZCMI                     5         562,754           --     562,754      4.57%       2.67%

Wal-Mart                 3          86,944      210,128     297,072      2.41%         *

Meier & Frank            1              --      183,500     183,500      1.49%        --

Mervyn's                 2              --      159,648     159,648      1.30%        --

Gottschalk's             1         150,000           --     150,000      1.22%         *

ShopKo                   1              --      111,500     111,500      0.90%        --

The Emporium             2          84,261           --      84,261      0.68%         *

Lamonts                  2          80,953           --      80,953      0.66%         *

Target                   1              --       75,883      75,883      0.62%        --

Dillard's                1          72,212           --      72,212      0.59%         *

Nordstrom                1              --       72,000      72,000      0.58%        --
</TABLE>
---------------------------
*  Less than 1%
(1) Revenue defined as minimum rents plus percentage rents

                                      12
<PAGE>
 
     Anchor tenants occupying the greatest  amount  of GLA in the Company's
community  centers  are  ShopKo, Fred Meyer, Albertsons,  Burlington  Coat,
Safeway,  Wal-Mart and Payless  Drug  Stores.   Anchors  in  the  community
centers occupy  approximately  71.2% of Total GLA of the community centers.
The  following table summarizes the  Total  GLA  owned  and  leased  as  of
December 31, 1997 by these anchors:

<TABLE>
<CAPTION>
                                                               Anchor              Company-Owned
                     Number of   Company-Owned Anchor-Owned  Total GLA  Percentage  Anchors As
  Anchor           Anchor Stores  Square Feet  Square Feet  Square Feet  Total GLA % Of Revenue(1)
------------       ------------- ------------- -----------  ----------- ---------- ---------------
<S>                <C>           <C>           <C>          <C>         <C>        <C>
ShopKo                   4             104,000     297,140      401,140      3.25%        *

Albertsons               8             269,098     41,407       310,505      2.52%       1.24%

Fred Meyer               3             309,944         --       309,944      2.51%       1.16%

Burlington Coat (2)      2             174,248         --       174,248      1.41%         *

Safeway                  2              52,764     53,000       105,764      0.86%         *

Wal-Mart                 1                  --    102,440       102,440      0.83%         --

Ernst Home Centers(3)    2              94,783         --        94,783      0.77%         *

PayLess Drug             2              70,583         --        70,583      0.57%         *

Best Products(4)         1              59,350         --        59,350      0.48%         *
</TABLE>
_________________
*   Less than 1%.
(1) Revenue defined as minimum rents plus percentage rents.
(2) Sublease from Fred Meyer, Inc.
(3) Ernst Home Center has filed for protection under the Bankruptcy Code but
    continues to be responsible for lease payment pursuant to the terms of the
    Gateway Crossing lease and the Bankruptcy Code.  The Ernst Home Center
    lease for space at the Red Cliffs Plaza has been rejected and the Company
    is currently in the process of releasing the space.
(4) Best Products lease for space at the Riverside Plaza has been rejected and
    the Company is currently in the process of re-leasing the space.

                                      13
<PAGE>
 
Major Tenants

      Nonanchor  tenants  owned  by  major  national  retail  chains  lease   a
considerable  amount  of space in the Company's retail properties.  Such retail
chains include Amcena Corporation (Maurice's), Brown Group (Naturalizer Shoes),
Claire's (Claire's Boutique),  Edison  Brothers  (Bakers  Shoes, Jeans West, J.
Riggings,  5-7-9), Waldenbooks Books, Inc., The Limited (Lane  Bryant,  Lerner,
Limited  Express,  Victoria's  Secret,  Bath  &  Body  Works,  Structure),  May
Department Stores (PayLess ShoeSource), Kay-Bee Toys, Wilson's Suede & Leather,
Musicland   Land   Group  (Musicland,  Sam  Goody,  Suncoast  Pictures),  Tandy
Corporation  (Radio  Shack),   Woolworth  Corporation,  (Northern  Reflections,
Afterthoughts, Athletic X-press,  Foot  Locker,  Kinney Shoes, Lady Footlocker,
San  Francisco Music Box Company), B. Dalton (B. Dalton  Bookseller,  Barnes  &
Noble), Charming Shoppes, Inc. (Fashion Bug), Deb Shops, Regis Corporation, Jay
Jacobs,  County  Seat,  General  Mills (Olive Garden, Red Lobster), Gap Stores,
Inc. (Gap, GapKids), The Buckle, Eddie  Bauer, Zales Corporation, Gymboree, Fred
Meyer, Millers Outpost, Pearle Vision and Pendleton.

LEASES

      Most of the Company's leases are long-term leases that contain fixed base
rents  and step-ups in rent typically occurring  every  three  to  five  years.
These leases  generally pass through to the tenant the tenant's share of common
area charges, including  insurance costs and real estate taxes.  Generally, all
of the regional mall leases  and certain of the community center leases include
roof and structure repair costs  in  common area charges.  The Company's leases
also generally provide for additional  rents  based  on  a percentage of tenant
sales.  For the years ended December 31, 1996 and 1997, such percentage rents
accounted for approximately 7.2% and 6.1% respectively, of total rental income
from the Properties owned by the Company during such periods.

The following table sets forth information relating to the rental  revenue from
the Properties for the periods indicated:

<TABLE>
<CAPTION>
                                                   Years Ended December 31,
                                       ----------------------------------------------
     Property Type                        1997     1996      1995     1994    1993
     -------------                     --------- --------- -------- -------- --------
                                                    (Dollars in thousands)
                                       <C>       <C>       <C>      <C>      <C>
<S>
Regional Malls                          $ 44,005  $ 36,286 $ 29,299 $ 24,860 $ 22,882
Community Centers and
Free-Standing Retail Properties           13,192    13,591   12,173   10,658    9,453
Commercial Properties                      6,323     6,631    5,633    4,929    4,646
                                        -------- --------- -------- -------- --------
Total                                   $ 63,520 $  56,508 $ 47,105 $ 40,447 $ 36,981
                                        ======== ========= ======== ======== ========
</TABLE>

Vacant Space

     Approximately 803,000 square feet, or 6.51%, of Total GLA was vacant
as of December 31, 1997.  Of this vacant space, approximately 523,000
square feet was in the regional mall portfolio (20% of which is anchor and
80% of which is mall shop space), 168,171 square feet was in the community
center portfolio and 111,586 square feet was in the commercial portfolio.

     The following tables set forth information relating to lease
expirations for retail store and commercial property leases in effect as of
December 31, 1997, over the ten-year period commencing January 1, 1998 and
thereafter  for  large  stores  (over 20,000 square feet) and small stores
(20,000 square feet or less) at the retail properties and for all leases
at the commercial properties.   Unless otherwise indicated, all information
set forth below assumes that none of the  tenants  exercise renewal options and
excludes leases that had not commenced as of December 31, 1997.

                                      14
<PAGE>
 
<TABLE>
<CAPTION>

                                 Lease Expirations For
                    Retail Store Leases (Over 20,000 Square Feet)
                                                                                            Average
                                                                                         Annualized Base
            Lease Expiration           Number of      Approximate       Annualized Base  Rent Per Square
               Year Ending              Leases          GLA in            Rent Under       Foot Under
              December 31,             Expiring       Square Feet       Expiring Leases Expiring Leases(1)
              ------------             --------       -----------       --------------- ------------------
       <S>                             <C>            <C>               <C>             <C>
       1998                                 8            370,846         $    510,121    $      1.38
       1999                                 2            201,690              323,647           1.60
       2000                                 3            119,045              365,534           3.07
       2001                                 9            595,718            1,423,260           2.39
       2002                                 4            231,458              711,643           3.07
       2003                                 3            100,249              303,001           3.02
       2004                                 4            255,669              725,957           2.84
       2005                                 1             33,421              111,605           3.34
       2006                                 3            185,240              562,696           3.04
       2007 and thereafter                 40          2,409,564           11,874,088           4.93
                                       --------       ----------
       Total                               77          4,502,900
                                       ========       ==========
</TABLE>
<TABLE>
<CAPTION>
                                Lease Expirations For
                  Retail Store Leases (20,000 Square Feet or Less)
                                                                                            Average
                                                                                         Annualized Base
            Lease Expiration           Number of      Approximate       Annualized Base  Rent Per Square
               Year Ending              Leases          GLA in            Rent Under       Foot Under
              December 31,             Expiring       Square Feet       Expiring Leases Expiring Leases(1)
              ------------             --------       -----------       --------------- ------------------
      <S>                              <C>            <C>               <C>             <C>
       1998                               177             294,545        $   3,847,377   $      13.06
       1999                               160             337,915            4,562,648          13.50
       2000                               177             347,098            5,403,907          15.57
       2001                               125             282,675            4,008,790          14.18
       2002                               134             331,438            4,273,324          12.89
       2003                                70             211,116            3,067,072          14.53
       2004                                63             181,666            3,094,598          17.03
       2005                                46             133,587            2,421,583          18.13
       2006                                51             144,223            2,745,303          19.04
       2007 and thereafter                150             509,436            9,418,638          18.49
                                       --------        ----------
       Total                             1,153          2,773,699
                                       ========        ==========
</TABLE>
<TABLE>
<CAPTION>
                                Lease Expirations For
                                Commercial Properties
                                                                                             Average
                                                                                         Annualized Base
            Lease Expiration           Number of      Approximate       Annualized Base  Rent Per Square
               Year Ending              Leases          GLA in            Rent Under       Foot Under
              December 31,             Expiring       Square Feet       Expiring Leases Expiring Leases(1)
              ------------             --------       -----------       --------------- -----------------
       <S>                             <C>            <C>               <C>             <C>
       1998                                15             363,165        $   1,616,563   $       4.45
       1999                                12             195,205              929,800           4.76
       2000                                12             422,641            2,002,513           4.74
       2001                                 3             113,115              922,213           8.15
       2002                                10             170,585            1,174,651           6.89
       2003                                 1              20,988              275,572          13.13
       2004                                 2              28,621              146,464           5.12
       2005                                --                  --                   --             --
       2006                                --                  --                   --             --
       2007 and thereafter                 --                  --                   --             --
                                       --------        ----------
       Total                               55           1,314,320
</TABLE>                               ========        ==========
_______________

(1) Excludes tenants paying percentage rents in lieu of minimum rents.

     As leases expire, the Company currently expects to be able to increase
rental revenue by re-leasing the underlying space  (either  to a new tenant
or  to an existing tenant) at rental rates that are at or higher  than  the
existing rates.

                                      15
<PAGE>
 
Operations and Management

      The  Company  performs  all  property   management   functions   for  the
Properties.   At  December  31,  1997  the  Company had 311 full-time employees
devoted exclusively to property management.  Each of the regional malls has on-
site management and maintenance personnel as  well  as  a  marketing  staff  to
assist  the  mall tenants in promoting and advertising their products.  Overall
supervision of  mall  operations,  headed by a Director of Enclosed Malls and a
Director of Marketing, is conducted  in  a centralized fashion in order to take
advantage of economies of scale and to deliver  a  uniform  presentation of all
management  functions.  The Company's internal property management  information
system enables  it  to  quickly  determine  tenant  status, tenant gross sales,
insurance, and other critical information in order to  effectively  manage  the
affairs   of  its  real  property  portfolio.   The  data  collected  regarding
percentage  sales  allows  the  Company to predict sales, to retain tenants and
enhance mall stability.

      The  Leasing/Development  Department   is   responsible  for  maintaining
relationships  with  tenants  that  afford the Company  opportunities  for  new
development and expansion.  The Company  conducts an active program of leasing,
within the common area space of its malls  and  community  centers,  kiosks and
other  promotional  displays  on  a  seasonal  basis.  In addition to increased
customer traffic, this approach generates additional  revenue  for  the Company
and offers an opportunity for entrepreneurial individuals interested in opening
stores on a more permanent basis within one of the Company's Properties.

      The  Company's  property  management efforts will continue to be directed
toward improving the attractiveness  and  appeal of its retail properties and a
pleasant shopping environment in order to increase  overall  tenant  sales  and
rents.   The  Company  strives to meet the needs of its tenants in the areas of
promotion, marketing and  ongoing  management  of  its  properties and seeks to
bring together a sufficient critical mass of complementary  upscale  and brand-
name tenants.  As part of its property management efforts, the Company monitors
tenant  mix,  store  size, sales results and store locations, and works closely
with tenants to improve  the  overall performance of their stores.  The Company
seeks to anticipate trends in the  retailing  industry and introduce new retail
names and concepts into its retail properties in response to these trends.  The
Company maintains its malls and community centers  to  very  high standards and
believes  that  the  aesthetics,  ambiance and cleanliness of these  Properties
contribute to repeat visits by customers.

Acquisition Program

      In June 1997, the Company acquired Silver Lake Mall, a 298,711 square
foot mall located in Coeur d'Alene, Idaho.  The Company, which had  held  a 30%
interest  in  Silver  Lake Mall, Ltd., a limited partnership owning Silver Lake
Mall, prior to its acquisition of the mall, acquired the remaining 70% interest
in such limited partnership  in  exchange  for  72,000  partnership  units ("OP
Units")  and  the  assumption  of  approximately  $24.8  million in outstanding
indebtedness.   Silver Lake Mall is anchored by JCPenney, Sears,  Emporium  and
Lamonts and contains  65  mall  shops.   Silver  Lake Mall was 99% leased as of
December 31, 1997.

      In June 1997, the Company also acquired Visalia  Mall,  a  439,716 square
foot  mall  located  in  Visalia,  California  for approximately $38.0 million.
Visalia  Mall is anchored by JCPenney and Gottschalk's  and  contains  68  mall
shops.  Prior  to  the Company's purchase of Visalia Mall, the mall underwent a
major renovation which  included  the  expansion  of  anchor  tenant space, the
addition of a new food court, the renovation and expansion of additional tenant
shop space and the construction of a new 1,000 stall parking facility.  Visalia
Mall was 98% leased as of December 31, 1997.

      In December 1997, the Company acquired the Salem Center, a 650,000 square
foot  enclosed mall located in Salem, Oregon.  The Company acquired  the  Salem
Center  for  approximately  $32.0  million  of  which  the  Company financed by
borrowing under the 1997 Credit Facility and assuming debt for  the  remainder.
Salem  Center  is  located in Salem's downtown business district covering  over
five contiguous city  blocks  and  is  anchored by Nordstrom, Meryvn's, Meier &
Frank,  JCPenney and a 7-screen, 2,300 seat  theater.   Salem  Center  was  97%
leased as of December 31, 1997.

                                      16
<PAGE>
 
Development

     Since  1976,  the  Company  and  the  Predecessor  Companies have been
responsible  for  developing more retail malls in the Intermountain  Region
than any other developer,  having  constructed, developed or redeveloped 11
malls  in  the  region  (as  well  as  three  other  malls  in  Oregon  and
Washington).  The Company maintains the  in-house  capability  to  bring  a
project from concept to completion.  The Leasing/Development Department had
a total of 30 full-time employees at December 31, 1997, including directors
of Leasing, Development, Tenant Coordination and Design/Drafting.

     In  August  1997, the Company held a grand opening for its development
of the Spokane Valley Mall, a two-level, 688,982 square foot regional mall,
located on an 85 acre  parcel of land overlooking the Spokane River and the
Centennial Trail in Spokane, Washington.  The mall is anchored by JCPenney,
Sears and The Bon Marche  and  contains 101 mall shops.  In addition to the
273,673 square feet of retail mall space, the mall contains a 40,000 square
foot 12-screen ACT III theater and  seven  out-parcel  pads  for retail and
restaurant development.

     In  early  1997,  the  Company  began developing Boise Towne Plaza,  a
105,664 square foot shopping center located  adjacent to Boise Towne Square
in Boise, Idaho.  The first phase of construction  at  Boise  Towne  Plaza,
containing 76,414 square feet of retail space, was completed and opened  in
November  1997.   The  second  phase  of construction at Boise Towne Plaza,
containing 29,250 square feet of retail  space, is expected to be completed
in the second quarter of 1998.  During 1997, the Company also completed the
construction of (i) a 76,411 square foot Sears department store at the Pine
Ridge Mall located in Pocatello, Idaho, (ii)  a 36,036 square foot addition
to the Sears department store at the Silver Lake  Mall  and  (iii)  a 5,500
square  foot  Applebees  restaurant  at  the  Animas Valley Mall located in
Farmington, New Mexico.

     The Company is currently expanding Boise Towne Square which will add
Dillard's as a fifth anchor.  The project will add approximately 273,000
Total GLA with approximately 180,000 Total GLA for Dillard's, 30,000 GLA
for the expansion of The Bon Marche and approximately 63,000 GLA for
additional shops.

     The Company is also developing Provo Towne  Centre,  a  750,000 square
foot  enclosed  regional mall, located in Provo, Utah.  Provo Towne  Center
will be anchored  by  JCPenney, Sears, and Dillard's and will include space for
more  than  80  mall  shops.    Additionally,   the  Company  is  currently
contemplating  the  expansion  and  renovation  of  several  other  of  its
Properties as well as other developments and acquisitions.

    Further, the Properties contain approximately 48  acres of vacant land
suitable   for   additional  retail  expansion  projects.   Likewise,   the
Properties include  additional  improved  land  ready  for  development  of
approximately  263,000  square  feet  of  free  standing retail space.  The
Company  will  seek  to  expand these and other Properties  in  its  retail
portfolio, as well as newly acquired properties, depending on tenant demand
and market conditions.

Third Party Property Management

     The Company provides third-party property management for an office
building and a commercial building located in the greater Salt Lake City,
Utah  metropolitan  area, a commercial building located in Albuquerque, New
Mexico and Silver Lake Plaza, a community center, located in Coeur d'Alene,
Idaho.  In addition to  these  arrangements,  the  Company  plans to pursue
other  property  management  opportunities.   Because  property  management
facilitates  an understanding of a property's value and potential for  cash
flow growth, the  Company believes that, in addition to generating property
management fees, third-party   property  management  arrangements  can be a
source  of  future  acquisitions for the Company.  For example, the Company
was the property manger  for  Eastridge  Mall and Silver Lake Mall prior to
their acquisitions by the Company.

Employees

      The Company had over 506 employees at  December  31,  1997.   The Company
believes  its  relationship  with  its  employees  is  very  good.  None of the
Company's employees are unionized.

                                      17
<PAGE>
 
ITEM 3.  LEGAL PROCEEDINGS

      The Company is not aware of any pending or threatened litigation  at this
time  that  will have a materially adverse effect on the Company or any of  the
Properties or its development parcels.


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

      No matters  were  submitted  to stockholders during the fourth quarter of
the period covered by this report.

ITEM 4A.   EXECUTIVE OFFICERS OF THE REGISTRANTS

      The following table sets forth certain information with respect to the
executive officers of the Company as of December 31, 1997.

<TABLE>
<CAPTION>


Name                       Age Position
-----------                --- --------
<S>                        <C> <C>
John Price                  64  Chairman of the Board of Directors and Chief Executive Officer

G. Rex Frazier              54  President, Chief Operating Officer and Director

Paul K. Mendenhall          50  Vice President--Chief Investment Officer and Secretary

Martin G. Peterson          51  Vice President--Administration

Thomas L. Mulkey            45  Vice President--Leasing/Development

Greg Curtis                 47  Vice President--Management

David R. Sabey              45  Vice President and General Counsel

M. Scott Collins            42  Vice President--Chief Financial Officer and Treasurer
</TABLE>

      John Price has served as Chairman  of  the  Board  of Directors and Chief
Executive Officer since September, 1993.  Mr. Price formed Fairfax Realty, Inc.
("Fairfax"), the principal entity through which the business of the Predecessor
Companies was conducted, in 1972, and it's predecessor, John  Price Associates,
Inc.,  a  construction  company,  in 1957.  Mr. Price has developed  and  built
substantial retail and commercial real estate properties during his 40 years in
the real estate industry and has been  involved  in  all  facets of real estate
development, construction, leasing, management and financing.   Mr.  Price is a
member  of  the  Board  of  Directors  and  the  Executive  Committee  of  Alta
Industries-Utah,  Inc.  (a  distributor  of ferrous and nonferrous metals and a
manufacturer of roofing, siding, and other  structural  components).  Mr. Price
is also a member of the NAREIT Legislative Advisory Council,  a  trustee of the
University  of  Utah,  a  member  of  the Board of Directors of the Utah  State
Fairpark Corporation which operates the  Utah State Fairgrounds and a member of
the Advisory Board of the First Security Bank  of  Utah,  N.A.   Mr. Price is a
graduate of the University of Utah.

      G. Rex Frazier has served as President, Chief Operating Officer  and  a
Director since September,  1993.  Mr. Frazier has served as President and Chief
Operating Officer of Fairfax  since  1986,  prior  to  which  he  had served as
Executive Vice- President, Vice President-Finance and Director of Finance.  Mr.
Frazier  has  been involved in the real estate industry since 1976.   He  is  a
certified public  accountant  and, prior to joining Fairfax, worked as an audit
supervisor with Touche Ross & Company.   Mr.  Frazier  is  a  graduate  of  the
University of Utah.

      Paul K. Mendenhall has served as Vice President-Chief Investment Officer
and Secretary  since  May,  1997,  prior  to which he served as Vice President-
Finance and Secretary.  Mr. Mendenhall has served as Vice President-Finance and
Secretary  of  Fairfax since 1986, prior to which  he  served  as  Director  of
Finance and as Financial Analyst.  Mr. Mendenhall has been involved in the real
estate industry  since 1977.  He is a certified public accountant and, prior to
joining Fairfax, worked  as  a  senior  auditor for Touche Ross & Company.  Mr.
Mendenhall  is  a former President and Director  of  the  Utah  Association  of
Certified Public  Accountants  (UACPA).   Mr.  Mendenhall  is a graduate of the
University of Utah.

                                      18
<PAGE>
 
      Martin G. Peterson  has  served as Vice President-Administration  since
September,   1993,   prior   to   which   he    served   as   Vice   President-
Administration/Accounting and Treasurer and as Assistant  Vice  President.   In
addition,   Mr.  Peterson  has  served  as  Vice  President-Administration  and
Treasurer of  Fairfax  since  1978.  Mr. Peterson has been involved in the real
estate industry since 1975.  He  is a certified public accountant and, prior to
joining Fairfax, worked as a senior  auditor  for  Price  Waterhouse & Co.  Mr.
Peterson is a member of the Advisory Board of the Marriott School of Management
at  Brigham  Young  University.   Mr. Peterson is a graduate of  Brigham  Young
University.

      Thomas L. Mulkey has served as  Vice  President-Leasing/Development since
September, 1993.  In addition, Mr. Mulkey has  served  as  the  Vice President-
Leasing/Development  of  Fairfax  since  1987,  prior  to which he oversaw  the
development of many of the Company's properties.  Mr. Mulkey  has been involved
in the real estate industry since 1974.  Prior to joining Fairfax,  Mr.  Mulkey
was  a  project  manager  for the May Stores Centers, Inc. (a retail department
store company).  Mr. Mulkey is a graduate of the University of Missouri.

      Greg Curtis has served  as  Vice  President-Management  since  September,
1993.   In  addition,  Mr.  Curtis  has served as Vice President-Management  of
Fairfax since 1982, prior to which he  served as Director of Enclosed Malls and
as a Mall Manager.  Mr. Curtis has been  involved  in  real  estate since 1977.
Mr. Curtis is a graduate of Brigham Young University.

      David R. Sabey has served as Vice President and General Counsel since
September, 1993.   In  addition,  Mr.  Sabey  has  served as Vice President and
General  Counsel of Fairfax since 1990.  Prior to joining  Fairfax,  Mr.  Sabey
worked as  Assistant  General  Counsel for the Longs Drug Stores Corporation (a
retail drug store company).  Mr.  Sabey  has been in the retail and real estate
industry since 1983.  Mr. Sabey is a graduate of McGeorge School of Law and the
University of Utah.

      M. Scott Collins has served as Vice President-Chief Financial Officer and
Treasurer since May, 1997.  From November,  1992 through May, 1997, Mr. Collins
served as Vice President-Finance and Administration,  Chief  Financial  Officer
and Secretary of Park City Group, Inc. (a software development company).  Prior
to  his employment with Park City Group, Mr. Collins worked as a senior manager
for Price  Waterhouse where he was also involved with the real estate industry.
Mr. Collins is a certified public accountant and is a graduate of Brigham Young
University.

                                      19
<PAGE>
 
                                        PART II

ITEM 5.MARKET  FOR  THE  REGISTRANT'S  COMMON  EQUITY  AND  RELATED STOCKHOLDER
       MATTERS

      The Company's Common Stock is listed on the New York Stock Exchange under
the  symbol "JPR."  Prior to the Offering of the Common Stock  on  January  14,
1994, there was no public market for the Common Stock.  As of March 10, 1998,
the sales  price  for  the  Common  Stock on the New York Stock Exchange  was
$25 per  share.   As  of  March 10, 1998, there were 189 stockholders of record,
of which 188 were holders of Common Stock and one was a holder of Price Group
Stock.

      The following table sets forth, the high and low closing  sales price per
share of the Common Stock and the distributions paid per share for  each of the
quarters presented:

<TABLE>
<CAPTION>
                                            Sales Price
                                         ---------------------   Distributions
                                           High         Low        Per Share
                                         --------    ---------  ----------------
      <S>                                <C>         <C>        <C>      
      Year Ended 12/31/96
         First Quarter                   $ 21-7/8    $ 18-3/4   $   .420
         Second Quarter                    21-1/2      19           .420
         Third Quarter                     22-7/8      20-3/4       .420
         Fourth Quarter                    27-1/4      21-3/4       .435


      Year Ended 12/31/97
         First Quarter                   $ 25-3/8    $ 27-1/2   $   .435
         Second Quarter                    24-7/8      27-1/2       .435
         Third Quarter                     24-1/16     27-7/16      .435
         Fourth Quarter                    23-13/16    25-15/16     .450
</TABLE>

      During 1997 and 1996, the Company recorded  regular  quarterly
distributions, totaling $30,797,000 and $27,139,000,  respectively,  or  $1.755
and $1.695 per share of Common Stock, respectively.  Of the amounts paid during
1997  and  1996,   11%  and 13%, respectively, represented a return of capital.
The  Board of Directors has  declared  a  quarterly  distribution,  payable  to
stockholders  of  record as of April 3, 1998, of  $.45 per share which is an
amount equivalent to an annual distribution of $1.80 per share. Distributions
on Price Group Stock are payable by the Company at a rate per share equal to 80%
of the distributions declared on  Common  Stock.   Future distributions will be
determined by the Board of Directors and will be dependent  upon cash available
for distribution, financial position and cash requirements of the Company.

      At  December  31,  1997, there were 200,000 shares of Price  Group  Stock
outstanding.  In addition  to receiving distributions at a rate equal to 80% of
the distributions paid on the  Common  Stock,  the  shares of Price Group Stock
have the right, voting as a separate class from the Common  Stock, to elect two
of  the seven directors of the Company.  Each holder of Price  Group  Stock  is
entitled  to  one  vote  for each share held.  All of the outstanding shares of
Price Group Stock may be converted  at  the option of the Company into an equal
number or shares of Common Stock if certain conditions are met.

ITEM 6.  SELECTED FINANCIAL DATA

     The following table  sets  forth selected financial and other data for
(i) the Company for the years ended  December 31, 1997, 1996 and 1995, and for
the period January 21, 1994 through December  31,  1994  and (ii) the
Predecessor  Companies  for the period January 1, 1994 through January  20,
1994 and for the year ended  December  31,  1993.  The historical financial
information  for  all  the  periods  have  been derived  from  the  audited
historical consolidated and combined financial statements.

  The  following  selected  financial  information   should   be   read  in
conjunction with all of the financial statements included elsewhere  herein
and  "Management's  Discussion  and  Analysis  of  Financial  Condition and
Results of Operations."

                                      20
<PAGE>
 
<TABLE>
<CAPTION>
                                                        SELECTED FINANCIAL DATA
                                            (Dollars in thousands except per share amounts)

                                                                                                    Predecessor  Predecessor
                                                                                        Company      Companies    Companies
                                                  Company     Company      Company      January 2,   January 1,     Year
                                                 Year Ended  Year Ended   Year Ended    1994 to       1994 to       Ended
                                                December 31, December 31, December 31, December 31,  January 20, December 31,
                                                    1997       1996         1995         1994(1)       1994         1993
                                                ----------- ------------  ----------- ------------- ------------ ------------
<S>                                             <C>         <C>           <C>         <C>           <C>          <C>
REVENUES                                         $   82,973  $    72,949   $   60,950  $     50,071  $     2,578  $    47,728
                                                 ==========  ===========   ==========  ============  ===========  ===========

EXPENSES
Operating Expenses before Interest,
 Depreciation and Amortization                       27,434       24,405       20,389        17,090          893       17,226

Interest                                              9,066        7,776        6,623         5,873          826       18,482

Depreciation and Amortization                        13,410       11,979       11,528         8,734          430        8,530
                                                 ----------  -----------   ----------
   Total                                             49,910       44,160       38,540        31,697        2,149       44,238
                                                 ----------  -----------   ----------  ------------  -----------  -----------
                                                     33,063       28,789       22,410        18,374          429        3,490
Minority Interest in Income of Consolidated
Partnerships                                          (273)         (269)        (320)         (221)          --         (251)

Equity in Net Loss of Partnership Interest              --            --         (184)          (82)           7         (238)

Gain of Sales of Real Estate                            339           94          918            --           --          607

Income Before Extraordinary Item and Minority
Interest of the Operating Partnership
 Unitholders                                         33,129       28,614       22,824        18,071          436        3,608

Minority Interest of the Operating Partnership
 Unitholders                                         (5,675)      (5,244)      (4,646)       (3,943)          --           --

Extraordinary Item - Loss on Extinguishment
 of Debt,
 Net of Minority Interest of the Operating
 Partnership Unitholders                               (133)          --           --        (5,215)          --           --
                                                 ----------  -----------   ----------  ------------  -----------  -----------
 Net Income                                      $   27,321  $    23,370   $   18,178  $      8,913  $       436  $     3,608
                                                 ==========  ===========   ==========  ============  ===========  ===========
Basic Earnings Per Share (2):
 Income Before Extraordinary Item                      1.57         1.46         1.27       1.07
 Extraordinary Item                                    (.01)          --           --      (.40)
                                                 ----------  -----------   ----------
 Net Income                                      $     1.56  $      1.46   $     1.27   $    .67
                                                 ==========  ===========   ==========
Diluted Earnings Per Share:
 Income Before Extraordinary Item                $     1.56  $      1.45   $     1.26   $   1.07
 Extraordinary Item                                    (.01)          --           --       (.40)
                                                 ----------  -----------   ----------
 Net Income                                      $     1.55  $      1.45   $     1.26   $    .67
                                                 ==========  ===========   ==========
Distributions per share                          $    1.755  $     1.695   $    1.635   $  1.525
                                                 ==========  ===========   ==========
</TABLE>

                                      21
<PAGE>
 
<TABLE>
<CAPTION>
                                                       SELECTED FINANCIAL DATA
                                             (Dollars in thousands except per share amounts)


                                                                                                    Predecessor  Predecessor
                                                                                        Company      Companies    Companies
                                                  Company     Company      Company      January 2,   January 1,     Year
                                                 Year Ended  Year Ended   Year Ended    1994 to       1994 to       Ended
                                                December 31, December 31, December 31, December 31,  January 20, December 31,
                                                    1997       1996         1995         1994(1)       1994         1993
                                                ----------- ------------  ----------- ------------- ------------ ------------
<S>                                            <C>          <C>          <C>          <C>          <C>         <C>
Balance Sheet Data
Real Estate, before Accumulated Depreciation    $  619,371   $ 453,241      $ 388,205   $ 321,242      N/A    $ 286,719

Total Assets                                       545,684     381,360       327,061     281,696        N/A     236,482

Total Debt                                         283,390     162,375       106,406     108,741        N/A     235,799

Shareholders' Equity (Deficit)                     207,986     172,556       175,754     127,593        N/A     (6,951)

Other Data

Funds From Operations (3)                           44,523      39,098        32,139      26,083        859      10,792

Net Operating Income                                55,539      48,544        40,561      32,981      1,685      30,502

</TABLE>
<TABLE>
<CAPTION>
                                           NUMBER OF PROPERTIES/TOTAL GLA AT DECEMBER 31,

                                                    1997        1996        1995        1994        1993
                                                 ----------  ----------  ----------  ----------  -----------
<S>                                              <C>         <C>         <C>         <C>         <C>
Number of Properties at Year End                      48          44          43          40           38
                                                      ==          ==          ==          ==           ==

 Total GLA in square feet at Year End:

Malls                                             7,745,000   5,553,000   5,020,000   3,898,000    3,855,000

Community Centers and Free-Standing Retail
Properties                                        3,164,000   3,091,000   3,091,000   2,997,000    2,742,000

Commercial Properties                             1,418,000   1,418,000   1,394,000   1,113,000    1,113,000
                                                 ----------  ----------  ----------  ----------  -----------
   Total                                         12,327,000  10,062,000   9,505,000   8,008,000    7,710,000
                                                 ==========  ==========  ==========  ==========  ===========
</TABLE>
----------------------
(1)     The  Company closed its initial public offering  of  shares  of  Common
        Stock on January 21, 1994.
(2)     Basic  earnings  per  share based on 17,471,000, 16,048,000, 14,345,000
        and 13,231,000 weighted  average  number  of shares of Common Stock and
        Price Group Stock outstanding for the years  ended  December  31, 1997,
        1996, 1995 and 1994, respectively.  Diluted earnings per share based on
        17,637,000,  16,133,000,  14,411,000  and  13,300,000  weighted diluted
        average number of shares outstanding for years ended December 31, 1997,
        1996, 1995 and 1994, respectively.
(3)     The  Company  considers  funds  from  operations to be an appropriate
        measure of the performance of an equity  REIT.  Funds from operations
        ("FFO")  is  defined  by  the  National Association  of  Real  Estate
        Investment Trusts ("NAREIT") as  "net  income (computed in accordance
        with generally accepted accounting principles),  excluding  gains (or
        losses)   from   debt  restructuring  and  sales  of  property,  plus
        depreciation   and   amortization    and    after   adjustments   for
        unconsolidated partnerships and joint ventures."   While  the Company
        believes that FFO is the most relevant and widely used measure of its
        operating  performance,  it  does  not represent cash generated  from
        operating activities in accordance with generally accepted accounting
        principles  and is not indicative of  cash  available  to  fund  cash
        needs.  FFO should  not be considered as an alternative to net income
        as an indication of the  Company's  operating  performance  or  as an
        alternative  to  cash  flow as a measure of liquidity.  The Company's
        presentation  of  FFO,  however,  may  not  be  comparable  to  other
        similarly  titled  measures   used   by   other  equity  REITs.   See
        "Management's  Discussion  and  Analysis of Financial  Condition  and
        Results of Operations - Liquidity and Capital Resources."

                                      22
<PAGE>
 
ITEM  7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
       OF OPERATIONS

Overview

      The  following  discussion  should  be read in conjunction with "Selected
Financial Data" and the Consolidated Financial  Statements  of  the Company and
the Notes thereto appearing elsewhere herein.

      JP Realty, Inc. completed  its initial public offering on January  21,
1994, and conducts all of its business  operations  through,  and  holds an 83%
controlling  general  partner  interest in, Price Development Company,  Limited
Partnership ("the Operating Partnership")  as of December 31, 1997.  JP Realty,
Inc. together with its subsidiaries which included  Price  Development Company,
Limited Partnership will herein be referred to as the Company.

      The Company is a fully integrated, self-administered and  self-managed
REIT primarily engaged in the ownership,  leasing,  management,  operation,
development, redevelopment and acquisition  of  retail  properties  in  the
Intermountain Region, as well as in Oregon, Washington and California.  The
Company's existing portfolio consists of 48 properties, including  15  enclosed
regional  malls,  25 community centers, two freestanding retail properties  and
six mixed-use commercial  properties  ("Properties").   The Company's financial
condition and results of operations were positively impacted  by  the Operating
Partnership's June 1997 acquisitions of the Silver Lake Mall, Visalia  Mall,
the August 13, 1997 opening of the Spokane Valley Mall, the 1996 acquisition of
the  Grand Teton Mall and the 1995 acquisition of two regional malls, Eastridge
Mall and  Animas Valley Mall, and one community center, Cottonwood Square.  The
Company also  acquired Salem Center on December 30, 1997 which has not affected
financial  results   in   1997.   The  Company's  acquisition  and  development
activities added a combined  2,798,000  square  feet of Total GLA to the retail
portfolio and 24,000 square feet of GLA to the commercial portfolio during 1996
and 1997.

    The Company completed an additional public offering in  August 1995, raising
approximately  $56.4  million in gross proceeds through the sale  of  2,750,000
shares of its Common Stock.   An  additional  public  offering was completed in
January 1997, raising approximately $40.7 million in gross proceeds through the
sale of 1,500,000 shares of Common Stock.

    During 1995, the Company obtained a $50 million credit  facility (the "1995
Credit  Facility")  to fund working capital and property acquisition, expansion
and development activities.   On  January  22,  1996,  the  Company obtained an
additional  $25  million credit facility (the "1996 Credit Facility,"  together
with the 1995 Credit Facility, the "Credit Facilities") which was available for
the same purposes as the 1995 Credit Facility.  In October 1997 the 1996 Credit
Facility was increased  to  $40  million.   On  November  7,  1997 these Credit
Facilities were paid off and canceled.

    On October 16, 1997, the Company obtained a $150 million unsecured  Credit
Facility (the "1997 Credit Facility")  to  fund  working  capital,  property
acquisition, expansion  and  development  activities, to pay off and cancel the
$50  million  1995  Credit Facility and pay off  and  cancel  the  1996  Credit
Facility which were obtained  for the same purpose as the 1997 Credit Facility.
On December 18, 1997, the $150  million  1997  Credit Facility was increased to
$200 million.

Results of Operations

    Comparison of Year Ended December 31, 1997 to Year Ended December 31, 1996

    For the year ended December 31, 1997, income before  extraordinary item and
minority interest of the Operating Partnership Unitholders increased $4,515,000
or  16%  when compared to the year ended December 31, 1996.  The improvement in
operations was primarily attributable to the following factors:  an increase in
minimum rents  of  $7,177,000;  and  an  increase in recoveries from tenants of
$2,642,000 and an increase in other revenues of $373,000.  These increases were
offset by an increase in operating expenses of $1,775,000; an increase in taxes
and insurance of $867,000; an increase in general and administrative expense of
$387,000; an increase in interest expense  of  $1,290,000 and a net increase in
depreciation and amortization of $1,431,000.

    Funds from operations increased $5,425,000 or 14% primarily as a result of
acquisitions and developments as discussed herein.

                                      23
<PAGE>
 
    Total revenues for the year ended December 31, 1997 increased $10,024,000 or
14%  to  $82,973,000  as  compared  to  $72,949,000  in 1996.  This increase is
primarily  attributable to a $7,177,000 or 14% increase  in  minimum  rents  to
$59,624,000  as compared to $52,447,000 in 1996.  Additionally, recoveries from
tenants increased  $2,642,000  or 17% to $18,199,000 as compared to $15,557,000
in 1996 and other income increase  $373,000 due to development and leasing fees
relating to the opening of Spokane Valley  Mall.   Recoveries from Tenants as a
percentage of operating expenses were 83% in 1997, compared to 80% in 1996.

    The April, 1996 acquisition of Grand Teton Mall, the June, 1997 acquisitions
of Silver Lake Mall and Visalia Mall and the August 13, 1997 opening of Spokane
Valley  Mall  contributed  to  $6,923,000  to  the  minimum rent  increase  and
$2,453,000 of the increase in recoveries from tenants.   Minimum rent growth in
the  remaining  portfolio  was  offset by certain unexpected vacancies  in  the
retail and commercial properties.

    Property operating expenses, including  operating and maintenance and real
estate  taxes  and  insurance  increased $1,775,000 or 15% and $867,000 or 11%,
respectively.  These increases were  attributable  to the acquisitions of Grand
Teton Mall, Silver Lake Mall, Visalia Mall and the opening  of  Spokane  Valley
Mall.   These  properties  contributed  $1,804,000 to operating and maintenance
costs and $885,000 to taxes and insurance.

    General and administrative expenses increased $387,000 or 8% to $5,447,000
as compared to $5,060,000.  The increase is primarily due to payroll costs from
additional personnel added to support the Company's growth.

    Interest  expense increased $1,290,000 or 17% to $9,066,000 as compared to
$7,776,000 in  1996.  This increase is the result of additional interest on new
borrowings to acquire  Silver  Lake  Mall,  Visalia  Mall and to the opening of
Spokane Valley Mall.

    Depreciation expense increased $1,572,000 or 15% to $11,802,000 as compared
to  $10,230,000 in 1996.  This increase is primarily due to the acquisition  of
Grand  Teton  Mall,  Silver Lake Mall, Visalia Mall, the opening of the Spokane
Valley Mall and tenant allowances given on existing GLA.

Comparison of Year Ended December 31, 1996 to Year Ended December 31, 1995

    For the year ended December 31, 1996, income before extraordinary item and
minority interest of the Operating Partnership Unitholders increased $5,790,000
or 25% when compared to the year ended December 31, 1995.  The improvement in
operations was primarily attributable to the following factors:  an increase in
minimum rents of $8,807,000; an increase in percentage  and  overage  rents  of
$596,000;  and  an  increase  in  recoveries from tenants of $3,305,000.  These
increases were offset by a decrease  in  interest and other income of $709,000;
an  increase in operating expenses of $3,041,000;  an  increase  in  taxes  and
insurance  of  $787,000;  an  increase in general and administrative expense of
$215,000; and an increase in interest  expense  of $1,153,000.  These were also
offset by an increase in depreciation and amortization of $451,000.

    Funds from operations increased $6,959,000 or 22%  primarily as a result of
acquisitions, minimum rent increases and percentage and overage rent  increases
as discussed herein.

    Total revenues for the year ended December 31, 1996 increased $11,999,000 or
20%  to  $72,949,000  as  compared  to  $60,950,000  in 1995.  This increase is
primarily attributable to an $8,807,000 or 20% increase  in  minimum  rents  to
$52,447,000  as  compared to $43,640,000 in 1995.  Additionally, percentage and
overage rents increased $596,000 or 17% to $4,061,000 as compared to $3,465,000
in 1995.

    The  April  1996  acquisition of the Grand Teton Mall,  the  June  1995
acquisitions of the Eastridge Mall  and the Animas Valley Mall and the December
1995 acquisition of Cottonwood Square  contributed a combined $6,915,000 to the
minimum rent increase and $459,000 to the  percentage and overage rent increase
in 1996.

                                      24
<PAGE>
 
    Recoveries  from  tenants  increased $3,305,000 or 27% to $15,557,000  as
compared  to  $12,252,000  in 1995.   Property  operating  expenses,  including
operating  and  maintenance and  real  estate  taxes  and  insurance  increased
$3,014,000 or 35%  and  $787,000  or  11%,  respectively.   These increases are
mainly due to the 1995 and 1996 property acquisitions.  Recoveries from tenants
as  a percentage of property operating expenses were 80% in 1996,  compared  to
79% in 1995.

    Interest  expense increased $1,153,000 or 17% to $7,776,000 as compared to
$6,623,000 in 1995.  This increase resulted from  additional borrowings used to
acquire the Grand Teton Mall in April 1996.

    Depreciation  increased  $620,000  or  6%  to  $10,230,000  as compared to
$9,610,000  in  1995.   This  increase  is primarily due to the 1995  and  1996
property acquisitions and the development of additional GLA at the Properties.

Liquidity and Capital Resources

    The  Company's principal uses of its liquidity  and  capital resources have
historically  been  for  distributions,  property  development,  expansion  and
renovation  programs  and  debt  repayment.  To maintain its qualification as a
REIT under the Internal Revenue Code  of  1986,  as  amended  (the "Code"), the
Company is required to distribute to its shareholders at least 95% of its "Real
Estate  Investment Trust Taxable Income" as defined in the Code.   The  Company
declared   quarterly  distributions  aggregating  $1.755  per  share  in  1997.
Approximately 11% of the distributions represented a return of capital.  Future
distributions will be determined based on actual results of operations and cash
available for distribution.

   The Company's principal source of liquidity is its cash flow from operations
generated from its  real  estate  investments.   As  of  December 31, 1997, the
Company's cash and restricted cash amounted to approximately  $8.1 million.  In
addition to its cash and restricted cash, unused capacity under its 1997 Credit
Facility  totaled  $73 million at year end.  On January 28, 1997,  the  Company
completed an additional  public  offering  of 1,500,000 shares of Common Stock,
raising approximately $40.7 million in gross  proceeds.   The  net  proceeds of
approximately  $38.8  million  were  used  to pay costs of the offering and  to
reduce  outstanding  borrowings under the Credit  Facilities  by  approximately
$38.6 million.

    The Company generally intends to distribute approximately 80% to 85% of its
funds from operations with the remaining  20%  to  15%  to  be held for capital
expenditures  and  additional  growth.  The Company expects to meet  its  other
short-term cash requirements, through undistributed funds from operations, cash
balances and advances under the 1997 Credit Facility.

   The Company prepares an annual capital expenditure and maintenance budget for
each Property which includes provisions  for  all  necessary  recurring capital
improvements.    The  Company  believes  that  its  undistributed  funds   from
operations will provide  the  necessary  funding  for  these requirements.  The
Company believes that these funds will be sufficient to cover (i) tenant finish
costs associated with the renewal or replacement of current  tenant  leases  as
existing  leases  expire  and  (ii)  capital  expenditures  which  will  not be
reimbursed  by  tenants.   During  1997,  the Company had capital expenditures,
excluding  acquisitions,  totaling  approximately   $51,683,000.   This  amount
consists  of  $49,166,000  in revenue enhancing construction  and  development,
$1,167,000 in revenue enhancing  tenant  allowances,  $567,000  in  non-revenue
enhancing tenant allowances and $783,000 in other non-revenue enhancing capital
expenditures.  The Company also had $1,132,000 in leasing commissions  paid  to
outside  parties.   Of this amount, $1,003,000 was considered revenue enhancing
and $129,000 was considered  non-revenue  enhancing.  Exclusive of construction
and development, capital expenditures (both  revenue and non-revenue enhancing)
for  the  existing  Properties  are  budgeted  in  1998   to  be  approximately
$5,000,000.

    The  Company's  principal  long-term  liquidity  requirements will be the
repayment of principal on the $95 million mortgage debt, which matures  in 2001
and  which may require principal payments in an amount necessary to reduce  the
debt to  $83.1  million  as  of  January  21,  2000,  and to retire outstanding
balances under the 1997 Credit Facility.

                                      25
<PAGE>
 
    An  additional long-term capital need of the Company is the construction of
the regional mall in Spokane, Washington, through its consolidated partnership,
Spokane  Mall  Development Company Limited Partnership.  On July 30, 1996, this
consolidated partnership  entered  into  a $50 million construction facility to
meet its development and construction needs regarding the Spokane project.  The
mall opened August 13, 1997, and contains  approximately 689,000 square feet of
Total GLA.  Continued payments for initial tenant  construction  allowances and
completion of construction will increase borrowings on the loan.   The  Company
estimates  the  total  cost  of this project will be approximately $67 million.
The difference between the estimated  cost  of  the  project  and amount of the
construction facility is comprised of costs incurred to date for  the  purchase
of  land  and payment of fees and other development costs.  As of December  31,
1997, borrowings on the loan were approximately $43.0 million.

    The Operating  Partnership has initiated  the  development of Provo Towne
Centre,  an  enclosed  regional  mall  in  Provo, Utah through its consolidated
partnership  Provo Mall Development Company,  Ltd.   This  property  will  also
represent a future long-term capital need for the Company.  The Company expects
to fund this project  through  advances  under  its  1997  Credit  Facility  in
combination with construction financing.

   The Company is also contemplating the expansion and renovation of several of
its existing properties and additional development projects and acquisitions as
a means  to  expand  its  portfolio.   The  Company does not expect to generate
sufficient funds from operations to meet such  long-term  needs  and intends to
finance these costs primarily through advances under the 1997 Credit  Facility,
together with equity and debt offerings and individual property financing.

    On September 2, 1997 the Company and the Operating Partnership filed a shelf
registration  statement on Form S-3 with the Securities and Exchange Commission
for the purpose  of  registering  common  stock,  preferred  stock,  depositary
shares,   common   stock   warrants,  debt  securities  and  guaranties.   This
registration statement, when  combined with the Company's unused portion of its
previous shelf registration, would  allow  for up to $400 million of securities
to be offered by the Company and the Operating  Partnership.  On March 11, 1998
the Operating Partnership under its shelf registration,  issued $100 million of
ten year senior unsecured notes bearing annual interest at  a  rate  of  7.29%.
Principal  payments of $25 million are due annually beginning March 2005.   The
proceeds were  used  to  partially  repay outstanding borrowings under the 1997
Credit Facility.

    The  Company  intends to fund its  distribution,  development,  expansion,
renovation, acquisition and debt repayment  activities from its credit facility
as well as other debt and equity financing, including  public  financing,  in a
manner  consistent  with  its intention to operate with a conservative debt-to-
total market capitalization  ratio  of  less  than 50%.  The Company's ratio of
debt-to-total market capitalization was approximately  34%  as  of December 31,
1997.

    The  Company  believes  that  to  facilitate a clear understanding of the
consolidated  historical  operating  results  of  the  Company and  Predecessor
Companies,  net  income  should  be  examined in conjunction  with  funds  from
operations.  The Company considers funds  from  operations to be an appropriate
measure of the performance of an equity REIT.  Funds from operations ("FFO") is
defined by the National Association of Real Estate Investment Trusts ("NAREIT")
as  "net  income  (computed  in accordance with generally  accepted  accounting
principles), excluding gains (or  losses)  from debt restructuring and sales of
property,  plus  depreciation  and  amortization   and  after  adjustments  for
unconsolidated partnerships and joint ventures."  While  the  Company  believes
that  FFO  is  the  most  relevant  and  widely  used  measure of its operating
performance, it does not represent cash generated from operating  activities in
accordance with generally accepted accounting principles and is not  indicative
of  cash  available  to  fund  cash needs.  FFO should not be considered as  an
alternative  to  net  income  as  an  indication  of  the  Company's  operating
performance or as an alternative to  cash  flow as a measure of liquidity.  The
Company's  presentation  of  FFO,  however, may  not  be  comparable  to  other
similarly titled measures used by other equity REITs.

                                      26
<PAGE>
 
The Company's calculation of funds from operations is as follows:

<TABLE>
<CAPTION>
                                (DOLLARS IN THOUSANDS)

                                                 Company           Company
                                                Historical        Historical
                                                Year Ended        Year Ended
                                               December 31,      December 31,
                                                   1997              1996
                                               ------------      ------------
<S>                                            <C>               <C>

Income from Operations before Equity in
 Net Income of Partnership Investment and
 Minority Interests in Income of
 Consolidated Partnerships                      $    33,063       $     28,789

Add:  Depreciation Buildings & Improvements          11,599             10,011
Add:  Amortization of Deferred Leasing Costs            639                664
Less: Minority Interests in Income of
      Consolidated Partnerships                        (273)              (269)
Less: Straight-Line Rent Accrual                       (505)               (97)
                                                -----------       ------------
Funds From Operations                           $    44,523       $     39,098
                                                ===========       ============

</TABLE>

Inflation

      Inflation has remained relatively low during the past three years and has
had minimal impact on the operating performance of the Properties.  Nonetheless,
substantially all of the retail tenants' leases contain provisions designed  to
protect  the  Company  from  the  impact of inflation.  Such provisions include
clauses enabling the Company to receive  percentage  rents  based  on  tenants'
gross  sales,  which  generally  increase  as  prices  rise,  and/or escalation
clauses,  which  generally increase rents during the terms of the  leases.   In
addition, many of  the  leases  are  for  terms  less than ten years, which may
enable the Company to replace existing leases with  new  leases  at higher base
and/or percentage rents if rents of the existing leases are below then-existing
market  rates.  Substantially all of the leases, other than those for  anchors,
require the  tenants  to  pay  a  proportionate  share  of  operating expenses,
including  common  area  maintenance, real estate taxes and insurance,  thereby
reducing the Company's exposure  to  increases  in costs and operating expenses
resulting from inflation.

      However, inflation may have a negative impact on  some of the Company's
other operating  items.  Interest and general and administrative expenses may
be adversely affected by inflation  as  these  specified costs could increase
at a rate higher than rents.  Also, for tenant leases with specified rent
increases, inflation may have a negative effect as the specified rent increases
in these leases could be lower than the increase in the inflation rate at any
given time.

      The statements  contained  in  this  annual  report of Form 10-K that are
not purely historical fact are forward looking statements within the meaning of
Section  27A  of  the  Securities Act of 1933 and Section 21E of the Securities
Exchange   Act  of  1934,  including   statements   regarding   the   Company's
expectations,  budgets,  estimates,  and  contemplations.   All forward looking
statements included in this document are based on information  available to the
Company on the date hereof, and the Company assumes no obligation to update any
such  forward  looking  statement.  It is important to note that the  Company's
actual results could differ  materially  from  those  in  such  forward looking
statements.   Certain  factors that might cause such differences include  those
relating to changes in economic climate, local conditions, law and regulations,
the relative illiquidity of real property investments, the potential bankruptcy
of tenants and the development, redevelopment or expansion of properties.

  7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

        Not applicable

                                      27
<PAGE>
 
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

      The financial statements and supplementary data are listed in the Index to
Financial Statements and Financial Statement Schedules appearing on Page F-1 of
this Form 10-K/A.


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

        During the two most recent fiscal years, the Company has not experienced
        any changes in or disagreements with its independent auditors.


                                   PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

  The following information is furnished regarding the Directors of the Company.
 
  JOHN PRICE, age 64, has served as Chairman of the Board of Directors and
Chief Executive Officer of the Company since September 1993. Mr. Price formed
Fairfax in 1972, and its predecessor, John Price Associates, Inc., a
construction company, in 1957. Mr. Price has developed and built substantial
retail and commercial real estate properties during his 40 years in the real
estate industry and has been involved in all facets of real estate development,
construction, leasing, management and financing. Mr. Price is a member of the
Board of Directors and the Executive Committee of Alta Industries--Utah, Inc. (a
distributor of ferrous and nonferrous metals and a manufacturer of roofing,
siding, and other structural components). Mr. Price is also a member of the
NAREIT Legislative Advisory Council, a trustee of the University of Utah, a
member of the Board of Directors of the Utah State Fairpark Corporation which
operates the Utah State Fairgrounds and a member of the Advisory Board of the
First Security Bank of Utah, N.A. Mr. Price is a graduate of the University of
Utah.
 
  G. REX FRAZIER, age 54, has served as President, Chief Operating Officer and
a Director of the Company since September 1993. Mr. Frazier has served as
President and Chief Operating Officer of Fairfax since 1986, prior to which he
had served as Executive Vice President, Vice President--Finance and Director
of Finance. Mr. Frazier has been involved in the real estate industry since
1976. He is a certified public accountant and, prior to joining Fairfax,
worked as an audit supervisor with Touche Ross & Company. Mr. Frazier is a
graduate of the University of Utah.
 
  WARREN P. KING, age 60, has been a Director since the formation of the
Company and was appointed Vice Chairman of the Board of Directors in August
1994. Prior to the formation of the Company, Mr. King served as Vice Chairman
of the Board of Directors and Chairman of the Finance Committee of Fairfax
beginning in 1977, and has been involved in the real estate industry since
1974. He is the President and Chief Executive Officer and director of Alta
Industries--Utah, Ltd. Mr. King is also a director of A.T.S. Industrial Supply
(an industrial tool and supply distributor). He is a certified public
accountant and is a graduate of Stevens Henager Business College.
 
  JAMES A. ANDERSON, age 62, has been a Director since the formation of the
Company. From April 1978 to March 1993, Mr. Anderson was the Chairman of the
Board of Directors of the State of California Mining and Geology Board. He
also was the Executive Vice President of Fulcrum Management, Inc. (a public
and private natural resource venture capital investment company) from 1987 to
1991, and was a director of Venture Trident Ltd. Partnership (the parent
company of Fulcrum Management, Inc.). He also served as a director of
Homestake Mining Company from 1980 to 1987 and as Executive Vice President
from 1979 to 1987. Mr. Anderson received his bachelor's degree in geological
engineering from the University of Utah, a masters degree in mining geology
and a doctorate degree in economic geology from Harvard University and a
degree in business administration from the Stanford University Executive
Program.
 
  SAM W. SOUVALL, age 77, has been a Director since the formation of the
Company. Since 1979, Mr. Souvall has been Chairman of the Board of Alta
Industries--Utah, Ltd. and, from 1970 to 1978, was President and Chief
Executive Officer of that company. From 1972 to 1984, Mr. Souvall served as a
director of Valley Bank & Trust Company and as Chairman of the Board of
Directors from 1984 to 1988. Mr. Souvall also served as Chairman of the Board
of Directors of Utah Bancorporation from 1980 to 1988, and as President and
Chief Executive Officer of Souvall Bros. Intermountain Wholesalers from 1946
to 1969.
 
  ALLEN P. MARTINDALE, age 66, has been a Director since the formation of the
Company. Since 1988, Mr. Martindale has served as the President of A.P.M.
Associates (a management consulting firm). Mr. Martindale has served as a
director of Smith's Food and Drug Center, Inc. (a retail food and drug store)
since 1970 and served such company in several senior executive capacities
since that date, including Chairman of the Board of Directors and Chief
Executive Officer. He also served as President and Chief Executive Officer of
Arden-Mayfair from 1964 to 1970. Mr. Martindale is a certified public
accountant and a graduate of the University of California at Los Angeles.
 
  ALBERT SUSSMAN, age 81, has been a Director since the formation of the
Company. Since January 1985, Mr. Sussman has been the Senior Advisor and a
lifetime member of the Board of Trustees of the International Council of
Shopping Centers, an organization of which he had previously served as
executive head for 28 years. From 1987 to 1988, Mr. Sussman was consultant to
LaSalle Partners (a national firm which specializes in the management and
investment of real estate properties held by major corporations) and he also
was a consultant to Kimco Realty Corporation (a public company owning/managing
small and medium-size shopping centers). Mr. Sussman is a graduate of the City
College of New York.

  The following information is furnished regarding compliance with Section 16(a)
of the Securities Exchange Act of 1934.
 
  Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and holders of more than 10% of the outstanding shares of
Common Stock ("10% Stockholders") to file with the Commission and the New York
Stock Exchange initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company.
Directors, executive officers and 10% Stockholders are required by the
Commission's regulations to furnish the Company with copies of all Section
16(a) forms and amendments thereto filed during any given year.
 
  Based on review of the copies of such reports and amendments thereto
furnished to the Company and representations from the Company's directors,
executive officers and 10% Stockholders that no other reports were required to
be filed, the Company believes that for the year ended December 31, 1997, the
Company's directors, executive officers and 10% Stockholders complied with all
Section 16(a) filing requirements applicable to them.
 
   Information  regarding  Executive  Officers  appears in Item 4A of Part I of
this Form 10-K/A.

ITEM 11. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE
 
  The following table sets forth certain information concerning the
compensation paid by the Company to its Chief Executive Officer and Chairman
of the Board of Directors and to its President and Chief Operating Officer,
Vice President and General Counsel, Vice President-Leasing/Development and
Vice President-Chief Investment Officer and Secretary, the Company's four most
highly compensated executive officers other than the Chief Executive Officer
(together with the Chief Executive Officer, the "Named Executive Officers").
 
<TABLE>
<CAPTION>
                                                         LONG-TERM
                              ANNUAL COMPENSATION  COMPENSATION  AWARDS
                             --------------------- ---------------------
  NAME AND PRINCIPAL                                    SECURITIES          ALL OTHER
      POSITIONS         YEAR SALARY($) BONUS($)(1) UNDERLYING OPTIONS(#) COMPENSATION($)
  ------------------    ---- --------- ----------- --------------------- ---------------
<S>                     <C>  <C>       <C>         <C>                   <C>
John Price(2)           1997 $118,500    $53,325            --             $13,313(3)
 Chairman of the Board  1996  115,000     86,250            --              11,767(4)
 and Chief Executive    1995  100,000     45,000            --               9,397(5)
 Officer

G. Rex Frazier          1997 $134,000    $60,300            --             $14,596(3)
 President and Chief    1996  130,000     97,500          12,500            11,007(4)
 Operating Officer      1995  125,000     56,250            --              16,440(5)

David R. Sabey          1997 $103,000    $20,394            --             $ 8,941(3)
 Vice President and     1996  100,000     33,000           5,000             8,925(4)
 General Counsel        1995   97,500     19,305            --               7,836(5)

Thomas L. Mulkey        1997 $103,000    $30,900            --             $ 8,981(3)
 Vice President--       1996  100,000     50,000          10,000             7,581(4)
 Leasing/Development    1995   97,000     29,100            --               8,293(5)

Paul K. Mendenhall      1997 $ 82,500    $24,750            --             $10,459(3)
 Vice President--       1996   80,000     40,000          10,000             9,194(4)
 Chief Investment       1995   77,500     23,250            --               9,272(5)
 Officer and Secretary
</TABLE>
--------
(1) Bonuses received for 1995, 1996 and 1997 were paid in February, 1996, 1997
    and 1998, respectively.
(2) Mr. Price receives a minimum of $100,000 in annual compensation and
    participates in other standard benefit programs available to senior
    executives generally pursuant to a year-to-year employment and non-
    competition agreement that was entered into on January 21, 1994, the
    closing date of the Company's initial public offering (the "IPO").
(3) Amounts received in 1997 for each of the Named Executive Officers are as
    follows:
 
<TABLE>
<CAPTION>
                         HEALTH     LIFE                RETIREMENT
                        INSURANCE INSURANCE 401(K) PLAN    PLAN     TOTAL
                        --------- --------- ----------- ---------- -------
    <S>                 <C>       <C>       <C>         <C>        <C>
    John Price           $7,708    $1,053     $1,000      $3,552   $13,313
    G. Rex Frazier        9,147       432      1,000       4,017    14,596
    David R. Sabey        4,592       261      1,000       3,088     8,941
    Thomas L. Mulkey      4,632       261      1,000       3,088     8,981
    Paul K. Mendenhall    6,530       432      1,000       2,497    10,459
</TABLE>
 
(4) Amounts received in 1996 for each of the Named Executive Officers are as
    follows:
 
<TABLE>
<CAPTION>
                         HEALTH     LIFE                RETIREMENT
                        INSURANCE INSURANCE 401(K) PLAN    PLAN     TOTAL
                        --------- --------- ----------- ---------- -------
    <S>                 <C>       <C>       <C>         <C>        <C>
    John Price           $6,264    $1,053     $1,000      $3,450   $11,767
    G. Rex Frazier        5,675       432      1,000       3,900    11,007
    David R. Sabey        4,772       153      1,000       3,000     8,925
    Thomas L. Mulkey      3,370       153      1,000       3,058     7,581
    Paul K. Mendenhall    5,487       261      1,000       2,446     9,194
</TABLE>
 
(5) Amounts received in 1995 for each of the Named Executive Officers are as
    follows:
 
<TABLE>
<CAPTION>
                         HEALTH     LIFE                RETIREMENT
                        INSURANCE INSURANCE 401(K) PLAN    PLAN    TOTAL
                        --------- --------- ----------- ---------- ------
    <S>                 <C>       <C>       <C>         <C>        <C>
    John Price           $4,344    $1,053     $1,000      $3,000   $9,397
    G. Rex Frazier       11,258       432      1,000       3,750   16,440
    David R. Sabey        3,758       153      1,000       2,925    7,836
    Thomas L. Mulkey      4,230       153      1,000       2,910    8,293
    Paul K. Mendenhall    5,686       261      1,000       2,325    9,272
</TABLE>
 
OPTION GRANTS FOR CALENDAR YEAR 1997
 
  No options were granted to any of the Named Executive Officers during 1997.
 
OPTION EXERCISES/VALUES OF UNEXERCISED OPTIONS
 
  The following table sets forth as to each of the Named Executive Officers
information with respect to option exercises during 1997 and unexercised
options on December 31, 1997.
 
                AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                     AND FISCAL YEAR-END OPTION VALUES(1)
<TABLE>
<CAPTION>
                                                    NUMBER OF                                  
                                              SECURITIES UNDERLYING     VALUE OF UNEXERCISED   
                      SHARES                 UNEXERCISED OPTIONS AT     IN-THE-MONEY OPTIONS   
                     ACQUIRED                  FISCAL  YEAR-END(#)    AT FISCAL YEAR-END ($)(2)
                        ON         VALUE    ------------------------- ------------------------- 
       NAME         EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------------  ----------- ----------  ----------- ------------- ----------- -------------
<S>                 <C>         <C>         <C>         <C>           <C>         <C>
John Price              --           --       106,000      106,000     $894,375     $894,375
G. Rex Frazier          625       $5,625       31,550       30,000      259,953      228,125
David R. Sabey          900        8,775       12,100       12,000       99,594       91,250
Thomas L. Mulkey        --           --        20,000       20,000      163,750      148,750
Paul K. Mendenhall      285        2,565       19,143       20,000      156,519      148,750
</TABLE>
--------
(1) No SARs are held by any of the Named Executive Officers.
(2) In accordance with the rules of the Securities and Exchange Commission
    (the "Commission"), values are calculated by subtracting the exercise
    price of an option from the fair market value of the underlying Common
    Stock. For purposes of this table, fair market value is deemed to be
    $25.9375, the closing price of the Common Stock reported for the New York
    Stock Exchange on December 31, 1997.
 
REPORT ON EXECUTIVE COMPENSATION
 
  This report is presented to describe the compensation policies applied by
the Executive Compensation Committee of the Board of Directors with regard to
the Company's executive officers and the basis for the compensation of John
Price, Chief Executive Officer of the Company, for the year 1997.
 
  Compensation Philosophy. The Company's compensation program for executive
officers is based upon a desire to achieve both its short-term and long-term
business goals and strategies with a view to enhancing stockholder value. To
achieve its goals, the Company recognizes that it must adopt a compensation
program which will attract, retain and motivate qualified and experienced
executive officers and that its compensation program should align the
financial interests of its executive officers with those of its stockholders.
 
  Compensation of Executive Officers (other than the Chief Executive Officer).
Each year, the Executive Compensation Committee reviews the compensation of
each executive officer of the Company for the previous year. In approving the
1997 annual salary for each of the executive officers, the Executive
Compensation Committee considered several factors, including the individual's
salary for the previous year, the individual's anticipated bonus (if any) for
the previous year, the scope of the individual's responsibilities, the
recommendations of management as to salary and bonus formula for the
subsequent year, the Company's historical financial results and the Company's
anticipated financial performance. The compensation determination for each
individual was largely subjective, and no specific weight was given to any
particular factor. In addition to their base salaries, these executive
officers of the Company are eligible to participate in the Management
Incentive Compensation Plan described below and to receive discretionary
bonuses tied to their individual performances and the overall performance of
the Company.
 
  Compensation of Chief Executive Officer. The Executive Compensation
Committee determined the 1997 annual salary for John Price, Chief Executive
Officer of the Company, based upon a number of factors and criteria, including
the Company's historical financial results, the Company's anticipated
financial performance and the requirements of Mr. Price. As Chief Executive
Officer of the Company, Mr. Price is also eligible to participate in the
Management Incentive Compensation Plan described below and to receive
discretionary bonuses tied to his individual performance and the overall
performance of the Company.
 
  1993 Stock Option Plan. The Company believes that providing executive
officers with opportunities to acquire significant equity stakes in its growth
and prosperity through the grant of stock options will enable the Company to
attract and retain qualified and experienced executive officers. Stock options
represent a valuable portion of the compensation program for the Company's
executive officers. Stock options are generally awarded to executive officers
at the time that they join the Company and periodically thereafter. The
exercise price of stock options has thus been tied to the fair market value of
the Company's Common Stock on the date of the grant, and will only have value
if the value of the Common Stock increases. The size of the initial grants of
stock options made to the existing executive officers was determined in
connection with the formation of the Company. As of December 31, 1997, there
has been only one additional grant of stock options under the plan. Future
grants of stock options to executive officers will generally be made by the
Executive Compensation Committee upon the recommendation of management and be
based upon the level of each executive officer's position with the Company, an
evaluation of the executive officer's past and expected future performance,
the number of outstanding and previously granted options, and discussions with
the executive officer.
 
  Management Incentive Compensation Plan. The Company established an incentive
compensation plan for its officers beginning in 1995. The plan provides that
each officer will earn a cash bonus for a calendar year equal to a percentage
of his annual base salary provided that funds from operations per share of
Common Stock increase at specified levels as compared to the previous year.
The Executive Compensation Committee will review the plan at the end of each
fiscal year to determine if it should be retained or revised to take into
consideration future developments.
 
                       Executive Compensation Committee
 
                           Warren P. King, Chairman
                               James A. Anderson
                                Sam W. Souvall
 
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
 
  John Price, Chief Executive Officer of the Company, is a director of Alta
Industries--Utah, Ltd.; Warren P. King, a Director of the Company and the
Chairman of the Executive Compensation Committee of the Company's Board of
Directors, is the President and Chief Executive Officer of Alta Industries--
Utah, Ltd.
 
                            SHARE PERFORMANCE GRAPH
 
  The graph and table set forth below compare the cumulative total stockholder
return on the Company's Common Stock for the period of January 1994 through
December 1997, with the NAREIT Equity Retail REIT Total Return Index, the
NAREIT Equity Mall REIT Total Return Index and the S&P 500 Index for the same
period. The graph and table assume an investment of $100 in the Common Stock
and each index on or about January 21, 1994, the date trading of the Common
Stock commenced on the New York Stock Exchange, and the reinvestment of all
dividends.
 
 
                    [SHARE PERFORMANCE GRAPH APPEARS HERE]


<TABLE> 
<CAPTION> 

                        Jan. 31, 1994   Dec. 31, 1994   Dec. 31, 1995   Dec. 31, 1996   Dec. 31,1997 
----------------------------------------------------------------------------------------------------
<S>                     <C>             <C>             <C>             <C>             <C> 
Equity Retail REIT         100.00           99.45          104.53          140.70          164.54
----------------------------------------------------------------------------------------------------
Equity Mall REIT           100.00          105.42          108.58          157.73          179.33
----------------------------------------------------------------------------------------------------
S & P 500 Index            100.00           98.02          134.71          165.64          220.92
----------------------------------------------------------------------------------------------------
JP Realty, Inc.            100.00          123.11          144.80          184.74          198.40
----------------------------------------------------------------------------------------------------
</TABLE> 
 
  The foregoing Share Performance Graph and the Report on Executive
Compensation shall not be deemed incorporated by reference by any general
statement incorporating by reference this Proxy Statement into any filing
under the Securities Act of 1933, as amended, or the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), except to the extent that the
Company specifically incorporates such graph or report by reference and shall
not otherwise be deemed filed under such acts.
 
  There can be no assurance that the Company's share performance will continue
into the future with the same or similar trends depicted in the graph above.
The Company will not make or endorse any predictions as to future share
performance.
 

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

  The following table sets forth certain information as of March 31, 1998
regarding the beneficial ownership of the Company's Common Stock and Price
Group Stock with respect to (i) each person known to the Company to be the
beneficial owner of 5% or more of the Company's outstanding shares of Common
Stock and Price Group Stock; (ii) the Named Executive Officers; (iii) the
Company's directors; and (iii) all directors and executive officers of the
Company as a group.
 
                         BENEFICIAL OWNERSHIP TABLE(1)
 
<TABLE>
<CAPTION>
                                                      SHARES
          NAME AND BUSINESS ADDRESS                BENEFICIALLY         PERCENT OF
             OF BENEFICIAL OWNER                      OWNED               SHARES
---------------------------------------------      ------------         ----------
<S>                                                <C>                  <C>
John Price(2)................................       3,167,868             15.43%

Warren P. King(3)............................         153,297                *

G. Rex Frazier(4)............................          78,365                *

Paul K. Mendenhall(5)........................          34,865                *

Sam W. Souvall(6)............................          33,061                *

Allen P. Martindale(7).......................          23,000                *

David R. Sabey(8)............................          19,061                *

Thomas L. Mulkey(9)..........................          11,291                *

James A. Anderson(10)........................           9,000                *

Albert Sussman(11)...........................           9,000                *
</TABLE>
 
<TABLE>
<CAPTION>
                                                      SHARES
          NAME AND BUSINESS ADDRESS                BENEFICIALLY         PERCENT OF
             OF BENEFICIAL OWNER                      OWNED               SHARES
---------------------------------------------      ------------         ----------
<S>                                                <C>                  <C>
All Directors and Executive Officers
of the Company as a Group (13 Persons).......       3,606,567             17.23

Fairfax Realty, Inc.(12)
35 Century Park-Way
Salt Lake City, Utah 84115...................       2,967,313             14.60

Fairfax Holding, L.L.C.(13)
35 Century Park-Way
Salt Lake City, Utah 84115...................       2,967,313             14.60

Cohen & Steers Capital Management, Inc.(14)
757 Third Avenue
New York, New York 10017.....................       2,198,600             12.50

Grantham, Mayo, Van Otterloo & Co., LLC(15)
40 Rowes Wharf
Boston, Massachusetts 02110..................       1,502,500              8.54

The Equitable Companies Incorporated(16)
787 Seventh Avenue
New York, New York 10019.....................       1,321,100              7.50
</TABLE>
--------
*   An asterisk indicates ownership of less than 1%.

(1) For purposes of this table, a person is deemed to be the beneficial owner
    of shares of Common Stock if that person has the right to acquire such
    shares within 60 days of the Record Date by the exercise of any stock
    option or any other right to convert or exchange outstanding securities.
    The Company is the sole general partner of, and owns an 83% interest in,
    the Operating Partnership. OP Units are exchangeable, at the option of
    the holders thereof, for shares of Common Stock on a one-for-one basis
    (subject to adjustment in the event of stock splits, dividends,
    combinations or reclassifications). OP Units and stock options held by a
    person are deemed to have been exchanged or exercised for the purpose of
    computing the percentage of outstanding shares of Common Stock
    beneficially owned by such person, but shall not be deemed to have been
    exchanged or exercised for the purpose of computing the percentage of
    outstanding shares of Common Stock beneficially owned by any other person.
    The Company has the right to convert any outstanding shares of Price Group
    Stock on a one-for-one basis into shares of Common Stock in the event that
    the combined direct or indirect economic interest held by the Price Group
    in the Operating Partnership falls below 10%. Even though such economic
    interest held by the Price Group is not below the 10% level, for purposes
    of this table, shares of Price Group Stock are deemed to be converted into
    an equivalent number of shares of Common Stock. Additionally, for the
    purposes of this table, a person or entity shall be deemed to be a
    beneficial owner of shares of Common Stock if such person or entity has or
    shares either investment or voting power with respect to such shares.

(2) Includes (i) 37,101 OP Units held by Mr. Price, (ii) 2,713,313 OP Units
    and 200,000 shares of Price Group Stock held by Fairfax Holding, L.L.C., a
    limited liability company in which Mr. Price holds an approximate 85%
    direct and indirect interest ("Holding"), (iii) 4,454 OP Units held by
    JPET, and (iv) options to purchase 159,000 shares of Common Stock. Mr.
    Price, through his control of Holding and JPET, exercises sole investment
    and voting power over the OP Units and shares of Price Group Stock held by
    such entities and disclaims beneficial ownership of the OP Units held by
    Holding and JPET, except to the extent of his approximate 85% interest in
    Holding and his approximate 6% interest in JPET.

(3) Includes (i) 80,952 OP Units held by Mr. King, (ii) 16,008 OP Units held
    by Mr. King's wife, Florence K. King, (iii) 29,337 OP Units held by W.P.
    King & Co., a partnership in which Mr. King holds an approximate 8.5%
    interest, and (iv) options to purchase 27,000 shares of Common Stock.
 
(4) Includes (i) 31,831 OP Units and (ii) options to purchase 43,515 shares of
    Common Stock.

(5) Includes (i) 7,187 OP Units and (ii) options to purchase 27,143 shares of
    Common Stock.

(6) Includes (i) 23,371 OP Units and (ii) options to purchase 9,000 shares of
    Common Stock. Of the shares of Common Stock reported in the table, 2,300
    shares are owned of record by S.W. Souvall Co., a partnership in which Mr.
    Souvall and his wife each hold 2% general partner interests, and 2,300
    shares are owned of record by Sary Enterprises, a partnership of which Mr.
    Souvall and his wife are 11% and 3% owners, respectively. Mr. Souvall
    disclaims beneficial ownership of the shares of Common Stock held by S.W.
    Souvall Co. and Sary Enterprises, except to the extent of Mr. and Mrs.
    Souvall's ownership interests therein.

(7) Includes options to purchase 1,000 shares of Common Stock.

(8) Includes (i) 1,595 OP Units and (ii) options to purchase 17,100 shares of
    Common Stock.

(9) Includes (i) 3,291 OP Units and (ii) options to purchase 8,000 shares of
    Common Stock.

(10) Includes options to purchase 9,000 shares of Common Stock.

(11) Includes options to purchase 3,000 shares of Common Stock.

(12) Includes 200,000 shares of Price Group Stock and 2,713,313 OP Units held
     by Holding. Fairfax exercises shared investment and voting power with
     respect to the OP Units held by Holding and disclaims beneficial
     ownership of such OP Units, except to the extent of its approximate 44%
     interest in Holding. All shares beneficially owned by Fairfax and Holding
     are additionally identified as being beneficially owned by Mr. Price.

(13) Includes 200,000 shares of Price Group Stock and 2,713,313 OP Units, of
     which 1,157,298 OP Units and 1,100,945 OP Units are additionally
     identified as being beneficially owned by Mr. Price and Fairfax,
     respectively.

(14) On its Schedule 13G filed with the Commission February 12, 1998, Cohen &
     Steers Capital Management, Inc. reported sole voting power with respect
     to 1,861,200 shares of Common Stock beneficially owned by them and sole
     dispositive power with respect to 2,198,600 shares of Common Stock
     beneficially owned by them.

(15) On its Schedule 13G filed with the Commission on January 21, 1998,
     Grantham, Mayo, Van Otterloo & Co., LLC reported sole voting power and
     sole dispositive power with respect to 1,502,500 shares of Common Stock
     beneficially owned by them.

(16) On its Schedule 13G/A filed with the Commission February 17, 1998, The
     Equitable Companies Incorporated, Alpha Assurances Vie Mutuelle, AXA
     Assurances I.A.R.D. Mutuelle, AXA Assurances Vie Mutuelle, AXA Courtage
     Assurance Mutuelle and AXA-UA reported sole voting power with respect to
     102,686 shares of Common Stock beneficially owned by them, shared voting
     power with respect to 1,203,021 shares of Common Stock beneficially owned
     by them, sole dispositive power with respect to 1,317,459 shares of
     Common Stock beneficially owned by them and shared dispositive power with
     respect to 3,721 shares of Common Stock beneficially owned by them.
 

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

MANAGEMENT CONTRACTS
 
  The Company provided third-party management services for certain properties
owned directly or indirectly by John Price, Chairman of the Board of Directors
and Chief Executive Officer of the Company, as follows: (i) an office building
in Salt Lake City, Utah, the owner of which paid the Company a management fee
of $105,000, $114,000 and $100,000 in 1997, 1996 and 1995, respectively
(Fairfax, a company which is wholly owned by John Price, is a general partner
of the owner of this building); (ii) a commercial building in Layton, Utah,
the owner of which paid the Company a management fee of $22,000, $21,000 and
$21,000 in 1997, 1996 and 1995, respectively; and (iii) a commercial building
in Salt Lake City, Utah, the owner of which paid the Company a management fee
of $1,900, $3,000 and $1,000 in 1997, 1996 and 1995, respectively (John Price
is the general partner of the owner of this building).
 
COMPUTER SERVICES
 
  The Operating Partnership leases computer services from Alta Computer
Services, Inc. ("Alta Computer"). Alta Computer is majority owned by John
Price, Chairman of the Board of Directors and Chief Executive Officer of the
Company, Warren P. King, a Director of the Company, and Sam W. Souvall, a
Director of the Company. The Operating Partnership paid $200,000, $194,000 and
$196,000 in 1997, 1996 and 1995, respectively, for such services.
 
ACCOUNTING AND MANAGEMENT SERVICES
 
  The Operating Partnership has entered into a management agreement under
which it performs certain accounting and management functions on behalf of
Fairfax. Management fees collected by the Operating Partnership under this
agreement totaled $72,000 for each of the three years ended December 31, 1997.
 
BOISE TOWNE SQUARE SETTLEMENT
 
  On March 17, 1997, a settlement agreement was entered into by the Company,
Boise Mall Development Company, Ltd., a Utah partnership which is beneficially
owned by, among others, John Price (Chairman of the Board of Directors and
Chief Executive Officer of the Company), G. Rex Frazier (President and Chief
Operating Officer and a Director of the Company), Paul K. Mendenhall (Vice
President--Chief Investment Officer and Secretary of the Company), Martin G.
Peterson (Vice President--Administration of the Company), Greg Curtis (Vice
President--Management of the Company), Warren P. King (a Director of the
Company), Fairfax and JPET II Company, Ltd. (a limited partnership in which
John Price is the sole general partner ("JPET")) and which contributed Boise
Towne Square to the Company ("BMDC"), and the successor to the company that
owned a certain parcel adjacent to Boise Towne Square (the "Prior Owner"),
which parcel is believed to be the source of an environmental contaminant that
has been found to affect Boise Towne Square as well as certain other adjacent
parcels. The settlement agreement, which was approved by the unanimous vote of
the independent directors of the Board of Directors of the Company,
memorializes the final settlement of all claims that the Company and BMDC have
against the Prior Owner relating to the environmental condition existing at
Boise Towne Square. In connection with the settlement agreement, BMDC, which
retained all claims of an environmental nature with respect to Boise Towne
Square that it held on the date of the contribution of such property to the
Company received a cash payment totaling $4.5 million for its prior damages.
In addition, the Company received a cash payment of $1.1 million which is
intended to defray, based on independent studies of the condition, the
additional costs that may be incurred by the Company in any future expansion
of Boise Towne Square as result of such environmental condition and to
reimburse the Company for certain sums escrowed at the time of, and in
connection with, its formation and the closing of the IPO. In addition, the
Company has received from the Prior Owner a broad indemnification relating to
such environmental condition as well as covenant to complete the ongoing
remediation of such environmental condition.

                                      28
<PAGE>
 
                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

    (a)  (1) and (2) Financial Statements and Financial Statements Schedules

    See  Index  to  Financial  Statements  and  Financial  Statement  Schedules
  appearing on page F-1 of this Form 10-K/A

    (b) Reports on Form 8-K

    On  November  10, 1997, the Company filed a Current Report  on  Form  8-K/A
amending its Current  Report  on  Form  8-K, dated June 30, 1997, reporting its
acquisition of the remaining 70% interest  in  Silver  Lake  Mall, Ltd. and the
Visalia Mall.

  The financial statements filed were as follows:

  SILVER LAKE MALL AND VISALIA MALL
  Statements of Revenues and Certain Expenses for
   the Year Ended December 31, 1996
  Statements of Revenues and Certain Expenses for
   the Three Month Period Ended March 31, 1997 and 1996 (unaudited)
  Notes to Statements of Revenues and Certain Expenses

  JP REALTY, INC.
  Pro Forma - Unaudited:
  Condensed Consolidated Balance Sheet as of
   March 31, 1997
  Condensed Consolidated Statement of Operations for the Three-
   Month Period Ended March 31, 1997 and for the Year
   Ended December 31, 1996
  Estimated Twelve Month Pro Forma Statement of Taxable
  Net Operating Income and Operating Funds Available

  (c)   Exhibits


                                      29
<PAGE>
 
                                      EXHIBIT INDEX

                                       Description
                                       -----------
Exhibit                                                                   Page
Number                                                                    Number
------                                                                    ------
3.1   Amended and Restated Articles of Incorporation the Company (3(a))*        
3.2   Amended and Restated Bylaws of the Company (3(b))*                        
4.1   Specimen of Common Stock Certificate (4)*                                 
10.1  Amended and Restated Agreement of Limited Partnership of Price            
      Development Company, Limited Partnership (10(a))*                         
10.2  Agreement  of  Limited  Partnership  of  Price Financing Partnership,     
      L.P. (10(b))*                                                             
10.3  Loan Agreements related to Mortgage Debt and related documents (10(c))*   
      i)   Deed of Trust, Mortgage, Security Agreement  and  Assignment  of     
           Leases and Rents of Price Financing Partnership, L.P.                
      ii)  Intentionally Omitted                                                
      iii) Indenture between Price Capital Corp. and a Trustee                  
      iv)  Limited Guarantee Agreement (Guarantee of Collection) for outside    
           investors                                                            
      v)   Limited Guarantee Agreement (Guarantee of Collection) for Price      
           Group Investors                                                      
      vi)  Cash Collateral Account Security, Pledge and Assignment Agreement    
           among Price Financing Partnership, L.P., Price Capital Corp. and     
           Continental Bank N.A.                                                
      vii) Note Issuance Agency  Agreement  between Price Capital Corp. and     
           Price Financing Partnership, L.P.                                    
      viii)Management and Leasing Agreement among Price Financing Partnership,  
           L.P.and Price Development Company, Limited Partnership               
      ix)  Assignment of Management and Leasing Agreement of Price Financing    
           Partnership, L.P.                                                    
10.4  Employment and Non-Competition Agreement  between  the  Company  and      
      John Price (10(d))*                                                       
10.5  Indemnification Agreement for Directors and Officers (10(f))*             
10.6  Registration  Rights  Agreement among the Company and the Limited         
      Partners of Price Development Company, Limited Partnership (10(g))* 
10.7  Amendment No. 1 to Registration  Rights  Agreement,  dated August 1, 1995,
      among the Company and the Limited Partners of Price Development Company,  
      Limited Partnership**                                                     
10.8  Exchange Agreement among the Company and the Limited Partners of Price    
      Development Company, Limited Partnership (10(h))*                         
10.9  1993 Stock Option Plan (10(i))*                                           
10.10 Amendment to Groundlease between Price Development Company and Alvin      
      Malstrom as Trustee and C.F. Malstrom, dated December 31, 1985.           
      (Groundlease for Plaza 9400) (10(j))*                                     
10.11 Lease Agreement between The Corporation of the President of the Church    
      of Jesus Christ of Latter Day Saints and Price-James and Assumptions,     
      dated September 24, 1979.  (Groundlease for Anaheim Plaza) (10(k))*       
10.12 Indenture of Lease between Ambrose and Zelda Motta and Cordova            
      Village, dated July 26, 1974, and Amendments and Transfers thereto.       
      (Groundlease for Fort Union Plaza) (10(l))*                               
10.13 Lease Agreement between Advance Management Corporation and Price Rentals, 
      Inc. and dated August 1, 1975 and Amendments thereto. (Groundlease  for   
      Price Fremont) (10(m))*                                                   
10.14 Groundlease between  Aldo  Rossi and Price Development Company, dated     
      June 1, 1989, and related documents.  (Groundlease  for Halsey Crossing)  
      (10(n))*                                                                  

                                      30
<PAGE>
 
                                 EXHIBIT INDEX

                                  Description
                                  -----------
Exhibit                                                                 Page
Number                                                                  Number
------                                                                  -------
10.15       Loan Agreements related to 1995 Credit Facility**
         i) Credit  Agreement, dated  March  8,  1995,  between  
            Price Development Company, Limited Partnership and 
            Lexington Mortgage Company as 
        ii) Note dated March 8, 1995                                           
       iii) Guaranty of Payment dated March 8, 1995 between the 
            Company and Lexington Mortgage Company 
        iv) Cash Collateral Account Security, Pledge and Assignment 
            Agreement dated March 8, 1995 between Price Development 
            Company, Limited Partnership, Bank One, Utah, N.A. and 
            Lexington Mortgage Company   
         v) Amended and Restated Credit Agreement dated June 29, 1995 
            between Price Development Company, Limited Partnership, 
            Merrill Lynch Mortgage Capital, Inc. and Capital Market 
            Assurance Corporation    
        vi) Amendment to Cash  collateral  Account, Security, Pledge 
            and Assignment Agreement dated June 29, 1995 
       vii) Reaffirmation of Guaranty dated June 29, 1995                       
23.         Consent of Independent Accountants                                35
----------------------
*Documents were previously filed with the Company's Registration Statement on
Form S-11, File No. 33-68844,  under  the exhibit numbered  in  parenthetical,
and are incorporated herein by reference.

**Documents were previously filed with the Company's Annual Report on Form 10-K
for the year ended December 31, 1995 and are incorporated herein by reference.



<PAGE>
 
                                    SIGNATURES

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

                                          JP REALTY, INC.


                                          By: /s/ M. Scott Collins
                                          ------------------------
                                          M. Scott Collins
                                          Vice President - Chief
                                          Financial Officer



Date:  May 8, 1998
                           -------------------------
<PAGE>
 
                                   EXHIBIT INDEX

                                    Description
                                    -----------
Exhibit                                                                Page
Number                                                                 Number
------                                                                 ------
 3.1  Amended and Restated Articles of Incorporation the Company (3(a))*
 3.2  Amended and Restated Bylaws of the Company (3(b))*
 4.1  Specimen of Common Stock Certificate (4)*
10.1  Amended and Restated Agreement of Limited Partnership of
      Price Development Company, Limited Partnership (10(a))*
10.2  Agreement of Limited Partnership of Price Financing Partnership, L.P.
      (10(b))*
10.3  Loan Agreements related to Mortgage Debt and related documents (10(c))*
      i)Deed of Trust, Mortgage, Security Agreement and Assignment of
         Leases and Rents of Price Financing Partnership, L.P.
      ii)Intentionally Omitted
      iii)Indenture between Price Capital Corp. and a Trustee
      iv)Limited Guarantee Agreement (Guarantee of Collection)
         for outside investors
      v) Limited Guarantee Agreement (Guarantee of Collection)
         for Price Group Investors
      vi)Cash Collateral Account Security, Pledge and Assignment
         Agreement among Price Financing Partnership, L.P., Price
         Capital Corp. and Continental Bank N.A.
      vii)Note Issuance Agency Agreement between Price Capital Corp.
         and Price Financing Partnership, L.P.
      viii) Management and Leasing Agreement among Price Financing
         Partnership, L.P.and Price Development Company, Limited Partnership
      ix)Assignment of Management and Leasing Agreement of Price
         Financing Partnership, L.P.
10.4  Employment and Non-Competition Agreement between the Company
      and John Price (10(d))*
10.5  Indemnification Agreement for Directors and Officers (10(f))*
10.6  Registration Rights Agreement among the Company and the Limited
      Partners of Price Development Company, Limited Partnership (10(g))*
10.7  Amendment No. 1 to Registration Rights Agreement, dated August 1,
      1995, among the Company and the Limited Partners of Price Development
      Company, Limited Partnership**
10.8  Exchange Agreement among the Company and the Limited Partners of
      Price Development Company, Limited Partnership (10(h))*
10.9  1993 Stock Option Plan (10(i))*
10.10 Amendment to Groundlease between Price Development Company and
      Alvin Malstrom as Trustee and C.F. Malstrom, dated December 31, 1985.
      (Groundlease for Plaza 9400) (10(j))*
10.11 Lease Agreement between The Corporation of the President of the
      Church of Jesus Christ of Latter Day Saints and Price-James and
      Assumptions, dated September 24, 1979.  (Groundlease for Anaheim
      Plaza) (10(k))*
10.12 Indenture of Lease between Ambrose and Zelda Motta and Cordova
      Village, dated July 26, 1974, and Amendments and Transfers thereto.
      (Groundlease for Fort Union Plaza) (10(l))*
<PAGE>
 
                                   EXHIBIT INDEX

                                    Description
                                    -----------
Exhibit                                                            Page  
Number                                                             Number
------                                                             ------

10.13 Lease Agreement between Advance Management Corporation and
      Price Rentals, Inc. and dated August 1, 1975 and Amendments
      thereto. (Groundlease for Price Fremont) (10(m))*
10.14 Groundlease between Aldo Rossi and Price Development Company,
      dated June 1, 1989, and related documents.  (Groundlease for
      Halsey Crossing) (10(n))*
10.15 Loan Agreements related to 1995 Credit Facility**
      i) Credit Agreement, dated March 8, 1995, between Price
         Development Company, Limited Partnership and Lexington
         Mortgage Company as
      ii)Note dated March 8, 1995
      iii)Guaranty of Payment dated March 8, 1995 between the Company
         and Lexington Mortgage Company
      iv)Cash Collateral Account Security, Pledge and Assignment
         Agreement dated March 8, 1995 between Price Development
         Company, Limited Partnership, Bank One, Utah, N.A. and
         Lexington Mortgage Company
      v) Amended and Restated Credit Agreement dated June 29, 1995
         between Price Development Company, Limited Partnership,
         Merrill Lynch Mortgage Capital, Inc. and Capital Market
         Assurance Corporation
      vi)Amendment to Cash collateral Account, Security, Pledge and
         Assignment Agreement dated June 29, 1995
      vii)Reaffirmation of Guaranty dated June 29, 1995
23.   Consent of Independent Accountants 35
-----------------------
*Documents were previously filed with the Company's Registration Statement on
Form S-11, File No. 33-68844, under the exhibit numbered in parenthetical, and
are incorporated herein by reference.

**Documents were previously filed with the Company's Annual Report on Form 10-K
for the year ended December 31, 1995 and are incorporated herein by reference.

<PAGE>
 
                            CONSENT OF INDEPENDENT ACCOUNTANTS
                            ----------------------------------

     We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statements on Form S-3 (No. 33-93752,
No. 333-3624, No. 333-34835-01) and Registration Statement of Form S-8 (No.
333-3550) of JP Realty, Inc. of our report dated February 3, 1998 appearing
on page F-2 of the Form 10-K.



/s/ Price Waterhouse LLP
-------------------------
Price Waterhouse LLP
Salt Lake City, Utah
March 18, 1997
<PAGE>
 
                            INDEX TO FINANCIAL STATEMENTS


JP Realty, Inc.

                                                                    Page
                                                                    ----
Report of Independent Accountants                                   F-2

Consolidated Balance Sheet as of December 31, 1997 and 1996         F-3

Consolidated Statement of Operations
 for the years ended December 31, 1997, 1996 and 1995               F-4

Consolidated Statement of Shareholders' Equity                      F-5

Consolidated Statement of Cash Flows
for the years ended December 31, 1997, 1996 and 1995                F-6

Notes to Consolidated Financial Statements                          F-7

Schedule II - Valuation and Qualifying Accounts                     F-18

Schedule III - Real Estate and Accumulated Depreciation             F-19
<PAGE>
 
                       REPORT OF INDEPENDENT ACCOUNTANTS


To the Board of Directors and Shareholders
of JP Realty, Inc.


     In our opinion, the consolidated  financial statements listed in  the
accompanying index, present fairly, in all material aspects, the financial
position of JP Realty, Inc. and its subsidiaries at December 31, 1997 and 1996,
and the results of their operations and their cash flows for each of the three
years in the period ended December 31, 1997, in conformity with generally
accepted accounting principles.  These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits.  We conducted our
audits of these statements in accordance with generally accepted auditing
standards which 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, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation.  We believe that
our audits provide a reasonable basis for the opinion expressed above.



/s/ Price Warerhouse LLP
------------------------
Price Waterhouse LLP
Salt Lake City, Utah
February 4, 1998

                                      F-2
<PAGE>
 
                                JP REALTY, INC.
                          CONSOLIDATED BALANCE SHEET
                            (DOLLARS IN THOUSANDS)



                                                  December 31,    December 31,
                                                      1997            1996
                                                  ------------    ------------
ASSETS

Real Estate Assets
  Land........................................     $   95,523     $   69,714
  Buildings...................................        490,183        353,500
                                                   ----------     ----------
                                                      585,706        423,214
Less:  Accumulated Depreciation...............       (98,404)        (87,318)
                                                   ----------     ----------
  Operating Real Estate Assets................        487,302        335,896
Real Estate Under Development.................         33,665         30,027
                                                   ----------     ----------
   Net Real Estate Assets.....................        520,967        365,923
Cash..........................................          5,603          1,750
Restricted Cash...............................          2,465          2,372
Accounts Receivable, Net......................          5,759          3,498
Deferred Charges, Net.........................          7,536          6,512
Other Assets..................................          3,354          1,305
                                                   ----------     ----------

                                                   $  545,684      $ 381,360
                                                   ==========     ==========

LIABILITIES AND SHAREHOLDERS' EQUITY
Borrowings....................................     $  283,390      $ 162,375
Accounts Payable and Accrued Expenses.........         18,840         11,611
Accumulated Losses in Excess of Equity Investment          --          1,555
Other Liabilities.............................            617            485
                                                   ----------     ----------
                                                      302,847        176,026
                                                   ----------     ----------
Minority Interests............................         34,851         32,778
                                                   ----------     ----------

Commitments and Contingencies

SHAREHOLDERS' EQUITY
Common Stock, $.0001 par value, 124,800,000 shares
  authorized, 17,390,000 shares and 15,874,000
  shares issued and outstanding at December 31,
  1997 and 1996, respectively..................            2              2
Price Group Stock, $.0001 par value, 200,000 shares
  authorized, issued and outstanding...........            --             --
Excess Stock, 75,000,000 shares authorized.....            --             --
Additional Paid-in Capital.....................       232,135        193,229
Accumulated Distributions in Excess of Net Income    (24,151)        (20,675)
                                                   ----------      ---------
                                                      207,986        172,556
                                                   ----------      ---------
                                                   $  545,684      $ 381,360
                                                   ==========      =========


See accompanying notes to consolidated financial statements.

                                  F-3
<PAGE>
 
                                      JP REALTY, INC.
                           CONSOLIDATED STATEMENT OF OPERATIONS
                     (DOLLARS IN THOUSANDS - EXCEPT PER SHARE AMOUNTS)

                                              For the Year Ended December 31,
                                             -------------------------------


                                             1997         1996          1995
                                            -----         ----          ----

REVENUES
Minimum Rents.............................  $ 59,624     $ 52,447      $ 43,640
Percentage and Overage Rents..............     3,896        4,061         3,465
Recoveries from Tenants...................    18,199       15,557        12,252
Interest..................................       546          549         1,231
Other.....................................       708          335           362
                                            --------     --------      --------
                                              82,973       72,949        60,950
                                            --------     --------      --------
EXPENSES
Operating and Maintenance.................    12,990       11,240         8,288
Real Estate Taxes and Insurance...........     8,546        7,679         6,892
Advertising and Promotions................       451          426           364
General and Administrative................     5,447        5,060         4,845
Depreciation..............................    11,802       10,230         9,610
Amortization of Deferred Financing Costs..       969        1,085         1,256
Amortization of Deferred Leasing Costs....       639          664           662
Interest..................................     9,066        7,776         6,623
                                            --------     --------      --------
                                              49,910       44,160        38,540
                                            --------     --------      --------
                                              33,063       28,789        22,410
Minority Interest in Income of
 Consolidated Partnerships................      (273)        (269)        (320)
Equity in Net Loss of Partnership
 Interest.................................        --          --          (184)
Gain on Sales of Real Estate..............       339           94          918
                                            --------     --------      --------
Income Before Extraordinary Item and Minority
 Interest of the Operating Partnership
  Unitholders.............................    33,129       28,614       22,824
Minority Interest of the Operating........
 Partnership Unitholders..................    (5,675)      (5,244)      (4,646)
                                            --------     --------      --------
Income Before Extraordinary Item..........    27,454       23,370       18,178
Extraordinary Item - Loss on Extinguishment
  of Debt, Net of Minority Interest of
  the Operating Partnership Unitholders...      (133)         --            --
                                            --------     --------      --------
Net
Income....................................  $ 27,321     $ 23,370    $ 18,178
                                            ========     ========    ==========

Basic Earnings Per Share:
 Income Before Extraordinary Item.........  $   1.57     $   1.46    $   1.27
 Extraordinary Item.......................      (.01)          --          --

 Net Income...............................  $   1.56     $   1.46    $   1.27

Diluted Earnings Per Share:
 Income Before Extraordinary Item.........  $   1.56     $   1.45    $   1.26
 Extraordinary Item.......................  $   (.01)    $     --    $     --

 Net Income...............................  $   1.55     $   1.45    $   1.26



               See accompanying notes to consolidated financial statements.


                                      F-4
<PAGE>
 
                                       JP REALTY, INC.
                        CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                                    (DOLLARS IN THOUSANDS)


                                                         Accumulated
                                           Additional   Distributions
                                   Common   Paid-In     In Excess of
                          Shares*  Stock    Capital     Net Income     Total
                          -------  ------  ----------   -------------  -----

Shareholders' Equity at
 December 31, 1994       13,231,000 $   1   $ 138,795  $ (11,203)    $ 127,593
 Sale of Common Stock     2,750,000     1      52,887         --        52,888
 Stock Options Exercised     55,000    --         976         --           976
 Net Income                      --    --          --     18,178        18,178
 Distributions Paid              --    --          --    (23,881)      (23,881)
                          ---------  ------  ---------  ---------    ----------
Shareholders' Equity at
 December 31, 1995       16,036,000     2     192,658    (16,906)      175,754
  Stock Options Exercised    22,000    --         407         --           407
  Operating Partnership
  Units Converted            16,000     --        164         --           164
  Net Income                     --     --         --     23,370        23,370
  Distributions Paid             --     --         --    (27,139)      (27,139)
                          ---------  ------  ---------  ---------    ----------
Shareholders' Equity at
 December 31, 1996       16,074,000      2    193,229    (20,675)      172,556
 Sale of Common Stock     1,500,000     --     38,632        --         38,632
 Stock Options Exercised    12,000      --        234        --            234
 Operating Partnership
 Units Converted             4,000      --         40        --             40
  Net Income                    --      --         --     27,321        27,321
  Distributions Paid            --      --         --    (30,797)      (30,797)
                          ---------  ------  ---------  ---------    ----------

Shareholders' Equity at
 December 31, 1997      17,590,000   $   2  $ 232,135   $(24,151)    $ 207,986
                        ==========   ======  =========  =========    =========


    * Includes Common and Price Group Stock



            See accompanying notes to consolidated financial statements.

                                         F-5
<PAGE>
 
                                     JP REALTY, INC.
                           CONSOLIDATED STATEMENT OF CASH FLOWS
                                  (DOLLARS IN THOUSANDS)





                                             For the Year Ended December 31,
                                             -------------------------------
                                                 1997       1996       1995
                                             -----------  ---------- --------

Cash Flows from Operating Activities
Net Income...................................   $ 27,321    $ 23,370  $ 18,178
Adjustments to Reconcile Net Income to Net
 Cash Provided by Operating Activities:
  Depreciation...............................     11,802      10,230     9,610
  Amortization...............................      1,608       1,749     1,918
  Minority Interest in Income
   of Consolidated Partnerships..............        273         269       320
  Minority Interest of the Operating.........
  Partnership Unitholders....................      5,675       5,244     4,646
  Unitholders' Interest in Extraordinary Item        (29)         --        --
  Equity in Net Loss of Partnership Interest.         --          --       184
  Gain on Sales of Real Estate...............        339)        (94)     (918)
  Increase in Accounts Receivable............      2,261)       (786)     (540)
  Increase in Deferred Charges...............     (1,128)       (387)   (1,428)
  Increase in Accounts Payable and
  Accrued Expenses...........................      3,368       3,774       887
  Increase in Other Assets...................     (1,917)       (295)     (138)
                                                --------    --------    -------
  Net Cash Provided by Operating Activities..     44,373      43,074    32,719
                                                --------    --------    -------
CASH FLOWS FROM INVESTING ACTIVITIES
Real Estate Assets, Developed or Acquired....   (137,560)    (65,323)  (69,300)
Proceeds from Sales of Real Estate...........        469          --     1,281
(Increase) Decrease in Restricted Cash.......        (93)         92       636
                                                --------    --------    -------
 Net Cash Used in Investing Activities.......   (137,184)    (65,231)  (67,383)
                                                --------    --------    -------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Borrowings.....................    219,088      65,442    47,009
Repayment of Borrowings......................   (123,320)     (9,473)  (49,344)
Deferred Financing Costs.....................     (1,503)         --       --
Net Proceeds from Sale of Common Stock.......     38,865         407    53,850
Capital Contribution by Minority Partner.....      1,000          --        --
Distributions to Minority Interests
 and Unitholders.............................     (6,669)     (7,157)   (6,295)
Distributions Paid to Shareholders...........    (30,797)    (27,139)  (23,881)
                                                --------    --------    -------
  Net Cash Provided by Financing Activities..     96,664      22,080    21,339
                                                --------    --------    -------
Net Increase (Decrease) in Cash..............      3,853         (77)   (1,325)
Cash, Beginning of Period....................      1,750       1,827    15,152
                                                --------    --------    -------
Cash, End of Period..........................   $  5,603    $  1,750   $ 1,827
                                                --------    --------    -------


          See accompanying notes to consolidated financial statements.

                                      F-6
<PAGE>
 
                              JP REALTY, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

1.    BUSINESS AND BASIS OF PRESENTATION

Business

      JP Realty, Inc. (the "Company"), a Maryland Corporation, is engaged in
the business of owning, leasing, managing, operating, developing and
redeveloping regional malls, community centers and other commercial properties.
The Company is a real estate investment trust ("REIT") as defined by the
Internal Revenue Code and owns an interest in and conducts its business
activities through Price Development Company, Limited Partnership (the
"Operating Partnership").   The Company owned an 82.7 and 81.7 percent general
partnership interest in the Operating Partnership at December 31, 1997 and
1996, respectively, which owns a portfolio of 48 properties consisting of 15
enclosed regional malls, 25 community centers, two free-standing retail
properties and six mixed-use commercial properties.  The tenant base includes
primarily national, regional and local retailers; as such, the Company's credit
risk is concentrated in the retail industry.

Basis of Presentation

      The accompany consolidated financial statements include the accounts
of the Company, the Operating Partnership and all controlled affiliates. 
During 1995,  the Operating Partnership used the equity method to
account for a 30 percent limited partnership interest in a partnership
owning a regional mall.  Commencing in 1996, the  Operating  Partnership
discontinued recording  its proportionate interest in the losses generated
by this partnership, as it was not required to fund such losses.
During 1997, the Operating Partnership acquired the remaining 70 percent
interest in this partnership.

      The effect of all significant intercompany balances and transactions have
been eliminated in the consolidated presentation.   Certain amounts in the 1996
and 1995 financial statements have been reclassified to conform with the 1997
presentation.

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


2.    SUMMARY OF SIGNIFICANT ACCOUNTING

Real Estate Assets

      Real estate assets are stated at cost less accumulated depreciation.  At
each balance sheet date, the Company reviews book values of real estate assets
for possible impairment based upon expectations of future nondiscounted cash
flows (excluding interest) from each property.

      Costs directly related to the acquisition and development of real estate
assets, including overhead costs directly attributable to property development
are capitalized.  Interest and real estate taxes incurred during the
development and construction period are capitalized.

      Depreciation is computed on a straight-line basis generally over 40 years
for buildings and four  to  ten  years  for  equipment  and  fixtures.   Tenant
improvements are capitalized and depreciated on a straight-line basis over  the
life  of  the  related  lease.   Expenditures  for  maintenance and repairs are
charged to operations as incurred.  Major replacements  and  betterments  which
improve  or  extend  the life of the asset are capitalized and depreciated over
their estimated useful lives.

                                    F-7
<PAGE>
 
                          JP REALTY, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

2.    SUMMARY OF SIGNIFICANT ACCOUNTING (CONTINUED)

Revenue Recognition

      Certain minimum rents are recognized monthly based upon amounts which are
currently due from tenants, when such amounts are not materially different than
recognizing the fixed  cash  flow  over the initial term of the lease using the
straight-line  method.   All  other minimum  rents  are  recognized  using  the
straight-line method.  Percentage  rents  are  recognized monthly on an accrual
basis based on estimated annual amounts.   The Company  receives reimbursements
from  tenants  for  certain  costs as provided in the lease agreements.   These
costs consist of real estate taxes,  insurance,  common  area  maintenance  and
other  recoverable costs.  Recoveries from tenants are recognized monthly on an
accrual basis based on estimated amounts.

      An  allowance for doubtful accounts has been provided against the portion
of tenant accounts  receivable  which is estimated to be uncollectible.  Tenant
accounts  receivable  in  the accompanying  balance  sheet  are  shown  net  of
allowance for doubtful accounts  of  $570  and $489 as of December 31, 1997 and
1996, respectively.

Restricted Cash

      Restricted cash reflects cash restricted  under terms of a loan agreement
to be used for certain capital expenditures and funds  held  in  reserve  by  a
trustee for interest payments on borrowings.

Deferred Charges

      Deferred  charges  consists  principally  of  financing  fees and leasing
commissions  paid to third parties.  These costs are amortized on  a  straight-
line basis over  the  terms  of the respective agreements.  Deferred charges in
the accompanying consolidated  balance  sheet  are  shown  net  of  accumulated
amortization   of  $5,857  and  $6,064  as  of  December  31,  1997  and  1996,
respectively.

Income Taxes

      The Company  has elected to be taxed as a REIT under the Internal Revenue
Code of 1986, as amended  (the  "Code"), commencing with the taxable year ended
December 31, 1994.  To qualify as  a REIT, the Company must distribute annually
to its shareholders at least 95% of  its REIT taxable income, as defined in the
Code,  and  satisfy  certain other requirements.   As  a  result,  the  Company
generally will not be subject to federal income taxation at the corporate level
on the income it distributes to shareholders.

      As of December 31,  1997,  the  net  assets  as reported in the Company's
consolidated financial statements exceeded the net basis for federal income tax
purposes, taking into account the special allocation  of  gain  to the partners
contributing property to the Operating Partnership, by approximately $129,664.

Recent Accounting Pronouncements

      In  June  1997, the Financial Accounting Standards Board ("FASB")  issued
Statement of Financial  Standards  ("SFAS")  No.  130  "Reporting Comprehensive
Income".  SFAS No. 130 establishes standards for the reporting  and  display of
comprehensive  income  and  its  components  in  a  full set of general purpose
financial statements.  Comprehensive income is defined  as the change in equity
of a business enterprise during a period from transactions  and other event and
circumstances  from nonowner sources.  The new standard becomes  effective  for
the Company for  the  year  ending  December 31, 1998, and requires comparative
information from earlier years to be restated to conform to the requirements of
this standard.  The Company does not  expect  this  pronouncement to materially
impact the presentation or form of its financial statements.

                                     F-8
<PAGE>
 
                          JP REALTY, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

2.    SUMMARY OF SIGNIFICANT ACCOUNTING (CONTINUED)

      In June 1997, the FASB issued SFAS No. 131, "Disclosures  about  Segments
of  an Enterprise and Related Information".  SFAS No. 131 establishes standards
for disclosure  about  operating  segments  in  annual financial statements and
selected  information  in  interim  financial  reports.   It  also  establishes
standards for related disclosures about products and services, geographic areas
and  major  customers.   This  statement supersedes  SFAS  No.  14,  "Financial
Reporting for Segments of a Business  Enterprise".   The  new  standard becomes
effective for the Company for the year ending December 31, 1998,  and  requires
that  comparative information from earlier years be restated to conform to  the
requirements of this standard.


3.    ACQUISITIONS AND DEVELOPMENTS

Acquisitions

      On  December 30, 1997, the Operating Partnership acquired Salem Center, a
mall located  in  Salem,  Oregon  for  $32,500.   The  acquisition was financed
utilizing borrowings on its $200,000 unsecured credit facility.

      On June 30, 1997, the Operating Partnership acquired Visalia Mall located
in Visalia, California for $38,000.  The acquisition was  financed  principally
from borrowings.

      On  June  1,  1997, the Operating Partnership acquired the remaining  70%
interest in Silver Lake  Mall,  Ltd.  a  Limited Partnership owning Silver Lake
Mall located in Coeur d'Alene, Idaho.  Prior  to the acquisition, the Operating
Partnership  held  a  30%  interest in the partnership.   The  acquisition  was
financed  by  issuing  72,000 Operating  Partnership  Units  ("OP  Units")  and
assuming debt totaling $24,755.

      On April 4, 1996,  the  Operating  Partnership  acquired Grand Teton Mall
located in Idaho Falls, Idaho for approximately $34,400.   The  acquisition was
financed utilizing borrowings from a credit facility.


Developments

      The  Operating Partnership, through its consolidated partnership  Spokane
Mall Development  Company  Limited  Partnership,  completed  the development of
Spokane Valley Mall located in Spokane, Washington and held a  grand opening on
August 13, 1997.  The mall contains approximately 689,000 square  feet of total
gross leasable area ("Total GLA").  The partnership expended a total of $57,855
for  the  development.   At  December  31, 1997, the Operating Partnership  had
leased approximately 89% of the mall.

      The Operating Partnership has initiated  the  development  of Provo Towne
Centre,  an  enclosed  regional  mall  in  Provo, Utah through its consolidated
partnership  Provo  Mall  Development  Company,   LTD.    The   mall  will  add
approximately  750,000  square  feet of Total GLA.  At December 31,  1997,  the
partnership  had  expended  $30,490   for  development  costs  and  anticipates
expending an additional $23,039 to complete the development during 1998.

                                   F-9
<PAGE>
 
                          JP REALTY, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

4.    BORROWINGS



                                                              December 31,
                                                            1997       1996
                                                            ----       ----

Credit Facility, unsecured; weighted average
 interest at 6.75 percent during 1997                    $ 127,000    $     --

Notes, secured by real estate; interest at 6.37 percent;
 due in 2001                                                95,000      95,000

Construction Loan, secured by real estate; interest at
 7.41 percent as of December 31, 1997, due in 1999          43,009      16,943

Mortgage payable, secured by real estate; interest at
 8.5 percent, due in 2000                                   12,827          --

Other notes payable, secured by real estate;
 interest ranging from 7.0 to 9.99;
 maturing 2000 to 2095                                       5,554       2,232

Credit Facility, secured by real estate;
 interest at 115 basis points over AAA commercial paper         --      44,000

Credit Facility, unsecured; interest at
 175 basis points over LIBOR                                    --       4,200

                                                           -------  ----------
                                                           283,390  $  162,375
                                                           =======  ==========

Credit Facilities

      On  October 16, 1997, the Operating Partnership obtained a $150,000 three
year unsecured  credit  facility  (the  "1997 Credit Facility") from a group of
banks.   On  December  18, 1997, the amount  was  increase  to  $200,000.   The
facility has a three year  term  and  bears  interest,  at  the  option  of the
Operating  Partnership,  at  one,  or  a  combination, of (i) the higher of the
federal funds rate plus 50 basis points or the prime rate, or (ii) LIBOR plus a
spread  of  70 to 130 basis points.  The LIBOR  spread  is  determined  by  the
Operating Partnership's  credit  rating and/or leverage ratio.  The 1997 Credit
Facility also includes a competitive bid option in the amount of $100,000 which
will allow the Operating Partnership  to  solicit  bids for borrowings from the
bank group.  The facility will be used for general corporate purposes including
development,  working  capital,  equity  investments,  repayment   of   amounts
outstanding under its other credit facilities, repayment of indebtedness and/or
amortization  payments.   The facility contains restrictive covenants including
limitations on the amount of  secured  and  unsecured  debt,  and  requires the
Operating  Partnership  to maintain certain financial ratios.  At December  31,
1997, the Operating Partnership  was  in  compliance with these covenants.  For
the  year ended December 31, 1997, the Operating  Partnership  paid  commitment
fees totaling $50.

      On  November 7, 1997, the Operating Partnership borrowed $85,000 from the
1997 Credit  Facility and utilized the proceeds to retire and cancel previously
existing credit  facilities  and  to  pay for development activities.  Deferred
financing  costs related to the canceled  credit  facilities  were  written-off
resulting in  an  extraordinary  loss  of  $133,  net of minority interest.  On
December 29, 1997, the Operating Partnership borrowed  an additional $42,000 to
pay  for  the  acquisition  of  Salem  Center  (Note  3)  and  for  development
activities.  At December 31, 1997, the 1997 Credit Facility had  a  balance  of
$127,000.

      On  March  8,  1995,  the  Operating  Partnership  entered into a $50,000
secured credit facility agreement which provided for a two year commitment with
an  option  to  extend  for an additional year (which option was  exercised  on
January 22, 1997).  Borrowings  under  this  agreement  were  collateralized by
certain real estate assets.  The credit facility bore interest  at  a  floating
rate  equal  to  115  basis  points over the established rate of AAA commercial
paper and was guaranteed by the  Company.  For the year ended December 31, 1997
and 1996, the Operating Partnership  paid  commitment  fees  totaling  $280 and
$200, respectively.  On November 7, 1997, borrowings under this credit facility
were retired and the facility was canceled.

                                  F-10
<PAGE>
 
                          JP REALTY, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

4.    BORROWINGS (CONTINUED)

      On  January  22,  1996,  the Operating Partnership entered into a $25,000
unsecured credit facility agreement  which  provided  for a two year commitment
with an option to extend for an additional year (which  option was exercised on
January 24, 1997).  On October 6, 1997, the limit was raised  to  $40,000.  For
the  year  ended  December  31,  1997 and 1996, the Operating Partnership  paid
commitment  fees totaling $86 and $67,  respectively.   On  November  7,  1997,
borrowings under  this  credit  facility  were  retired  and  the  facility was
canceled.

Notes

      On  January  21,  1994, a subsidiary of the Operating Partnership  issued
$95,000 in secured notes  bearing  interest  at  6.37%  per  annum.   The notes
require  quarterly  interest  payments  and  a principal payment of $11,875  on
January  21, 2000 with the remaining balance due  on  January  21,  2001.   The
subsidiary has an option to extend the notes to January 21, 2003.

Construction Loan

      On July 30, 1996, Spokane Mall Development Company Limited Partnership, a
consolidated  partnership,  of  which  the Operating Partnership is the general
partner, entered into a $50,000 construction facility.  The loan bears interest
at a variable interest rate indexed to the  LIBOR rate.  The proceeds from this
facility have been used to fund the development and construction of the Spokane
Valley Mall in Spokane, Washington.  The construction  loan  has  a  three year
term with an optional two year extension, is secured by the Spokane Valley Mall
and is guaranteed by the Operating Partnership.  At December 31, 1997, the loan
had a balance of $43,009.

Mortgage Payable

      In  June  1997,  the  Operating  Partnership  assumed a mortgage note  of
$24,755 as part of the acquisition of Silver Lake Mall  (Note  3)  and  retired
portions of the debt principally using borrowings under a credit facility.  The
assumed  debt  bears  interest  at  8.5%  per  annum and has a maturity date of
October 1, 2000 when a balloon payment of $11,971 is due.  At December 31, 1997
the loan had a balance of $12,827.

Interest Rate Protection Agreement

      In December 1997, the Operating Partnership entered into an interest rate
protection agreement with a notional value of $100,000  and  a forward yield of
5.74%  based  on  the  10-year  treasury  note.  This interest rate  protection
agreement will be used to hedge the interest rate on an anticipated offering of
unsecured debt.  At December 31, 1997, the  fair  value  of this instrument, as
estimated by dealers was $0.

Scheduled Principal Repayments

      The  following  summarizes  the  scheduled  maturities of  borrowings  at
December 31, 1997:

      Year                                                                Total
      ----                                                              -------
      1998......................................................        $   560
      1999......................................................         43,589
      2000......................................................        151,145
      2001......................................................         84,741
      2002......................................................             41
      Thereafter................................................          3,314

                                                                     $  283,390
                                                                     ==========



                                    F-11
<PAGE>
 
                                 JP REALTY, INC.
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

5.    Capital Stock

      The  authorized  capital  stock  of  the  Company consists of 200,000,000
shares of capital stock, of which 124,800,000 shares  are  classified as Common
Stock,  200,000  shares  are  classified  as Price Group Stock, and  75,000,000
shares are classified as Excess Stock.  Each  holder  of Common and Price Group
Stock shall be entitled to one vote for each share held.  Shares of Price Group
Stock shall have the right, voting as a separate class,  to elect two directors
of the Company.  Cash dividends for shares of Price Group  Stock shall be equal
to 80 percent of the amount payable on each share of Common  Stock.  All of the
outstanding shares of Price Group Stock may be converted at the  option  of the
Company into an equal number of shares of Common Stock, if certain requirements
are met.

      On January 28, 1997, the Company sold 1,500,000 shares of common stock in
an  underwritten  public offering at $27.13 per share.  Net proceeds of $38,632
were contributed to  the  Operating  Partnership  in  exchange  for  additional
partnership  units and were principally used to repay indebtedness incurred  by
the Operating Partnership to fund acquisition activities.

      On August  7,  1995, the Company sold 2,750,000 shares of common stock in
an underwritten public  offering  at $20.50 per share.  Net proceeds of $52,887
were  contributed  to  the Operating Partnership  in  exchange  for  additional
partnership units and were  principally  used to repay indebtedness incurred by
the Operating Partnership to fund acquisition activities.


6.    Rental Income

      Substantially all real estate held for investment is leased to retail and
commercial tenants under arrangements which  generally  require  the tenants to
pay property taxes, insurance and maintenance charges.  These operating  leases
generally range from 1 to 25 years and provide for minimum monthly rents and in
certain instances percentage rents based on the tenants' sales.

      All  non-cancelable  leases,  assuming  no  new or renegotiated leases or
option  extensions, in effect at December 31, 1997 provide  for  the  following
minimum future rental income:


  YEAR                                                                  TOTAL
  ----                                                               --------
  1998.........................................................      $ 54,604
  1999.........................................................        59,103
  2000.........................................................        53,420
  2001.........................................................        48,026
  2002.........................................................        41,316
  Thereafter                                                          243,117
                                                                      -------
                                                                    $ 499,586
                                                                     =========

                                      F-12
<PAGE>
 
                                   JP REALTY, INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

7.    Commitments and Contingencies

      Future  minimum  rental  payments  under  the terms of all non-cancelable
operating  leases  under  which  the  Operating  Partnership   is  the  lessee,
principally for ground leases, are as follows:

      YEAR                                                            TOTAL
      ----                                                           --------
      1998......................................................     $    971
      1999......................................................          983
      2000......................................................          986
      2001......................................................          998
      2002......................................................        1,011
      Thereafter                                                       27,323
                                                                     --------
                                                                     $ 32,272
                                                                     ========

      The Company is a defendant in certain litigation relating to its business
activities.   Management  does not believe that the resolution of these matters
will have a materially adverse effect upon the Company.


8.    Supplemental Disclosure of Cash Flow Information

      During the years ended December 31, 1997 and 1996, non-cash investing and
financing transactions included  an  increase  in  accounts  payable  of $3,861
related  to  development  activities,  the  assumption  of  debt related to the
acquisition of Salem Center totaling $494 in December 1997, the  assumption  of
debt  related  to  the acquisition of Silver Lake Mall totaling $24,755 in June
1997, and the write-off  of  capitalized  tenant  allowances  of $406 and $159,
respectively.  In addition, the holders of Operating Partnership  Units elected
to convert 4,000 and 16,000 OP Units, having a recorded value of $40  and $164,
into common stock for the years ended December 31, 1997 and 1996, respectively.

      Interest paid (net of capitalized amounts of $3,509, $1,261 and $788, for
the  years  ended  December 31, 1997, 1996 and 1995) aggregated $8,276, $7,707,
and $6,597, for the years ended December 31, 1997, 1996 and 1995, respectively.

      Purchase of the remaining 70% interest in Silver Lake Mall, Ltd.:


      72,000 Operating Partnership Units issued                       $  1,863
      Book value of 30% equity investment in Silver Lake Mall, Ltd.     (1,555)
      Debt assumed                                                      24,755
                                                                      --------
                                                                      $ 25,063
                                                                      ========

9.    Related Party Transactions

      On January 2, 1996, the Operating Partnership purchased an interest in an
affiliated   limited  partnership   for   $1,200.    The   affiliated   limited
partnership's  only asset was its ownership in Operating Partnership Units.  In
June  1996,  the affiliated  limited  partnership  was  liquidated  and  66,000
Operating Partnership  Units were received by the Operating Partnership in such
liquidation.   To account  for  this  transaction,  the  Operating  Partnership
recorded a reduction  in  minority interest liability for the book value of the
acquired partner's interest  of  $705, and recognized the excess cost over book
value of $495 as an asset on the Operating  Partnership's  books.   This excess
cost is being amortized over 40 years.

      The  Operating  Partnership  leases  computer services from Alta Computer
Services, Inc. ("Alta").  Alta is majority owned  by  three  directors  of  the
Company.   The Operating Partnership paid $200, $194 and $196 in 1997, 1996 and
1995, respectively, for such services.

                                       F-13
<PAGE>
 
                                  JP REALTY, INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

9.    Related Party Transactions (continued)

      The Operating  Partnership  has entered into a management agreement under
which  the Operating Partnership performs  certain  accounting  and  management
functions  on  behalf of a company, whose majority owner is the Chairman of the
Board of Directors  of the Company.  Management fees collected by the Operating
Partnership under this  agreement totaled $72 for each of the three years ended
December 31, 1997.


10.   Stock Incentive Plan

      On October 26, 1993, the Company adopted the 1993 Stock Option Plan which
authorizes the discretionary  grant by the Executive Compensation Committee, of
options intended to qualify as  "incentive stock options" within the meaning of
Section 422 of the Internal Revenue  Code,  to key employees of the Company and
the  discretionary  grant  of  nonqualified stock  options  to  key  employees,
directors and consultants of the  Company.   The  maximum  number  of shares of
common stock subject to option under the Company's Plan is 1,100,000.  No stock
options  may  be granted after ten years from the date of adoption and  options
must be granted at a price generally not less than the fair market value of the
Company's common  stock at the date of grant.  These options vest over a period
of one to five years.

<TABLE>
<CAPTION>

A summary of the Company's stock option plan is set forth below:

                                              1997                  1996                1995
                                      -------------------    ------------------   -----------------
                                                  Weighted              Weighted             Weighted
                                                  Average                Average              Average
                                                  Exercise              Exercise             Exercise
                                        SHARES    PRICE        SHARES    PRICE       SHARES     PRICE
                                      --------   ---------    -------   --------   --------- --------
<S>                                    <C>        <C>         <C>        <C>        <C>        <C>
Outstanding at beginning of year       558,000   $  17.99     494,000   $ 17.56    550,000   $  17.54
 Granted                                 7,000      25.38     107,000     20.02      7,000      19.13
 Exercised                             (12,000)     18.64     (22,000)    17.57    (55,000)     17.50
 Forfeited                                  --         --     (21,000)    18.85    ( 8,000)     17.50
                                      --------   ---------    -------   --------   --------- --------
Outstanding at end of year             553,000*  $  18.07     558,000   $ 17.99    494,000   $  17.56


   Exercisable at end of year          277,000   $  17.87     178,000   $ 17.77    96,000    $  17.83
                                      ========  ==========    =======   ========   ========= ========

</TABLE>
* The weighted average remaining contractual life of options outstanding as of
  December 31, 1997 was 8 years.  The range of option prices was $17.50 to
  $25.38 per share.


                                       F-14
<PAGE>
 
                                   JP REALTY, INC.
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

10.   Stock Incentive Plan (continued)

      The  Company  has  applied  Accounting Principals Board  Opinion  25  and
selected  interpretations  in  accounting   for   its  plan.   Accordingly,  no
compensation  costs  have  been  recognized.  Had compensation  costs  for  the
Company's plan been determined based  on  the  fair value at the grant date for
options granted in 1997, 1996 and 1995, respectively,  in  accordance  with the
method  required  by  SFAS 123, "Accounting for Stock-Based Compensation",  the
Company's net income and  net  income  per share would have been reduced to the
proforma amounts as follows:

<TABLE>
<CAPTION>

                                                          FOR THE YEAR ENDED DECEMBER 31
                                                         ---------------------------------
                                                            1997        1996       1995
                                                         ---------   ---------    --------
<S>                                                         <C>          <C>          <C>
Net income
 As reported                                             $  27,321   $  23,370    $ 18,178
 Proforma                                                $  27,283      23,334      18,164

Basic net income per share
 As reported                                             $    1.56   $    1.46    $   1.27
 Proforma                                                     1.56        1.45        1.27

Diluted net income per share
 As reported                                             $    1.55   $    1.45    $   1.26
 Proforma                                                     1.55        1.45        1.26

</TABLE>

      The fair value of each option grant was estimated on the date of grant
using the Black-Sholes options pricing model using the following assumptions:

<TABLE>
<CAPTION>
                                                          For the Year Ended December 31
                                                         ---------------------------------
                                                            1997        1996       1995
                                                         ---------   ---------    --------
<S>                                                         <C>          <C>         <C>
Risk free interest rate                                     6.76%       5.50%      6.96%
Dividend yield                                              7.00%       7.00%      7.00%
Expected life                                             9 years     10 years   10 years
Expected volatility                                        16.50%      16.00%     20.00%

Weighted average per share
 fair value of an option granted during the year        $   2.53     $  1.47   $   2.34

</TABLE>

11.   Employee Benefit Plan

      The  Company has a 401(k) profit sharing plan which permits participating
employees to  defer  up to a maximum of 15% of their compensation.  The Company
matches 50% of the qualified employees' contributions up to a maximum of $1 per
employee each year.  Employees  working  a  minimum of 1,000 hours per year who
have completed at least one year of service and  attained  the  age  of  21 are
qualified  to  participate  in  the  plan.   The  employees'  contributions are
immediately vested.  Additionally, the Company annually contributes  3% of base
salary to the plan for each qualified employee.  Contributions from the Company
vest  at  20% per year.  The Company's contributions to the plan for the  years
ended December 31, 1997, 1996 and 1995 were $225, $190, and $159, respectively.

                                        F-15
<PAGE>
 
                                 JP REALTY, INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

12.   Fair Value of Financial Instruments

      The following  disclosures  of  estimated  fair  value were determined by
management  using  available  market  information.   Considerable  judgment  is
necessary  to  interpret  market  data  and  develop  estimated   fair   value.
Accordingly,  the estimates presented herein are not necessarily indicative  of
the  amounts  the  Company  could  realize  on  disposition  of  the  financial
instruments.   The  use  of  different  market  assumptions  and/or  estimation
methodologies may have a material effect on the estimated fair value amounts.

      The carrying  value  of  cash,  accounts receivable, accounts payable and
accrued expenses at December 31, 1997 and  1996  are  reasonable  estimates  of
their fair values because of the short maturity of these financial instruments.

      Borrowings with an aggregate carrying value of $283,390 and $162,375 have
an estimated aggregate fair value of $283,533 and $158,287 at December 31, 1997
and  1996,  respectively.   Estimated  fair  value  is  based on interest rates
currently  available  to  the Company for issuance of borrowings  with  similar
terms and remaining maturities.


13.   Earnings Per Share

      Earnings per share "EPS" have been computed pursuant to the provisions of
SFAS No. 128, "Earnings Per  Share"  which  became effective after December 15,
1997;  all  periods  prior  thereto  have been restated  to  conform  with  the
provisions of this Statement.

      The  following  table provides a reconciliation  of  both  income  before
extraordinary items and the number of common shares used in the computations of
"basic" EPS, which utilizes  the  weighted  average  number  of  common  shares
outstanding  without regard to potentially dilutive common shares and "diluted"
EPS, which includes all such shares.


<TABLE>
<CAPTION>
                                                    FOR THE YEAR ENDED DECEMBER 31,
                                                    1997       1996      1995
                                                 --------    --------   --------
<S>                                                  <C>       <C>       <C>
Income (Numerator):
  Before extraordinary item                      $ 27,454    $ 23,370   $ 18,178
                                                 ========    ========   ========

Shares (Denominator):
  Basic-average common shares outstanding          17,471     16,048      14,345
  Add: Dilutive effect of stock options               166         85          66
                                                 --------    -------     -------
  Diluted shares                                   17,637     16,133      14,411
                                                 ========    ========   ========
Per-Share Amounts - Income before
  extraordinary item
 Basic                                            $ 1.57     $  1.46     $  1.27
                                                 ========    ========   ========
  Diluted                                         $ 1.56     $  1.45     $  1.26
                                                 ========    ========   ========
</TABLE>

      Options to purchase 553,000, 558,000 and 494,000 shares of common stock
were outstanding at   December 31, 1997, 1996 and 1995, respectively (Note 10),
a portion of which has been reflected above using the treasury stock method.

                                      F-16
<PAGE>
 
                                  JP REALTY, INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

14.   Quarterly Financial Information (Unaudited)

      Financial information  for  each  of  the  quarters  in  the  years ended
December 31, 1997 and 1996 are as follows:

<TABLE>
<CAPTION>
                                           FIRST    SECOND    THIRD   FOURTH     TOTAL
                                         -------- --------- -------- --------  --------
<S>                                         <C>       <C>       <C>     <C>       <C>
   YEAR ENDED
DECEMBER 31, 1997
Total Revenues........................   $ 18,375 $ 18,617  $ 21,773 $ 24,208  $ 82,973
Income Before Extraordinary Item
 and Minority Interest................      7,484    8,400     8,168   9,077     33,129
Net Income............................      6,214    6,968     6,760   7,379     27,321
Basic Earnings Per Share..............        .36      .40       .38     .42       1.56
Diluted Earnings Per Share............        .36      .40       .38     .41       1.55
Distributions Declared Per Share......       .435     .435      .435     .45      1.755*

</TABLE>

<TABLE>
<CAPTION>


                                           FIRST    SECOND    THIRD   FOURTH     TOTAL
                                         -------- --------- -------- --------  --------
<S>                                         <C>       <C>       <C>     <C>       <C>
  YEAR ENDED
DECEMBER 31, 1996
Total Revenues........................   $ 16,942 $ 18,407 $ 18,497  $ 19,103 $  72,949
Income Before Extraordinary Item
 and Minority Interest................      6,721    7,155    7,023     7,715    28,614
Net Income............................      5,486    5,840    5,749     6,295    23,370
Basic Earnings Per Share..............        .34      .36      .36       .40      1.46
Diluted Earnings Per Share............        .34      .36      .36       .39      1.45
Distributions Declared Per Share.......      .420     .420     .420      .435     1.695*

</TABLE>

* Of which $.194 and $.212 represents a non-taxable return of capital  for  the
  years ended December 31, 1997 and 1996, respectively.


15.   Pro Forma Financial Information (Unaudited)

      The  following  unaudited  proforma summary financial information for the
years ended December 31, 1997 and  1996, is presented as if the acquisitions of
Grand  Teton  Mall,  Silver Lake Mall,  Visalia  Mall,  Salem  Center  and  the
additional common stock  offering  on January 22, 1997, had been consummated as
of January 1, 1997 and January 1, 1996, respectively:

                                                       1997      1996
                                                     --------  --------
       Revenues.............................         $ 92,602  $ 88,620
       Income Before Extraordinary Item.....           28,104    26,167
       Net Income...........................           27,971    26,167

       Basic Earnings Per Share:
         Income Before Extraordinary Item...             1.60      1.49
         Net Income.........................             1.59      1.49
       Diluted Earnings Per Share:
         Income Before Extraordinary Item...             1.58      1.48
         Net Income.........................             1.58      1.48


      The proforma financial information  summarized  above  is  presented  for
information  purposes  only and may not be indicative of what actual results of
operations would have been  had the acquisitions and offering been completed as
of the beginning of the periods presented, nor does it purport to represent the
results of operations for future periods.

                                      F-17
<PAGE>
 
                                                                  SCHEDULE II

                                    JP REALTY, INC.
                           VALUATION AND QUALIFYING ACCOUNTS
                 FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
                                (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>

                                            Balance at
                                            Beginning   Charged to           Balance at
                                             of Year    Expense   Deductions End of Year
                                            ----------  ---------- ---------- -----------
<S>                                           <C>           <C>       <C>          <C>
Year ended December 31, 1997
 Allowance for uncollectible accounts         $   489    $  346     $  265      $  570

Year ended December 31, 1996
 Allowance for uncollectible accounts         $   504    $  340     $  355       $ 489

Year ended December 31, 1995
 Allowance for uncollectible accounts         $   437    $  258     $  191       $ 504


</TABLE>





                                   F-18
<PAGE>
 
<TABLE>
<CAPTION>
                                                                                SCHEDULE III
                                        JP REALTY, INC.
                          REAL ESTATE AND ACCUMULATED DEPRECIATION
                                        DECEMBER 31, 1997
                                      (DOLLARS IN THOUSANDS)

                                                                         
                                                      Capitalized  Gross Amount at Which Carried
                                      Initial Costs    Subsequent        at Close of Period                 Date            Deprec-
                                     ----------------                  -----------------------------         of              iable
                         Related            Building &      to              Bldg. &            Accumulated Constru-  Date    Lives
Description            Encumbrances  Land  Improvements Acquisition  Land   Improv.   Total(1) Depreciation ction   Acquired Years
-----------            ------------ ------ ------------ ----------- ------ ---------  -------- ------------ ------- -------- -----
<S>                    <C>          <C>      <C>        <C>         <C>     <C>       <C>      <C>         <C>      <C>      <C>
MALLS:
Animas Valley
  Mall, Farmington, NM $        --  $3,902 $    24,059    $     28   $3,902 $ 24,087   $27,989  $    1,518       --  1995       40
Boise Towne Square,
  Boise, ID                 32,475   6,512          --      37,045    6,512   37,045    43,557      12,455  1987-88  1985-86  5-40
Cache Valley Mall,
  Logan, UT                  5,781     909          --       8,419      909    8,419     9,328       4,209  1975-76  1973-75 10-40
Cottonwood Mall,
  Salt Lake City, UT        19,857   7,514      20,776      30,851    7,514   51,627    59,141      18,048  1981-87  1980     4-40
Eastridge Mall,
  Casper, WY                    --   4,300      19,896       3,421    4,300   23,318    27,618       1,321       --  1995       40
Grand Teton Mall,
  Idaho Falls, ID               --   5,802      28,614          92    5,802   28,706    34,508       1,252       --  1996       40
North Plains Mall,
  Clovis, NM                 5,472   1,592          --      10,863    1,592   10,863    12,455       3,409  1984-85  1979-84 10-40
Pine Ridge Mall,
  Pocatello, ID             10,019   1,883          --      21,566    1,883   21,566    23,449       7,916  1979-81  1979    10-40
Red Cliffs Mall,
  St. George, UT             6,132     903          --      12,846      903   12,846    13,749       2,913  1989-90  1989     3-40
Salem Center Mall,
  Salem, OR                     --   1,704      30,504          --    1,704   30,504    32,208          --       --  1997       40
Silver Lake Mall,
  Coeur d'Alene, ID         12,827   4,055      21,379         181    4,055   21,560    25,615         293       --  1997       40
Spokane Valley Mall,
  Spokane, WA               43,009   6,645      34,341      16,869    6,645   51,210    57,855         475  1990-97  1990       40
Three Rivers Mall,
  Kelso, WA                 10,175   1,977          --      20,380    1,977   20,380    22,357       4,971  1986-87  1984    10-40
Visalia Mall,
  Visalia, CA                   --   6,146      31,812         834    6,146   32,645    38,791         397       --  1997       40
White Mountain Mall,
  Rock Springs, WY           5,083   1,120          --      15,789    1,120   15,789    16,909       6,053  1977-78  1977       40

COMMUNITY CENTERS &
  FREE-STANDING RETAIL:

Alameda Plaza,
  Pocatello, ID                 --     500          --       3,365      500    3,365    3,865        1,837     1973  1973       40
Anaheim Plaza,
  Anaheim, CA                   --      --          --          54       --54       54           30  1980-81  1979       40
Austin Bluffs Plaza,
  Colorado Springs, CO          --   1,488          --       1,943    1,488    1,943    3,431          594     1985  1979     3-40
Bailey Hills Plaza,
  Eugene, OR                    --     157          --         317      157      317      474           51  1988-89  1988       40
Bank One, Nephi, UT             --      17         183          --       17      183      200          140       --  1976       40
Baskin Robbins 17th St.,
  Idaho Falls, ID               --       9          67           7        9       74       83           18       --  1988       40
Boise Plaza, Boise, ID          --     322          --       1,382      322    1,382    1,704          900  1970-71  1970       40
Boise Towne Plaza,
  Boise, ID                     --   3,316       4,243       1,049    3,316    5,292    8,608           15  1996-97  1996-97    40
Cottonwood Square,
  Salt Lake City, UT            --   1,926       3,535          --    1,926    3,535    5,461          177       --  1995       40
Division Crossing,
  Portland, OR                  --   2,429          --       4,483    2,429    4,483    6,912          813  1990-91  1990    20-40
Fort Union Plaza,
  Salt Lake City, UT            --      21          --       1,673       21    1,673    1,694          628  1979-84    --       40
Fremont Plaza,
  Las Vegas, NV                 --      --          --       2,254       --2,254    2,254        1,132  1976-80    --       40
Fry's Shopping Plaza,
  Glendale, AZ                  --     353          --       4,582    1,254    3,682    4,936        1,544  1980-81  1980       40
Gateway Crossing,
  Bountiful, UT                 --   3,644          --       8,480    3,644    8,480   12,124        1,052  1990-92  1990       40
</TABLE>
                                         F-19
<PAGE>
 
<TABLE>
<CAPTION>

                                                       JP REALTY, INC.   
                                                                                                               SCHEDULE III
                                    REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED)
                                                      DECEMBER 31, 1997
                                                   (DOLLARS IN THOUSANDS)

                                                      Capitalized  Gross Amount at Which Carried
                                      Initial Costs    Subsequent        at Close of Period                 Date            Deprec-
                                     ----------------                  -----------------------------         of              iable
                         Related            Building &      to              Bldg. &            Accumulated Constru-  Date    Lives
Description            Encumbrances  Land  Improvements Acquisition  Land   Improv.   Total(1) Depreciation ction   Acquired Years
-----------            ------------ ------ ------------ ----------- ---------------- -------- ------------ ------- -------- -----
<S>                    <C>          <C>    <C>          <C>         <C>     <C>       <C>      <C>         <C>      <C>      <C>
Halsey Crossing,
  Gresham, OR                  --       --          --        2,302      --     2,302     2,302       492    1989-91     --    4-40
North Temple Shops,
  Salt Lake City, UT           --       60          --          177      60       177       237        83    1970      1970      40
Orem Plaza Center
  Street, Orem, UT             --      371         330        1,091     344     1,448     1,792       592    1976-87   1973   10-40
Orem Plaza State
  Street, Orem, UT             --      126          --          687     126       687       813       345    1975      1973   29-40
Plaza 800, Sparks, NV          --       33       2,969           38      33     3,007     3,040     1,665    1974        --      40
Plaza 9400, Sandy, UT          --       --          --        4,514      --     4,514     4,514     1,916    1976-84     --   10-40
Red Cliffs Plaza,
  St. George, UT               --       --       2,403           --      --     2,403     2,403       195    1994-95 1994-95     40
River Pointe Plaza,
  West Jordan, UT              --    1,130          --        2,668   1,130     2,668     3,798       727    1987-88 1986-87   5-40
Riverside Plaza, Provo, UT     --      427       1,886        1,289     427     3,175     3,602     1,461    1978-81    1977     40
Twin Falls Crossing,
  Twin Falls, ID               --      125          --          776     125       776       901       407    1976       1975     40
University Crossing,
  Orem, UT                     --      230          --        4,424     230     4,424     4,654     1,681    1971-92    1971     40
Woodlands Village,
  Flagstaff, AZ                --    2,068       5,329          228   2,068     5,557     7,625       455      --       1994     40
Yellowstone Square,
  Idaho Falls, ID              --      355          --        4,552     355     4,552     4,907     2,554    1972-77    1972     40

  COMMERCIAL:
First Security Place,
  Boise, ID                    --      300          --        3,249     300     3,249     3,549     1,471    1978-80    1978  10-40
Price Business Center-
  Commerce Park,
  West Valley City, UT         --      415       2,109        8,509   1,147     9,886    11,033     1,349    1980    1973-95     40
Price Business
  Center-Pioneer Square,
  Salt Lake City, UT           --      658          --       10,468     658    10,468    11,126     3,311    1974-92    1973   3-40
Price Business
  Center-South Main,
  Salt Lake City, UT           --      317          --        2,469     317     2,469     2,786     1,298    1967-82 1966-81   3-40
Price Business Center-
  Timesquare,
  Salt Lake City, UT           --      581          --        9,019     581     9,019     9,600     3,544    1974-80 1972-80   5-40
Sears-Eastbay, Provo, UT    1,927      275          --        2,079     275     2,079     2,354       457    1989-90    1989     40

  OTHER REAL ESTATE:
Provo Towne Centre,
  Provo, UT                 3,000   13,829      16,661           --  13,829    16,661    30,490        --    1997(2)    1997     40
Miscellaneous Real Estate      --    3,471          17        7,029   3,471     7,045    10,516       240      --    1980-95     40
                          -------  ------- -----------   ---------- ----------------  --------   -------
  TOTAL                 $ 155,763 $ 93,917 $   251,113   $  274,341 $95,523 $ 523,848  $619,371 $  98,404
                        ========= ======== ===========   ========== ======= =========  ======== =========

(1)  The  aggregate  cost  for  Federal  Income  Tax purposes was approximately $642,645 at December 31, 1997.
(2) Construction in progress as of December 31, 1997.
</TABLE>

                                     F-20
<PAGE>
 
                                                  JP REALTY, INC.
                                     REAL ESTATE AND ACCUMULATED DEPRECIATION
                                                 DECEMBER 31, 1997
                                               (DOLLARS IN THOUSANDS)



        A  summary  of  activity  for  real estate investments and  accumulated
depreciation is as follows:

<TABLE>
<CAPTION>
                                                               FOR THE YEARS ENDED DECEMBER 31,
                                                              ----------------------------------
                                                                  1997       1996       1995
                                                              ----------- ---------- -----------
<S>                                                           <C>         <C>        <C>
Real Estate Investments:
 Balance at Beginning of Year                                  $  453,241  $ 388,205  $  321,242
  Acquisitions                                                     96,615     37,055      59,081
  Improvements                                                     69,921     28,268       9,903
  Disposition of Property                                            (406)      (287)     (2,021)
                                                              ----------- ----------  ----------
 Balance at End of Year                                        $  619,371  $ 453,241  $  388,205
                                                              =========== ==========  ==========

Accumulated Depreciation:
 Balance at Beginning of Year                                  $   87,318  $  77,462  $   69,660
  Depreciation                                                     11,492     10,015       9,386
  Depreciation of Disposed Property                                  (406)      (159)     (1,584)
                                                              ----------- ----------  ----------

 Balance at End of Year                                        $   98,404  $  87,318  $    77,462
                                                              ===========  =========  ===========
</TABLE>

                                     F-21