EQUITY ONE INC, S-11/A, 1997-10-10

EQUITY ONE INC
S-11/A, 1997-10-10
REAL ESTATE INVESTMENT TRUSTS

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 10, 1997
REGISTRATION NO. 333-33977
================================================================================
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549
---------------

AMENDMENT NO. 2
TO

FORM S-11
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
OF SECURITIES OF CERTAIN REAL ESTATE COMPANIES
---------------
EQUITY ONE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS GOVERNING INSTRUMENTS)
---------------
<TABLE>
<S> <C>
CHAIM KATZMAN
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
EQUITY ONE, INC.
777 17TH STREET, PENTHOUSE 777 17TH STREET, PENTHOUSE
MIAMI BEACH, FLORIDA 33139 MIAMI BEACH, FLORIDA 33139
(305) 538-5488 (305) 538-5488
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (NAME AND ADDRESS OF AGENT FOR SERVICE)
</TABLE>
---------------
WITH COPIES TO:
<TABLE>
<S> <C> <C>
GARY EPSTEIN, ESQ. JUDITH D. FRYER, ESQ. THOMAS W. DOBSON, ESQ.
GREENBERG TRAURIG HOFFMAN GREENBERG TRAURIG HOFFMAN LATHAM & WATKINS
LIPOFF ROSEN & QUENTEL, P.A. LIPOFF ROSEN & QUENTEL, 633 WEST FIFTH STREET, SUITE 4000
1221 BRICKELL AVENUE A PARTNERSHIP OF LOS ANGELES, CALIFORNIA 90071-2007
MIAMI, FLORIDA 33131 PROFESSIONAL CORPORATIONS (213) 485-1234
(305) 579-0500 153 EAST 53RD STREET
NEW YORK, NEW YORK 10021
(212) 801-9200
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
---------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
================================================================================

<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THESE CURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED OCTOBER 10, 1997

[EQUITY ONE LOGO]

4,700,000 Shares

EQUITY ONE, INC.
Common Stock

$0.01 PAR VALUE

-----------

Equity One, Inc., a Maryland corporation (together with its subsidiaries, the
"Company"), is a self-administered, self-managed real estate investment trust
that principally acquires, renovates, develops and manages community and
neighborhood shopping centers anchored by national and regional supermarket
chains. The Company's portfolio consists of 15 shopping centers, two mixed use
(office/retail) properties, one office building and one mini-warehouse
facility. These properties are located in Florida and Texas and contain an
aggregate of approximately 2.0 million square feet of gross leasable area. The
Company also owns 10.0 acres of land in Southwest Dade County, Florida on which
it intends to develop a 100,000 square foot neighborhood shopping center, and
has recently acquired a community shopping center in North Dade County, Florida
which, after a comprehensive redevelopment, will contain approximately 300,000
square feet of gross leasable area. In addition, the Company has recently
agreed to purchase a neighborhood shopping center comprising an aggregate of
approximately 85,300 square feet of gross leaseable area located in Lantana,
Florida and a neighborhood shopping center comprising an aggregate of
approximately 67,930 square feet of gross leasable area located in
Jacksonville, Florida. The Company also owns an aggregate of approximately 13.0
acres of land adjacent to certain of the Company's existing properties and
recently agreed to acquire 4.4 acres of vacant land proximate to the Company's
10.0 acres of land in Southwest Dade County, Florida, substantially all of
which is intended for retail development.

All of the shares of Common Stock of the Company offered hereby (the
"Offering") are being sold by the Company and will represent approximately
40.0% of all shares of Common Stock outstanding after consummation of the
Offering. Upon consummation of the Offering, the Company's existing
stockholders will retain approximately 60.0% of the Common Stock. See
"Principal Stockholders." To assist the Company in meeting its qualifications
as a REIT for federal income tax purposes, ownership by any stockholder is
limited to 5.0% of the then outstanding Common Stock, except that the Company's
Board of Directors has previously exempted certain existing stockholders from
this ownership limitation. Prior to the Offering there has been no public
market for the Common Stock. It is anticipated that the initial public offering
price will be $14.75 per share of Common Stock. For information relating to the
factors considered in determining the initial public offering price, see
"Underwriting". Application has been made to list the Common Stock on the New
York Stock Exchange under the symbol "EQY". No assurance can be given that a
public market for the Common Stock will develop or if developed, will be
maintained. See "Glossary" beginning on page 99 for definitions of certain
terms used in this Prospectus. The Company is in no way related to, or
affiliated with, Equity Residential Properties Trust, Equity Office Properties
Trust or Equity Inns, Inc., other publicly-traded REITS.

FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN
CONNECTION WITH AN INVESTMENT IN THE COMMON STOCK, SEE "RISK FACTORS"
COMMENCING ON PAGE 15, INCLUDING:

/bullet/ Dependence on certain key tenants, particularly Winn-Dixie and Publix
supermarkets, thereby increasing the potential negative impact on the
Company of adverse developements in the business of, or its
relationship with, such tenants;
/bullet/ Geographic concentration of all but two of the Company's properties
in the State of Florida increasing the risk that the Company will be
materially adversely affected by a downturn in the general economic
conditions in such state;
/bullet/ Although a portion of the Company's anticipated cash flow may be
generated as a result of the development of additional properties,
the Company has not yet developed any new shopping centers;
/bullet/ The Company relies on key personnel whose continued service is not
guaranteed, including Messrs. Katzman and Valero;
/bullet/ Management and affiliates of the Company will own approximately 59.0%
of the outstanding Common Stock after the Offering and the public
stockholders' ability to control the Company is limited by their
minority positions and by the Company's organizational documents and
Maryland law;
/bullet/ Certain members of management are subject to conflicts of interest in
that they may engage in other activities, including other real estate
activities;
/bullet/ The Company's estimated distribution for the 12 months following the
consummation of the Offering will represent 94.4% of cash available
for distribution and should the Company not be able to pay estimated
distributions out of cash available for distribution, the Company may
be required to fund distributions from working capital, borrow to
make such distributions or reduce the amount of such distributions;
/bullet/ Taxation of the Company as a corporation if it fails to qualify as a
real estate investment trust for federal income tax purposes and the
resulting decreases in cash available for distribution; and
/bullet/ All of the Company's properties are subject to the risks of ownership
of real estate including risks related to direct competition from
nearby properties.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE

SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
Underwriting
Price to Discounts and Proceeds to
Public Commissions Company(1)
------------ --------------- ------------
<S> <C> <C> <C>
Per Share ...... $ $ $
Total(2) ...... $ $ $
</TABLE>

(1) Before deduction of expenses payable by the Company estimated at $ .

(2) The Company has granted the Underwriters an option, exercisable for 30 days
from the date of this Prospectus, to purchase a maximum of 705,000
additional shares to cover over-allotments of shares. If the option is
exercised in full, the total Price to Public will be $ , Underwriting
Discounts and Commissions will be $ and Proceeds to Company will be
$ .
-----------

The Common Stock is offered by the several Underwriters when, as and if
issued by the Company, delivered to and accepted by the Underwriters, and
subject to their right to reject orders in whole or in part. It is expected
that the Common Stock will be ready for delivery on or about , 1997,
against payment therefor in immediately available funds.

CREDIT SUISSE FIRST BOSTON

ROBINSON-HUMPHREY COMPANY

SALOMON BROTHERS

Prospectus Dated , 1997

<PAGE>

[PHOTOGRAPHS OF CERTAIN OF THE TENANTS OF THE COMPANY'S
LAKE MARY SHOPPING CENTER, LAKE MARY, FLORIDA
FOUR CORNERS SHOPPING CENTER, TOMBALL, TEXAS
OAK HILL, JACKSONVILLE, FLORIDA
BIRD LUDLUM SHOPPING CENTER, MIAMI, FLORIDA.]

CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK
OFFERED HEREBY, INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE
SHORT COVERING TRANSACTIONS AND PENALTY BIDS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING".
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS SUMMARY ..............................
The Company .................................
Summary Risk Factors ...........................
Business and Growth Strategies ...............
Market Data ....................................
Properties ....................................
Distributions .................................
Mortgage Indebtedness and
Credit Facilities ........................
Financing Policies ...........................
Benefits of Offering to Existing
Stockholders, Including
Management ..............................
Restrictions on Ownership of
Common Stock ..............................
Tax Status of the Company .....................
Company Information ...........................
The Offering .................................
Summary Consolidated Financial Data
RISK FACTORS ....................................
The Company's Results of Operations
are Dependent Upon Certain Key
Tenants .................................
Geographic Concentration of the
Company's Properties Increases the
Risk of a Negative Impact as a
Result of Economic Downturns in
Such Areas ..............................
Risks of Construction and
Development ..............................
The Company Relies on Key Personnel
Who Conduct Other Business
Activities ..............................
Directors, Executive Officers and
Affiliates Have the Ability to
Control the Company .....................
Possible Conflicts of Interest ...............
REIT Distribution Requirements
and the Company's Financial
Condition will Affect the Amount
of Distributions to Stockholders ......
Estimated Initial Cash Available for
Distribution May Not be Sufficient
to Make Distribution at Expected
Level ....................................
The Company's Performance and Value
are Subject to Risks Associated with
the Real Estate Industry ..................

PAGE
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<S> <C>
Adverse Tax Consequences; Failure to
Qualify as a REIT Would Cause the
Company to be Taxed as a Regular
Corporation ..............................
Compliance with Law Could Have an
Adverse Effect on the Financial
Condition of the Company ..................
The Company's Use of Debt,
Refinancing Needs, Increases in
Interest Rates and an Absence of a
Limitation on Debt Could Adversely
Affect the Company ........................
Management of the Company Has
Broad Discretion in Determining
How to Apply a Significant Portion
of the Proceeds of the Offering .........
Stockholder Approval is not Required
to Engage in Investment Activity .........
Changes in Interest Rates Could
Adversely Affect the Value of the
Company's Properties and the Price
of the Common Stock .....................
Purchasers of Common Stock Will
Experience Dilution .....................
The Price of the Common Stock May
be Adversely Affected by the Lack
of a Prior Public Market; Stock Price
Not Based Upon Property
Valuations; and Fluctuations in the
Stock Market ..............................
The Company's Financial Condition
Could be Affected by Damages to
Property Not Covered by Insurance .
Certain Indebtedness of the Company
May Prohibit the Sale of Shares of
Common Stock ..............................
Availability of Shares of Common
Stock for Future Sale Could
Adversely Affect the Price of the
Common Stock ..............................
The Ability to Effect a Change of
Control of the Company is Limited .........
USE OF PROCEEDS .................................
DISTRIBUTION POLICY ...........................
DILUTION .......................................
CAPITALIZATION .................................
SELECTED CONSOLIDATED
FINANCIAL DATA ..............................
</TABLE>

i
<PAGE>

<TABLE>
<CAPTION>
PAGE
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<S> <C>
MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS
OF OPERATIONS ..............................
Results of Operations ........................
Indebtedness .................................
Liquidity and Capital Resources ............
Impact of Accounting Pronouncements
Issued but not Adopted ..................
Inflation ....................................
BUSINESS ....................................
General ....................................
Business and Growth Strategies ...............
Market Data .................................
Existing Properties ........................
Redevelopment and Development
Properties ..............................
Major Tenants ..............................
Lease Expirations ...........................
Additional Information Concerning
the Existing Properties ...............
Property Management, Leasing and
Related Service Business ...............
Competition .................................
Regulations and Insurance ..................
Environmental Matters ........................
Employees ....................................
Legal Proceedings ...........................
MANAGEMENT ....................................
Directors and Executive Officers ............
Key Employee ..............................
Directors' Compensation .....................
Committees of the Board of Directors .
Executive Compensation .....................
Employment Agreements ........................
Stock Option Plan ...........................
CERTAIN TRANSACTIONS ........................
Investment Agreement ........................
Agreement Among Stockholders ...............
Acquisition of Global Realty &
Management, Inc. ........................
Loans to Executive Officers ...............
Consulting Agreements .....................
Managed Properties ...........................
Registration Rights ........................
Use Agreement ..............................
Service Agreement ...........................
Other .......................................
POLICIES WITH RESPECT TO
CERTAIN ACTIVITIES ........................
Investment Policies ........................
Financing Policies ...........................
Conflicts of Interest Policies ...............

PAGE
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<S> <C>
Redevelopment and Development
Policies ..............................
Policies with Respect to
Other Activities ........................
PRINCIPAL STOCKHOLDERS ........................
DESCRIPTION OF CAPITAL STOCK .
Common Stock .................................
Preferred Stock ..............................
Warrants ....................................
Restrictions on Ownership and
Transfer of Common Stock ...............
Anti-Takeover Effects of Certain
Provisions of Maryland Law, and the
Company's Charter and Bylaws ............
Advance Notice of Director
Nominations and New Business .........
Indemnification of Officers and
Directors ..............................
Transfer Agent and Registrar ...............
SHARES ELIGIBLE FOR FUTURE
SALE ....................................
FEDERAL INCOME TAX
CONSIDERATIONS ...........................
Taxation of the Company .....................
Failure to Qualify for Taxation
as a REIT ..............................
Taxation of U.S. Stockholders ...............
Backup Withholding ........................
Taxation of Certain Tax-Exempt
Stockholders ...........................
Taxation of Non-U.S. Stockholders ............
Taxpayer Relief Act of 1997 ..................
Other Tax Consequences .....................
ERISA CONSIDERATIONS ........................
Fiduciary Considerations ..................
Plan Assets Issue ...........................
UNDERWRITING .................................
NOTICE TO CANADIAN
RESIDENTS .................................
Resale Restrictions ........................
Representation of Purchasers ...............
Right of Action and Enforcement ............
Enforcement of Legal Rights ..................
Notice to British Columbia Residents .........
Taxation and Eligibility for Investment .
LEGAL MATTERS .................................
EXPERTS ....................................
ADDITIONAL INFORMATION ........................
GLOSSARY ....................................
INDEX TO FINANCIAL
STATEMENTS ................................. F-1
</TABLE>

ii
<PAGE>

PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND THE FINANCIAL STATEMENTS APPEARING ELSEWHERE IN THIS
PROSPECTUS. UNLESS OTHERWISE INDICATED, (I) THE "COMPANY" REFERS TO THE
BUSINESS AND PROPERTY OF EQUITY ONE, INC. AND ITS CONSOLIDATED SUBSIDIARIES,
(II) THE INFORMATION SET FORTH IN THIS PROSPECTUS GIVES EFFECT TO THE
TWO-FOR-ONE STOCK SPLIT THAT OCCURRED ON JULY 15, 1997 AND ASSUMES THAT THE
UNDERWRITERS' OVER-ALLOTMENT OPTION IS NOT EXERCISED, (III) ALL REFERENCES TO
SQUARE FOOTAGE REFER TO GROSS LEASABLE AREA ("GLA") AND (IV) PERCENTAGES OF GLA
AND SQUARE FOOTAGE ARE APPROXIMATE. SEE "GLOSSARY" BEGINNING ON PAGE 99 FOR THE
DEFINITIONS OF CERTAIN TERMS USED IN THIS PROSPECTUS, INCLUDING CAPITALIZED
TERMS USED HEREIN WITHOUT DEFINITION.

THE COMPANY

The Company is a self-administered, self-managed real estate investment
trust ("REIT") that principally acquires, renovates, develops and manages
community and neighborhood shopping centers anchored by national and regional
supermarket chains ("Supermarket Centers"). The Company's portfolio consists of
14 Supermarket Centers, one drug store anchored neighborhood shopping center,
two mixed-use (office/retail) properties, one office building and one
mini-warehouse facility (collectively, the "Existing Properties"). The Existing
Properties are located primarily in the Dade County (Miami), Orlando and
Jacksonville metropolitan areas of Florida, and in Texas, and contain an
aggregate of 2.0 million square feet of GLA which, as of June 30, 1997, were
93.0% leased. The Company also owns 10.0 acres of land in Southwest Dade
County, Florida ("Coral Way") on which it intends to develop a 100,000 square
foot Supermarket Center, and has recently acquired a shopping center in
Northeast Dade County, Florida which will be comprehensively redeveloped into a
300,000 square foot Supermarket Center ("Sky Lake"). In addition, the Company
has recently agreed to purchase a Supermarket Center consisting of an aggregate
of 85,300 square feet of GLA located in Lantana, Florida ("Lantana Village")
and a Supermarket Center consisting of an aggregate of 67,930 square feet of
GLA located in Jacksonville, Florida ("Beauclerc Village"). The Company also
owns an aggregate of 13.0 acres of land adjacent to certain of the Existing
Properties and recently agreed to purchase 4.4 acres of vacant land proximate
to Coral Way, substantially all of which is intended for retail development.

Supermarket Centers are anchored by national and regional supermarkets
such as Winn-Dixie (the fourth largest supermarket chain in the country),
Publix (the largest supermarket chain in Florida), Albertsons (the sixth
largest supermarket chain in the country) and Kroger (the largest supermarket
chain in the country). Other tenants particularly responsible for drawing
tenants and shoppers to the Company's Supermarket Centers (including national
and regional supermarkets, "Anchor Tenants") include national retailers such as
K-Mart, Best Buy, Walgreen's and Eckerd. Other tenants of the Supermarket
Centers include national and regional retailers and service providers, as well
as local businesses. The Company believes that supermarkets and other Anchor
Tenants offering daily necessity items generate regular consumer traffic and
enhance the performance and stability of a center. As of June 30, 1997, the
Company's supermarket Anchor Tenants, other Anchor Tenants and other tenants
contributed 24.7%, 23.1% and 52.2%, respectively, of the Company's aggregate
annualized minimum rents and occupied approximately 31.1%, 22.2% and 52.2%,
respectively, of GLA. In addition, the Company's supermarket Anchor Tenants
have leases with an average of 11 years remaining on their terms.

1
<PAGE>

expansion, renovation and redevelopment. In order to take advantage of property
management operating efficiencies and present attractive leasing opportunities
to tenants who seek multiple locations in an area, the Company also targets
properties proximate to its other properties. All properties must be well
located and have visibility, open air designs, ease of entry and exit and ample
parking. The Company acquires both Supermarket Centers that are substantially
fully leased (i.e., existing tenants occupying 85% or more of GLA), and which
typically are well maintained and appropriately tenanted ("Performing
Supermarket Centers"), and Supermarket Centers which are not Performing
Supermarket Centers which meet the Company's turnaround criteria
("Underperforming Supermarket Centers"). In acquiring Performing Supermarket
Centers, the Company seeks attractive and sustainable rates of return, and in
acquiring Underperforming Centers, the Company requires opportunities to
increase revenues primarily through renovation and retenanting.

The Company believes that its seasoned management team possesses the
experience and expertise necessary to identify, acquire, renovate, develop and
manage additional Supermarket Centers. The Company's principal senior
executives and property managers average 15 years experience in the real estate
industry and have acquired and managed all the Existing Properties. Management
believes that it has cultivated strong relationships with supermarkets and
other Anchor Tenants which, in combination with its in-depth knowledge of the
Company's primary markets, has contributed substantially to the Company's
success in identifying, acquiring and operating its properties.

Since its formation, the Company has experienced sustained growth in its
real estate portfolio, revenues and net income. From January 1, 1994 to June
30, 1997, the Company increased total assets and GLA to $120.9 million and 2.0
million square feet, respectively, from $28.5 million and 600,000 square feet,
respectively. For the year ended December 31, 1996, total revenues and net
income increased to $16.7 million and $3.9 million, respectively, from $2.1
million and $49,000, respectively, for the year ended December 31, 1993.
Similarly, total revenues and net income increased to $9.7 million and $2.6
million, respectively, for the six months ended June 30, 1997 from $8.0 million
and $1.8 million, respectively, for the six months ended June 30, 1996. For a
discussion of the Company's funds from operations, see "Summary Consolidated
Financial Data" and "Selected Consolidated Financial Data."

SUMMARY RISK FACTORS

An investment in the Common Stock involves various risks, and prospective
investors should carefully consider the matters discussed under "Risk Factors"
prior to an investment in the Company. Such risks include, among others:

/bullet/ The Company's results of operations are dependent on certain key
tenants, particularly Winn-Dixie and Publix supermarkets, which
represented approximately 12.5% and 3.8%, respectively, of the
Company's aggregate annualized minimum rental revenues for the six
months ended June 30, 1997, thereby increasing the potential negative
impact to the Company of downturns in the business of, or its
relationship with, such tenants;

/bullet/ All but two of the Company's properties are located in the State of
Florida increasing the risk that the Company will be materially
adversely affected by a downturn in the general economic conditions
in such state;

/bullet/ A portion of the Company's anticipated cash flow may be generated as
a result of development of Supermarket Centers. The Company has no
experience in developing new shopping centers;

/bullet/ Dependence on key personnel whose continued service is not
guaranteed, particularly Messrs. Katzman and Valero;

<PAGE>

/bullet/ Control over the affairs of the Company by certain affiliated
stockholders and the ability of the Board of Directors to change the
investment policies of the Company without the consent of
stockholders, which may result in a decline in the market value of
the Common Stock;

/bullet/ Certain members of management of the Company are subject to conflicts
of interest in that they may engage in other activities, including
other real estate activities;

/bullet/ The distribution requirements for REITs under federal income tax laws
may limit the Company's ability to finance future acquisitions,
redevelopments and developments without additional debt or equity
financing and may limit cash available for distribution to
stockholders;

/bullet/ The Company's estimated annual distribution following the Offering
will represent 94.4% of the Company's estimated Cash Available for
Distribution (as defined in the Glossary and described under
"Distribution Policy")(100.2% of the Company's Cash Available for
Distribution if the over-allotment option granted to the
Underwriters' is exercised in full). If the Company is unable to pay
such estimated distribution out of cash available for distribution,
the Company could be required to borrow under lines of credit to fund
such distribution, or to reduce such distribution;

/bullet/ Taxation of the Company as a corporation if it fails to qualify as a
REIT for federal income tax purposes, the Company's liability for
certain federal, state and local income taxes in such event and the
resulting decrease in Cash Available for Distribution;

/bullet/ Real estate investment considerations such as the effect of economic
and other conditions on real estate values, the general lack of
liquidity of investments in real estate, the ability of tenants to
pay rents, the possibility that leases may not be renewed or will be
renewed on terms less favorable to the Company, the possibility of
uninsured losses, including losses associated with natural disasters,
the ability of the Company's Existing Properties to generate
sufficient cash flow to meet operating expenses, including debt
service, and competition in seeking properties for acquisition and in
seeking tenants, which, individually or in the aggregate, may
negatively impact the Company's ability to make distributions to
stockholders;

/bullet/ The potential liability of the Company for environmental matters and
the costs of compliance with certain governmental regulations, which
may have an adverse effect on the Company's financial condition,
results of operations and Cash Available for Distribution;

/bullet/ Risks associated with borrowing, including: (i) the Company's
possible inability to obtain new financing on favorable terms, (ii)
the required refinancing of mortgage indebtedness of approximately
$47.1 million at maturity dates ranging from May 1999 to February
2015, (iii) the possibility that indebtedness might be refinanced on
less favorable terms, (iv) the absence of limitations on the amount
of indebtedness that the Company may incur, (v) that interest rates
might increase on any variable rate or refinanced indebtedness and
(vi) that the Company's leverage may limit its ability to grow
through additional debt financing, which may have an adverse effect
on the ability of the Company to repay debt, particularly in the
event of a downturn in the Company's business;

/bullet/ The ability of the Company to incur more debt, thereby increasing its
debt service, which could adversely affect the Company's cash flow;

3
<PAGE>

/bullet/ Management of the Company will have broad discretion as to the
application of a significant portion of the proceeds of the Offering;

/bullet/ Immediate and substantial dilution of $4.83 per share in the net
tangible book value per share of the shares of Common Stock purchased
by new investors in the Offering;

/bullet/ No prior public market for the Common Stock, including the risk that
an active trading market might not develop, or if developed might not
be maintained, which may negatively impact the price at which shares
of Common Stock may be resold;

/bullet/ Potential adverse effects on the value of the shares of Common Stock
of fluctuations in interest rates or equity markets, which may
negatively impact the price at which shares of Common Stock may be
resold and may limit the Company's ability to raise additional equity
to finance future development; and

/bullet/ The possible issuance of additional shares of Common Stock,
including, among other things, (i) 1,306,124 shares of Common Stock
issuable upon the exercise of outstanding warrants to purchase Common
Stock, (ii) 580,288 shares of Common Stock issuable to an affiliate
of the Company pursuant to a stock purchase agreement and (iii)
1,000,000 shares of Common Stock reserved for issuance upon exercise
of stock options granted under the Company's 1995 Stock Option Plan,
pursuant to which options to purchase 614,000 shares of Common Stock
have been granted, which may adversely affect the market price of the
shares of Common Stock or result in dilution on a per share basis of
Cash Available for Distribution.

4
<PAGE>

BUSINESS AND GROWTH STRATEGIES

The Company intends to maximize total return to stockholders by increasing
cash flow per share and maximizing the value of its real estate portfolio. The
Company believes it can achieve this objective primarily through the
acquisition, renovation, development and management of Supermarket Centers and
other properties which meet the Company's investment criteria. The Company
believes it has certain competitive advantages which enhance its ability to
capitalize on acquisition opportunities, including: (i) management's
significant local market experience and expertise; (ii) the Company's long-
standing relationship with real estate brokers, tenants and institutional and
other real estate owners in its current target markets; (iii) a streamlined
acquisition process; (iv) access to capital; and (v) the ability to offer cash
and tax advantaged structures to sellers. The Company's principal business and
growth strategies include:

/bullet/ ACQUISITION OF PERFORMING SUPERMARKET CENTERS. The Company intends to
acquire Performing Supermarket Centers that offer attractive and
sustainable rates of return in areas throughout the Southeast having
demographic characteristics similar to those of its present markets.
Examples of acquisitions of Performing Supermarket Centers include,
(i) West Lake Plaza Shopping Center and Forest Edge Shopping Center in
1996, (ii) Lake Mary Shopping Centre and Pointe Royale Shopping Center
in 1995 and (iii) Bird Ludlum Shopping Center in 1994. The Company
will target Performing Supermarket Centers which offer attractive and
sustainable rates of return and are adaptable to expansion, renovation
and redevelopment, and, in order to maximize property management
efficiencies, are located proximate to other Company owned Supermarket
Centers or to one another. In entering new markets, the Company
considers its ability to increase and concentrate holdings in order to
achieve economies of scale.

In September 1997, the Company agreed to acquire Lantana Village for
approximately $7.0 million. Lantana Village is a Performing Supermarket Center
located in Lantana, Florida, which contains 85,300 square feet of GLA,
represents aggregate annualized minimum rental revenues of $800,000 and is
anchored by a Winn-Dixie. The Company has also agreed to acquire Beauclerc
Village for approximately $3.0 million. Beauclerc Village is a Performing
Supermarket Center located in Jacksonville, Florida, which contains 67,930
square feet of GLA, represents aggregate annualized minimum rental revenues of
$300,000 and is anchored by a Walgreens and an Old America. The Company
anticipates that both of these acquisitions will be consummated prior to
December 31, 1997.

/bullet/ ACQUISITION OF UNDERPERFORMING SUPERMARKET CENTERS. The Company
intends to acquire Underperforming Supermarket Centers that meet the
Company's turnaround criteria, which includes having the potential to
increase revenues and operating cash flows through renovation and
retenanting. Underperforming Supermarket Centers are typically
undercapitalized, poorly managed and/or poorly maintained and may
require significant capital improvements. The Company's turnaround
criteria requires attractive location and market demographics,
availability on favorable terms, and willingness of supermarket and
other Anchor Tenants to commit to lease space. Several examples of the
Company's enhancment of Underperforming Supermarket Centers include
East Bay, Four Corners, Fort Caroline and Parker Towne. East Bay,
which was acquired in July 1993 at a 48.0% occupancy rate, was 82.6%
occupied at June 30, 1997; Four Corners, which was acquired in January
1993 at a 76.0% occupancy rate, was 94.2% occupied at June 30, 1997;
Fort Caroline, which was acquired in January 1994 at a 83.0% occupancy
rate, and was 95.9% occupied at June 30, 1997 (including an additional
7,200 square feet of Company developed GLA); and Parker Towne, which
was acquired in December 1993 at a 40.0% occupancy rate, was 60.0%
occupied at June 30, 1997. The Company believes that its in-depth
market knowledge, strong relationships with supermarkets and other
Anchor Tenants and its capabilities in renovation and redevelopment,
are particularly integral to its ability to acquire and reposition
Underperforming Supermarket Centers.

5
<PAGE>

/bullet/ REDEVELOPMENT AND DEVELOPMENT OF SUPERMARKET CENTERS. The Company will
redevelop existing and develop new Supermarket Centers with
characteristics similar to those of the Company's Supermarket Centers.
The Company has recently acquired Sky Lake which will be
comprehensively redeveloped into a 300,000 square foot Supermarket
Center. Examples of the Company's redevelopment activities include the
redevelopment of Parker Towne Centre into 205,752 square feet of GLA
and the redevelopment of tenant space on an as-leased basis.In
addition, the Company owns (i) Coral Way on which it intends to
develop a 100,000 square foot Supermarket Center and (ii) 13.0 acres
of land adjacent to certain of the Existing Properties, substantially
all of which is intended for retail development. The Company will
consider development only if the overall economics of developing a
property are more favorable than acquiring or acquiring and
redeveloping a Supermarket Center in the same geographic area. The
Company has not developed, any new Supermarket Centers. See
"--Properties--Redevelopment and Development Properties", "Use of
Proceeds" and "Risk Factors--Risks of Construction and Development".

/bullet/ INCREASING REVENUES AND INCREASING OPERATING MARGINS. The Company will
continue to seek to improve the financial performance of its portfolio
by increasing revenues (through increased occupancy and/or rental
rates), maintaining high tenant retention rates (i.e., the percentage
of tenants who renew their leases upon expiration), replacing certain
existing tenants with more creditworthy tenants and aggressively
managing operating expenses. In addition, most of the Company's lease
agreements provide for percentage rents, indexed rent increases (based
on CPI or other criteria) and/or scheduled rent escalations. See
"Business-Business and Growth Strategies".

MARKET DATA

The Company has concentrated its activity in the Dade County (Miami),
Orlando and Jacksonville metropolitan areas of Florida. These areas provide the
Company with attractive demographic and competitive retail conditions. The
Company believes that population and employment growth are the primary demand
generators for retail properties and that retail sales are further enhanced by
Florida's sizable tourist and seasonal population. The population of the Miami
metropolitan area grew 2.8% from 1992 to 1997 while retail sales grew 13.5%
during the same period. Additionally, population is projected to grow by 1.7%
between 1998 and 2001, while retail sales are projected to grow by 3.1% during
the same period. The population in the Orlando metropolitan area grew 16.6%
from 1992 to 1997, while retail sales grew 28.5% during the same period.
Additionally, population is projected to grow by 9.9% between 1998 and 2001,
while retail sales are projected to grow by 11.1% during the same period.
Population in the Jacksonville area grew 5.6% from 1992 to 1997 while retail
sales grew 16.2% during the same period. Additionally, population is projected
to grow by 3.0% between 1998 and 2001, while retail sales are projected to grow
by 4.2% during the same period. The foregoing information is derived from data
provided by the United States Department of Commerce.

6
<PAGE>

PROPERTIES

EXISTING PROPERTIES

The Existing Properties, consisting primarily of Supermarket Centers,
contain an aggregate of 2.0 million square feet of GLA. All of the Company's
Supermarket Centers were developed after 1982. Management believes that the
location and quality of its Existing Properties have enabled the Company to
develop and retain an attractive and diverse tenant base. As of June 30, 1997,
the Existing Properties were 93.0% leased to approximately 360 tenants (not
including 535 tenants of the Company's mini-storage facility). With the
exception of Winn-Dixie, which represented approximately 12.5% of aggregate
annualized minimum rental revenues (i.e., the annualized fixed monthly base
rental amount in effect under each lease executed as of June 30, 1997,
excluding amounts paid by tenants to the Company for operating and other
expenses and percentage rents), no tenant accounted for more than 4.2% of such
tenant rent as of June 30, 1997. The following table provides a brief
description of each of the Existing Properties:

<TABLE>
<CAPTION>
GLA NET OPERATING
(SQ. FT.) NET OPERATING INCOME FOR THE
AT INCOME FOR SIX YEAR ENDED
DATE JUNE 30, MONTHS ENDED DECEMBER 31,
PROPERTY(1) ACQUIRED 1997 JUNE 30, 1997 1996
- ------------------------------- ---------- ----------- ------------------- ----------------
<S> <C> <C> <C> <C>
NORTH FLORIDA
Atlantic Village June 100,559 $ 374,172 $ 731,461
Shopping Center 1995
Atlantic Beach, FL
Commonwealth February 71,021 $ 210,939 $ 460,541
Shopping Center 1994
Jacksonville, FL
Fort Caroline Trading Post(3) January 74,546 $ 228,201 $ 472,879
Jacksonville, FL 1994
Monument Pointe January 75,328 $ 190,985 (4) N/A
Shopping Center 1997
Jacksonville, FL
Oak Hill Shopping Center December 78,492 $ 229,012 $ 448,219
Jacksonville, FL 1995
Mandarin Mini-Storage May 52,880 $ 96,680 $ 208,239
Jacksonville, FL 1994
CENTRAL FLORIDA
East Bay Plaza July 85,426 $ 152,716 $ 230,077
Shopping Center 1993
Largo, FL
Eustis Square October 126,791 $ 349,246 $ 703,518
Shopping Center 1993
Eustis, FL
Forest Edge December 68,631 $ 182,190 N/A
Shopping Center 1996
Orlando, FL
Lake Mary November 288,450 $ 1,447,409 $2,787,759
Shopping Centre 1995
Lake Mary, FL
SOUTH FLORIDA
Bird Ludlum August 192,477 $ 1,167,993 $2,223,722
Shopping Center 1994
Miami, FL
Plaza Del Rey December 50,146 $ 283,981 $ 572,143
Shopping Center 1992
Miami, FL
Pointe Royale July 199,068 $ 477,851 $1,080,640
Shopping Center 1995
Miami, FL
Pointe Royale July 18,000 -- --
Office Building 1995
Miami, FL

<CAPTION>
AVERAGE
MINIMUM PERCENT
RENT PER LEASED
SQ. FT. AS PERCENT AT
OF JUNE 30, LEASED AT JUNE 30, KEY
PROPERTY(1) 1997 ACQUISITION 1997 TENANTS
- ------------------------------- ------------- ------------- ---------- ---------------------------
<S> <C> <C> <C> <C>
NORTH FLORIDA
Atlantic Village $ 7.73 100% 98% Publix, Walgreen's(2),
Shopping Center Blockbuster Music
Atlantic Beach, FL
Commonwealth $ 6.83 100% 95% Winn-Dixie
Shopping Center
Jacksonville, FL
Fort Caroline Trading Post(3) $ 6.93 83% 96% Winn-Dixie, Eckerd,
Jacksonville, FL McDonalds
Monument Pointe $ 5.93 94% 94% Winn-Dixie, Eckerd
Shopping Center
Jacksonville, FL
Oak Hill Shopping Center $ 6.53 96% 100% Publix, Walgreen's,
Jacksonville, FL Blockbuster Video
Mandarin Mini-Storage $ 5.58 98% 95% --
Jacksonville, FL
CENTRAL FLORIDA
East Bay Plaza $ 6.89 48% 83% Scotty's, Hollywood Video,
Shopping Center Albertsons(5)
Largo, FL
Eustis Square $ 6.89 95% 92% Publix, Bealls, Walgreen's
Shopping Center
Eustis, FL
Forest Edge $ 6.70 100% 99% Winn-Dixie, Auto Zone
Shopping Center
Orlando, FL
Lake Mary $10.98 97% 100% K-Mart, Albertsons,
Shopping Centre General Cinema
Lake Mary, FL
SOUTH FLORIDA
Bird Ludlum $12.68 96% 100% Winn-Dixie, Eckerd,
Shopping Center Blockbuster Video, Vision
Miami, FL Works
Plaza Del Rey $11.95 82% 98% Navarro
Shopping Center
Miami, FL
Pointe Royale $ 5.59 96% 99% Winn-Dixie, Best Buy,
Shopping Center Eckerd(6)
Miami, FL
Pointe Royale -- -- -- --
Office Building
Miami, FL
</TABLE>

7
<PAGE>

<CAPTION>
AVERAGE
MINIMUM PERCENT
RENT PER LEASED
SQ. FT. AS PERCENT AT
OF JUNE 30, LEASED AT JUNE 30, KEY
PROPERTY(1) 1997 ACQUISITION 1997 TENANTS
- --------------------- ------------- ------------- ---------- -----------------------
<S> <C> <C> <C> <C>
West Lake Plaza $ 9.67 96% 99% Winn-Dixie, Eckerd(6),
Shopping Center Burger King
Miami, FL
Diana Building $14.13 0% 60% Fat Tuesday's
West Palm Beach, FL
Equity One $10.94 0% 100% City of Miami
Office Building Beach Parking
Miami Beach, FL Department
TEXAS
DALLAS AREA
Parker Towne Centre $ 5.23 40% 60% Minyards, Blockbuster
Plano, TX Video
HOUSTON AREA
Four Corners $ 9.03 76% 94% Kroger, Eckerd,
Shopping Center ------ -- ---- Wendy's
Tomball, TX
TOTAL/WEIGHTED
AVERAGE $ 8.25 84% 93%
======= === ====
</TABLE>

- ----------------

(1) Does not include two properties which the Company has agreed to purchase.

(2) Walgreen's has vacated the site, but continues to make lease payments.
(3) Since its acquisition in 1994, Winn-Dixie's occupied space has been
increased by an aggregate of approximately 7,200 square feet.
(4) Represents net operating income for the five months ended June 30, 1997.

(5) Albertsons is located on property contiguous to the Company's property
which is not owned by the Company. Accordingly, Albertsons does not pay
base rent or make payments to the Company for common area maintenance and
similar charges at this location.
(6) Eckerd has vacated the leased space but has, to date, continued to make
lease payments.

(7) Represents net operating income for the two months ended December 31, 1996.

(8) Includes 3,000 square feet of GLA which is occupied by the Company.

See "Business--Existing Properties", "--Tenant Diversification", "--Lease
Expirations", and "--Additional Information Concerning the Existing
Properties".

8
<PAGE>

REDEVELOPMENT AND DEVELOPMENT PROPERTIES

SKY LAKE. In August 1997, the Company acquired Sky Lake, an existing
community shopping center, for approximately $11.85 million. Sky Lake is
located in the North Miami Beach, Florida area. Approximately 150,000 residents
with household incomes averaging approximately $50,000 are located within a
three mile radius of Sky Lake. The Company intends to commence a comprehensive
redevelopment program at Sky Lake in order to create a Supermarket Center
containing 300,000 square foot of GLA. The Company expects that the
redevelopment will cost approximately $18.0 million and will occur in several
phases, the first of which is expected to commence in early 1998 and all of
which are expected to be completed by May 1999. The Company has entered into a
non-binding letter of intent with Albertsons for the lease of 60,000 square
feet of GLA at Sky Lake. During the redevelopment, the Company expects to
receive certain rent revenue from tenants who will continue operations during
the redevelopment process.

CORAL WAY. On June 2, 1997, the Company acquired 10.0 acres of vacant land
at Coral Way for approximately $1.5 million for the development of a 100,000
square foot Supermarket Center. Coral Way is located in a newly rezoned high
growth area of Southwest Dade County, Florida. The Company does not expect to
commence development at Coral Way earlier than one year from the Offering and
to complete such development earlier than one year from the commencement of
this development. The Company anticipates that the costs of development will
approximate $10.0 million. In addition, the Company has agreed to acquire 4.4
acres of land proximate to Coral Way for future development contingent upon,
among other things, the rezoning of such property for commercial use.

LAND FOR DEVELOPMENT. The Company owns approximately 13.0 acres of land
adjacent to certain of the Existing Properties which it intends to develop as
retail space. The Company expects to commence construction on 5.0 acres
adjacent to its Lake Mary Shopping Centre and 0.5 acres adjacent to its
Commonwealth Shopping Center, within three months following the Offering. The
Company expects to complete these projects by December 1998, at a cost of
approximately $3.0 million and $450,000, respectively.

There can be no assurance that Sky Lake, Coral Way or any other
acquisition, redevelopment or development project will be consummated or, if
consummated, will be successful. See "Business--Redevelopment and Development
Properties", "Policies with Respect to Certain Activities--
Development Policies" and "Use of Proceeds".

DISTRIBUTIONS

In general, qualification as a REIT requires the annual distribution to
stockholders of at least 95.0% of the REIT's taxable income. Following the
consummation of the Offering, the Company intends to continue to pay regular
quarterly dividends to its stockholders. The Company anticipates that the first
dividend to stockholders purchasing Common Stock in the Offering will be paid
with respect to the quarterly period ended December 31, 1997, based upon $0.262
per share for a full quarter (which if annualized, would be $1.05 per share or
an annual distribution rate of 7.1%) based on the estimated initial public
offering price of the Common Stock of $14.75. The Company does not intend to
reduce the expected dividend per share if the Underwriters' over-allotment
option is exercised in full. The Company has established its initial dividend
based on information and certain assumptions described herein. See
"Distribution Policy". The Company intends to maintain its initial distribution
rate for the first 12 months following the Offering, unless actual results of
operations, economic conditions or other factors differ from the assumptions
used in its estimate, and to review the dividend rate on a quarterly basis.

The Company currently expects to distribute approximately 94.4% of its
estimated Cash Available for Distribution (as defined below) for the 12 months
following the consummation of the Offering

9
<PAGE>

(100.2% if the over-allotment option granted to the Underwriters is exercised
in full). Cash Available for Distribution is equal to Funds from Operations (as
defined in footnote 4 to the "Summary Consolidated Financial Data" set forth
below) as adjusted for capital expenditures and scheduled principal payments
("Cash Available for Distribution") The Company's intended distributions are
based on an estimate of the cash flow that will be available to it for
distributions for the 12-month period following completion of the Offering.
This estimate is based on pro forma cash flows provided by operations for the
twelve months ended June 30, 1997, as adjusted for certain events and
contractual commitments described in the section entitled "Distribution Policy"
set forth herein. The calculation is being made solely for the purpose of
setting the distribution amount and is not intended to be a projection or
prediction of the Company's actual results of operations nor is the methodology
upon which such adjustments are made intended to be a basis for determining
future distributions. Future distributions by the Company will be at the
discretion of the Board of Directors. However, the Company has adopted a policy
pursuant to which it intends to limit distributions to no more than 94.0% of
its Cash Available for Distribution for periods subsequent to the 12 months
following the consummation of the Offering. There can be no assurance that any
distributions will be made by the Company or that the expected level of
distributions will be maintained.

In general, distributions by the Company to the extent of its current or
accumulated earnings and profits, other than capital gain dividends, will be
taxable to stockholders as ordinary income for federal income tax purposes. The
Company anticipates that approximately % of the distributions intended to
be paid by the Company for the 12-month period following the consummation of
the Offering will represent a return of capital for federal income tax
purposes. For a discussion of the tax treatment of distributions to
stockholders, see "Federal Income Tax Considerations-Taxation of U.S.
Stockholders".

For a discussion of dividends paid by the Company since January 1, 1995,
see "Distribution Policy".

MORTGAGE INDEBTEDNESS AND CREDIT FACILITIES

As of June 30, 1997, the Company had total indebtedness of $64.9 million,
all of which was mortgage indebtedness and was collateralized by 14 of the
Existing Properties. As of such date, the percentage of the net book value of
the Company's assets that were encumbered by debt was 76.9% and the Company's
debt to total stockholders' equity was 54.8%. All of the existing debt is fixed
rate debt. None of the existing mortgages is subject to cross default
provisions of mortgages on other properites or is cross collateralized.
However, in connection with the Company's acquisition of the Lake Mary Shopping
Centre, the Company has provided a $1.5 million letter of credit to secure
certain obligations, which letter of credit is collateralized by its West Palm
Beach property. At June 30, 1997, no amount was drawn under this letter of
credit. The existing debt contains customary terms and conditions including
among others, restrictions on the incurrence of debt and related liens and
changes in control. See "Risk Factors--Certain Indebtedness of the Company May
Prohibit the Sale of Shares of Common Stock" for a discussion of other
restrictions.

The Company has received a commitment from City National Bank of Florida
and a particpating lender to provide the Company with a line of credit of up to
$35.0 million to finance the acquisition and development of new properties and
for other general corporate purposes (the "Acquisition Line of Credit"), to be
secured by certain of the Company's unencumbered Existing Properties (including
Existing Properties which will become unencumbered following the application of
net proceeds from the Offering) and other properties acquired by the Company.
See "Use of Proceeds". The Company expects that the Acquisition Line of Credit
will bear a variable rate of interest and be due within three years. See
"Management Discussion and Analysis of Financial Condition and Results of
Operation--Liquidity and Capital Resources".

The Company has a line of credit from City National Bank of Florida in the
amount of $2.5 million collateralized by the Equity One Office Building. The
Company anticipates that this line of credit will

10
<PAGE>

be terminated upon the effectiveness of the Acquisition Line of Credit. At June
30, 1997, no amount was outstanding under this line of credit. See "Management
Discussion and Analysis of Financial Condition and Results of
Operation--Liquidity and Capital Resources".

FINANCING POLICIES

Subject to economic conditions, the Company intends to maintain a policy
limiting its total indebtedness to 50.0% of its total market capitalization.
Such objective may be altered without the consent of the Company's
stockholders, and the Company's organizational documents do not limit the
amount of indebtedness that the Company may incur. At June 30, 1997, the
Company had outstanding mortgage indebtedness of $64.9 million, all of which
bears interest at fixed rates with a weighted average annualized rate of
approximately 8.3%. Upon application of the estimated net proceeds of the
Offering set forth herein, total debt will constitute approximately 21.6% of
the Company's total market capitalization. The Company intends to utilize
various sources of capital, including the proceeds of the Offering, the
Acquisition Line of Credit, other credit facilities, mortgage indebtedness, the
issuance of debt or equity securities in public or private capital markets when
appropriate, and reserves, for future acquisitions, capital improvements and
development activities. See "Policies with Respect to Certain
Matters--Financing Policies"; "Business--Indebtedness"; and Note 5 of Notes to
Consolidated Financial Statements.

BENEFITS OF OFFERING TO EXISTING STOCKHOLDERS, INCLUDING MANAGEMENT

Existing stockholders, including certain members of management, are
expected to benefit from the Offering due to the anticipated improved liquidity
of their shares of Common Stock, an increase in the net tangible book value of
their shares of Common Stock and the potential increase in the value of any
options which they hold to purchase additional shares of Common Stock.

RESTRICTIONS ON OWNERSHIP OF COMMON STOCK

Due to limitations on the concentration of ownership of stock of a REIT
imposed by the Internal Revenue Code of 1986, as amended (the "Code"), the
Company's charter prohibits any stockholder from actually or constructively
owning more than 5.0% in value or number of the outstanding shares of Common
Stock, whichever is more restrictive (the "Ownership Limit"); the Board of
Directors has waived the Ownership Limit with respect to Gazit (1995), Inc.,
Globe Reit Investments, Ltd., Dan Overseas, Ltd. and M.G.N. (USA), Inc.,
affiliates of the Company. See "Risk Factors-The Ability to Effect a Change in
Control of the Company is Limited" and "Description of Capital
Stock-Restrictions on Ownership and Transfer of Common Stock".

TAX STATUS OF THE COMPANY

The Company elected to be taxed as a REIT under Sections 856 through 860
of the Code, commencing with its taxable year ending December 31, 1995, and
believes that it has met and will continue to meet the requirements for
qualification as a REIT. Based on various assumptions and factual
representations made by the Company in the Prospectus and elsewhere regarding
various requirements for qualification as a REIT, in the opinion of Greenberg
Traurig Hoffman Lipoff Rosen & Quentel, P.A., tax counsel to the Company,
commencing in the taxable year ending December 31, 1995, the Company has been
organized in conformity with the requirements for qualification as a REIT, and
its proposed method of operation has enabled and will enable the Company to
meet the requirements for continued qualification and taxation under the Code
as a REIT. The opinion of counsel is not, however, binding on the Internal
Revenue Service or on any court.

To maintain REIT status, an entity must meet a number of organizational
and operational requirements, including a requirement that it currently
distribute at least 95.0% of its taxable income to

11
<PAGE>

its stockholders. See "Federal Income Tax Considerations--Taxation of the
Company-Annual Distribution Requirements". As a REIT, the Company generally
will not be subject to federal income tax on net income it distributes
currently to its stockholders. If the Company fails to qualify as a REIT in any
taxable year, it will be subject to federal income tax at regular corporate
rates which would adversely affect its FFO and its ability to make expected
distributions to its stockholders and could preclude the Company from
qualifying as a REIT for subsequent taxable years. See "Federal Income Tax
Considerations" and "Risk Factors-Adverse Consequences of Failure to Qualify as
a REIT". Even if the Company qualifies for taxation as a REIT, the Company may
be subject to certain federal, state and local taxes on its income and
property.

COMPANY INFORMATION

The Company was incorporated under the laws of the State of Maryland in
1992. The Company's principal executive offices are located at 777 17th Street,
Penthouse, Miami Beach, Florida 33139, and its telephone number is (305)
538-5488.

THE OFFERING

<TABLE>
<S> <C>
Issuer ....................................... Equity One, Inc.

Offering .................................... 4,700,000 shares(1)

Shares outstanding after the Offering ......... 11,608,130 shares(1)(2)

Use of Proceeds .............................. The net proceeds will be used for the Acquisi-
tion and Development of the Redevelopment/
Development Properties, the Proposed Per-
forming Supermarket Center Acquisitions, the
Renovation of Existing Properties, the repay-
ment of the Mortgage Indebtedness, and for
working capital and general corporate purpos-
es. See "Use of Proceeds".

Risks of Offering ........................... See "Risk Factors", beginning on page 15.

Proposed New York Stock Exchange symbol ...... "EQY"
</TABLE>

- ----------------
(1) Assumes no exercise of the Underwriters' over-allotment option. See
"Underwriting".

(2) Does not include at June 30, 1997 an aggregate of (i) 1,000,000 shares of
Common Stock reserved for issuance upon exercise of stock options granted
under the Company's 1995 Plan, pursuant to which options to purchase
614,000 shares of Common Stock have been granted, (ii) 580,288 shares of
Common Stock reserved for issuance to an affiliate of the Company pursuant
to a stock purchase agreement, and (iii) 1,306,124 shares of Common Stock
reserved for issuance upon exercise of outstanding Series C Warrants. See
"Management--Stock Option Plan" and "Certain Transactions".

12
<PAGE>

SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PERCENTAGES AND PER SHARE DATA)

The summary consolidated financial data and balance sheet data set forth
below have been derived from the consolidated financial statements of the
Company, including the consolidated financial statements for the years ended
December 31, 1994, 1995 and 1996 and for the six months ended June 30, 1996 and
1997 contained elsewhere herein. The consolidated financial statements as of
and for the years ended December 31, 1992, 1993, 1994, 1995 and 1996 have been
audited by Deloitte & Touche LLP, independent auditors. The income statement
data for the six months ended June 30, 1996 and 1997 and the balance sheet data
as of June 30, 1997 have been derived from unaudited interim consolidated
financial statements contained elsewhere herein, which in the opinion of
management, include all adjustments (consisting of only normal recurring
adjustments) necessary for a fair presentation of the information set forth
therein. Results for the six months ended June 30, 1997 are not necessarily
indicative of the results for the entire year. The data set forth below should
be read in conjunction with the financial statements and related notes, and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included elsewhere in this Prospectus.

The unaudited pro forma consolidated balance sheet data as of June 30,
1997 set forth below is presented as if the Offering and the application of the
net proceeds of the Offering all had occurred on June 30, 1997. The unaudited
pro forma consolidated statement of operations data for the six months ended
June 30, 1997 and the year ended December 31, 1996 are presented as if the
Offering and the application of the net proceeds of the Offering (and the
acquisitions of West Lake Plaza Shopping Center, Forest Edge Shopping Center,
Monument Pointe Shopping Center, Lantana Village and Beauclerc Village) all had
occurred on January 1, 1996. See "Use of Proceeds". The pro forma consolidated
financial data should be read in conjunction with the Company's pro forma
consolidated financial statements and related notes and historical consolidated
financial statements and related notes included elsewhere in this Prospectus.

Because the preponderance of proceeds are allocated to acquisition,
development, redevelopment and renovation projects which, for pro forma
statement of operations purposes, do not generate any revenue or expense, pro
forma results of operations reflect only the repayment of mortgage notes
payable, and the proposed acquisitions of Lantana Village and Beauclerc Village
and omit any revenue or expense from other proceeds uses (except for historical
revenue and expense attributable to Sky Lake expected to continue during the
redevelopment process). Accordingly, the pro forma consolidated financial
statements do not purport to represent the Company's financial position as of
June 30, 1997 or the results of operations for the six months ended June 30,
1997 or for the year ended December 31, 1996 that would actually have occurred
had the Offering (and the acquisitions listed above) and the application of the
net proceeds of the Offering all been completed on June 30, 1997 or at the
beginning of the periods presented, or to project the Company's financial
position or results of operations as of any future date or for any future
period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-----------------------------
PRO FORMA HISTORICAL
----------- -----------------
1997 1997 1996
----------- -------- --------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Total revenues ........................... $10,729 $9,673 $8,042
Operating expenses ........................ 2,878 2,743 2,341
Depreciation and amortization ............ 1,312 1,178 1,010
Interest ................................. 2,753 2,939 2,648
General and administrative expenses ...... 316 241 213
-------- ------- -------
Total expenses ........................ 7,259 7,101 6,212
-------- ------- -------
Net income (loss) ........................ $ 3,470 $2,572 $1,830
======== ======= =======
Net earnings per share(1) ............... $ 0.30 $ 0.37 $ 0.34
======== ======= =======

<CAPTION>
YEAR ENDED
DECEMBER 31,
-----------------------------------------------------------------
PRO FORMA HISTORICAL
----------- -----------------------------------------------------
1996 1996 1995 1994 1993 1992
----------- --------- --------- ------------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Total revenues ........................... $20,918 $16,714 $11,348 $ 6,198 $2,070 $ 666
Operating expenses ........................ 5,848 4,832 3,293 2,236 665 252
Depreciation and amortization ............ 2,559 2,067 1,496 996 298 107
Interest ................................. 5,216 5,380 3,498 2,099 734 301
General and administrative expenses ...... 665 515 549 504 324 167
-------- -------- -------- -------- ------- ------
Total expenses ........................ 14,288 12,794 8,836 5,835 2,021 827
-------- -------- -------- -------- ------- ------
Net income (loss) ........................ $ 6,630 $ 3,920 $ 2,512 $ 233(2) $ 49 ($ 161)
======== ======== ======== ======== ======= ======
Net earnings per share(1) ............... $ 0.62 $ 0.65 $ 0.51 $ 0.07
======== ======== ======== ========
</TABLE>

<TABLE>
<CAPTION>
JUNE 30, 1997 DECEMBER 31,
----------------------------- --------------------------------------------------------
PRO FORMA(3) HISTORICAL 1996 1995 1994 1993 1992
-------------- ------------ ---------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA
Total rental properties, before
accumulated depreciation ...... $154,816 $112,406 $106,706 $92,770 $52,047 $22,491 $4,784
Total assets .................. 166,002 120,873 111,822 94,470 63,644 28,526 7,439
Mortgage notes payable ......... 47,056 64,916 66,831 60,583 32,690 15,543 3,222
Total liabilities ............... 49,519 67,379 68,727 64,331 33,846 15,922 3,388
Stockholders' equity ............ 116,483 53,494 43,095 29,139 28,798 12,604 4,051
</TABLE>

13
<PAGE>

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-----------------------------------
PRO FORMA HISTORICAL
----------- -----------------------
1997 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
OTHER DATA:
Funds from Operations(4) .................. $5,403 $ 3,867 $ 2,815
Ratio of earnings to fixed charges(5) ...... 2.26 1.88 2.38
Cash flows from:
Operating activities ..................... -- 3,492 3,980
Investing activities ..................... -- (6,766) (3,495)
Financing activities ..................... -- 5,881 7,013
Gross leasable area (square feet)
(at end of period) ........................ -- 1,951 1,670
Occupancy (at end of period) ............... -- 93% 89%

<CAPTION>
YEAR ENDED
DECEMBER 31,
---------------------------------------------------------------------------
PRO FORMA HISTORICAL
----------- ---------------------------------------------------------------
1996 1996 1995 1994 1993 1992
----------- ------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
OTHER DATA:
Funds from Operations(4) .................. $9,841 $ 6,136 $ 3,973 $ 1,308 $ 347 $ (54)
Ratio of earnings to fixed charges(5) ...... 2.27 1.74 1.72 1.11 1.07 0.47
Cash flows from:
Operating activities ..................... -- 6,680 3,469 2,433 (289) (46)
Investing activities ..................... -- (18,277) (37,211) (29,755) (20,414) (1,995)
Financing activities ..................... -- 12,778 27,441 32,726 20,671 3,728
Gross leasable area (square feet)
(at end of period) ........................ -- 1,807 1,670 1,003 583 50
Occupancy (at end of period) ............... -- 91% 90% 80% 60% 92%
</TABLE>

- ----------------
(1) Based on the weighted average number of shares outstanding.

(2) Represents net income after income tax expense of $130,000.

(3) Adjusted to reflect the sale of 4,700,000 shares of Common Stock offered by
the Company at an estimated initial public offering price of $14.75 per
share and the application of the estimated net proceeds therefrom.

(4) In March 1995, the National Association of Real Estate Investment Trusts
("NAREIT") adopted the NAREIT White Paper on Funds from Operations (the
"White Paper") which provided additional guidance on the calculation of
funds from operations. The White Paper defines funds from operations as
net income (loss) (computed in accordance with generally accepted
accounting principles ("GAAP")), excluding gains (or losses) from debt
restructuring and sales of property, plus real estate related depreciation
and amortization and after adjustments for unconsolidated partnerships and
joint ventures ("FFO"). Management believes FFO is helpful to investors as
a measure of the performance of an equity REIT because, along with cash
flows from operating activities, financing activities and investing
activities, it provides investors with an understanding of the ability of
the Company to incur and service debt and make capital expenditures. The
Company computes FFO in accordance with standards established by the White
Paper, which may differ from the methodology for calculating FFO utilized
by other equity REITs, and, accordingly, may not be comparable to such
other REITs. Further, FFO does not represent amounts available for
management's discretionary use because of needed capital replacement or
expansion, debt service obligations, or other commitments and
uncertainties. The Company believes that in order to facilitate a clear
understanding of the combined historical operating results of the Company,
FFO should be examined in conjunction with the income (loss) as presented
in the audited combined financial statements and information included
elsewhere in this Prospectus. FFO should not be considered as an
alternative to net income (determined in accordance with GAAP) as an
indication of the Company's financial performance or to cash flows from
operating activities (determined in accordance with GAAP) as a measure of
the Company's liquidity, nor is it indicative of funds available to fund
the Company's cash needs, including its ability to make distributions. See
"Distributions Policy".

(5) For the purposes of calculating the ratio of earnings to fixed charges,
earnings include net income before extraordinary items plus interest
expense, amortization of interest previously capitalized, and amortization
of financing costs. Fixed charges include all interest costs consisting of
interest expense, interest capitalized, and amortization of financing
costs.

<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30,
-----------------------------
PRO FORMA HISTORICAL
----------- -----------------
1997 1997 1996
----------- -------- --------
<S> <C> <C> <C>
FFO:
Income (loss) before extraordinary items ......... $3,470 $2,572 $1,830
Add:
Real estate depreciation and amortization ...... 1,287 1,172 985
Non-recurring items(6) ........................ 646 123 --
FFO ............................................. $5,403 $3,867 $2,815

<CAPTION>
YEAR ENDED
DECEMBER 31,
--------------------------------------------------------
PRO FORMA HISTORICAL
----------- --------------------------------------------
1996 1996 1995 1994 1993 1992
----------- -------- -------- -------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
FFO:
Income (loss) before extraordinary items ......... $6,630 $3,920 $2,512 $ 233 $ 49 $ (161)
Add:
Real estate depreciation and amortization ...... 2,509 2,037 1,461 1,075 298 107
Non-recurring items(6) ........................ 702 179 -- -- -- --
FFO ............................................. $9,841 $6,136 $3,973 $1,308 $347 $ (54)
</TABLE>

- ----------------
(6) Reflects pre-payment penalties and write-offs of unamortized loan costs
related to repayment of debt as non-recurring.

14
<PAGE>

RISK FACTORS

THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK, INCLUDING THE
RISKS DESCRIBED BELOW. PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE
SPECIFIC FACTORS SET FORTH BELOW, AS WELL AS THE OTHER INFORMATION CONTAINED IN
THIS PROSPECTUS, BEFORE DECIDING TO INVEST IN THE COMMON STOCK OFFERED HEREBY.

THIS PROSPECTUS CONTAINS CERTAIN "FORWARD-LOOKING STATEMENTS" WHICH
REPRESENT THE COMPANY'S EXPECTATIONS OR BELIEFS, INCLUDING, BUT NOT LIMITED TO,
STATEMENTS CONCERNING INDUSTRY PERFORMANCE, THE COMPANY'S OPERATIONS,
PERFORMANCE, FINANCIAL CONDITION, PLANS, GROWTH AND STRATEGIES. FOR THIS
PURPOSE, ANY STATEMENTS CONTAINED IN THIS PROSPECTUS THAT ARE NOT STATEMENTS OF
HISTORICAL FACT MAY BE DEEMED TO BE FORWARD-LOOKING STATEMENTS. WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, WORDS SUCH AS "MAY", "WILL",
"EXPECT", "ANTICIPATE", "INTEND", "COULD", "ESTIMATE" OR "CONTINUE" OR THE
NEGATIVE OR OTHER VARIATIONS THEREOF OR COMPARABLE TERMINOLOGY ARE INTENDED TO
IDENTIFY FORWARD-LOOKING STATEMENTS. THESE STATEMENTS BY THEIR NATURE INVOLVE
SUBSTANTIAL RISKS AND UNCERTAINTIES, CERTAIN OF WHICH ARE BEYOND THE COMPANY'S
CONTROL, AND ACTUAL RESULTS MAY DIFFER MATERIALLY DEPENDING ON A VARIETY OF
IMPORTANT FACTORS, INCLUDING THOSE DESCRIBED BELOW UNDER THIS "RISK FACTORS"
SECTION AND ELSEWHERE IN THIS PROSPECTUS.

THE COMPANY'S RESULTS OF OPERATIONS ARE DEPENDENT UPON CERTAIN KEY TENANTS

ADVERSE DEVELOPMENTS IN THE BUSINESS OF WINN-DIXIE OR PUBLIX COULD HAVE A
NEGATIVE IMPACT ON THE BUSINESS OF THE COMPANY

As of June 30, 1997, 308,864 square feet and 118,110 square, or 15.8% and
6.1% of the aggregate GLA owned by the Company was leased to Winn-Dixie and
Publix, respectively, and these leases represented $1.9 million and $634,000,
or 12.5% and 3.8%, respectively, of the aggregate annualized minimum rental
revenues from the Existing Properties. The Company's financial condition,
results of operations, liquidity and FFO and its ability to make distributions
to stockholders could be adversely affected in the event of the bankruptcy or
insolvency of, or a downturn in the business of, Winn-Dixie, Publix or any
other Anchor Tenant, or in the event that any of such tenants is unable to pay
its rent as it becomes due or does not renew its lease as it expires or renews
at lower rental rates.

Tenants may seek the protection of the bankruptcy laws, which could result
in the rejection and termination of their leases, or a continuation of their
leases on less advantageous terms, thereby causing a reduction in the cash flow
available for distribution by the Company. Such reduction could be material if
an Anchor Tenant files for bankruptcy protection. No assurance can be given
that any Anchor Tenants will not file for bankruptcy protection in the future,
or if they file, that they will affirm their leases and continue to make rental
payments in a timely manner.

ANCHOR TENANTS ARE CENTRAL TO THE FINANCIAL SUCCESS OF THE COMPANY'S
SUPERMARKET CENTERS

Shopping centers generally rely on Anchor Tenants to attract customers to
the centers. Vacated Anchor Tenant space reduces rental revenues if not
re-rented promptly at the same rental rates and, even when the tenant continues
to make rental payments, tends to adversely affect the entire shopping center
because of the loss of the departed Anchor Tenant's power to draw customers to
the center. No assurances can be given that existing Anchor Tenants will renew
their leases as they expire or will not vacate their space prior to expiration.
The closing of one or more stores occupied by Anchor Tenants or lease
terminations by one or more Anchor Tenants could adversely affect that property
and result in lease terminations or rent reductions by other tenants whose
leases may permit termination or rent reduction in such circumstances. Each of
these developments could adversely affect the Company's FFO and its ability to
make expected distributions to stockholders. In three instances, drug store
Anchor Tenants have vacated their leased space or indicated their intention to
do so, although they continue to make lease payments to the Company; Eckerd has
vacated its leased space at Pointe Royale and West Lake and Walgreens has
vacated its leased space at Atlantic Village. These leases represented $300,000
and $150,000 of the Company's revenues for the year ended December 31, 1996 and
the six months ended June 30, 1997, respectively. Although these tenants have
vacated their respective leased space,

15
<PAGE>

each tenant has continued to pay rent in accordance with the terms of its
lease. See "--Reliance on Tenants in Certain Industries" and
"Business--Additional Information Concerning the Existing Properties".

RELIANCE ON TENANTS IN CERTAIN INDUSTRIES

As of June 30, 1997, 606,191 square feet and 108,669 square feet, or 31.1%
and 5.6% of the aggregate GLA owned by the Company was leased to Anchor Tenants
who are supermarkets and drugstores, respectively, and these leases represented
$3.6 million and $914,000, or 24.7% and 6.2%, respectively, of the aggregate
annualized minimum rental revenues from the Existing Properties. The Company
could be adversely affected by having a tenant base concentrated in these or
other industries in the event that there is an economic downturn in these
industries or if there is a change in the manner in which these industries
conduct business. For example, it has recently become more common for
drugstores to seek to rent freestanding structures instead of space within
shopping centers. During the last year, before the expiration of its leases,
Eckerd, a drugstore chain Anchor Tenant, vacated the premises of two sites
which it leased from the Company, and on which it continues to make rental
payments, in favor of nearby free standing structures. Eckerd presently leases
and continues to occupy 3.1% of the aggregate GLA owned by the Company
representing approximately 3.4% of the aggregate annualized minimum rental
revenues from Existing Properties. Walgreen's, another drugstore chain Anchor
Tenant, has advised the Company that it will be vacating its leased space in
Atlantic Village.

GEOGRAPHIC CONCENTRATION OF THE COMPANY'S PROPERTIES INCREASES THE RISK OF A
NEGATIVE IMPACT AS A RESULT OF ECONOMIC DOWNTURNS IN SUCH AREAS

The Existing Properties consist exclusively of properties located in
Florida and Texas. Approximately 83.6% of the Existing Properties (based on
GLA) are located in Florida and represented $13.1 million, or 89.0%, of annual
minimum rental revenues as of June 30, 1997. The Company's performance may
therefore be linked to economic conditions and especially the market for
Supermarket Centers in Florida. A decline in the economy in this market may
adversely affect the Company's financial condition, results of operations,
liquidity and FFO, and its ability to make expected distributions to
stockholders.

Although the Company is seeking additional properties and sites in its
primary markets, it will also seek to locate properties in other areas with
similar demographic characteristics throughout the Southeast. In seeking
investment opportunities in other areas of the Southeast, the Company will not
initially possess the same level of familiarity as it possesses with respect to
its current markets, which could adversely affect its ability to acquire,
develop, manage or lease properties in new markets.

RISKS OF CONSTRUCTION AND DEVELOPMENT

THE COMPANY'S INEXPERIENCE IN CONSTRUCTION AND DEVELOPMENT COULD ADVERSELY
AFFECT THE COMPANY'S FINANCIAL CONDITION

Until recently, the Company's growth strategy has focused primarily on the
acquisition and renovation of existing Supermarket Centers. In light of
changing market conditions, the Company plans to develop vacant land and
redevelop certain of its Existing Properties. See "Summary-Business and Growth
Strategies", "--Redevelopment and Development Properties" and "Use of
Proceeds". The Company has not developed any new Supermarket Centers, although
its management has experience in development activities and has undertaken and
completed renovation, expansion and redevelopment projects with respect to
certain of the Existing Properties including (i) completion of renovation
projects in connection with retenanting activities at substantially all of the
Existing Properties, (ii) expansion of the space leased by Winn-Dixie at Fort
Caroline by 7,200 square feet and (iii) redevelopment of the Equity One office
building, Diana Building and Parker Towne. The Company has recently hired a
licensed architect and general contractor to head its development department
and is in the process of retaining at least one additional full-time employee
to support its construction and

16
<PAGE>

development personnel. See "Management". The Company's relative inexperience in
these activities may make it more difficult for it to construct, develop and
redevelop Supermarket Centers successfully.

CONSTRUCTION COSTS AND OTHER CONTINGENCIES COULD AFFECT THE COMPANY'S
PERFORMANCE

The Company intends to pursue construction and development activities as
opportunities arise. Such activities may include expanding and/or renovating
properties or developing new sites. See "Business-Business and Growth
Strategies". Expansion, renovation and development projects generally require
expenditures of capital, as well as various government and other approvals,
which the Company may not be able to obtain, or may only obtain after delay and
at substantial costs. While policies with respect to expansion, renovation and
development activities are intended to limit some of the risks otherwise
associated with such activities, such as initiating construction after securing
commitments from Anchor Tenants, the Company will nevertheless incur certain
risks, including the risks that: construction costs of a property may exceed
original estimates, possibly making the property uneconomical; occupancy rates
and rents at a newly completed property may not be sufficient to make the
property profitable; construction and permanent financing may not be available
on favorable terms for development; and construction and lease-up may not be
completed on schedule, resulting in increased debt service expense and
construction costs.

THE COMPANY RELIES ON KEY PERSONNEL WHO CONDUCT OTHER BUSINESS ACTIVITIES

The Company's ability to execute its acquisition and growth strategy
successfully depends to a significant degree upon the continued contributions
of Chaim Katzman, the Company's Chairman of the Board, President and Chief
Executive Officer, and Doron Valero, the Company's Executive Vice President and
Chief Operating Officer. Pursuant to Mr. Katzman's employment agreement with
the Company, Mr. Katzman is required to devote only so much of his business
time, attention, skill and efforts as shall be required for the faithful
performance of his duties. Additionally, although Mr. Katzman presently resides
in the United States, Mr. Katzman is not required under his employment
agreement to reside and perform his duties within the United States. The loss
of the services of either Mr. Katzman or Mr. Valero could have a material
adverse effect on the Company's income, FFO, and ability of the Company to make
expected distributions to stockholders. Neither Mr. Katzman nor Mr. Valero is a
citizen of the United States. Although Mr. Katzman and Mr. Valero each have
resident alien cards, there can be no assurance that changes in the immigration
laws or policies of the Immigration and Naturalization Service will permit each
of Mr. Katzman and Mr. Valero to remain in the country or continue to work in
the United States. See "--Possible Conflicts of Interest".

DIRECTORS, EXECUTIVE OFFICERS AND AFFILIATES HAVE THE ABILITY TO CONTROL THE
COMPANY

Following the consummation of the Offering, directors and executive
officers of the Company and their affiliates will beneficially own 59.1% of the
outstanding Common Stock (55.7% if the over-allotment granted to the
Underwriters is exercised in full). Certain stockholders of the Company have
entered into agreements to control the Company. Such stockholders directly and
indirectly own and/or control an aggregate of 96.6% of the issued and
outstanding Common Stock of the Company before giving effect to the Offering.
The agreements provide that, in all matters affecting the Company (other than
the election of directors) the parties to the agreements will vote all of their
shares as they may agree, or if they cannot agree, will vote against any such
proposal to which they cannot agree. With respect to the election of directors,
the parties have granted an irrevocable power of attorney to Globe Reit, which
is an affiliate of Mr. Katzman and of Messrs. Makavy and Wulkan, directors of
the Company. Globe Reit has the power under an irrevocable power of attorney
(the "Irrevocable Proxy") to vote all of the shares of Common Stock owned by
the stockholders who are parties to the Irrevocable Proxy for the election of
directors through May, 2001, with, effectively, one-half of the directors
designated by each of Gazit and Danbar Resources, and if there is an additional
director, such director shall be designated by agreement. Pursuant to this
agreement, the parties to the agreement may be deemed a "group" within the
meaning of Section 13(d) of the Exchange Act and may direct the business and
affairs of the Company. See "Principal Stockholders" and "Certain
Transactions".

17
<PAGE>

POSSIBLE CONFLICTS OF INTEREST

Pursuant to Mr. Katzman's employment agreement with the Company, Mr.
Katzman is required to devote only so much of his business time, attention,
skill and efforts as shall be required for the faithful performance of his
duties. Presently, his significant other activities consist primarily of
serving as the President and Chief Executive Officer of Gazit, a public company
whose securities are traded on the Tel Aviv Stock Exchange and whose primary
activity is its substantial investment in the Company. Accordingly, Mr.
Katzman's primary business activities are presently focused on the Company. Mr.
Katzman currently also invests in and serves as the non-executive chairman of
the board of real estate companies whose holdings include commercial properties
in Canada and Israel and may have other interests in the future. Additionally,
although Mr. Katzman presently resides in the United States, Mr. Katzman is not
required under his employment agreement to reside and perform his duties within
the United States. Mr. Valero currently serves as the President and director of
several entities which own apartment properties in Miami Beach, Florida.
Although the Company does not currently engage in activities outside the United
States or acquire residential properties, no assurance can be given that such
activities will not conflict with those of Messrs. Katzman or Valero in the
future.

REIT DISTRIBUTION REQUIREMENTS AND THE COMPANY'S FINANCIAL CONDITION WILL
AFFECT THE AMOUNT OF DISTRIBUTIONS TO STOCKHOLDERS

The Code requires a REIT to annually distribute to its stockholders 95.0%
of its taxable income (excluding capital gains). Subject to this requirement,
distributions by the Company will be dependent on a number of other factors,
including the Company's financial condition, reinvestment of funds in
properties, capital expenditures, cash flow invested in the construction and
development of properties which are not yet income producing, the annual
distribution requirements under the REIT provisions of the Code and other
factors. If the Company incurs additional indebtedness in the future, it will
require additional funds to service such indebtedness and as a result, amounts
available to make distributions may decrease. Initial distributions for the 12
months ended September 30, 1998 are estimated to be 94.4% of Cash Available for
Distribution (100.2% of the overallotment granted to the Underwriters is
exercised in full). Accordingly, any failure of the Company to meet anticipated
operating results could result in the Company's inability to make such
projected distributions. In addition, of the estimated initial distribution of
$1.05 per share, approximately $0.14 per share is expected to be generated from
the temporary investment of a significant portion of the Offering proceeds in
short term investments such as government and government agency securities,
mortgage backed securities, collateralized mortgage obligations, certificates
of deposit, commercial paper, money market funds or investment grade preferred
stock of other publicly traded REITS during the period prior to investment in
properties.

Distributions by the Company to its stockholders will be based principally
on Cash Available for Distribution from its Existing Properties and properties
acquired in the future. Increases in base rent under Existing Property leases
or the payment of rent in connection with future acquisitions will increase the
Company's Cash Available for Distribution to stockholders. However, in the
event of a default or a lease termination by a lessee, there could be a
decrease or cessation of rental payments and thereby a decrease in Cash
Available for Distribution. If Cash Available for Distribution generated by the
Company's assets for any period is less than the Company's estimate, or if such
Cash Available for Distribution decreases in future periods from expected
levels, the Company's ability to make the expected distributions would be
adversely affected. Any such failure to make expected distributions could
result in a decrease in the market price of the Common Stock.

ESTIMATED INITIAL CASH AVAILABLE FOR DISTRIBUTION MAY NOT BE SUFFICIENT TO MAKE
DISTRIBUTIONS AT EXPECTED LEVELS

The Company's proposed annual distributions following the consummation of
the Offering represent 94.4% of the Company's estimated initial Cash Available
for Distribution for the 12 months ending September 30, 1998 (100.2% if the
overallotment granted to the Underwriters is exercised in

18
<PAGE>

full). In the event that the Company is not able to pay its estimated initial
annual distribution of $1.05 per share to stockholders out of Cash Available
for Distribution as calculated under "Distribution Policy" below, the Company
could be required to fund distributions from working capital, to draw down
under available lines of credit to provide funds for such distribution, or to
reduce the amount of such distribution. Pending investment of the net proceeds
and the production of income therefrom or in the event the Underwriters'
over-allotment option is exercised, the Company's ability to pay such
distribution out of Cash Available for Distribution may be further adversely
affected. See "--REIT Distribution Requirements and the Company's Financial
Condition will Affect the Amount of the Distributions to Stockholders."

THE COMPANY'S PERFORMANCE AND VALUE ARE SUBJECT TO RISKS ASSOCIATED WITH THE
REAL ESTATE INDUSTRY

THE VALUE OF THE COMPANY'S PROPERTIES ARE AFFECTED BY NUMEROUS FACTORS

Real estate values are affected by a number of factors, including changes
in the general economic climate, local conditions (such as an over-supply of
space or a reduction in demand for real estate in an area), the quality and
policies of management, competition from other properties, the ability of the
owner to provide adequate maintenance and insurance, and variable operating
costs. Shopping centers, in particular, may be affected by changing perceptions
of retailers or shoppers of the safety, convenience and attractiveness of the
shopping center. Real estate values are also affected by such factors as
government regulations, interest rate levels, the availability of financing and
potential liability under and changes in environmental, zoning, tax and other
laws. Because substantially all of the Company's income and FFO will be derived
from rental income from real property, the Company's FFO and its ability to
make expected distributions to stockholders would be adversely affected if a
number of the Company's tenants were unable to meet their obligations to the
Company, or if the Company were unable to lease a significant amount of space
in its properties on economically favorable terms. In the event of a default by
a tenant, the Company may experience delays in enforcing, and incur substantial
costs to enforce, its rights as landlord. As a result of the above, or other
factors, including the cyclical nature of real estate markets, the value of the
Company's properties could decrease.

LEASE EXPIRATIONS AND UNLEASED SPACE COULD AFFECT THE COMPANY'S PERFORMANCE

The ability of the Company to rent unleased or vacated space will be
affected by many factors, including covenants found in certain leases with
tenants restricting the use of other space at a property. Of the leases for the
Existing Properties, leases covering 153,955 square feet, 134,148 square feet
and 166,975 square feet (representing 7.9%, 6.9% and 8.6%, respectively, of the
GLA), will expire in 1998, 1999 and 2000, respectively. Based upon existing
annualized rental revenue, such leases will represent $1.8 million, $1.5
million and $1.7 million of the Company's annualized rental revenue for the
years ended December 31, 1998, 1999 and 2000, respectively. No Anchor Tenant
leases expire before 2004. If the Company is able to re-let vacated space,
there is no assurance that rental rates will be equal to or in excess of
current rental rates. In addition, the Company may incur substantial costs in
obtaining new tenants, including Leasing Commissions, and the cost of making
Tenant Improvements or repairs required by a new tenant.

ALL EXISTING PROPERTIES ARE, AND FUTURE PROPERTIES ARE EXPECTED TO BE, SUBJECT
TO COMPETITION

All of the Company's Supermarket Centers are located in developed areas
that include other Supermarket Centers. The number of retail properties in a
particular area could materially adversely affect the Company's ability to
lease vacant space and maintain the rents charged at the Supermarket Centers or
at any newly acquired property or properties. One shopping center constructed
less than two years ago stands within a two-mile radius of Bird Ludlum. In
addition, several smaller and older strip centers are located along Bird Road
in Miami. Lake Mary is located on a retail thoroughfare which includes direct
and proximate competition from a free-standing Home Depot, a Target store and
two shopping centers anchored by Winn-Dixie and Publix, respectively. West Lake
and Four Corners each competes with nearby shopping centers anchored by
supermarkets. Pointe Royale is located within

19
<PAGE>

proximity to Cutler Ridge Mall and a Publix-anchored shopping center.
Free-standing retailers such as Circuit City and Toys R' Us located within one
mile of Point Royale compete directly with tenants in such Supermarket Center.
In addition, there are several strip shopping centers in the vicinity. The
Company's other properties are subject to similar competition. In addition,
retailers at the Existing Properties face increasing competition from outlet
malls, discount shopping clubs, direct mail and telemarketing sales. The
Company has determined that competitive factors have made it less likely that
the Company will be able to achieve its growth objectives exclusively through
acquisitions and that it will need to develop or redevelop properties to
achieve these objectives. There can be no assurance that it will be able to do
so successfully. There can be no assurance that the Company will be able to
acquire suitable properties and tenants for its properties in the future or
that such properties will be profitable. See "Business--Competition".

THE COMPANY FACES COMPETITION FROM LARGER, WELL-FUNDED DEVELOPERS WHO ARE ALSO
SEEKING TO ACQUIRE AND DEVELOP PROPERTIES WITHIN THE TARGET MARKETS

There are numerous commercial developers, real estate companies and other
owners of real estate in the areas in which the Existing Properties are
located, including financial institutions, pension funds and private owners,
that compete with the Company in seeking land for development, properties for
acquisition, financing and tenants. Many of such competitors have substantially
greater resources than the Company.

THE ILLIQUIDITY OF REAL ESTATE INVESTMENTS COULD ADVERSELY AFFECT THE COMPANY'S
FINANCIAL CONDITION

Equity real estate investments are relatively illiquid and therefore tend
to limit the ability of the Company to vary its portfolio promptly in response
to changes in economic or other conditions. The Existing Properties are
primarily Supermarket Centers. The Company has no present intention to vary the
types of real estate in its portfolio.

FIXED COSTS DO NOT VARY WITH REVENUES

Certain significant expenditures associated with properties (such as
mortgage payments, real estate taxes and maintenance costs) are generally not
reduced when circumstances cause a reduction in income from the property.
Should such circumstances occur, they would adversely affect the Company's
ability to pay distributions to stockholders. The Company may be unable to
increase revenues to the same extent that its fixed costs increase.

ADVERSE TAX CONSEQUENCES; FAILURE TO QUALIFY AS A REIT WOULD CAUSE THE COMPANY
TO BE TAXED AS A REGULAR CORPORATION

Although the Company's management believes that it has operated so as to
qualify as a REIT under the Code since its REIT election in 1995, no assurance
can be given that the Company has qualified or will remain qualified as a REIT.
In addition, no assurance can be given that legislation, new regulations,
administrative interpretations or court decisions will not significantly change
the tax laws with respect to qualification as a REIT or the federal income tax
consequences of such qualification. Qualification as a REIT involves the
application of highly technical and complex Code provisions for which there are
only limited judicial and administrative interpretations. The determination of
various factual matters and circumstances not entirely within the Company's
control may affect the Company's ability to qualify as a REIT. For example, in
order to qualify as a REIT, at least 95.0% of the Company's gross income in any
year must be derived from qualifying sources and the Company must make
distributions to stockholders aggregating annually at least 95.0% of its REIT
taxable income (excluding capital gains). The Company intends to make
distributions to its stockholders to comply with the distribution provisions of
the Code. Although the Company anticipates that its cash flows from operating
activities and FFO will be sufficient to enable it to pay its operating
expenses and meet distribution requirements, no assurances can be given in this
regard.

If the Company were to fail to qualify as a REIT in any taxable year, the
Company would be subject to federal income tax (including any applicable
alternative minimum tax) on its taxable income

20
<PAGE>

at regular corporate rates, and would not be allowed a deduction in computing
its taxable income for amounts distributed to its stockholders. Moreover,
unless entitled to relief under certain statutory provisions, the Company also
would be ineligible for qualification as a REIT for the four taxable years
following the year during which qualification was lost. Such disqualification
would reduce the net earnings of the Company available for investment or
distribution to its stockholders due to the additional tax liability of the
Company for the years involved. See "Federal Income Tax Considerations--Failure
to Qualify for Taxation as a REIT".

COMPLIANCE WITH LAWS COULD HAVE AN ADVERSE EFFECT ON THE FINANCIAL CONDITION OF
THE COMPANY

LIABILITY FOR ENVIRONMENTAL MATTERS COULD ADVERSELY AFFECT THE COMPANY'S
FINANCIAL CONDITION

Under various federal, state and local laws, ordinances and regulations
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act, as amended by the Superfund Amendments and
Reauthorization Act of 1986 ("CERCLA"), an owner or operator of real estate may
be required to investigate and clean up hazardous or toxic substances or
petroleum product releases at such property and may be held liable to a
governmental entity or to third parties for property damage and for
investigation and clean-up costs incurred by such parties in connection with
contamination. The cost of investigation, remediation or removal of such
substances may be substantial, and the presence of such substances, or the
failure to properly remediate such substances, may adversely affect the owner's
ability to sell or rent such property or to borrow using such property as
collateral. In connection with the ownership (direct or indirect), operation,
management and development of real properties, the Company is generally
considered an owner or operator of such properties or as having arranged for
the disposal or treatment of hazardous or toxic substances and, therefore,
potentially liable for removal or remediation costs, as well as certain other
related costs, including governmental fines and damages for injuries to persons
and property. Although the Company obtained Phase I or similar environmental
audits (which involve general inspections without soil sampling or groundwater
analysis) completed by independent environmental consultants when it acquired
all but two of the Existing Properties, six of the Existing Properties have
environmental assessments that were conducted more than four years ago and two
Existing Properties do not currently have environmental assessments. These
assessments are currently being performed or updated.

The Company believes that the environmental studies conducted to date have
not revealed significant environmental liabilities that would have a material
adverse effect on the Company's financial condition, results of operations,
liquidity and FFO; however, no assurances can be given that environmental
studies obtained by the Company reveal all environmental liabilities, that any
prior owner of land or a property owned or acquired by the Company did not
create any material environmental condition not known to the Company, or that a
material environmental condition does not otherwise exist (or may not exist in
the future). Tenants at the shopping centers and other properties owned and
operated by the Company include plant-on-premises dry cleaners, gasoline
service stations and tire centers, photo development firms and other retailers
which use hazardous substances in their businesses. Although leases with such
tenants contain provisions intended to minimize the environmental risks and to
shift the financial risks to the tenants, there is no assurance that the
Company will not incur liability in this regard. A limited monitoring program
with respect to groundwater testing has been implemented at Plaza Del Rey based
on questions raised by environmental studies conducted at the time of purchase.
While this site is not regarded by management as a significant environmental
risk, if a material environmental condition does in fact exist (or exists in
the future) at this or other properties, it could have a significant adverse
impact upon the Company's financial condition, results of operations, liquidity
and FFO.

In connection with the Company's acquisition of Sky Lake, a Phase II
Environmental Site Assessment dated July 15, 1997 revealed the existence of
perchloroethylene at levels above regulatory limits caused by a dry cleaning
business operated on the premises. The Company has learned that this site is
included in the Florida Dry Cleaners State Program. As a condition to the
Company's purchase of the property, the seller agreed to pay all remediation
costs, which environmental consultants have

21
<PAGE>

estimated will approximate $250,000. At the closing, $500,000 was placed into
an escrow account to pay for the remediation. Based on the remediation cost
estimates, the guarantee of the seller to pay for the cleanup and the
establishment of the escrow account, the Company has concluded that the
property does not pose a material liability to the Company. See
"Business--Environmental Matters".

COMPLIANCE WITH LOCAL BUILDING CODES AND ORDINANCES COULD ADVERSELY AFFECT THE
COMPANY'S FINANCIAL CONDITION

In developing a project, the Company must obtain the approval of numerous
government authorities regulating such matters as permitted land uses and
levels of density, the installation of utility services such as water and waste
disposal and the dedication of acreage for open space, parks, schools and other
community purposes. Several authorities in Florida have imposed impact fees as
a means of defraying the cost of providing certain governmental services to
developing areas and the amount of these fees has increased significantly
during recent years. Other Florida laws require the use of specific
construction materials which reduce the need for energy-consuming heating and
cooling systems. In addition, Broward and Palm Beach counties, adjacent to Dade
County, have attempted to impose restrictive zoning and density requirements in
order to limit the number of persons who live and work within their boundaries.
As a result of Hurricane Andrew, which struck Southern Florida in August 1992,
Dade and Broward counties in Florida enacted more stringent building codes
which have increased costs of construction. The State of Florida has also, at
times, declared moratoriums on the issuance of building permits and imposed
other restrictions in areas where the infrastructure does not reach minimum
standards. Other states and localities in which the Company seeks to develop
projects may have similar or other government regulations. There is no
assurance that these and other restrictions will not adversely affect the
Company in the future.

The ability of the Company to obtain necessary approvals and permits for
projects is often beyond the Company's control, and could restrict or prevent
the development of otherwise desirable property. The period of time necessary
to obtain permits and approvals increases the carrying costs of unimproved
property acquired for the purpose of development and construction. In addition,
the continued effectiveness of permits already granted is subject to factors
such as changes in policies, rules and regulations and their interpretation and
application.

Certain employees of the Company are required to maintain certain real
estate and mortgage brokers licenses in order for the Company to manage
properties and receive certain commissions. Changes in the requirements for
maintaining these licenses or failure of such employees to qualify for such
licenses could have an adverse affect on the Company.

THE COST OF COMPLYING WITH THE AMERICANS WITH DISABILITIES ACT COULD ADVERSELY
AFFECT THE COMPANY'S CASH FLOW

Under the ADA, places of public accommodation or commercial facilities are
required to meet certain federal requirements related to access and use by
disabled persons. These requirements became effective after January 1, 1991.
Although management of the Company believes that the Existing Properties are
substantially in compliance with the present requirements of the ADA, the
Company may incur additional costs in connection with such compliance in the
future. Also, a number of additional federal, state and local laws and
regulations exist that may require modifications to the Company's properties,
or affect certain future renovations thereof, with respect to access by
disabled persons. Non-compliance with the ADA could result in the imposition of
fines, an award of damages to private litigants, or an order to correct any
non-complying feature. Under certain of the Company's leases, the tenant is
responsible for ensuring that the property complies with all laws and
regulations, including the ADA. Notwithstanding the foregoing, the Company may
be required to make substantial capital expenditures to comply with this law.
In addition, provisions of the ADA may impose limitations or restrictions on
the completion of certain renovations and thus may limit the overall returns on
the Company's investments.

22
<PAGE>

THE COMPANY'S USE OF DEBT, REFINANCING NEEDS, INCREASES IN INTEREST RATES AND
AN ABSENCE OF A LIMITATION ON DEBT COULD ADVERSELY AFFECT THE COMPANY

The Company will be subject to the risks normally associated with debt
financing, including the risk that the Company's cash flow will be insufficient
to meet required payments of principal and interest, and the risk that
indebtedness on its properties will not be refinanced at maturity or that the
terms of such refinancing will not be as favorable as the terms of such
indebtedness. Most of the Company's existing mortgage indebtedness has an
amortization schedule which results in substantial payments being due at
maturity. See "Business--Indebtedness" and Note 5 of Notes to Consolidated
Financial Statements.

The Company's Acquisition Line of Credit is expected to bear a variable
rate of interest and be due within three years (similar to its existing lines
of credit). Changes in interest rates on the Acquisition Line of Credit are
unlikely to correspond with changes in rental rates, and the Company has no
present intention to (but may) purchase hedge agreements against interest rate
fluctuations. There can be no assurance that the Company will be able to obtain
the Acquisition Line of Credit. See "--Changes in Interest Rates Could
Adversely Affect the Value of the Company's Properties and the Price of the
Common Stock", "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity and Capital Resources" and
"Business--Indebtedness".

If the Company were unable to refinance its indebtedness on acceptable
terms, or at all, the Company might be forced to dispose of one or more of its
properties upon disadvantageous terms, which might result in losses to the
Company and might adversely affect the Cash Available for Distribution. If
prevailing interest rates or other factors at the time of refinancing result in
higher interest rates on refinancings, the Company's interest expense would
increase, without a corresponding increase in its rental rates, which would
adversely affect the Company's cash flow and its ability to pay expected
distributions to stockholders. Further, if one of the Company's properties is
mortgaged to secure payment of indebtedness and the Company is unable to meet
mortgage payments, or is in default under the related mortgage or deed of
trust, such property could be transferred to the mortgagee, or the mortgagee
could foreclose upon the property, appoint a receiver and receive an assignment
of rents and leases or pursue other remedies, all with a consequent loss of
income and asset value to the Company. Foreclosure could also create taxable
income without accompanying cash proceeds, thereby hindering the Company's
ability to meet the REIT distribution requirements under the Code.

As of June 30, 1997, the Company had total indebtedness of approximately
$64.9 million, all of which is related to mortgage indebtedness collateralized
by 14 of the Existing Properties. All of the existing indebtedness is fixed
rate. The Company is not subject to any material negative covenants with
respect to any of its mortgage indebtedness but see "Risk Factors--Certain
Indebtedness of the Company May Prohibit the Sale of Shares Common Stock" for a
discussion of certain other restrictions. As of June 30, 1997, the debt to
total stockholders' equity was approximately 59.8%. Upon consummation of the
Offering, the Company's debt to total market capitalization ratio will be
approximately 21.6%. The Board of Directors has adopted a policy to limit the
Company's indebtedness to approximately 50.0% of its total market
capitalization (i.e., the market value of the issued and outstanding shares of
Common Stock, plus total debt). The organizational documents of the Company do
not contain any limitation on the amount or percentage of indebtedness that the
Company may incur. The Board of Directors, without the vote of the Company's
stockholders, could alter or eliminate its current policy on borrowing at any
time at its discretion. If this policy were changed, the Company could become
more highly leveraged, resulting in an increase in debt service costs that
could adversely affect the Company's FFO and its ability to make expected
distributions to its stockholders and an increased risk of default on the
Company's obligations.

MANAGEMENT OF THE COMPANY HAS BROAD DISCRETION IN DETERMINING HOW TO APPLY A
SIGNIFICANT PORTION OF THE PROCEEDS OF THE OFFERING

The Company will have broad discretion as to the application of a
significant portion of net proceeds of the Offering that have been allocated to
working capital and general corporate purposes

23
<PAGE>

including unidentified acquisition and development activities, operations or
for other corporate purposes. This amount would be increased to the extent the
Underwriters' over-allotment is exercised, or to the extent any proposed use of
proceeds requires less funds or becomes impracticable, and would be decreased
to the extent any of such proposed uses would require more funds than is
currently forecast. An investor will not have the opportunity to evaluate the
economic, financial and other relevant information which will be utilized by
the Company in determining the application of such proceeds and will be
dependent on management's determination how to deploy successfully these
proceeds. See "Use of Proceeds".

STOCKHOLDER APPROVAL IS NOT REQUIRED TO ENGAGE IN INVESTMENT ACTIVITY

The Company's Board of Directors determines the Company's investment and
financing policies and its policies with respect to certain other activities,
including its debt capitalization, growth, distributions, REIT status, and
investment and operating policies. The Board of Directors has no present
intention to amend or revise these policies. However, the Board of Directors
may do so at any time without a vote of the Company's stockholders. A change in
these policies could adversely affect the Company's financial condition,
results of operations, cash flows and the amounts distributed to holders of
Common Stock.

CHANGES IN INTEREST RATES COULD ADVERSELY AFFECT THE VALUE OF THE COMPANY'S
PROPERTIES AND THE PRICE OF THE COMMON STOCK

The market price of the Common Stock will be affected by the annual
distribution rate on the shares of Common Stock. Increasing market interest
rates may lead prospective purchasers of the Common Stock to seek a higher
annual distribution rate from their investments. Such an increase in market
expectations or requirements would be likely to affect the market price of the
Common Stock adversely. Likewise, increases in interest rates may have the
effect of depressing the value (including the collateral value) of retail
properties such as the Existing Properties.

THE PURCHASERS OF COMMON STOCK WILL EXPERIENCE DILUTION

Purchasers of the Common Stock offered hereby will experience immediate
and significant dilution of $4.83 per share ($4.56 per share if the
Underwriters' over-allotment option is exercised in full) in the net tangible
book value of their shares. See "Dilution".

THE PRICE OF THE COMMON STOCK MAY BE ADVERSELY AFFECTED BY THE LACK OF A PRIOR
MARKET; STOCK PRICE NOT BASED UPON PROPERTY VALUATIONS; AND FLUCTUATIONS IN THE
STOCK MARKET

Prior to the Offering, there has been no public market for the Common
Stock. Although the Common Stock will be listed on the New York Stock Exchange,
there can be no assurance that an active trading market for the Common Stock
will develop or that, if developed, it will be sustained. In connection with
the Offering, neither the Company nor the Underwriters have obtained appraisals
or other valuations of the Existing Properties. The initial public offering
price of the Common Stock has been determined by negotiation among the
Underwriters and the Company and may not reflect the fair market value of the
Company's Existing Properties. The Offering price may not be indicative of the
market price for the Common Stock after the Offering. The market price of the
Common Stock could be subject to significant fluctuations in response to the
Company's operating results and other factors. In addition, the stock market in
recent years has experienced extreme price and volume fluctuations that often
have been unrelated or disproportionate to the operating performance of
individual companies. Such fluctuations, and general economic and market
conditions, may adversely affect the market price of the Common Stock. See
"Selected Consolidated Financial Data", "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and "Underwriting".

24
<PAGE>

THE COMPANY'S FINANCIAL CONDITION COULD BE AFFECTED BY DAMAGES TO PROPERTY NOT
COVERED BY INSURANCE

The Company believes that it carries comprehensive liability, fire, flood,
extended coverage and rental loss insurance with respect to its properties with
policy specifications and insured limits customarily carried for similar
properties. The Company believes that the insurance currently carried on the
Existing Properties is adequate and in accordance with industry standards.
There are, however, certain types of losses (such as from hurricanes) which may
be uninsurable, or the cost of insuring against such losses may not be
economically justifiable. Should an uninsured loss occur, the Company could
lose both its invested capital in and anticipated revenues from the property,
and would continue to be obligated to repay any recourse mortgage indebtedness
on the property. This risk may be intensified by the fact that most of the
Company's Existing Properties are clustered in certain markets, making it
likely that a natural disaster in any such market could affect a number of the
Existing Properties.

CERTAIN INDEBTEDNESS OF THE COMPANY MAY PROHIBIT THE SALE OF SHARES OF COMMON
STOCK

Certain of the mortgages on the Existing Properties contain prohibitions
on transfers of ownership interests in the mortgagor without the prior written
consent of the lenders, which provisions may have been violated by previous
issuances of Common Stock and may be violated by the Offering. A violation
could serve as a basis for the lenders to accelerate amounts due under the
related mortgages. The Company is currently in the process of obtaining a
clarification, amendment or consent from each of the various lenders under such
mortgages. The outstanding amounts under the mortgages on the affected Existing
Properties covered by such restrictions on transfer total approximately $11.0
million. In the event that the requested assurances or consents are not
obtained and the mortgage holders declare defaults under the mortgage
documents, the Company will either prepay the mortgages from the net proceeds
from the Offering, or reserve the capacity to prepay the mortgages under the
Acquisition Line of Credit.

AVAILABILITY OF SHARES OF COMMON STOCK FOR FUTURE SALE COULD ADVERSELY AFFECT
THE PRICE OF THE COMMON STOCK

Future sales of substantial amounts of Common Stock in the public market,
or the availability of such shares for future sale, could impair the Company's
ability to raise capital through an offering of securities and may adversely
affect the then-prevailing market prices. See "Shares Eligible for Future
Sale". The Company and holders of substantially all of the outstanding Common
Stock have agreed not to sell any shares of Common Stock for 180 days from the
date of this Prospectus without the prior written consent of Credit Suisse
First Boston. See "Underwriting". Following such 180-day period, approximately
5,300,000 shares held by current stockholders will be available for sale under
Rule 144 of the Act. Additionally, shares of Common Stock have been reserved
for issuance under the Company's 1995 Plan, under which options to purchase
614,000 shares of Common Stock are issued and outstanding. The Company intends
to register under the Act all 1,000,000 eligible shares reserved for issuance
under the 1995 Plan. See "Management--Stock Option Plan". Shares covered by
such registration will, when issued, be eligible for resale in the public
market, subject to Rule 144 limitations applicable to affiliates. Pursuant to
certain registration rights agreements among the Company and certain current
stockholders, the Company has granted various registration rights to such
stockholders who have waived such rights with respect to the Offering. See
"Certain Transactions".

THE ABILITY TO EFFECT A CHANGE OF CONTROL OF THE COMPANY IS LIMITED

MARYLAND LAW AND THE CHARTER AND BYLAWS OF THE COMPANY MAY INHIBIT A CHANGE OF
CONTROL OF THE COMPANY

Certain provisions of the Maryland General Corporation Law, as amended
(the "MGCL"), and of the Company's Charter and Bylaws may have the effect of
delaying, deferring or preventing

25
<PAGE>

discouraging or preventing a change in control of the Company or the removal of
existing management and, as a result, may prevent the stockholders of the
Company from receiving a substantial premium for their shares over then-current
market prices.

CERTAIN BUSINESS COMBINATIONS ARE PROHIBITED UNDER MARYLAND LAW. Under the
MGCL, certain "business combinations" (including a merger, consolidation, share
exchange, or, in certain circumstances, an asset transfer or issuance or
reclassification of equity securities) between a Maryland corporation and any
person who beneficially owns ten percent or more of the voting power of the
corporation's shares or an affiliate of the corporation who, at any time within
the two-year period prior to the date in question, was the beneficial owner of
ten percent or more of the voting power of the then outstanding voting stock of
the corporation (an "Interested Stockholder") or an affiliate thereof are
prohibited for five years after the most recent date on which the Interested
Stockholder becomes an Interested Stockholder. Thereafter, any such business
combination must be approved by two supermajority stockholder votes unless,
among other conditions, the holders of Common Stock receive a minimum price (as
defined in the MGCL) for their shares of Common Stock and the consideration is
received in cash or in the same form as previously paid by the Interested
Stockholder for its Common Stock. These provisions of the MGCL do not apply,
however, to business combinations that are approved or exempted by the Board of
Directors prior to the time that the Interested Stockholder becomes an
Interested Stockholder. Each of Gazit (1995), Globe Reit, Dan Overseas and
M.G.N. beneficially owns more than ten percent of the Company's voting shares
and would, therefore, be subject to the business combination provision of the
MGCL.

THE CONTROL SHARE ACQUISITION STATUTE COULD INHIBIT CHANGES IN
CONTROL. The MGCL provides that "control shares" of a Maryland corporation
acquired in a "control share acquisition" have no voting rights except to the
extent approved by a vote of two-thirds of the votes entitled to be cast on the
matter, excluding shares of stock owned by the acquiror, by officers or by
directors who are employees of the corporation. "Control shares" are voting
shares of stock which, if aggregated with all other such shares of stock
previously acquired by such person, or in respect of which such person is able
to exercise or direct the exercise of voting power (except solely by virtue of
a revocable proxy), would entitle the acquirer to exercise voting power in
electing directors within one of the following ranges of voting power: (i)
one-fifth or more but less than one-third, (ii) one-third or more but less than
a majority, or (iii) a majority of all voting power. Control shares do not
include shares the acquiring person is then entitled to vote as a result of
having previously obtained stockholder approval. A "control share acquisition"
means the acquisition of control shares subject to certain restrictions.

The control share acquisition statute does not apply to shares acquired in
a merger, consolidation or share exchange if the corporation is a party to the
transaction, or to acquisitions approved or exempted by the charter or bylaws
of a corporation. The Bylaws of the Company contain a provision exempting from
the control share acquisition statute any and all acquisitions by any person of
the Company's shares of Common Stock. Such provision of the Bylaws may be
amended by the Board of Directors without stockholder approval. There can be no
assurance that such provision will not be amended or eliminated at any time in
the future. As a result of the Company's decision to opt out of the "control
share acquisition" provisions of the MGCL, stockholders who acquire a
substantial block of Common Stock are not precluded from exercising full voting
rights with respect to their shares on all matters without first obtaining the
approval of other stockholders entitled to vote. This may have the effect of
making it easier for any such control share stockholder to effect a business
combination with the Company.

In addition, certain provisions of the Company's Charter and Bylaws
summarized in the following paragraphs may be deemed to have anti-takeover
effects and may delay, defer or prevent a tender offer or takeover attempt that
a stockholder might consider in its best interest, including those attempts
that might result in a premium over the market price for the shares held by
stockholders. See "Description of Capital Stock--Anti-Takeover Effect of
Certain Provisions of Maryland Law and the Company's Charter and Bylaws".

26
<PAGE>

THE BOARD OF DIRECTORS IS CLASSIFIED INTO THREE CLASSES. The Company's
Board of Directors is divided into three classes with staggered three-year
terms. The initial terms of the first, second and third classes will expire in
1998, 1999 and 2000, respectively. Beginning in 1998, directors of each class
will be chosen for three-year terms upon the expiration of their current terms
and each year one class of directors will be elected by the stockholders. The
staggered terms of directors may have the effect of deterring certain potential
acquisitions of the Company because control of the Company's Board of Directors
could not be obtained at a single annual meeting of stockholders.

A SUPERMAJORITY VOTE IS REQUIRED TO REMOVE A DIRECTOR. The Charter
provides that one or more directors may be removed only for Cause (as defined
in the Charter) by the affirmative vote of at least 80% of the votes cast at an
annual or special meeting of stockholders (but in no event less than a majority
of all votes entitled to be cast at the meeting) in the election of directors.
This provision, when coupled with the provision in the Charter authorizing the
Board of Directors to fill vacant directorships, precludes stockholders from
removing incumbent directors except upon the existence of cause for removal.

STOCK OWNERSHIP LIMIT IN THE CHARTER COULD INHIBIT CHANGES IN CONTROL. The
Charter includes limitations on the actual or constructive ownership of
outstanding Common Stock by any single stockholder to 5.0% in value of the
outstanding Common Stock or number of shares, whichever is more restrictive, in
order to protect the Company against the loss of REIT status due to the
concentration of ownership among its stockholders. The Board of Directors has
waived such Ownership Limit with respect to certain of its affiliates, Gazit
(1995), Globe Reit, Dan Overseas, and M.G.N.

THE CHARTER PERMITS THE ISSUANCE OF ADDITIONAL STOCK. The Charter
authorizes the issuance of additional shares of stock and the classification or
reclassification of unissued shares of either Common Stock or Preferred Stock
with such preferences, conversion and voting rights as may be determined from
time to time by the Board of Directors. Accordingly, the Board of Directors is
empowered, without stockholder approval (unless otherwise required by the rules
of any stock exchange on which the Common Stock is then traded), to issue
preferred stock with dividend, liquidation, conversion, voting or other rights
which could adversely affect the voting power or other rights of the holders of
the Common Stock. In the event of such issuance, the preferred stock could be
utilized, under certain circumstances, as a method of discouraging, delaying or
preventing a change in control of the Company. Although the Company has no
present intention to issue any shares of its preferred stock, there can be no
assurance that the Company will not do so in the future.

SPECIAL MEETINGS OF STOCKHOLDERS. The Bylaws provide that special meetings
of stockholders may be called only by the President, Chief Executive Officer,
or Chairman of the Board of Directors and must be called upon the written
demand of the holders of not less than a majority of all the votes entitled to
be cast at the meeting.

PROVISIONS IN THE CHARTER AND BYLAWS COULD PREVENT ACQUISITIONS AND
CHANGES IN CONTROL. Under the Bylaws of the Company, the affirmative vote of
at least 662/3% of the votes cast at a meeting of stockholders duly called at
which a quorum is present is required to approve any matter properly before the
meeting unless a greater percentage is required by statute or by the Charter.
Under the MGCL, a Maryland corporation generally cannot dissolve, amend its
charter, merge, sell all or substantially all of its assets, engage in a share
exchange or engage in similar transactions outside of the ordinary course of
business unless approved by the affirmative vote of stockholders holding at
least two-thirds of the shares entitled to vote on the matter unless a greater
or lesser percentage (but no less than a majority of all of the votes entitled
to be cast on the matter) is set forth in the corporation's charter. Any
amendment to any provision of the Charter requiring a vote of stockholders by a
percentage greater than 662/3% must be approved by the greater of the vote
required by such provision on the affirmative vote of at least 662/3% of all
votes entitled to be cast on the matter. The Bylaws provide that a vote of at
least 80% of the Board of Directors is required to approve any matter before
the Board of Directors.

27
<PAGE>

USE OF PROCEEDS

The net proceeds to be received by the Company from the sale of shares of
Common Stock offered hereby, based upon an assumed initial public offering
price of $14.75 per share and after deducting the underwriting discounts and
commissions and estimated Offering expenses, are estimated to be approximately
$63.3 million ($73.0 million if the Underwriters' over-allotment option is
exercised in full).

The Company intends to use the net proceeds from the Offering as follows:

<TABLE>
<CAPTION>
APPROXIMATE
APPROXIMATE PERCENTAGE OF
APPLICATION OF PROCEEDS DOLLAR AMOUNT NET PROCEEDS
- ------------------------------------------------------------------ --------------- --------------
<S> <C> <C>
Proposed Acquisitions and Development of the Redevelopment/
Development Properties(1) .................................... $26,010,000 41%
Proposed Acquisitions of Performing Supermarket Centers(2) ...... 10,000,000 16
Renovation of and development at Existing Properties(3) ......... 6,400,000 10
Repayment of indebtedness(4) .................................... 17,860,000 28
Working capital and general corporate purposes(5) ............... 3,032,000 5
------------ ----
Total ......................................................... $63,302,000 100%
============ ====
</TABLE>

- ----------------

(1) Represents (i) $7.0 million related to the repayment of seller financing,
and approximately $18.0 million for the renovation and/or development of
retail space at, Sky Lake and (ii) $1.1 million to acquire 4.4 acres of
vacant land in Miami, Florida which the Company has under contract
(collectively, the "Acquisition and Development of the Redevelopment/
Development Properties").

(2) Represents (i) $7.0 million to acquire Lantana Village, which the Company
has under contract and (ii) $3.0 million to acquire Beauclerc Village,
which the Company has an agreement to purchase (collectively, the
"Proposed Performing Supermarket Center Acquisitions").

(3) Represents (i) approximately $850,000 to renovate Atlantic Village, (ii)
approximately $1.75 million for Commonwealth, of which $1.3 million will
be used to expand retail space leased by Winn-Dixie and $450,000 will be
used to renovate and develop a pad site containing approximately 6,000
square feet of GLA, (iii) approximately $3.0 million to develop
approximately 50,000 square feet of additional GLA at Lake Mary and (iv)
approximately $800,000 to renovate the 18,000 square foot office building
at Pointe Royale (collectively the "Renovation of Existing Properties").

(4) Represents the repayment of approximately (i) $3.0 million outstanding
under a mortgage loan related to Four Corners obtained in 1993, which
accrues interest at an annual rate of 9.49% and is due and payable in
January, 2003, (ii) $2.0 million outstanding under a mortgage loan related
to Forest Edge obtained in 1996, which accrues interest at an annual rate
of 8.25% and is due and payable in October 2002, (iii) $4.0 million
outstanding under a mortgage loan related to Atlantic Village obtained in
1995 which accrues interest at an annual rate of 8.15% and is due and
payable in July, 2002 and (iv) $3.0 million outstanding under a mortgage
loan related to Plaza Del Rey obtained in 1996, which accrues interest at
an annual rate of 8.125% and is due in September, 2001 and (v) $5.9
million outstanding under a mortgage loan related to West Lake obtained in
1996, which accrues interest at an annual rate of 7.875% and is due and
payable in June, 2006 (collectively, the "Mortgage Indebtedness").

(5) This amount may increase to the extent the Underwriters' over-allotment is
exercised, or to the extent any proposed application of proceeds requires
less funds or becomes impracticable, and could be decreased to the extent
that proposed uses require more funds than currently forecast.

Proceeds not immediately required for the purposes described above will be
invested by the Company in interest-bearing accounts and short-term,
interest-bearing securities, which are consistent with the Company's intention
to continue to qualify for taxation as a REIT. Such investments may include,
for example, government and government agency securities, mortgage backed
securities, collateralized mortgage obligations, certificates of deposit,
commercial paper, money market funds or investment grade preferred stock of
other publicly traded REITs.

28
<PAGE>

DISTRIBUTION POLICY

Subsequent to the Offering, the Company intends to make regular quarterly
distributions to the holders of its Common Stock. The first dividend, for the
period commencing upon the consummation of the Offering and ending December 31,
1997, is anticipated to be in an amount approximately equivalent to a quarterly
distribution of $0.262 per share (which, if annualized, would equal $1.05 per
share), or an annual yield of 7.1% based on an assumed initial public offering
price per share of $14.75. The Company does not intend to reduce the expected
distribution per share if the Underwriters' over-allotment option is exercised.
The Company currently expects to distribute approximately 94.4% of its
estimated Cash Available for Distribution for the 12 months following the
consummation of the Offering (100.2% if the over-allotment option granted to
the Underwriters is exercised in full), . The Company has adopted a policy
pursuant to which it intends to limit distributions to no more than 94.0% of
its Cash Available for Distribution for periods subsequent to 12 months
following the consummation of the Offering. Distribution amounts could change
if actual results from operations, economic conditions or other factors differ
significantly from the assumptions used by the Company in calculating estimated
Cash Available for Distribution. In addition, of the estimated distribution of
$1.05 per share, for the initial 12 month period, approximately $0.14 per share
is expected to be generated from the temporary investment of a significant
portion of the Offering proceeds in short term investments such as government
and goverment agency securities, mortgage backed securities, collateralized
mortgage obligations, certificates of deposit, commercial paper, money market
funds or investment grade preferred stock of other publicly traded REITs during
the period prior to investment in properties.

The Company's intended annual distribution for the 12-month period
following the Offering is based on an estimate for such period. This estimate
is based on pro forma net income for the twelve months ended June 30, 1997, as
adjusted for certain events and contractual commitments that are not reflected
in the Company's historical or pro forma financial statements, as set forth in
the table below. The calculation of adjustments to pro forma FFO is being made
solely for the purpose of estimating the distribution amount for this period
and is not intended to be a projection or prediction of the Company's actual
results of operations or of its liquidity, nor is the methodology upon which
such adjustments are made intended to be a basis for determining future
distributions. Future distributions by the Company will be at the discretion of
the Board of Directors. There can be no assurance that any distributions will
be made nor that the expected level of distributions will be maintained by the
Company. The actual return that the Company will realize will be affected by a
number of factors, including the revenue received from its Properties, the
operating expenses of the Company, the interest expense incurred on its
borrowings, the ability of tenants to meet their obligations, general leasing
activity and unanticipated capital expenditures. See "Risk Factors--The
Company's Performance and Value are Subject to Risks Associated with the Real
Estate Industry ".

29
<PAGE>

The following table illustrates the adjustments made by the Company to its
pro forma FFO for the 12 month period ended June 30, 1997 in order to calculate
estimated Cash Available for Distribution for the 12 month period ending
September 30, 1998:

<TABLE>
<CAPTION>
IN THOUSANDS
-------------
<S> <C>
Pro forma net income for the year ended December 31, 1996 ........................ $ 6,630
Plus: Pro forma net income for the six months ended June 30, 1997 .................. 3,470
Less: Pro forma net income for the six months ended June 30, 1996 .................. (3,001)
Plus: Pro forma depreciation for the 12 months ended June 30, 1997(1) ............ 2,920
--------
Pro forma FFO for the 12 months ended June 30, 1997 .............................. 10,019
--------
Adjustments:
Net increase in contractual rental income for months in effect(3) ............... 356
Net increase from new leases(4) ................................................... 1,753
Net effect of lease expirations, assuming no renewals(5) ........................ (884)
Net increase from reduced interest expense(6) .................................... 347
Interest income on excess cash from proceeds of Offering(7) ..................... 1,646
Plus: Non-recurring items(2) ...................................................... 867
--------
Pro forma FFO for the 12 months ended 1998 ....................................... 14,104
Non-real estate amortization(8) ................................................... 111
--------
Estimated adjusted pro forma cash flows from operating activities for the 12 months
ended July 31, 1998 ............................................................ 14,215
Estimated capital expenditures(9) ................................................ (100)
Scheduled debt principal payments(10) ............................................. (1,210)
--------
Estimated Cash Available for Distribution for the 12 months ended July 31, 1998 ... $ 12,905
========
Total estimated initial distributions ............................................. $ 12,189
========
Estimated initial annual distributions per share ................................. $ 1.05
========
Payout ratio based on estimated cash available for distributions .................. 94.4 %
========
</TABLE>

- ----------------

(1) Pro forma depreciation of $2,724 for the year ended December 31, 1996 plus
$1,444 for the period ended June 30, 1997 less $1,248 for the period ended
June 30, 1996.

(2) Includes prepayment fees and amortization of loan costs associated with
repayment of mortgage notes payable.

(3) This adjustment gives effect to the net increase in rental revenues for
contractual rental increases for the 12 month period ending September 30,
1998.

(4) Gives effect to the net increase in rental revenues attributable to leases
in effect on June 30, 1997, which were not in effect for the full 12 month
period from July 1, 1996 to June 30, 1997 and from new fully executed
leases commencing on or after July 1, 1997.

(5) This adjustment gives effect to the net decrease in rental revenues for
the 12 month period ending September 30, 1998 attributable to leases
expiring on or after July 1, 1997, assuming no renewals.

(6) Represents the incremental increase in FFO attributable to a net decrease
in interest expense, calculated in accordance with GAAP, from the pro
forma 12 months ended June 30, 1997 to the 12 months ending September 30,
1998 from loans repaid during the twelve months ended June 30, 1997.

(7) Represents estimated interest earned at 6.0% on working capital reserves
derived from $27,432 of excess cash from proceeds of the Offering.

(8) Represents the amortization of financing costs for the 12 months ending
September 30, 1998.

(9) Assumes non-development related capital expenditures of $0.05 per square
foot of GLA.

(10) Calculations based on pro forma debt outstanding for the 12 months ending
September 30, 1998 and the principal payments related to such
indebtedness.

In order to qualify to be taxed as a REIT, the Company must make annual
distributions to stockholders of at least 95.0% of its REIT taxable income
(determined without regard to the dividends received deduction and by excluding
any net capital gains). See "Federal Income Tax Considerations--Taxation of the
Company--Annual Distribution Requirements". The Company anticipates that its
estimated Cash Available for Distribution will exceed its REIT taxable income
due to non-cash expenses,

30
<PAGE>

primarily depreciation and amortization, to be incurred by the Company. It is
possible, however, that the Company from time to time, may not have sufficient
cash or other liquid assets to meet these distribution requirements due to
timing differences between (i) the actual receipt of income and actual payment
of deductible expenses and (ii) the inclusion of such income and deduction of
such expenses in arriving at taxable income of the Company. In the event that
such timing differences occur, in order to meet the distribution requirements,
the Company may find it necessary to arrange for short-term, or possibly long-
term, borrowings or to pay dividends in the form of taxable stock dividends.
Distributions by the Company to the extent of its current and accumulated
earnings and profits for federal income tax purposes, other than capital gain
dividends, will be taxable to stockholders as ordinary dividend income. Capital
gain distributions generally will be treated as long-term capital gains.
Distributions in excess of earnings and profits generally will be treated as
non-taxable return of capital to the extent of each stockholder's basis in his
or her Common Stock and thereafter as taxable gain. The non-taxable
distributions will reduce each stockholders' tax basis in the Common Stock and,
therefore, the gain (or loss) recognized on the sale of such Common Stock or
upon liquidation of the Company will be increased (or decreased) accordingly.
For a discussion of the tax treatment of distributions to holders of Common
Stock, see "Federal Income Tax Considerations-Taxation of U.S. Stockholders"
and "--Taxation of Non-U.S. Stockholders".

Financing activities such as repayment or refinancing of loans also may
affect the Company's assets and liabilities and the amount of Cash Available
for Distribution for future periods. Management will seek to control the timing
and nature of investing and financing activities in order to maximize the
Company's return on invested capital.

Future distributions by the Company will be subject to the requirements of
the MGCL and the annual distribution requirements under the REIT provisions of
the Code (see "Federal Income Tax Considerations--Taxation of the
Company--Annual Distribution Requirements") and will depend on the actual cash
flow of the Company, its financial condition, its capital requirements, and
such other factors as the Board of Directors deems relevant. There can be no
assurance that any distributions will be made or that the expected level of
distributions will be maintained by the Company. See "Risk Factors-General
Risks Related to Real Estate Investments" and "Distribution to Stockholders
Affected by Many Factors". If revenues generated by the Company's properties in
future periods decrease materially from current levels, the Company's ability
to make expected distributions would be materially adversely affected, which
could result in a decrease in the market price of the shares of Common Stock.

The Company may in the future implement a distribution reinvestment
program under which holders of shares of Common Stock may elect automatically
to reinvest distributions in additional shares of Common Stock. The Company
may, from time to time, repurchase shares of Common Stock in the open market
for purposes of fulfilling its obligations under this distribution reinvestment
program, if adopted, or may elect to issue additional shares of Common Stock.
If the Company adopts a distribution reinvestment program, it will solicit
participation in the program after the Offering by means of a separate
prospectus, and a purchase of shares of Common Stock in the Offering does not
entitle any investor to participate in any such program. There can be no
assurance that the Company will adopt such a program, and consequently, the
probable date of adoption or number of shares of Common Stock that would be
available under such program cannot be determined at this time.

DIVIDENDS

Since the Company's election of REIT status, the Company has paid cash
dividends to its stockholders in accordance with REIT distribution
requirements.

During 1997, the Company paid cash dividends of $0.215 per share, $0.225
per share and $0.2625 per share on March 31, June 18, and September 16,
respectively, to all stockholders of record on those dates. Gross dividends
paid by the Company for the nine months ended Septemeber 30, 1997 were $3.6
million.

31
<PAGE>

During 1996, the Company paid cash dividends of $0.375 per share, $0.20
per share and $0.225 per share on June 18, September 30, and December 31,
respectively, to all stockholders of record on those dates. Gross dividends
paid by the Company for the year ended December 31, 1996 were $4.2 million.

During 1995, the Company paid cash dividends of $0.25 per share, $0.125
per share and $0.25 per share on June 28, September 27, and December 28,
respectivley, to all stockholders of record on those dates. Gross dividends
paid by the Company for the year ended December 31, 1995 were $2.8 million.

The Company did not pay any dividends to its stockholders prior to January
1, 1995.

32
<PAGE>

DILUTION

The net tangible book value of the Company's Common Stock as of June 30,
1997 was $51.8 million, or approximately $7.50 per share. Net tangible book
value per share is determined by dividing net tangible book value (tangible
assets less liabilities) of the Company by 6,908,130 shares of Common Stock
outstanding (including common stock equivalents).

Net tangible book value dilution per share represents the difference
between the amount per share paid by purchasers of shares of Common Stock in
the Offering and the pro forma net tangible book value per share of Common
Stock immediately after consummation of the Offering. After giving effect to
the sale by the Company of 4,700,000 shares of Common Stock in the Offering at
an assumed initial public offering price of $14.75 per share, and the
application of the estimated net proceeds therefrom, the pro forma net tangible
book value of the Company as of June 30, 1997 would have been $115.1 million,
or $9.92 per share. This would represent an immediate increase in net tangible
book value of $2.42 per share to the existing stockholders and an immediate
dilution in net tangible book value of $4.83 per share to purchasers of Common
Stock in the Offering, as illustrated in the following table.

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share of Common Stock(1) ... $14.75
Net tangible book value at June 30, 1997 ........................... $7.50
------
Increase per share attributable to new investors ..................... $2.42
------
Pro forma net tangible book value after the Offering(2) ............... $ 9.92
-------
Net tangible book dilution per share to new investors(2)(3)(4)(5) ...... $ 4.83
=======
</TABLE>

- ----------------

(1) Before deducting the underwriting discounts and commissions and estimated
expenses of the Offering.
(2) If the Underwriters exercise their over-allotment option in full, the pro
forma net tangible book value per share would be $10.19 and dilution of
net tangible book value per share to new investors would be $4.56.
(3) Does not give effect to the issuance of shares of Common Stock issuable
upon exercise of stock options granted under the Company's 1995 Plan,
pursuant to which options to purchase 614,000 shares of Common Stock at
exercise prices ranging from $8.25 to $12.375 per share have been issued
and are outstanding as of the date of this Prospectus. If exercised, these
options would result in a decrease in dilution to new investors of $0.06
per share. See "Management--Stock Option Plan".
(4) Does not give effect to the issuance of up to 1,306,124 shares of Common
Stock pursuant to exercise of the Series C Warrants at an exercise price
of $8.25 per share. If exercised, these warrants would result in
additional dilution to new investors of $0.21 per share.
(5) Does not give effect to the issuance of 580,288 shares of Common Stock at a
price of $12.71 per share reserved for issuance to an affiliate of the
Company pursuant to a stock purchase agreement. If purchased, these shares
would result in a decrease in dilution to new investors of $0.09 per
share. See "Certain Transactions".

The following table sets forth as of June 30, 1997, the difference between
the existing stockholders and the purchasers of shares in the Offering with
respect to the number of shares purchased from the Company, the total
consideration paid and the average price per share paid at the assumed initial
offering price of $14.75 per share:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
------------------------------------ ---------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
------------------ --------------- ---------- --------- --------------
<S> <C> <C> <C> <C> <C>
Existing stockholders ...... 6,908,130(1) 59.5%(2) $ 53,494 43.6% $ 7.74
New investors ............... 4,700,000 40.5 69,325 56.4 14.75
------------- --------- --------- ------
Total ..................... 11,608,130 100.0% $122,819 100.0%
============= ========= ========= ======
</TABLE>

- ----------------
(1) Does not include (i) 705,000 shares of Common Stock reserved for issuance
upon exercise of the Underwriters' over-allotment option, (ii) 614,000
shares of Common Stock reserved for issuance upon the exercise of
outstanding options under the 1995 Plan, (iii) 386,000 shares of Common
Stock reserved for issuance upon the exercise of options available for
future grant under the 1995 Plan, (iv) 580,288 shares of Common Stock
reserved for issuance to an affiliate pursuant to a stock purchase
agreement, and (v) 1,306,124 shares of Common Stock reserved for issuance
upon exercise of the Series C Warrants. See "Management--Stock Option
Plan", "Certain Transactions", "Description of Capital Stock" and
"Underwriting" and Note 9 of Notes to Financial Statements.
(2) If the Underwriters exercise their over-allotment option in full, the
Company's existing stockholders will own 56.1% of the shares of Common
Stock outstanding upon consummation of the Offering. See "Principal
Stockholders".

33
<PAGE>

CAPITALIZATION

The following table sets forth the capitalization of the Company as of
June 30, 1997 and as adjusted for the sale of the 4,700,000 shares of Common
Stock offered hereby (at an assumed initial public offering price of $14.75 per
share) and the application of the estimated net proceeds therefrom. See "Use of
Proceeds".

<TABLE>
<CAPTION>
JUNE 30, 1997
-------------------------
ACTUAL AS ADJUSTED
---------- ------------
(IN THOUSANDS)
<S> <C> <C>
Mortgage notes payable ................................................... $64,916 $ 47,056
-------- --------
Stockholders' equity:
Preferred stock, $0.01 par value per share; 5,000,000 shares authorized; no
shares issued and outstanding .......................................... - -
Common Stock, $0.01 par value per share; 40,000,000 shares authorized;
6,908,130 shares issued and outstanding; 11,608,130 shares issued and
outstanding, as adjusted(1) ............................................. 69 116
Additional paid-in capital ................................................ 54,950 118,205
Notes receivable from stock sales .......................................... (1,525) (1,525)
Retained earnings (deficit) ................................................ -- (313)
-------- --------
Total stockholders' equity ............................................. $53,494 $116,483
======== ========
</TABLE>

- ----------------
(1) Does not include (i) 705,000 shares of Common Stock reserved for issuance
upon exercise of the Underwriters' over-allotment option, (ii) 614,000
shares of Common Stock reserved for issuance upon the exercise of
outstanding options under the 1995 Plan, (iii) 386,000 shares of Common
Stock reserved for issuance upon the exercise of options available for
future grant of options under the 1995 Plan, (iv) 580,288 shares of Common
Stock reserved for issuance to an affiliate pursuant to a stock purchase
agreement, and (v) 1,306,124 shares of Common Stock reserved for issuance
upon exercise of the Series C Warrants. See "Management--Stock Option
Plan", "Certain Transactions", "Description of Capital Stock" and
"Underwriting".

34
<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The selected consolidated financial data and balance sheet data set forth
below have been derived from the consolidated financial statements of the
Company, including the consolidated financial statements for the years ended
December 31, 1994, 1995 and 1996 and for the six months ended June 30, 1996 and
1997 contained elsewhere herein. The consolidated financial statements as of
and for the years ended December 31, 1992, 1993, 1994, 1995 and 1996 have been
audited by Deloitte & Touche LLP, independent auditors. The income statement
data for the six months ended June 30, 1996 and 1997 and the balance sheet data
as of June 30, 1997 have been derived from unaudited interim consolidated
financial statements contained elsewhere herein, which in the opinion of
management, include all adjustments (consisting of only normal recurring
adjustments) necessary for a fair presentation of the information set forth
therein. Results for the six months ended June 30, 1997 are not necessarily
indicative of the results for the entire year. The data set forth below should
be read in conjunction with the financial statements and related notes, and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included elsewhere in this Prospectus.

The unaudited pro forma consolidated balance sheet data as of June 30,
1997 set forth below is presented as if the Offering and the application of the
net proceeds of the Offering all had occurred on June 30, 1997. The unaudited
pro forma consolidated statement of operations data for the six months ended
June 30, 1997 and the year ended December 31, 1996 are presented as if the
Offering and the application of the net proceeds of the Offering (and the
acquisitions of West Lake, Forest Edge, Monument Pointe, Lantana Village and
Beauclerc Village) all had occurred on January 1, 1996. See "Use of Proceeds".
The pro forma consolidated financial data should be read in conjunction with
the Company's pro forma consolidated financial statements and related notes and
historical consolidated financial statements and related notes included
elsewhere in this Prospectus.

Because the preponderance of proceeds are allocated to acquisition,
development, redevelopment and renovation projects which, for pro forma
statement of operations purposes, do not generate any revenue or expense, pro
forma results of operations reflect only the repayment of mortgage notes
payable and the proposed acquisitions of Lantana Village and Beauclerc Village
and omit any revenue or expense from other proceeds uses (except for historical
revenue and expense attributable to Sky Lake expected to continue during the
redevelopment process). Accordingly, the pro forma consolidated financial
statements do not purport to represent the Company's financial position as of
June 30, 1997 or the results of operations for the six months ended June 30,
1997 or for the year ended December 31, 1996 that would actually have occurred
had the Offering (and the acquisitions listed above) and the application of the
net proceeds of the Offering all been completed on June 30, 1997 or at the
beginning of the periods presented, or to project the Company's financial
position or results of operations as of any future date or for any future
period.

35
<PAGE>

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-----------------------------------
PRO FORMA HISTORICAL
----------- -----------------------
1997 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
OTHER DATA:
Funds from Operations(4) .................. $5,403 $ 3,867 $ 2,815
Ratio of eanings to fixed charges (5) ...... 2.26 1.88 2.38
Cash flows from:
Operating activities ..................... -- 3,492 3,980
Investing activities ..................... -- (6,766) (3,495)
Financing activities ..................... -- 5,881 7,013
Gross leasable area (square feet)
(at end of period) ........................ -- 1,951 1,670
Occupancy (at end of period) ............... -- 93% 89%

<CAPTION>
YEAR ENDED
DECEMBER 31,
---------------------------------------------------------------------------
PRO FORMA HISTORICAL
----------- ---------------------------------------------------------------
1996 1996 1995 1994 1993 1992
----------- ------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
OTHER DATA:
Funds from Operations(4) .................. $9,841 $ 6,136 $ 3,973 $ 1,308 $ 347 $ (54)
Ratio of eanings to fixed charges (5) ...... 2.27 1.74 1.72 1.11 1.07 0.47
Cash flows from:
Operating activities ..................... -- 6,680 3,469 2,433 (289) (46)
Investing activities ..................... -- (18,277) (37,211) (29,755) (20,414) (1,995)
Financing activities ..................... -- 12,778 27,441 32,726 20,671 3,728
Gross leasable area (square feet)
(at end of period) ........................ -- 1,807 1,670 1,003 583 50
Occupancy (at end of period) ............... -- 91% 90% 80% 60% 92%
</TABLE>

- ----------------
(1) Based on the weighted average number of shares outstanding.

(2) Represents net income after income tax expense of $130,000.

(4) The White Paper defines FFO as net income (loss) (computed in accordance
with GAAP), excluding gains (or losses) from debt restructuring and sales
of property, plus real estate related depreciation and amortization and
after adjustments for unconsolidated partnerships and joint ventures.
Management believes FFO is helpful to investors as a measure of the
performance of an equity REIT because, along with cash flows from
operating activities, financing activities and investing activities, it
provides investors with an understanding of the ability of the Company to
incur and service debt and make capital expenditures. The Company computes
FFO in accordance with standards established by the White Paper, which may
differ from the methodology for calculating FFO utilized by other equity
REITs, and, accordingly, may not be comparable to such other REITs.
Further, FFO does not represent amounts available for management's
discretionary use because of needed capital replacement or expansion, debt
service obligations, or other commitments and uncertainties. The Company
believes that in order to facilitate a clear understanding of the combined
historical operating results of the Company, FFO should be examined in
conjunction with the income (loss) as presented in the audited combined
financial statements and information included elsewhere in this
Prospectus. FFO should not be considered as an alternative to net income
(determined in accordance with GAAP) as an indication of the Company's
financial performance or to cash flows from operating activities
(determined in accordance with GAAP) as a measure of the Company's
liquidity, nor is it indicative of funds available to fund the Company's
cash needs, including its ability to make distributions. See "Distribution
Policy".

(5) For the purpose of calculating the ratio of earnings to fixed charges,
earnings include net income before extraordinary items plus interest
expense, amortization of interest previously capitalized, and amortization
of financing costs. Fixed charges include all interest costs consisting of
interest expense, interest capitalized, and amortization of financing
costs.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-----------------------------
HISTORICAL
PRO FORMA -----------------
1997 1997 1996
----------- -------- --------
<S> <C> <C> <C>
FFO:
Income (loss) before extraordinary items ......... $3,470 $2,572 $1,830
Add:
Real estate depreciation and amortization ...... 1,287 1,172 985
Non-recurring items(6) ........................ 646 123 --
FFO ............................................. $5,403 $3,867 $2,815

<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
HISTORICAL
PRO FORMA --------------------------------------------
1996 1996 1995 1994 1993 1992
----------- -------- -------- -------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
FFO:
Income (loss) before extraordinary items ......... $6,630 $3,920 $2,512 $ 233 $ 49 $ (161)
Add:
Real estate depreciation and amortization ...... 2,509 2,037 1,461 1,075 298 107
Non-recurring items(6) ........................ 702 179 -- -- -- --
FFO ............................................. $9,841 $6,136 $3,973 $1,308 $347 $ (54)
</TABLE>

- ----------------
(6) Reflects the pre-payment penalties and loan cost amortization related to
repayment of debt as non-recurring.

36
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with
"Selected Consolidated Financial Data" and the Company's Consolidated Financial
Statements, and the notes thereto, appearing elsewhere in this Prospectus.

The Company receives income primarily from rental revenue (including
recoveries from tenants) from the Existing Properties. As a result of the
Company's acquisition and redevelopment programs, the financial data shows
increases in total revenue from year to year, largely attributable to the
acquisitions of properties placed into operation during the year and the
benefit of a full period of rental and other revenue for properties acquired or
placed into operation in the preceding year.

The following table sets forth as of June 30, 1997 and 1996 and as of
December 31, 1996, 1995 and 1994, respectively, information regarding the
components of the Company's revenues and expenses as a percentage of total
revenues. For purposes of the following table, "aggregate minimum rental
revenue" is the fixed base rental amount in effect throughout the relevant
periods; "percentage rent" is rent based on a percentage of certain gross
sales; and "recoveries from tenants" is the tenants' share of real estate
taxes, insurance and common area maintenance expenses.

<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, YEAR ENDED DECEMBER 31,
------------------------- ---------------------------------------
1997 1996 1996 1995 1994
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Aggregate minimum rental revenue ......... 75.09% 77.37% 75.55% 73.44% 74.15%
Percentage rent ........................... 0.71% 1.13% 0.92% 1.15% 1.24%
Recoveries from tenants .................. 18.72% 18.81% 18.50% 17.99% 16.94%
Other income .............................. 5.48% 2.69% 5.03% 7.42% 7.67%
------- ------- ------- ------- -------
Total Revenues ........................... 100.00% 100.00% 100.00% 100.00% 100.00%
------- ------- ------- ------- -------
Operating expenses ........................ 28.36% 29.11% 28.91% 29.02% 36.08%
Depreciation and amortization ............ 12.18% 12.56% 12.37% 13.18% 16.07%
Interest ................................. 30.38% 32.93% 32.19% 30.82% 33.87%
General and administrative expenses ...... 2.49% 2.65% 3.08% 4.84% 8.13%
------- ------- ------- ------- -------
Total costs and expenses .................. 73.41% 77.25% 76.55% 77.86% 94.15%
------- ------- ------- ------- -------
Net income .............................. 26.59% 22.75% 23.45% 22.14% 5.85%
======= ======= ======= ======= =======
</TABLE>

RESULTS OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996

Total revenues increased by approximately $1.7 million, or 21.3%, to $9.7
million for the six months ended June 30, 1997 from $8.0 million for the
comparable period of 1996. The increase resulted primarily from the acquisition
of West Lake in November 1996, Forest Edge in December 1996 and Monument Pointe
in January 1997, which acquisitions represented $600,000, $300,000 and $300,000
of such increase, respectively.

Operating expenses increased by approximately $400,000, or 17.4%, to $2.7
million for the six months ended June 30, 1997 from $2.3 million for the
comparable period of 1996, as a result of operations at West Lake, Forest Edge
and Monument Pointe. However, for such periods, operating expenses as a percent
of revenues decreased to 28.4% from 29.1% due to operating efficiencies based,
in part, on owning more properties and in concentrated areas.

Depreciation and amortization expense increased by approximately $200,000,
or 20.0%, to $1.2 million for the six months ended June 30, 1997 from $1.0
million for the comparable period of 1996 primarily as a result of an increase
in depreciable assets resulting from the Company's purchase of West Lake,
Forest Edge and Monument Pointe.

37
<PAGE>

Interest expense increased by approximately $300,000, or 11.5%, to $2.9
million for the six months ended June 30, 1997 from $2.6 million for the
comparable period of 1996 primarily as a result of increased mortgage
indebtedness incurred by the Company in connection with its purchase of West
Lake, Forest Edge and Monument Pointe.

General and administrative expenses increased by approximately $28,000, or
13.1%, to $241,000 for the six months ended June 30, 1997 from $213,000 for the
comparable period of 1996, primarily as a result of the increase in the
Company's portfolio of Supermarket Centers. However, for such periods, general
and administrative expenses as a percent of revenues decreased to approximately
2.5% from approximately 2.7% due to operating efficiencies based in part on
owning more properties in a concentrated area.

As a result of the foregoing, net income increased approximately by
$800,000, or 44.4%, to $2.6 million in the six months ended June 30, 1997, from
$1.8 million in the comparable period of 1996, and FFO increased by $1.1
million, or 39.3%, to $3.9 million in the six months ended June 30, 1997 from
$2.8 million in the comparable period of 1996.

YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995

Total revenues increased $5.4 million, or 46.5%, in 1996 to $16.7 million
from $11.3 million in 1995 due to the first full year of operations for
Atlantic Village, Oak Hill, Lake Mary and Pointe Royale, and the acquisition of
West Lake in November 1996. Of such increase $500,000, $600,000, $3.1 million,
$900,000 and $200,000 were attributable to Atlantic Village, Oak Hill, Lake
Mary, Pointe Royale and West Lake, respectively.

Operating expenses increased by approximately $1.5 million, or 45.5%, to
$4.8 million in 1996 from $3.3 million in 1995, primarily as a result of a full
year of operations for Atlantic Village, Oak Hill, Lake Mary and Pointe Royale,
as well as the Company's acquisition of West Lake. However, for such periods,
operating expenses as a percent of revenues remained essentially flat at 29.0%.

Depreciation and amortization expense increased by approximately $600,000,
or 42.9%, to $2.0 million in 1996 from $1.4 million in 1995, primarily due to
an increase in depreciable assets resulting from the Company's purchase of
Atlantic Village, Oak Hill, Lake Mary and Pointe Royale and from capital
expenditures incurred by the Company in connection with tenant improvements at
each of such properties.

Interest expense increased by approximately $1.9 million, or 54.3%, to
$5.4 million in 1996 from $3.5 million in 1995, primarily as a result of
increased mortgage indebtedness incurred by the Company in connection with the
purchase of Atlantic Village, Oak Hill, Lake Mary and Pointe Royale in 1995 and
the acquisition of the West Lake in November 1996.

General and administrative expenses decreased by approximately $34,000, or
6.2%, to $515,000 in 1996 from $549,000 in 1995, primarily as a result of a
decrease in legal and accounting fees incurred in connection with the Company's
REIT status election, which election was effective as of January 1, 1995.
However, for such periods, general and administrative expenses as a percent of
revenues decreased to approximately 3.1% from approximately 4.8% due to
operating efficiencies based in part on owning more properties in a
concentrated area.

As a result of the foregoing, net income increased by $1.4 million, or
56%, to $3.9 million in 1996 from $2.5 million in 1995, and FFO increased by
$2.1 million, or 52.5%, to $6.1 million in 1996 from $4.0 million in 1995.

YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994

Total revenues increased $5.1 million, or 82.3%, in 1995 to $11.3 million
from $6.2 million in 1994 due to the first full year of operations for
Commonwealth, Fort Caroline, Bird Ludlum and Mandarin

38
<PAGE>

and the acquisitions of Atlantic Village, Oak Hill, Lake Mary and Pointe Royale
during 1995. Of such increase, $100,000, $100,000, $2.1 million, $100,000,
$500,000, $100,000, $500,000 and $700,000 are attributable to Commonwealth,
Fort Caroline, Bird Ludlum, Mandarin, Atlantic Village, Oak Hill, Lake Mary and
Pointe Royale.

Operating expenses increased by approximately $1.1 million, or 50.0%, to
$3.3 million in 1995 from $2.2 million in 1994, reflecting a full year of
operations for Commonwealth, Fort Caroline, Bird Ludlum and Mandarin acquired
during 1994, as well as the acquisition of Atlantic Village, Oak Hill, Lake
Mary and Pointe Royale in 1995. However, for such periods, operating expenses
as a percent of revenues decreased to approximately 29.0% from approximately
36.1% due to operating efficiencies based, in part, on owning more properties
and in concentrated areas.

Depreciation and amortization expense increased by approximately $500,000,
or 55.6%, to $1.4 million in l995 from $900,000 in 1994 primarily due to the
Company's purchase of Commonwealth, Fort Caroline, Bird Ludlum and Mandarin, as
well as the acquisition of Atlantic Village, Oak Hill, Lake Mary and Pointe
Royale in 1995, and from capital expenditures incurred by the Company in
connection with tenant improvements at certain of these properties.

Interest expense increased by approximately $1.4 million, or 66.7%, to
$3.5 million in 1995 from $2.1 million in 1994 as a result of increased
mortgage indebtedness incurred by the Company in connection with the purchase
of Commonwealth, Fort Caroline, Bird Ludlum and Mandarin in 1994, as well as
the acquisition of Atlantic Village, Oak Hill, Lake Mary and Pointe Royale in
1995.

General and administrative expenses increased by approximately $45,000, or
8.9%, to $549,000 in 1995 from $504,000 in 1994 as a result of an increase in
legal and accounting fees incurred in connection with the Company's REIT status
election. However, for such periods, general and administrative expenses as a
percent of revenues decreased to approximately 4.8% from approximately 8.1% due
to operating efficiencies based, in part, on owning more properties in a
concentrated area.

As a result of the foregoing, the Company's net income increased by
approximately $2.3 million, or 97.8%, to $2.5 million in 1995 from $233,000 in
1994, and FFO increased by approximately $2.7 million, or 207.7%, to $4.0
million from $1.3 million for the same periods.

39
<PAGE>

INDEBTEDNESS

The following table sets forth certain information regarding mortgage
indebtedness of the Company related to the Existing Properties as of June 30,
1997:

<TABLE>
<CAPTION>
BALANCE
INTEREST FACE PROJECTED ANNUAL DUE AT
RATE AMOUNT INTEREST PAYMENTS MATURITY DATE MATURITY(2)
---------- --------- ------------------- ---------------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
NORTH FLORIDA
Atlantic Village(1) ......... 8.15 % $ 3,988 $ 321 July 2002 $3,294
Fort Caroline ............... 9.35 2,393 221 March 2002 2,078
Monument Pointe ............ 10.06 2,731 273 June 2001 2,564
Oak Hill .................. 7.625 2,415 182 February 2006 1,703
Mandarin Mini-Storage ...... 6.375 1,219 77 May 1999 1,172
CENTRAL FLORIDA
East Bay .................. 8.25 916 75 August 2000 859
Eustis Square ............... 9.00 5,399 480 July 2002 4,322
Forest Edge(1) ............ 8.25 2,031 165 October 2002 1,597
Lake Mary .................. 7.85 12,956 1,007 December 2010 5,569
SOUTH FLORIDA
Bird Ludlum ............... 7.68 13,281 1,007 February 2015 0
Plaza Del Rey(1) ............ 8.125 2,961 260 September 2011 0
Pointe Royale ............... 7.95 5,746 451 July 2010 2,502
West Lake(1) ............... 7.875 5,892 459 June 2006 4,157
TEXAS
Four Corners(1) ............ 9.49 2,988 283 February 2003 2,785
</TABLE>

- ----------------
(1) The Company intends to retire the mortgages on each of these properties,
except Forest Edge, from the net proceeds of the Offering immediately
following consummation of the Offering. The Company intends to retire the
mortgage on Forest Edge from net proceeds on or about April 1, 1998.

(2) With respect to the mortgage indebtedness to be repaid from the proceeds of
the Offering, the loan on Atlantic Village does not have any prepayment
penalty. Forest Edge and Four Corners loans have prepayment penalties of
1.0% and 2.0% of the outstanding principal, respectively. Plaza Del Rey
and West Lake each have prepayment penalties of 5.0% of the outstanding
principal. The prepayment penalty associated with Lake Mary mortgage
indebtedness is the greater of 1.0% of the outstanding principal balance
or the present value differences in interest rates at the time of
prepayment. The prepayment penalty associated with Bird Ludlum mortgage
indebtedness in the greater of 1.0% of the outstanding principal balance
or the present value differences in interest rates at the time of
prepayment.

The Company's mortgage indebtedness expected to be outstanding after the
application of the net proceeds of the Offering will require balloon payments
of approximately $1.2 million, $860,000, $2.6 million, $2.2 million, $1.7
million and $8.1 million in 1999, 2000, 2001, 2002, 2006 and 2010,
respectively. The Company may not have sufficient funds on hand to repay these
balloon amounts at maturity. Therefore, the Company expects to refinance such
debt either through additional debt financings secured by individual properties
or groups of properties, by unsecured private or public debt offerings or by
additional equity offerings. See "Business-- Indebtedness" and "Risk
Factors--The Company's Use of Debt, Refinancing Needs, Increases in Interest
Rates and an Absence of a Limitation on Debt Could Adversely Affect the
Company".

The Company has received a commitment from City National Bank of Florida
and a participating lender to provide the Company with an Acquisition Line of
Credit of up to $35.0 million to be secured by certain of the Company's
unencumbered Existing Properties and other properties acquired by the Company.
There can be no assurance that the Company will be able to obtain the
Acquisition Line of Credit. The Company expects that the Acquisition Line of
Credit will bear interest at a variable rate, will be due within three years
and will contain cross-default and cross collateralization provisions as well
as certain customary terms and conditions including, among others, restrictions
on incurrance of indebtedness and changes in control.

40
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

Historically, the principal sources of funding for the Company's
operations, including the renovation, expansion, development and acquisition of
shopping centers, have been operating cash flows, the issuance of equity
securities and mortgage loans.

From 1992 to the present, the Company raised proceeds from the private
placement of Common Stock and warrants and it used such proceeds to acquire the
Existing Properties, purchasing approximately $4.7 million of real property in
1992, approximately $17.2 million in 1993, approximately $29.0 million in 1994,
approximately $39.6 million in 1995, approximately $11.0 million in 1996 and
approximately $3.7 million in the first six months of 1997. Management recently
determined that in seeking to significantly expand its investment portfolio,
the Company would have greater flexibility if it had access to both public and
private capital markets and, accordingly, decided to publicly offer the Common
Stock pursuant to the Offering.

As of June 30, 1997, the Company had total indebtedness of approximately
$64.9 million, all of which is related to mortgage indebtedness collateralized
by 14 of the Existing Properties. As of such date, the percentage of the net
book value of the Company's assets that were encumbered by debt was 76.9% and
the Company's debt to total stockholder's equity was 54.8%. All of the existing
debt is fixed rate debt. None of the existing mortgages is subject to cross
default provisions of mortgages on other properties or is cross collateralized.
However, in connection with the Company's acquisition of Lake Mary, the Company
has provided a $1.5 million letter of credit to secure certain obligations,
which letter of credit is collateralized by its West Palm Beach property. The
Company is not subject to any material negative covenants with respect to any
of its mortgage indebtedness but see "Risk Factors--Certain Indebtedness May
Prohibit the Sale of Shares of Common Stock" for a discussion of certain other
restrictions.

The Company has obtained a line of credit from City National Bank of
Florida in the amount of $2.5 million which expires in May 1998 and is
collateralized by the Equity One Office Building. At June 30, 1997, no amount
was outstanding under this line of credit. The Company anticipates that this
line of credit will be terminated upon the effectiveness of the Acquisition
line of Credit. Additionally, in connection with the Company's acquisition of
Lake Mary in 1995, the Company obtained a $1.5 million letter of credit from
Barnett Bank in order to guarantee certain development obligations. At June 30,
1997, no amount was drawn under this letter of credit.

The Company's principal demands for cash are expected to be acquisition
and development activities, maintenance, repair and tenant improvements related
to the Existing Properties, debt service and repayment obligations and
distributions to its stockholders. In particular, the Company intends to
complete the initial phase of the redevelopment of Sky Lake, estimated to cost
approximately $8.0 million, primarily using liquid assets and cash from
operations.

The Company expects to meet certain long-term liquidity requirements such
as property acquisition and development, scheduled debt maturities,
renovations, expansions and other non-recurring capital improvements through
long-term secured and unsecured indebtedness and the issuance of debt or equity
securities. The Company also expects to use funds available under the
Acquisition Line of Credit to finance acquisition and development activities
and capital improvements on an as needed basis.

In order to qualify as a REIT for federal income tax purposes, the Company
is required to pay dividends to its stockholders of at least 95.0% of its net
taxable income. See "Federal Income Tax Considerations". The Company intends to
pay these dividends from operating cash flows which are expected to increase
due to future purchases and reduction in debt service resulting from the
repayment of certain of the Company's mortgage indebtedness with the proceeds
of the Offering, and anticipated future growth in rental revenues.

The Company anticipates that the cash reserves and the cash flow available
after the consummation of the Offering, together with the estimated net
proceeds from the Offering, will be adequate to meet

41
<PAGE>

the capital and liquidity needs of the Company for at least 12 months. The
Company's short-term liquidity will be enhanced by the excess Offering proceeds
which are initially retained for future investment and by the interest income
earned on such proceeds. For information with respect to Cash Available for
Distribution, see "Distribution Policy".

For a discussion of certain contingencies which could affect the Company's
liquidity and capital resources, see "Risk Factors-The Company's Results of
Operations are Dependent upon Certain Key Tenants", "-The Company's Performance
and Value are Subject to Risks Associated with the Real Estate Industry ",
"-Adverse Tax Consequences of Failure to Qualify as a REIT Would Cause the
Company to be Taxed as a Regular Corporation", "--Compliance with Laws Could
Have an Adverse Effect on the Financial Condition of the Company" and "--The
Company's Use of Debt, Refinancing Needs, Increases in Interest Rates and an
Absence of a Limitation on Debt Could Adversely Affect the Company".

IMPACT OF ACCOUNTING PRONOUNCEMENTS ISSUED BUT NOT ADOPTED

In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings Per Share"
("Statement No. 128"), which establishes standards for computing and presenting
earnings per share ("EPS") and applies to entities with publicly held common
stock. Statement No. 128 simplifies the standards for computing earnings per
share previously found in APB Opinion No. 15, "Earnings Per Share", and makes
them comparable to international EPS standards. It replaces the presentation of
primary EPS with a presentation of basic EPS.

In February 1997, SFAS No. 129, DISCLOSURE OF INFORMATION ABOUT CAPITAL
STRUCTURE was issued. SFAS No. 129, which applies to all entities that have
issued securities, requires in summary form, the pertinent rights and
privileges of the various securities outstanding. Examples of information that
shall be disclosed are dividends and liquidation preferences, participation
rights, call prices and dates, conversion or exercise prices or rates and
pertinent dates, sinking-fund requirements, unusual voting rights, and
significant terms of contracts to issue additional shares. SFAS No. 129 is
effective for financial statements issued for periods ending after December 15,
1997.

INFLATION

Most of the Company's leases contain provisions designed to mitigate the
adverse impact of inflation. Such provisions include clauses enabling the
Company to receive percentage rents based on a tenant's gross sales above
predetermined levels, which rents generally increase as prices rise, or
escalation clauses which are typically related to increases in the CPI or
similar inflation indices. Most of the Company's leases require the tenant to
pay its 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.

42
<PAGE>

BUSINESS

GENERAL

The Company is a self-administered, self-managed REIT that principally
acquires, renovates, develops and manages Community and Neighborhood Shopping
Centers anchored by national and regional supermarket chains ("Supermarket
Centers"). The Company's portfolio consists of 15 Community and Neighborhood
Shopping Centers, of which 14 are Supermarket Centers anchored by supermarkets
and one is a one drug store anchored Neighborhood Shopping Center, two
mixed-use (office/retail) properties, one office building and one
mini-warehouse facility (collectively, the "Existing Properties"). The Existing
Properties are located primarily in the Dade County (Miami), Orlando and
Jacksonville metropolitan areas of Florida, and in Texas and contain an
aggregate of 2.0 million square feet of GLA which, as of June 30, 1997, were
93.0% leased. The Company also owns Coral Way on which it intends to develop a
100,000 square foot Supermarket Center, and has recently acquired Sky Lake
which will be comprehensively redeveloped into a 300,000 square foot
Supermarket Center. In addition, the Company has recently agreed to purchase
Lantana Village, a performing Supermarket Center consisting of an aggregate of
85,300 square feet of GLA located in Lantana, Florida, and Beauclerc Village, a
Performing Supermarket Center consisting of an aggregate of 67,930 square feet
of GLA located in Jacksonville, Florida. The Company also owns an aggregate of
approximately 13.0 acres of land adjacent to certain of the Existing Properties
and recently agreed to acquire 4.4 acres of vacant land proximate to Coral Way,
substantially all of which is intended for retail development.

Supermarket Centers are anchored by national and regional supermarkets
such as Winn-Dixie (the fourth largest supermarket chain in the country),
Publix (the largest supermarket chain in Florida), Albertsons (the sixth
largest supermarket chain in the country) and Kroger (the largest supermarket
chain in the country). Other Anchor Tenants of the Company's Supermarket
Centers include national retailers such as K-Mart, Best Buy, Walgreen's and
Eckerd. Other tenants of the Supermarket Centers include national and regional
retailers and service providers, as well as local businesses. The Company
believes that supermarkets and other Anchor Tenants offering daily necessity
items generate regular consumer traffic and enhance the performance and
stability of a center. As of June 30, 1997, the Company's supermarket Anchor
Tenants, other Anchor Tenants and other tenants contributed 24.7%, 23.1% and
52.2%, respectively, of the Company's aggregate annualized minimum rents and
occupied approximately 31%, 22.2% and 52.2%, respectively, of GLA. In addition,
the Company's supermarket Anchor Tenants have leases with an average of at
least 11 years remaining on their terms.

The Company was organized in June 1992 under the laws of the State of
Maryland to acquire Supermarket Centers in high growth, densely populated areas
throughout the Southeast generating stable cash flows and long-term value. The
Company selects properties for acquisition or development which have, or are
suitable for, supermarket and other Anchor Tenants, and are adaptable over time
for expansion, renovation and redevelopment. In order to take advantage of
property management operating efficiencies and present attractive leasing
opportunities to tenants who seek multiple locations in an area, the Company
also targets properties proximate to its other properties. All properties must
be well located and have visibility, open air designs, ease of entry and exit
and ample parking. The Company acquires both Performing Supermarket Centers,
which typically are well maintained, substantially fully leased and
appropriately tenanted, and Underperforming Supermarket Centers which meet the
Company's turnaround criteria. In acquiring Performing Supermarket Centers, the
Company seeks attractive and sustainable rates of return, and in acquiring
Underperforming Centers, the Company requires opportunities to increase
revenues primarily through renovation and retenanting.

43
<PAGE>

BUSINESS AND GROWTH STRATEGIES

GENERAL. The Company intends to maximize total return to stockholders by
increasing cash flow per share and maximizing the value of its real estate
portfolio. The Company believes it can achieve this objective primarily through
the acquisition, renovation, development and management of Supermarket Centers
and other properties which meet the Company's investment criteria. The Company
also believes it has certain competitive advantages which enhance its ability
to capitalize on acquisition opportunities, including: (i) management's
significant local market experience and expertise; (ii) the Company's
long-standing relationship with real estate brokers, tenants and institutional
and other real estate owners in its current target markets; (iii) a streamlined
acquisition process; (iv) access to capital; and (v) the ability to offer cash
and tax advantaged structures to sellers.

The Company intends to maintain significant flexibility with respect to
the form of its acquisition transactions, using cash available from operations
or lines of credit for sellers who seek immediate liquidity, as well as
tax-advantaged partnership structures to attract tax-motivated sellers. Such
structures may include entering into joint ventures or other types of
co-ownership with the sellers, whether in the form of limited partnership,
limited liability companies, or otherwise, with the Company expected to acquire
the controlling interests in such ventures. The sellers may be offered
interests in the ventures which are convertible or exchangeable for shares of
Common Stock or otherwise allow the seller to participate in the financial
condition of the Company. The Company may in the future acquire all or
substantially all of the securities of other REITs or similar entities when
such investments would be consistent with the Company's investment objectives.

The Company's principal business and growth strategies are as follows:

ACQUISITION OF PERFORMING SUPERMARKET CENTERS. The Company intends to
acquire Performing Supermarket Centers that offer attractive and sustainable
rates of return throughout the Southeast having demographic characteristics
similar to those of its present markets. Examples of the Company's acquisitions
of Performing Supermarket Centers include (i) West Lake and Forest Edge in
1996, (ii) Lake Mary and Point Royale in 1995 and (iii) Bird Ludlum in 1994.
The Company will target Performing Supermarket Centers which offer attractive
and sustainable rates of return and are adaptable to expansion, renovation and
redevelopment, and, in order to maximize property management efficiencies, are
located proximate to other Company owned Supermarket Centers or to one another.
The Company will seek Supermarket Centers offering daily necessities and
value-oriented merchandise, and have high visibility, open-air designs, ease of
entry and exit and ample parking. Given the Company's relationship with certain
Anchor Tenants, particularly supermarkets, and its operational expertise, the
Company anticipates that it will be able to enhance the performance of
properties satisfying its acquisition criteria.

In September 1997, the Company agreed, subject to the satisfaction of
certain conditions, to acquire Lantana Village, a Performing Supermarket Center
located in Lantana, Florida, for an approximately $7.0 million. Lantana Village
contains 85,300 square feet of GLA representing aggregate annualized minimum
rental revenues of $800,000 and is anchored by a Winn-Dixie. The Company has
also agreed, subject to the satisfaction of certain conditions, to acquire
Beauclerc Village, a Performing Supermarket Center located in Jacksonville,
Florida, for approximately $3.0 million. Beauclerc Village

44
<PAGE>

contains 67,930 square feet of GLA representing aggregate annualized minimum
rental revenues of $300,000 and is anchored by a Walgreens and an Old America.
The Company anticipates that both of these acquisitions are due to be
consummated prior to December 31, 1997; however, there is no assurance that the
acquisitions will be consummated.

The Company has developed an integrated methodology for sourcing and
completing acquisitions, with legal and operational analyses efficiently
coordinated by in-house employees. The Company believes it has superior access
to potential acquisition opportunities by virtue of its relationships with
brokers, tenants, financial institutions, development agencies, contractors,
and others involved in the real estate market. Additionally, the Company
believes that as institutional investors in real estate become less willing to
own and manage significant real estate assets and more comfortable with
indirect investments, such institutions will become significant sellers of
properties and the Company will be an attractive purchaser in its target
markets. The Company conducts its review procedures with the full participation
of the Company's senior officers, which, combined with the Company's access to
capital and knowledge of existing markets, allows the Company to make expedited
determinations and consummate transactions quickly.

When evaluating potential acquisitions and development projects, the
Company considers such factors as (i) economic, demographic, and regulatory and
zoning conditions in the property's local and regional market; (ii) the
location, construction quality, and design of the property; (iii) the current
and projected cash flow of the property and the potential to increase cash
flow; (iv) Anchor Tenants' and other tenants' gross sales per square foot
measured against industry standards; (v) the potential for capital appreciation
of the property; (vi) the terms of tenant leases, including the relationship
between the property's current rents and market rents and the ability to
increase rents upon lease rollover; (vii) the occupancy and demand by tenants
for properties of a similar type in the market area; (viii) the potential to
complete a strategic renovation, expansion, or retenanting of the property;
(ix) the property's current expense structure and the potential to increase
operating margins; (x) the ability of the Company to subsequently sell or
refinance the property; and (xi) competition from comparable retail properties
in the market area.

ACQUISITION OF UNDERPERFORMING SUPERMARKET CENTERS. The Company intends to
acquire Underperforming Supermarket Centers that meet the Company's turnaround
criteria, which includes having the potential to increase revenues and
operating cash flows through renovation and retenanting. Underperforming
Supermarket Centers are typically undercapitalized, poorly managed and/or
poorly maintained and may require significant capital improvements. The
Company's turnaround criteria requires favorable location and market
demographics, availability on attractive terms, and willingness of supermarket
and other Anchor Tenants to commit to lease space. The Company believes that
its in-depth market knowledge and its strong relationships with supermarkets
and other Anchor Tenants, and its capabilities in renovation and redevelopment,
are particularly integral to its ability to acquire and reposition
Underperforming Supermarket Centers.

The Company considers similar factors to those applied in the acquisition
of performing shopping centers and will complete such acquisitions only upon
completion of a careful due diligence process, including an in-depth study of
the reasons for the center's failure to perform, the community demographics,
the costs of renovation or redevelopment, and the willingness of acceptable
Anchor Tenants and other tenants to commit to the site. Similarly, the Company
believes that its competitive advantage is enhanced by its ability to conduct
an efficient due diligence investigation and to commit to and fund an
acquisition that is structured so as to meet the requirements of a seller with
respect to receiving cash or tax deferred benefits. In addition, the Company's
relationships with Anchor Tenants, who are familiar with the Company's
commitment to quality construction, maintenance and operations, will aid it in
obtaining preleasing expressions of interest before the decision to acquire the
property is made.

Several examples of the Company's ability to enhance Underperforming
Supermarket Centers include East Bay, Four Corners, Fort Caroline and Parker
Towne. East Bay, which was acquired in July

45
<PAGE>

1993 at a 48.0% occupancy rate, was 82.6% occupied at June 30, 1997; Four
Corners, which was acquired in January 1993 at a 76.0% occupancy rate, was
94.2% occupied at June 30, 1997; Fort Caroline, which was acquired in January
1994 at a 83.0% occupancy rate, (including an additional 7,200 square feet of
Company developed GLA); was 95.9% occupied at June 30, 1997; and Parker Towne,
which was acquired in December 1993 at a 40.0% occupancy rate, was 60.0%
occupied at June 30, 1997. While the Company has increased occupancy by 50.0%
and increased space since its acquisition, the retenanting of Parker Towne is
proceeding at a slower pace than anticipated.

In addition, the acquisition of Underperforming Supermarket Centers
frequently provides the Company with an opportunity to buy adjacent undeveloped
land whose value is depressed by proximity to the underperforming Supermarket
Center and can be enhanced by the Company's rehabilitation program.

REDEVELOPMENT AND DEVELOPMENT OF SUPERMARKET CENTERS. The Company will
redevelop existing and develop new Supermarket Centers with characteristics
similar to those of the Company's existing Supermarket Centers. The Company has
recently acquired Sky Lake which will be comprehensively redeveloped into a
300,000 square foot Supermarket Center. Examples of such redevelopment
activities include the redevelopment of Parker Towne into 205,752 square feet
of GLA and the redevelopment of tenant space on an as-leased basis. In
addition, the Company owns (i) Coral Way on which it intends to develop a
100,000 square foot Supermarket Center and (ii) 13.0 acres of land adjacent to
certain of the Existing Properties, substantially all of which is intended for
retail development. The Company will consider development only if the overall
economics of developing a property are more favorable than acquiring a shopping
center in the same geographic area. The Company has not developed any new
Supermarket Centers.

Although the Company previously concentrated on the acquisition of
existing Supermarket Centers, the Company believes that, as a result of
changing market conditions, development and redevelopment will provide
significant growth opportunities in the future. Accordingly, it may acquire or
option parcels of land in its target markets which are likely to be subject to
increased development. In connection with its development activities, the
Company has recently hired a licensed architect and general contractor to head
its development department and is in the process of retaining at least one
additional full-time employee to support its construction and development
personnel. Although management of the Company has experience, through the
Company and other ventures, and has expanded and significantly renovated
Existing Properties, the Company has not previously undertaken construction of
new developments. See "Risk Factors--Risks of Construction and Development".

INCREASING REVENUES AND IMPROVING OPERATING MARGINS. The Company will
continue to seek to improve the financial performance of its portfolio by
increasing revenues (through increased occupancy and/or rental rates),
maintaining high tenant retention rates (i.e., the percentage of tenants who
renew their leases upon expiration), replacing certain existing tenants when
necessary with more creditworthy tenants, and aggressively managing operating
expenses. Increased competition, changes in economic conditions and declines in
tenant retention levels could adversely affect the Company's ability to improve
the financial performance of its property portfolio. In addition, most of the
Company's lease agreements provide for percentage rents, indexed rent increases
based on CPI or other criteria or have scheduled rent escalations. While the
Company believes that substantially all its properties are in desirable
locations that are experiencing rising rents, low vacancy rates, and increased
demand, allowing the Company to renew leases, or relet, space under expired
leases, at favorable rents, any significant increases in vacancy rates and/or
decreases in demand could adversely affect the Company's ability to renew such
leases, or relet space under expired leases, at favorable rates, there is no
assurance that such trends will continue.

The Company has developed strong relationships with its Anchor Tenants by
continually striving to promote tenant satisfaction by anticipating and
responding to their requirements. A number of the Company's Anchor Tenants have
evidenced this satisfaction by expanding their leased space within the
Company's properties. For example, in Commonwealth, the Company will invest
$1.3 million to expand

46
<PAGE>

Winn-Dixie's space by 12,000 square feet, and in return Winn-Dixie (i) will
increase its annual minimum rent by approximately $144,000, starting January
1998 and (ii) extend its lease for an additional 20-year period. See "Use of
Proceeds". In addition, the Company seeks to increase operating results through
the strategic renovation and/or expansion of properties which are typically
adaptable for varied tenant layouts and can be reconfigured to accommodate new
tenants or the changing space needs of existing tenants.

In three instances, drug store Anchor Tenants have vacated their leased
space, although they continue to be bound by the terms of the leases and make
lease payments to the Company. The Company may seek to obtain replacement
tenants with respect to these leased spaces with rental rates at least equal to
or exceeding those currently being paid by such drug store Anchor Tenants. So
long as such tenants continue to make rental payments, there is no adverse
effect on the Company's occupancy and rental rates. In the event any of such
drug store Anchor Tenants terminates its lease with the Company, the Company
believes that it could relet the revelant space on terms substantially similar
or more favorable than the existing leases.

OTHER ACQUISITIONS. The Company may from time to time acquire or develop,
on a highly selective basis, other types of income-producing commercial
properties in markets in which the Company has significant expertise and which
present superior return opportunities. An example of such opportunistic
acquisitions is the Equity One Office Building in Miami Beach, Florida. The
office building was purchased in April 1992 when it was unoccupied and as of
June 30, 1997 was 100% occupied and generating annualized revenue of $317,000,
as well as providing the Company's 3,000 square foot executive offices rent
free. The Company also owns an additional 0.5 acres of land adjacent to this
office building which it plans to develop in the future.

MARKET DATA

The Company has concentrated its activity in the Dade County (Miami),
Orlando and Jacksonville metropolitan areas of Florida. These areas provide the
Company with attractive demographic and competitive retail conditions. The
Company believes that population and employment growth are the primary demand
generators for retail properties and that retail sales are further enhanced by
Florida's sizable tourist and seasonal population. The population of the Miami
Metropolitan area grew 2.8% from 1992 to 1997 while retail sales grew 13.5%
during the same period. Additionally, population is projected to grow by 1.7%
between 1998 and 2001, while retail sales are projected to grow by 3.1% during
the same period. The population in the Orlando metropolitan area grew 16.6%
from 1992 to 1997, while retail sales grew 28.5% during the same period.
Additionally, population is projected to grow by 9.9% between 1998 and 2001,
while retail sales are projected to grow by 11.1% during the same period.
Population in the Jacksonville area grew 5.6% from 1992 to 1997 while retail
sales grew 16.2% during the same period. Additionally, population is projected
to grow by 3.0% between 1998 and 2001, while retail sales are projected to grow
by 4.2% during the same period. The foregoing information is derived from data
provided by the United States Department of Commerce.

47
<PAGE>

EXISTING PROPERTIES

The Existing Properties' portfolio consists primarily of Supermarket
Centers and contains an aggregate of approximately 2.0 million square feet of
GLA. As of June 30, 1997, the Existing Properties were 93.0% leased to
approximately 360 tenants (not including 535 tenants of the mini-warehouse
facility). With the exception of Winn-Dixie, which represents approximately
12.5% of aggregate annualized minimum rental revenues (i.e., the annualized
fixed monthly base rental amount in effect under each lease executed as of June
30, 1997, excluding monthly tenant pass-throughs of operating and other
expenses), no Anchor Tenant accounted for more than 4.2% of such tenant rent as
of June 30, 1997. All the Supermarket Centers were developed after 1982. See
"--Lease Expirations", "--Competition" and "Policies with Respect to Certain
Activities--Investment Policies". See also "--Additional Information Concerning
the Existing Properties" and "Use of Proceeds", for a discussion of renovations
and improvements contemplated for certain of the Existing Properties.

The following table sets forth certain information relating to the
Existing Properties as of June 30, 1997. All references to net rent per square
foot are calculated without giving effect to vacant space, unless otherwise
specified.

<TABLE>
<CAPTION>
NET
NET OPERATING
OPERATING INCOME
INCOME FOR FOR THE
NUMBER THE YEAR SIX MONTHS
OF ENDED ENDED
DATE TENANTS DECEMBER 31, JUNE 30,
PROPERTY(1) ACQUIRED GLA (UNITS) 1996 1997
- ----------------------- -------------- --------- --------- -------------- -----------------
<S> <C> <C> <C> <C> <C>
NORTH FLORIDA
Atlantic Village June 30, 100,559 24 $ 731,461 $ 374,172
Shopping Center 1995
Atlantic Beach, FL
Commonwealth February 28, 71,021 14 $ 460,541 $ 210,939
Shopping Center 1994
Jacksonville, FL
Fort Caroline January 21, 74,546 10 $ 472,879 $ 228,201
Trading Post 1994
Jacksonville, FL
Monument Pointe January 31, 75,328 12 N/A $ 190,985(4)
Shopping Center 1997
Jacksonville, FL
Oak Hill Village December 7, 78,492 19 $ 448,219 $ 229,012
Shopping Center 1995
Jacksonville, FL
Mandarin Mini-Storage May 10, 52,880 535 $ 208,239 $ 96,680
Jacksonville, FL 1994
CENTRAL FLORIDA
East Bay Plaza July 23, 85,426 20 $ 230,077 $ 152,716
Largo, FL 1993
Eustis Square October 22, 126,791 22 $ 703,519 $ 349,246
Shopping Center 1993
Eustis, FL
Forest Edge December 31, 68,631 12 -- $ 182,190
Shopping Center 1996
Orlando, FL
Lake Mary November 9, 288,450 53 $2,787,759 $ 1,447,409
Shopping Centre 1995
Lake Mary, FL
SOUTH FLORIDA
Bird Ludlum August 11, 192,477 48 $2,223,722 $ 1,167,993
Shopping Center 1994
Miami, FL

<CAPTION>
AVERAGE AVERAGE INITIAL PERCENT
MINIMUM MINIMUM ACQUISITION & LEASED AT
BASE RENT BASE RENT REDEVELOPMENT JUNE 30, KEY TENANTS
PROPERTY(1) (ANCHORS) (LOCALS) COSTS 1997 LEASE EXPIRATION DATES
- ----------------------- ----------- ----------- --------------- ---------- ------------------------
<S> <C> <C> <C> <C> <C>
NORTH FLORIDA
Atlantic Village $4.50 $ 9.93 $ 5,950,000 98% Publix (2004),
Shopping Center Walgreen's (2019)(2)(3)
Atlantic Beach, FL
Commonwealth $6.10 $ 7.79 $ 3,650,000 95% Winn-Dixie (2017)
Shopping Center
Jacksonville, FL
Fort Caroline $6.40 $ 7.86 $ 3,705,000 96% Winn-Dixie (2015),
Trading Post Eckerd (2004)
Jacksonville, FL
Monument Pointe $4.67 $ 8.48 $ 3,731,000 94% Winn-Dixie (2005),
Shopping Center Eckerd (2005)
Jacksonville, FL
Oak Hill Village $4.50 $ 8.61 $ 3,450,000 100% Publix (2005),
Shopping Center Walgreen's (2019)(3)
Jacksonville, FL
Mandarin Mini-Storage $ -0- $ 5.59 $ 1,810,000 95% --
Jacksonville, FL
CENTRAL FLORIDA
East Bay Plaza $4.69 $ 8.81 $ 1,610,000 83% Scottys (2001),
Largo, FL Albertsons(5),
Hollywood Video (2007)
Eustis Square $5.13 $ 9.44 $ 7,249,000 92% Publix (2004),
Shopping Center Bealls (2005),
Eustis, FL Walgreen's (2024)(3)
Forest Edge $6.01 $ 7.83 $ 3,100,000 99% Winn-Dixie (2007),
Shopping Center AutoZone (2006)
Orlando, FL
Lake Mary $9.17 $14.24 $20,850,000 100% K-Mart (2013),
Shopping Centre Albertsons (2012),
Lake Mary, FL General Cinema (2010)
SOUTH FLORIDA
Bird Ludlum $9.00 $13.78 $21,801,000 100% Winn-Dixie (2007),
Shopping Center Eckerd (2007),
Miami, FL Vision Works (2008)
</TABLE>

48
<PAGE>

<TABLE>
<CAPTION>
NET
NET OPERATING
OPERATING INCOME
INCOME FOR FOR THE
NUMBER THE YEAR SIX MONTHS
OF ENDED ENDED
DATE TENANTS DECEMBER 31, JUNE 30,
PROPERTY(1) ACQUIRED GLA (UNITS) 1996 1997
- ------------------------ -------------- --------------- --------- ----------------- ------------
<S> <C> <C> <C> <C> <C>
SOUTH FLORIDA--(CONTINUED)
Plaza Del Rey December 50,146 20 $ 572,143 $ 283,981
Shopping Center 1992
Miami, FL
Pointe Royale July 27, 199,068 20 $ 1,080,640 $ 477,851
Shopping Center 1995
Miami, FL
Pointe Royale July 27, 18,000(6) 0 $ -0- $ -0-
Office Building 1995
Miami, FL
West Lake Plaza November 6, 100,747 25 $ 129,984(7) $ 412,268
Shopping Center 1996
Miami, FL
Diana Building February 15, 18,707 5 $ 1,266(7) $ 41,234
W. Palm Beach, FL 1995
Equity One April 10, 28,980(8) 10 $ 259,373 $ 145,545
Office Building 1992
Miami Beach, FL
TEXAS
Four Corners January 22, 115,178 25 $ 775,874 $ 427,255
Shopping Center 1993
Tomball, TX
Parker Tower Centre December 9, 205,792 18 $ 407,766 $ 217,069
Plano, TX 1993 --------- --- ----------- ----------
Total/Weighted Average 1,951,219 892 $11,493,462 $6,634,746
========== ==== ============ ===========

<CAPTION>
AVERAGE AVERAGE INITIAL PERCENT
MINIMUM MINIMUM ACQUISITION & LEASED AT
BASE RENT BASE RENT REDEVELOPMENT JUNE 30, KEY TENANTS
PROPERTY(1) (ANCHORS) (LOCALS) COSTS 1997 LEASE EXPIRATION DATES
- ------------------------ ----------- ----------- --------------- ---------- -----------------------
<S> <C> <C> <C> <C> <C>
SOUTH FLORIDA--(CONTINUED)
Plaza Del Rey $ -0- $11.95 $ 3,831,000 98% Navarro (2001)
Shopping Center
Miami, FL
Pointe Royale $3.62 $10.02 $ 8,725,000 99% Best Buy (2010),
Shopping Center Winn-Dixie (2011),
Miami, FL Eckerd (2007)
Pointe Royale $ -0- $ -0- $ -0- -- --
Office Building
Miami, FL
West Lake Plaza $7.79 $11.55 $ 7,930,000 99% Winn-Dixie (2016),
Shopping Center Eckerd (2004)
Miami, FL
Diana Building $ -0- $14.13 $ 1,514,000 60% Fat Tuesday's (2001)
W. Palm Beach, FL
Equity One $ -0- $12.20 $ 1,748,000 100% City of
Office Building Miami Beach (1998),
Miami Beach, FL Renal Dialysis (2000)
TEXAS
Four Corners $3.60 $ 7.42 $ 4,750,000 94% Kroger (2005),
Shopping Center Eckerd (2004)
Tomball, TX
Parker Tower Centre $8.20 $ 9.63 $ 4,157,000 60% Minyards (2011)
Plano, TX ----- ------ ------------ ----
Total/Weighted Average $5.96 $ 9.96 $109,561,000 93%
====== ======= ============= ====
</TABLE>

- ----------------

(1) Does not include two properties which the Company has agreed to purchase.

(2) Walgreen's has vacated this site, but continues to make lease payments.

(3) Pursuant to its lease agreement, Walgreen's may terminate the lease in
2004.

(4) Represents NOI for the five months ended June 30, 1997.

(5) Albertsons is located on property contiguous to the Company's property not
owned by the Company. Accordingly, Albertsons does not pay base rent or
make payments to the Company for common area maintenance and similar
charges at this location.

(6) Represents GLA following redevelopment. See "Use of Proceeds".

(7) Represents NOI for the two months ended December 31, 1996.

(8) Includes 3,000 square feet of GLA occupied by the Company.

49
<PAGE>

REDEVELOPMENT AND DEVELOPMENT PROPERTIES

SKY LAKE. In August 1997 the Company acquired Sky Lake, an existing
Community Shopping Center, for approximately $11.85 million. Sky Lake is
located in the North Miami Beach, Florida area. Approximately 150,000 residents
with household incomes averaging approximately $50,000 are located within a
three mile radius of Sky Lake. The Company intends to commence a comprehensive
redevelopment program at Sky Lake to create a Supermarket Center containing
300,000 square foot of GLA. The Company expects that the redevelopment will
cost approximately $18.0 million and will occur in several phases which are
expected to be completed by May 1999. The Company has entered into a
non-binding letter of intent with Albertsons for the lease of 60,000 square
feet of GLA at Sky Lake. During the redevelopment, the Company expects to
receive certain rent revenue from tenants who will continue operations during
the redevelopment process.

CORAL WAY. In June 1997 the Company acquired 10.0 acres of vacant land at
Coral Way for approximately $1.5 million for the development of a 100,000
square foot Supermarket Center. Coral Way is located in a newly rezoned high
growth area of Southwest Dade County, Florida. The Company does not expect to
commence development at Coral Way earlier than one year from the Offering and
to complete such development earlier than one year from commencement. The
Company anticipates that the costs of development will approximate $10.0
million. In addition, the Company has agreed to acquire 4.4 acres of land
proximate to Coral Way for future development contingent upon, among other
things, the rezoning of such property for commercial use.

LAND FOR DEVELOPMENT. The Company owns approximately 13.0 acres of land
adjacent to certain of the Existing Properties which it intends to develop as
retail space. The Company expects to commence construction on 5.0 acres
adjacent to its Lake Mary Supermarket Center and 0.5 acres adjacent to its
Commonwealth Supermarket Center within three months following the Offering. The
Company expects to complete these projects by December, 1998, at a cost of
approximately $3.0 million and $450,000, respectively.

The following chart provides additional information with respect to
Redevelopment and Development Properties.

<TABLE>
<CAPTION>
NUMBER OF DEVELOPABLE CURRENT
PROPERTY LOCATION ACREAGE PARCELS SQUARE FEET ZONING
- ------------------------------------------------ -------------------- --------- ----------- --------------- ------------
<S> <C> <C> <C> <C> <C>
ADJACENT TO EXISTING PROPERTIES
Commonwealth ................................. Jacksonville, FL 0.50 1 6,000 Retail
Fort Caroline ................................. Jacksonville, FL 0.50 1 7,000 Retail
Oak Hill .................................... Jacksonville, FL 0.25 1 6,000 Retail
Lake Mary .................................... Lake Mary, FL 5.00 1 70,000 Retail
Bird Ludlum ................................. Miami, FL 6.20 1 150 Units Residential
Equity One Office Building .................. Miami Beach, FL 0.50 2 50,000 Office
------ --- ---------
Total - Adjacent to Existing Properties ...... 12.95 7 139,000 (1)
------ --- ---------
REDEVELOPMENT/ DEVELOPMENT
PROPERTIES
Sky Lake .................................... NE Dade County, FL 24.00 1 285,000 Retail
Sky Lake .................................... NE Dade County, FL 1.50 2 15,000 Retail
Coral Way .................................... SW Dade County, FL 10.00 1 100,000 Retail
Vacant Land(2) .............................. SW Dade County, FL 4.40 2 40,000 Retail
------ --- ---------
Total--Redevelopment/Development
Properties ................................. 39.90 6 440,000
------ --- ---------
Total ....................................... 52.85 13 579,000
====== === =========
</TABLE>

- ----------------
(1) For a discussion of the properties, see "Additional Information Concerning
the Existing Properties".

(2) Under contract to purchase.

There can be no assurance that Sky Lake, Coral Way or any other
acquisition, redevelopment or development project will be consummated or, if
consummated, will be successful. See "Policies with Respect to Certain
Activities--Development Policies" and "Use of Proceeds".

50
<PAGE>

MAJOR TENANTS

The following table sets forth the GLA of the Existing Properties leased
to Anchor Tenants and other tenants as of June 30, 1997.

<TABLE>
<CAPTION>
ANCHOR OTHER
TENANTS TENANTS TOTAL
----------- --------- -------------
<S> <C> <C> <C>
Existing Properties (sq. ft.) ...... 1,039,044 752,707 1,791,751
Percentage of Total Leased GLA ...... 57.99% 42.01% 100.00%
</TABLE>

The following table sets forth as of June 30, 1997, information regarding
the leases with the Company's largest tenants based upon annualized minimum
rents of at least $250,000:

<TABLE>
<CAPTION>
PERCENT OF
GLA NUMBER ANNUALIZED AGGREGATE ANNUALIZED
TENANT (SQ. FT.) OF STORES MINIMUM RENTS MINIMUM RENTS
- -------------------------- ----------- ----------- --------------- ---------------------
<S> <C> <C> <C> <C>
Winn-Dixie ............ 308,864 7 $1,886,286 12.52%
General Cinemas ......... 35,712 1 633,888 4.21
Albertsons ............ 63,139 1 568,251 3.77
Eckerd(1) ............... 59,700 6 514,142 3.41
K-Mart .................. 86,479 1 497,254 3.30
Publix .................. 118,110 3 567,080 3.76
Kroger .................. 45,528 1 373,330 2.48
Best Buy ............... 91,472 1 365,888 2.43
Blockbuster Video ...... 23,609 4 309,503 2.05
Walgreen's(2) ......... 34,996 3 265,720 1.76
Minyard's ............... 70,550 1 253,980 1.69
-------- --- ----------- -------
Total ............... 938,159 29 $6,235,322 41.38%
======== === =========== =======
</TABLE>

- ----------------

(1) Includes two stores where the tenant has vacated the premises but has
continued to pay rent pursuant to its lease with the Company.

(2) Includes a store which Walgreen's has vacated but continues to pay rent
pursuant to its lease.

LEASE EXPIRATIONS

The following table sets forth the anticipated lease expirations of the
Company's tenants (excluding renewal options and the mini-storage facility)
from July 1, 1997 through June 30, 2007 and thereafter.

<TABLE>
<CAPTION>
PERCENT OF AVERAGE
AGGREGATE ANNUAL
NUMBER OF GLA PERCENT OF ANNUALIZED ANNUALIZED MINIMUM RENT
JUNE 30, LEASES (SQ. FT.) TOTAL GLA MINIMUM RENT MINIMUM RENT PER SQ. FT.
- ---------------------- ----------- ----------- ------------ -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
1998 ............... 71 153,955 8.88% $ 1,808,628 12.24% $ 11.75
1999 ............... 71 134,148 7.74 1,496,282 10.13 11.15
2000 ............... 81 166,975 9.63 1,737,637 11.76 10.41
2001 ............... 46 147,612 8.52 1,293,669 8.76 8.76
2002 ............... 33 74,376 4.29 977,403 6.62 13.14
2003 ............... 11 33,835 1.95 332,507 2.25 9.83
2004(1) ............ 5 54,857 3.17 292,917 1.98 5.34
2005 ............... 10 237,662 13.71 1,310,551 8.87 5.51
2006 ............... 2 50,878 2.94 442,880 3.00 8.70
2007 ............... 5 21,299 1.23 268,950 1.82 12.63
THEREAFTER ......... 22 657,450 37.94 4,812,047 32.57 7.32
---- ---------- ------- ------------ ------- --------
Total/Average ...... 357 1,733,047 100.00% $14,773,471 100.00% $ 8.52
==== ========== ======= ============ ======= ========
</TABLE>

- ----------------
(1) Does not include three lease agreements with Walgreen's expiring in the
years 2019, 2019 and 2024, respectively, which Walgreen's may terminate in
2004.

51
<PAGE>

Historically, the Company has not incurred substantial costs associated
with Tenant Improvements relating to lease expirations or renewals.
Additionally, because leasing activities are performed in-house, the Company
has not historically incurred substantial costs associated with Leasing
Commissions. No assurance can be given that such expenses will not increase in
the future.

ADDITIONAL INFORMATION CONCERNING THE EXISTING PROPERTIES

As of December 31, 1996, two of the Supermarket Centers, Bird Ludlum and
Lake Mary, either had a book value equal to or greater than 10.0% of the total
assets of the Company or gross revenues which accounted for more than 10.0% of
the Company's aggregate gross revenues. Set forth below is additional
information with respect to each of such properties.

BIRD LUDLUM. Bird Ludlum is a 192,477 square foot Supermarket Center
occupied by 48 tenants which is located at the intersection of Bird Road and
Ludlum Road in Miami, Florida. Traffic count at the Bird Ludlum center averages
approximately 85,000 vehicles per day. The property is located approximately
one mile east of the Palmetto Expressway, a major Miami roadway. Bird Ludlum is
located in a densely populated trade area of Miami with a population of over
155,000 within a three mile radius and an average household income of $51,000
per year. This property includes five out-parcel buildings, and has attracted a
full range of national and regional chain store tenants including Winn-Dixie,
Eckerd, Blockbuster, Radio Shack and Little Ceasars. Outparcel buildings are
occupied by Visionworks, McDonalds, Dairy Queen, Jiffy Lube and Barnett Bank.
For a discussion of competition, see "--Competition."

In 1996, the Company purchased 7.4 acres of vacant land adjacent to Bird
Ludlum for a purchase price of $1.1 million. During early 1997, the Company
utilized approximately 1.2 acres of this land to build a parking lot for 150
automobiles.

Winn-Dixie, the only tenant which occupies more than 10.0% of the GLA at
Bird Ludlum, occupies 44,400 square feet of GLA under a lease which expires in
December 2007 and contains five renewal options of five years each. The annual
minimum rent payable by Winn-Dixie under this lease is $399,600. For the years
ended June 30, 1994, 1995 and 1996, Winn-Dixie reported sales of $22.3 million,
$22.3 million and $23.6 million, respectively.

The following table sets forth a schedule of lease expirations at Bird
Ludlum, assuming none of the tenants exercise renewal options.

<TABLE>
<CAPTION>
PERCENT OF AVERAGE
AGGREGATE ANNUAL
NUMBER OF GLA PERCENT OF ANNUALIZED ANNUALIZED MINIMUM RENT
YEAR LEASES (SQ. FT.) TOTAL GLA MINIMUM RENT MINIMUM RENT PER SQ. FT.
- ---------------------- ----------- ----------- ------------ -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
1998 ............... 11 40,435 21.01% $ 620,627 25.44% $ 15.35
1999 ............... 12 30,540 15.87 375,859 15.40 12.31
2000 ............... 9 25,194 13.09 293,710 12.04 11.66
2001 ............... 3 10,300 5.35 81,687 3.35 7.93
2002 ............... 4 5,775 3.00 113,241 4.64 19.61
2003 ............... 5 15,195 7.89 200,813 8.23 13.22
2004 ............... 0 0 0.00 0 0.00 0.00
2005 ............... 0 0 0.00 0 0.00 0.00
2006 ............... 0 0 0.00 0 0.00 0.00
2007 ............... 0 0 0.00 0 0.00 0.00
THEREAFTER ......... 4 65,038 33.79 754,085 30.90 11.59
--- -------- ------- ----------- ------- --------
Total/Average ...... 48 192,477 100.00% $2,440,022 100.00% $ 12.68
=== ======== ======= =========== ======= ========
</TABLE>

The average annual rental income per square foot of GLA at Bird Ludlum for
the years ended December 1994, 1995 and 1996 was $18.61, $17.31 and $16.89,
respectively, and as of June 30, 1997 was $16.87.

52
<PAGE>

At the time of its acquisition by the Company, Bird Ludlum was 96.0%
leased. For the three years ended December 31, 1994, 1995 and 1996 and the six
months ended June 30, 1997, the percentage of Bird Ludlum that was leased was
100.0%, 99.0%, 100.0% and 100.0%, respectively.

Depreciation (for tax purposes) on Bird Ludlum is taken as follows: (i)
approximately $14.2 million of the basis is being depreciated on a straight
line basis over 40 years, and (ii) $1.3 million of the basis uses a 15-year
Accelerated Cost Recovery System ("ACRS") depreciation. Depreciation for book
purposes is calculated on a straight-line basis over 40 years.

LAKE MARY. Lake Mary is a 288,450 square foot Supermarket Center occupied
by 53 tenants which is located at the southeast corner of Lake Mary Boulevard
and Lake Emma Road in Lake Mary, Seminole County, Florida, in the Orlando
metropolitan area. The property was originally constructed during 1987 and
1988. Certain improvements and additions were made to Lake Mary in 1990. Lake
Mary, which is situated on a 47.0 acre parcel, has attracted a full range of
national and regional chain store tenants including K-Mart, Albertsons, General
Cinema, Chilis, Burger King, Einstein's Bagels, Carvel Ice Cream, Radio Shack,
Little Ceasars and H&R Block. For a discussion of competition, see
"--Competition".

Three tenants, K-Mart, Albertsons and General Cinemas, each occupy in
excess of 10.0% of the GLA at Lake Mary. K-Mart occupies 86,479 square feet of
GLA under a lease which expires in August, 2013. The annual minimum rent is
$497,254. For the years ended December 31, 1994, 1995 and 1996, K-Mart reported
sales of $7.5 million, $7.7 million and $8.2 million, respectively. Management
of the Company believes that this K-Mart is an underperforming store. The prior
owner and current lender on the property has agreed to guarantee the rent due
from K-Mart (including recoveries) at any time K-Mart ceases making rental
payments during the three years following the Company's purchase of Lake Mary
for a period of three years subsequent to such breach. Albertsons occupies
63,139 square feet of GLA under a lease which expires in June 2012 and has four
renewal options of five years each. The annual minimum rent under the
Albertsons lease is $568,251, increasing to $599,820 in June 2002 and $631,390
in June 2007. For the years ended December 31, 1994, 1995 and 1996, Albertsons
reported sales of $23.8 million, $25.6 million and $27.5 million, respectively.
General Cinemas occupies 35,712 square feet of GLA under a lease which expires
in June, 2010. The annual minimum rent is $633,888. The Company plans to
allocate $3.0 million from the proceeds of the Offering to develop 50,000
square feet of additional space at Lake Mary.

The following table sets forth a schedule of lease expirations at Lake
Mary, assuming none of the tenants exercise renewal options:

<TABLE>
<CAPTION>
PERCENT OF AVERAGE
AGGREGATE ANNUAL
NUMBER OF GLA PERCENT OF ANNUALIZED ANNUALIZED MINIMUM RENT
YEAR LEASES (SQ. FT.) TOTAL GLA MINIMUM RENT MINIMUM RENT PER SQ. FT.
- ---------------------- ----------- ----------- ------------ -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
1998 ............... 8 10,835 3.79% $ 159,314 5.03% $ 14.70
1999 ............... 12 19,049 6.65 260,719 8.23 13.69
2000 ............... 10 18,025 6.30 230,497 7.28 12.79
2001 ............... 5 11,960 4.18 143,326 4.52 11.98
2002 ............... 11 25,916 9.05 356,864 11.26 13.77
2003 ............... 0 0 0.00 0 0.00 0.00
2004 ............... 1 1,332 0.46 19,154 0.61 14.38
2005 ............... 0 0 0.00 0 0.00 0.00
2006 ............... 0 0 0.00 0 0.00 0.00
2007 ............... 1 3,909 1.37 113,986 3.60 29.16
THEREAFTER ......... 5 195,229 68.20 1,884,197 59.47 9.65
--- -------- ------- ----------- ------- --------
Total/Average ...... 53 286,255 100.00% $3,168,057 100.00% $ 11.07
=== ======== ======= =========== ======= ========
</TABLE>

The average rental income per square foot of GLA at Lake Mary for the
years ended December 1995 and 1996 was $12.30, and as of June 30, 1997 was
$12.73.

53
<PAGE>

At the time of its acquisition by the Company, Lake Mary was 97.0% leased.
For the two years ended December 31, 1995 and 1996 and the six months ended
June 30, 1997, the percentage of Lake Mary that was leased was 97.0%, 100.0%
and 100.0%, respectively.

Depreciation (for tax purposes) on Lake Mary is taken as follows: (i)
approximately $11.3 million of the basis is being depreciated on a straight
line basis over 40 years, and (ii) $2.0 million of the basis uses a 15-year
ACRS depreciation. Depreciation for book purposes is calculated on a
straight-line basis over 40 years.

Set forth below is additional information with respect to each of the
Company's other Existing Properties:

ATLANTIC VILLAGE. Atlantic Village is a 100,559 square foot Supermarket
Center occupied by 24 tenants which is located in Atlantic Beach, Florida (in
the Jacksonville metropolitan area). Atlantic Village is situated on 14.0 acres
and is anchored by Publix and Walgreen's. For the year ended December 31, 1996,
Publix reported sales of $19.9 million. The Company will invest $850,000 to
remodel the property and in return, Publix will renew its lease for another 10
years starting August 1998. Walgreen's has advised the Company that it will be
vacating this site, but is expected to continue to make lease payments.

COMMONWEALTH. Commonwealth is a 71,021 square foot Supermarket Center
occupied by 14 tenants which is located in Jacksonville, Florida. Commonwealth
is situated on 12.8 acres and is anchored by Winn-Dixie. For the year ended
June 30, 1996, Winn-Dixie reported sales of $12.4 million. The Company will
invest $1.3 million to expand Winn-Dixie's space by 12,000 square feet and in
return Winn-Dixie (i) will increase its monthly minimum rent by approximately
$12,000, starting January 1998 and (ii) extend its lease for an additional
20-year period. Additionally, the Company intends to build 6,000 square feet of
retail space on an existing out-parcel to accommodate an existing tenant at a
cost of approximately $450,000.

FORT CAROLINE. Fort Caroline is a 74,546 square foot Supermarket Center
occupied by 10 tenants which is located in Jacksonville, Florida. Fort Caroline
is situated on 9.6 acres and is anchored by Winn-Dixie and Eckerd Drugs. For
the year ended June 30, 1996, Winn-Dixie reported sales of $13.8 million.
During 1994 and 1995 the Company expanded Winn-Dixie's occupied space by an
aggregate of approximately 7,200 square feet, and Winn-Dixie agreed to extend
its lease for an additional 20-year period.

MONUMENT POINTE. Monument Pointe is a 75,328 square foot Supermarket
Center occupied by 12 tenants located in Jacksonville, Florida. Monument Pointe
is situated on 7.3 acres and is anchored by Winn-Dixie and Eckerd. For the year
ended June 30, 1996, Winn-Dixie reported sales of $15.5 million.

OAK HILL. Oak Hill is a 78,492 square foot Supermarket Center occupied by
19 tenants located in Jacksonville, Florida. Oak Hill is situated on 11.7 acres
and is anchored by Publix and Walgreen's. For the year ended December 31, 1996,
Publix reported sales of $12.9 million.

EAST BAY. East Bay is a 85,426 square foot Supermarket Center occupied by
20 tenants located in Largo, Florida (in the Tampa metropolitan area). East Bay
is situated on 10.3 acres and is anchored by Albertsons, Scotty's and Hollywood
Video. Albertsons is located on property contiguous to the Company's property
which is not owned by the Company. The Company recently signed a 10 year lease
with Hollywood Avenue with an annual minimum rent of $102,000.

EUSTIS SQUARE. Eustis Square is a 126,791 square foot Supermarket Center
occupied by 22 tenants located in Eustis, Florida. Eustis Square is situated on
13.5 acres and is anchored by Publix, Bell's and Walgreen's. For the year ended
December 31, 1996, Publix reported sales of $12.5 million.

FOREST EDGE. Forest Edge is a 68,631 square foot Supermarket Center
occupied by 12 tenants located in Orlando, Florida. Forest Edge is situated on
8.2 acres and is anchored by Winn-Dixie and AutoZone. For the year ended June
30, 1996, Winn-Dixie reported sales of $12.5 million.

54
<PAGE>

PLAZA DEL REY. Plaza Del Rey is a 50,146 square foot shopping center
occupied by 20 tenants located in Southwest Dade County, Florida. Plaza Del Rey
is situated on 4.6 acres and is anchored by Navarro's. For the year ended
December 31, 1996, Navarro's reported sales of $8.9 million.

POINTE ROYALE. Pointe Royale is a 199,068 square foot Supermarket Center
occupied by 20 tenants located in Cutler Ridge, Dade County, Florida. Pointe
Royale is situated on 14.5 acres and is anchored by Best Buy and Winn-Dixie.
For the year ended June 30, 1996, Winn-Dixie reported sales of $16.9 million.
The Company intends to invest $800,000 during 1998 to renovate a currently
vacant 18,000 square foot office building situated on the property. Eckerd has
vacated its leased space but has, to date, continued to pay rent pursuant to
its lease with the Company.

WEST LAKE. West Lake is a 100,747 square foot Supermarket Center occupied
by 25 tenants located in Kendall Lakes, Dade County, Florida. West Lake is
situated on 8.8 acres and is anchored by Winn-Dixie, Eckerd and Burger King.
Eckerd has vacated the leased space but has, to date, continued to pay rent
pursuant to its lease with the Company. For the year ended June 30, 1996,
Winn-Dixie reported sales of $10.2 million.

FOUR CORNERS. Four Corners is a 115,178 square foot Supermarket Center
occupied by 25 tenants located in Tomball, Texas (Houston metropolitan area).
Four Corners is situated on 12.0 acres and is anchored by Kroger and Eckerd.
For the year ended December 31, 1996, Kroger reported sales of $22.1 million.

PARKER TOWNE. Parker Towne is a 205,792 square foot Supermarket Center
occupied by 18 tenants located in Plano, Texas (Dallas metropolitan area).
Parker Towne is situated on 19.2 acres and is anchored by Minyard's. For the
year ended December 31, 1996, Minyard's reported sales of $23.1 million.

EQUITY ONE OFFICE BUILDING. The Equity One Office Building is a 28,980
square foot mixed use (office/retail) property occupied by 10 tenants,
including the Company's corporate offices located in Miami Beach, Florida The
property is located on one of four parcels, which, in the aggregate, total 1.2
acres. This property was purchased in 1992 and was completely redeveloped by
the Company. The property is adjacent to the Miami Beach City Hall and
proximate to the Miami Beach Convention Center.

DIANA BUILDING. The Diana building is a 18,707 square foot mixed use
(office/retail) property currently occupied by five tenants located in West
Palm Beach, Florida. This property was purchased in 1995 and was completely
redeveloped by the Company.

MANDARIN MINI-STORAGE. Mandarin is a 52,880 square foot mini-storage
warehouse occupied by 535 tenants located in Jacksonville, Florida. The
property is situated on 2.8 acres.

55
<PAGE>

PROPERTY MANAGEMENT, LEASING AND RELATED SERVICE BUSINESS

The Company's property management and substantially all of its leasing
activities, operating and administrative functions (including leasing, legal,
construction, data processing, maintenance, finance and accounting) are
administered or coordinated by Company personnel. On-site functions such as
maintenance, landscaping, sweeping, plumbing and electrical are subcontracted
out at each location and, to the extent permitted by their respective leases,
the cost of these functions is passed on to the tenants. Personnel from the
Company's corporate headquarters conduct regular inspections of each property
and maintain frequent contact with major tenants.

The Company maintains an active leasing and maintenance program that,
combined with the quality and locations of the properties, has made the
Existing Properties attractive to tenants. The Company intends to continue to
hold the properties for long-term investment and, accordingly, places a strong
emphasis on quality construction and an on-going program of regular
maintenance. The properties are designed to require minimal capital
improvements.

The Company's management information systems provides operating data
necessary to make informed business decisions on a timely basis. These systems
allow instant access to store availability, lease data, tenants' sales history,
cash flow budgets and forecasts and enable the Company to maximize cash flow
from operations and closely monitor corporate expenses.

In addition to managing the Existing Properties, the Company provides
management and leasing services to certain third party owned properties.
Services are provided to third-party owners pursuant to contracts that are of
varying lengths of time and which generally provide for management fees of up
to 4.0% of monthly base rent property receipts. The management contracts are
typically cancelable upon 30 days' notice or upon certain events, including the
sale of the property. Leasing fees typically range from $2 to $3 per square
foot. During the year ended December 31, 1996 and the six months ended June 30,
1997, the Company earned management fees of $229,995 and $159,135,
respectively, in connection with its management of third party owned
properties. At present, the Company has no plans to expand these activities.

COMPETITION

There are numerous commercial developers, real estate companies and other
owners of real estate in the areas in which the Existing Properties are located
that compete with the Company in seeking land for development, properties for
acquisition, financing and tenants. Many of such competitors have substantially
greater resources than the Company. All of the Company's Supermarket Centers
are located in developed areas that include other Supermarket Centers. The
number of retail properties in a particular area could materially adversely
affect the Company's ability to lease vacant space and maintain the rents
charged at the Supermarket Centers or at any newly acquired property or
properties. One shopping center constructed less than two years ago stands
within a two-mile radius of Bird Ludlum. In addition, several smaller and older
strip centers are located along Bird Road in Miami. Lake Mary is located on a
retail thoroughfare which includes direct and proximate competition from a
free-standing Home Depot, a Target store and two shopping centers anchored by
Winn-Dixie and Publix, respectively. West Lake and Four Corners each competes
with nearby shopping centers anchored by supermarkets. Pointe Royale is
proximate to Cutler Ridge Mall and a Publix-anchored shopping center.
Free-standing retailers such as Circuit City and Toys R' Us within one mile of
Pointe Royale compete directly with tenants in such Supermarket Center. In
addition, there are several strip shopping centers in the vicinity. The
Company's other properties are subject to similar competition. Certain of the
Company's competitors may possess greater resources than the Company and may
have management with more experience than the Company's management. See "Risk
Factors--The Company's Performance and Value are Subject to Risks Associated
with the Real Estate Industry".

REGULATIONS AND INSURANCE

REGULATIONS. Retail properties are subject to various laws, ordinances and
regulations. The Company believes that each of the Existing Properties
maintains all material operating permits and

56
<PAGE>

approvals necessary to be maintained by the Company. For a discussion of the
ADA and government approvals regarding land uses, levels of density, and
utility services, among others, see "Risk Factors--Compliance with Laws Could
Have an Adverse Effect on the Financial Condition of the Company" and "--The
Company's Financial Condition Could be Affected by Damages to Property Not
Covered by Insurance".

INSURANCE. Under their leases, the Company's tenants are generally
responsible for providing adequate insurance on the property they lease. The
Company believes the Existing Properties are covered by adequate fire, flood
and property insurance provided by reputable companies. However, certain of the
Existing Properties are not covered by disaster insurance with respect to
certain hazards (such as hurricanes) for which coverage is not available or
available only at rates which, in the opinion of the Company, are prohibitive.

ENVIRONMENTAL MATTERS

Under various federal, state and local laws, ordinances and regulations,
an owner or operator of real estate may be required to investigate and clean up
hazardous or toxic substances or petroleum product releases at such property
and may be held liable to a governmental entity or to third parties for
property damage and for investigation and clean-up costs incurred by such
parties in connection with contamination. Many such laws, including CERCLA,
typically impose such liability without regard for whether the owner knew of,
or was responsible for, the presence of such hazardous or toxic substances and
the liability under such laws has been interpreted to be joint and several
unless divisible and there is a reasonable basis for allocation of
responsibility. The cost of investigation, remediation or removal of such
substances may be substantial, and the presence of such substances, or the
failure to properly remediate such substances, may adversely affect the owner's
ability to sell or rent such property or to borrow using such property as
collateral. Persons who arrange for the disposal or treatment of hazardous or
toxic substances may also be liable for the costs of removal or remediation of
such substances at a disposal or treatment facility, whether or not such
facility is owned or operated by such person. Some environmental laws create a
lien on a contaminated site in favor of the government for damages and costs it
incurs in connection with the contamination. The owner of a contaminated site
also may be subject to common law claims by third parties based on damages and
costs resulting from environmental contamination emanating from such site. In
connection with the ownership (direct or indirect), operation, management and
development of real properties, the Company is generally considered an owner or
operator of such properties or as having arranged for the disposal or treatment
of hazardous or toxic substances and, therefore, potentially liable for removal
or remediation costs, as well as certain other related costs, including
governmental fines and injuries to persons and property.

Certain federal, state and local laws, regulations and ordinances also
govern the removal, encapsulation or disturbance of asbestos-containing
materials ("ACMs") when such materials are in poor condition or in the event of
construction, remodeling, renovation or demolition of a building. Such laws may
impose liability for release of ACMs and may permit third parties to seek
recovery from owners or operators of such properties for personal injury
associated with ACMs. Some of the environmental site assessments conducted at
the Existing Properties to date indicate that a number of the Existing
Properties contain ACMs. The Company is not aware, however, of any ACMs at the
properties that are friable or in otherwise poor condition. Assessments for
these properties are being conducted at this time.

Although the Company obtained Phase I or similar environmental audits
(which involved a general inspection without soil sampling or groundwater
analysis) by independent environmental consultants when it acquired all but two
of the Existing Properties, six of the Existing Properties have environmental
assessments that were conducted more than four years ago and one existing
Property does not currently have an environmental assessment. These assessments
are currently being performed or updated by the Company.

The environmental studies conducted to date have not revealed any
significant environmental liability that would have a material adverse effect
on the Company's business, results of operations and

57
<PAGE>

liquidity; tenants at the Existing Properties include plant-on-premises dry
cleaners, gasoline service stations and tire centers, photo development firms
and other retailers which use hazardous substances in their businesses.
Although leases with such tenants contain provisions intended to minimize
environmental risks and to shift the financial risks to the tenants, there is
no assurance that the Company will not incur liability in this regard. A
limited monitoring program with respect to a groundwater testing program has
been implemented at Plaza Del Rey based on questions raised by environmental
studies conducted at the time of purchase. While this site is not regarded by
management as a significant environmental risk, if a material environmental
condition does in fact exist (or exists in the future) at this or other
properties, it could have a significant adverse impact upon the Company's
financial condition, results of operations and liquidity. No assurance can be
given that the environmental studies that were performed at the properties
would disclose all environmental liabilities thereon, that any prior owner
thereof did not create a material environmental condition not known to the
Company or that a material environmental condition does not otherwise exist as
to any of the Existing Properties.

In connection with the Company's acquisition of Sky Lake, a Phase II
Environmental Site Assessment dated July 15, 1997 has revealed the existence of
perchloroethylene at levels above regulatory limits caused by a dry cleaning
business operated on the premises. The Company has learned that the site is
included in the Florida Dry Cleaners State Program, and as a condition to the
Company's purchase of the property, the seller agreed to pay all remediation
costs, which environmental consultants have estimated to be approximately
$250,000. In addition, $500,000 has been placed into an escrow account at
closing to pay for the remediation. Based on the remediation cost estimates,
guarantees by the seller to pay for the cleanup and the establishment of the
escrow account, the Company has concluded that the property does not pose a
material environmental liability.

EMPLOYEES

At June 30, 1997, the Company had 18 full-time employees. The Company's
employees are not represented by a collective bargaining group, and the Company
considers its relations with its employees to be good.

LEGAL PROCEEDINGS

Neither the Company nor the Existing Properties are presently subject to
any material litigation. Additionally, to the Company's knowledge, there is no
litigation threatened against the Company or the Existing Properties, other
than routine litigation and administrative proceedings arising in the ordinary
course of business, which collectively are not expected to have a material
adverse effect on the business, financial condition, results of operations or
cash flows of the Company.

58
<PAGE>

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The Company's Board of Directors currently consists of eight members,
including three members who are independent directors. Pursuant to the
Company's Bylaws, the Board of Directors is divided into three classes of
directors and directors serve until the election and qualification of their
successor. The initial terms of the first, second and third classes will expire
in 1998, 1999 and 2000, respectively. Beginning in 1998, directors of each
class will be chosen for three-year terms upon the expiration of their current
terms and each year one class of directors will be elected by stockholders. The
Company believes that classification of the Board of Directors will help to
assure the continuity and stability of the Company's business strategies and
policies as determined by the Board of Directors. Holders of shares of Common
Stock will have no right to cumulative voting in the election of directors. At
each annual meeting of stockholders, the holders of 66 2/3% of the shares of
Common Stock cost at such meeting will be able to elect all of the successors
of the class of directors whose terms expire at that meeting. Subject to rights
granted pursuant to any employment agreements, officers of the Company serve at
the pleasure of the Board of Directors.

Certain stockholders of the Company have entered into agreements to
control the Company. Such stockholders directly and indirectly own and/or
control an aggregate of 96.6% of the issued and outstanding shares of Common
Stock of the Company before giving effect to the Offering. Upon consummation of
the Offering, such stockholders will own and/or control an aggregate of 57.5%
of the outstanding shares of Common Stock (54.2% if the over-allotment option
granted to the Underwriters is exercised in full). The agreements provide that,
in all matters affecting the Company (other than the election of directors) the
parties to the agreements will vote all of their shares as they may agree, or
if they cannot agree, will vote against any proposal to which they cannot
agree. With respect to the election of directors, the parties have granted an
Irrevocable Proxy to Globe Reit, which is an affiliate of Mr. Katzman and of
Messrs. Makavy and Wulkan, directors of the Company. Globe Reit has the power
under the Irrevocable Proxy to vote all of the shares of the Common Stock of
the stockholders who are parties to the Irrevocable Proxy for the election of
directors through May 2001, with, effectively, one-half of the directors
designated by each of Gazit and Danbar Resources, and if there is an additional
director, such director shall be designated by agreement. As a result of this
agreement, the parties to the agreement may be deemed a "group" within the
meaning of Section 13(d) of the Exchange Act and may direct the business and
affairs of the Company. See "Principal Stockholders" and "Certain
Transactions".

The following table sets forth certain information with respect to the
directors and executive officers of the Company:

<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITION WITH THE COMPANY TERM EXPIRES
- ------------------------ ----- ------------------------------------------------------- -------------
<S> <C> <C> <C>
Chaim Katzman ......... 47 Chairman of the Board, President, 1998
Chief Executive Officer and Director
Doron Valero ......... 40 Executive Vice President, 1999
Chief Operating Officer and Director
David Bookman ......... 41 Vice President, Chief Financial Officer and Treasurer N/A
Alan Marcus ......... 40 Vice President, General Counsel and Secretary N/A
Noam Ben-Ozer ......... 33 Director 2000
Eli Makavy ............ 49 Director 1998
Shaiy Pilpel ......... 47 Director 2000
Shulamit Rozen- 34 Director 1999
Katzman ...............
David Wulkan ......... 44 Director 1999
Yuval Yanai ......... 45 Director 2000
Robert L. Cooney ...... 63 Director Nominee 1998
</TABLE>

59
<PAGE>

CHAIM KATZMAN has served as President, Chairman of the Board and Chief
Executive Officer and a director of the Company since its formation in 1992,
and has been involved in the purchase, development and management of commercial
and residential real estate in the southeastern United States since 1980. Mr.
Katzman received an LL.B. from Tel Aviv University Law School in 1973. In 1991,
Mr. Katzman purchased the controlling interest of Gazit. Mr. Katzman has served
as Chairman of the Board and Chief Executive Officer of Gazit since May 1991
and remains its largest stockholder and has served as a director of Globe Reit
since 1994. A licensed real estate broker in Florida, Mr. Katzman is a member
of NAREIT and the ICSC.

DORON VALERO has served as Executive Vice President, Chief Operating
Officer and a director of the Company since 1994. Mr. Valero manages the
Company's portfolio of properties and is responsible for, among other things,
acquisitions and leasing properties. Prior to joining the Company, from 1990 to
1993, Mr. Valero served as President and Chief Executive Officer of Global Fund
Investment, Inc., a real estate investment and management company. A licensed
mortgage broker in Florida, Mr. Valero is a member of NAREIT and ICSC. Mr.
Valero received a B.S.E. from Nova University in 1986.

DAVID N. BOOKMAN has served as the Company's Chief Financial Officer, Vice
President and Treasurer since July 1997. From December 1995 to July 1997, Mr.
Bookman served as the Company's Controller. From 1987 to 1995, Mr. Bookman was
a manager with Kenneth Leventhal & Co. Mr. Bookman has been a licensed
certified public accountant in the States of New York and Florida since 1985.
Mr. Bookman received his B.B.A. from Pace University in 1982.

ALAN J. MARCUS will become Vice President, General Counsel and Secretary
of the Company upon consummation of the Offering. Mr. Marcus has been a member
of the Florida Bar since 1984 and has maintained private practice in Dade
County, Florida since 1986. Mr. Marcus' practice has concentrated on real
estate and corporate matters. He is also an adjunct professor at Florida
International University. Mr. Marcus has represented Global Realty &
Management, Inc., the property management subsidiary of the Company, since 1990
and the Company since 1993. Mr. Marcus received a B.S. from the University of
Miami in 1978 and a J.D. and LL.M. (Taxation) from the University of Miami in
1983 and 1984, respectively.

NOAM BEN-OZER has been a director of this Company since 1996. Mr. Ben-Ozer
obtained an M.B.A. from Harvard University in 1994, and has served as a
consultant for Bain & Company since 1994. From 1993 to 1994 Mr. Ben-Ozer served
as an outside consultant to Lemout & Hauspie Speech Products. Mr. Ben-Ozer is a
certified public accountant in Israel.

ELI MAKAVY has served as a director of the Company since 1996. Mr. Makavy
currently serves as Chairman of the Board and Chief Executive of Danbar, as
well as Chairman of the Board of Danbar Resources. Mr. Makavy also serves on
the board of directors of Globe Reit and D.C.L. Technologies Ltd., an Israeli
company whose securities are publicly traded on TASE.

DR. SHAIY PILPEL has served as a director of the Company since 1996. Dr.
Pilpel heads the trading operation at Wexford Management, an investment firm.
From 1995 to 1996, Dr. Pilpel was a managing director of Canadian Imperial Bank
of Commerce where he headed the Mortgage Arbitrage and Quantitative Strategies
proprietary trading group, and prior thereto, a portfolio manager for
Steinhardt Partners. Dr. Pilpel received a B.S. in mathematics and B.A. in
philosophy from Tel Aviv University, a M.Sc. in mathematics from the Hebrew
University in Jerusalem, a Ph.D. in Statistics from the University of
California at Berkeley and a M.B.A. from Columbia University.

DR. SHULAMIT ROZEN-KATZMAN has served as a director of the Company since
1992. Dr. Rozen-Katzman has been a board certified pediatrician since 1992, and
currently is an attending physician at Jackson Memorial Hospital in Miami,
Florida. Dr. Rozen-Katzman has served as a director of Gazit since 1991 and
currently serves as its Vice Chairman. Dr. Rozen-Katzman is the wife of Chaim
Katzman. Dr. Rozen-Katzman received her medical degree from Tel Aviv University
School of Medicine.

60
<PAGE>

DAVID WULKAN has served as a director of the Company since 1996. Mr.
Wulkan serves as a member of the board of directors of Danbar Resources,
Chairman of the Board of Danbar Technologies Ltd., an Israeli company whose
securities are publicly traded on TASE, a board member and executive of Danbar,
and a Board member of each of Globe Reit and Data Automatization Ltd., an
Israeli company whose securities are publicly traded on the TASE. Mr. Wulkan
holds a B.A. Degree in Economics & Accounting and an M.B.A. from Tel Aviv
University. Mr. Wulkan is a certified public accountant in Israel.

YUVAL YANAI has served as a director of the Company since 1996 and has
been the Vice President, Finance and Chief Financial Officer of Elscint Ltd.
(Israel) since August 1991. Previously, he was senior consultant and head of
the economics department of Control Data Corporation (Israel), Tel Aviv. Mr.
Yanai is Chairman of the Board of Elscint Espan-a S.A. (Spain) and Productos
Medico Hospitalares Elscint Ltd. (Brazil). Mr. Yanai is a director of Elscint
Inc. (USA), Elscint France S.A. (France), Elscint GmbH (Germany) and Elgems
Ltd. (Israel). Mr. Yanai holds a B.A. in accounting and economics from Tel Aviv
University.

ROBERT L. COONEY will become a director of the Company upon consummation
of the Offering. Mr. Cooney has served as a Managing Director of Equity Capital
Markets of Credit Suisse First Boston Corporation since 1978. Mr. Cooney
obtained an M.B.A. from Harvard University in 1962 and a B.S. from College of
the Holy Cross in 1956. Mr. Cooney has over 35 years experience in the capital
markets and investment banking.

KEY EMPLOYEE

RAFAEL EGUILIOR, 44, was recently hired to serve as the Company's head of
development. Mr. Eguilior has served as the President of CCS Design Group,
Inc., an architectural design firm in Miami, Florida since 1996. From 1994 to
1996, Mr. Eguilior was the principal architect in the design firm bearing his
name. From 1992 to 1994, Mr. Eguilior was a principal architect with the
Nichols Partnership, Inc., of Coral Gables, Florida. Mr. Eguilior has worked
with the Company in connection with the construction and remodeling of West
Lake, and has performed site plan analyses for the Company with respect to
various properties. Mr. Eguilior has been a licensed architect and certified
general contractor in the State of Florida since 1982 and 1987, respectively.
Mr. Eguilior received a B.A. in Architecture from the University of Miami in
1979.

DIRECTORS' COMPENSATION

Non-employee directors will receive, upon election to the Board of
Directors and annually thereafter, options to purchase 6,000 shares of Common
Stock. These options will become exercisable over two years. In addition,
non-employee directors will receive a fee of $1,000 for each Board of Directors
meeting or committee meeting attended in person, plus reimbursement for
reasonable expenses incurred in attending the meetings. Non-employee directors
will receive an additional fee of $250 for each telephonic meeting attended.
Officers of the Company who are directors, and the two current directors who
receive consulting fees, will not be paid any directors' fees.

COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors has maintained an Executive Committee and Audit and
Review Committee since 1996. The Executive Committee is authorized to perform
all functions which may be lawfully delegated by the Board of Directors,
provided, however, that the Executive Committee can only act based on a
unanimous vote and that the Executive Committee may only approve acquisitions
of property similar to the Company's portfolio requiring an initial equity
investment of up to $15.0 million and acquisitions of vacant land having an
initial equity investment of up to $5.0 million in the aggregate. The Executive
Committee is comprised of Chaim Katzman, Doron Valero and Eli Makavy. The Audit
and Review Committee is comprised of Shaiy Pilpel, Noam Ben-Ozer and Yuval
Yanai, each of whom is a non-employee director of the Company. The Audit and
Review Committee's functions

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include recommending to the Board the engagement of the Company's independent
certified public accountants, reviewing with such accountants the plan and
results of their audit of the Company's financial statements and determining
the independence of such accountants.

In connection with the Offering, the Company has authorized the formation
of a Compensation Committee, whose members include Messrs. Pilpel, Ben-Ozer and
Yanai. The Compensation Committee will make recommendations with respect to
compensation of officers and key employees, including the granting of options
under the 1995 Plan.

EXECUTIVE COMPENSATION

The following table sets forth the compensation paid by the Company, for
services rendered during the year ended December 31, 1996, to the Company's
Chief Executive Officer and to the Company's Executive Vice President and Chief
Operating Officer (collectively, the "Named Officers"). No other employee of
the Company received compensation equal to or exceeding $100,000 during such
year.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------------------- -------------------
OTHER ANNUAL SECURITIES
NAME AND PRINCIPAL POSITION SALARY BONUS COMPENSATION UNDERLYING OPTIONS
- ---------------------------------- ---------- --------- -------------- -------------------
<S> <C> <C> <C> <C>
Chaim Katzman .................. $240,000 -- (1) 200,000(2)
Chairman of the Board, President,
and Chief Executive Officer

Doron Valero .................. $180,000 $50,000 (1) 150,000(2)
Executive Vice President and
Chief Operating Officer
</TABLE>

- ----------------
(1) The aggregate amount of perquisites and other personal benefits provided to
such Named Officer is less than 10% of the total annual salary and bonus
of such officer.

(2) Represents options granted under the 1995 Plan.

EMPLOYMENT AGREEMENTS

The Company has entered into employment agreements with Chaim Katzman,
Chairman of the Board, President and Chief Executive Officer of the Company,
and Doron Valero, Executive Vice President and Chief Operating Officer, each of
which expires on December 31, 2003 (the "Employment Agreements"). Each of the
Employment Agreements is automatically renewable for an additional 7 year term
unless either party gives written notice of an intent not to renew. Pursuant to
the Employment Agreements, Messrs. Katzman and Valero receive annual base
salaries of $240,000 and $180,000, respectively, which base salary is increased
annually by the greater of 6% or the rate of increase of the CPI for the year
immediately preceding each anniversary of the agreements. In addition, the
Employment Agreements provide that Messrs. Katzman and Valero may receive a
bonus as determined by the Company's Board of Directors, in its sole
discretion. Pursuant to Mr. Katzman's Employment Agreement, Mr. Katzman is
required to devote only so much of his time, attention, skill and efforts as
shall be required for the faithful performance of his duties. In addition, Mr.
Katzman is not required to reside and/or perform his duties within the United
States. Pursuant to the Employment Agreements, in the event the executives are
terminated by the Company without Cause (as defined in the Employment
Agreements), the executives shall receive all base compensation due under the
remaining term of such agreements. Mr. Katzman's Employment Agreement provides
that upon termination without Cause (as defined) or upon the occurrence of a
change in control, Mr. Katzman shall receive (i) all compensation due for the
balance of the term of his employment agreement, (ii) a

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<PAGE>

severance payment equal to two years of his current salary, (iii) vesting of
all stock options granted to him, (iv) payment of legal fees and expenses
incurred as a result of termination or change in control, and (v) a "put"
option to tender all of his shares of stock in the Company at a specified
price. If the "put" option is exercised, the Company must purchase all his
shares of Common Stock at a price per share equal to (i) if the Common Stock is
then listed and traded on a securities exchange, the average closing price over
the forty-five trading days immediately preceding the date the stock is
tendered or (ii) if the Common Stock is not then listed and traded on a
securities exchange, the price per share used in a similar third party arms'
length sale of Common Stock during the six-month period immediately preceding
the tender. If the purchase price cannot be determined in accordance with (i)
and (ii) above, the price per share shall be determined by an acceptable
arbitrator in accordance with the rules of commercial arbitration, or in the
event the parties cannot agree on an arbitrator, an arbitrator appointed by the
American Arbitration Association.

The executive officers each hold options to purchase Common Stock granted
under the Company's 1995 Plan. The Employment Agreements provide that, to the
extent not already exercisable, such options will become immediately
exercisable if the executive's employment is terminated for any reason other
than Cause or voluntary resignation. Each of the executives is prohibited from
competing with the Company for the duration of their respective Employment
Agreements and, if terminated for Cause or upon voluntary resignation, for a
period of one year thereafter, without the prior written consent of the
Company's Board of Directors. During the term of Mr. Katzman's Employment
Agreement and thereafter, Mr. Katzman is authorized to engage in any other
business or businesses not in competition with the Company in the United
States, which may include non-commercial real estate acquisitions, development
and management, provided that his involvement in such business does not
adversely affect the performance of his duties under the Employment Agreement
or detrimentally affect the Company's business and affairs. Mr. Katzman may
engage in any business outside the United States, including the development of
commercial real property. Mr. Katzman and companies affiliated with Mr. Katzman
currently invest in commercial and retail properties in Canada and Israel.

Pursuant to the terms of each of Messrs. Katzman's and Valero's Employment
Agreements, such executives were granted registration rights with respect to
the shares of Common Stock issuable to such executives under options granted
pursuant to such employment agreements. Each of the executives has waived such
registration rights in connection with the Offering. See "Certain
Transactions".

STOCK OPTION PLAN

In December 1995, the Company adopted the 1995 Stock Option Plan (the
"1995 Plan"), pursuant to which 1,000,000 shares of Common Stock are currently
reserved for issuance upon exercise of options. The 1995 Plan is designed as a
means to retain and motivate key employees, officers and directors. The
Company's Compensation Committee, or in the absence thereof, the Board of
Directors, administers and interprets the 1995 Plan and is authorized to grant
options thereunder to all eligible employees of the Company, including
executive officers and directors (whether or not they are employees) of the
Company or affiliated companies. Options granted under the 1995 Plan are on
such terms and at such prices as determined by the Compensation Committee,
except that the per share exercise price of incentive stock options cannot be
less than the fair market value of the Common Stock on the date of grant. Each
option is exercisable after the period or periods specified in the option
agreement but no option may be exercisable after the expiration of ten years
from the date of grant except for reload options, as provided under the 1995
Plan. The 1995 Plan will terminate on December 31, 2005, unless sooner
terminated by the Company's Board of Directors. Options granted to an
individual who owns (or is deemed to own) at least 10% of the total combined
voting power of all classes of stock of the Company or its subsidiary and which
is intended to be an incentive stock option must have an exercise price of at
least 110% of the fair market value of the of the Common Stock on the date of
grant, and a term of no more than five years. The 1995 Plan also authorizes the
Company to make or guarantee loans to optionees to enable them to exercise
their options. Such loans must (i) provide for recourse to the optionee, (ii)
bear interest at a rate not less than the prime rate of interest, and (iii) be
secured by the shares of Common Stock purchased. The Board of Directors has the

63
<PAGE>

authority to amend or terminate the 1995 Plan, provided that no such amendment
may impair the rights of the holder of any outstanding option without the
written consent of such holder, and provided further that certain amendments of
the 1995 Plan are subject to stockholder approval. At the date of consummation
of the Offering, options to purchase an aggregate of 614,000 shares of Common
Stock will be outstanding under the 1995 Plan at an exercise price ranging from
$8.25 to $12.375 per share, of which options to purchase 160,500 shares are
currently exercisable, options to purchase 352,500 shares are exercisable on
December 31, 1999 and options to purchase 101,000 shares are exercisable on
December 31, 2000. The exercise price of all options granted under the 1995
Plan were determined by the Company's Board of Directors and were equal to the
fair market value of the Common Stock as of the date of grant. At the date of
consummation of the Offering, 386,000 shares of Common Stock will be available
for future grants under the 1995 Plan.

The following table sets forth certain information with respect to options
granted under the 1995 Plan to the Named Officers for the year ended December
31, 1996, and represents all options granted by the Company to such Named
Officers for the period. In accordance with rules of the Commission, the table
also describes the hypothetical gains that would exist for the respective
options based on assumed rates of annual compounded stock appreciation of 5%
and 10% from the date of grant to the end of the option term. These
hypothetical gains are based on assumed rates of appreciation and, therefore,
the actual gains, if any, on stock option exercises are dependent on, among
other things, the future performance of the Common Stock, overall stock market
conditions, and the Named Officer's ability to exercise the option(s). As a
result, the amounts reflected in this table may not necessarily be achieved.

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATE OF
SECURITIES TOTAL OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM
OPTIONS EMPLOYEES IN EXERCISE PRICE EXPIRATION ---------------------------------------
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 5%($) 10%
- -------------------------- ------------- -------------- ---------------- ----------- ------------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Chaim Katzman ............ 200,000 44.4% $ 12.375(1) 12/31/05 $ 1,354,537(2) $ 3,360,920(2)
Chairman of the Board,
President and Chief
Executive Officer

Doron Valero ............ 150,000 33.3% $ 12.375(1) 12/31/05 $ 1,023,390(2) $ 2,520,690(2)
Executive Vice President
and Chief Operating
Officer ...............
</TABLE>

- ----------------
(1) Pursuant to the terms of each of Mr. Katzman's and Mr. Valero's Employment
Agreements, the option exercise price is subject to downward adjustment to
the extent that dividends declared and paid by the Company in each year
subsequent to 1995 exceed dividends declared and paid by the Company in
the year ended December 31, 1995.

(2) Does not take into account the effect of the downward adjustment to the
option exercise price described in note (1) above.

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<PAGE>

CERTAIN TRANSACTIONS

INVESTMENT AGREEMENT

During 1996, the Company entered into an agreement with Globe Reit, an
affiliate of the Company, pursuant to which Globe Reit, through its wholly
owned subsidiary M.G.N., agreed to purchase an aggregate of 2,000,000 shares of
Common Stock for $24.75 million over a period of 30 months. As set forth in the
agreement, the per share purchase price increases at an annual rate of 9.7% and
decreases by amounts paid as dividends by the Company. The agreement also
provides for the purchase by Globe Reit of 400,000 Series C Warrants for the
purchase price of $1.8 million. See "Description of Capital Stock--Warrants".
Chaim Katzman, the Company's Chairman of the Board, President and Chief
Executive Officer, and Eli Makavy and David Wulkan, directors of the Company,
directly and indirectly share the power to control Globe Reit. See
"Management--Directors and Executive Officers" and "Principal Stockholders". As
of the date of this Prospectus, Globe Reit had purchased an aggregate of
approximately 1,400,000 shares of Common Stock and is required to purchase the
additional 580,288 shares of Common Stock by August 1998. The Company believes
that such sales to Globe Reit of Common Stock and warrants were made at full
market value on substantially the same terms as the Company could have
negotiated with other unaffiliated third parties.

The agreement further provides that each of the Company, Globe Reit, Dan
Overseas and Gazit are also required to grant each other loans for amounts up
to $3.0 million, which amounts must be repaid within six months. Interest on
such loans shall be payable at the prevailing rate of interest at Bank Leumi
le-Israel B.M. at such time. Certain of the shares of the stock of the Company
owned by a borrower under such loan shall be pledged as collateral for the
repayment of any loan under the agreement.

During December 1995, the Company borrowed $2.2 million from Gazit, Globe
Reit and Dan Overseas for the purposes of making distributions, which amount
was repaid in full in June 1996. No loan amount is outstanding as of the date
of the Offering. This borrowing arrangement will be terminated upon
consummation of the Offering.

AGREEMENT AMONG STOCKHOLDERS

Globe Reit, Dan Overseas, M.G.N., Gagit (1995) and Chaim Katzman have
entered into agreements to control the Company. Such stockholders directly and
indirectly own and/or control an aggregate of 96.5% of the issued and
outstanding Common Stock of the Company before giving effect to the Offering.
Upon consummation of the Offering, such stockholders will own and/or control an
aggregate of 57.5% of the outstanding Common Stock (54.2% if the over-allotment
option granted to the Underwriters is exercised in full). Despite the reduction
in ownership following the Offering, the control which these stockholders may
exert over the affairs of the Company will continue. The agreements provide
that, in all matters affecting the Company (other than the election of
directors) the parties to the agreements will vote all of their shares as they
may agree, or if they cannot agree, will vote against any such proposal to
which they cannot agree. With respect to the election of directors of the
Company, the parties have granted an Irrevocable Proxy to Globe Reit, which is
an affiliate of Mr. Katzman and of Messrs. Makavy and Wulkan, directors of the
Company. Globe Reit has the power under the Irrevocable Proxy to vote all of
the shares of Common Stock of the stockholders who are parties to the
Irrevocable Proxy for the election of directors of the Company through May,
2001, with, effectively, one-half of the directors designated by each of Gazit
and Danbar Resources, and if there is an additional director, such director
shall be designated by agreement. Pursuant to this agreement, the parties to
the agreement may be deemed a "group" within the meaning of Section 13(d) of
the Exchange Act and may direct the business and affairs of the Company. See
"Principal Stockholders" and "Certain Transactions".

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<PAGE>

ACQUISITION OF GLOBAL REALTY & MANAGEMENT, INC.

In January 1994, the Company acquired all of the outstanding capital stock
of Global Management from Doron Valero, the Company's Executive Vice President
and Chief Operating Officer, in exchange for 144,000 shares of Common Stock and
warrants to purchase an aggregate of 48,000 shares of Common Stock at an
exercise price of $8.25 per share. Such warrants were exercised by Mr. Valero
in December 1996.

LOANS TO EXECUTIVE OFFICERS

In June 1996, the Company made a loan to Chaim Katzman, the Company's
Chairman of the Board, President and Chief Executive Officer, in the principal
amount of $1.1 million, bearing interest at an annual rate of 6.86%. The funds
advanced to Mr. Katzman were used to exercise certain warrants to purchase an
aggregate of 215,000 shares of Common Stock. Interest on the loan is payable
annually on January 5. This loan is secured by the shares of Common Stock
acquired by Mr. Katzman through exercise of the warrants and matures on June
16, 2003, at which time the entire principal balance is due and payable. At
June 30, 1997, $1.1 million was outstanding under this loan. In the opinion of
the Company, the foregoing loan was made on substantially the same terms,
including interest rates and collateral, as those prevailing on the time for
comparable transactions with other unaffiliated third parties.

In December 1996, the Company made a loan to Doron Valero, the Company's
Executive Vice President and Chief Operating Officer, in the principal amount
of $396,000, bearing interest at an annual rate of 5.25%. The funds advanced to
Mr. Valero were used to exercise certain warrants to purchase an aggregate of
48,000 shares of Common Stock. Interest on the loan is payable annually on
January 5. The loan is secured by the shares of Common Stock acquired by Mr.
Valero through exercise of the warrants and matures on June 16, 2003, at which
time the entire principal balance is due and payable. At June 30, 1997,
$396,000 was outstanding under this loan.

CONSULTING AGREEMENTS

In January 1996, the Company entered into consulting agreements with each
of Eli Makavy and David Wulkan, directors of the Company, pursuant to which
Messrs. Makavy and Wulkan provide the Company with financial and other advice,
assistance and support on an as-needed basis. In consideration for services
rendered under the consulting agreements, Messrs. Makavy and Wulkan receive a
quarterly consulting fee of $7,500, which amount is increased annually at the
greater of 6.0% or the increase in the CPI. Pursuant to the consulting
agreements, each of Messrs. Makavy and Wulkan are eligible to receive options
under the 1995 Plan. As of June 30, 1997, the Company had paid an aggregate of
$61,800 to each of Messrs. Makavy and Wulkan under such consulting agreements
for the two year period ended December 31, 1997. In addition, each of Messrs.
Makavy and Wulkan have received an aggregate of 50,000 options to purchase
Common Stock at an exercise price of $12.375 per share. Pursuant to the terms
of each of Mr. Wulkan's and Mr. Makavy's consulting agreements, the option
price is subject to downward adjustment to the extent that dividends declared
and paid by the Company in each year subsequent to 1995 exceed dividends
declared and paid by the Company in the year ended December 31, 1995.

MANAGED PROPERTIES

Several apartment properties in which Mr. Valero has an ownership interest
or which are owned by corporations on which he serves as an officer or director
are managed by the Company. Each of these management agreements represents
arms-length contractual agreements, and generate an average of $4,800 in
management fees per year per property. Mr. Valero receives no additional
compensation in connection with these management agreements.

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<PAGE>

REGISTRATION RIGHTS

Pursuant to the terms of each of Messrs. Katzman's and Valero's Employment
Agreements, such executives were granted registration rights (collectively,
"Registration Rights") with respect to the shares of Common Stock issuable to
such executives under options granted pursuant to such employment agreements.
Each of the executives has waived such Registration Rights in connection with
the Offering.

Pursuant to the terms of the Series C Warrants, the holders of the Series
C Warrants were granted Registration Rights for the shares of Common Stock
issuable upon the exercise of such warrants. The holders of the Series C
Warrants have waived such Registration Rights in connection with the Offering.

Pursuant to a registration rights agreement, the Company has granted both
demand and piggyback Registration Rights to each of Chaim Katzman, Gazit
(1995), Dan Overseas, Globe Reit, Eli Makavy, Doron Valero and David Wulkan
with respect to the shares of Common Stock owned by them (the "Registration
Rights Agreement"). Each of the parties to the Registration Rights Agreement
has waived its registration rights in connection with the Offering.

BENEFITS OF OFFERING TO EXISTING STOCKHOLDERS, INCLUDING MANAGEMENT

USE AGREEMENT

In 1994 and 1995, the Company paid Gazit a user fee of $172,500 and
$150,000, respectively, for the use of Gazit's facilities and equipment for the
conduct of the Company's business affairs, as well as for Mr. Katzman's
services to the Company.

SERVICE AGREEMENT

On January 1, 1996, the Company and Gazit entered into an agreement
whereby Chaim Katzman, or any employee of Gazit or its affiliates, may use the
Company's facilities, equipment, supplies and personnel to conduct Gazit's and
Mr. Katzman's business affairs for a quarterly user fee of $2,500. Since the
commencent of this agreement an aggregate of $17,500 has been paid by Gazit to
the Company.

OTHER

The Company paid legal fees in the approximate amount of $88,529, $95,160
and $84,340 during the years ended December 31, 1994, 1995, and 1996,
respectively, to the Law Office of Alan J. Marcus. Mr. Marcus will become Vice
President, General Counsel and Secretary of the Company following consummation
of the Offering.

POLICIES WITH RESPECT TO CERTAIN ACTIVITIES

The following is a discussion of certain investment, financing, conflicts
of interest, redevelopment and development and other policies of the Company.
These policies have been determined by the Company's Board of Directors and
generally may be amended or revised from time to time by the Board of Directors
without a vote of the stockholders.

INVESTMENT POLICIES

INVESTMENTS IN REAL ESTATE. The Company's investment objective is to
maximize total return to stockholders by increasing cash flow per share and
maximizing the value of its properties primarily

67
<PAGE>

through the acquisition, development, renovation and management of Supermarket
Centers. See "Business--Business and Growth Strategies".

Although the Company intends to principally acquire or develop Supermarket
Centers, it may acquire or develop other types of properties such as office
buildings or multifamily residential projects. In addition, although the
Company presently intends to acquire and develop properties in various
locations in the Southeast with demographic characteristics similar to its
present markets, its future acquisitions and development activities may not be
limited to any geographic area. There is also no limit on the percentage of the
Company's assets which may be invested in one property or in any area.

Pending disbursements for investment as described herein, the Company may
invest its funds in deposits at commercial banks, money market accounts,
certificates of deposit, government securities, preferred stock of other
publicly held REITS or other liquid investments (including GNMA, FNMA, and
FHLMC mortgage-backed securities) as the Board of Directors deems appropriate.
The Company intends to continue to make investments in such a way that it will
continue to qualify as a REIT and not be treated as an investment company under
the Investment Company Act of 1940.

While to date the Company has emphasized equity real estate investments,
it may, in its discretion, invest in mortgages and other real estate and
related interests. Subject to the percentage ownership limitations and gross
income tests necessary for REIT qualification, the Company also may invest in
securities of entities engaged in real estate activities or securities of other
issuers, including for the purpose of exercising control over such entities. As
of September 30, 1997, the Company held approximately 0.5% of the outstanding
capital stock of Sizeler Property Investors Inc., a publicly held REIT. See
"Federal Income Tax Considerations--Taxation of the Company". The Company may
acquire all or substantially all of the securities or assets of other REITs or
similar entities where such investments would be consistent with the Company's
investment policies.

INVESTMENTS IN REAL ESTATE THROUGH OTHER ENTITIES. The Company also may
participate with other entities in property ownership, through joint ventures
or other types of co-ownership. Although the Company would likely seek to
acquire the controlling interest in such entities, it is not required to do so.
To date, the Company has not participated in property ownership with other
entities. The Company will not enter into a joint venture or partnership to
make an investment that would not otherwise meet its investment policies.

FINANCING POLICIES

The Company intends to finance future acquisitions with the most
advantageous sources of capital available at the time, which may include
additional equity offerings, debt financing, retention of cash flow subject to
provisions in the Code or a combination of these methods.

The Company's policy is to maintain a ratio of total indebtedness to total
market capitalization of approximately 50.0% or less. Upon completion of the
Offering, assuming an initial offering price of $14.75, and use of the net
proceeds contemplated thereby, the ratio of the Company's total indebtedness to
total market capitalization will be approximately 21.6%. The Company may, from
time to time re-evaluate its borrowing policies in light of then current
economic conditions, relative costs of debt and equity capital, the market
value of its properties, growth and acquisition opportunities and other
factors. Because there is no limit on the Company's ratio of debt-to-total
market capitalization, the Company may modify its borrowing policy and may
increase or decrease its ratio of debt-to-total market capitalization as, when
and if the Company deems it appropriate. Borrowings may be unsecured or may be
secured by any or all of the Existing Properties or additional properties and
may have full or limited recourse to all or any assets of the Company and may
contain cross-default or cross-collateralization provisions.

The Company may acquire properties subject to seller financing, existing
loans secured by mortgages, deeds of trust or similar liens. The Company does
not have a policy limiting the number or

68
<PAGE>

amount of mortgages that may be placed on any particular property, but mortgage
financing instruments usually limit additional liens on such properties.

The Company may incur indebtedness for purposes other than the acquisition
or development of properties when it deems it advisable to do so. For example,
the Company may borrow for working capital purposes or to make capital
improvements. In addition, the Company may borrow to meet the REIT taxable
income distribution requirements under the Code if the Company has taxable
income without receipt of cash sufficient to meet these distribution
requirements.

CONFLICTS OF INTEREST POLICIES

The Company has adopted certain policies designed to reduce potential
conflicts of interest. In general, the Company will not engage in any
transaction with any director, officer or affiliate thereof involving the
purchase or sale of property unless such transaction is approved by a majority
vote (or in certain cases by a unanimous vote) of the disinterested directors
(including a majority of independent directors) as being fair, competitive, and
commercially reasonable and no less favorable to the Company than similar
transactions between unaffiliated parties under the same circumstances.

Chaim Katzman, the Company's Chairman of the Board, President and Chief
Executive Officer, and Doron Valero, the Company's Executive Vice President and
Chief Operating Officer, are subject to certain conflict of interest
restrictions as set forth in their employment agreements with the Company. See
"Management--Employment Agreements". Each of Messrs. Katzman and Valero are
involved in other business activities, including real estate activities.
Certain of the Company's independent directors generally may engage in real
estate transactions which may be of the type conducted by the Company, but it
is not anticipated that such transactions will have any material effect upon
the Company's operations.

REDEVELOPMENT AND DEVELOPMENT POLICIES

The Company may invest in properties under development or vacant land upon
which development will occur and may redevelop existing properties. See
"Business-Business and Growth Strategies". Although historically the Company
has not commenced construction in any redevelopment or development projects
without obtaining a commitment from an Anchor Tenant, it is not obligated to do
so.

POLICIES WITH RESPECT TO OTHER ACTIVITIES

The Company has authority to offer shares of Common Stock and preferred
stock or other securities and to repurchase or otherwise reacquire its shares
of Common Stock and preferred stock or any other securities and may engage in
such activities in the future.

The Company has no outstanding loans to other entities or persons,
including its officers and directors, except for outstanding loans to Chaim
Katzman and Doron Valero in connection with their acquisition of Common Stock.
The Company may in the future make loans to other persons with the approval of
the independent directors.

The Company intends to furnish its stockholders with annual reports
containing audited financial statements which have been certified by its
independent public accountants, and quarterly reports containing unaudited
summary financial information for each of the first three quarters of each
fiscal year.

The Company's policies with respect to all of the above activities may be
reviewed and modified from time to time by the Company's Board of Directors
without a vote of the stockholders.

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<PAGE>

PRINCIPAL STOCKHOLDERS

Certain stockholders of the Company have entered into agreements to
control the Company. In particular, pursuant to an Investment Contract, dated
as of May 21, 1996, among Dan Overseas, Gazit (1995), as successor-in-interest
to Gazit Holdings Inc., Globe Reit and the Company (the "Investment Contract"),
and a Shareholders Agreement, dated May 21, 1996, between Gazit and Danbar
Resources (the "Shareholders Agreement," and together with the Investment
Contract, the "Control Agreements"), Globe Reit has been granted an Irrevocable
Proxy to vote all the shares of Common Stock owned by the stockholders who are
parties to the Control Agreements (collectively with Mr. Katzman, the
"Affiliated Group") for the election of directors of the Company through May
2001, with, effectively, one-half of the directors designated by each of Gazit
and Danbar Resources, and if there is an additional director, such director
shall be designated by agreement. With respect to all other matters, the
Control Agreements provide that the parties to the Affiliated Group will vote
all of their shares as they may agree, or if they cannot agree, will vote
against any such proposal. Chaim Katzman, the Company's Chairman of the Board,
President and Chief Executive Officer, has agreed that his shares of Common
Stock would be bound by the terms of the Control Agreements and the Irrevocable
Proxy.

Pursuant to the Control Agreements, the Affiliated Group may be deemed to
beneficially own, for purposes of the Exchange Act, all shares of Common Stock
beneficially owned by any member of the Affiliated Group (including shares of
Common Stock which may be acquired within 60 days upon the exercise of options
or warrants or pursuant to contract) or 8,623,959 shares of Common Stock at
June 30, 1997, constituting 97.2% of the outstanding Common Stock at June 30,
1997 (63.6% following consummation of the Offering). The table set forth below
does not give effect to such beneficial ownership by any member of the
Affiliated Group. Similarly, each member of the Affiliated Group may be deemed
to own all of the shares of Common Stock owned by the Affiliated Group by
virtue of the shared power to vote such shares of Common Stock; the table set
forth below does not give effect to this shared power.

By virtue of his offices, direct and indirect share ownership and voting
arrangement regarding Gazit, Mr. Katzman may be deemed to control Gazit (and
Gazit to control Globe Reit and the Company). Additionally, each of Messrs.
Makavy and Wulkan, by virtue of his office and direct and indirect share
ownership of Danbar, may be deemed to control Danbar (and Danbar to control
Danbar Resources, Globe Reit and the Company). As a result, Mr. Katzman may be
deemed to beneficially own the Common Stock owned by Gazit (1995) and Globe
Reit, and each of Messrs. Makavy and Wulkan to beneficially own the Common
Stock owned by Dan Overseas and Globe Reit. The table set forth below does not
give effect to such beneficial ownership of each of Gazit and Danbar Resources
of Globe Reit.

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Subject to the foregoing, the following table sets forth certain
information concerning the beneficial ownership of the Common Stock as of June
30, 1997, and as adjusted to reflect the sale of 4,700,000 shares of Common
Stock by the Company by (i) each person known by the Company to be the
beneficial owner of more than 5.0% of the outstanding Common Stock, (ii) each
director of the Company, (iii) each of the Named Officers and (iv) all
executive officers and directors of the Company as a group.

<TABLE>
<CAPTION>
PERCENTAGE OF
OUTSTANDING SHARES
OWNED
----------------------
BEFORE AFTER
NAME AND ADDRESS OF BENEFICIAL OWNER(1) BENEFICIAL OWNERSHIP OFFERING OFFERING
- --------------------------------------------------- ---------------------- ---------- ---------
<S> <C> <C> <C>
Affiliated Group(2) .............................. 8,623,959 97.2% 63.6%
Globe Reit Investments, Ltd.(3) .................. 3,460,001 47.4% 28.8%
Gazit (1995), Inc.(4) ........................... 3,072,592 41.2% 25.3%
Dan Overseas, Ltd.(5) ........................... 1,663,032 23.1% 14.0%
M.G.N. (USA), Inc.(6) ........................... 1,819,712 24.9% 15.2%
Chaim Katzman(7) ................................. 3,475,926 46.0% 28.3%
Doron Valero(8) ................................. 307,500 4.4% 2.6%
Eli Makavy(9) .................................... 1,675,532 23.2% 14.1%
David Wulkan(10) ................................. 1,675,532 23.2% 14.1%
Shaiy Pilpel .................................... -- -- --
Yuval Yanai .................................... -- -- --
Shulamit Katzman(11) ........................... -- -- --
Noam Ben Ozer .................................... -- -- --
All executive officers and directors of the Company
as a group (8 persons) (12) ..................... 5,471,458 69.4% 43.5%
</TABLE>

- ----------------
(1) A person is deemed to be the beneficial owner of securities that can be
acquired by such persons within 60 days from the date of this Prospectus
upon the exercise of options and warrants or purchasable pursuant to an
executory contract to acquire Common Stock. Each beneficial owner's
percentage ownership is determined by assuming that options and warrants
and shares purchasable under an executory contract that are held by such
person (but not those held by any other person) and that are exercisable
or purchasable within 60 days from the date of this Prospectus have been
exercised or purchased. For purposes of this table, a beneficial owner of
securities includes any person who, directly or indirectly, through any
contract, arrangement, understanding, relationship or otherwise has or
shares (i) voting power which includes the power to vote, or direct the
voting of, such security and/or (ii) investment power which includes the
power to dispose, or to direct the disposition of, such security.

(2) See Notes (3), (4), (5), (6), (7), (9) and (10) below.

(3) Includes (i) 580,288 shares of Common Stock purchasable under an executory
agreement to purchase Common Stock, (ii) 1,420,953 shares of Common Stock
beneficially owned by M.G.N. and (iii) 398,760 shares of Common Stock
issuable upon the exercise of presently exercisable warrants to purchase
Common Stock owned by M.G.N. Does not give effect to the Control
Agreements.

(4) Includes 542,136 shares of Common Stock issuable upon the exercise of
presently exercisable warrants to purchase Common Stock. Does not give
effect to the Control Agreements.

(5) Includes 293,430 shares of Common Stock issuable upon the exercise of
presently exercisable warrants to purchase Common Stock. Does not give
effect to the Control Agreements.

(6) Includes 398,760 shares of Common Stock issuable upon the exercise of
presently exercisable warrants to purchase Common Stock. Does not give
effect to the Control Agreements.

(7) Includes (i) 2,530,456 shares of Common Stock beneficially owned by Gazit
(1995) which Mr. Katzman may be deemed to control, (ii) 542,136 shares of
Common Stock issuable upon the exercise of presently exercisable warrants
to purchase Common Stock owned by Gazit (1995), (iii) 50,000 shares of
Common Stock issuable upon the exercise of options granted to Mr. Katzman
under the 1995 Plan, which options are currently exercisable and (iv)
62,344 shares of Common Stock issuable to Mr. Katzman as custodian for his
minor children upon the exercise of presently exercisable warrants to
purchase Common Stock. Does not include 150,000 shares of Common Stock
issuable upon exercise of options granted to Mr. Katzman under the 1995
Plan, which options are not currently exercisable. Does not give effect to
the Control Agreements.

(8) Includes (i) 67,500 shares of Common Stock issuable upon the exercise of
options granted to Mr. Valero under the 1995 Plan, which options are
currently exercisable and (ii) 48,000 shares of Common Stock issuable upon
the exercise of presently exercisable warrants to purchase Common Stock.
Does not include 112,500 shares of Common Stock issuable upon the exercise
of options granted to Mr. Valero under the 1995 Plan, which options are
not currently exercisable.

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<PAGE>

(9) Includes (i) 1,369,602 shares of Common Stock beneficially owned by Dan
Overseas which Mr. Makavy may be deemed to control, (ii) 293,430 shares of
Common Stock issuable upon the exercise of presently exercisable warrants
to purchase Common Stock owned by Dan Overseas and (iii) 12,500 shares of
Common Stock issuable upon the exercise of options granted to Mr. Makavy
under the 1995 Plan, which options are currently exercisable. Does not
include 37,500 shares of Common Stock issuable upon the exercise of
options to granted to Mr. Makavy under the 1995 Plan, which options are
not currently exercisable. Does not give effect to the Control Agreements.

(10) Includes (i) 1,369,602 shares of Common Stock beneficially owned by Dan
Overseas which Mr. Wulkan may be deemed to control, (ii) 293,430 shares of
Common Stock issuable upon the exercise of presently exercisable warrants
to purchase Common Stock owned by Dan Overseas and (iii) 12,500 shares of
Common Stock issuable upon the exercise of options granted to Mr. Wulkan
under the 1995 Plan, which options are currently exercisable. Does not
include 37,500 shares of Common Stock issuable upon the exercise of
options to granted to Mr. Wulkan under the 1995 Plan, which options are
not currently exercisable. Does not give effect to the Control Agreements.

(11) Shulamit Rozen-Katzman is the wife of Chaim Katzman, the Company's
Chairman of the Board, President and Chief Executive Officer. Does not
include shares of Common Stock owned by Chaim Katzman. See Note (7) above.

(12) See footnotes (7)-(10) above.

DESCRIPTION OF CAPITAL STOCK

The Company's authorized stock consists of 40,000,000 shares of Common
Stock, $0.01 par value per share, and 5,000,000 shares of preferred stock,
$0.01 par value per share. As of June 30, 1997, 6,908,130 shares of Common
Stock and no shares of preferred stock were issued and outstanding. Under
Maryland law, stockholders generally are not liable for the corporation's debts
or obligations. The following summary of the terms of the capital stock of the
Company does not purport to be complete and is subject to and qualified in its
entirety by reference to the MGCL and to the Company's Charter and the
Company's Bylaws.

COMMON STOCK

Each outstanding share of Common Stock entitles the holder to one vote on
all matters presented to stockholders for a vote, including the election of
directors. Except as provided in the terms of any other class or series of
stock, the holders of Common Stock possess the exclusive voting power, subject
to the provisions of the Company's Charter regarding the ownership of shares of
Common Stock in excess of the Aggregate Stock Ownership Limit, or such other
limit as provided in the Company's Charter or as otherwise permitted by the
Board of Directors described below.

Holders of shares of Common Stock have no preference, conversion,
exchange, sinking fund, redemption or appraisal rights and have no preemptive
rights to subscribe for any securities of the Company or cumulative voting
rights in the election of directors. All shares of Common Stock to be issued
and outstanding following the consummation of the Offering will be duly
authorized, validly issued, fully paid, nonassessable and free of preemptive
rights. Subject to the preferential rights of any other shares or series of
stock and to the provisions of the Charter regarding ownership of shares of
Common Stock in excess of the Aggregate Stock Ownership Limit, or such other
limit as provided by the Company's Charter or as otherwise permitted by the
Board of Directors described below, distributions may be paid to the holders of
shares of Common Stock if and when authorized and declared by the Board of
Directors of the Company out of assets legally available therefor. The Company
intends to make quarterly distributions, beginning with distributions for the
portion of the quarter from the consummation of the Offering through December
31, 1997. See "Distribution Policy".

Subject to the right of any holders of Preferred Stock to receive
preferential distributions, if the Company is liquidated each outstanding share
of Common Stock will be entitled to participate pro rata in the assets
remaining after payment of, or adequate provision for, all known debts and
liabilities of the Company.

Subject to the provisions of the Charter regarding the ownership of shares
of Common Stock in excess of the Aggregate Stock Ownership Limit, or such other
limit as provided in the Company's

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<PAGE>

Charter or as otherwise permitted by the Board of Directors described below,
all shares of Common Stock will have equal distribution, liquidation and voting
rights, and will have no preferences or exchange rights. See "--Restrictions on
Ownership and Transfer of Common Stock".

Under the MGCL, a Maryland corporation generally cannot dissolve, amend
its charter, merge, sell all or substantially all of its assets, engage in a
share exchange or engage in similar transactions outside of the ordinary course
of business unless approved by the affirmative vote of stockholders holding at
least two-thirds of the shares entitled to vote on the matter unless a greater
or lesser percentage (but no less than a majority of all of the votes entitled
to be cast on the matter) is set forth in the corporation's Charter. The
Charter contains no such provision increasing or decreasing the two-thirds vote
requirement. The phrase "substantially all of the assets" is not defined in the
MGCL and is, therefore, subject to interpretation by courts applying Maryland
law in the context of the facts and circumstances of any particular case.

The Charter authorizes issuances of additional shares of stock and the
classification as reclassification of unissued shares of either Common Stock or
Preferred Stock into other classes or series of classes of stock with
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications and terms or
conditions of redemption for each such class or series.

PREFERRED STOCK

The Charter authorizes the Board of Directors to classify any unissued
shares of preferred stock and to reclassify any previously classified but
unissued shares of any series, as authorized by the Board of Directors. Prior
to issuance of shares of each series, the Board is required by the MGCL and the
Charter to set, subject to the provisions of the Charter regarding the
restrictions on transfer of stock, the terms, preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends or other
distributions, qualifications and terms or conditions of redemption for each
such series. Thus, the Board of Directors could authorize the issuance of
shares of preferred stock with terms and conditions which could have the effect
of delaying, deferring or preventing a transaction or a change in control of
the Company that might involve a premium price for holders of Common Stock or
otherwise be in their best interest. As of the date hereof, no shares of
preferred stock are outstanding and the Company has no present plans to issue
any preferred stock.

WARRANTS

As of June 30, 1997, Series C Warrants to purchase an aggregate of
1,306,124 shares of Common Stock at an exercise price of $8.25 per share,
subject to adjustments, were issued and outstanding. These warrants are freely
transferable and are exercisable by the holders thereof through the close of
business on December 31, 1999. Series C Warrants to purchase 1,296,670 shares
of Common Stock have been issued to Gazit (1995), Dan Overseas, M.G.N. and
Chaim Katzman, as custodian for his minor children. The Series C Warrants
provide for certain registration rights which have been waived by each of the
holders of the outstanding Series C Warrants in connection with the Offering.

RESTRICTIONS ON OWNERSHIP AND TRANSFER OF COMMON STOCK

For the Company to qualify as a REIT under the Code, not more than 50.0%
in value of the issued and outstanding capital stock may be owned, actually or
constructively, by five or fewer individuals (as defined in the Code to include
certain entities) during the last half of a taxable year and the capital stock
must be beneficially owned by 100 or more persons during at least 335 days of a
taxable year of 12 months (or during a proportionate part of a shorter taxable
year). In addition, rent from Related Party Tenants (as defined below under
"Federal Income Tax Considerations Taxation of the Company--Income Tests") is
not qualifying income for purposes of the gross income tests of the Code. See
"Federal Income Tax Considerations-Taxation of the Company--Requirements for
Qualification".

Because the Board of Directors believes it is essential for the Company to
qualify as a REIT, the Board of Directors has adopted provisions in the
Company's Charter restricting the acquisition and

73
<PAGE>

ownership of shares of the Company's capital stock. Subject to certain
exceptions specified in the Company's Charter, no holder may own, either
actually or constructively under the applicable attribution rules of the Code,
more than the Aggregate Stock Ownership Limit or more than the Common Stock
Ownership Limit.

If, as a result of a purported acquisition (actual or constructive) of
capital stock, any person (a "Prohibited Transferee") would acquire, either
actually or constructively under the applicable attribution rules of the Code,
shares of capital stock in excess of an applicable ownership restriction, such
shares will be automatically transferred to a trust for the benefit of a
charitable beneficiary, and the Prohibited Transferee shall not acquire any
rights in such shares. Such automatic transfer shall be deemed to be effective
as of the close of business on the business day prior to the purported
acquisition by the Prohibited Transferee. The Prohibited Transferee shall not
benefit economically from ownership of any shares of stock held in trust, shall
have no rights to dividends and shall not possess any rights to vote or other
rights attributable to the shares of stock held in trust. While such stock is
held in trust, the trustee shall have all voting rights with respect to the
shares, and all dividends or distributions paid on such stock will be paid to
the trustee of the trust for the benefit of the charitable beneficiary (any
dividend or distribution paid on shares of capital stock prior to the discovery
by the Company that such shares have been automatically transferred to the
trust shall, upon demand, be paid over to the trustee for the benefit of the
charitable beneficiary). The Prohibited Transferee shall have no voting rights
with respect to shares of stock held in the trust and, subject to Maryland law,
effective as of the date that such shares of stock have been transferred to the
trust, the trustee shall have the authority (at the trustee's sole discretion)
(i) to rescind as void any vote cast by a Prohibited Transferee prior to the
discovery by the Company that such shares have been transferred to the Trust
and (ii) to recast such vote in accordance with the desires of the trustee
acting for the benefit of the charitable beneficiary. However, if the Company
has already taken irreversible corporate action, then the trustee shall not
have the authority to rescind and recast such vote. Within 20 days of receiving
notice from the Company of the transfer of shares to the trust, the trustee of
the trust is required to sell the shares held in the trust to a person
designated by the trustee who may own such shares without violating the
ownership restrictions (a "Permitted Holder"). Upon such sale, the interest of
the charitable beneficiary in the shares sold shall terminate and the price
paid for the shares by the Permitted Holder shall be distributed to the
Prohibited Transferee to the extent of the lesser of (i) the price paid by the
Prohibited Transferee for the shares or, in the case of a transfer of shares to
a trust resulting from an event other than an actual acquisition of shares by a
Prohibited Transferee, the fair market value, on the date of transfer to the
trust, of the shares so transferred or (ii) the fair market value of the shares
on the date of transfer by the trustee to the Permitted Holder. Any proceeds in
excess of this amount shall be paid to the charitable beneficiary. If, prior to
the discovery by the Company that shares of stock have been transferred to the
trust, such shares are sold by a Prohibited Transferee, then (i) such shares
shall be deemed to have been sold on behalf of the trust and (ii) to the extent
that the Prohibited Transferee received an amount for such shares that exceeds
the amount that such Prohibited Transferee was entitled to receive pursuant to
the aforementioned requirement, such excess shall be paid to the Trustee upon
demand.

Shares of capital stock transferred to a trustee shall be deemed to be
offered for sale to the Company, or its designee, at a price per share equal to
the lesser of (i) the price per share in the transaction that resulted in such
transfer to the trust (or, in case of a devise or gift, the fair market value
on the date of such devise or gift) or (ii) the fair market value on the date
the Company, or its designee, accepts such offer. The Company shall have the
right to accept such offer until the Trustee has sold the shares of stock held
in the Trust. Upon such a sale to the Company, the interest of the charitable
beneficiary in the shares sold shall terminate and the Trustee shall distribute
the net proceeds of the sale to the Prohibited Transferee.

If shares of capital stock which would cause the Company to be
beneficially owned by less than 100 persons are issued or transferred to any
person, such issuance or transfer shall be null and void to the intended
transferee, and the intended transferee would acquire no rights to such stock.

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<PAGE>

In addition to any of the foregoing ownership limits, the Company's
Charter provides that no holder may own, either actually or constructively
under the applicable attribution rules of the Code, any shares of any class of
the Company's stock if such ownership or acquisition (i) would cause more than
50.0% in value of the Company's outstanding stock to be owned, either actually
or constructively under the applicable attribution rules of the Code, by five
or fewer individuals (as defined in the Code to include certain entities), (ii)
would result in the Company's stock being beneficially owned by less than 100
persons (determined without reference to any rules of attribution), or (iii)
would otherwise result in the Company failing to qualify as a REIT. Acquisition
or ownership (actual or constructive) of the Company's stock in violation of
these restrictions will result in automatic transfer of such stock to a trust
for the benefit of a charitable beneficiary, automatic repurchase of the
violative shares by the Company, or the violative transfer will be deemed void
AB INITIO, as described above.

The Board of Directors may, but in no event will be required to, exempt a
stockholder from the Aggregate Stock Ownership Limit and the Common Stock
Ownership Limit, as the case may be, if it determines that such ownership will
not jeopardize the Company's status as a REIT and the Board of Directors
otherwise decides such action would be in the best interests of the Company. As
a condition to such waiver, the Board of Directors may require an opinion of
counsel satisfactory to it and/or undertakings or representations from the
applicant with respect to preserving the REIT status of the Company. The
Company has exempted Gazit (1995), Globe Reit, Dan Overseas and M.G.N. from the
Common Stock Ownership Limit and the Aggregate Stock Ownership Limit.

If the Board of Directors shall at any time determine in good faith that a
person intends to acquire or own, has attempted to acquire or own, or may
acquire or own stock of the Company in violation of the above described limits,
the Board of Directors shall take such action as it deems advisable to refuse
to give effect or to prevent such ownership or acquisition, including but not
limited to causing the Company to repurchase stock, refusing to give effect to
such ownership or acquisition on the books of the Company, or instituting
proceedings to enjoin such ownership or acquisition.

The constructive ownership rules are complex and may cause Common Stock
owned actually or constructively by a group of related individuals and/or
entities to be constructively owned by one individual or entity. As a result,
the acquisition of less than 5% of the outstanding Common Stock by an
individual or entity could cause that individual or entity (or another
individual or entity) to constructively own Common Stock in excess of the
limits described above, and thus subject such stock to the Common Stock
Ownership Limit, or the Aggregate Stock Ownership Limit.

All certificates representing shares of the Company's stock bear a legend
referring to the restrictions described above.

All persons who own more than 5.0% (or such lower percentage as required
by the Code or the Treasury Regulations promulgated thereunder) of all classes
or series of the Company's stock, including the Company's Common Stock, must
file annually with the Company a report containing information regarding their
ownership of such shares, as set forth in the Treasury Regulations. Each such
owner shall provide to the Company such additional information as the Company
may request in order to determine the effect, if any, of such beneficial
ownership or the Company's status as a REIT and to ensure compliance with the
Aggregate Stock Ownership Limit. In addition, each stockholder shall upon
demand be required to disclose to the Company in writing such information with
respect to the actual and constructive ownership of shares as the Board of
Directors deems necessary to comply with the provisions of the Code applicable
to a REIT or to comply with the requirements of any taxing authority or
governmental agency.

These ownership limitations could have the effect of delaying, deferring
or preventing a change of control or other transaction in which holders of
some, or a majority, of shares of Common Stock might receive a premium for
their shares over the then prevailing market price or which such holders might
believe to be otherwise in their best interest.

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<PAGE>

ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF MARYLAND LAW, AND THE COMPANY'S
CHARTER
AND BYLAWS

The following paragraphs summarize certain provisions of the MGCL and the
Company's Charter and Bylaws. The summary does not purport to be complete and
is subject to and qualified in its entirety by reference to Maryland law and to
the Company's Charter and Bylaws, copies of which have been filed as exhibits
to the Registration Statement of which this Prospectus is a part. See
"Additional Information".

PROVISIONS OF MARYLAND LAW; CHARTER PROVISIONS

Certain provisions of the MGCL and of the Company's Charter and Bylaws may
have the effect of delaying, deferring or preventing a change in control of the
Company or the removal of existing management and, as a result, may prevent the
stockholders of the Company from receiving a substantial premium for their
shares over then-current market prices.

BUSINESS COMBINATIONS. Under the MGCL, certain "business combinations"
(including a merger, consolidation, share exchange, or, in certain
circumstances, an asset transfer or issuance or reclassification of equity
securities) between a Maryland corporation and any person who beneficially owns
ten percent or more of the voting power of the corporation's shares or an
affiliate of the corporation who, at any time within the two-year period prior
to the date in question, was the beneficial owner of ten percent or more of the
voting power of the then outstanding voting stock of the corporation (an
"Interested Stockholder") or an affiliate thereof are prohibited for five years
after the most recent date on which the Interested Stockholder becomes an
Interested Stockholder. Thereafter, any such business combination must be
recommended by the board of directors of such corporation and approved by the
affirmative vote of at least (a) 80% of the votes entitled to be cast by
holders of outstanding shares of voting stock of the corporation and (b)
two-thirds of the votes entitled to be cast by holders of voting stock of the
corporation other than shares held by the Interested Stockholder with whom (or
with whose affiliate) the business combination is to be effected, unless, among
other conditions, the corporation's common stockholders receive a minimum price
(as defined in the MGCL) for their shares and the consideration is received in
cash or in the same form as previously paid by the Interested Stockholder for
its shares. These provisions of the MGCL do not apply, however, to business
combinations that are approved or exempted by the board of directors of the
corporation prior to the time that the Interested Stockholder becomes an
Interested Stockholder. Each of Globe Reit, Gazit (1995), M.G.N. and Dan
Overseas beneficially own more than 10.0% of the Company's voting shares and
would, therefore, be subject to the business combination provision of the MGCL.

CONTROL SHARE ACQUISITIONS. The MGCL provides that "control shares" of a
Maryland corporation acquired in a "control share acquisition" have no voting
rights except to the extent approved by a vote of two-thirds of the votes
entitled to be cast on the matter, excluding shares of stock owned by the
acquiror, by officers or by directors who are employees of the corporation.
"Control shares" are voting shares of stock which, if aggregated with all other
such shares of stock previously acquired by such person, or in respect of which
such person is able to exercise or direct the exercise of voting power (except
solely by virtue of a revocable proxy), would entitle the acquiror to exercise
voting power in electing directors within one of the following ranges of voting
power: (i) one-fifth or more but less than one-third, (ii) one-third or more
but less than a majority, or (iii) a majority of all voting power. Control
shares do not include shares the acquiring person is then entitled to vote as a
result of having previously obtained stockholder approval. A "control share
acquisition" means the acquisition of control shares subject to certain
exceptions.

A person who has made or proposes to make a control share acquisition,
upon satisfaction of certain conditions (including an undertaking to pay
expenses), may compel the Board of Directors to call a special meeting of
stockholders to be held within 50 days of demand to consider the voting rights
of the shares. If no request for a meeting is made, the corporation may itself
present the question at any stockholders meeting.

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<PAGE>

If voting rights are not approved at the meeting or if the acquiring
person does not deliver an acquiring person statement as required by the
statute, then, subject to certain conditions and limitations, the corporation
may redeem any or all of the control shares (except those for which voting
rights previously have been approved) for fair value determined, without regard
to the absence of voting rights for control shares, as of the date of the last
control share acquisition by the acquiror or of any meeting of stockholders at
which the voting rights of such shares are considered and not approved. If
voting rights for control shares are approved at a stockholders meeting and the
acquiror becomes entitled to vote a majority of the shares entitled to vote,
all other stockholders may exercise appraisal rights. The fair value of the
shares as determined for purposes of such appraisal rights may not be less than
the highest price per share paid by the acquiror in the control share
acquisition.

The control share acquisition statute does not apply to shares acquired in
a merger, consolidation or share exchange if the corporation is a party to the
transaction or to acquisitions approved or exempted by the charter or bylaws of
a corporation.

The Bylaws of the Company contain a provision exempting from the control
share acquisition statute any and all acquisitions by any person of the
Company's shares of Common Stock. Such provision of the Bylaws may be amended
without stockholder approval. There can be no assurance that such provision
will not be amended or eliminated at any time in the future. As a result of the
Company's decision to opt out of the "control share acquisition" provisions of
the MGCL, stockholders who acquire a substantial block of Common Stock are not
precluded from exercising full voting rights with respect to their shares on
all matters without first obtaining the approval of other stockholders entitled
to vote. This may have the effect of making it easier for any such control
share stockholder to effect a business combination with the Company. However,
no assurance can be given that any such business combination would be
consummated or, if consummated, would result in a purchase of shares of Common
Stock from any stockholder at a premium.

In addition, certain provisions of the Company's Charter and Bylaws
summarized in the following paragraphs may be deemed to have an anti-takeover
effect and may delay, defer or prevent a change in control, a tender offer or
takeover attempt that a stockholder might consider in its best interest,
including those attempts that might result in a premium over the market price
for the shares held by stockholders.

CLASSIFICATION OF THE BOARD OF DIRECTORS. The Company's Charter provides
that the number of directors of the Company may be established by the Bylaws
but may not be fewer than the minimum number required by the MGCL (under which
most circumstances is three directors). Any vacancy may be filled, at any
regular meeting or at any special meeting called for that purpose, by 80% of
the remaining directors. Pursuant to the Bylaws, the Company's Board of
Directors are divided into three classes. As the term of each class expires,
the directors in that class will be elected for a term of three years. The
affirmative vote of a majority of the votes represented at a meeting of
stockholders duly called shall be required to elect a director. The Company
believes that the classification of the Board of Directors will help to assure
the continuity and stability of the Company's business strategies and policies
as determined by the Board of Directors. Holders of Common Stock will have no
right to cumulative voting for the election of directors. Consequently, at each
annual meeting of stockholders, the holders of a majority of the quorum of
shares of Common Stock will be able to elect all of the successors of the class
of directors whose terms expire at that meeting.

The classified director provision could have the effect of making the
replacement of incumbent directors more time consuming and difficult, and could
discourage a third-party from making a tender offer or otherwise attempting to
obtain control of the Company, even though such an attempt might be beneficial
to the Company and its stockholders. Elections of directors at two annual
meetings would be necessary to effect a change in control of the Board of
Directors. Thus, the classified board provision could increase the likelihood
that incumbent directors will retain their positions.

REMOVAL OF DIRECTORS. The Charter provides that one or more directors may
be removed only for cause (as defined in the Charter) and by the affirmative
vote of at least 80% of the votes cast at an

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annual or special meeting of stockholders (but in no event less than a majority
of all votes entitled to be cast at the meeting). This provision, when coupled
with the provision in the Charter authorizing the Board of Directors to fill
vacant directorships, precludes stockholders from removing incumbent directors
except for cause for removal.

SPECIAL MEETINGS. The Bylaws provide that special meetings of stockholders
may be called only by the President, Chief Executive Officer, or Chairman of
the Board of Directors and must be called upon the written demand of the
holders of not less than a majority of all of the votes entitled to be cast at
a the meeting.

AUTHORIZED BUT UNISSUED SHARES. The authorized but unissued shares of
Common Stock and preferred stock are available for future issuance without
stockholder approval. If issued, these additional shares may be utilized for a
variety of corporate purposes, including future public offerings to raise
additional capital, corporate acquisitions and employee benefit plans. The
existence of authorized but unissued Common Stock and preferred stock may
enable the Board of Directors to issue shares to persons friendly to current
management which could render more difficult or discourage an attempt to obtain
control of the Company by means of a proxy contest, tender offer, merger or
otherwise, and thereby protect the continuity of the Company's management.

SUPERMAJORITY PROVISIONS. Under the Bylaws of the Company, the
affirmative vote of at least 662/3% of the votes cast at a meeting of
stockholders duly called at which a quorum is present is required to approve
any matter properly before the meeting, unless a greater percentage is required
by statute or by the Charter. Under the MGCL, a Maryland corporation generally
cannot dissolve, amend its charter, merge, sell all or substantially all of its
assets, engage in a share exchange or engage in similar transactions outside of
the ordinary course of business unless approved by the affirmative vote of
stockholders holding at least two-thirds of the shares entitled to vote on the
matter unless a greater or lesser percentage (but no less than a majority of
all of the votes entitled to be cast on the matter) is set forth in the
corporation's charter. Any amendment to any provision of the Charter requiring
a vote of stockholders by a percentage greater than 662/3% must be approved by
the greater of the votes required by such provision or the affirmative vote of
at least 662/3% of all votes entitled to be cast on the matter. The Bylaws
provide that a vote of at least 80% of the Board of Directors is required to
approve any matter before the Board of Directors.

ADVANCE NOTICE OF DIRECTOR NOMINATIONS AND NEW BUSINESS

The Bylaws of the Company provide that (a) with respect to an annual
meeting of stockholders, nominations of persons for election to the Board of
Directors and the proposal of business to be considered by stockholders may be
made only (i) pursuant to the Company's notice of the meeting, (ii) by the
Board of Directors or (iii) by a stockholder who is entitled to vote at the
meeting and has complied with the advance notice procedures set forth in the
Bylaws and (b) with respect to special meetings of stockholders, only the
business specified in the Company's notice of meeting may be brought before the
meeting of stockholders and nominations of persons for election to the Board of
Directors may be made only (i) pursuant to the Company's notice of the meeting,
(ii) by the Board of Directors or (iii) provided that the Board of Directors
has determined that directors shall be elected at such meeting, by a
stockholder who is entitled to vote at the meeting and has complied with the
advance notice provisions set forth in the Bylaws.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Bylaws of the Company obligate the Company to the maximum extent
permitted by Maryland law, to indemnify and to pay or reimburse reasonable
expenses in advance of final disposition of a proceeding to (a) any present or
former director or officer who is made a party to the proceeding by reason of
his service in that capacity or (b) any individual who, while a director of the
Company and at the request of the Company, serves or has served another
corporation, real estate investment trust partnership, joint venture, trust,
employee benefit plan or any other enterprise as a director, officer,

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partner, managing member or trustee of such corporation, real estate investment
trust partnership, joint venture, trust, employee benefit plan or other
enterprise and who is made a party to the proceeding by reason of his service
in that capacity. The Bylaws also permit the Company to indemnify and advance
expenses to any person who served a predecessor of the Company in any of the
capacities described above and to any employee or agent of the Company or a
predecessor of the Company.

The MGCL requires a corporation (unless its Charter provides otherwise,
which the Company's Charter does not) to indemnify a director or officer who
has been successful, on the merits or otherwise, in the defense of any
proceeding to which he is made a party by reason of his service in that
capacity. The MGCL permits a corporation to indemnify its present and former
directors and officers, among others, against judgments, penalties, fines,
settlements and reasonable expenses actually incurred by them in connection
with any proceeding to which they may be made a party by reason of their
service in those or other capacities unless it is established that (a) the act
or omission of the director or officer was material to the matter giving rise
to the proceeding and (i) was committed in bad faith or (ii) was the result of
active and deliberate dishonesty, (b) the director or officer actually received
an improper personal benefit in money, property or services or (c) in the case
of any criminal proceeding, the director or officer had reasonable cause to
believe that the act or omission was unlawful or for a judgment of liability on
the basis that personal benefit was improperly received, unless, in either
case, a court orders indemnification, and then only for expenses. However,
under the MGCL, a Maryland corporation may not indemnify for an adverse
judgment in a suit by or in the right of the corporation. In addition, the MGCL
permits a corporation to advancing reasonable expenses to a director or officer
upon the corporation's receipt of (a) a written affirmation by the director or
officer of his good faith belief that he has met the standard of conduct
necessary for indemnification by the corporation and (b) a written undertaking
by or on his behalf to repay the amount paid or reimbursed by the Company if it
shall ultimately be determined that the standard of conduct was not met. The
termination of any proceeding by conviction, or upon a plea of nolo contendere
or its equivalent, or an entry of any order of probation prior to judgment,
creates a rebuttable presumption that the director or officer did not meet the
requisite standard of conduct required for indemnification to be permitted.

The Company has entered into indemnification agreements with each member
of the Board of Directors (each, an "Indemnified Director"). The
indemnification agreements require, among other things, that the Company
indemnify to the fullest extent permitted by law and advance to the Indemnified
Director all related expenses, subject to reimbursement if it is subsequently
determined that indemnification is not permitted. Under the indemnification
agreements, the Company must also indemnify and advance all expenses incurred
by an Indemnified Director seeking to enforce his rights under the
indemnification agreements and may cover executive officers and directors under
the Company's directors' and officers' liability insurance. Although the form
of indemnification agreement offers substantially the same scope of coverage
afforded by law, it provides greater assurance to directors and executive
officers that indemnification will be available, because, as a contract, it
cannot be modified unilaterally in the future by the Board of Directors or the
stockholders to eliminate the rights it provides.

The Charter of the Company authorizes it, to the maximum extent permitted
by Maryland law, to obligate itself to indemnify and to pay or reimburse
reasonable expenses in advance of final disposition of a proceeding to (a) any
present or former director or officer of the Company or (b) any individual who,
while a director of the Company and at the request of the Company, serves or
has served another corporation, real estate investment trust, partnership,
joint venture, trust, employee benefit plan or any other enterprise as a
director, officer, managing member, partner or trustee of such corporation,
real estate investment trust, partnership, joint venture, trust, employee
benefit plan or other enterprise from and against any claim or liability to
which such person may become subject or which such person may incur by reason
of his or her status as a present or former director or officer of the Company.
The Bylaws of the Company obligate it, to the maximum extent permitted by
Maryland law, to indemnify and to pay or reimburse reasonable expenses in
advance of final disposition of a proceeding to (a) any present or former
director or officer who is made a party to the proceeding by reason of his
service in that capacity or (b) any individual who, while a director of the
Company and at the request of the

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Company, serves or has served another corporation, real estate investment
trust, partnership, joint venture, trust, employee benefit plan or any other
enterprise as a director, officer, partner or trustee of such corporation, real
estate investment trust, partnership, joint venture, trust, employee benefit
plan or other enterprise and who is made a party to the proceeding by reason of
his service in that capacity. The charter and Bylaws also permit the Company to
indemnify and advance expenses to any person who served a predecessor of the
Company in any of the capacities described above and to any employee or agent
of the Company or a predecessor of the Company.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar of the Common Stock will be American
Stock Transfer & Trust Company.

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SHARES ELIGIBLE FOR FUTURE SALE

Upon consummation of the Offering, the Company will have 11,608,130 shares
of Common Stock outstanding (12,313,130 shares if the over-allotment option is
exercised in full). Of those shares, the 4,700,000 shares sold in the Offering
(5,405,000 shares if the over-allotment option is exercised in full) will be
freely transferable without restriction or registration under the Act, unless
purchased by persons deemed to be "affiliates" of the Company (as that term is
defined under the Act). The remaining 6,908,130 shares of Common Stock to be
outstanding immediately following the Offering ("restricted shares") may only
be sold in the public market if such shares are registered under the Act or
sold in accordance with Rule 144 promulgated under the Act.

In general, under Rule 144 a person (or persons whose shares are
aggregated) including an affiliate, who has beneficially owned his shares for
one year, may sell in the open market within any three-month period a number of
shares that does not exceed the greater of (i) 1% of the then outstanding
shares of the Company's Common Stock (approximately 116,081 shares immediately
after the Offering, 123,131 if the over-allotment option is exercised in full)
or (ii) the average weekly trading volume in the Common Stock in the
over-the-counter market during the four calendar weeks preceding such sale.
Sales under Rule 144 are also subject to certain limitations on the manner of
sale, notice requirements and availability of current public information about
the Company. A person (or persons whose shares are aggregated) who is deemed
not to have been an "affiliate" of the Company at any time during the 90 days
preceding a sale by such person and who has beneficially owned his shares for
at least two years, may sell such shares in the public market under Rule 144(k)
without regard to the volume limitations, manner of sale provisions, notice
requirements or availability of current information referred to above.
Restricted shares properly sold in reliance upon Rule 144 are thereafter freely
tradeable without restrictions or registration under the Act, unless thereafter
held by an "affiliate" of the Company.

The Company and the holders of substantially all of the outstanding Common
Stock have agreed not to sell any shares of Common Stock for 180 days from the
date of this Prospectus without the prior written consent of Credit Suisse
First Boston. See "Underwriting". Following such 180-day period, approximately
5,300,000 shares held by current stockholders will be available for sale under
Rule 144 of the Act. Additionally, shares of Common Stock have been reserved
for issuance under the Company's 1995 Plan, under which options to purchase
614,000 shares of Common Stock are issued and outstanding. The Company intends
to register under the Act all 1,000,000 eligible shares issued or reserved for
issuance under the 1995 Plan. See "Management--Stock Option Plan". Shares
covered by such registration will, when issued, be eligible for resale in the
public market, subject to Rule 144 limitations applicable to affiliates.
Pursuant to certain registration rights agreements among the Company and
certain current stockholders, the Company has granted various registration
rights to such stockholders who have waived such rights with respect to the
Offering. See "Certain Transactions".

Prior to the Offering, there has been no trading market for the Common
Stock. No prediction can be made as to the effect, if any, that future sales of
shares pursuant to Rule 144 or otherwise will have on the market price
prevailing from time to time. Sales of substantial amounts of the Common Stock
in the public market following the Offering could adversely affect the then
prevailing market price.

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FEDERAL INCOME TAX CONSIDERATIONS

The following summary discusses the material federal income tax
considerations to prospective purchasers of the Common Stock, other than
existing stockholders, with respect to the acquisition, ownership and
disposition of Common Stock. This summary includes a discussion of tax matters
regarding the Company. The statements set forth below, insofar as they purport
to describe matters of law, are, in the opinion of Greenberg Traurig Hoffman
Lipoff Rosen & Quentel, P.A., tax counsel to the Company, the material federal
tax considerations relevant to purchasers of Common Stock, other than existing
stockholders of the Company. A copy of that tax opinion has been filed as an
exhibit to the Company's registration statement of which this Prospectus forms
a part. This discussion does not purport to deal with tax considerations
relevant to an existing stockholder of the Company or all aspects of taxation
that may be relevant to any other particular purchaser in light of his or her
personal investment or tax circumstances, or to certain types of purchasers
subject to special treatment under the federal income tax laws (including
insurance companies, financial institutions, broker-dealers, tax-exempt
organizations, foreign corporations or persons who are not citizens or
residents of the United States, except to the extent discussed under the
headings "Taxation of Tax-Exempt Stockholders" and "Taxation of Non-U.S.
Stockholders"). This summary is based on current law, which is subject to
change, possibly retroactively.

EACH PROSPECTIVE PURCHASER, INCLUDING EXISTING STOCKHOLDERS, ARE URGED TO
CONSULT HIS OR HER OWN TAX ADVISER REGARDING THE SPECIFIC TAX CONSEQUENCES TO
HIM OR HER OF THE PURCHASE, OWNERSHIP AND SALE OF A SHARE OF COMMON STOCK,
INCLUDING THE FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF THE
PURCHASE, OWNERSHIP AND SALE AND POTENTIAL CHANGES IN APPLICABLE TAX LAWS.

TAXATION OF THE COMPANY

GENERAL

The Company has elected to be taxed as a REIT under sections 856 through
860 of the Code, commencing with its taxable year ending December 31, 1995. The
Company believes that it has been organized and has operated in a manner that
qualifies it to be taxed under the code as a REIT commencing with that taxable
year. The Company intends to continue to operate in that manner. No assurance,
however, can be given that the manner in which the Company has operated or will
operate qualified or will qualify the Company to be taxed as a REIT.

The sections of the Code that govern the federal income tax treatment of a
REIT and its stockholders are highly technical and complex. The following
discussion sets forth the material aspects of those sections. This summary is
qualified in its entirety by the applicable Code provisions, the rules and
regulations promulgated thereunder, and the administrative and judicial
interpretations thereof.

In the opinion of Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A.,
commencing with the Company's taxable year ending December 31, 1995, the
Company has been organized in conformity with the requirements for
qualification as a REIT, and its proposed method of operation has enabled and
will enable the Company to meet the requirements for continued qualification
and taxation under the Code as a REIT. It must be emphasized that this opinion
is based on various factual assumptions relating to the organization and
operation of the Company and is conditioned upon certain representations as to
factual matters made by the Company. In addition, this opinion is based upon
the factual representations of the Company concerning its business and
properties as set forth in this Prospectus and assumes that actions described
in this Prospectus have been completed as described. Moreover, qualification
and taxation as a REIT depend upon the Company's ability to meet, through
actual annual operating results, distribution levels and diversity of stock
ownership, the various qualification tests imposed by the Code, discussed
below, the results of which have not been and will not be reviewed by Greenberg
Traurig Hoffman Lipoff Rosen & Quentel, P.A. Accordingly, no assurance

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can be given that the actual results of the Company's operations for any
particular taxable year will satisfy those requirements. Further, the
anticipated income tax treatment described in this Prospectus could be changed,
perhaps retroactively, by legislative or administrative action at any time. See
"--Failure to Qualify".

If the Company qualifies for taxation as a REIT, it generally will not be
subject to federal corporate income tax on its net income that is distributed
currently to stockholders. This treatment substantially eliminates the double
taxation at the corporate and stockholder levels that generally results from
investment in a corporation. The Company, however, nevertheless will be subject
to federal income tax as follows: First, the Company will be taxed at regular
corporate rates on any undistributed REIT taxable income, including
undistributed net capital gains. Second, under certain circumstances, the
Company may be subject to the alternative minimum tax on its items of tax
preference. Third, if the Company (i) has net income from the sale or other
disposition of foreclosure property (defined generally as a property acquired
by the Company through foreclosure or otherwise after a default on a loan
secured by the property or on a lease of the property) that is held primarily
for sale to customers in the ordinary course of business or (ii) has other
nonqualifying income from foreclosure property, the Company will be subject to
tax at the highest corporate rate on that income. Fourth, if the Company has
net income from prohibited transactions (which are, in general, certain sales
or other dispositions of property held primarily for sale to customers in the
ordinary course of business, other than foreclosure property), that income will
be subject to tax at a 100% rate. Fifth, if the Company should fail to satisfy
the 75% gross income test or the 95% gross income test (discussed below) but
nonetheless has maintained its qualification as a REIT because certain other
requirements have been met, it will be subject to tax at a 100% rate on an
amount equal to (a) the gross income attributable to the greater of the amount
by which the Company fails the 75% or 95% test multiplied by (b) a fraction
intended to reflect the Company's profitability. Sixth, if the Company should
fail to distribute during any calendar year at least the sum of (i) 85% of its
REIT ordinary income for the year, (ii) 95% of its REIT capital gain net income
for the year, and (iii) has any undistributed taxable income from prior
periods, the Company would be subject to a 4% excise tax on the excess of the
required distribution over the amount actually distributed. Seventh, if the
Company acquires an asset from a C corporation (I.E., generally a corporation
subject to full corporate level tax) in a transaction in which the basis of the
Company in the asset is determined by reference to the basis of the C
corporation in the asset (a "Built-In Gain Asset"), and if the Company
recognizes gain on a disposition of the asset during the ten-year period
beginning on the date the Company acquired the asset (the "Recognition
Period"), the Company, pursuant to Treasury regulations yet to be issued, will
pay tax at the highest regular corporate tax rate on the lesser of (i) the
excess of the fair market value of the asset over the basis of the Company in
the asset on the date the Company acquired the asset (the "Built-In Gain") and
(ii) the gain recognized by the Company. The Company has elected pursuant to
Notice 88-19 to be subject to the rules similar to the rules of section 1374 of
the Code on net Built-In Gains. This election was adopted for the tax year
ending December 31, 1995 and is being filed with the Company's Form 1120 for
the tax year ended December 31, 1996.

REQUIREMENTS FOR QUALIFICATION

The Code defines a REIT as a corporation, trust or association (1) that is
managed by one or more trustees or directors; (2) the beneficial ownership of
which is evidenced by transferable shares, or by transferable certificates of
beneficial interest; (3) that would be taxable as a domestic corporation but
for sections 856 through 859 of the Code; (4) that is neither a financial
institution nor an insurance company subject to certain provisions of the Code;
(5) the beneficial ownership of which is held by 100 or more persons; (6)
during the last half of whose taxable year not more than 50% in value of the
outstanding stock of which is owned, directly or constructively, by five or
fewer individuals (as defined in the Code to include certain entities); and (7)
that meets certain other tests, described below, regarding the nature of its
income and assets. The Code provides that conditions (1) through (4) must be
met during the entire taxable year and that condition (5) must be met during at
least 335 days of a taxable year of twelve months or during a proportionate
part of a taxable year of less than twelve months. Conditions (5) and (6) do
not apply until after the first taxable year for which an election is

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made to be taxed as a REIT. For purposes of conditions (5) and (6), pension
funds and certain other tax-exempt entities are treated as individuals, subject
to a "look-through" exception in the case of condition (6).

The Company has satisfied condition (5) and believes that it has issued
sufficient shares to allow it to satisfy condition (6). In addition, the
Company's Charter provides for restrictions regarding ownership and transfer of
shares, which restrictions are intended to assist the Company in continuing to
satisfy the share ownership requirements described in (5) and (6) above. Those
ownership and transfer restrictions are described in "Description of Capital
Stock--Restrictions on Ownership and Transfer of Common Stock". Those
restrictions may not ensure that the Company in all cases will be able to
satisfy the share ownership requirements described above. If the Company fails
to satisfy those share ownership requirements, the Company's status as a REIT
will terminate. See "--Failure to Qualify". Pursuant to the Taxpayer Relief Act
of 1997, enacted August 5, 1997, starting with a REIT's first taxable year that
begins after August 5, 1997, a REIT that complies with Treasury regulations for
ascertaining the ownership of its shares and that does not know or, exercising
reasonable diligence would not have known, whether it failed condition (6) will
be treated as meeting condition (6).

In addition, a corporation may not elect to become a REIT unless its
taxable year is a calendar year. The Company has and will continue to have a
calendar taxable year.

OWNERSHIP OF SUBSIDIARIES

Section 856(i) of the Code provides that a corporation that is a qualified
REIT subsidiary (defined as any corporation if 100 percent of whose stock is
held by the REIT at all times during the period the corporation is in
existence) shall not be treated as a separate corporation, and all assets,
liabilities and items of income, deduction and credit of a qualified REIT
subsidiary shall be treated as assets, liabilities and those items (as the case
may be) of the REIT. The Company believes that each of its subsidiaries
qualifies as a qualified REIT subsidiary within the meaning of the Code. Thus,
in applying the requirements described herein, the Company's subsidiaries are
ignored, and all assets, liabilities and items of income, deduction and credit
of those subsidiaries are treated as assets, liabilities and items of income,
deduction and credit of the Company. Pursuant to the Taxpayer Relief Act of
1997, starting with a REIT's first taxable year that begins after August 5,
1997, a corporation can qualify as a qualified REIT subsidiary even though
there was a period of time during which the REIT did not own 100 percent of its
stock, in which case the corporation will be treated as liquidated and
reincorporated by the REIT.

INCOME TESTS

To maintain qualification as a REIT, the Company each year must satisfy
three gross income requirements. First, at least 75% of the Company's gross
income (excluding gross income from prohibited transactions) must be derived
directly or indirectly from investments relating to real property or mortgages
on real property (including rents from real property and, in certain
circumstances, interest) or from certain types of temporary investments.
Second, at least 95% of the Company's gross income (excluding gross income from
prohibited transactions) must be derived from such real property investments,
dividends, interest and gain from the sale or disposition of stock or
securities (or from any combination of the foregoing). Third, gain derived from
the sale or other disposition of stock or securities held for less than one
year, property in a prohibited transaction and real property held for less than
four years (apart from involuntary conversions and sales of foreclosure
property) must represent less than 30% of the Company's gross income (including
gross income from prohibited transactions). Pursuant to the Taxpayer Relief Act
of 1997, the third gross income requirement is eliminated, starting with a
REIT's first taxable year that begins after August 5, 1997.

Rents received by the Company will qualify as rents from real property in
satisfying the gross income requirements for a REIT described above only if
several conditions are met. First, the amount of rent must not be based in
whole or in part on the income or profits of any person. However, an

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amount received or accrued generally will not be excluded from rents from real
property solely by reason of being based on a fixed percentage or percentages
of receipts or sales. Second, rents received from a tenant will not qualify as
rents from real property in satisfying the gross income tests if the REIT, or
an actual or constructive owner of 10% or more of the REIT, actually or
constructively owns 10% or more of the tenant (a "Related Party Tenant").
Third, if rent attributable to personal property leased in connection with a
lease of real property is greater than 15% of the total rent received under the
lease, the portion of the rent attributable to the personal property will not
qualify as rents from real property. Finally, for rents received to qualify as
rents from real property, the REIT generally must not operate or manage the
property or furnish or render services to the tenants of such property, other
than through an independent contractor from whom the REIT derives no revenue.
The REIT, however, may perform directly certain services that are usually or
customarily rendered in connection with the rental of space for occupancy only
and are not otherwise considered rendered to the occupant of the property.
Moreover, pursuant to the Taxpayer Relief Act of 1997, starting with a REIT's
first taxable year that begins after August 5, 1997, income derived by a REIT
from services provided to tenants or from managing or operating a property will
be treated as rent from real property provided the income does not exceed one
percent of the REIT's gross income from the property. The Company has not and
will not (i) charge rent for any property that is based in whole or in part on
the income or profits of any person (except by reason of being based on a
percentage of receipts or sales, as described above), (ii) rent any property to
a Related Party Tenant (unless the Board of Directors determines in its
discretion that the rent received from the Related Party Tenant is not material
and will not jeopardize the Company's status as a REIT), (iii) derive rental
income attributable to personal property (other than personal property leased
in connection with the lease of real property, the amount of which is less than
15% of the total rent received under the lease) or (iv) perform services
considered to be rendered to the occupant of the property (unless the income
from those services qualifies as rent from real property pursuant to the
Taxpayer Relief Act of 1997) other than through an independent contractor from
whom the Company derives no revenue. The Company believes that the aggregate
amount of any nonqualifying income in any taxable year has not exceeded and
will not exceed the limit on nonqualifying income under the gross income tests.

If the Company fails to satisfy one or both of the 75% or 95% gross income
tests for any taxable year, it nevertheless may qualify as a REIT for that year
if it is entitled to relief under certain provisions of the Code. Those relief
provisions generally will be available if the Company's failure to meet the
gross income tests was due to reasonable cause and not willful neglect, the
Company attaches a schedule of the sources of its income to its federal income
tax return, and any incorrect information on the schedule is not due to fraud
with intent to evade tax. It is not possible, however, to state whether in all
circumstances the Company would be entitled to the benefit of those relief
provisions. For example, if the Company fails to satisfy the gross income tests
because nonqualifying income that the Company intentionally receives exceeds
the limits on that income, the IRS could conclude that the Company's failure to
satisfy the gross income tests was not due to reasonable cause. If those relief
provisions are inapplicable to a particular set of circumstances involving the
Company, the Company will not qualify as a REIT. As discussed above in
"--Taxation of the Company-General", even if those relief provisions apply, a
tax would be imposed with respect to the net nonqualifying income. No similar
mitigation provision provides relief if the Company fails the 30% gross income
test. In that case, the Company would cease to qualify as a REIT. As noted
above, however, that test no longer will apply to the Company starting January
1, 1998.

Any gain realized by the Company on the sale of any property held as
inventory or other property held primarily for sale to customers in the
ordinary course of business will be treated as income from a prohibited
transaction that is subject to a penalty tax at a 100% rate. This prohibited
transaction income also may have an adverse effect upon the Company's ability
to satisfy the gross income tests for qualification as a REIT. Under existing
law, whether property is held as inventory or primarily for sale to customers
in the ordinary course of a trade or business is a question of fact that
depends on all the facts and circumstances with respect to the particular
transaction. The Company intends to hold the Existing Properties for investment
with a view to long-term appreciation, to engage in the business of developing,
owning and operating the Existing Properties and acquiring, developing, owning
and

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operating other properties and to make occasional sales of the Existing
Properties consistent with the Company's investment objectives. There can be no
assurance, however, that the IRS might not contend that one or more of those
sales is subject to the 100% penalty tax.

ASSET TESTS

The Company must satisfy three tests relating to the nature of its assets
at the close of each quarter of its taxable year. First, at least 75% of the
value of the Company's total assets must be represented by real estate assets,
cash, cash items and government securities (including stock or debt instruments
held for not more than one year purchased with the proceeds of an offering by
the Company of stock or debt with a term of at least five years). Second, not
more than 25% of the Company's total assets may be represented by securities
other than those qualifying for the 75% asset class. Third, of the investments
included in the 25% asset class, the value of any one issuer's securities owned
by the Company may not exceed 5% of the value of the Company's total assets,
and the Company may not own more than 10% of any one issuer's outstanding
voting securities.

After initially meeting the asset tests at the close of any quarter, the
Company will not lose its status as a REIT for failure to satisfy those tests
at the end of a later quarter solely by reason of changes in asset values. If
the failure to satisfy the asset tests results from an acquisition of
securities or other property during a quarter, the failure can be cured by
disposition of sufficient nonqualifying assets within 30 days after the close
of that quarter. The Company has maintained and will continue to maintain
adequate records of the value of its assets to ensure compliance with the asset
tests and within the 30 days after the close of any quarter will take those
actions that may be required to cure any noncompliance. If the Company fails to
cure noncompliance with the asset tests within that time period, the Company
will cease to qualify as a REIT.

ANNUAL DISTRIBUTION REQUIREMENTS

To qualify as a REIT, the Company is required to distribute dividends to
its stockholders (other than capital gain dividends) in an amount at least
equal to (A) the sum of (i) 95% of the Company's REIT taxable income (computed
without regard to the dividends paid deduction and the Company's net capital
gain) and (ii) 95% of any after tax net income from foreclosure property minus
(B) the sum of certain items of noncash income in excess of 5% of the Company's
REIT taxable income. In addition, if the Company disposes of any Built-In Gain
Asset during its Recognition Period, the Company will be required to distribute
at least 95% of any Built-in Gain, after tax, recognized on the disposition of
that asset pursuant to Treasury regulations that have not yet been promulgated.
Those distributions must be paid in the taxable year to which they relate or in
the following taxable year if declared before the Company timely files its tax
return for that year and if paid on or before the first regular dividend
payment after declaration. Those distributions are taxable to holders of Common
Stock (other than tax-exempt entities, as discussed below) in the year paid
even though they relate to a prior year for purposes of the Company's 95%
distribution requirement. To the extent the Company does not distribute all of
its net capital gain or distributes at least 95% but less than all of its REIT
taxable income, as adjusted, it will be subject to tax thereon at regular
corporate tax rates. The Company has made and intends to make timely
distributions sufficient to satisfy these annual distribution requirements.

It is expected that the Company's REIT taxable income will be less than
its cash flow due to the allowance of depreciation and other noncash charges in
computing REIT taxable income. Accordingly, the Company anticipates that it
generally will have sufficient cash or liquid assets to enable it to satisfy
the distribution requirements described above. It is possible, however, that
the Company, from time to time, may not have sufficient cash or other liquid
assets to meet those distribution requirements due to timing differences
between (i) the actual receipt of income and actual payment of deductible
expenses and (ii) the inclusion of the income and deduction of the expenses in
arriving at taxable income of the Company. If timing differences occur, the
Company, in order to meet the distribution requirements, may find it necessary
to arrange for short-term, or possibly long-term, borrowings or to pay
dividends in the form of taxable stock dividends.

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Under certain circumstances, the Company may be able to rectify a failure
to meet the distribution requirements for a year by paying a deficiency
dividend to stockholders in a later year. A deficiency dividend may be included
in the Company's deduction for dividends paid for the earlier year. Thus, the
Company may be able to avoid paying tax on amounts that can be deducted as
deficiency dividends. The Company, however, will be required to pay interest
with respect to tax eliminated through a deficiency dividend.

Furthermore, if the Company should fail to distribute during any calendar
year at least the sum of (i) 85% of its REIT ordinary income for the year, (ii)
95% of its REIT capital gain income for the year and (iii) any undistributed
taxable income from prior periods, the Company would be subject to a 4% excise
tax on the excess of that required distribution over the amounts actually
distributed.

FAILURE TO QUALIFY FOR TAXATION AS A REIT

If the Company fails to qualify for taxation as a REIT in any taxable
year, and if the relief provisions do not apply, the Company will be subject to
tax (including any applicable alternative minimum tax) on its taxable income at
regular corporate rates. Distributions to stockholders in any year in which the
Company fails to qualify as a REIT will not be deductible by the Company (nor
be required to be made). As a result, the Company's failure to qualify as a
REIT would reduce the Cash Available for Distribution by the Company to its
stockholders. In addition, if the Company fails to qualify as a REIT, all
distributions to stockholders will be taxable to them as ordinary income to the
extent of the Company's current and accumulated earnings and profits, although,
subject to certain limitations, corporate distributees may be eligible for the
dividends received deduction. Unless entitled to relief under specific
statutory provisions, the Company also will be disqualified from taxation as a
REIT for the four taxable years following the year during which qualification
is lost. It is not possible to state whether the Company in all circumstances
would be entitled to statutory relief from disqualification as a REIT.

TAXATION OF U.S. STOCKHOLDERS

As used herein, the term "U.S. Stockholder" means a holder of shares of
Common Stock who, for U.S. federal income tax purposes, is (i) a citizen or
resident of the United States, (ii) a corporation, partnership or other entity
created or organized in or under the laws of the United States or of any state
therein or the District of Columbia, (iii) an estate the income of which is
subject to U.S. federal income taxation regardless of its source, or (iv) is a
trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more U.S.
fiduciaries have the authority to control all substantial decisions of the
trust.

As long as the Company qualifies as a REIT, distributions made by the
Company out of its current or accumulated earnings and profits (and not
designated as a capital gain dividend) will constitute dividends taxable to its
taxable U.S. Stockholders as ordinary income. Those distributions will not be
eligible for the dividends received deduction in the case of U.S. Stockholders
that are corporations.

Distributions by the Company that are designated by the Company properly
as capital gain dividends, to the extent they do not exceed the Company's
actual net capital gain for the taxable year, will constitute gain from the
sale or other disposition of a capital asset held for more than one year to a
U.S. Stockholder without regard to the period for which the U.S. Stockholder
has held his shares of Common Stock. Gain recognized by the Company on
disposition of a property will not qualify as capital gain to the extent it
does not exceed prior depreciation deductions taken with respect to the
property. It is not clear whether amounts qualifying as capital gain dividends
will be taxable to a noncorporate U.S. Stockholder at the mid-term capital
gains rate (applicable to gain from the sale of an asset held for more than one
year but not more than eighteen months), long term capital gains rate
(applicable to gain from the sale of an asset held for more than eighteen
months), or some other rate. This uncertainty may be clarified by future
regulations. A U.S. Stockholder that is a corporation may be required to treat
up to 20% of certain capital gain dividends as ordinary income.

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Pursuant to the Taxpayer Relief Act of 1997, starting with a REIT's first
taxable year that begins after August 5, 1997, a REIT may elect to retain and
pay income tax on net long-term capital gains that it receives during a taxable
year. If a REIT makes this election, its stockholders are required to include
in their income as long-term capital gain their proportionate share of the
undistributed long-term capital gains so designated by the REIT. A stockholder
will be treated as having paid his or her share of the tax paid by the REIT in
respect of long-term capital gains so designated by the REIT, for which the
stockholder will be entitled to a credit or refund. In addition, the
stockholder's basis in his or her REIT shares will be increased by the amount
of the REIT's designated undistributed long-term capital gains that are
included in the stockholder's long-term capital gains, reduced by the
stockholder's proportionate share of tax paid by the REIT on those gains that
the stockholder is treated as having paid. The earnings and profits of the REIT
will be reduced, and the earnings and profits of any corporate stockholder of
the REIT will be increased, to take into account amounts designated by the REIT
pursuant to this rule. A REIT must pay its tax on its designated long-term
capital gains within 30 days of the close of any taxable year in which it
designates long-term capital gains pursuant to this rule, and it must mail a
written notice of its designation to its stockholders within 60 days of the
close of the taxable year.

Distributions by the Company that exceed the Company's current and
accumulated earnings and profits and that are not designated as capital gain
dividends will be treated by a U.S. Stockholder first as tax free reductions of
his tax basis in his shares of Common Stock to the extent thereof and
thereafter as capital gains (provided he holds those shares as capital assets).
Capital gain recognized by certain noncorporate U.S. Stockholders is taxed at
preferential rates that will vary depending on whether the Common Stock has
been held for more than one year or more than 18 months on the date of a
distribution. Dividends declared by the Company in October, November or
December of any year and payable to a stockholder of record on a specified date
in any of those months shall be treated as both paid by the Company and
received by the stockholder on December 31 of that year, provided the dividend
actually is paid by the Company on or before January 31 of the following year.
A stockholder may not include in his own income tax return any net operating
loss or capital loss of the Company. Distributions made by the Company and gain
arising from the sale or exchange by a U.S. Stockholder of shares of Common
Stock will not be treated as passive activity income, and, as a result, a U.S.
Stockholder generally will not be able to apply any "passive losses" against
that income or gain. Distributions by the Company, to the extent they do not
constitute a return of basis, generally will be treated as investment income
for purposes of computing the investment income limitation. Gain arising from
the sale or other disposition of Common Stock, however, will not be treated as
investment income unless the U.S. Stockholder elects to reduce the amount of
his total net capital gain eligible for preferential capital gains tax rates by
the amount of that gain with respect to that Common Stock.

Upon any sale or other disposition of Common Stock, a U.S. Stockholder
will recognize gain or loss for federal income tax purposes in an amount equal
to the difference between (i) the amount of cash and the fair market value of
any property received on the sale or other disposition and (ii) the holder's
adjusted tax basis in the Common Stock. That gain or loss will be capital gain
or loss if the Common Stock has been held by the U.S. Stockholder as a capital
asset and will be long-term gain or loss if the share has been held for more
than one year. In general, any loss recognized by a U.S. Stockholder upon the
sale or other disposition of Common Stock that has been held for six months or
less (after applying certain holding period rules) will be treated as a
long-term capital loss to the extent of distributions received by the U.S.
Stockholder from the Company that were required to be treated as long-term
capital gains.

BACKUP WITHHOLDING

The Company will report to its U.S. Stockholders and to the IRS the amount
of dividends paid during each calendar year and the amount of tax withheld, if
any. Under the backup withholding rules, a U.S. stockholder may be subject to
backup withholding at the rate of 31% with respect to dividends paid unless the
U.S. Stockholder (a) is a corporation or comes within certain other exempt
categories and, when required, demonstrates that fact or (b) provides a
taxpayer identification number, certifies as to no

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loss of exemption from backup withholding and otherwise complies with
applicable requirements of the backup withholding rules. A U.S. Stockholder
that does not provide the Company with his correct taxpayer identification
number also may be subject to penalties imposed by the IRS. Any amount paid as
backup withholding will be creditable against the U.S. Stockholder's income tax
liability. In addition, the Company may be required to withhold a portion of
capital gain distributions to any stockholders who fail to certify their
non-foreign status to the Company. See "--Taxation of Non-U.S. Stockholders".

TAXATION OF CERTAIN TAX-EXEMPT STOCKHOLDERS

The IRS has ruled that amounts distributed as dividends by a qualified
REIT do not constitute unrelated business taxable income ("UBTI") when received
by a tax-exempt entity. Based on that ruling, provided a tax-exempt stockholder
(with certain exceptions described below) has not held its Common Stock as
"debt financed property" within the meaning of the Code and the Common Stock is
not otherwise used in a trade or business, dividends from the Company will not
be UBTI. Similarly, income from the sale of Common Stock will not constitute
UBTI unless the tax-exempt stockholder has held the Common Stock as "debt
financed property" within the meaning of the Code or has used the Common Stock
in a trade or business.

For a tax-exempt stockholder that is a social club, voluntary employee
benefit association, supplemental unemployment benefit trust or qualified group
legal services plan exempt from federal income taxation under Code section
501(c)(7), (c)(9), (c)(17) or (c)(20), respectively, income from an investment
in the Company will constitute UBTI unless the organization is able properly to
deduct amounts set aside or placed in reserve for certain purposes so as to
offset the income generated by its investment in the Company. Those prospective
investors should consult their own tax advisers concerning these "set aside"
and reserve requirements.

Notwithstanding the above, however, a portion of the dividends paid by a
pension-held REIT shall be treated as UBTI as to any trust that (1) is
described in section 401(a) of the Code, (2) is tax-exempt under section 501(a)
of the Code and (3) holds more than 10% by value of the interests in the REIT.
Tax-exempt pension funds that are described in section 401(a) of the Code are
referred to below as qualified trusts. A REIT is a pension-held REIT if (1) it
would not have qualified as a REIT but for the fact that section 856(h)(3) of
the Code provides that stock owned by a qualified trust shall be treated, for
purposes of requirement (5) of the requirements for qualification as a REIT
(see "Taxation of the Company Requirements for Qualification"), as owned by the
beneficiaries of the trust (rather than by the trust itself), and (2) either
(a) at least one qualified trust holds more than 25% by value of the interests
in the REIT, or (b) one or more qualified trusts, each of which owns more than
10% by value of the interests in the REIT, hold in the aggregate more than 50%
by value of the interests in the REIT. The percentage of any REIT dividend
treated as UBTI is equal to the ratio of (i) the UBTI earned by the REIT
(treating the REIT as if it were a qualified trust and therefore subject to tax
on UBTI) to (ii) the total gross income of the REIT. A de minimis exception
applies when the percentage is less than 5% for any year. The provisions
requiring qualified trusts to treat a portion of REIT distributions as UBTI
will not apply if the REIT is able to satisfy requirement (5) of the
requirements for qualification as a REIT without relying upon the look-through
exception with respect to qualified trusts. As a result of certain limitations
on the transfer and ownership of Common Stock contained in the Charter, the
Company is not and does not expect to be classified as a pension held REIT.

TAXATION OF NON-U.S. STOCKHOLDERS

The rules governing U.S. federal income taxation of the ownership and
disposition of Common Stock by persons that are, for purposes of such taxation,
nonresident alien individuals, foreign corporations, foreign partnerships or
foreign estates or trusts (collectively, "Non-U.S. Stockholders") are complex,
and no attempt is made herein to provide more than a brief summary of the
rules. The discussion, which is directed only at prospective investors that are
not existing stockholders, does not address all aspects of U.S. federal income
taxation and does not address state, local or foreign tax consequences that may
be relevant to a Non-U.S. Stockholder in light of his particular circumstances.
In

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addition, this discussion is based on current law, which is subject to change,
and assumes that the Company qualifies for taxation as a REIT. Prospective
Non-U.S. Stockholders should consult their own tax advisers to determine the
impact of federal, state, local and foreign tax laws, including any reporting
requirements, with regard to an investment in Common Stock.

DISTRIBUTIONS

A distribution by the Company to a Non-U.S. Stockholder which is neither
attributable to gain from a sale or exchange by the Company of a U.S. real
property interest nor designated by the Company as a capital gain dividend will
be treated as a dividend to the extent it is paid out of current or accumulated
earnings and profits of the Company. A dividend will be subject to withholding
of U.S. federal income tax imposed on the gross amount thereof at the rate of
30% or any lower rate that may be specified by an applicable income tax treaty,
unless the dividend is effectively connected with the conduct of trade or
business by the Non-U.S. Stockholder within the United States or, if an income
tax treaty applies, is attributable to a U.S. permanent establishment of the
Non-U.S. Stockholder. A dividend received by a Non-U.S. Stockholder which is
effectively connected with a U.S. trade or business or is attributable to a
U.S. permanent establishment will be subject to tax at graduated rates on net
income in generally the same manner as a dividend received by a U.S.
Stockholder is taxed and is not subject to U.S. withholding tax. A dividend
received by a Non-U.S. Stockholder that is a corporation also may be subject to
an additional branch profits tax at a 30% rate or a lower rate that may be
specified by an applicable income tax treaty.

Pursuant to current Treasury regulations, dividends paid to an address in
a country outside the United States generally are presumed to be paid to a
resident of that country for purposes of determining the applicability of U.S.
withholding tax and the applicability of a tax treaty. Under proposed Treasury
regulations not currently in effect, however, a Non-U.S. Stockholder who wishes
to claim the benefit of an applicable treaty would be required to satisfy
certain certification and other requirements. Under certain treaties, lower
withholding rates generally applicable to dividends do not apply to dividends
from a REIT. Certain certification and disclosure requirements must be
satisfied to qualify for the exemption from U.S. withholding tax for income
effectively connected with a U.S. trade or business or attributable to a U.S.
permanent establishment.

Distributions in excess of current or accumulated earnings and profits of
the Company will not be taxable to a Non-U.S. Stockholder to the extent they do
not exceed the adjusted basis of the stockholder's Common Stock but rather will
reduce the adjusted basis of that Common Stock. To the extent those
distributions exceed the adjusted basis of a Non-U.S. Stockholder's Common
Stock, they will be treated as gain from the sale or exchange of his Common
Stock, the tax treatment of which is described below. If it cannot be
determined at the time a distribution is made whether or not that distribution
will exceed current and accumulated earnings and profits, the distribution
generally will be treated as a dividend for withholding tax purposes. However,
amounts thus withheld are generally refundable by the IRS if it subsequently is
determined that the distribution in fact exceeded current and accumulated
earnings and profits of the Company.

A distribution to a Non-U.S. Stockholder that is designated by the Company
at the time of distribution as a capital gains dividend (and not arising from
the disposition of a United States real property interest) generally will not
be subject to U.S. federal income tax unless (i) income in respect of the
Common Stock is effectively connected with a U.S. trade or business of the
Non-U.S. Stockholder (or, if an income tax treaty applies, is attributable to a
U.S. permanent establishment of the Non-U.S. Stockholder), in which case the
Non-U.S. Stockholder will be subject to the same tax consequences as a U.S.
Stockholder with respect to that distribution (except that a Non-U.S.
stockholder that is a foreign corporation also may be subject to the U.S.
branch profits tax, as discussed above), or (ii) the Non-U.S. Stockholder is a
nonresident alien individual who is present in the United States for 183 days
or more during the taxable year and has a "tax home" in the United States, in
which case the nonresident alien individual will be subject to a 30% tax on his
net capital gains.

A distribution to a Non-U.S. Stockholder that is attributable to gain from
a sale or exchange by the Company of a United States real property interest
will be treated as income effectively connected with

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a U.S. trade or business of the Non-U.S. Stockholder. The Non-U.S. Stockholder
thus generally would be taxed at the same graduated tax rates applicable to a
U.S. Stockholder (subject to a special alternative minimum tax in the case of a
nonresident alien individual). A distribution by the Company is deemed to be
designated as a capital gain dividend to the maximum extent it may be so
designated, and tax in an amount equal to 35% of that amount must be withheld
from the portion of the distribution paid to a Non-U.S. Stockholder. In
addition, in the hands of a Non-U.S. Stockholder that is a corporation, the
gain may be subject to the U.S. branch profits tax, as discussed above. In
general, in determining whether a stockholder is a U.S. Stockholder not subject
to withholding tax, the Company or other withholding agent may rely on an IRS
Form W-9 or on a certificate of non-foreign status containing information
specified by Treasury regulations, provided the Company or other withholding
agent does not have actual knowledge to the contrary. The amount of any tax
withheld is creditable against the Non-U.S. Stockholder's U.S. federal income
tax liability, and any amount of tax withheld in excess of that tax liability
may be refunded provided an appropriate claim for refund is filed with the IRS.

SALE OF COMMON STOCK

A Non-U.S. Stockholder will not be subject to U.S. federal income tax on
gain recognized on a sale or other taxable disposition of Common Stock which is
not effectively connected with a U.S. trade or business of the Non-U.S.
Stockholder, so long as the Common Stock is regularly traded on an established
securities market. Notwithstanding the foregoing, gain from the sale or
exchange of Common Stock will be taxable to a Non-U.S. Stockholder if either
(i) the gain is effectively connected with a U.S. trade or business of the
Non-U.S. Stockholder (or, if an income tax treaty applies, is attributable to a
U.S. permanent establishment of the Non-U.S. Stockholder), in which case the
Non-U.S. Stockholder generally will be subject to the same tax treatment as a
U.S. Stockholder with respect to that gain (subject possibly to a special
alternative minimum tax in the case of a nonresident alien individual), and a
Non-U.S. Stockholder that is a foreign corporation also may be subject to a
U.S. branch profits tax, as discussed above, or (ii) the Non-U.S. Stockholder
is a nonresident alien individual who is present in the United States for at
least 183 days during the taxable year and who has a "tax home" in the United
States. In the latter case, the nonresident alien will be subject to a 30% U.S.
withholding tax on his or her net capital gains. If any gain on a sale or other
disposition of Common Stock would be subject to taxation under section 897 of
the Code, the purchaser generally would be required to withhold and remit to
the IRS tax in an amount equal to 10% of the purchase price.

BACKUP WITHHOLDING OF TAX AND INFORMATION REPORTING

Backup withholding of tax (which generally is a withholding tax imposed at
the rate of 31% on certain payments to persons that fail to furnish identifying
information under the U.S. information reporting requirements) and information
reporting generally will not apply to distributions paid to Non-U.S.
Stockholders outside the United States that are treated as (i) dividends
subject to the 30% (or lower treaty rate) withholding tax discussed above, (ii)
capital gain dividends or (iii) distributions attributable to gain from the
sale or exchange by the Company of U.S. real property interests. As a general
matter, backup withholding and information reporting will not apply to a
payment of the proceeds of a sale of Common Stock by or through a foreign
office of a foreign broker. Information reporting (but not backup withholding)
will apply, however, to a payment of the proceeds of a sale of Common Stock by
a foreign office of a broker that (a) is a United States person, (b) derives
50% or more of its gross income for certain periods from the conduct of a trade
or business in the United States or (c) is a "controlled foreign corporation"
(generally, a foreign corporation controlled by certain U.S. stockholders) for
U.S. tax purposes, unless the broker has documentary evidence in its records
that the holder is a Non-U.S. Stockholder and certain other conditions are met,
or the Non-U.S. Stockholder otherwise establishes an exemption. Payment of the
proceeds of sale of Common Stock to or through a U.S. office of a broker is
subject to both backup withholding and information reporting unless the
stockholder certifies under penalties of perjury that he is a Non-U.S.
Stockholder or otherwise establishes an exemption. A Non-U.S. Stockholder may
obtain a refund of any amounts withheld under the backup withholding rules by
filing the appropriate claim for refund with the IRS.

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The U.S. Treasury recently has issued proposed regulations regarding the
withholding and information reporting rules discussed above. In general, the
proposed regulations do not alter the substantive withholding and information
reporting requirements but unify current certification procedures and forms and
clarify and modify reliance standards. If finalized in their current form, the
proposed regulations generally would be effective for payments made after
December 31, 1997, subject to certain transition rules.

TAXPAYER RELIEF ACT OF 1997

On August 5, 1997, President Clinton signed into law the Taxpayer Relief
Act of 1997 (H.R. 2014), which will have the effect of modifying certain
REIT-related Code provisions for taxable years beginning on or after January 1,
1998. In addition to the changes contained in this legislation discussed above,
some of the other potentially significant REIT-related changes contained in the
legislation include; (i) the rule disqualifying a REIT for any year in which it
fails to comply with certain regulations requiring the REIT to monitor its
stock ownership is replaced with a financial penalty; (ii) the rules regarding
attribution to partnerships of ownership in another entity for purposes of
defining qualified rent and independent contractors are modified so that
attribution occurs only when a partner owns a 25% or greater interest in the
partnership; (iii) the class of excess noncash items for purposes of the REIT
distribution requirements is expanded; and (iv) certain other Code provisions
relating to REITs are amended. Some or all of the provisions could affect both
the Company's operations and its ability to maintain its REIT status for its
taxable years beginning in 1998.

OTHER TAX CONSEQUENCES

The Company and its stockholders may be subject to taxation in various
state or local jurisdictions, including those in which it or they transact
business or reside. The state and local tax treatment of the Company and its
stockholders may not conform to the federal income tax consequences discussed
above. Consequently, prospective stockholders should consult their own tax
advisers regarding the effect of state and local tax laws on an investment in
the Company.

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ERISA CONSIDERATIONS

The following is a summary of material considerations arising under the
Employment Retirement Income Security Act of 1974 ("ERISA") and the Code that
may be relevant to a prospective purchaser (including with respect to the
discussion contained in "Plan Assets Issue", to a prospective purchaser that is
not an employee benefit plan, another tax-qualified retirement plan, an
individual retirement account or an individual retirement annuity ("IRAs")).
This discussion does not propose to deal with all aspects of ERISA or the Code
or, to the extent not preempted, state law that may be relevant to particular
employee benefit plan shareholders (including plans subject to Title I of
ERISA, other employee benefit plans and IRAs subject to the prohibited
transaction provisions of the Code, and governmental plans and church plans
that are exempt from ERISA and prohibited transaction provisions of the Code
but that may be subject to state law requirements) in light of their particular
circumstances.

THE FOLLOWING IS INTENDED TO BE A SUMMARY ONLY AND IS NOT A SUBSTITUTE FOR
CAREFUL PLANNING WITH A PROFESSIONAL. A FIDUCIARY MAKING THE DECISION TO INVEST
IN SHARES OF COMMON STOCK ON BEHALF OF A PROSPECTIVE PURCHASER WHICH IS A PLAN
SUBJECT TO ERISA, A TAX-QUALIFIED RETIREMENT PLAN, AN IRA OR OTHER EMPLOYEE
BENEFIT PLAN (COLLECTIVELY "PLANS") IS ADVISED TO CONSULT ITS OWN LEGAL ADVISOR
REGARDING THE SPECIFIC CONSIDERATIONS ARISING UNDER ERISA, THE CODE AND (TO THE
EXTENT NOT PREEMPTED) STATE LAW WITH RESPECT TO THE PURCHASE, OWNERSHIP OR SALE
OF SHARES OF COMMON STOCK BY SUCH PLAN OR IRA. A fiduciary should also consider
the entire discussion under the heading "Federal Income Tax Considerations", as
material contained therein is relevant to any decision by an employee benefit
plan, tax-qualified retirement plan or IRA to purchase the Common Stock.

FIDUCIARY CONSIDERATIONS

Each fiduciary of a Plan subject to ERISA should carefully consider
whether an investment in shares of Common Stock is consistent with its
fiduciary responsibilities under ERISA. In particular, to the extent a Plan is
subject to ERISA, the fiduciary requirements of Part 4 of Title I of ERISA
require (i) the Plan's investments to be prudent and in the best interests of
the Plan, its participants and beneficiaries, (ii) the Plan's Investments to be
diversified in order to reduce the risk of large losses, unless under the
circumstances it is clearly prudent not to do so and (iii) the Plan's
investments to be authorized under ERISA and the terms of the governing
documents of the Plan. In determining whether an investment in shares of Common
Stock is prudent for purposes of ERISA, the appropriate fiduciary of a Plan
should consider all of the facts and circumstances, including, without
limitation, whether the investment is reasonably designed, as a part of the
Plan's portfolio for which the fiduciary has investment responsibility, to meet
the objectives of the Plan, taking into consideration the risk of loss and
opportunity for gain (or other return) from the investment, the diversification
cash flow and funding requirements of the Plan, and the liquidity and current
return of the Plan's portfolio. A fiduciary should also take into account the
nature of the Company's business, the management of the Company and the length
of the Company's operating history and other matters described under "Risk
Factors".

In addition, provisions of ERISA and the Code prohibit certain
transactions in Plan assets that involve persons who have specified
relationships with a Plan. The consequences of such prohibited transactions
include excise taxes, disqualification of IRAs and other liabilities.

PLAN ASSETS ISSUE

A prohibited transaction may occur if the assets of the Company are deemed
to be Plan assets. In certain circumstances where a Plan holds an interest in
an entity, the assets of the entity are deemed to be Plan assets (the
"look-through rule"). Under such circumstances, any person that exercises
authority

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or control with respect to the management or disposition of such assets is a
Plan fiduciary. Plan assets are not defined in ERISA or the Code, but the
United States Department of Labor has issued regulations, effective March 13,
1987 (the "Regulations"), that outline the circumstances under which a Plan's
interest in an entity will be subject to the look-through rule.

The Regulations apply only to the purchase by a Plan of an "equity
interest" in an entity, such as common stock of a REIT. However, the
Regulations provide an exception to the look-through rule for equity interests
that are "publicly-offered securities".

Under the Regulations, a "publicly-offered security" is a security that is
(i) freely transferable, (ii) part of a class of securities that is widely held
and (iii) either (a) part of a class of securities that is registered under
section 12(b) or 12(g) of the Exchange Act or (b) sold to a Plan as part of an
offering of securities to the public pursuant to an effective registration
statement under the Securities Act and the class of securities of which such
security is a part is registered under the Exchange Act within 120 days (or
such longer period as may be allowed by the Commission) after the end of the
fiscal year of the issuer during which the offering of such securities to the
public occurred. Whether a security is considered "freely transferable" depends
on the facts and circumstances of each case. Generally, if the security is part
of an offering in which the minimum investment is $10,000 or less, any
restriction on or prohibition against any transfer or assignment of such
security for the purposes of preventing a termination or reclassification of
the entity for federal or state tax purposes will not of itself prevent the
security from being considered freely transferable. A class of securities is
considered "widely-held" only if it is a class of securities that is owned by
100 or more investors independent of the issuer and of one another.

The Company anticipates that the Common Stock will meet the criteria of
the publicly-offered securities exception to the look-through rule. First, the
Company anticipates that the Common Stock will be considered to be freely
transferable, as the minimum investment will be less than $10,000 and the only
restrictions upon its transfer are those required under federal income tax laws
to maintain the Company's status as a REIT. Second, the Company believes that
the Common Stock will be held by l00 or more investors and that at least 100 or
more of these Investors will be independent of the Company and of one another.
Third, the Common Stock will be part of an offering of securities to the public
pursuant to an effective registration statement under the Securities Act and
will be registered under the Exchange Act within 120 days after the end of the
fiscal year of the Company during which the offering of such securities to the
public occurs. Accordingly, the Company believes that if a Plan purchases the
Common Stock, the Company's assets should not be deemed to be Plan assets and,
therefore, that any person who exercises authority or control with respect to
the Company's assets should not be a Plan fiduciary.

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<PAGE>

UNDERWRITING

Under the terms and subject to the conditions contained in an Underwriting
Agreement dated , 1997 (the "Underwriting Agreement"), the Underwriters
named below (the "Underwriters"), for whom Credit Suisse First Boston
Corporation, Robinson-Humphrey Company and Salomon Brothers Inc., Inc. are
acting as representatives (collectively, the "Representatives"), have severally
but not jointly agreed to purchase from the Company the following respective
numbers of shares of Common Stock:

<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERWRITER -----------------
<S> <C>
Credit Suisse First Boston Corporation ......
Robinson-Humphrey Company, Inc. .............
Salomon Brothers Inc. ........................
Total .................................... 4,700,000
</TABLE>

The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will be obligated to purchase all of the shares of Common Stock
offered hereby (other than those shares covered by the over-allotment option
described below) if any are purchased. The Underwriting Agreement provides
that, in the event of a default by an Underwriter, in certain circumstances,
the purchase commitments of the non-defaulting Underwriters may be increased or
the Underwriting Agreement may be terminated.

The Company has granted to the Underwriters an option, expiring at the
close of business on the 30th day after the date of this Prospectus, to
purchase up to 705,000 additional shares at the initial public offering price
less the underwriting discounts and commissions, all as set forth on the cover
page of this Prospectus. Such option may be exercised only to cover
over-allotments in the sale of the shares of Common Stock. To the extent such
option is exercised, each Underwriter will become obligated, subject to certain
conditions, to purchase approximately the same percentage of such additional
shares of Common Stock as it was obligated to purchase pursuant to the
Underwriting Agreement.

The Company has been advised by the Representatives that the Underwriters
propose to offer the shares of Common Stock to the public initially at the
public offering price set forth on the cover page of this Prospectus and,
through the Representatives, to certain dealers at such price less a concession
of $ per share, and the Underwriters and such dealers may allow a discount
of $ per share on sales to certain other dealers. After the initial public
offering, the public offering price and concession and discount to dealers may
be changed by the Representative.

The Representatives have informed the Company that they do not expect
discretionary sales by the Underwriters to exceed 5.0% of the number of shares
being offered hereby.

The Company and its officers, directors and holders of substantially all
of the outstanding shares of Common Stock have agreed that they will not offer,
sell, contract to sell, announce their intention to sell, pledge or otherwise
dispose of, directly or indirectly, or file with the Securities and Exchange
Commission a registration statement under the Securities Act relating to, any
additional shares of Common Stock or securities convertible or exchangeable
into or exercisable for any shares of Common Stock without the prior written
consent of Credit Suisse First Boston Corporation for a period of 180 days
after the date of this Prospectus.

The Company has agreed to indemnify the Underwriters against certain
liabilities, including civil liabilities under the Securities Act, or
contribute to payments which the Underwriters may be required to make in
respect thereof.

Application has been made to list the Common Stock on the New York Stock
Exchange.

Prior to the Offering, there has been no public market for the Common
Stock. The initial price to the public for the shares of Common Stock has been
negotiated among the Company and the

95
<PAGE>

Representatives. Such initial price is based on, among other things in addition
to prevailing market conditions, the Company's financial and operating history
and condition, its prospects and the prospects for its industry in general, the
management of the Company and the market prices for securities of companies in
businesses similar to that of the Company. See "Risk Factors-Absence of Public
Market; Stock Price Not Based on Property Valuation; Possible Fluctuations of
Stock Price".

The Representatives, on behalf of the Underwriters, may engage in
over-allotment, stabilizing transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Exchange Act.
Over-allotment involves syndicate sales in excess of the Offering size, which
creates a syndicate short position. Stabilizing transactions permit bids to
purchase the underlying security so long as the stabilizing bids do not exceed
a specified maximum. Syndicate covering transactions involve purchases of the
Common Stock in the open market after the distribution has been completed in
order to cover syndicate short positions. Penalty bids permit the
Representatives to reclaim a selling concession from a syndicate member when
the Common Stock originally sold by such syndicate member are purchased in a
syndicate covering transaction to cover syndicate short positions. Such
stabilizing transactions, syndicate covering transactions and penalty bids may
cause the price of the Common Stock to be higher than it would otherwise be in
the absence of such transactions. These transactions may be effected on the New
York Stock Exchange or otherwise and, if commenced, may be discontinued at any
time.

NOTICE TO CANADIAN RESIDENTS

RESALE RESTRICTIONS

The distribution of the Common Stock in Canada is being made only on a
private placement basis exempt from the requirement that the Company prepare
and file a prospectus with the securities regulatory authorities in each
province where trades of Common Stock are affected. Accordingly, any resale of
the Common stock in Canada must be made in accordance with applicable
securities laws which will vary depending on the relevant jurisdiction, and
which may require resales to be made in accordance with available statutory
exemptions or pursuant to a discretionary exemption granted by the applicable
Canadian securities regulatory authority. Purchasers are advised to seek legal
advice prior to any resale of the Common Stock.

REPRESENTATION OF PURCHASERS

Each purchaser of Common stock in Canada who receives a purchase
confirmation will be deemed to represent to the Company and the dealer from
whom such purchase confirmation is received that (i) such purchaser is entitled
under applicable provincial securities laws to purchase such Common Stock
without the benefit of a prospectus qualified under such securities laws, (ii)
where required by law, that such purchaser is purchasing as principal and not
as agent, and (iii) such purchaser has reviewed the text above under "Resale
Restrictions".

RIGHT OF ACTION AND ENFORCEMENT

The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
section 32 of the Regulation under the Securities Act (Ontario). As a result,
Ontario purchasers may rely on other remedies that may be available, including
common law rights of action for damages or rescission or rights of action under
the civil liability provisions of the U.S. federal securities laws.

ENFORCEMENT OF LEGAL RIGHTS

All of the Company's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be
possible for Canadian purchasers to effect service of

96
<PAGE>

process within Canada upon the Company or such persons. All or a substantial
portion of the assets of the Company and such persons may be located outside of
Canada and, as a result, it may not be possible to satisfy a judgment against
the Company or such persons in Canada or to enforce a judgment obtained in
Canadian courts against the Company or such persons outside of Canada.

NOTICE TO BRITISH COLUMBIA RESIDENTS

A purchaser of Common Stock to whom the Securities Act (British Columbia)
applies is advised that such purchaser is required to file with the British
Columbia Securities Commission a report within ten days of the sale of any
Common Stock acquired by such purchaser pursuant to the Offering. Such report
must be in the form attached to British Columbia Securities Commission Blanket
Order BOR #95/17, a copy of which may be obtained from the Company. Only one
such report must be filed in respect of Common stock acquired on the same date
and under the same prospectus exemption.

TAXATION AND ELIGIBILITY FOR INVESTMENT

Canadian purchasers of Common Stock should consult their own legal and tax
advisers with respect to the tax consequences of an investment in the Common
Stock in their particular circumstances and with respect to the eligibility of
the shares for investment by the purchaser under relevant Canadian legislation.

LEGAL MATTERS

The legality of the shares of Common Stock offered hereby will be passed
upon for the Company by Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A.,
Miami, Florida. In addition, the description of federal income tax consequences
contained in this Prospectus entitled "Federal Income Tax Considerations" is
based upon the opinion of Greenberg Traurig Hoffman Lipoff Rosen & Quentel,
P.A., Miami, Florida. Certain legal matters related to the Offering will be
passed upon for the Underwriters by Latham & Watkins, Los Angeles, California.
Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A. and Latham & Watkins
will rely upon the opinion of Ballard Spahr Andrews & Ingersoll, Baltimore,
Maryland, as to certain matters relating to Maryland law.

EXPERTS

The financial statements of the Company as of December 31, 1996 and 1995
and for each of the three years in the period ended December 31, 1996 included
in this prospectus and the related financial statement schedule included
elsewhere in the registration statement have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their reports appearing herein and
elsewhere in the registration statement, and have been so included in reliance
upon the reports of such firm given upon their authority as experts in
accounting and auditing.

The statements of revenues and certain expenses of West Lake for the
period from January 1, 1996 through November 5, 1996 and Lantana Village for
the year ended December 31, 1996 included in this prospectus have been audited
by Deloitte & Touche LLP, independent auditors, as stated in their reports
appearing herein and elsewhere in the registration statement, and have been so
included in reliance upon the report of such firm given upon their authority as
experts in accounting and auditing.

ADDITIONAL INFORMATION

The Company has filed with the Commission a Registration Statement on Form
S-11 (together with all amendments, exhibits and schedules thereto, the
"Registration Statement") under the Securities Act, with respect to the Common
Stock offered hereby. This Prospectus does not contain all of the

97
<PAGE>

information set forth in the Registration Statement. For further information
with respect to the Company and the Common Stock offered hereby, reference is
hereby made to such Registration Statement. Statements contained in this
Prospectus as to the contents of any contract or other document are not
necessarily complete and, in each instance, reference is made to the copy of
such contract or document filed as an exhibit to the Registration Statement,
each such statement being qualified in all respects by such reference. Copies
of the Registration Statement may be obtained from the Commission's principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional
offices of the Commission at Seven World Trade Center, New York, New York 10048
and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, upon payment
of the fees prescribed by the Commission, or may be examined without charge at
the offices of the Commission. In addition, copies of the Registration
Statement and related documents may be obtained through the Commission's
Internet address at http://www.sec.gov.

98
<PAGE>

GLOSSARY

Unless the context otherwise requires, the following capitalized terms
shall have the meanings set forth below for the purposes of this Prospectus:

"ACQUISITION AND DEVELOPMENT OF THE REDEVELOPMENT/DEVELOPMENT PROPERTIES"
means the acquisition and development of those properties referred to in
footnote (1) to the table under "Use of Proceeds".

"ACQUISITION LINE OF CREDIT" means a line of credit of up to $35.0 million
to be secured by unencumbered Existing Properties and other properties of the
Company.

"ACRS" means the accelerated cost recovery system depreciation.

"ADA" means the Americans with Disabilities Act, enacted on July 26, 1990.

"AGGREGATE STOCK OWNERSHIP LIMIT" means not more than 5% (in value or in
number of shares, whichever is more restrictive) of the aggregate of the
outstanding shares of all classes or series of stock of the Company, including,
without limitation, Common Stock and Preferred Stock.

"ANCHOR TENANT" means a tenant that, due to size, reputation or other
factors, is particularly responsible for drawing other tenants and shoppers to
a shopping center.

"ATLANTIC VILLAGE" means the Atlantic Village Shopping Center, comprising
100,559 of GLA, located in Atlantic Beach, Florida.

"BASE RENT" means gross rent excluding payments by tenants on account of
real estate taxes, operating expenses, utility expenses and percentage rent.

"BEAUCLERC VILLAGE" means the Beauclerc Village Shopping Center,
comprising 67,930 square feet of GLA located in Jacksonville, Florida.

"BIRD LUDLUM" means the Bird Ludlum Shopping Center, comprising 192,477
square feet of GLA located in Miami, Florida.

"BYLAWS" means the bylaws of the Company.

"CASH AVAILABLE FOR DISTRIBUTION" means FFO as adjusted for capital
expenditures and scheduled principal payments.

"CHARTER" means the articles of amendment and restatement of the Company.

"CODE" means the Internal Revenue Code of 1986, as amended.

"COMMISSION" means the Securities and Exchange Commission.

"COMMON STOCK" means shares of the Company's common stock, par value $0.01
per share.

"COMMON STOCK OWNERSHIP LIMIT" means not more than five percent (in value
or in number of shares, whichever is more restrictive) of the aggregate of the
outstanding shares of Common Stock of the Company.

"COMMONWEALTH" means the Commonwealth Shopping Center, comprising 71,021
square feet of GLA located in Jacksonville, Florida.

"COMMUNITY SHOPPING CENTER" means a shopping center containing 100,000 to
300,000 square feet of GLA.

99
<PAGE>

"COMPANY" means Equity One, Inc., a Maryland corporation.

"CORAL WAY" means 10 acres of real property located in Southwest Dade
County, Florida upon which the Company intends to develop a 100,000 square foot
Supermarket Center.

"CPI" means the Consumer Price Index.

"DANBAR" means Danbar, Ltd., an Israeli corporation whose securities are
publicly traded on TASE.

"DANBAR RESOURCES" means Danbar Resources, Ltd., an Israeli corporation
whose securities are publicly traded on TASE and a subsidiary of Danbar.

"DAN OVERSEAS" means Dan Overseas, Ltd., a British Virgin Islands
corporation and wholly-owned subsidiary of Danbar Resources.

"DIANA BUILDING" means the 18,707 square feet mixed use office/retail
property located in West Palm Beach, Florida.

"EAST BAY" means East Bay Plaza comprising 85,426 square feet of GLA
located in Largo, Florida.

"EMPLOYMENT AGREEMENTS" mean, collectively, the employment agreements by
and between the Company and each of Chaim Katzman and Doron Valero, each of
which expire on December 31, 2003.

"EQUITY ONE OFFICE BUILDING" means the Equity One Office Building
comprising 28,980 square feet of mixed-use office/retail property, including
the Company's corporate offices located in Miami Beach, Florida.

"ERISA" means the Employee Retirement Income Security Act of 1974.

"EUSTIS SQUARE" means the Eustis Square Shopping Center comprising 126,791
square feet of GLA located in Eustis, Florida.

"EXCESS SHARES" means those shares, the number of which is in excess of
the Ownership Limit.

"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

"EXISTING PROPERTIES" means the 15 rental properties, two mixed used
(office/retail) properties, one office building and one mini-warehouse facility
owned by the Company at the time of the Offering.

"FFO" means Funds From Operations.

"FIRPTA" means the Foreign Investment in Real Property Tax Act of 1980.

"FOREST EDGE" means the Forest Edge Shopping Center comprising 68,631
square feet of GLA located in Orlando, Florida.

"FORT CAROLINE" means the Fort Caroline Trading Post comprising 74,546 of
GLA located in Jacksonville, Florida.

"FOUR CORNERS" means the Four Corners Shopping Center comprising 115,178
square feet of GLA located in Tomball, Texas, in the Houston metropolitan area.

"FUNDS FROM OPERATIONS" means, as defined by NAREIT, net income (loss)
(computed in accordance with GAAP), excluding gains (or losses) from debt
restructuring and sales of property, plus real estate related depreciation and
amortization (excluding amortization of deferred financing costs).

100
<PAGE>

"GAAP" means generally accepted accounting principles.

"GAZIT (1995)" means Gazit (1995), Inc., a Nevada corporation, a wholly
owned subsidiary of Gazit and successor in interest to Gazit Holdings, Inc..

"GAZIT" means Gazit Inc., a Panamanian corporation whose securities are
publicly traded on TASE.

"GLA" means gross leasable area.

"GLOBAL REALTY" means Global Realty & Management, Inc., a wholly owned
subsidiary of the Company, which performs property management services for the
Company's properties.

"GLOBE REIT" means Globe Reit Investments, Ltd., an Israeli corporation
(formerly known as M.G.N. Oil and Gas Resources, Ltd.) whose securities are
publicly traded on TASE.

"ICSC" means the International Council of Shopping Centers.

"INTERESTED STOCKHOLDER" means, for purposes of the MGCL, any person who
beneficially owns ten percent or more of the voting power of the Company's
shares or an affiliate of the corporation who, at any time within a two year
period prior to a specified date, was the beneficial owner of ten percent or
more of the voting power of the then outstanding voting stock of the Company.

"IRREVOCABLE PROXY" means the irrevocable proxy granted to Globe Reit by
Dan Overseas, Gazit (1995) and Mr. Chaim Katzman to vote through May 2001 all
of the shares of Common Stock now owned or hereafter acquired by Dan Overseas,
Gazit (1995) and Mr. Katzman for the purposes of electing directors of the
Company.

"IRS" means the Internal Revenue Service.

"LAKE MARY" means the Lake Mary Shopping Centre comprising 288,450 square
feet of GLA located in Seminole County, Orlando, Florida.

"LANTANA VILLAGE" means Lantana Village Square Shopping Center, comprising
85,300 square feet of GLA located in Lantana, Florida.

"LEASING COMMISSIONS" means brokerage commission fees paid by the Company
in connection with new leases or lease renewals.

"LIBOR" means London Interbank Offered Rate published by the Wall Street
Journal.

"M.G.N". means M.G.N. (USA), Inc., a Nevada corporation and wholly owned
subsidiary of Globe Reit.

"MANDARIN" means the Mandarin Mini-Storage warehouse comprising 52,880
square feet of GLA located in Jacksonville, Florida.

"MGCL" means the Maryland General Corporation Law, as amended.

"MONUMENT POINTE" means the Monument Pointe Shopping Center comprising
75,328 square feet of GLA located in Jacksonville, Florida.

"MORTGAGE INDEBTEDNESS" means that mortgage indebtedness referred to in
footnote (4) to the table under "Use of Proceeds".

"NAMED OFFICERS" means, collectively, the Company's Chief Executive
Officer, and the Company's Executive Vice President and Chief Operating
Officer.

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<PAGE>

"NAREIT" means the National Association of Real Estate Investment Trusts.

"NAREIT WHITE PAPER" means the White Paper on FFO approved by the Board of
Governors of the NAREIT in March 1995.

"NEIGHBORHOOD SHOPPING CENTER" means a shopping center containing less
than 100,000 square feet of GLA.

"1995 PLAN" means the 1995 Stock Option Plan adopted by the Company in
December, 1995.

"NET OPERATING INCOME" or "NOI" means net operating income determined by
subtracting operating and general administrative expenses directly related to
the property from total revenues.

"1995 PLAN" means the 1995 Stock Incentive Plan of the Company.

"NYSE" means the New York Stock Exchange, Inc.

"OAK HILL" means the Oak Hill Village Shopping Center comprising 78,492
square feet of GLA located in Jacksonville, Florida.

"OFFERING" means the offering of shares of Common Stock of the Company
pursuant to and as described in this Prospectus.

"OWNERSHIP LIMIT" means the restriction contained in the Company's Charter
providing that, subject to certain exceptions, no holder may own, or be deemed
to own by virtue of the constructive ownership provisions of the Code, more
than 5% (by number or value, whichever is more restrictive) of the outstanding
shares of Common Stock.

"PARKER TOWNE" means the Parker Towne Centre comprising 205,792 of GLA
located in Plano, Texas, in the Dallas metropolitan area.

"PERFORMING SUPERMARKET CENTER" means Neighborhood and Community Shopping
Centers with tenants occupying 85% or more of GLA and which are well
maintained, substantially fully leased and maintain an appropriate mix of
Anchor Tenants and other tenants.

"PERMITTED HOLDER" means a person who may own shares of stock of the
Company without violating the ownership restrictions of the Charter.

"PLAZA DEL REY" means the Plaza Del Rey Shopping Center comprising 50,146
square feet of GLA located in Southwest Dade County, Florida.

"POINTE ROYALE" means the Pointe Royale Shopping Center comprising 199,068
of GLA located in Cutler Ridge, Dade County, Florida.

"PROHIBITED OWNER" means a person or entity holding record title to shares
in excess of the Ownership Limit.

"PROHIBITED TRANSFEREE" means any person to which any transfer of Common
Stock of the Company would result in the person violating the Ownership Limit.

"PROPOSED PERFORMING SUPERMARKET CENTER ACQUISITIONS" means the proposed
acquisitions of Lantana Village and Beauclerc Village referred to in footnote
(2) to the table under "Use of Proceeds".

"REGISTRABLE SHARES" means those shares of stock of the Company granted
Registration Rights.

"REGISTRATION RIGHTS AGREEMENT" means the registration right agreement by
and among the Company and each of Chaim Katzman, Gazit (1995), Dan Overseas,
Globe Reit, Eli Makavy, Doron Valero and David Wulkan with respect to their
Registrable Shares.

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<PAGE>

"REGISTRATION RIGHTS" mean those registration rights granted to certain
stockholders pursuant to the Registration Rights Agreement, the Employment
Agreements, and the Series C Warrants.

"REIT" means a real estate investment trust as defined in Section 856 of
the Code which meets the requirements for qualification as a REIT described in
Sections 856 through 860 of the Code.

"RELATED PARTY TENANT" means a tenant actually or constructively owned 10%
or more by the REIT or an owner of 10% or more of the REIT.

"RENOVATION OF EXISTING PROPERTIES" means the renovation and development
of those properties referred to in footnote (3) to the table under "Use of
Proceeds".

"REPRESENTATIVE" shall mean Credit Suisse First Boston Corporation, as
representative for the Underwriters.

"RULE 144" means Rule 144 promulgated under the Securities Act.

"SECURITIES ACT" means the Securities Act of 1933, as amended.

"SERIES C WARRANTS" means the warrants to purchase up to 1,400,000 shares
of Common Stock of the Company at an exercise price of $8.25 exercisable
through December 31, 1999.

"SKY LAKE" means the property recently acquired by the Company which is
known as Sky Lake Mall in North Dade County, Florida, which, after a
comprehensive redevelopment, will contain 300,000 square feet of GLA.

"STATEMENT NO. 128" means the Statement of Financial Accounting Standards
No. 128, "Earnings Per Share", issued by the Financial Accounting Standards
Board in February 1997.

"SUPERMARKET CENTERS" means Community and Neighborhood Shopping Centers
anchored by supermarkets.

"TASE" means the Tel Aviv Stock Exchange.

"TENANT IMPROVEMENTS" means capital costs incurred by the Company for
leasehold improvements including costs for items such as heating, ventilation
and air conditioning, plumbing, electrical upgrades, interior walls, wall
finishes, ceiling treatment and floor coverings.

"TREASURY REGULATIONS" means regulations of the U.S. Department of the
Treasury under the Code.

"UBTI" means unrelated business taxable income.

"UNDERPERFORMING SUPERMARKET CENTER" means Neighborhood and Community
Shopping Centers which are not Performing Supermarket Centers.

"UNDERWRITERS" means Credit Suisse First Boston Corporation, and those
parties named in the Underwriting Agreement as underwriters of the Offering.

"UNDERWRITING AGREEMENT" means the Underwriting Agreement between the
Company and the Representative relating to the purchase of the Common Stock
offered hereby.

"WEST LAKE" means the West Lake Plaza Shopping Center comprising 100,747
of GLA located in Kendall Lakes, Dade County, Florida.

103

<PAGE>

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S> <C>
PAGE
----
EQUITY ONE, INC. AND SUBSIDIARIES
PRO FORMA (UNAUDITED):
Pro Forma Consolidated Financial Statements .................................... F-2
Pro Forma Consolidated Balance Sheet as of June 30, 1997 ..................... F-3
Pro Forma Consolidated Statement of Operations
for the six months ended June 30, 1997 ....................................... F-4
Pro Forma Consolidated Statement of Operations
for the year ended December 31, 1996 ....................................... F-5
Notes to the Pro Forma Consolidated Financial Statements ..................... F-6
HISTORICAL:
Condensed Consolidated Balance Sheets as of June 30, 1997 (Unaudited)
and December 31, 1996 ...................................................... F-8
Unaudited Condensed Consolidated Statements of Operations
for the six months ended June 30, 1997 and 1996 .............................. F-9
Unaudited Condensed Consolidated Statements of Stockholders' Equity
for the six months ended June 30, 1997 and 1996 .............................. F-10
Unaudited Condensed Consolidated Statements of Cash Flows
for the six months ended June 30, 1997 and 1996 .............................. F-11
Notes to Unaudited Condensed Consolidated Financial Statements ............... F-12
Independent Auditors' Report ................................................... F-13
Consolidated Balance Sheets as of December 31, 1996 and 1995 .................. F-14
Consolidated Statements of Operations for the years ended
December 31, 1996, 1995 and 1994 ............................................. F-15
Consolidated Statements of Stockholders' Equity
for the years ended December 31, 1996, 1995 and 1994 ........................ F-16
Consolidated Statements of Cash Flows
for the years ended December 31, 1996, 1995 and 1994 ........................ F-17
Notes to Consolidated Financial Statements .................................... F-18
WEST LAKE PLAZA SHOPPING CENTER - 1996 ACQUISITION PROPERTY
Independent Auditors' Report ................................................... F-29
Statement of Revenues and Certain Expenses for the period from January 1, 1996
through November 5, 1996 ..................................................... F-30
Notes to Statement of Revenues and Certain Expenses ........................... F-31
LANTANA VILLAGE SQUARE - PROPOSED ACQUISITION PROPERTY
Independent Auditors' Report ................................................... F-33
Statement of Revenues and Certain Expenses for the year ended
December 31, 1996 and the six months ended June 30, 1997 (Unaudited) ......... F-34
Notes to Statement of Revenues and Certain Expenses ........................... F-35
</TABLE>

F-1
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The unaudited pro forma consolidated balance sheet as of June 30, 1997 is
presented as if the Offering and the application of the net proceeds of the
Offering all had occurred on June 30, 1997. The pro forma consolidated
statements of operations for the six months ended June 30, 1997 and the year
ended December 31, 1996 are presented as if the Offering and the application of
the net proceeds (and the acquisition of West Lake, Forest Edge, Monument,
Lantana and Beauclerc), all had occurred on January 1, 1996.

The pro forma consolidated financial statements should be read in
conjunction with and are based upon the historical consolidated financial
statements of Equity One, Inc. and Subsidiaries, including the notes thereto,
included elsewhere in the Prospectus. Because the preponderance of proceeds are
allocated to acquisition, development, redevelopment and renovation projects
which, for pro forma statement of operations purposes, do not generate any
revenue or expense, pro forma results of operations reflect only the repayment
of mortgage notes payable, proposed acquisitions of Lantana Village and
Beauclerc Village and omit any revenue or expense from other proceeds uses
(except for historical revenue and expense attributable to Sky Lake which will
continue during the redevelopment process). Accordingly, the pro forma
consolidated financial statements do not purport to represent the Company's
financial position as of June 30, 1997 or the results of operations for the six
months ended June 30, 1997 or for the year ended December 31, 1996 that would
actually have occurred had the Offering (and the acquisitions listed above) and
the application of the net proceeds of the Offering all been completed on June
30, 1997 or at the beginning of the periods presented, or to project the
Company's financial position or results of operations as of any future date or
for any future period.

F-2
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1997
(AMOUNTS IN THOUSANDS)

(UNAUDITED)

<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS(1)
--------------------------
HISTORICAL DEBIT CREDIT PRO FORMA
------------ --------- -------------- -----------
<S> <C> <C> <C> <C>
ASSETS
RENTAL PROPERTIES:
Land .......................................... $ 30,961 $ 8,666 A(1) $ 39,627
Building and improvements ..................... 81,445 33,744 A(2) 115,189
-------- -------- -------- --------
112,406 42,410 154,816
Less accumulated depreciation .................. (6,003) (6,003)
-------- --------
Rental properties, net ........................ 106,403 42,410 148,813
Cash and cash equivalents ........................ 4,558 3,032 B 7,590
Accounts and other receivables, net ............ 824 824
Securities available for sale .................. 5,589 5,589
Deposits ....................................... 1,403 1,403
Prepaid and other assets ........................ 1,210 1,210
Deferred financing costs, net .................. 886 313C 573
-------- --------- --------
Total assets ................................. $120,873 $45,442 $ 313 $166,002
======== ======== ====== ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
LIABILITIES:
Mortgage notes payable ........................... $ 64,916 $17,860 D $ 47,056
Tenants' security deposits ..................... 708 708
Accounts payable and accrued expenses ............ 1,679 1,679
Deferred rental income ........................... 76 76
-------- --------
Total liabilities ........................... 67,379 17,860 0 49,519
======== ======== ====== ========
STOCKHOLDER'S EQUITY:
Common stock .................................... 69 47E 116
Additional paid-in capital ..................... 54,950 63,255E 118,205
Notes receivable from stock sales ............... (1,525) (1,525)
Retained (deficit) .............................. 0 313 C (313)
-------- -------- ------ --------
Total stockholders' equity .................. 53,494 313 63,302 116,483
-------- -------- ------ --------
Total liabilities and stockholders' equity ...... $120,873 $18,173 $ 63,302 $166,002
======== ======== ====== ========
</TABLE>

The accompanying notes are an integral part of these
pro forma consolidated financial statements.

F-3
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 1997

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(UNAUDITED)

<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS(2) PRO FORMA
------------ ---------------- ----------
<S> <C> <C> <C>
REVENUES:
Rental income ........................... $9,361 $ 1,056F $10,417
Investment revenue ........................ 312 312
------- --------
Total revenues ........................ 9,673 1,056 10,729
------- -------- --------
COSTS AND EXPENSES:
Operating expenses ........................ 2,743 135 F 2,878
Depreciation and amortization ............ 1,178 134 F 1,312
Interest ................................. 2,939 (186)G 2,753
General and administrative expenses ...... 241 75 H 316
------- -------- --------
Total costs and expenses ............... 7,101 158 7,259
------- -------- --------
Net income .............................. $2,572 $ 898 $ 3,470
======= ======== ========
Net earnings per share (I) ............... $ 0.30
========
Weighted average number of shares of
common stock outstanding ............... 11,649
========
</TABLE>

The accompanying notes are an integral part of these
pro forma consolidated financial statements.

F-4
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 1996

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(UNAUDITED)

<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS(2) PRO FORMA
------------ ---------------- ----------
<S> <C> <C> <C>
REVENUES:
Rental income ........................... $16,337 $ 4,204F $20,541
Investment revenue ........................ 377 377
-------- --------
Total revenues ........................ 16,714 4,204 20,918
-------- --------- --------
COSTS AND EXPENSES:
Operating expenses ........................ 4,832 1,016 F 5,848
Depreciation and amortization ............ 2,067 492 F 2,559
Interest ................................. 5,380 (164)G 5,216
General and administrative expenses ...... 515 150 H 665
-------- ----------- --------
Total costs and expenses ............... 12,794 1,494 14,288
-------- --------- --------
Net income .............................. $ 3,920 $ 2,710 $ 6,630
======== ========= ========
Net earnings per share (I) ............... $ 0.62
========
Weighted average number of shares of
common stock outstanding ............... 10,623
========
</TABLE>

The accompanying notes are an integral part of these
pro forma consolidated financial statements.

F-5
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN THOUSANDS)

(UNAUDITED)

1. ADJUSTMENTS TO THE PRO FORMA CONSOLIDATED BALANCE SHEET

The pro forma adjustments to the Pro Forma Consolidated Balance Sheet as
of June 30, 1997 are as follows:

<TABLE>
<S> <C>
(A) Reflects the cost of the proposed retail property acquisitions and the cost of the
renovation and development of the Existing Properties
Purchase price of Sky Lake ...................................................... $ 7,000
Development costs of Sky Lake ................................................... 18,000
Purchase price of proposed retail property acquisitions (Lantana and Beauclerc) ... 10,000
Purchase price of 4.4 acres of vacant land proximate to Coral Way (not yet
acquired) ..................................................................... 1,010
Atlantic Village Shopping Center renovation costs .............................. 850
Commonwealth Shopping Center renovation costs .................................... 1,750
Lake Mary Centre development costs ................................................ 3,000
Point Royale office building renovation costs .................................... 800
--------
Total proposed retail property acquisitions and renovation and development
of Existing Properties ......................................................... $42,410
========
</TABLE>

The cost of the proposed retail property acquisitions and renovations and
development of Existing Properties will be allocated as follows:

<TABLE>
<S> <C>
(1) Land .............................................................................. $ 8,666
(2) Buildings and improvements ...................................................... 33,744
---------
$ 42,410
=========
(B) The adjustment to pro forma cash and cash equivalents was determined as follows:
Net proceeds from the Offering after underwriting discount and estimated issuance
costs of $5,500..................................................................... $ 63,825
Repayment of mortgage notes payable including $523 of additional loan fees ............ (18,383)
Purchase of proposed retail property acquisitions and costs of renovation and
development of Existing Properties ................................................ (42,410)
---------
Net increase in cash and cash equivalents ............................................. $ 3,032
=========
(C) Reflects the write-off of loan costs relating to repayment of mortgage notes payable $ 313
=========
(D) Reflects the repayment of mortgage notes payable of $18,383, net of $523 of
additional loan fees ............................................................... $ 17,860
=========
(E) Reflects the sale of 4,700 shares of common stock in the Offering
Proceeds from the Offering ............................................................ $ 69,325
Costs associated with the Offering ................................................... (5,500)
Additional loan fees resulting from the early repayment of mortgage
notes payable ..................................................................... (523)
---------
Net proceeds after expenses and loan fees ................................................ $ 63,302
=========
Par value of common stock to be issued in the Offering ................................. $ 47
Additional paid-in capital from the net proceeds of the Offering ........................ 63,255
---------
$ 63,302
=========
</TABLE>
F-6
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(AMOUNTS IN THOUSANDS)

(UNAUDITED)

2. ADJUSTMENTS TO THE PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

The pro forma adjustments to the Pro Forma Consolidated Statements of
Operations for the six months ended June 30, 1997 and the year ended December
31, 1996 are as follows:

<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
1997 1996
----------- -------------
<S> <C> <C>
(F) Reflects the pro forma net effect of a full year of operations of
West Lake, Sky Lake, Forest Edge, Monument, Lantana and
Beauclerc shopping centers
Rental income ......................................................... $ 1,056 $ 4,204
Operating expenses ................................................... (135) (1,016)
Depreciation and amortization ....................................... (134) (492)
------- --------
$ 787 $ 2,696
======= ========
(G) Reflects the effect on interest expense as a result of the following:
Pro forma net effect of a full year of operations of West Lake, Sky
Lake, Forest Edge, Monument, Lantana and Beauclerc
shopping centers ................................................... $ 37 $ 851
Increase in interest expense from prepayment penalties ............... 523 523
Decrease in interest expense, including the amortization of
deferred financing costs, resulting from the repayment of
mortgage notes payable .......................................... (746) (1,538)
------- --------
$ (186) (164)
======= ========
(H) Reflects the increase in general and administrative expenses for the
incremental costs of operating as a public REIT ..................... $ 75 $ 150
======= ========
( I ) Pro forma net earnings per share is based upon the following
weighted average shares outstanding:
Common stock outstanding (weighted average) ........................ 6,949 5,923
Common stock to be issued in the Offering ........................... 4,700 4,700
------- --------
11,649 10,623
======= ========
</TABLE>

F-7
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
------------ -------------
(UNAUDITED)
<S> <C> <C>
ASSETS
RENTAL PROPERTIES:
Land ............................................................... $ 30,961 $ 28,094
Building and improvements .......................................... 81,445 78,612
-------- --------
112,406 106,706
Less accumulated depreciation ....................................... (6,003) (4,849)
-------- --------
Rental properties, net ............................................. 106,403 101,857
Cash and cash equivalents .......................................... 4,558 1,951
Accounts and other receivables, net ................................. 824 800
Securities available for sale ....................................... 5,589 4,528
Deposits ............................................................ 1,403 510
Prepaid and other assets .......................................... 1,210 1,165
Deferred financing costs, net ....................................... 886 1,011
-------- --------
Total assets ................................................... $120,873 $111,822
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Mortgage notes payable ............................................. $ 64,916 $ 66,831
Tenants' security deposits .......................................... 708 694
Accounts payable and accrued expenses .............................. 1,679 950
Deferred rental income ............................................. 76 252
-------- --------
Total liabilities ................................................ 67,379 68,727
======== ========
COMMITMENTS AND CONTIGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock $0.01 par value, 5,000 shares
authorized but unissued ..........................................
Common stock $0.01 par value, 40,000 shares authorized;
6,908 and 5,768 shares issued and outstanding, respectively ...... 69 58
Additional paid-in capital .......................................... 54,950 44,562
Notes receivable from stock sales ................................. (1,525) (1,525)
-------- --------
Total stockholders' equity ....................................... 53,494 43,095
-------- --------
Total liabilities and stockholders' equity ........................ $120,873 $111,822
======== ========
</TABLE>

The accompanying notes are an integral part of these
unaudited condensed consolidated financial statements.

F-8
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
FOR THE
SIX MONTHS ENDED
JUNE 30,
------------------
1997 1996
-------- -------
<S> <C> <C>
REVENUES:
Rental income ....................................... $9,361 $8,000
Investment revenue ................................. 312 42
------- -------
Total revenues ................................. 9,673 8,042
------- -------
COSTS AND EXPENSES:
Operating expenses ................................. 2,743 2,341
Depreciation and amortization ..................... 1,178 1,010
Interest .......................................... 2,939 2,648
General and administrative expenses ............... 241 213
------- -------
Total costs and expenses ........................ 7,101 6,212
------- -------
Net income .......................................... $2,572 $1,830
======= =======
Net earnings per share (Restated, see Note 1) ...... $ 0.37 $ 0.34
======= =======
</TABLE>

The accompanying notes are an integral part of these
unaudited condensed consolidated financial statements.

F-9
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996

(AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
NOTES
ADDITIONAL RECEIVABLE TOTAL
COMMON PAIN-IN FROM RETAINED STOCKHOLDERS'
STOCK CAPITAL STOCK SALES EARNINGS EQUITY
-------- ------------ ------------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Balance January 1, 1996 ............... $44 $29,095 $ 29,139
Net income .............................. $ 1,830 1,830
Issuance of common stock ............... 10 12,786 12,796
Dividends paid ........................ (1,775) (1,775)
Notes receivable from stock sales ...... $ (1,129) (1,129)
-------- --------
Balance June 30, 1996 (Unaudited) ...... $54 $41,881 $ (1,129) $ 55 $ 40,861
==== ======= ======== ======== ========
Balance January 1, 1997 ............... $58 $44,562 $ (1,525) $ 43,095
Net income .............................. $ 2,572 2,572
Issuance of common stock ............... 11 10,596 10,607
Dividends paid ........................ (208) (2,572) (2,780)
------- -------- --------
Balance June 30, 1997 (Unaudited) ...... $69 $54,950 $ (1,525) $ 0 $ 53,494
==== ======= ======== ======== ========
</TABLE>

The accompanying notes are an integral part of these
unaudited condensed consolidated financial statements.

F-10
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
FOR THE
SIX MONTHS ENDED
JUNE 30,
---------------------------
1997 1996
------------ ------------
(UNAUDITED)
<S> <C> <C>
OPERATING ACTIVITIES:
Net income ......................................................... $ 2,572 $ 1,830
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization .................................... 1,335 1,067
Provision for losses on accounts receivable ........................ 23
Loss (gain) on sales of securities ................................. 5 (3)
Changes in assets and liabilities:
Accounts and other receivables .................................... (47) 342
Deposits ......................................................... (892) (593)
Prepaid and other assets .......................................... (63) (47)
Accounts payable and accrued expenses ........................... 729 1,349
Tenants' security deposits ....................................... 13 30
Deferred rental income .......................................... (176) (34)
Due from related parties .......................................... (7) 39
---------- ---------
Net cash provided by operating activities ........................ 3,492 3,980
INVESTING ACTIVITIES:
Acquisition of rental property .................................... (5,204) (1,193)
Acquisition of building improvements .............................. (496) (1,168)
Purchases of securities ............................................. (3,950) (1,199)
Sales and prepayments of securities ................................. 2,884 65
---------- ---------
Net cash used in investing activities ........................... (6,766) (3,495)
---------- ---------
FINANCING ACTIVITIES:
Due to stockholders ................................................ (2,130)
Repayments of mortgage notes payable .............................. (18,063) (629)
Borrowings under mortgage notes payable ........................... 16,148
Stock subscription and issuance .................................... 10,607 11,667
Cash dividends paid to stockholders ................................. (2,780) (1,775)
Deferred financing costs .......................................... (31) (120)
---------- ---------
Net cash provided by financing activities ........................ 5,881 7,013
---------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS ........................... 2,607 7,498
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ..................... 1,951 770
---------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD ........................... $ 4,558 $ 8,268
========== =========
SUPPLEMENTAL DISCLOSURE:
Cash paid for interest ............................................. $ 2,755 $ 2,523
========== =========
Common stock issued for notes receivable ........................... $ 1,129
=========
</TABLE>

The accompanying notes are an integral part of these
unaudited condensed consolidated financial statements.

F-11
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The unaudited condensed consolidated financial statements of the Company
should be read in conjunction with the audited consolidated financial
statements included elsewhere herein. Accordingly, certain disclosures
accompanying the annual consolidated financial statements prepared in
accordance with generally accepted accounting principles are omitted. In the
opinion of management, all adjustments, consisting solely of normal recurring
adjustments, necessary for fair presentation of the condensed consolidated
financial statements have been included. The current period's results of
operations are not necessarily indicative of results which ultimately may be
achieved for the year.

The condensed consolidated financial statements include the accounts of
the Company's wholly-owned subsidiaries. All intercompany balances have been
eliminated.

NEW ACCOUNTING PRONOUNCEMENTS - In February 1997, SFAS No. 128, EARNINGS
PER SHARE was issued. SFAS No. 128, which supersedes APB Opinion No. 15,
requires a dual presentation of basic and diluted earnings per share on the
face of the income statement. Basic earnings per share excludes dilution and is
computed by dividing income or loss attributable to common stockholders by the
weighted-average number of common shares outstanding for the period. Diluted
earnings per share reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted
into common stock or resulted in the issuance of common stock that then shared
in the earnings of the entity. Diluted earnings per share is computed similarly
to fully diluted earnings per share under APB Opinion No. 15. SFAS No. 128 is
effective for financial statements issued for periods ending after December 15,
1997, including interim periods; earlier application is not permitted. When
adopted, all prior-periods earnings per share data are required to be restated.

NET EARNINGS PER SHARE - Net earnings per share is calculated by dividing
net earnings by the weighted average number of common shares and common share
equivalents outstanding during the six month period. The weighted average
number of shares outstanding and used in the calculation of net earnings per
share was restated for the subsequent stock split, see Note 2, and was
6,949,107 and 5,412,144 in 1997 and 1996, respectively.

2. SUBSEQUENT EVENTS

On July 15, 1997, the Company's Board of Directors declared and paid a
two-for-one split of the Company's common stock in the form of a 100% stock
dividend to stockholders on July 15, 1997. A total of 3,454,065 shares of
common stock were issued in connection with the split. The stated par value of
each share was not changed from $1.00. A total of $3,454,065 was reclassified
from the Company's additional paid in capital account to the Company's common
stock account. All share and per share amounts have been restated to
retroactively reflect the stock split.

On September 16, 1997, the Company's Board of Directors declared a stock
dividend equal to $0.2625 per share and payable to stockholders of record at
the close of business on September 16, 1997.

F-12
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors of
Equity One, Inc.:

We have audited the accompanying consolidated balance sheets of Equity
One, Inc. and subsidiaries (the "Company") as of December 31, 1996 and 1995,
and the related consolidated statements of operations, stockholders' equity and
cash flows for each of the three years in the period ended December 31, 1996.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

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

In our opinion, the accompanying consolidated financial statements present
fairly, in all material respects, the consolidated financial position of Equity
One, Inc. and subsidiaries as of December 31, 1996 and 1995 and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1996 in conformity with generally accepted accounting
principles.

DELOITTE & TOUCHE LLP

Miami, Florida
February 15, 1997
(July 15, 1997 as to Note 10)

F-13
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 1996 AND 1995

(IN THOUSANDS EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
1996 1995
---------- --------
<S> <C> <C>
ASSETS
RENTAL PROPERTIES:
Land ............................................. $ 28,094 $23,358
Buildings and improvements ..................... 78,612 69,412
-------- --------
106,706 92,770
Less accumulated depreciation ..................... 4,849 2,832
-------- --------
Rental properties, net ........................... 101,857 89,938
Cash and cash equivalents ........................ 1,951 770
Accounts and other receivables, net ............... 800 922
Securities available for sale ..................... 4,528 160
Deposits .......................................... 510 623
Prepaid and other assets ........................ 1,165 1,120
Deferred financing costs, net ..................... 1,011 937
-------- --------
Total assets ................................. $111,822 $94,470
======== ========
LIABILITIES, COMMON STOCK ISSUED WITH
PUT OPTION AND STOCKHOLDERS' EQUITY
LIABILITIES:
Mortgage notes payable ........................... $ 66,831 $60,583
Due to stockholders .............................. 2,216
Tenants' security deposits ........................ 694 552
Accounts payable and accrued expenses ............ 950 917
Deferred rental income ........................... 252 63
-------- --------
Total liabilities ........................... 68,727 64,331
-------- --------
Common Stock Issued With Put Option -
144,000 Shares ................................. -0- 1,000
-------- --------
COMMITMENTS AND CONTINGENCIES (Note 8)
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value - 5,000,000 shares
authorized but unissued
Common stock, $0.01 par value - 40,000,000 shares
authorized; 5,768,418 and 4,517,558 shares
issued and outstanding for 1996 and
1995, respectively .............................. 58 44
Additional paid-in capital ........................ 44,562 29,095
Notes receivable from stock sales ............... (1,525) -0-
-------- --------
Total stockholders' equity .................. 43,095 29,139
-------- --------
Total liabilities and stockholders' equity ...... $111,822 $94,470
======== ========
</TABLE>

See accompanying notes to the consolidated financial statements.

F-14
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
1996 1995 1994
--------- --------- ----------
<S> <C> <C> <C>
RENTAL INCOME ....................................... $16,337 $10,792 $6,125
-------- -------- ------
INVESTMENT REVENUE:
Interest .......................................... 239 497 166
Dividends .......................................... 111 23 42
Realized gain (loss) on securities, net ............ 27 36 (135)
-------- -------- ------
Total investment revenue ........................ 377 556 73
-------- -------- ------
COSTS AND EXPENSES:
Operating expenses ................................. 4,832 3,293 2,236
Depreciation and amortization ..................... 2,067 1,496 996
Interest .......................................... 5,380 3,498 2,099
General and administrative expenses ............... 515 549 504
-------- -------- ------
Total costs and expenses ........................ 12,794 8,836 5,835
-------- -------- ------
Income Before Income Taxes ........................ 3,920 2,512 363
Income Taxes ....................................... 130
------
Net Income .......................................... $ 3,920 $ 2,512 $ 233
======== ======== ======
Net Earnings Per Share (Restated, see Note 1) ...... $ 0.65 $ 0.51 $ 0.07
======== ======== ======
</TABLE>

See accompanying notes to the consolidated financial statements.

F-15
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

(IN THOUSANDS)

<TABLE>
<CAPTION>
NET NOTES RETAINED
ADDITIONAL UNREALIZED RECEIVABLE EARNINGS TOTAL
COMMON PAID-IN HOLDING LOSS FROM (ACCUMULATED STOCKHOLDERS'
STOCK CAPITAL ON SECURITIES STOCK SALES DEFICIT) EQUITY
-------- ------------ --------------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1993 ............ $25 $12,797 $ (71) $ (147) $ 12,604
Issuance of common stock ............... 18 15,900 15,918
Net income .............................. 233 233
Change in net unrealized holding
loss on securities available
for sale .............................. 43 43
---- ------- ----- -------- -------- --------
Balance, December 31, 1994 ............ 43 28,697 (28) 86 28,798
Issuance of common stock ............... 1 622 623
Net income .............................. 2,512 2,512
Dividends paid ........................ (224) (2,598) (2,822)
Change in net unrealized
holding loss on securities
available for sale ..................... 28 28
---- ------- ----- -------- -------- --------
Balance, December 31, 1995 ............ 44 29,095 29,139
Issuance of common stock ............... 13 14,727 14,740
Conversion of common stock
issued with put option to
equity ................................. 1 999 1,000
Net income .............................. 3,920 3,920
Dividends paid ........................ (259) (3,920) (4,179)
Notes receivable from stock sales ...... $ (1,525) (1,525)
---- ------- ----- -------- -------- --------
Balance, December 31, 1996 ............ $58 $44,562 $ 0 $ (1,525) $ 0 $ 43,095
---- ------- ----- -------- -------- --------
</TABLE>

See accompanying notes to the consolidated financial statements.

F-16
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

(IN THOUSANDS)

<TABLE>
<CAPTION>
1996 1995 1994
------------ ------------ --------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income ................................................ $ 3,920 $ 2,512 $ 233
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization ........................... 2,282 1,578 1,049
(Gain) loss on sales of securities ..................... (27) (36) 135
Changes in assets and liabilities (net of acquisition):
Accounts and other receivables ........................ 122 (651) 489
Deposits ................................................ 113 (262) (194)
Prepaid and other assets .............................. (112) (75) (7)
Accounts payable and accrued expenses .................. 67 250 370
Income tax liability ................................. (34) (35) 70
Tenants' security deposits .............................. 142 219 225
Deferred rental income ................................. 189 (57) 114
Due to related party .................................... 0 0 (2)
Due from related party ................................. 18 26 (49)
--------- --------- ----------
Net cash provided by operating activities ............ 6,680 3,469 2,433
--------- --------- ----------
INVESTING ACTIVITIES:
Acquisition of rental property ........................... (13,936) (40,722) (29,556)
Purchases of securities ................................. (7,029) (3,601) (3,540)
Proceeds from sales and principal payments on securities 2,688 6,812 2,696
Change in deposits for acquisition of rental property ... 0 0 220
Repayment of notes receivable ........................... 0 300 425
--------- --------- ----------
Net cash used in investing activities .................. (18,277) (37,211) (29,755)
--------- --------- ----------
FINANCING ACTIVITIES:
Due to stockholders ....................................... (2,216) 2,216 0
Repayments of mortgate notes payable ..................... (4,352) (729) (452)
Borrowings under mortgage notes ........................... 10,599 28,620 17,599
Deferred financing costs ................................. (289) (467) (339)
Stock subscription and issuance ........................... 13,215 623 15,918
Cash dividends paid to stockholders ..................... (4,179) (2,822) 0
--------- --------- ----------
Net cash provided by financing activities ............ 12,778 27,441 32,726
--------- --------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS .......................................... 1,181 (6,301) 5,404
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD ....................................... 770 7,071 1,667
--------- --------- ----------
CASH AND CASH EQUIVALENTS,
END OF PERIOD ............................................. $ 1,951 $ 770 $ 7,071
========= ========= ==========
SUPPLEMENTAL SCHEDULE OF CASH
AND NONCASH ITEMS:
ACQUISITION:
Other receivables ....................................... $ 8
Other assets ............................................. 992
----------
Common stock issued with put option ..................... $ 1,000
==========
Conversion of common stock issued
with put option to equity .............................. $ 1,000
=========
Cash paid for interest .................................... $ 4,752 $ 3,513 $ 1,956
========= ========= ==========
Cash paid for income taxes .............................. $ 36 $ 60
========= ==========
Common stock issued for notes receivable .................. $ 1,525
=========
Change in unrealized depreciation in securities
available for sale .................................... $ 28 $ 43
========= ==========
</TABLE>

See accompanying notes to the consolidated financial statements.

F-17
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

GENERAL - Equity One, Inc. (the "Company") was incorporated in Maryland on
June 15, 1992, as a wholly-owned subsidiary of Gazit Holdings, Inc. During
1996, Gazit Holdings, Inc. transferred all of its stock ownership to Gazit
(1995), Inc. ("Gazit") ( See Note 6). During 1996 and 1995, additional shares
of stock were issued to both affiliated and unaffiliated entities, reducing
Gazit's holdings in the Company to approximately 37% and 45% as of December 31,
1996 and 1995, respectively.

Effective January 1, 1994 the Company acquired Global Realty and
Management, Inc. ("Global"), the property manager for four of the Company's
properties at the time of acquisition respresenting approximately 30% of
Global's revenues. The acquisition was accounted for as a purchase. The
outstanding common stock of Global was exchanged for 144,000 shares of the
Company's common stock and 48,000 Class B warrants to purchase the Company's
common stock at $8.25 per share through December 31, 1996. The Class B warrants
were issued to all common stockholders on a pro rata basis based on their
percentage of common stock owned. The former stockholder of Global was granted
an option to "put" his newly acquired Company stock to the Company for $1,000
for a five-year period. During 1996, the Company canceled the put option in
exchange for a similar put option to be issued by certain stockholders of the
Company. On December 30, 1996, the former stockholder of Global exercised the
48,000 Class B warrants to purchase the Company's common stock at $8.25 per
share. The Company provided a $396 loan for a six year period for the purpose
of exercising the Class B warrants held by the former stockholder. The loan
bears interest at 5.25% per year. The loan has been offset against
stockholders' equity. Additionally, the Company entered into an employment
agreement with the former stockholder for a period of 7 years with an option to
extend the agreement for another 7 years. The former stockholder is entitled to
remuneration of $180 per year, effective January 1, 1996 and options to
purchase 150,000 shares in the Company at an exercise price of $12.38 per share
under the Company's 1995 Stock Option Plan (the "Plan").

The Company currently owns and operates fourteen retail properties and two
mixed use (office/
retail) properties and one mini-warehouse located in Florida and Texas,
comprising approximately 87% and 13% of the total rentable square footage,
respectively. In addition, Winn-Dixie Stores Inc., and Publix Supermarkets
Inc., rent approximately 16% and 7%, 10% and 7%, and 13% and 4% of the total
rentable square footage, for 1996, 1995 and 1994, respectively.

BASIS OF CONSOLIDATION - The consolidated financial statements include the
accounts of Equity One, Inc. and its wholly-owned subsidiaries (collectively
the "Company"): Florida Del Rey Holdings II, Inc., Gazit (Meridian), Inc., Four
Corners Equity Corp., Equity One (Beta), Inc., Equity One (Eustis Square),
Inc., Equity One (Parker Towne Center), Inc., Global Realty and Management,
Inc., Equity One (Commonwealth), Inc., Equity One (Alpha), Inc., Equity One
(Mandarin), Inc., Equity One (Atlantic Village), Inc., Equity One (Epsilon),
Inc., Equity One (Point Royal), Inc., Equity One (Lake Mary), Inc., Equity One
(Olive), Inc., Equity One (West Lake), Inc., Equity One (Forest Edge), Inc.,
Equity One (Oak Hill), Inc., and Equity One (Delta), Inc. All subsidiaries
hereinafter are referred to as "the Consolidated Companies." All intercompany
balances and transactions have been eliminated.

CASH AND CASH EQUIVALENTS - For purposes of the statements of cash flows,
the Company considers certificates of deposit with an initial maturity of three
months or less to be cash equivalents. Cash and cash equivalents consist of the
following as of December 31, 1996 and 1995:

F-18
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

<TABLE>
<CAPTION>
L996 1995
-------- -----
<S> <C> <C>
Cash ........................... $1,828 $770
Certificates of deposit ...... 123
------- ----
Total ..................... $1,951 $770
======= =====
</TABLE>

INVESTMENT SECURITIES - Investment securities are accounted for under
Statement of Financial Accounting Standards ("SFAS") No. 115, ACCOUNTING FOR
CERTAIN INVESTMENTS IN DEBT AND EQUITY SECURITIES, which the Company adopted
during 1993. Under SFAS No. 115, investment securities must be classified and
accounted for under the following conditions:

TRADING ACCOUNT SECURITIES - Trading account securities are held in
anticipation of short-term sales or market movements. Trading account
securities are stated at fair value. Gains or losses on the sale of trading
account securities, as well as unrealized fair value adjustments, are
included in operating income.

SECURITIES AVAILABLE FOR SALE - Securities to be held for unspecified
periods of time including securities that management intends to use as part
of its asset/liability strategy, or that may be sold in response to changes
in interest rates, changes in prepayment risk, or other similar factors,
are classified as available for sale and are carried at fair value.
Unrealized gains or losses are reported as a net amount in a separate
component of stockholders' equity until realized. As of December 31, 1996
and 1995, all of the Company's securities are classified as securities
available for sale.

SECURITIES HELD TO MATURITY - Securities that management has a positive
intent and the ability to hold to maturity are carried at cost, adjusted
for amortization of premiums and accretion of discounts over the life of
the securities using a method which approximates the level yield method.

DEPOSITS - Deposits are comprised of funds held by various institutions
for future payments of taxes and insurance, utility and other service deposits.

RENTAL PROPERTY - Rental property is stated at cost. Major renewals and
betterments are capitalized. Maintenance, repairs and minor renewals are
charged to operating expense as incurred. Depreciation is provided for using
the straight-line method over the estimated useful lives of the assets which
range from 5 to 40 years, except for building improvements related to leasehold
improvements which are depreciated over the lesser of the assets' useful lives
or the terms of the related leases.

LONG-LIVED ASSETS - In accordance with Financial Accounting Standards No.
121, ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED
ASSETS TO BE DISPOSED OF (SFAS No. 121), long-lived assets, such as property,
certain identifiable intangibles, and goodwill related to those assets to be
held and used are to be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amounts of an asset may not be
recoverable. The Company periodically assesses the recoverability of the
long-lived assets based on its expectations of future profitability and
undiscounted cash flow of the related operations. These factors, along with
management's plans with respect to the operations, are considered in assessing
the recoverability of long-lived assets. If the Company determines, based on
such measures, that the carrying amount is impaired, the long-lived assets will
be written down to its recoverable value with corresponding charge to earnings.
During the periods presented, no such impairment was incurred.

F-19
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

DEFERRED FINANCING COSTS - Deferred financing costs consist of loan
origination and other fees directly related to the rental property financing
with third parties. The fees are being amortized using the straight-line method
over the term of the notes, ranging from 5 to 30 years.

RENTAL INCOME - Rental income is recognized on a straight-line basis over
the terms of the respective leases and is comprised of minimum rentals,
contingent rentals and the pass-through of certain expenses. Contingent rentals
are generally received from tenants based on their gross sales. For the years
ended December 31, 1996, 1995 and 1994, contingent rentals recognized by the
Company were approximately $153, $87 and $80, respectively.

INCOME TAXES - There is no provision for income tax expense for the year
ended December 31, 1996 and 1995, as a result of the Company changing to real
estate investment trust ("REIT") status, effective January 1, 1995. The Company
is not taxed on its taxable operating income if it distributes such income to
stockholders in conformity with the requirements of the Internal Revenue Code
and meets certain other requirements. Company management is of the opinion that
they are complying with the requirements of REIT status and hence starting from
January 1, 1995 the Company is a REIT for income tax purposes. The Company
intends to continue to meet such requirements and distribute any of its future
taxable operating income in conformity with such requirements. Distributed
capital gains on sales of real estate are not subject to tax; however,
undistributed capital gains are taxed as capital gain.

PERVASIVENESS OF ESTIMATES - The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and 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.

NEW ACCOUNTING PRONOUNCEMENTS - In October 1995, SFAS No. 123, ACCOUNTING
FOR STOCK-BASED COMPENSATION, was issued. SFAS No. 123, encourages, but does
not require a fair value based method of accounting for employee stock options
or similar equity instruments. Entities which elect not to adopt the fair value
method of accounting are required to make pro-forma disclosures of net income
and earnings per share as if the fair value method were adopted. The company
has not adopted the fair value method and therefore continues to apply the
intrinsic method of measuring stock based compensation as prescribed by
Accounting Principles Board Opinion ("APB") No. 25, Accounting for Stock Issued
to Employees, and related interpretations.

In February 1997, SFAS No. 128, EARNINGS PER SHARE was issued. SFAS No.
128, which supersedes APB Opinion No. 15, requires a dual presentation of basic
and diluted earnings per share on the face of the income statement. Basic
earnings per share excludes dilution and is computed by dividing income or loss
attributable to common stockholders by the weighted-average number of common
shares outstanding for the period. Diluted earnings per share reflects the
potential dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock or resulted in the
issuance of common stock that then shared in the earnings of the entity.
Diluted earnings per share is computed similarly to fully diluted earnings per
share under APB Opinion 15. SFAS No. 128 is effective for financial statements
issued for periods ending after December 15, 1997,

F-20
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

including interim periods; earlier application is not permitted. When adopted,
all prior-period earnings per share data are required to be restated but are
not expected to differ materially from the historical amounts.

FAIR VALUE OF FINANCIAL INSTRUMENTS - The estimated fair values of
financial instruments have been determined by the Company using available
market information and appropriate valuation methods in accordance with
Statement of Financial Accounting Standards No. 107, DISCLOSURES ABOUT FAIR
VALUE OF FINANCIAL INSTRUMENTS. The Company has used the following market
assumptions and/or estimation methods:

CASH AND CASH EQUIVALENTS, ACCOUNTS AND OTHER RECEIVABLES AND ACCOUNTS
PAYABLE - The carrying amounts reported in the consolidated balance sheets
are reasonable estimates of fair value due to their short term nature.

INVESTMENT SECURITIES - Fair values are based on quoted market prices,
dealer quotes, and independent pricing services. The carrying value
approximates fair value due to the nature of the investments due to their
short-term nature.

MORTGAGE NOTES PAYABLE - The estimated fair value at December 31, 1996 and
1995 was $63,016 and $57,065, respectively, calculated based on the net
present value of payments over the term of the notes using estimated market
rates for similar notes payable.

INTEREST RATE CAP AGREEMENTS - The fair value is based on dealer quotes and
generally represents an estimate of the amount the Company would be paid to
terminate the agreement at the reporting date. The fair value at December
31, 1996 and 1995 was $6 and $0 respectively.

The fair value estimates presented herein are based on information
available to management as of the reporting dates. Although management is not
aware of any factors that would significantly affect the estimated fair value
amounts, such amounts have not been comprehensively revalued for purposes of
these financial statements since that date and, therefore, current estimates of
fair value may differ significantly from the amounts presented herein.

NET EARNINGS PER SHARE - Net earnings per share is calculated by dividing
net earnings by the weighted average number of common shares and common stock
equivalents outstanding during each year. The weighted average number of shares
outstanding and used in the calculation were restated for the subsequent stock
split, see Note 10, and were 5,923,250, 5,375,580 and 3,453,792 in 1996, 1995
and 1994, respectively.

2. SECURITIES AVAILABLE FOR SALE

As of December 31, 1996 and 1995, there were no material differences
between amortized cost and fair value. For the years ended December 31, 1996,
1995 and 1994, the Company had gross securities

F-21
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

2. SECURITIES AVAILABLE FOR SALE--(CONTINUED)

sales of $2,411, $6,776 and $2,831 resulting in gross realized gains of $32,
$52 and $26 and gross realized losses of $5, $16 and $161, respectively.

At December 31, 1996 and 1995, debt securities, mortgage-backed securities
and U.S. government obligations all mature within five years. Actual maturities
may differ from contractual maturities because borrowers may have the right to
call or prepay obligations with or without call or prepayment penalties.

3. ACCOUNTS AND OTHER RECEIVABLES

Composition in the consolidated balance sheets:

<TABLE>
<CAPTION>
1996 1995
------ -----
<S> <C> <C>
Tenants .......................................... $746 $907
Accrued interest receivable - institutions ...... 38
Employee loans and advances ..................... 16 15
----- -----
Total .......................................... $800 $922
===== =====
</TABLE>

The accounts receivable balances do not include a valuation allowance as
the Company has historically had minor charge-offs.

4. RENTAL PROPERTY

Composition in the consolidated balance sheets:

<TABLE>
<CAPTION>
LAND,
BUILDINGS
AND BUILDING
COST EQUIPMENT IMPROVEMENTS TOTAL
- ------------------------------------------- ----------- -------------- -----------
<S> <C> <C> <C>
Balance at beginning of year ......... $ 90,595 $2,175 $ 92,770
Additions in the reporting year ...... 12,381 1,555 13,936
-------- ------ --------
Balance at end of year ............... 102,976 3,730 106,706
-------- ------ --------
ACCUMULATED DEPRECIATION
Balance at beginning of year ......... (2,622) (210) (2,832)
Depreciation for the year ............ (1,854) (163) (2,017)
-------- ------ --------
Balance at end of year ............... (4,476) (373) (4,849)
-------- ------ --------
Undepreciated balance
as of December 31, 1996 ............... $ 98,500 $3,357 $101,857
======== ====== ========
Undepreciated balance
as of December 31, 1995 ............... $ 87,973 $1,965 $ 89,938
======== ====== ========
</TABLE>

Substantially all of the Company's rental property serves as collateral to
non-recourse mortgages payable totaling $66,831 and $60,583 as of December 31,
1996 and 1995, respectively (See Note 5).

Assets are depreciated on a straight-line basis over their estimated
useful lives, as follows:

F-22
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

4. RENTAL PROPERTY--(CONTINUED)

<TABLE>
<S> <C>
Buildings .............................. 33 to 40 years
Building/leasehold improvements ...... 5 to 40 years
Furniture and equipment ............... 5 to 7 years
</TABLE>

5. MORTGAGE NOTES PAYABLE

Mortgage notes payable consist of the following:

<TABLE>
<CAPTION>
1996 1995
--------- --------
<S> <C> <C>
Mortgage payable, 8.125%, payable in monthly installments of $29
including interest, unpaid balance due August 31, 2011, collateralized
by rental property (Financed through an Insurance Company) ............ $ 3,015 $3,036
Mortgage payable, 9.49%, payable in monthly installments of $26
including interest, unpaid balance due March 1, 2003, collateralized
by rental property (Financed through an Insurance Company) ............ 3,001 3,026
Mortgage payable, 8.25%, payable in monthly installments of $8
including interest, unpaid balance due August 1, 2000, collaterized by
rental property (Financed through an Insurance Company) ............... 924 939
Mortgage payable, 9%, payable in monthly installments of $55
including interest, unpaid balance due July 1, 2002, collaterized by
rental property (Financed through an Insurance Company) ............... 5,482 5,638
Mortgage payable, 8.5%, interest only payable monthly through
January 1, 1996 with monthly installments of $21 including
interest commencing January 1, 1996, unpaid balance due
September 30, 1998, collateralized by rental property (Financed
through an Insurance Company) ....................................... 2,351 2,400
Mortgage payable, 7.75% through August 1, 1997, at which time the
rate will adjust, payable in monthly installments of $115 including
interest, at which time the remaining principal is payable unless the
lender extends the loan. Under the terms of the note, the lender
shall not declare the note to be due and payable provided that the
Company has satisfied all of the lender's conditions as set forth in
the note agreement. Under the terms of the note, the lender has the
option to extend the loan for two three-year periods at an interest
rate to be determined by the lender. Interest at this rate plus
principal payments amortizing the remaining balance over a 17 and
14 year period at each of the option dates, respectively, are payable
monthly and any remaining principal due on August 1, 2003. The
Company has entered into a cap agreement to hedge its interest rate
risk as discussed below. The loan is collateralized by rental property.
(Financed through an Insurance Company) .............................. 13,221 13,561
</TABLE>

F-23
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

5. MORTGAGE NOTES PAYABLE--(CONTINUED)

<TABLE>
<CAPTION>
1996 1995
--------- --------
<S> <C> <C>
Mortgage payable, 8.75%, payable in monthly installments of $19
including interest, unpaid balance due June 30, 2000, collaterized by
rental property (Financed through a Bank) .............................. 2,247 2,277
Mortgage payable, 6.375%, payable in monthly installments of $8
including interest, unpaid balance due May 10, 1999, collaterized by
rental property (Financed through an Insurance Company) ............... 1,227 1,244
Mortgage payable, 8.15%, payable in monthly installments of $37
including interest, unpaid balance due July 1, 2002, collaterized by
rental property (Financed through an Insurance Company) ............... 4,044 4,150
Mortgage payable, 7.625%, payable in monthly installments of $20
including interest, unpaid balance due January 1, 2006, collaterized
by rental property (Financed through an Insurance Company) ............ 2,445 2,500
Mortgage payable, 9.35%, payable in monthly installments of $23
including interest, unpaid balance due March 1, 2002, collaterized by
rental property (Financed through an Insurance Company) ............... 2,419 2,467
Mortgage payable, 7.95%, payable in monthly installments of $50
including interest, unpaid balance due July 15, 2010, collaterized by
rental property (Financed through an Insurance Company) ............... 5,816 5,946
Mortgage payable, 7.85%, payable in monthly installments of $111
including interest, unpaid balance due December 1, 2010, collaterized
by rental property (Financed through an Insurance Company) ............ 13,109 13,399
Mortgage payable, 8.25%, payable in monthly installments of $19
including interest, unpaid balance due October 1, 2002, collaterized
by rental property (Financed through an Insurance Company) ............ 2,058
Mortgage payable, 7.875%, through July 1, 2006 payable in monthly
installments of $46 including interest, at which time the lender will
adjust the rate of interest equal to the sum of "Moody's" "A"
corporate bond index daily rate plus .375%, rounded to the next
highest one-eighth percentage rate. An additional disbursement of
$480 will be made by the lender after certain conditions and terms
are met, including but not limited to the construction of a restaurant,
at which time the monthly installment will increase to $50. The
unpaid balance is due June 30, 2016, collateralized by rental property
(Financed through an Insurance Company) ................................. 5,472
-------- -------
Total ..................................................................... $66,831 $60,583
======== ========
</TABLE>

F-24
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

5. MORTGAGE NOTES PAYABLE--(CONTINUED)

Principal maturities of the mortgage notes payable as of December 31, 1996
are as follows:

<TABLE>
<CAPTION>
YEAR ENDING
DECEMBER 31,
- -------------
<S> <C>
1997 ............ $ 1,655
1998 ............ 4,037
1999 ............ 3,057
2000 ............ 4,951
2001 ............ 3,118
Thereafter ...... 50,013
--------
Total ......... $66,831
========
</TABLE>

As of December 31, 1996 and 1995, the Company had outstanding an off
balance sheet interest rate cap on a variable rate obligation, which protects
the Company from rising interest rates. This cap has a notional amount of
$13,000.

On February 14, 1997, the Company refinanced the mortgage note payable of
7.75% with a principal balance of $13,221 as of December 31, 1996, referred to
above. The principal amount received was $13,400. The new loan bears an
interest rate of 7.68% per year. The monthly installments are $115 including
interest. The new loan is repayable in periodic installments and matures in
2015.

6. RELATED PARTY TRANSACTIONS

In May 1996, an agreement was signed with the Company's principal
stockholders, Gazit(1995), Inc., Danbar Resources and Development Ltd. through
their wholly owned subsidiaries and Globe-Reit Investments, Ltd. and other
stockholders and interested parties, to raise capital for expansion and other
purposes. Under this agreement, the Company will issue 2,000,000 shares of
$0.01 par value common stock to a wholly owned subsidiary of Globe-Reit
Investments, Ltd. at $12.375 per share in installments determined by the
Company. As of December 31, 1996, 800,000 shares of common stock were issued to
M.G.N. (USA), Inc. for $9,908.

The per share price will be increased by 9.7% per annum for each year or
part of a year that elapses from December 10, 1995 until the date the proceeds
are received, reduced by the amount of dividends that are distributed per share
in that period. Dividends distributed subsequent to December 10, 1995 and the
accrued interest, adjusted the share price to $12.64 as of December 31, 1996.

STOCK OPTION PLAN - On October 23, 1996, the Company adopted the Plan
which is described below. The Company applies APB Opinion 25 and related
interpretations in accounting for the Plan. The purpose of the Plan is to
further the growth of the Company, by offering an incentive to directors,
officers and other key employees of the Company, and to increase the interest
of these employees in the Company, through additional ownership of its common
stock. The effective date of the Plan is January 1, 1996. The maximum number of
shares of common stock as to which options may be granted under this Plan is
1,000,000 shares, which shall be reduced each year by the required or
discretionary grant of options. The term of each option shall be determined by
the Stock Option Committee (the "Committee") of the Company, but in no event
shall be longer than ten years from the date of the grant. The vesting of the
options shall be determined by the Committee, in its sole and absolute
discretion, at the date of grant of the option.

F-25
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

6. RELATED PARTY TRANSACTIONS--(CONTINUED)

During 1996, the Company issued 350,000 options under the Plan to two
officers of the Company at an exercise price of $12.375 per share, fair market
value on the date of grant as determined by an independent valuation, which
shall vest over a four year period, 87,500 shares each year, commencing on
January 1, 1997, and on the first day of each year, until all options vest. The
per share option price is subject to a downward adjustment to the extent that
dividends declared and paid by the Company in each year subsequent to 1995
exceed dividends declared and paid by the Company in the year ended December
31, 1995. As of December 31, 1996, the per share price if exercised on that
date was $12.20. On the date of exercise of options under the Plan, the Company
will record compensation expense for any difference between the exercise price
and fair market value of the shares on that date.

The Company applies APB No. 25 and related interpretations in accounting
for its stock option plan to employees and non-employee members of the Board as
described in Note 1. Accordingly, no compensation expense has been recognized
in the year ended December 31, 1996 related to this Plan. Compensation costs
would have been increased by approximately $418,000 in 1996 had the fair value
of stock options granted been recognized as compensation expense as prescribed
by SFAS No. 123. The fair value of the stock options at the date of grant was
estimated using the minimum value method prescribed by SFAS No. 123.

MANAGEMENT AGREEMENT - An affiliated entity, Gazit U.S.A., Inc., has
provided the Company with office space, office services and certain management
and consulting services for which the Company pays a management fee. For the
years ended December 31, 1995 and 1994 such fee totaled $150 and $172
respectively, and is included in general and administrative expenses in the
accompanying consolidated statements of operations.

The Company provided an affiliated entity, Gazit (1995), Inc., with office
space, office services and certain management and consulting services for which
the Company receives a management fee. For the year ended December 31, 1996,
such fees totaled $10 and is included as an offset to general and
administrative expenses in the accompanying consolidated statements of
operations.

DUE TO STOCKHOLDERS - As of December 31, 1995, the Company had notes
payable of $2,200 to three of its stockholders bearing interest at 10%, payable
on demand. Interest expense related to these notes for the years ended December
31, 1996 and 1995 was $96 and $16, respectively. These notes were repaid in
June, 1996.

7. INCOME TAXES

There is no income tax provision for 1996 and 1995 due to the Company's
change to real estate investment trust status (See Note 1).

As of December 31, 1996 and 1995, the Company had a capital loss
carryforward of $72 and $99, respectively.

F-26
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

8. FUTURE MINIMUM RENTAL INCOME, COMMITMENTS AND CONTINGENCIES

Future minimum rental income under noncancelable leases approximates the
following as of December 31, 1996:

<TABLE>
<CAPTION>
YEAR ENDING
DECEMBER 31,
- ------------
<S> <C>
1997 ............ $ 13,334
1998 ............ 11,609
1999 ............ 10,234
2000 ............ 8,848
2001 ............ 7,780
Thereafter ...... 54,170
--------
Total ......... $105,975
========
</TABLE>

During 1996, the Company obtained a line of credit of $2,500 secured by
rental property.

During 1996, the Company pledged a letter of credit for $1,500 as
additional security on one of its properties. The letter of credit is
collateralized by securities held by the Company at December 31, 1996.

The Company is subject to litigation in the normal course of business,
none of which, in the opinion of management, will have a material adverse
effect on the financial condition, results of operations or cash flows of the
Company.

9. STOCKHOLDERS' EQUITY

As of December 31, 1996 and 1995, the Company has authority to issue
45,000,000 shares, of which 40,000,000 are shares of common stock and 5,000,000
are shares of preferred stock. The Company had Class A and B warrants issued
and outstanding to purchase 735,000 and 1,141,734 shares of the Company's
common stock as of December 31, 1995. Each Class A warrant is exercisable at
$5.25 per share and expires on December 31, 1998. Each Class B warrant was
exercisable at $8.25 per share.

On December 30, 1996, 235,610 Class B warrants were exercised at $8.25 per
share and the remaining 906,124 warrants exchanged proportionately for
1,340,000 Class C warrants. The Company authorized the issuance of up to
1,400,000 Class C warrants at an exercise price of $8.25 per share and expire
on December 31, 1999. As of December 31, 1996, the Company has 1,306,124 Class
C warrants issued and outstanding.

The composition of the number of shares of issued and outstanding common
stock is as follows:

<TABLE>
<CAPTION>
1996 1995
------- ------
<S> <C> <C>
Common Stock ....................................... 5,768 4,374
Common stock issued with put option (Note 1) ...... 144
----- ------
Total shares issued and outstanding ............ 5,768 4,518
===== ======
</TABLE>

During 1996, the Company paid cash dividends of $.375, $.20 and $.225 on
June 18, September 30, and December 31, respectively, to all stockholders of
record on those dates. Gross dividends paid were $4,179 for the year ended
December 31, 1996.

F-27
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

9. STOCKHOLDERS' EQUITY--(CONTINUED)

During 1995, the Company paid cash dividends of $.25, $.125 and $.25 on
June 28, September 27, and December 28, respectively, to all stockholders of
record on those dates. Gross dividends paid were $2,822 for the year ended
December 31, 1995.

During 1996, two officers exercised stock options for promissory notes.
These notes are full recourse promissory notes bearing interest at 5.25% and
6.86%, respectively, and are collateralized by the stock issued upon exercise
of the stock options. Interest is payable annually and principal is due on
December 30, 2002 and June 16, 2003, respectively. The notes have been
reflected in the financial statements as a reduction of stockholders' equity.

An officer's Employment Agreement provides that if his employment is
terminated for any reason other than Cause, or in the event of a Change in
Control (as defined in the Employment Agreement), the officer shall be granted
a "put" option giving him the right to tender all of his shares of Common Stock
to the Company for purchase at a price per share equal to (i) if the Common
Stock is then listed and traded on a securities exchange, the average closing
price over the forty-five trading days immediately preceding the date the stock
is tendered or (ii) if the Common Stock is not then listed and traded on a
securities exchange, the price per share used in a similar third party arms'
length sale of Common Stock during the six-month period immediately preceding
the tender. If the purchase price cannot be determined in accordance with (i)
and (ii) above, the price per share shall be determined by an acceptable
arbitrator in accordance with the rules of commercial arbitration, or in the
event the parties cannot agree on an arbitrator, an arbitrator appointed by the
American Arbitration Association.

10. SUBSEQUENT EVENT

On July 15, 1997, the Company's Board of Directors declared and paid a
two-for-one split of the Company's Common Stock in the form of a 100% stock
dividend to stockholders on July 15, 1997. A total of 3,454,065 shares of
common stock were issued in connection with the split. The stated par value of
each share was not changed from $.01. A total of $3,454,065 was reclassified
from the Company's additional paid in capital account to the Company's common
stock account. All share and per share amounts have been restated to
retroactively reflect the stock split.

11. CONDENSED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
-------- -------- -------- -------
<S> <C> <C> <C> <C>
1996
Total revenue ............... $4,030 $4,012 $4,240 $4,432
Net income .................. 907 923 1,138 952
Net earnings per share ...... $ 0.18 $ 0.19 $ 0.19 $ 0.09
1995
Total revenue ............... $2,271 $2,527 $3,065 $3,485
Net income .................. 517 586 713 696
Net earnings per share ...... $ 0.11 $ 0.12 $ 0.16 $ 0.12
</TABLE>

Quarterly computations of per share amounts which have been restated for
the subsequent stock split, see Note 10, are made independently. Therefore, the
sum of the per share amounts for the quarters may not agree with the per share
amounts for the year.

F-28
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors of
Equity One (West Lake), Inc.:

We have audited the statement of revenues and certain expenses of West
Lake Plaza Shopping Center (the "Property") for the period from January 1, 1996
through November 5, 1996. This financial statement is the responsibility of the
Property's management. Our responsibility is to express an opinion on the
financial statement based on our audit.

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

The accompanying statement of revenues and certain expenses was prepared
for the purpose of complying with the rules and regulations of the Securities
and Exchange Commission (for inclusion in the filing of Form S-11 of Equity
One, Inc.). Material amounts, described in Note 1 to the statement of revenues
and certain expenses, that would not be comparable to those resulting from
future operations of the acquired property are excluded, and the statement is
not intended to be a complete presentation of the acquired property's revenues
and expenses.

In our opinion, the financial statement referred to above presents fairly,
in all material respects, the revenues and certain expenses of West Lake Plaza
Shopping Center for the period from January 1, 1996 through November 5, 1996 in
conformity with generally accepted accounting principles.

Deloitte & Touche LLP

Miami, Florida
July 22, 1997

F-29
<PAGE>

WEST LAKE PLAZA SHOPPING CENTER

STATEMENT OF REVENUES AND CERTAIN EXPENSES

<TABLE>
<CAPTION>
PERIOD FROM
JANUARY 1, 1996
THROUGH
NOVEMBER 5, 1996
-----------------
<S> <C>
REVENUES:
Rental income .............................. $781,125
Recoverable expenses ........................ 180,092
Total revenues ........................... 961,217
---------
CERTAIN EXPENSES:
Property operating ........................ 107,966
Real estate taxes ........................... 115,830
Insurance ................................. 26,468
---------
Total certain expenses .................. 250,264
---------
REVENUES IN EXCESS OF CERTAIN EXPENSES ...... $710,953
=========
</TABLE>

See notes to the statement of revenues and certain expenses.

F-30
<PAGE>

WEST LAKE PLAZA SHOPPING CENTER

NOTES TO THE STATEMENT OF REVENUES AND CERTAIN EXPENSES

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

WEST LAKE PLAZA SHOPPING CENTER ("West Lake" or the "Property"), located
in Miami, Florida, was acquired by Equity One, (West Lake), Inc. (the
"Company") from an unrelated party on November 6, 1996. The statement of
revenues and certain expenses includes information related to the operations of
the Property for the period from January 1, 1996 through November 5, 1996 as
recorded by the previous owner, Real Equities Limited Partnership II, and for
the period from November 6, 1996 through December 31, 1996 as recorded by
Equity One (West Lake), Inc.

The accompanying historical financial statement information is presented
in conformity with Rule 3-14 of the Securities and Exchange Commission.
Accordingly, the financial statement is not representative of the actual
operations for the year ended December 31, 1996 as certain expenses, which may
not be comparable to the expenses expected to be incurred in the future
operations of the acquired property, have been excluded. Expenses excluded
consist of interest, income taxes, depreciation and amortization, and other
costs not directly related to the future operations of the acquired property.

The Company is not aware of any material factors relating to the Property
that would cause the reported financial information not to be necessarily
indicative of future operating results.

The statement of revenues and certain expenses for the six month period
ended June 30, 1997 has not been audited. In the opinion of management, all
adjustments consisting solely of normal recurring adjustments necessary for the
fair presentation of the statement of revenues and certain expenses for the
interim period have been included. The current period's results of operations
are not necessarily indicative of results which ultimately may be achieved for
the year.

MANAGEMENT'S USE OF ESTIMATES - The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

RENTAL INCOME - Rental income is recognized on a straight-line basis over
the terms of the related leases.

PROPERTY OPERATING EXPENSES - Property operating expenses consist
primarily of utilities, repairs and maintenance, security and safety, cleaning,
and other administrative expenses.

MANAGEMENT FEES - For the period ended November 5, 1996, the Property was
managed by Real Equities Limited Parternship II for a property management fee
paid monthly based on an annual rate of 4% of total rental income. For the
period from November 6, 1996 through December 31, 1996, the Property was
managed by Global Realty and Management, Inc. for a property management fee
paid monthly based on an annual rate of 4% of total base rents collected.

F-31
<PAGE>

WEST LAKE PLAZA SHOPPING CENTER

NOTES TO THE STATEMENT OF REVENUES AND CERTAIN EXPENSES--(CONTINUED)

2. OPERATING LEASES

Operating revenue is principally obtained from tenant rentals under
noncancelable operating lease agreements. The future minimum rentals under
noncancelable operating lease agreements as of December 31, 1996 are as
follows:

<TABLE>
<CAPTION>
DECEMBER 31 AMOUNT
----------- -----------
<S> <C>
1997 ............ $ 819,117
1998 ............ 696,251
1999 ............ 610,681
2000 ............ 549,950
2001 ............ 533,106
Thereafter ...... 6,004,968
-----------
Total ......... $9,214,073
===========
</TABLE>

* * * * * *

F-32
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors of
Equity One, Inc.:

We have audited the statement of revenues and certain expenses of Lantana
Village Square (the "Property") for the year ended December 31, 1996. This
financial statement is the responsibility of the Property's management. Our
responsibility is to express an opinion on the financial statement based on our
audit.

In our opinion, the financial statement referred to above presents fairly,
in all material respects, the revenues and certain expenses of Lantana Village
Square for the year ended December 31, 1996 in conformity with generally
accepted accounting principles.

Deloitte & Touche LLP

Miami, Florida
October 1, 1997

F-33
<PAGE>

LANTANA VILLAGE SQUARE

STATEMENT OF REVENUES AND CERTAIN EXPENSES

<TABLE>
<CAPTION>
SIX MONTHS IN THE
PERIOD ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
------------------ ------------------
(UNAUDITED)
<S> <C> <C>
REVENUES:
Rental income .............................. $377,197 $751,867
Recoverable expenses ........................ 87,037 161,633
Other income .............................. 776 1,985
--------- ---------
465,010 915,485
--------- ---------
CERTAIN EXPENSES:
Property operating ........................ 36,059 88,895
Real estate taxes ........................... 64,765 129,530
Insurance ................................. 19,578 19,493
--------- ---------
Total certain expenses .................. 120,402 237,918
--------- ---------
REVENUES IN EXCESS OF CERTAIN EXPENSES ...... $344,608 $677,567
========= =========
</TABLE>

See notes to the statement of revenues and certain expenses.

F-34
<PAGE>

LANTANA VILLAGE SQUARE

NOTES TO THE STATEMENT OF REVENUES AND CERTAIN EXPENSES

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Lantana Village Square ("Lantana" or the "Property"), located in Lantana,
Florida, is under contract to be acquired from an unrelated party by Equity
One, Inc. (the "Company"). The statement of revenues and certain expenses
includes information related to the operations of the Property for the year
ended December 31, 1996 as recorded by the owner, Commercial Venture Services,
Inc.

The accompanying historical financial statement information is presented
in conformity with Rule 3-14 of the Securities and Exchange Commission.
Accordingly, the financial statement is not representative of the actual
operations for the year ended December 31, 1996 as certain expenses, which may
not be comparable to the expenses expected to be incurred in future operations
of the property, have been excluded. Expenses excluded consist of interest,
income taxes, depreciation and amortization, and other costs not directly
related to the future operations of the property after acquisition.

The Company is not aware of any material factors relating to the Property
that would cause the reported financial information not to be necessarily
indicative of future operating results.

The statement of revenues and certain expenses for the six months in the
period ended June 30, 1997 has not been audited. In the opinion of management,
all adjustments consisting solely of normal recurring adjustments necessary for
the fair presentation of the statement of revenues and certain expenses for the
interim period have been included. The current period's results of operations
are not necessarily indicative of results which ultimately may be achieved for
the year.

RENTAL INCOME - Rental income is recognized on a straight-line basis over
the terms of the related leases. For the year ended December 31, 1996,
contingent rentals recognized by the Property were approximately $16,577.

PROPERTY OPERATING EXPENSES - Property operating expenses consist
primarily of utilities, repairs and maintenance, security and safety, cleaning,
and other expenses.

MANAGEMENT FEES - For the year ended December 31, 1996, the Property was
managed by Commercial Venture Services, Inc. for a property management fee paid
monthly based on a fixed monthly fee of $3,200.

CONTRACT FOR PURCHASE OF PROPERTY - A contract for the purchase of the
Property was signed on September 24, 1997 with Commercial Venture Services,
Inc. The closing date is scheduled for November 5, 1997.

F-35
<PAGE>

LANTANA VILLAGE SQUARE

NOTES TO THE STATEMENT OF REVENUES AND CERTAIN EXPENSES--(CONTINUED)

2. OPERATING LEASES

<TABLE>
<CAPTION>
DECEMBER 31 AMOUNT
----------- -----------
<S> <C>
1997 ............ $ 724,817
1998 ............ 702,035
1999 ............ 613,303
2000 ............ 521,128
2001 ............ 505,184
Thereafter ...... 5,007,204
-----------
Total ............ $8,073,671
===========
</TABLE>

F-36
<PAGE>

===============================================================================
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THE OFFERING OTHER
THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR BY THE UNDERWRITERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES
OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF.
---------
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Prospectus Summary ..............................
Risk Factors .................................
Use of Proceeds ..............................
Distribution Policy ...........................
Dilution .......................................
Capitalization .................................
Selected Consolidated Financial Data .........
Management's Discussion and Analysis of
Financial Condition and Results of
Operations .................................
Business .......................................
Management ....................................
Certain Transactions ...........................
Policies with Respect to Certain Activities .
Principal Stockholders ........................
Description of Capital Stock ..................
Shares Eligible for Future Sale ...............
Federal Income Tax Considerations ............
ERISA Considerations ...........................
Underwriting .................................
Notice to Canadian Residents ..................
Legal Matters .................................
Experts .......................................
Additional Information ........................
Glossary .......................................
Index to Financial Statements .................. F-1
</TABLE>

---------
UNTIL , 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATIONS OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
===============================================================================

===============================================================================

[EQUITY ONE LOGO]

EQUITY ONE, INC.

4,700,000 Shares

Common Stock

PROSPECTUS

CREDIT SUISSE FIRST BOSTON

ROBINSON-HUMPHREY
COMPANY

SALOMON BROTHERS

, 1997
===============================================================================
<PAGE>

PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 31. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The Registrant estimates that expenses payable by the Registrant in
connection with the Offering described in this registration statement (other
than underwriting discounts and commissions) will be as follows:

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee .................. $ 24,158.71
NASD filing fee ...................................................... 8,472.37
New York Stock Exchange listing fee ................................. 107,700.00
Printing and engraving expenses ....................................... 100,000.00
Accounting fees and expenses .......................................... 100,000.00
Legal fees and expenses ............................................. 200,000.00
Fees and expenses (including legal fees) for qualifications under state
securities laws ................................................... 5,000.00
Registrar and Transfer Agent's fees and expenses ..................... 5,000.00
Miscellaneous ......................................................... 49,668.92
-------------
Total ............................................................ $ 600,000.00
=============
</TABLE>

- ----------------
All amounts except the Securities and Exchange Commission registration fee, the
NASD filing fee and the NYSE listing fee are estimated.

ITEM 32. SALES TO SPECIAL PARTIES.

The following table sets forth the persons to whom the Company sold Common
Stock within the last six months at prices varying from the proposed Offering
price. Share amounts and purchase prices have been adjusted for the two-for-one
stock split effected by the Company on July 15, 1997.

<TABLE>
<CAPTION>
DATE PURCHASER PURCHASE PURCHASE PRICE PRICE PER SHARE
- ---------- ------------------------------ ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
05/09/97 Globe Reit Investments, Ltd. 522,404 Shares $6,692,000 $ 12.81
05/21/97 Globe Reit Investments, Ltd. 35,034 Shares $ 450,000 $ 12.84
06/17/97 Globe Reit Investments, Ltd. 38,670 Shares $ 500,003 $ 12.93
06/17/97 Gazit (1995), Inc. 400,000 Shares $2,050,000 $ 5.125(1)
06/17/97 Dan Overseas, Ltd. 120,000 Shares $ 615,000 $ 5.125(1)
06/19/97 Globe Reit Investments, Ltd. 23,604 Shares $ 300,006 $ 12.71
</TABLE>

- ----------------
(1) Represents the exercise of Outstanding Series A Warrants, which warrants
were issued by the Company in early 1993.

II-1
<PAGE>

ITEM 33. RECENT SALES OF UNREGISTERED SECURITIES.

(A) Set forth below is information relating to certain sales of an
aggregate of 3,098,676 shares of Common Stock within the last three years.

<TABLE>
<CAPTION>
DATE OF SALE PURCHASER PURCHASE PRICE
- -------------- --------------------------------- SHARES PURCHASED ---------------
<S> <C> <C> <C>
09/29/94 Dan Overseas, Ltd. 10,260 Shares $ 85,000
10/03/94 Gazit Holdings, Inc. 255,556 Shares $ 2,300,000
10/03/94 Dan Overseas, Ltd. 138,148 Shares $ 1,243,332
11/07/94 Globe Reit Investments, Ltd. 300,000 Shares $ 2,775,000
11/25/94 Globe Reit Investments, Ltd. 430,000 Shares $ 4,017,060
12/07/94 Globe Reit Investments, Ltd. 266,668 Shares $ 2,500,000
06/10/96 Chaim Katzman 215,000 Shares(1) $ 1,128,750
06/28/95 Globe Reit Investments, Ltd. 63,332 Shares $ 622,505
07/05/96 Globe Reit Investments, Ltd.(2) 800,000 Shares $11,668,125
05/09/97 Globe Reit Investments, Ltd.(2) 522,404 Shares $ 6,692,000
05/21/97 Globe Reit Investments, Ltd.(2) 35,034 Shares $ 450,000
06/17/97 Globe Reit Investments, Ltd.(2) 38,670 Shares $ 500,003
06/19/97 Globe Reit Investments, Ltd.(2) 23,604 Shares $ 300,000
</TABLE>

- ----------------
(1) Represents the exercise of Series A Warrants granted to Mr. Katzman in the
beginning of 1993.
(2) Represents sales pursuant to the investment agreement between the Company
and Globe Reit Investments, Ltd. dated May 21, 1996.

The aforementioned issuances and sales were made in reliance upon the
exemption from registration provisions of the Act afforded by Section 4(2)
thereof, as transactions by an issuer not involving a public offering.

(B) On December 30, 1996, the Company issued an aggregate of 235,500
shares of Common Stock upon the exercise of outstanding Series B Warrants (the
"Series B Warrants"). The Series B Warrants were issued by the Company in June
1994.

<TABLE>
<CAPTION>
PURCHASER SHARES PURCHASED AGGREGATE PURCHASE PRICE
- ------------------------------ ------------------ -------------------------
<S> <C> <C>
Gazit (1995), Inc. 101,516 Shares $837,507
Dan Overseas, Ltd. 54,984 Shares $453,618
Globe Reit Investments, Ltd. 1,240 Shares $ 10,320
Doron Valero 48,000 Shares $396,000
Chaim Katzman 25,980 Shares $214,417
Saul Rickman 870 Shares $ 8,002
Martin Klein 2,910 Shares $ 24,007
</TABLE>

(C) On December 30, 1996, the Company issued Series C Warrants in exchange
for outstanding Series B Warrants on a pro rata basis. Series C Warrants to
purchase an aggregate of 1,306,124 shares of Common Stock were issued in
connection with this exchange. The Series C Warrants are exercisable at an
exercise price of $8.25 per share, the exercise price of the Series B Warrants
and expire on December 31, 1999. The Series C Warrants were issued as follows:

<TABLE>
<CAPTION>
STOCKHOLDER SHARES SUBJECT TO WARRANTS
- --------------------------------- ---------------------------
<S> <C>
Gazit (1995), Inc. ...... 542,136 Shares
Dan Overseas, Ltd. ...... 293,430 Shares
M.G.N. (USA) Inc. ...... 398,760 Shares
Chaim Katzman ............ 62,344 Shares
Saul Rickman ............ 2,364 Shares
Martin Klein ............ 7,090 Shares
</TABLE>

II-2
<PAGE>

The aforementioned issuances were made in reliance upon the exemption from
registration provisions of the Act afforded by Section 4(2) thereof, as
transactions by an issuer not involving a public offering.

(D) On June 17, 1997, the Company issued an aggregate of 520,000 shares of
Common Stock upon the exercise of outstanding Series A Warrants. The Series A
Warrants were issued by the Company in the beginning of 1993. The Common Stock
was issued as follows:

<TABLE>
<CAPTION>
STOCKHOLDER SHARES PURCHASED AGGREGATE PURCHASE PRICE
- -------------------- ------------------ -------------------------
<S> <C> <C>
Gazit (1995), Inc. 400,000 Shares $2,050,000
Dan Overseas, Ltd. 120,000 Shares $ 615,000
</TABLE>

ITEM 34. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Maryland General Corporation Law (the "MGCL") permits a Maryland
corporation to include in its Charter a provision eliminating the liability of
its directors and officers to the corporation and its stockholders for money
damages except for liability resulting from (a) actual receipt of an improper
benefit or profit in money, property or services or (b) active and deliberate
dishonesty established by a final judgment as being material to the cause of
action. The Charter of the Company contains such a provision which limits such
liability to the maximum extent permitted by the MGCL. This provision does not
limit the ability of the Company or its stockholders to obtain other relief,
such as an injunction or rescission.

The Bylaws of the Company obligate it to the maximum extent permitted by
Maryland law to indemnify and to pay or reimburse reasonable expenses in
advance of final disposition of a proceeding to (a) any present or former
director or officer who is made a party to the proceeding by reason of his
service in that capacity or (b) any individual who, while a director of the
Company and at the request of the Company, serves or has served another
corporation, partnership, joint venture, trust, employee benefit plan or any
other enterprise as a director, officer, partner or trustee of such
corporation, partnership, joint venture, trust, employee benefit plan, or other
enterprise and who is made a party to the proceeding by reason of his service
in that capacity. The Charter and Bylaws also permit the Company to indemnify
and advance expenses to any person who served a predecessor of the Company in
any of the capacities described above and to any employee or agent of the
Company or a predecessor of the Company.

The MGCL requires a corporation (unless its Charter provides otherwise,
which the Company's Charter does not) to indemnify a director or officer who
has been successful, on the merits or otherwise, in the defense of any
proceeding to which he is made a party by reason of his service in that
capacity. The MGCL permits a corporation to indemnify its present and former
directors and officers, among others, against judgments, penalties, fines,
settlements and reasonable expenses actually incurred by them in connection
with any proceeding to which they may be made a party by reason of their
service in those or other capacities unless it is established that (a) the act
or omission of the director or officer was material to the matter giving rise
to the proceeding and (i) was committed in bad faith or (ii) was the result of
active and deliberate dishonesty, (b) the director or officer actually received
an improper personal benefit in money, property or services or (c) in the case
of any criminal proceeding, the director or officer had reasonable cause to
believe that the act or omission was unlawful. However, under the MGCL, a
Maryland corporation may not indemnify for an adverse judgment in a suit by or
in the right of the corporation. In addition, the MGCL permits a corporation to
advance reasonable expenses to a director or officer upon the Company's receipt
of (a) a written affirmation by the director or officer of his good faith
belief that he has met the standard of conduct necessary for indemnification by
the Company and (b) a written statement by or on his behalf to repay the amount
paid or reimbursed by the Company if it shall ultimately be determined that the
standard of conduct was not met. The termination of any

II-3
<PAGE>

proceeding by conviction, or upon a plea of nolo contendere or its equivalent,
or an entry of any order of probation prior to judgment, creates a rebuttable
presumption that the director or officer did not meet the requisite standard of
conduct required for indemnification to be permitted.

It is the position of the Commission that indemnification of directors and
officers for liabilities arising under the Securities Act is against public
policy and is unenforceable pursuant to Section 14 of the Securities Act.

ITEM 35. TREATMENT OF PROCEEDS FROM STOCK BEING REGISTERED.

Not Applicable.

ITEM 36. FINANCIAL STATEMENTS AND EXHIBITS SCHEDULES.

(a) Financial Statements.

PRO FORMA (UNAUDITED)

Pro Forma Consolidated Financial Statements
Pro Forma Consolidated Balance Sheet as of June 30, 1997
Pro Forma Consolidated Statement of Operations for the six months ended
June 30, 1997
Pro Forma Consolidated Statement of Operations for the year ended December
31, 1996
Notes to the Pro Forma Consolidated Financial Statements

HISTORICAL:

Unaudited Condensed Consolidated Balance Sheets as of June 30, 1997
(Unaudited) and December 31, 1996
Unaudited Condensed Consolidated Statements of Operations for the six
months ended June 30, 1997 and 1996
Unaudited Condensed Consolidated Statements of Stockholders' Equity for the
six months ended June 30, 1997 and 1996
Unaudited Condensed Consolidated Statements of Cash Flows for the six
months ended June 30, 1997 and 1996
Notes to Unaudited Condensed Consolidated Financial Statements

Independent Auditor's Report
Consolidated Balance Sheets as of December 31, 1996 and 1995
Consolidated Statements of Operations for the years ended December 31,
1996, 1995 and 1994
Consolidated Statements of Stockholders' Equity for the years ended
December 31, 1996, 1995 and 1994
Consolidated Statements of Cash Flows for the years ended December 31,
1996, 1995 and 1994
Notes to Consolidated Financial Statements

WEST LAKE PLAZA SHOPPING CENTER--1996 ACQUISITION PROPERTY:

Independent Auditors' Report

Statement of Revenues and Certain Expenses for the year ended December 31,
1996
Notes to Statement of Revenues and Certain Expenses

LANTANA VILLAGE SQUARE--PROPOSED ACQUISITION PROPERTY
Independent Auditors' Report
Statement of Revenues and Certain Expenses for the year ended December 31,
1996 and the six months ended June 30, 1997 (unaudited)
Notes to Statement of Revenues and Certain Expenses

II-4
<PAGE>

(b) Exhibits

<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- --------- --------------------------------------------------------------------------------------------
<S> <C>
1.1 Proposed form of Underwriting Agreement.*
3.1 Company Charter, as amended.*
3.2 Company Bylaws, as amended.*
4.1 Form of Common Stock Certificate*
5.1 Opinion of Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A. as to the validity of the
Common Stock being registered.*
8.1 Form of opinion of Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A. as to tax
matters.
10.1 Form of Indemnification Agreement.
10.2 Employment Agreement, dated as of January 1, 1996 by and between the Company and Chaim
Katzman.
10.3 Employment Agreement, dated as of January 1, 1996 by and between the Company and Doron
Valero.
10.4 1995 Stock Option Plan, as amended.*
10.5 Form of Stock Option Agreement.*
10.6 Registration Rights Agreement, dated as of January 1, 1996 by and among the Company,
Chaim Katzman, Gazit Holdings, Inc., Dan Overseas Ltd., Glob Reit Investments, Ltd., Eli
Makavy, Doron Valero and David Wulkan.*
10.7 Stock Pledge Agreement, dated June 17, 1996, by and between Chaim Katzman and the
Company.
10.8 Promissory Note, in the amount of $1,128,750 from Chaim Katzman, payable to the Company.*
10.9 Stock Pledge Agreement, dated December 30, 1996, by and between the Company and Doron
Valero.
10.10 Promissory Note, in the amount of $396,000 from Doron Valero payable to the Company.*
10.11 Consulting Agreement, dated as of January 1, 1996 by and between the Company and Eli
Makavy.
10.12 Consulting Agreement, dated as of January 1, 1996 by and between the Company and David
Wulkan.
10.13 Investment Agreement, dated May 21, 1996 by and between Globe Reit Investments, Ltd.,
Dan Overseas, Ltd., Gazit Holdings, Inc. and the Company.*
10.14 Shareholders Agreement, dated May 21, 1996 by and between Gazit Inc. and Danbar
Resources, Ltd.*
10.15 Use Agreement, regarding use of facilities, by and between Gazit (1995), Inc. and the
Company, dated January 1, 1996.(1)
10.16 Pledge Agreement, dated November 9, 1995 among Equity One (Lake Mary), Inc. and The
Mutual Life Insurance Company of New York.(1)
10.17 Note Secured by First Real Estate Lien, dated November 9, 1995 in the amount of $13,422,500
from Equity One (Lake Mary), Inc. in favor of The Mutual Life Insurance Company of New
York.(1)
10.18 Purchase and Sale Agreement, dated October 24, 1995 by and between 1740 Ventures, Inc. and
Equity One (Lake Mary), Inc.(1)
10.19 Florida Real Estate Mortgage and Security Agreement, dated November 9, 1995 by and
between Equity One (Lake Mary), Inc. and The Mutual Life Insurance Company of New
York.(1)
10.20 Agreement for Purchase and Sale, dated June 12, 1997 by and between Equity One (Gamma)
Inc. and Isidoro Lerman, Trustee.(1)
10.21 Contract for Sale and Purchase, dated March 31, 1997 by and among Equity One (Gamma)
Inc., Angel Pena and Hermilio Concepcion.(1)
10.22 Property Management Agreement, dated as of January 1, 1996, by and between the Company
and Global Realty and Management, Inc.(1)
</TABLE>

II-5
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- --------- --------------------------------------------------------------------------------------------
<S> <C>
10.23 Agreement for Purchase and Sale (Lantana Village Square), dated September 24, 1997,
between Equity One (Gamma) Inc. and Commercial Ventures Services, Inc.
23.1 Consent of Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A. (to be included in its
opinion to be filed as Exhibit 5.1).
23.2 Consents of Deloitte & Touche LLP.
23.3 Consent of Ballard Spahr Andrews & Ingersoll.*
24.1 Reference is made to the Signatures section of this Registration Statement for the Power of
Attorney contained therein.
27.1 Financial Data Schedule.(1)
99.1 Consent of Robert L. Cooney.
</TABLE>

- ----------------

* To be filed by amendment.

(1) Previously filed.

Independent Auditors Report

Schedule III--Real Estate Investments and Accumulated Depreciation for the
year ended December 31, 1996

All other schedules have been omitted either because they are not
applicable or because the required information has been disclosed in the
financial statements and related notes included in the prospectus.

ITEM 37. UNDERTAKINGS

(a) The undersigned registrant hereby undertakes to provide to the
underwriters at the closing specified in the underwriting agreement,
certificates in such denominations and registered in such names as required by
the underwriter to permit prompt delivery to each purchaser.

(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registration of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
a registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of the
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

II-6
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Amendment No. 2 to Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Miami,
State of Florida, on October 10, 1997.

EQUITY ONE, INC.

By: /s/ CHAIM KATZMAN
-----------------------------------
Chaim Katzman, Chairman of the Board,
President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------- ---------------------------------- -----------------
<S> <C> <C>
/s/ CHAIM KATZMAN Chairman of the Board, President October 10, 1997
- ----------------------------- and Chief Executive Officer
Chaim Katzman (principal executive officer )

/s/ DAVID BOOKMAN Vice President, Chief Financial October 10, 1997
- ----------------------------- Officer and Treasurer
David Bookman (principal accounting officer)

/s/ DORON VALERO* Executive Vice President, Chief October 10, 1997
- ----------------------------- Operating Officer and Director
Doron Valero

Director October , 1997
- -----------------------------
Noam Ben Ozer

/s/ ELI MAKAVY* Director October 10, 1997
- -----------------------------
Eli Makavy

/s/ DR. SHAIY PILPEL* Director October 10, 1997
- -----------------------------
Dr. Shaiy Pilpel

/s/ DR. SHULAMIT ROZEN-KATZMAN* Director October 10, 1997
- -----------------------------
Dr. Shulamit Rozen-Katzman

/s/ DAVID WULKAN* Director October 10, 1997
- -----------------------------
David Wulkan

Director October , 1997
- -----------------------------
Yuval Yanai

* By: /s/ CHAIM KATZMAN October 10, 1997
- -----------------------------
Chaim Katzman
Attorney-in-fact
</TABLE>

II-7
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors of Equity One, Inc.:

We have audited the accompanying consolidated balance sheets of Equity
One, Inc. and subsidiaries (the "Company") as of December 31, 1996 and 1995,
and for each of the three years in the period ended December 31, 1996, and have
issued our report thereon dated February 15, 1997 (July 15, 1997 as to Note
10). Our audits also included the financial statement schedule, listed in Item
16. This financial statement schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion based on our audit. In
our opinion, such financial statement schedule, when considered in relation to
the basic consolidated financial statements taken as a whole, present fairly in
all material respects the information set forth therein.

Deloitte & Touche LLP

Miami, Florida
February 15, 1997

S-1
<PAGE>

SCHEDULE III

EQUITY ONE, INC. AND SUBSIDIARIES

REAL ESTATE INVESTMENTS AND
ACCUMULATED DEPRECIATION
DECEMBER 31, 1996

(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
GROSS AMOUNTS
AT WHICH CARRIED
CAPITALIZED AT THE CLOSE OF
INITIAL COST SUBSEQUENT TO THE PERIOD
BUILDINGS & ACQUISITION- ------------------------
PROPERTY LOCATION ENCUMBRANCES LAND IMPROVEMENTS IMPROVEMENTS THE LAND IMPROVEMENTS
- ----------------------- -------------------- -------------- --------- -------------- -------------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
NORTH FLORIDA
Atlantic Village
Shopping Center Atlantic Beach, FL $ 4,044 $ 1,190 $ 4,760 $ 18 $ 1,190 $ 4,778
Commonwealth
Shopping Center Jacksonville, FL 2,247 730 2,920 730 2,920
Fort Caroline
Trading Post Jacksonville, FL 2,419 738 2,432 535 738 2,967
Mandarin Mini-Storage Jacksonville, FL 1,227 362 1,448 5 362 1,453
Oak Hill Village
Shopping Center Jacksonville, FL 2,445 690 2,760 37 690 2,797
CENTRAL FLORIDA
East Bay Plaza Largo, FL 924 314 1,296 241 314 1,537
Eustis Square
Shopping Center Eustis, FL 5,482 1,450 5,799 23 1,450 5,822
Forest Edge
Shopping Center Orlando, FL 2,058 1,250 1,850 1,250 1,850
Lake Mary Centre Lake Mary, FL 13,109 6,972 13,878 30 6,972 13,908
SOUTH FLORIDA
Bird Ludlam
Shopping Center Miami, FL 13,221 4,080 16,318 1,403 5,425 16,375
Diana Building W. Palm Beach, FL 0 123 493 898 123 1,391
Equity One
Office Building Miami Beach, FL 0 579 423 746 579 1,169
Plaza Del Rey
Shopping Center Miami, FL 3,015 740 2,961 130 740 3,091
Point Royale
Shopping Center Miami, FL 5,816 3,720 5,005 106 3,720 5,111
West Lakes Plaza Miami, FL 5,472 2,141 5,789 65 2,141 5,854
TEXAS
Four Corners
Shopping Center Tomball,TX 3,001 950 3,800 278 950 4,078
Parker Towne Centre Plano, TX 2,351 720 2,881 556 720 3,437
-------- -------- -------- ------- -------- --------
TOTAL $66,831 $26,749 $74,813 $5,071 $28,094 $78,538
======== ======== ======== ======= ======== ========
</TABLE>

S-2
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

REAL ESTATE INVESTMENTS AND
ACCUMULATED DEPRECIATION--(CONTINUED)
DECEMBER 31, 1996

(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
ACCUMULATED DATE DEPRECIABLE
PROPERTY TOTAL DEPRECIATION ACQUIRED LIVES
- ---------------------------------- ---------- -------------- ------------------- ------------
<S> <C> <C> <C> <C>
NORTH FLORIDA
Atlantic Village Shopping Center $ 5,968 $ 179 JUNE 30, 1995 40
Commonwealth Shopping Center $ 3,650 207 FEBRUARY 28, 1994 40
Fort Caroline Trading Post $ 3,705 205 JANUARY 24, 1994 40
Mandarin Mini-Storage $ 1,815 96 MAY 10, 1994 40
Oak Hill Village Shopping Center $ 3,487 76 DECEMBER 7, 1995 40
CENTRAL FLORIDA
East Bay Plaza $ 1,851 186 JULY 27, 1993 30
Eustis Square Shopping Center $ 7,272 627 OCTOBER 22, 1993 30
Forest Edge Shopping Center $ 3,100 0 DECEMBER 31, 1996 40
Lake Mary Centre $ 20,880 406 NOVEMBER 9, 1995 40
SOUTH FLORIDA
Bird Ludlam Shopping Center $ 21,800 994 AUGUST 11, 1994 40
Diana Building $ 1,514 25 FEBRUARY 15, 1995 40
Equity One Office Building $ 1,748 84 APRIL 10, 1992 40
Plaza Del Rey Shopping Center $ 3,831 605 AUGUST 22, 1991 30
Point Royale Shopping Center $ 8,831 182 JULY 27, 1995 40
West Lakes Plaza $ 7,995 22 NOVEMBER 6, 1996 40
TEXAS
Four Corners Shopping Center $ 5,028 601 JANUARY 22, 1993 30
Parker Towne Centre $ 4,157 320 DECEMBER 9, 1993 30
--------- -------
TOTAL $106,632 $4,815
========= =======
</TABLE>

S-3
<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NO. DESCRIPTION NUMBER
- --------- ------------------------------------------------------------------------------ -----------
<S> <C> <C>
8.1 Form of opinion of Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A. as
to tax matters.
10.1 Form of Indemnification Agreement.
10.2 Employment Agreement, dated as of January 1, 1996 by and between the
Company and Chaim Katzman.
10.3 Employment Agreement, dated as of January 1, 1996 by and between the
Company and Doron Valero.
10.7 Stock Pledge Agreement, dated June 17, 1996, by and between Chaim Katzman
and the Company.
10.9 Stock Pledge Agreement, dated December 30, 1996, by and between the Company
and Doron Valero.
10.11 Consulting Agreement, dated as of January 1, 1996 by and between the Company
and Eli Makavy.
10.12 Consulting Agreement, dated as of January 1, 1996 by and between the Company
and David Wulkan.
10.23 Agreement for Purchase and Sale (Lantana Village Square), dated September 24,
1997, between Equity One (Gamma) Inc. and Commercial Ventures Services, Inc.
23.2 Consents of Deloitte & Touche LLP.
99.1 Consent of Robert L. Cooney.
</TABLE>

EXHIBIT 8.1

Charles E. Stiver, Jr.
(305) 579-0760

_________ __, 1997

_____________________________
_____________________________
_____________________________
_____________________________

Re: Federal Income Tax Considerations Relating to Equity One, Inc.

Ladies and Gentlemen:

We have acted as counsel to Equity One, Inc., a Maryland corporation
(the "Company"), in connection with the proposed issuance of its common stock in
a registered public offering and the preparation and filing of Amendment No. 2
to Registration Statement No. 333-33977 on Form S-11 to be filed by the Company
with the Securities and Exchange Commission on October __, 1997 (the
"Registration Statement") and the prospectus contained therein (the
"Prospectus"). This opinion is provided to you pursuant to section 6.(d)(viii),
(xiv) and (xv) of the underwriting agreement dated _____ __, 1997 between Credit
Suisse First Boston Corporation, as representative of the several underwriters,
and the Company.

In rendering our opinion, we have reviewed the Registration Statement
and the Prospectus and the documents attached as exhibits thereto, and we have
assumed that the statements therein are and will remain true, correct and
complete. In addition, we have reviewed documentation of the Company and
presentations and summaries of information regarding the Company's income,
assets, operations, records and other matters. We have assumed the conformity to
the originals of all documents submitted to us as copies and the authenticity of
the originals of all of those documents. We have assumed that all factual
matters in documents submitted to us and all of the other information furnished
to us are true, correct and complete. Further, we have relied on an opinion of
Deloitte & Touche LLP, the Company's accountants, regarding the Company's
compliance with requirements in the Internal Revenue Code of 1986, as amended
(the "Code") to be treated as a real estate investment trust ("REIT") for
federal income tax purposes for the Company's taxable years ending December 31,
1992 through December 31, 1996. Finally, we have assumed that representations
made by the Company to us in the letter attached hereto are true, accurate and
complete. Any variation or difference in the facts from those set forth or
assumed herein may affect the conclusions stated herein.

Based on the foregoing, in reliance thereon and subject thereto, and
based on the Code, the Treasury regulations promulgated thereunder,
administrative pronouncements of the Internal Revenue Service and judicial
decisions, all as in effect on the date hereof, it is our opinion that:

1. The statements set forth in the Prospectus under the caption
"Federal Income Tax Considerations", insofar as they purport to describe the
matters of law referred to therein,

<PAGE>

__________________________
___________ __, 1997
Page 2

represent the material federal income tax considerations relevant to purchasers
of Common Stock, other than existing stockholders of the Company.

2. The Company is organized in conformity with the requirements for
qualification as a REIT under the Code, the Company has qualified to be treated
as a REIT for federal income tax purposes commencing with its taxable year
ending December 31, 1995, and the Company's proposed method of operation as
described in the attached letter from the Company to us will enable the Company
to continue to satisfy the requirements to be taxable as a REIT for federal
income tax purposes. All statements in the Prospectus regarding the Company's
qualification as a REIT for federal income tax purposes are true, complete and
correct in all material respects.

3. Since the date of the Company's REIT election, each subsidiary of
the Company at all times has qualified to be treated as a "qualified REIT
subsidiary" within the meaning of section 856(i) of the Code.

The foregoing opinions are limited to the matters expressly set forth,
and no opinion is to be implied or inferred beyond the matters expressly stated.
These opinions speak only as of the date hereof and are based solely on legal
authorities as they currently exist, and we assume no obligation to update or
supplement these opinions.

These opinions are furnished to you solely for use in connection with
the Registration Statement and the Prospectus. We hereby consent to the filing
of this opinion as an exhibit to the Registration Statement. We also consent to
the references to the name of our firm under the heading "Federal Income Tax
Considerations" in the Registration Statement and Prospectus.

Very truly yours,

Charles E. Stiver, Jr.

CES/cb

Enclosure

EXHIBIT 10.1

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT ("Agreement"), is made and
entered into as of the _____ day of October, 1997, by and between EQUITY ONE,
INC., a Maryland corporation (the "Company"), and INDEMNITEE (the "Indemnitee").

RECITALS

A. The Indemnitee currently serves as a director and/or executive
officer of the Company.

B. As a condition to the Indemnitee's agreement to serve the Company
as such, the Indemnitee required that the Company indemnify him from liability
to the fullest extent permitted by law.

C. The Company has previously determined to indemnify the Indemnitee to
the fullest extent permitted by law in order to retain the services of the
Indemnitee and has entered into this Agreement in order to memorialize such
indemnification obligations.

NOW, THEREFORE, for and in consideration of the mutual premises and
covenants contained herein, the Company and the Indemnitee agree as follows:

SECTION 1. MANDATORY INDEMNIFICATION. The Company shall indemnify and
hold harmless the Indemnitee from and against any and all claims, damages,
expenses (including attorneys' fees), judgments, penalties, fines (including
excise taxes assessed with respect to an employee benefit plan), amounts paid in
settlement and all other liabilities actually and reasonably incurred or paid by
him in connection with the investigation, defense, prosecution, settlement or
appeal of any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative, investigative or otherwise and to which
the Indemnitee was or is a party or is threatened to be made a party by reason
of the fact that the Indemnitee is or was an officer, director, shareholder,
employee or agent of the Company, or is or was serving at the request of the
Company as an officer, director, partner, trustee, employee, manager or agent of
another corporation, partnership, joint venture, trust, employee benefit plan,
or other enterprise, or by reason of anything done or not done by the Indemnitee
in any such capacity or capacities, unless it is established that (a) the act or
omission by the Indemnitee was material to the matter giving rise to the
proceeding and (i) was committed in bad faith or (ii) was the result of active
and deliberate dishonesty, (b) the Indemnitee actually received an improper
personal benefit in money, property or services and (c) with respect to any
criminal action or proceeding, the Indemnitee had no reasonable cause to believe
his conduct was unlawful. In addition to the foregoing, the Company shall
indemnify the Indemnitee to the maximum extent permitted by the Maryland General
Corporation Law (the "MGCL") including the non-exclusivity clause of Section
2-418(g) of the MGCL.

SECTION 2. AUTHORIZATION OF INDEMNIFICATION. Any indemnification under
Section 1 (unless ordered by a court) shall be made by the Company upon a
determination (the "Determination") that indemnification or reimbursement of the
Indemnitee is proper in the circumstances because the Indemnitee has met the
applicable standard of conduct set forth in Section 1 hereof. Subject to
Sections 3.6, 3.7, 3.8 and 6 of this Agreement, the Determination shall be made
in the following order of preference:

(a) first, by the Company's Board of Directors (the "Board")
by majority vote or consent of a quorum consisting of directors ("Disinterested
Directors") who are not, at the time of

<PAGE>

the Determination, named parties to such action, suit or proceeding; or

(b) next, if such a quorum of Disinterested Directors cannot
be obtained, by majority vote or consent of a committee duly designated by the
Board (in which designation all directors, whether or not Disinterested
Directors, may participate) consisting solely of two or more Disinterested
Directors; or

(c) next, if such a committee cannot be designated, by any
independent legal counsel (who may be any outside counsel regularly employed by
the Company); or

(d) next, if such legal counsel determination cannot be
obtained, by vote or consent of the holders of a majority of the Company's
Common Stock that are represented in person or by proxy at a meeting called for
such purpose.

2.1 NO PRESUMPTIONS. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of NOLO
CONTENDERE or its equivalent, shall not, of itself, create a presumption that
the Indemnitee did not act in good faith and in a manner that he reasonably
believed to be in or not opposed to the best interests of the Company, and with
respect to any criminal action or proceeding, had reasonable cause to believe
that his conduct was unlawful.

2.2 BENEFIT PLAN CONDUCT. The Indemnitee's conduct with respect to
an employee benefit plan for a purpose he reasonably believed to be in the
interests of the participants in and beneficiaries of the plan shall be presumed
to be conduct that the Indemnitee reasonably believed to be not opposed to the
best interests of the Company.

2.3 RELIANCE AS SAFE HARBOR. For purposes of any Determination
hereunder, the Indemnitee shall be deemed to have acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company, or, with respect to any criminal action or proceeding, to have had
no reasonable cause to believe his conduct was unlawful, if his action is based
on (i) the records or books of account of the Company or another enterprise,
including financial statements, (ii) information supplied to him by the officers
of the Company or another enterprise in the course of their duties, (iii) the
advice of legal counsel for the Company or another enterprise, or (iv)
information or records given or reports made to the Company or another
enterprise by an independent certified public accountant or by an appraiser or
other expert selected with reasonable care by the Company or another enterprise.
The term "another enterprise" as used in this Section 2.3 shall mean any other
corporation or any partnership, joint venture, trust, employee benefit plan or
other enterprise of which the Indemnitee is or was serving at the request of the
Company as an officer, director, partner, trustee, employee or agent. The
provisions of this Section 2.3 shall not be deemed to be exclusive or to limit
in any way the other circumstances in which the Indemnitee may be deemed to have
met the applicable standard of conduct set forth in Section 1.

2.4 SUCCESS ON MERITS OR OTHERWISE. Notwithstanding any other
provision of this Agreement, to the extent that the Indemnitee has been
successful on the merits or otherwise in defense of any action, suit or
proceeding described in Section 1, or in defense of any claim, issue or matter
therein, the Company shall indemnify the Indemnitee against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection with the
investigation, defense, settlement or appeal thereof. For purposes of this
Section 2.4, the term "successful on the merits or otherwise" shall include, but
not be limited to, (i) any termination, withdrawal, or dismissal (with or
without prejudice) of any claim, action, suit or proceeding against the
Indemnitee without any express finding of liability or guilt against him, (ii)
the expiration of 120 days after the making of any claim or threat of an action,
suit or proceeding without the institution of the same and without any promise
or payment made to induce a settlement, or (iii) the settlement of any action,
suit or

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<PAGE>

proceeding under Section 1 hereof pursuant to which the Indemnitee pays less
than $25,000.

2.5 PARTIAL INDEMNIFICATION OR REIMBURSEMENT. If the Indemnitee is
entitled under any provision of this Agreement to indemnification and/or
reimbursement by the Company for some or a portion of the claims, damages,
expenses (including attorneys' fees), judgments, fines or amounts paid in
settlement by the Indemnitee in connection with the investigation, defense,
settlement or appeal of any action specified in Section 1 hereof, but not,
however, for the total amount thereof, the Company shall nevertheless indemnify
and/or reimburse the Indemnitee for the portion thereof to which the Indemnitee
is entitled. The party or parties making the Determination shall determine the
portion (if less than all) of such claims, damages, expenses (including
attorneys' fees), judgments, fines or amounts paid in settlement for which the
Indemnitee is entitled to indemnification and/or reimbursement under this
Agreement.

SECTION 3. PROCEDURES FOR DETERMINATION OF WHETHER STANDARDS HAVE BEEN
SATISFIED.

3.1 COSTS. All costs of making the Determination required by
Section 4 hereof shall be borne solely by the Company, including, but not
limited to, the costs of legal counsel, proxy solicitations and judicial
determinations. The Company shall also be solely responsible for paying (i) all
reasonable expenses incurred by the Indemnitee to enforce this Agreement,
including, but not limited to, the costs incurred by the Indemnitee to obtain
court-ordered indemnification pursuant to Section 6 hereof, regardless of the
outcome of any such application or proceeding, and (ii) all costs of defending
any suits or proceedings challenging payments to the Indemnitee under this
Agreement.

3.2 TIMING OF THE DETERMINATION. The Company shall use its best
efforts to make the Determination contemplated by Section 4 hereof promptly. In
addition, the Company agrees:

(a) if the Determination is to be made by the Board
or a committee thereof, such Determination shall be made not later than 15 days
after a written request for a Determination (a "Request") is delivered to the
Company by the Indemnitee;

(b) if the Determination is to be made by independent
legal counsel, such Determination shall be made not later than 30 days after a
Request is delivered to the Company by the Indemnitee; and

(c) if the Determination is to be made by the
shareholders of the Company, such Determination shall be made not later than 90
days after a Request is delivered to the Company by the Indemnitee.

The failure to make a Determination within the above-specified time period shall
constitute a Determination approving full indemnification or reimbursement of
the Indemnitee. Notwithstanding anything herein to the contrary, a Determination
may be made in advance of (i) the Indemnitee's payment (or incurring) of
expenses with respect to which indemnification or reimbursement is sought,
and/or (ii) final disposition of the action, suit or proceeding with respect to
which indemnification or reimbursement is sought.

3.3 REASONABLENESS OF EXPENSES. The evaluation and finding as to
the reasonableness of expenses incurred by the Indemnitee for purposes of this
Agreement shall be made (in the following order of preference) within 15 days
after the Indemnitee's delivery to the Company of a Request that includes a
reasonable accounting of expenses incurred:

(a) first, by the Board by majority vote or consent
of a quorum

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<PAGE>

consisting of Disinterested Directors; or

(b) next, if such a quorum cannot be obtained, by
majority vote or consent of a committee duly designated by the Board (in which
designation all directors, whether or not Disinterested Directors, may
participate), consisting solely of two or more Disinterested Directors; or

(c) next, if such a committee cannot be designated,
by any independent legal counsel (who may be any outside counsel regularly
employed by the Company);

provided, however, that if a determination as to reasonableness of expenses is
not made under any of the foregoing subsections (a), (b) and (c), such
determination shall be made, not later than 90 days after the Indemnitee's
delivery of such Request, by vote or consent of the holders of a majority of the
Company's Common Stock that are represented in person or by proxy at a meeting
called for such purpose.

All expenses shall be considered reasonable for purposes of this Agreement if
the finding contemplated by this Section 3.3 is not made within the prescribed
time. The finding required by this Section 3.3 may be made in advance of the
payment (or incurring) of the expenses for which indemnification or
reimbursement is sought.

3.4 PAYMENT OF INDEMNIFIED AMOUNT. Immediately following a
Determination that the Indemnitee has met the applicable standard of conduct set
forth in Section 1 hereof and the finding of reasonableness of expenses
contemplated by Section 3.3 hereof, or the passage of time prescribed for making
such determination(s), the Company shall pay to the Indemnitee in cash the
amount to which the Indemnitee is entitled to be indemnified and/or reimbursed,
as the case may be, without further authorization or action by the Board;
provided, however, that the expenses for which indemnification or reimbursement
is sought have actually been incurred by the Indemnitee.

3.5 SHAREHOLDER VOTE ON DETERMINATION. Notwithstanding the
provisions of Section 2-418 of the MGCL, the Indemnitee and any other
shareholder who is a party to the proceeding for which indemnification or
reimbursement is sought shall be entitled to vote on any Determination to be
made by the Company's shareholders, including a Determination made pursuant to
Section 3.7 hereof. In addition, in connection with each meeting at which a
shareholder Determination will be made, the Company shall solicit proxies that
expressly include a proposal to indemnify or reimburse the Indemnitee. Any
Company proxy statement relating to a proposal to indemnify or reimburse the
Indemnitee shall not include a recommendation against indemnification or
reimbursement.

3.6 SELECTION OF INDEPENDENT LEGAL COUNSEL. If the Determination
required under Section 2 is to be made by independent legal counsel, such
counsel shall be selected by the Indemnitee with the approval of the Board,
which approval shall not be unreasonably withheld. The fees and expenses
incurred by counsel in making any Determination (including Determinations
pursuant to Section 3.8 hereof) shall be borne solely by the Company regardless
of the results of any Determination and, if requested by counsel, the Company
shall give such counsel an appropriate written agreement with respect to the
payment of their fees and expenses and such other matters as may be reasonably
requested by counsel.

3.7 RIGHT OF INDEMNITEE TO APPEAL AN ADVERSE DETERMINATION BY
BOARD. If a Determination is made by the Board or a committee thereof that the
Indemnitee did not meet the applicable standard of conduct set forth in Section
1 hereof, upon the written request of the Indemnitee and the Indemnitee's
delivery of $500 to the Company, the Company shall cause a new Determination to
be made by the Company's shareholders at the next regular or special meeting of
shareholders. Subject to Section 6 hereof, such Determination by the Company's
shareholders shall

4
<PAGE>

be binding and conclusive for all purposes of this Agreement.

3.8 RIGHT OF INDEMNITEE TO SELECT FORUM FOR DETERMINATION. If, at
any time subsequent to the date of this Agreement, "Continuing Directors" do not
constitute a majority of the members of the Board, or there is otherwise a
change in control of the Company (as contemplated by Item 403(c) of Regulation
S-K), then upon the request of the Indemnitee, the Company shall cause the
Determination required by Section 2 hereof to be made by independent legal
counsel selected by the Indemnitee and approved by the Board (which approval
shall not be unreasonably withheld), which counsel shall be deemed to satisfy
the requirements of clause (3) of Section 2 hereof. If none of the legal counsel
selected by the Indemnitee are willing and/or able to make the Determination,
then the Company shall cause the Determination to be made by a majority vote or
consent of a Board committee consisting solely of Continuing Directors. For
purposes of this Agreement, a "Continuing Director" means either a member of the
Board at the date of this Agreement or a person nominated to serve as a member
of the Board by a majority of the then Continuing Directors.

3.9 ACCESS BY INDEMNITEE TO DETERMINATION. The Company shall
afford to the Indemnitee and his representatives ample opportunity to present
evidence of the facts upon which the Indemnitee relies for indemnification or
reimbursement, together with other information relating to any requested
Determination. The Company shall also afford the Indemnitee the reasonable
opportunity to include such evidence and information in any Company proxy
statement relating to a shareholder Determination.

SECTION 4. SCOPE OF INDEMNITY. The actions, suits and proceedings
described in Sections 1 hereof shall include, for purposes of this Agreement,
any actions that involve, directly or indirectly, activities of the Indemnitee
both in his official capacities as a Company director or officer and actions
taken in another capacity while serving as director or officer, including, but
not limited to, actions or proceedings involving (i) compensation paid to the
Indemnitee by the Company, (ii) activities by the Indemnitee on behalf of the
Company, including actions in which the Indemnitee is plaintiff, (iii) actions
alleging a misappropriation of a "corporate opportunity," (iv) responses to a
takeover attempt or threatened takeover attempt of the Company, (v) transactions
by the Indemnitee in Company securities, and (vi) the Indemnitee's preparation
for and appearance (or potential appearance) as a witness in any proceeding
relating, directly or indirectly, to the Company. In addition, the Company
agrees that, for purposes of this Agreement, all services performed by the
Indemnitee on behalf of, in connection with or related to any subsidiary of the
Company, any employee benefit plan established for the benefit of employees of
the Company or any subsidiary, any corporation or partnership or other entity in
which the Company or any subsidiary has a 5% ownership interest, or any other
affiliate of the Company, shall be deemed to be at the request of the Company.

SECTION 5. ADVANCE FOR EXPENSES.

5.1 MANDATORY ADVANCE. Expenses (including attorneys' fees, court
costs, judgments, fines, amounts paid in settlement and other payments) incurred
by the Indemnitee in investigating, defending, settling or appealing any action,
suit or proceeding described in Section 1 hereof shall be paid by the Company in
advance of the final disposition of such action, suit or proceeding. The Company
shall promptly pay the amount of such expenses to the Indemnitee, but in no
event later than 10 days following the Indemnitee's delivery to the Company of a
written request for an advance pursuant to this Section 5, together with a
reasonable accounting of such expenses, upon receipt of the written affirmation
required by Section 2-418(f)(i) of the MGCL and undertaking referred to in
Section 5.2 hereof.

5.2 UNDERTAKING TO REPAY. The Indemnitee hereby undertakes and
agrees to repay to the Company any advances made pursuant to this Section 5 if
and to the extent that it shall

5
<PAGE>

ultimately be found that the Indemnitee is not entitled to be indemnified by the
Company for such amounts.

5.3 MISCELLANEOUS. The Company shall make the advances
contemplated by this Section 5 regardless of the Indemnitee's financial ability
to make repayment, and regardless whether indemnification of the Indemnitee by
the Company will ultimately be required. Any advances and undertakings to repay
pursuant to this Section 5 shall be unsecured and interest-free.

SECTION 6. COURT-ORDERED INDEMNIFICATION. Regardless whether the
Indemnitee has met the standard of conduct set forth in Sections 1 hereof and
notwithstanding the presence or absence of any Determination whether such
standards have been satisfied, the Indemnitee may apply for indemnification
(and/or reimbursement pursuant to Section 10 hereof) to the court conducting any
proceeding to which the Indemnitee is a party or to any other court of competent
jurisdiction. On receipt of an application, the court, after giving any notice
the court considers necessary, may order indemnification (and/or reimbursement)
if it determines the Indemnitee is fairly and reasonably entitled to
indemnification (and/or reimbursement) in view of all the relevant circumstances
(including this Agreement).

SECTION 7. NONDISCLOSURE OF PAYMENTS. Except as expressly required by
Federal securities laws, neither party shall disclose any payments under this
Agreement unless prior approval of the other party is obtained. Any payments to
the Indemnitee that must be disclosed shall, unless otherwise required by law,
be described only in Company proxy or information statements relating to special
and/or annual meetings of the Company's shareholders, and the Company shall
afford the Indemnitee the reasonable opportunity to review all such disclosures
and, if requested, to explain in such statement any mitigating circumstances
regarding the events reported.

SECTION 8. COVENANT NOT TO SUE, LIMITATION OF ACTIONS AND RELEASE OF
CLAIMS. No legal action shall be brought and no cause of action shall be
asserted by or on behalf of the Company (or any of its subsidiaries) against the
Indemnitee, his spouse, heirs, executors, personal representatives or
administrators after the expiration of 2 years following the date the Indemnitee
ceases (for any reason) to serve as either an executive officer or director of
the Company, and any and all such claims and causes of action of the Company (or
any of its subsidiaries) shall be extinguished and deemed released unless
asserted by filing of a legal action within such 2-year period.

SECTION 9. INDEMNIFICATION OF INDEMNITEE'S ESTATE. Notwithstanding any
other provision of this Agreement, and regardless whether indemnification of the
Indemnitee would be permitted and/or required under this Agreement, if the
Indemnitee is deceased, the Company shall indemnify and hold harmless the
Indemnitee's estate, spouse, heirs, administrators, personal representatives and
executors (collectively the "Indemnitee's Estate") against, and the Company
shall assume, any and all claims, damages, expenses (including attorneys' fees),
penalties, judgments, fines and amounts paid in settlement actually incurred by
the Indemnitee or the Indemnitee's Estate in connection with the investigation,
defense, settlement or appeal of any action described in Section 1 hereof.
Indemnification of the Indemnitee's Estate pursuant to this Section 9 shall be
mandatory and not require a Determination or any other finding that the
Indemnitee's conduct satisfied a particular standard of conduct.

SECTION 10. REIMBURSEMENT OF ALL LEGAL EXPENSES. Notwithstanding any
other provision of this Agreement, and regardless of the presence or absence of
any Determination, the Company promptly (but not later than 30 days following
the Indemnitee's submission of a reasonable accounting) shall reimburse the
Indemnitee for all attorneys' fees and related court costs and other expenses
incurred by the Indemnitee (but not for judgments, penalties, fines or amounts
paid in settlement) in connection with the investigation, defense, settlement or

6
<PAGE>

appeal of any action described in Section 1 hereof (including, but not limited
to, the matters specified in Section 4 hereof).

SECTION 11. MISCELLANEOUS.

11.1 NOTICE PROVISION. Any notice, payment, demand or
communication required or permitted to be delivered or given by the provisions
of this Agreement shall be deemed to have been effectively delivered or given
and received on the date personally delivered to the respective party to whom it
is directed, or when deposited by registered or certified mail, with postage and
charges prepaid and addressed to the parties at the respective addresses set
forth below opposite their signatures to this Agreement, or to such other
address as to which notice is given.

11.2 ENTIRE AGREEMENT. Except for the Company's Charter, this
Agreement constitutes the entire understanding of the parties and supersedes all
prior understandings, whether written or oral, between the parties with respect
to the subject matter of this Agreement.

11.3 SEVERABILITY OF PROVISIONS. If any provision of this
Agreement is held to be illegal, invalid, or unenforceable under present or
future laws effective during the term of this Agreement, such provision shall be
fully severable; this Agreement shall be construed and enforced as if such
illegal, invalid, or unenforceable provision had never comprised a part of this
Agreement; and the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance from this Agreement. Furthermore, in
lieu of each such illegal, invalid, or unenforceable provision there shall be
added automatically as a part of this Agreement a provision as similar in terms
to such illegal, invalid or unenforceable provision as may be possible and be
legal, valid, and enforceable.

11.4 APPLICABLE LAW. This Agreement shall be governed by and
construed under the laws of the State of Maryland.

11.5 EXECUTION IN COUNTERPARTS. This Agreement and any amendment
may be executed simultaneously or in two or more counterparts, each of which
together shall constitute one and the same instrument.

11.6 COOPERATION AND INTENT. The Company shall cooperate in good
faith with the Indemnitee and use its best efforts to ensure that the Indemnitee
is indemnified and/or reimbursed for liabilities described herein to the fullest
extent permitted by law.

11.7 AMENDMENT. No amendment, modification or alteration of the
terms of this Agreement shall be binding unless in writing, dated subsequent to
the date of this Agreement, and executed by the parties.

11.8 BINDING EFFECT. The obligations of the Company to the
Indemnitee hereunder shall survive and continue as to the Indemnitee even if the
Indemnitee ceases to be a director, officer, employee and/or agent of the
Company. Each and all of the covenants, terms and provisions of this Agreement
shall be binding upon and inure to the benefit of the successors to the Company
and, upon the death of the Indemnitee, to the benefit of the estate, heirs,
executors, administrators and personal representatives of the Indemnitee.

11.9 GENDER AND NUMBER. Wherever the context shall so require, all
words herein in the male gender shall be deemed to include the female or neuter
gender, all singular words shall include the plural and all plural words shall
include the singular.

11.10 NONEXCLUSIVITY. The rights of indemnification and
reimbursement provided

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<PAGE>

in this Agreement shall be in addition to any rights to which the Indemnitee may
otherwise be entitled by statute, bylaw, agreement, vote of shareholders or
otherwise.

11.11 EFFECTIVE DATE. The provisions of this Agreement shall cover
claims, actions, suits and proceedings whether now pending or hereafter
commenced and shall be retroactive to cover acts or omissions or alleged acts or
omissions which heretofore have taken place.

(signatures on following page)

8
<PAGE>

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.

ADDRESS: THE COMPANY:
- -------- ------------

777 17th Street, Penthouse EQUITY ONE, INC.
Miami Beach, Florida 33139

By:
-------------------------------------
Name:
Title:

ADDRESS: THE INDEMNITEE:
- -------- --------------

----------------------------------------
(INDEMNITEE)

EXHIBIT 10.2

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT ("Agreement") is made as of January 1, 1996,
between EQUITY ONE, INC., a Maryland corporation (the "Employer"), and CHAIM
KATZMAN (the "Employee").

W I T N E S S E T H:

WHEREAS, the Employer desires to employ the Employee as its Chairman of
the Board of Directors, president and chief executive officer on the terms and
conditions set forth in this Agreement; and

WHEREAS, the Employee desires to accept such employment on the terms
and conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

1. TERM. The term of this Agreement shall commence on the date hereof,
and shall continue for a period of seven (7) years and shall be automatically
renewable for additional seven (7) year term unless either party gives the other
party prior written notice of intent not to renew at least 180 days prior to the
expiration of the initial term.

2. DUTIES. The Employee is engaged to act as Chairman of the Board of
Directors, President and Chief Executive Officer of the Employer. The Employee
shall be in complete charge of the operations of the Company, and shall have
full authority and responsibility for formulating policies, in accordance with
the actions of the Board of Directors, and administering the Company in all
respects. His powers shall include the authority to hire and fire personnel, and
to retain consultants when he deems necessary to implement the Employer's
policies. In addition, the Employee shall have such other duties as may from
time to time be reasonably assigned to him by the Board of Directors of the
Employer.

3. TIME DEVOTED.

(a) During the period of his employment hereunder, and except for
illness, reasonable vacation periods and reasonable leaves of absence, the
Employee shall devote so much of his business time, attention, skill and efforts
as shall be required for the faithful performance of his duties hereunder,
excluding state, federal and religious holidays observed. However, the Employee
may serve, or continue to serve, on the Boards of Directors of, and hold any
other offices or positions in, companies or organizations which will not present
any conflict of interest with the Employer or the Employer's business or
adversely affect

<PAGE>

the performance of the Employee's duties pursuant to this Agreement.

(b) The Employer recognizes that the Employee presently is the Chairman
of the Board of Directors, Chief Executive Officer and President of Gazit, Inc.
and certain of its affiliates and has an involvement in other ventures and
businesses to which the Employee will devote, from time to time, his time and
effort. Notwithstanding the generality of the provision found in Paragraph 3(a),
above, the Employee may, directly or indirectly, engage in other businesses not
in competition with the Employer in the United States, which may include
non-commercial real estate acquisitions, development and management, provided
that Employee's involvement in such other business shall not adversely affect
the Employee's performance of his duties pursuant to the terms of this Agreement
nor detrimentally affect the affairs and business of the Employer. Further,
Employee may, directly or indirectly, engage in other businesses outside the
United States, without limitation. For purposes of this Agreement,
"non-commercial real estate" shall mean any real estate that is not an office
building, warehouse or industrial complex or retail center or mall, excluding
such types of properties that are located within a primarily non-commercial
project.

4. COMPENSATION.

(a) For all services rendered by this Employee in any capacity during
his employment under the Agreement, the Employer shall pay the Employee as
compensation Two Hundred Forty Thousand and No/100 Dollars (US$240,000.00) per
annum for the first year, payable, in advance, in quarterly installments, on the
first day of each calendar quarter.

(b) The salary of the Employee may be supplemented by a bonus for
outstanding services rendered to the Employer, as determined by the Board of
Directors of the Employer in its sole discretion.

(c) The Employer shall provide, at Employer's cost, the Employee with
suitable automobile, including all related maintenance, repairs, insurance, and
other costs. Such automobile may be used by the Employee and the Employee's
immediate family at no cost to the Employee.

(d) The Employer shall provide, at Employer's cost, the Employee with
cellular telephones (portable and in the car), business telephone lines and
related telephone and telefax at his house. The cost of any service therefor,
which the parties recognize are necessary to the Employee's performance of his
duties hereunder, shall be borne by the Employer. The Employer recognizes and
agrees that the Employee shall have personal use of said telephones and
equipment at no cost to the Employee. The Employee shall not be required to
reside and perform his duties within the United States.

<PAGE>

(e) Compensation for the second year and any additional years, shall be
increased on January 1st of each year, commencing on January 1, 1997, by the
greater of six percent (6.00%) or the rate of increase of the Consumer Price
Index as determined by the United States Department of Labor for the year
immediately preceding each anniversary of this Agreement.

(f) The Employer shall reimburse the Employee for all reasonable
expenses incurred by him in the discharge of his duties hereunder. The Employer
shall provide the Employee with credit cards for the payment of business
expenses issued either in the name of the Employer with the Employee as
authorized user or in the name of the Employee for the account of the Employer,
and balances thereon shall be payable by Employer. The Employee shall maintain
detailed records of such expenses in such form as the Employer may reasonably
request and make such records available to the Employer as and when requested.

(g) All sums payable to the Employee hereunder shall be subject to all
federal, state and municipal laws or governmental regulations now or hereafter
in existence requiring the withholding, deduction, or payment therefrom of sums
for income or other taxes payable by or for or assessable against the Employee,
it being agreed that the Employer shall act thereon in accordance with its
interpretation and good faith of any such laws or regulations.

(h) The Employee has Series A options issued by the Employer granting
him the right to acquire up to 107,500 shares of the Employer's capital stock at
a total exercise price of $1,128,750.00. It is understood and agreed that,
should the Employee desire to exercise his options, in whole or in part, to
acquire such shares, and as further consideration for the Employee entering into
this Agreement, the Employer hereby agrees to lend to the Employee the amounts
necessary to permit the Employee to acquire the stock pursuant to the options
(the "Employee Loan"). The Employee shall exercise the options pursuant to the
terms thereof and the Employer shall issue the stock to the Employee. Upon such
issuance, the Employee shall deliver to the Employer a fully executed Promissory
Note in the form attached hereto as Exhibit "A" and a fully executed Stock
Pledge Agreement in the form attached hereto as Exhibit "B" and, immediately
thereupon, the Employer shall issue stock certificates evidencing the Employee's
ownership of the shares acquired. The Employee shall thereafter deliver to the
Employer all original stock certificates in accordance with the terms of the
Stock Pledge Agreement.

(i) In the event that at any time during the term of this Agreement,
the Employer proposes to register any of its securities under the Securities
Act of 1933, as amended, the Employer shall give the Employee the right and
opportunity to register, each time that the Employer so proposes, any or all
securities of the Employer held by the Employee, including, any stock options
and securities subject to such stock options.

<PAGE>

5. OPTIONS. The Employer shall issue to the Employee, pursuant to the
Employer's existing Stock Option Plan or other similar plan, options to acquire
100,000 shares of the Employer's capital stock, at an exercise price of $24.75
per share, such price to change downward only each fiscal year by the amount
that the dividends declared and paid for the immediately preceding fiscal year
exceed the dividends declared and paid for fiscal year 1995, such options to be
vested over 4 years, 25,000 shares each year, commencing on January 1, 1997, and
on the first day of each year, until all options vest. The options granted
hereunder shall expire on December 31, 2006, regardless of date of vesting or
issuance.

6. PARTICIPATION IN BENEFIT PLANS. The Employee shall be entitled to
participate in or receive benefits under all of the Employer's employee benefit
plans and arrangements in effect on the date hereof or made available in the
future to the executives and key management employees of the Employer, including
without limitation, health, medical and retirement plans, and being entitled to
be considered for awards under any future stock option plans, subject to and on
a basis consistent with the terms, conditions and overall administration of such
plans and arrangements. Notwithstanding the generality of the foregoing, the
Employer shall provide the Employee with disability insurance of the choice of
the Employee, such premiums to be paid by the Employer upon demand by the
Employee. If the Employee becomes disabled during the period of his employment,
his salary and other benefits shall continue at the same rate as if the Employee
were not disabled. If the Employee receives disability payments from insurance
policies paid for by the Employer, the payments to the Employee pursuant to this
Agreement during any period of disability shall be reduced by the amount of
disability payments received by the Employee under any such insurance policy or
policies.

7. VACATION; DAYS OFF. The Employee shall be entitled to take up to
twenty-four -(24) days of vacation, at times to be determined by agreement of
the Employee and the Employer. In addition, the Employee may take such time as
the Employee determines necessary to attend such meetings as may reflect the
interests of the Employer, and the Employer shall reimburse the Employee for
all of the expenses incurred thereby.

8. ILLNESS. The Employee shall be entitled to take up to thirty (30)
days of sick leave per year, provided, however, that any prolonged illness
resulting in absenteeism greater than the sick leave permitted herein or
disability shall not constitute "cause" for termination under the terms of this
Agreement.

9. TERMINATION FOR CAUSE.

(a) The Employee may be terminated immediately following notice by the
Employer for "cause." For this purpose the term "cause" shall be determined by
the affirmative vote of eighty percent (80.00%) of the members of the Board of
Directors of the

<PAGE>

Employer at a special meeting convened specifically for such determination and
in the following categories only:

(1) The material breach of provisions of this Agreement by
the Employee;

(2) The arrest and conviction of the Employee for a felony,
capital crime or any crime involving moral turpitude, including but not limited
to crimes involving illegal drugs, after all appeals; or

(3) The commission or participation by the Employee in an
injurious act of fraud or dishonesty against the Employer.

(b) After receipt of notice, unless "cause" is by reason of subsection
(1) or (2), in which case the Employee shall have thirty (30) days to remedy
such breach, or if the breach cannot be cured in such thirty (30) day period, to
commence to cure, to the satisfaction of the Employer's Board of Directors, if
the Employee has not cured such breach to the satisfaction of the Board of
Directors at the end of ninety (90) days, the Employer shall give notice of
termination to the Employee and the parties shall thereafter be relieved of all
further obligations hereunder.

(c) If this Agreement is not renewed by the Employer for an additional
seven (7) year term, the Employer shall pay the Employee severance compensation
equal to two (2) years' of the Employee's then current salary, payable in one
lump sum upon termination of the then current term.

l0. RESIGNATION FROM POSITIONS. Any termination of employment under the
Agreement, whether or not voluntary, will automatically constitute a resignation
of the Employee as to any and all positions held by the Employee as trustee of
any qualified or nonqualified trusts for the benefit of employees of the
Employer.

11. INFORMATION.

(a) Without the prior written consent of the Employer or as required by
law, the Employee will not, at any time, either during or after his employment
by the Employer, directly or indirectly divulge or disclose to any person, firm,
association, or Employer, or use for his own benefit, gain, or others, any
plans, products, data, results of tests and data, customer lists, or any other
trade secrets or confidential materials or like information of the Employer,
including (but not by way of limitation) any and all information and
instructions, technical or otherwise, prepared or issued for the use of the
Employer (collectively, the "Confidential Information"), it being the intent of
the Employer, with which intent the Employee hereby agrees to restrict him from
dissemination or using any like information that is unpublished or not readily
available to the general public.

<PAGE>

(b) Upon the termination of his employment from all positions by the
Employer, the Employee will immediately deliver to the Employer all lists,
books, records, data, and other information (including all copies) of every
kind relating to or connected with the Employer and its activities, business,
and customers.

12. NON-COMPETITION. The Employee specifically agrees that, in the case
of his voluntary resignation from all of his positions, for a period of one (1)
year (the "Non-Competition Period") from and after the time of his voluntary
resignation, and subject to the exceptions for the Employee's engagement in
other businesses or ventures as described in Section 3, above, the Employee
shall not engage, in the United States of America, without the prior written
consent of the Board of Directors of the Employer, directly or indirectly, (i)
own, control, or participate in the ownership or control of any line of business
or enterprise that directly competes with the Employer in any business of the
Employer existing or proposed at the time the Employee shall cease to perform
services hereunder wherever located; (ii) interfere with or disrupt or attempt
to disrupt, or take any action that could reasonably be expected to disrupt, any
past or present or prospective relationship, contractual or otherwise, between
the Employer and any customer, supplier, sales representative, or employee of
the Employer; (iii) directly or indirectly solicit for employment or attempt to
employ, or assist any other entity in employing or soliciting for employment,
either on a full-time or part-time or consulting basis, any employee or
executive (whether salaried or otherwise, union or non-union) who within one (1)
year of the time the Employee ceased to perform services hereunder had been
employed by the Employer, or (iv) communicate with or solicit any person who was
a customer of the Employer or any present or future customer of the Employer
(including without limitation customers previously or in the future generated or
produced by Employee), in any manner which interferes or might interfere with
such customer's relationship with the Employer, or in an effort to obtain such
customer as a customer of any person which conducts business competitive with
the Employer's business.

13. TERMINATION WITHOUT CAUSE. In the event the Employee is terminated
without cause from any, or all, of his positions, or in the event there is a
Change in Control of the Employer (as defined herein), upon termination or upon
such Change in Control: (i) all compensation due under the balance of the term
of this Agreement or any extension shall be paid to the Employee, (ii) all
severance compensation shall be paid to the Employee as if the first term of the
Agreement had not been renewed as set forth in Section 9(c), above, (iii) all
stock options granted to the Employee shall vest, (iv) the Employer shall pay to
the Employee all legal fees and expenses incurred by the Employee as a result of
termination or Change in Control (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination or in seeking to
enforce any right or benefit provided by this Agreement), and (v) the Employee
shall thereby be granted a "put" option giving him the right to tender all of
his shares of stock in

<PAGE>

the Employer, whereupon the Employer shall purchase the tendered shares
at (a) if the issuer's stock is listed and traded on a securities exchange, at
the price per share equal to the average closing price over the forty-five (45)
trading days preceding the date the stock is tendered pursuant to this
provision, (b) if the issuer's stock is not listed and traded on a securities
exchange, the price per share equal to the price per share of a third-party,
arms' length sale of stock of Equity One, Inc., in similar quantities, during
the six-month period immediately preceding the tender, or (c) if the price
cannot be determined pursuant to (a) or (b) above, the fair market value as
determined by an appraiser acceptable to both parties. If the parties are unable
to appoint or agree upon a mutually acceptable appraiser within ten (10) days
after notice is given of the proposed tender, the matter shall be submitted to
binding arbitration by the American Arbitration Association who shall appoint
one (1) arbitrator pursuant to the Rules of Commercial Arbitration within seven
(7) days after submission and said arbitrator shall determine the fair market
value of the Pledged Stock tendered by utilizing a nationally recognized,
reputable investment banking firm. The determination of fair market value must
be completed within thirty (30) days after the appointment of an arbitrator and
the arbitrator's findings shall be final. The proceedings shall take place in
Miami, Florida in the English language and each party shall pay one-half (1/2)
the cost of the proceedings and the appraisal. The Employee may tender so many
of the shares of the Employer's stock as the Employee shall, at his sole option,
determine. For purposes of this Agreement, Change in Control is defined as any
time that Gazit, Inc. is unable to, directly or indirectly, appoint one-half or
more of the members of the Board of Directors of the Employer (except in such
case where Gazit, Inc. voluntarily consents to election of a lesser number of
directors) or in the event that the Employee is removed as Chairman of the Board
of Directors of the Employer.

14. VIOLATIONS OF COVENANTS, ETC.

(a) The Employee agrees and acknowledges that (i) the services to be
rendered by him hereunder are of a special and original character that gives
them unique value, (ii) that the provisions of Paragraph 12, above, are, in view
of the nature of the business of the Employer, reasonable and necessary to
protect the legitimate interests of the Employer, (iii) that his violation of
any of the covenants or agreements hereof would cause irreparable injury to the
Employer, (iv) that the remedy at law for any violation or threatened violation
thereof would be inadequate, and (v) that the Employer shall be entitled to
temporary and permanent injunctive or other equitable relief as it may deem
appropriate without the accounting of all earnings, profits, and other benefits
arising from any such violation, which rights shall be cumulative and in
addition to any other rights or remedies available to the Employer. The Employee
hereby agrees that in the event of any such violation, the Employer shall be
entitled to commence an action in

<PAGE>

any court of appropriate jurisdiction for any such preliminary and permanent
injunctive relief and other equitable relief.

(b) The Employer and the Employee recognize that the laws and public
policies of the various states of the United States and the District of
Columbia may differ as to the validity and enforceability of certain of the
provisions contained herein. It is the intention of the Employer and the
Employee that the provision of this Agreement shall be enforced to the fullest
extent permissible under the laws and public policies of each state and
jurisdiction in which such enforcement is sought, but that the unenforceability
(or the modification to conform with such laws or public policies) of any
provision hereof shall not render unenforceable or impair the remainder of this
Agreement. Accordingly, if any provision of this Agreement shall be deemed to be
invalid or unenforceable, as may be determined by an arbitral tribunal, this
Agreement shall be deemed to delete or modify, as necessary, the offending
provision and to alter the balance of this Agreement in order to render the same
valid and enforceable to the fullest extent permissible as aforesaid.

15. Notice. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by certified or
registered mail, return receipt requested, to the parties at the following
addresses (or such other address as may be given to the other party in writing):

To the Employer:

---------------------------------
---------------------------------
---------------------------------

To the Employee:

---------------------------------
---------------------------------
---------------------------------

16. WAIVER OF BREACH. The waiver by the Employer or the Employee of a
breach of any condition of the Agreement by the Employee shall not be construed
as a waiver of any subsequent breach by the Employee.

17. ASSIGNMENT. Subject to the limitations below, this Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective heirs, representatives, successors and permitted assigns. The
Employer shall have the right to assign this Agreement and its rights hereunder
to any entity resulting from the reorganization, merger or consolidation of the
Employer or with any entity to which the Employer may sell all or substantially
all of its assets. The Employee acknowledges that his obligations hereunder are
personal and unique and agrees that he will not assign this Agreement or any of
his rights or obligations hereunder, except that the Employee may assign this
Agreement to an entity or entities controlled by the Employee or the Employee's
immediate family and, provided, that the Employee

<PAGE>

shall provide the services required hereunder. For purposes of this Section 17,
the Employee or his family shall be deemed to be control an entity if the
Employee or his immediate family own ten percent (10.00%) or more of the
ownership interest of such entity or if Employee or his immediate family have
the ability to control the day-to-day affairs of the entity. Any attempted
assignment in violation of this Paragraph 17 shall be void.

18. ATTORNEYS FEES. In the event either party is required to seek legal
counsel to enforce the terms and provisions of this Agreement, the prevailing
party in any action shall be entitled to recover attorneys fees and costs
(including on appeal).

19. ARBITRATION. Except as to any action commenced pursuant to
Paragraph 14, above, in the event of any controversy or claim between the
parties to this Agreement arising out of, or relating to, this Agreement, or any
breach thereof, whether that claim sounds in tort, contract, or any other legal
theory, then that dispute shall be resolved by binding arbitration, and
judgment upon the award(s) rendered by the arbitrators may be entered in any
court having jurisdiction thereof. The arbitral tribunal shall consist of one
member, appointed by agreement between the Parties; failing such agreement, a
neutral arbitrator will be appointed by the supervising authority. Arbitration
will be held in Miami, Florida, under the Rules of Commercial Arbitration and
under the institutional supervision of the American Arbitration Association. The
procedural law governing the arbitration shall be the law of Florida; the
substantive law applied by the arbitrator shall be the law of Florida. The
proceedings shall be conducted in the English language. Attorneys' fees and the
costs of the arbitration, including the fees of the arbitrator, shall ordinarily
be charged to the unsuccessful party, but the tribunal shall have the power to
apportion the legal fees and costs as it deems just.

20. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties. It may be changed only by agreement in writing signed by both
parties.

21. SURVIVAL. Notwithstanding the termination of the Employee's
employment hereunder by the Employer for cause, the obligations under Paragraphs
9(c), 10, 11, 12 and 14 of this Agreement shall survive and remain in full force
and effect.

22. HEADINGS. The headings herein are for convenience of reference only
and shall not be deemed to be part of the substance of this Agreement.

23. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed and original but all of which
together shall constitute one and the same agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

<PAGE>

EMPLOYER:

ATTEST: EQUITY ONE, INC., a Maryland

corporation

/s/ ILLEGIBLE By: /s/ CHAIM KATZMAN
- ----------------------------------- ------------------------------------
Authorized Signatory

WITNESSES: EMPLOYEE:

/s/ ILLEGIBLE

- ----------------------------------
/s/ CHAIM KATZMAN
- ---------------------------------- -------------------------------------
CHAIM KATZMAN

The contents of this agreement and its execution and delivery are approved:

Dan Overseas Limited

GAZIT INC. /s/ ILLEGIBLE
------------------------------------
Authorized Signatory

M.G.N. (Oil & Gas Resources) Ltd.

/s/ ILLEGIBLE
------------------------------------
Authorized Signatory

EXHIBIT 10.3

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT is made effective as of January 1, 1996,
between EQUITY ONE, INC., a Maryland Corporation ("Employer") and DORON VALERO
(the "Employee").

WITNESSETH:

WHEREAS, the Employer desires to employ the Employee as its assets
manager and executive vice president on the terms and conditions set forth in
this Agreement; and

WHEREAS, the Employee desires to accept such employment on the terms
and conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:

1. Term. The term of this Agreement shall commence on the date hereof,
and shall continue for a period of seven (7) years and shall be automatically
renewable for an additional seven (7) year term unless either party gives the
other party prior written notice of intent not to renew at least 180 days prior
to the expiration of the initial term.

2. Duties. The Employee is engaged to act as the Asset Manager and
Executive Vice President of the Employer. The Employee shall be in control of
day-to-day operations of the Employer's and the Employer's affiliates
properties. The Employee shall report directly to the President and Chief
Executive Officer of the Employer and shall have full authority and
responsibility for administering the Employer's properties in all respects. His
powers shall include the authority to hire and fire personnel, in consultation
with the President. In addition, the Employee

PAGE 1 OF 9 PAGE AGREEMENT

<PAGE>

shall have such other duties as may from time to time be reasonably assigned to
him by the President of the Employer.

3. Time Devoted. During the period of his employment hereunder, and
except for illness, reasonable vacation periods and reasonable leaves of
absence, the Employee shall devote all of his business time, attention, skill
and efforts as shall be required for the faithful performance of his duties
hereunder on the basis of a five-day work week, excluding state, federal and
religious holidays observed.

4. Compensation.

a. For all services rendered by the Employee in any capacity during his
employment under the Agreement, the Employer shall pay the Employee as
compensation $180,000.00 per annum for the first year, payable in quarterly
installments, on the first day of each calendar quarter.

b. The salary of the Employee may be supplemented by a bonus for
outstanding services rendered to the Employer, as determined by the Board of
Directors of the Employer and the President in their sole and absolute
discretion.

c. The Employer shall provide the Employee with a suitable automobile,
including all related maintenance, repairs, insurance, and other costs. Such
automobile may be used by the Employee and the Employee's immediate family and
domestic servants at no cost to the Employee.

d. The Employer shall provide the Employee with cellular telephones
(portable and in the car), business telephone lines and related telephone and
computer systems, and other office equipment and furnishings at his house and
the costs of any service therefor, which the parties recognize are necessary to
the Employee's performance of his duties hereunder. The Employer recognizes and
agrees that the Employee and domestic servants shall have personal use of said
telephones, equipment and furnishings at no cost to the Employee. The Employee
shall also be permitted to make reasonable use, for purposes of his personal
affairs, of the Employer's offices,

PAGE 2 OF 9 PAGE AGREEMENT

<PAGE>

equipment and administrative staff, provided such use does not adversely affect
the Employer's operations.

e. Compensation for the second year and any additional years, shall be
increased on January 1st of each year, commencing on January 1, 1997, by the
greater of six percent (6.00%) or the rate of increase of the Consumer Price
Index as determined by the United States Department of Labor for the year
immediately preceding each anniversary of this Agreement.

f. The Employer shall reimburse the Employee for all reasonable expenses
incurred by him in the discharge of his duties hereunder, including, but not
limited to, transportation, hotel accommodations and other lodging, local and
long distance telephone, tolls, couriers, postage, overnight and similar bulk
and express package delivery services. The Employer shall provide the Employee
with credit cards issued in the name of the Employer, and balances thereon shall
be payable by the Employer. The Employee shall maintain detailed records of such
expenses in such form as the Employer may reasonably request and make such
records available to the Employer as and when requested.

g. All sums payable to the Employee hereunder shall be subject to all
federal, state and municipal laws or governmental regulations now or hereafter
in existence requiring the withholding, deduction or payment therefrom of sums
for income or other taxes payable by or for or assessable against the Employee,
it being agreed that the Employer shall act thereon in accordance with its
interpretation and good faith of any such laws or regulations.

5. Options. The Employer shall issue to the Employee, pursuant to the
Employer's existing Stock Option Plan or other similar plan, options to acquire
75,000 shares of the Employer's capital stock, at an exercise price of $24.75
per share, such price to change downward only each fiscal year by the amount
that the dividends declared and paid for the immediately preceding fiscal year
exceed the dividend declared and paid for fiscal year 1995, such options to be
vested over (four) 4 years, 18,750 shares each year, commencing on January 1,
1997, and on the first day of each year, until all options vest. The options
granted hereunder shall expire on December 31, 2006, regardless of date of
vesting or issuance.

PAGE 3 OF 9 PAGE AGREEMENT
<PAGE>

6. Participation in Benefit Plans. The Employee shall be entitled to
participate in or receive benefits under all of the Employer's employee benefit
plans and arrangements in effect on the date hereof or made available in the
future to the executives and key management employees of the Employer, subject
to and on a basis consistent with the terms, conditions and overall
administration of such plans and arrangements.

7. Vacation; Days Off. The Employee shall be entitled to take up to
twenty-four (24) days of vacation, at times to be determined by the Employee
with the approval of the Employer.

8. Illness. The Employee shall be entitled to take up to thirty (30)
days of sick leave per year.

9. Termination for Cause.

a. The Employee may be terminated immediately following notice by the
Employer for "cause." For this purpose the term "cause" shall be determined by
the affirmative vote of eighty percent (80.00%) of the members of the Board of
Directors of the Employer voting at any regular or special meeting, such
determination to be made in any of the following categories only:

(1) The material breach of provisions of this Agreement by the
Employee;

(2) The arrest and conviction of the Employee for a felony, capital
crime or any crime involving moral turpitude, including but not limited to
crimes involving illegal drugs, after all appeals; or

(3) The commission or participation by the Employee in an injurious
act of fraud or dishonesty against the Employer.

b. After receipt of notice, unless "cause" is by reason of subsection
(1) or (2), in which case the Employee shall have thirty (30) days to remedy
such breach, or if the breach cannot be cured in such thirty (30) day period, to
commence to cure to the satisfaction of the Employer's Board of Directors. If
the Employee has not cured such breach to the satisfaction of the Board of
Directors at the end of ninety (90) days, the Employer shall give notice of
termination to the Employee and the parties shall thereafter be relieved of all
further obligations hereunder.

PAGE 4 OF 9 PAGE AGREEMENT

<PAGE>

1O. Information.

a. Without the prior written consent of the Employer or as required
by law, the Employee will not, at any time, either during or after his
employment by the Employer, directly or indirectly divulge or disclose to any
person, firm, association, or Employer, or use for his own benefit, gain, or
others, any plans, products, data, results of tests and data, customer lists, or
any other trade secrets or confidential materials or like information of the
Employer, including (but not by way of limitation) any and all information and
instruction and instructions, technical or otherwise, prepared or issued for the
use of the Employer (collectively, the "Confidential Information"), it being the
intent of the Employer, with which intent the Employee hereby agrees to restrict
him from dissemination or using any like information that is unpublished or not
readily available to the general public.

b. Upon the termination of his employment by the Employer, the
Employee will immediately deliver to the Employer all lists, books, records,
data, and other information (including all copies) of every kind relating to or
connected with the Employer and its activities, business and customers.

11. Non-Competition.

a. The Employee specifically agrees that, in the case of his
termination under this Agreement, for a period of one (1) year (the
"Non-Competition Period") from and after the time of termination of his
employment, the Employee shall not, in the States of Florida and Texas, without
the prior written consent of the Employer, directly or indirectly, (i) own or
control, or actively participate in the ownership or control of any line of
business or enterprise that directly competes with the Employer in any business
of the Employer existing or proposed at the time the Employee shall cease to
perform services hereunder wherever located; (ii) interfere with or disrupt or
attempt to disrupt, any past or present or prospective relationship, contractual
or otherwise, between the Employer and any customer, supplier, sales
representative, or employee of the Employer; (iii) directly or indirectly
solicit for employment or attempt to employ, or assist any other entity in
employing or soliciting for employment, either on a full-time or part-time or
consulting basis, any employee or executive (whether salaries or otherwise,
union or non-union) who within

PAGE 5 OF 9 PAGE AGREEMENT

<PAGE>

one (1) year of the time the Employee ceased to perform services hereunder had
been employed by the Employer, or (iv) communicate with or solicit any person
who, within the previous year, was a customer of the Employer or any present or
future customer of the Employer (including without limitation customers
previously or in the future generated or produced by Employee), in any manner
which interferes or might interfere with such customer's relationship with the
Employer, or in an effort to obtain such customer as a customer of any person
which conducts business competitive with the Employer's business.
Notwithstanding the foregoing and not intended as a limitation on Employee,
Employee may participate as a passive investor in any venture.

b. In the event the Employee is terminated without cause, upon
termination: (i) all compensation due under the balance of the terms of this
Agreement shall be paid to the Employee, (ii) all stock options granted to the
Employee shall vest, and (iii) the Employer shall pay to the Employee all legal
fees and expenses incurred by the Employee as a result of termination (including
all such fees and expenses, if any, incurred in contesting or disputing any such
termination or in seeking to enforce any right or benefit provided by this
Agreement).

12. Violations of Covenants, Etc.

a. The Employee agrees and acknowledges that (i) the services to be
rendered by him hereunder are of a special and original character that gives
them unique value, (ii) that the provisions of Paragraph 11, above, are, in view
of the nature of the business of the Employer, reasonable and necessary to
protect the legitimate interests of the Employer, (iii) that his violation of
any of the covenants or agreements hereof would cause irreparable injury to the
Employer, (iv) that the remedy at law for any violation or threatened violation
thereof would be inadequate, and (v) that the Employer shall be entitled to
temporary and permanent injunctive or other equitable relief as it may deem
appropriate without the accounting of all earnings, profits, and other benefits
arising from any such violation, which rights shall be cumulative and in
addition to any other rights or remedies available to the Employer. The Employee
hereby agrees that in the event of any such violation, the Employer shall be
entitled to commence an action in any court of appropriate jurisdiction for any
such preliminary and permanent injunctive relief and other equitable relief.

b. The Employer and the Employee recognize that the laws and public
policies

PAGE 6 OF 9 PAGE AGREEMENT

<PAGE>

of the various states of the United States and the District of Columbia may
differ as to the validity and enforceability of certain of the provisions
contained herein. It is the intention of the Employer and the Employee that the
provision of this Agreement shall be enforced to the fullest extent permissible
under the laws and public policies of each state and jurisdiction in which such
enforcement is sought, but that the unenforceability (or the modification to
conform with such laws or public policies) if any provision hereof shall not
render unenforceable or impair the remainder of this Agreement. Accordingly, if
any provision of this Agreement shall be deemed to be invalid or unenforceable,
as may be determined by an arbitral tribunal, this Agreement shall be deemed to
delete or modify, as necessary, the offending provision and to alter the balance
of this Agreement in order to render the same valid and enforceable to the
fullest extent permissible as aforesaid.

13. Notice. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and sent by certified mail, return
receipt requested, to the parties at the following addresses or such other
address as may be given to the other party in writing):

To the Employer: EQUITY ONE, INC.
777-17th Street Penthouse
Miami Beach, Florida 33139

To the Employee: DORON VALERO
106 West 4th Avenue
Miami Beach, Florida 33139

14. Waiver of Breach. The waiver by the Employer or the Employee of a
breach of any condition of the Agreement by the Employee shall not be construed
as a waiver of any subsequent breach by the Employee.

15. Assignment/Change of Control. Subject to the limitations below, this
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, representatives, successors and permitted assigns.
The Employer shall have the right to assign this

PAGE 7 OF 9 PAGE AGREEMENT

<PAGE>

Agreement and its rights hereunder to any entity resulting from the
reorganization, merger or consolidation of the Employer or with any entity to
which the Employer may sell all or substantially all of its assets. Such
reorganization, merger or consolidation of the Employer or with any entity to
which thc Employer may sell all or substantially all of its assets shall be
defined as a Change of Control. For purposes of this Agreement, there shall be
no Change of Control in any instance whereby CHAIM KATZMAN is President and
Chairman of the Board of Directors of the successor entity, or Gazit, Inc.,
controls, directly or indirectly, 50% or more of the Board of Directors of the
successor entity and Gazit, Inc. is controlled by CHAIM KATZMAN. In the event
CHAIM KATZMAN is not the President and Chairman of the Board of Directors of the
successor entity, or Gazit, Inc., does not control, directly or indirectly, 50%
or more of the Board of Directors of the successor entity and Gazit, Inc. is not
controlled by CHAIM KATZMAN, Valero shall have the right to consent, in his sole
and arbitrary discretion, to such assignment. Should Valero decline to consent,
the provisions of Paragraph 11 b. would apply. The Employee acknowledges that
his obligations hereunder are personal and unique and agrees that he will not
assign this Agreement or any of his rights or obligations hereunder. Any
attempted assignment in violation of this Paragraph 15 shall be void.

16. Attorneys' Fees. In the event either party is required to seek legal
counsel to enforce the terms and provisions of this Agreement, the prevailing
party in any action shall be entitled to recover attorney's fees and costs
(including on appeal).

17. Arbitration. Except as to any action commenced pursuant to Paragraph
12, above, in the event of any controversy or claim between the parties to this
Agreement arising out of, or relating tto, this Agreement, or any breach
thereof, whether that claim sounds in tort, contract, or any other legal theory,
then that dispute shall be resolved by birding arbitration, and judgment upon
the award(s) rendered by the arbitrators may be entered in any court having
jurisdiction thereof. The arbitral tribunal shall consist of one member,
appointed by agreement between the Parties; failing such agreement, a neutral
arbitrator will be appointed by the supervising authority. Arbitration will be
held in Miami, Florida; the substantive law applied by the arbitrator shall be
the law of Florida. The proceedings shall be conducted in the English language.
Attorney's fees and the costs of the

PAGE 8 OF 9 PAGE AGREEMENT

<PAGE>

arbitration, including the fees of the arbitrator, shall ordinarily be charged
to the unsuccessfull party, but the tribunal shall have the power to apportion
the legal fees and costs as it deems just.

18. Entire Agreement. This Agreement contains the entire agreement of
the parties. It may be changed only by agreement in writing signed by both
parties.

19. Survival. Notwithstanding the termination of the Employee's
employment hereunder by the Employer for cause, the obligations under
Paragraphs 10, 11 and 12 of this Agreement shall survive and remain in full
force and effect.

20. Headings. The headings herein are for convenience of reference
only and shall not be deemed to be part of the substance of this Agreement.

21. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.

EMPLOYER:

EQUITY ONE, INC.,
a Maryland Corporation

Attest:

/s/ Brenda O Campo
- ------------------
By: /s/ Chaim Katzman
---------------------------------
CHAIM KATZMAN, President

/s/ [illegible]
- ---------------------------------- EMPLOYEE:
Witness Signature

/s/ [illegible] /s/ Doron Valero
- ---------------------------------- ---------------------------------
Witness Signature DORON VALERO

PAGE 9 OF 9 PAGE AGREEMENT

EXHIBIT 10.7

STOCK PLEDGE AGREEMENT

THIS PLEDGE AGREEMENT, dated June 17, 1996, by and between CHAIM
KATZMAN (the "Pledgor") and EQUITY ONE' INC. (the "Pledgee").

W I T N E S S E T H:

WHEREAS, the Pledgor has executed and delivered a certain Promissory
Note of even date (the "Note") evidencing the debt from the Pledgor to the
Pledgee of $1,128,750.00,

WHEREAS, as an inducement to the Pledgee to make the loan provided for
in the Note, the Pledgor agreed to execute this agreement and, pursuant hereto,
to pledge the Pledged Stock, as defined in this Agreement, as security for the
prompt satisfaction of all of the loan `given by the Pledgee to the Pledgor (the
"Obligations")- .

NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, the parties agree as follows:

1. The term "Pledged Stock" shall mean the shares described in Schedule
I hereto, together with all certificates, options, rights, or other
distributions issued as an addition to, in substitution or in exchange for, or
on account of any such shares, and all proceeds of all of the foregoing, now or
hereafter owned or acquired by the Pledgor. The Pledgor may, at his sole option,
provide other collateral to secure the payment of the Obligations, provided that
such collateral, including any combination with any of the Pledged Stock
remaining, is valued at no less than one hundred thirty percent (130%) of the
Obligations due from the Pledgor to the Pledgee, and further provided that the
Pledgor shall execute and deliver to the Pledgee such documents' and shall
otherwise take such other action, as shall be required for the Pledgee to
perfect its first priority security interest in the substitute collateral.

2. (a) As security for the prompt satisfaction of the Obligations, the
Pledgor hereby pledges to the Pledgee the Pledged Stock and grants the Pledgee a
lien on and security interest therein.

(b) If the Pledgor shall become entitled to receive or shall
receive, in connection with any of the Pledged Stock, any:

<PAGE>

(i) Stock certificate, including, but without limitation, any
certificate representing a stock dividend or in connection with any increase or
reduction of capital, reclassification, merger, consolidation, sale of assets,
combination of shares, stock split, spin-off or split-off;

(ii) option, warrant, or right, whether as aN addition. to or in
substitution or in exchange for any of the Pledged Stock, or otherwise;

(iii) Dividend or distribution payable in property, including
securities issued by other than the issuer of any of the Pledged Stock; or

(iv) Dividends or distributions of any sort, then: the Pledgor
shall accept the same as the Pledgee's agent, in trust for the Pledgee, and
shall deliver them forthwith to the Pledgee in the exact form received with, as
applicable, the Pledgor's endorsement when necessary, or appropriate stock
powers duly executed in blank, to be held by the Pledgee, subject to the terms
hereof, as part of the Pledged Stock.

(c) At any time Pledgee, at its option, may have any or all of the
Pledged Stock registered in its name or that of its nominee, and the Pledgor
hereby covenants that, upon the Pledgee's request, the Pledgor will cause the
issuer of the Pledged Stock to effect such registration. If that shall be done
prior to the occurrence of a default under the Note (an "Event of Default"), the
Pledgor shall nevertheless retain all voting rights with respect to the Pledged
Stock, and, for that purpose, the Pledgee shall execute and deliver to the
Pledgor all necessary proxies. Immediately and without further notice, upon the
occurrence of an Event of Default, whether or not the Pledged Stock shall have
been registered in the name of the Pledgee or its nominee, the Pledgee or its
nominee shall have, with respect to the Pledged Stock, the right to exercise
all Voting rights as to all shares issued by other than a borrower under the
Note (a "Borrower"), and, as to all of the Pledged Stock, all other corporate
rights and all conversion, exchange, subscription or other rights, privileges or
options pertaining thereto as if it were the absolute owner thereof, including,
without limitation, the right to exchange any or all of The Pledged Stock upon
the merger, consolidation, reorganization, recapitalization or other
readjustment of the issuer thereof, or upon the exercise by such issuer of any
right, privilege, or option pertaining to any of the Pledged Stock, and, in
connection therewith, to deliver any of the Pledged Stock to any committee,
depository, transfer agent, registrar or other designated agency upon such terms
and conditions as it may determine, all without liability except to account for
property actually received by it; but the Pledgee shall have not duty to
exercise any of the

<PAGE>

aforesaid rights, privileges or options and shall not be responsible for any
failure to do so or delay in so doing.

(d) Unless an Event of Default shall have occurred and be
continuing, the Pledgor shall be entitled to receive for its own use cash
dividends on the Pledged Stock paid out of earned surplus. Upon the occurrence
of an Event of Default, the Pledgee may require any such cash dividends to be
delivered to the Pledgee as additional security hereunder or applied toward the
satisfaction of the obligations.

(e) Upon the occurrence of an Event of Default, the Pledgee shall
provide notice of default to the Pledgor and the Pledgor shall have twenty-one
(21) days within which to cure any default specified in the notice. In the event
the Event of Default is not cured within the applicable cure period, the Pledgor
may, at his option, tender all or any portion of the Pledged Stock for payment,
in full or in part, of the Obligations and the Pledgee shall credit the Pledgor
for the value of the Pledged Stock tendered in payment hereof, Any Pledged Stock
used in payment of the obligations shall be valued at (i) if the issuer's stock
is listed and traded on a securities exchange, at the price per share equal to
the average closing price over the 45 trading days preceding the date the
Pledged Stock is tendered fox payment by the Pledgor, (ii) if the issuer's stock
is not listed and traded on a securities exchange, the price per share equal to
the price per share of a third-party, arms' length sale of stock of Equity One,
Inc. during the six-month period immediately preceding the tender, or (iii) an
appraiser acceptable to both parties. If the parties are unable to appoint or
agree upon a mutually acceptable appraiser within ten (10) days after notice is
given of the proposed tender, the matter shall be submitted to binding
arbitration by the American Arbitration Association who shall appoint ONE (1)
arbitrator pursuant to the Rules of Commercial Arbitration within seven (7) days
after submission and said arbitrator shall determine the fair market value of
the Pledged Stock tendered by utilizing a nationally recognized, reputable
investment banking firm. The determination of fair market value must be
completed within thirty (30) days after the appointment of an arbitrator and the
arbitrator's findings shall be final. The proceedings shall take place in Miami,
Florida in the English language and each party shall pay ONE-half (1/2) the cost
of the proceedings and the appraisal. The Pledgor shall be permitted to tender
the only the number of shares of the Pledged Stock required to pay to the
Pledgee the amounts due under the Promissory Note and this Agreement .

(f) The proceeds of any such disposition or other action by the
Pledgee shall be applied as follows :

<PAGE>

(i) First, to the costs and expenses incurred in connection
therewith or incidental thereto or to the care or safekeeping of any of the
Pledged Stock or in any way relating to the rights of the Pledgee hereunder,
including reasonable attorneys' fees and legal expenses;

(ii) Second, to the satisfaction of the Obligations;

(iii) Third, to the payment of any other amounts required by
applicable law; and

(iv) Fourth, to the Pledgor to the extent of any surplus
proceeds.

3. The Pledgor represents and warrants that:

(a) It has, and has duly exercised, all requisite power and
authority to enter into this Agreement, to pledge the Pledged Stock for the
purposes described in paragraph 2(a), and to carry out the transactions
contemplated by this Agreement;

(b) He is the legal and beneficial owner of all of the Pledged
Stock;

(c) All of the shares of the Pledged Stock have been duly and
validly issued, are fully paid and nonassessable, and are owned by the Pledgor
free of any pledge, mortgage, hypothecation, lien, charge, encumbrance or
security interest in such shares of the proceeds thereof, except for that
granted hereunder;

(d) The execution and delivery of this Agreement, and the
performance of its terms, will not result in any violation Of any provision of
the Pledgor's certificate of incorporation or by laws, or violate or constitute
a default under the terms of any agreement, indenture or other instrument,
license, judgment, decree, order, law, statute, ordinance or other governmental
rule or regulation, applicable to the Pledgor or any of its property; and

(e) Upon delivery of the Pledged Stock to the Pledgee or its
agent, this Agreement shall create a valid first lien upon and perfected
security interest in the Pledged stock and the proceeds thereof, subject to no
prior security interest, lien, charge or encumbrance, or agreement purporting
to grant to any third party a security interest in the property or assets of the
Pledgor which would include the Pledged Stock.

4. (a) The Pledgor hereby covenants that, until all of the Obligations
have been satisfied in full, he will not:

<PAGE>

(i) Sell, convey, or otherwise dispose of any of the Pledged
Stock or any interest therein, or create, incur, or permit to exist any pledge,
mortgage, lien, charge, encumbrance or any security interest whatsoever in or
with respect to any of the Pledged Stock or the proceeds thereof, other than
that created hereby; or

(ii) Consent to or approve the issuance of any additional shares
of any class of capital stock in the issuer of the Pledged Stock; or any
securities convertible voluntarily by the holder thereof or automatically upon
the occurrence or nonoccurrence of any event or condition into, or exchangeable
for, any such shares; or any warrants, options, rights, or other commitment~
entitling any person to purchase or otherwise acquire any such shares,

(b) The Pledgor warrants and will, at its own expense, defend the
Pledgee's right, title, special property and security interest in and to the
Pledged Stock against the claims of any person, firm, corporation or other
entity.

5. (a) If the Pledgee shall elect to exercise its right to sell or
otherwise dispose of all or any part of the Pledged stock, and if, in the
opinion of counsel for the Pledgee, it is necessary to have the Pledged Stock or
that portion thereof to be sold registered under the provisions of the
securities Act of 1933, as amended (the "Securities Act"), the Pledgor will use
its best efforts to cause:

(i) The issuer of the Pledged Stock, its directors and officers,
to take all action necessary to register the Pledged Stock or that portion
thereof to be disposed of under the provisions of the Securities Act, at the
Pledgor's expense;

(ii) The registration statement relating thereto to become
effective and to remain so for not less than one year from the date of the first
public offering of the Pledged Stock or that portion thereof so to be disposed
of, and to make all amendments thereto and to the related prospectus which, in
the opinion of the Pledgee or its counsel, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto;

(iii) The issuer of the Pledged Stock to comply with the
provisions of the "Blue Sky" law of any jurisdiction which the Pledgee shall
designate; and

(iv) The issuer or the Pledger stock to make available to its
security holders, as soon as practicable, an earnings

<PAGE>

statement (which need not be audited) covering a period of at least twelve
months but not more than eighteen months, beginning with the first month after
the effective date of any such registration statement, which earnings statement
will satisfy the provisions of Section ll(a) of the Securities Act,

(b) The Pledgor acknowledges that a breach of any of the covenants
Contained in paragraph 5(a) above may cause irreparable injury to the Pledgee;
that the Pledgee will have no adequate remedy at law with respect to such
breach; and, as consequence, that the Pledgor's covenants in paragraph 5 (a)
shall be specifically enforceable against the Pledgor; and the Pledgor hereby
waives, to the extent such waiver is enforceable under law, and shall not
assert, any defenses against an action for specific performance of such
covenants, except for a defense that no Event of Default has occurred.

6. The Pledgor will promptly deliver to the Pledgee all written
notices, and will promptly give the Pledgee written notice of any other notices,
received by it with respect to Pledged Stock, and the Pledgee will promptly give
like notice to the Pledgor of any such notices received by it or its nominee.

7. The Pledgor shall at any time, and from time to time, upon the
written request of the Pledgee, execute and deliver such further documents and
do such further acts and things as the Pledgee may reasonably request to effect
the purposes of this Agreement, including, without limitation, delivering to the
Pledgee upon the occurrence of an Event of Default irrevocable proxies with
respect to the Pledged Stock in form satisfactory to the Pledgee. Until receipt
thereof/ this Agreement shall constitute the Pledgor's proxy to the Pledgee or
its nominee to vote all shares of Pledged Stock (other than that issued by a
Borrower) then registered in the Pledgor's name.

8. Upon the satisfaction in full of all Obligations and the
Satisfaction of all additional costs and expenses of the Pledgee as provided
herein, this Agreement shall terminate and the Pledgee shall deliver to the
Pledgor, at the Pledgor's expense, such of the Pledged Stock as shall not have
been sold or otherwise applied pursuant to this Agreement.

9. (a) Beyond the exercise of reasonable care to assure the safe
custody of the Pledged Stock while held hereunder, the Pledgee shall have no
duty or liability to preserve rights pertaining thereto and shall be relieved of
all responsibility for the Pledged Stock upon surrendering it or tendering
surrender of it to the Pledgor.

(b) No course of dealing between the Pledgor and the

<PAGE>

Pledgee, nor any failure to exercise, nor any delay in exercising, any right,
power or privilege of the Pledgee hereunder or under the Loan Agreement shall
operate as a waiver thereof, now shall any single or partial exercise of any
right, power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.

(C) The rights and remedies provided herein and in the Loan
Agreement and in all other agreements, instruments, and documents delivered
pursuant to or in connection with the Loan Agreement, are cumulative and are in
addition to and not exclusive of any rights or remedies provided by law,
including, but without limitation, the rights and remedies of a secured party
under the Uniform Commercial Code.

(d) The provisions of this Agreement are severable, and if any
clause or provision shall be held invalid or unenforceable in whole or in part
in any Jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision or part thereof in such jurisdiction and shall not in
any manner affect such clause or provision in any other jurisdiction or any
other clause or provision in this Agreement in any jurisdiction.

10. Any notice required or permitted by this Pledge Agreement shall be
effective if given in accordance with the provisions of the Loan Agreement.

11. This Agreement shall inure to the benefit of and shall be binding
upon the successors and assigns of the parties hereto.

12. This Agreement shall be construed in accordance with the
substantive law of the State of Florida without regard to principles of
conflicts of laws and is intended to take effect as an instrument under seal.

13. THE PLEDGEE AND THE PLEDGOR HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT ANY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH,
OR IN RESPECT OF ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS ( WHETHER
ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PLEDGE ENTERING INTO THIS AGREEMENT,

IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date and year first above written.

<PAGE>

PLEDGOR:
- -----------------------------------

/s/ CHAIM KATZMAN
- ----------------------------------- ---------------------------------
CHAIM KATZMAN

/s/ ILLEGIBLE PLEDGEE:
- -----------------------------------
EQUITY ONE, INC.

By:
- ------------------------------------ ------------------------------

STATE OF FLORIDA )
: ss.
COUNTY OF DADE )

The foregoing instrument was acknowledged before me by CHAIM KATZMAN,
on this _____day of ____________________, 1996, who is well known to me or who
has produced _____________________ as identification and who did/did not take an
oath,

----------------------------
Notary Public:

My Commission Expires:

STATE OF FLORIDA )
: ss.
COUNTY OF DADE )

The foregoing instrument was acknowledged before me by
________________, as President and _________________, as Secretary of EQUITY
ONE, INC., a Maryland corporation, on this day of _______________, 1996, who are
well-known to me or who have produced their ________________________as
identification and who did/did not take an oath.

-----------------------------
Notary Public

My commission Expires:

<PAGE>

CERTIFICATE NO.
ISSUER NO. .OF SHARES SHAREHOLDER
- ------ ----------- ---------- -----------

EQUITY ON, INC. ________ ________ Chaim Katzman

EXHIBIT 10.9

STOCK PLEDGE AGREEMENT

THIS PLEDGE AGREEMENT, dated December 30, 1996 by and between DORON
VALERO (the "Pledgor") and EQUITY ONE, INC. (the "Pledgee").

W I T N E S S ET H

WHEREAS, the Pledgor has executed and delivered a certain Promissory
Note of even date (the "Note") evidencing the debt from the Pledgor to the
Pledgee of $396,000.00; and

WHEREAS, as an inducement to the Pledgee to make the loan provided for
in the Note, the Pledgor agreed to execute this Agreement and, pursuant hereto,
to pledge the Pledged Stock, as defined in this Agreement, as security for
prompt satisfaction of all of the loan given by the Pledgee to the Pledgor (the
"Obligations").

NOW, THEREFORE, in consideration of the foregoing, and intending to be
legally bound hereby, the parties agree as follows:

1. The term "Pledged Stock" shall mean the shares described in Schedule
A attached hereto, together with all certificates, options, rights, or other
distributions issued as an addition to, in substitution or in exchange for, or
on account of, any such shares, and all proceeds of all of the foregoing, now or
hereafter owned or acquired by the Pledgor. The Pledgor may, at his sole option,
provide other collateral to secure the payment of the Obligations, provided that
such collateral, including any combination with any of the Pledged Stock
remaining, is valued at no less than one hundred thirty percent (130%) of the
Obligations due from the Pledgor to the Pledgee, and further, provided that the
Pledgor shall execute and deliver to the Pledgee such documents, and shall
otherwise take such other action, as shall be required for the Pledgee to
perfect its first priority security interest in the substitute collateral.

2. (a) As security for the prompt satisfaction of the Obligations, the
Pledgor hereby pledges to the Pledgee the Pledged Stock and grants the Pledgee a
lien on and security interest therein.

(b) If the Pledgor shall become entitled to receive or shall
receive, in connection with any of the Pledged Stock, any:

(i) Stock certificate, including, but without limitation, any
certificate representing a stock dividend or in connection with any increase or
reduction of capital,

<PAGE>

reclassification, merger, consolidation, sale of assets, combination of shares,
stock split, spin-off or split-off;

(ii) Option, warrant, or right, whether as an addition to or in
substitution or in exchange for any of the Pledged Stock, or otherwise;

(iii) Dividend or distribution payable in property, including
securities issued by other than the issuer of any of the Pledged Stock; or

(iv) Dividends or distributions of any sort, then:

the Pledgor shall accept the same as the Pledgee's agent, in trust for
the Pledgee, and shall deliver them forthwith to the Pledgee in the exact form
received with, as applicable, the Pledgor's endorsement when necessary, or
appropriate stock powers duly executed in blank, to be held by the Pledgee,
subject to the terms hereof, as part of the Pledged Stock.

(c) At any time Pledgee, at its option, may have any or all of the
Pledged Stock registered in its name or that of its nominee, and the Pledgor
hereby covenants that, upon the Pledgee's request, the Pledgor will cause the
issuer of the pledged Stock to effect such registration. If that shall be done
prior to the occurrence of a default under the Note (an "Event of Default"), the
Pledgor shall nevertheless retain all voting rights with respect to the Pledged
Stock, and, for that purpose, the Pledgee shall execute and deliver to the
Pledgor all necessary proxies. Immediately and without further notice, upon the
occurrence of an Event of Default, whether or not the Pledged Stock shall have
been registered in the name of the Pledgee or its nominee, the Pledgee or its
nominee shall have, with respect to the Pledged Stock, the right to exercise all
voting rights as to all shares issued by other than a borrower under the Note (a
"Borrower"), and, as to all of the Pledged Stock, all other corporate rights and
all conversion, exchange, subscription or other rights, privileges or options
pertaining thereto as if it were the absolute owner thereof, including, without
limitation, the right to exchange any or all of the Pledged Stock upon the
merger consolidation, reorganization, recapitalization or other readjustment of
the issuer thereof, or upon the exercise by such issuer of any right, privilege,
or option therewith, to deliver any of the Pledged Stock to any committee,
depository, transfer agent, registrar or other designated agency upon such terms
and conditions as it may determine, all without liability except to account for
the property actually received by it; but the Pledgee shall have not duty to
exercise

2
<PAGE>

any of the aforesaid rights, privileges or options and shall not be responsible
for any failure to do so or delay in doing so.

(e) Upon the occurrence of an Event of Default, the Pledgee shall
provide notice of default to the Pledgor and the Pledgor shall have twenty-one
(21 ) days within to cure any default specified in the notice. In the event the
Event of Default is not cured within the applicable cure period, the Pledgor
may, at his option, tender all or any portion of the Pledged Stock for payment
in full or in part, of the Obligations and the Pledgee shall credit the Pledgor
for the value of the Pledged Stock tendered in payment hereof. Any Pledged Stock
used in payment of the obligations shall be valued at (i) if the issuer's stock
is listed and traded on a securities exchange, at the price per share equal to
the average closing price over the 45 trading days preceding the date the
Pledged Stock is tendered for payment by the Pledgor; (ii) if the issuer's stock
is not listed and traded on a securities exchange, the price per share equal to
the price per share of a third-party, arms' length sale of stock of Equity One,
Inc. during the six-month period immediately preceding the tender, or (iii) an
appraiser acceptable to both parties. If the parties are unable to appoint or
agree upon a mutually acceptable appraiser within ten (10) days after notice is
given of the proposed tender, the matter shall be submitted to binding
arbitration by the American Arbitration Association who shall appoint one
(1)arbitrator pursuant to the Rules of Commercial Arbitration within seven (7)
days after submission and said arbitrator shall determine the fair market value
of the Pledged Stock tendered by utilizing a nationally recognized, reputable
investment banking firm. The determination of fair market value must be
completed within thirty (30) days after the appointment of an arbitrator and the
arbitrator's findings shall be final. The proceedings shall take place in Miami,
Florida, in the English language, and each party shall pay one-half (1/2) the
cost of the proceedings and the appraisal. I he Pledgor shall be permitted to
tender only the number of shares of the Pledged Stock required to pay to the
Pledgee the amounts due under the Promissory Note and this Agreement.

3
<PAGE>

(f) The proceeds of any such disposition or other action by the
Pledgee shall be applied as follows:

(i) First, to the costs and expenses incurred in connection
therewith or incidental thereto or to the care of safekeeping of any of the
Pledged Stock or in any way relating to the rights of the Pledgee hereunder,
including reasonable attorneys' fees and legal expenses;

(ii) Second, to the satisfaction of the Obligations;

(iii) Third, to the payment of any other amounts required by
applicable law; and

(iv) Fourth, to the Pledgor to the extent of any surplus
proceeds.

3. The Pledgor represents and warrants that:

(a) It has, and has duly exercised, all requisite power and
authority to enter unto this Agreement, to pledge the Pledged Stock for the
purposes described in paragraph 2(a), and to carry out the transactions
contemplated by this Agreement;

(b) He is the legal and beneficial owner of the Pledged Stock;

(d) The execution and delivery of this Agreement, and the
performance of its terms, will not result in any violation of any provision of
the Pledgor's certificate of incorporation or by laws, or violate or constitute
a default under the terms of any agreement, indenture or other instrument
license, judgment, decree, order, law, statute, ordinance or other governmental
rule or regulation, applicable to the Pledgor or any of its property; and

(e) Upon delivery of the Pledged Stock to the Pledgee or its agent,
the Agreement shall create a valid first lien upon and perfected security
interest in the Pledged Stock and the proceeds thereof, subject to no prior
security interest, lien, charge or encumbrance, or agreement purporting to grant
to any third party a security interest in the property or assets of the Pledgor
which would include the Pledged Stock.

4. (a) The Pledgor hereby covenants that, until all of the Obligations
have been satisfied in full, he will not:

4
<PAGE>

(ii) Consent to or approve the issuance of any additional share
of any class of capital stock in the issuer of the Pledged Stock; or any
securities convertible voluntarily by the holder thereof or automatically upon
the occurrence or nonoccurence of any event or condition into, or exchangeable
for, any such shares; or any warrants, options, rights, or other commitments
entitling any person to purchase or otherwise acquire any such shares.

(iii) The Pledgor warrants and will, at its own expense, defend
the Pledgee's right, title, special property and security interest in and to the
Pledged Stock against the claims of any person, firm, corporation or other
entity.

5. (a) If the Pledgee shall elect to exercise its right to sell or
otherwise dispose of all or any part of the Pledged Stock, and if, in the
opinion of counsel for the Pledgee, it is necessary to have the Pledged Stock or
that portion thereof to be sold registered under the provisions of the
Securities Act of 1933, as amended (the "Securities Act"), the Pledgor will use
its best efforts to cause:

(iii) The issuer of the Pledged Stock to comply with the
provisions of the "Blue Sky" law of any jurisdiction which the Pledgee shall
designate; and

(iv) The issuer of the Pledged Stock to make available to its
security holders, as soon as practicable, an earnings statement (which need not
be audited) covering a

5
<PAGE>

period of at least twelve months but not more than eighteen months, beginning
with the first month after the effective date of any such registration
statement, which earnings statement will satisfy the provisions of Section II
(a) of the Securities Act.

(b) The Pledgor acknowledges that a breach of any of the covenants
contained in paragraph 5(a) above may cause irreparable injury to the Pledgee;
that the Pledgee will have no adequate remedy at law with respect to such
breach; and, as a consequence, that the Pledgor's covenants in paragraph 5(a)
shall be specifically enforceable against the Pledgor; and the Pledgor hereby
waives, to the extent such waiver is enforceable under law, and shall not
assert, any defenses against an action for specific performance of such
covenants, except for a defense that no Event of Default has occurred.

6. 'The Pledgor will promptly deliver to the Pledgee all written
notices and will promptly give the Pledgee written notice of any other notices,
received by it with respect to Pledged Stock, and the Pledgee will promptly give
like notice to the Pledgor of any such notices received by it or its nominee.

7. The Pledgor shall at any time, and from time to time, upon the
written request of the Pledgee, execute and deliver such further documents and
do such further acts and things as the

Pledgee may reasonably request to effect the purposes of this
Agreement, including, without limitation, delivering to the Pledgee upon the
occurrence of an Event of Default irrevocable proxies with respect to the
Pledged Stock in form satisfactory to the Pledgee. Until receipt thereof, this
Agreement shall constitute the Pledgor's proxy to the Pledgee or its nominee to
vote all shares of Pledged Stock (other than that issued by a Borrower) then
registered in the Pledgor's name.

8. Upon satisfaction in full of all Obligations and the satisfaction of
all additional costs and expenses of the Pledgee as provided herein, this
Agreement shall terminate and the Pledgee shall deliver to the Pledgor, at the
Pledgor's expense, such of the Pledged Stock as shall not have been sold or
otherwise applied pursuant to this Agreement.

9. (a) Beyond the exercise of reasonable care to assure the safe
custody of the Pledged Stock while held hereunder, the Pledgee shall have no
duty or liability to preserve rights

6
<PAGE>

pertaining thereto and shall be relieved of all responsibility for the Pledged
Stock upon surrendering it or tendering surrender of it to the Pledgor.

(b) No course of dealing between the Pledgor and the Pledgee, nor
any failure to exercise, nor any delay in exercising, any right, power or
privilege of the Pledgee hereunder or under this Agreement shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or thereunder preclude any other or further exercise thereof
or the exercise of any other right, power or privilege.

(c) The rights and remedies provided herein and in all other
agreements, instruments, and documents delivered pursuant to or in connection
with this Agreement, are cumulative and are in addition to and not exclusive of
any rights or remedies provided by law, including, but without limitation, the
rights and remedies of a secured party under the Uniform Commercial Code.

(d) The provisions of this Agreement are severable, and if any
clause or provision shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision or part thereof in such jurisdiction and shall not in
any manner affect such clause or provision in any other jurisdiction or any
other clause or provision in this Agreement in any jurisdiction.

10. Any notice required or permitted by this Pledge Agreement shall be
effective if given via certified mail, return receipt requested, or by overnight
courier, as follows:

To the Pledgee: EQUITY ONE, INC.
777-17th Street Penthouse
Miami Beach, Florida 33139

To the Pledgor: DORON VALERO
106 West 4th Avenue
Miami Beach, Florida 33139

11. This Agreement shall inure to the benefit of and shall be binding
upon the successors and assigns of the parties hereto.

7
<PAGE>

13. THE PLEDGEE AND THE PLEDGOR HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT ANY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH,
OR IN RESPECT OF ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PLEDGEE ENTERING INTO THIS AGREEMENT.

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date and year first above written.

_____________________________________ PLEDGOR:

_____________________________________ ___________________________________
DORON VALERO

_____________________________________ PLEDGEE:

EQUITY ONE, INC.

_____________________________________ By:________________________________
CHAIM KATZMAN, President

STATE OF FLORIDA )
) SS.
COUNTY OF DADE )

The foregoing instrument was acknowledged before me by DORON VALERO, on
this ___ day of August, 1997, and who is personally known to me and who did take
an oath.

_________________________________
NOTARY PUBLIC

8
<PAGE>

STATE OF FLORIDA )
) SS.
COUNTY OF DADE )

The foregoing instrument was acknowledged before me by CHAIM KATZMAN,
as President and as Secretary of EQUITY ONE, INC., a Maryland Corporation, on
this ____ day of August, 1997, and who is personally known to me and who did
take an oath.

______________________________
NOTARY PUBLIC

EXHIBIT 10.11

CONSULTING AGREEMENT

This Consulting Agreement ("Agreement") is made as of January 1, 1996,
between EQUITY ONE, INC., a Maryland corporation (the "Company"), and ELI MACABY
("Consultant").

WITNESSETH:

WHEREAS, the Company desires to retain the services of Consultant for
certain matters; and

WHEREAS, Consultant desires to accept such engagement by the Company on
the terms and conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

1. ENGAGEMENT. The Company hereby engages Consultant and Consultant
hereby accepts engagement as a consultant to the Company upon the terms and
conditions hereinafter set forth.

2. SERVICES. Consultant agrees to devote Consultant's working time
during the term of this Agreement to financial advise, assisting auditors,
investor relations, including overseas investors, and computer and related
systems review, evaluation and implementation in connection with the Company's
operations, commensurate with the abilities, experience and know-how of
Consultant.

3. TERM. The term of this Agreement shall commence on the date hereof,
and shall continue for a period of seven (7) years, unless sooner terminated by
the Company pursuant to Section 6 of this Agreement, or by the Consultant
pursuant to Section 7 of this Agreement.

4. Compensation and Benefits.

a. For services rendered by Consultant under the terms of this
Agreement, and in consideration of the execution of this Agreement by Consultant
and Consultant's service on the Company's Board of Directors, the Company shall
pay Consultant an agreed fee of US$7, 500.00 per quarter payable at the
beginning of each calendar quarter of the term of this Agreement.

b. The company shall reimburse Consultant for all reasonable
expenses incurred by him in the discharge of his duties hereunder, including,
but not limited to, travel fare, hotel accommodations and other lodging, long
distance telephone tolls,

<PAGE>

automobile rentals, couriers, postage, overnight and similar bulk and express
package delivery services. Consultant shall maintain detailed records of such
expenses in such form as the Company may request and make such records available
to the Company as and when requested.

c. The Company shall issue to Consultant, pursuant to the
Company's existing Stock Option Plan or other similar plan, options to acquire
25,000 shares of the Company's capital stock, at an exercise price of $24.75 per
share, such price to change downward only each fiscal year by the amount that
the dividends declared and paid for the immediately preceding fiscal year exceed
the dividends declared and paid for fiscal year 1995, such options to be vested
over 4 years, 3,750 shares each year, commencing on January 1, 1997, and on the
first day of each year, until all options vest. The options granted hereunder
shall expire on December 31, 2006, regardless of date of vesting or issuance.

d. In the event that at any time during the term of this
Agreement, the Company proposes to register any of its securities under the
Securities Act of 1933, as amended, the Company shall give Consultant the right
and opportunity to register, the first time that the Company so proposes, any or
all securities of the Company held by Consultant, including, any stock options
and securities subject to such stock options.

5. DISCLOSURE OF INFORMATION. Consultant acknowledges that the
Company's trade secrets, private or secret processes as they exist from time to
time, customer lists and information concerning products, development, technical
information, procurement and sales activities and procedures, promotion and
pricing techniques and credit and financial data concerning customers (the
"Proprietary Information") are valuable, special and unique assets of the
Company, access to and knowledge of which are essential to the performance of
Consultant hereunder. In light of the highly competitive nature of the industry
in which the Company's business is conducted, Consultant agrees that all
Proprietary Information heretofore or in the future obtained by Consultant as a
result of Consultant's association with the Company shall be considered
confidential. In recognition of this fact, Consultant agrees that Consultant
will not disclose any of such Proprietary Information for Consultant's own
purposes or for the benefit of any person or other entity (except the Company)
under any circumstances unless such Proprietary Information has been publicly
disclosed generally or, upon written advice of legal counsel reasonably
satisfactory to the Company, Consultant is legally required to disclose such
Proprietary Information. Records prepared by Consultant or that come into
Consultant~s possession during Consultant's association with the Company are and
remain the property of the Company, and

-2-
<PAGE>

when this Agreement terminates, such records shall be left with the Company.

6. TERMINATION OF AGREEMENT.

a. This Agreement may be terminated immediately following notice
by the Company for "cause." For purposes of this Agreement, the term "cause"
shall be a determination by the affirmative vote of eighty percent (80%) of the
members of the Board of Directors of the Company voting at any regular or
special meeting that any of the following has occurred:

(i) The material breach of one or more provisions of this
Agreement by Consultant;

(ii) The arrest and conviction after all appeals of
Consultant for a felony, capital crime or any crime involving moral turpitude,
including but not limited to crimes involving illegal drugs;

(iii) The commission or participation by Consultant in an
injurious act of fraud or dishonesty against the Company;

b. After receipt of notice, unless "cause" is by reason of
subsection (i), in which case the Consultant shall have thirty (30) days to
remedy such breach, or if the breach cannot be cured in such thirty (30) day
period, to commence to cure, to the satisfaction of the Company's Board of
Directors, at the end of ninety (90) days, the Company shall give notice of
termination of this Agreement to Consultant and the parties shall thereafter be
relieved of all further obligations hereunder.

7. TERMINATION BY CONSULTANT. Consultant may terminate this Agreement
upon not less than ninety (90) days written notice to Company, in which case,
Consultant shall receive payments due hereunder up until the time of
Consultant's effective date of termination, and the Company shall have no
further obligation under this Agreement.

-3-
<PAGE>

Company, directly or indirectly, (i) own, control, or participate in the
ownership or control of any line of business or enterprise that directly
competes with the Company in any business of the Company existing or proposed at
the time the Consultant shall cease to perform services hereunder wherever
located; (ii) interfere with or disrupt or attempt to disrupt, or take any
action that could reasonably be expected to disrupt, any past or present or
prospective relationship, contractual or otherwise, between the Company and any
customer, supplier, sales representative, or consultant of the Company; (iii)
directly or indirectly solicit for employment or attempt to employ, or assist
any other entity in employing or soliciting for employment, either on a
full-time or part-time or consulting basis, any consultant or executive (whether
salaried or otherwise, union or non-union) who within one (1) year of the time
the Consultant ceased to perform services hereunder had been employed by the
Company, or (iv) communicate with or solicit any person who was a customer of
the Company or any present or future customer of the Company (including without
limitation customers previously or in the future generated or produced by
Consultant), in any manner which interferes or might interfere with such
customer's relationship with the Company, or in an effort to obtain such
customer as a customer of any person which conducts business competitive with
the Company's business.

9. TERMINATION WITHOUT CAUSE. In the event this Agreement is
terminated without cause, upon termination: (i) all compensation due under the
balance of the term of this Agreement shall be paid to Consultant, (ii) all
stock options granted to Consultant shall vest, and (iii) the Company shall pay
to Consultant all legal fees and expenses incurred by Consultant as a result of
termination or Change in Control (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination or in seeking to
enforce any right or benefit provided by this Agreement).

10. REMEDIES.

(a) Consultant acknowledges and agrees that the Company's remedy
at law for a breach or threatened breach of any of the provisions of Section 6,
above, would be inadequate. In recognition of this fact, in the event of a
breach by Consultant of any of the provisions of Section 6, above, Consultant
agrees that, in addition to the Company's remedy at law, all rights of
Consultant to payment or otherwise under this Agreement and all amounts then or
thereafter due Consultant from the company under this Agreement may be
terminated. Nothing herein contained shall be construed as prohibiting the
Company from pursuing any other remedies available to it for such breach or
threatened breach.

-4-
<PAGE>

(b) Consultant acknowledges that the granting of a temporary
injunction, temporary restraining order or permanent injunction merely
prohibiting the use of Proprietary Information would not be an adequate remedy
upon breach or threatened breach of Section 6, above, and consequently agrees,
upon proof of any such breach, to the granting of injunctive relief prohibiting
the design, development, manufacture, marketing or sale of products and
providing of services of the kind designed, developed, manufactured, marketed,
sold or provided by the Company or any other form of competition with the
Company. Nothing herein contained shall be construed as prohibiting the Company
from pursuing any other remedies available to it for such breach or threatened
breach.

11. INDEPENDENT CONTRACTOR. Consultant shall not for any purpose be
deemed to be an employee of the Company during the term of this Agreement, but
shall be an independent contractor. Consultant shall have no authority to act on
behalf of or to bind the Company in any manner whatsoever. Consultant shall be
solely responsible for the payment of any federal, state or local taxes
applicable to the fees paid to Consultant pursuant to this Agreement.

12. INFORMATION.

a. Without the prior written consent of the Company or as
required by law, Consultant will not, at any time, either during or after his
retention by the Company, directly or indirectly divulge or disclose to any
person, firm, or association, or use for his own benefit, gain, or others, any
plans, products, data, results of tests and data, customer lists, or any other
trade secrets or confidential materials or like information of the Company,
including (but not by way of limitation) any and all information and
instructions, technical or otherwise, prepared or issued for the use of the
Company (collectively, the "Confidential Information"), it being the intent of
the Company, with which intent Consultant hereby agrees to restrict him from
dissemination or using any like information that is unpublished or not readily
available to the general public.

b. Upon the termination of this Agreement for any reason
whatsoever, Consultant shall immediately deliver to the Company all lists,
books, records, data, and other information (including all copies) of every kind
relating to or connected with the Company and its activities, business, and
customers and Consultant's performance under this Agreement.

-5-
<PAGE>

13. NOTICE. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by certified or
registered mail, return receipt requested, to the parties at the following
addresses (or such other address as may be given to the other party in writing):

To the Company: __________________________
__________________________
__________________________

To Consultant: __________________________
__________________________
__________________________

14. WAIVER OF BREACH. The waiver by the Company of a breach of any
condition of the Agreement by Consultant shall not be construed as a waiver of
any subsequent breach by Consultant.

15. ASSIGNMENT. Subject to the limitations below, this Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective heirs, representatives, successors and permitted assigns. The Company
shall have the right to assign this Agreement and its rights hereunder to any
entity resulting from the reorganization, merger or consolidation of the Company
or with any entity to which the Company may sell all or substantially all of its
assets. Consultant acknowledges that his obligations hereunder are personal and
unique and agrees that he will not assign this Agreement or any of his rights or
obligations hereunder. Any attempted assignment in violation of this Paragraph
14 shall be void.

16. ARBITRATION. In the event of any controversy or claim between the
parties to this Agreement arising out of, or relating to, this Agreement, or any
breach thereof, whether that claim sounds in tort, contract, or any other legal
theory, then that dispute shall be resolved by binding arbitration, and judgment
upon the award(s) rendered by the arbitrators may be entered in any court having
jurisdiction thereof. The arbitral tribunal shall consist of one member,
appointed by agreement between the Parties; failing such agreement within ten
(10) days after commencement of any action, a neutral arbitrator will be
appointed by the supervising authority. Arbitration will be held in Miami,
Florida, under the Rules of Commercial Arbitration and under the institutional
supervision of the American Arbitration Association. The procedural law
governing the arbitration shall be the law of Florida; the substantive law
applied by the arbitrator shall be the

-6-
<PAGE>

law of Florida. The proceedings shall be conducted in the English language.
Attorneys' fees and the costs of the arbitration, including the fees of the
arbitrator, shall ordinarily be charged to the unsuccessful party, but the
tribunal shall have the power to apportion the legal fees and costs as it deems
just.

17. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties. It may be changed only by agreement in writing signed by both
parties.

18. HEADINGS. The headings herein are for convenience of reference only
and shall not be deemed to be part of the substance of this Agreement.

19. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed and original but all of which
together shall constitute one and the same agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

COMPANY:
EQUITY ONE, INC., a Maryland
corporation

Attest:

/s/ ILLEGIBLE By: /s/ CHAIM KATZMAN
- -------------------------------- ------------------------------
Authorized Signatory

CONSULTANT:

/s/ ELI MACABY
- -------------------------------- ---------------------------------
ELI MACABY

- --------------------------------

-7-

EXHIBIT 10.12

CONSULTING AGREEMENT

This Consulting Agreement ("Agreement") is made as of January 1, 1996,
between EQUITY ONE, INC., a Maryland corporation (the "Company"), and DAVID
VOOLKAN ("Consultant").

WITNESSETH:

WHEREAS, the Company desires to retain the services of Consultant for
certain matters; and

WHEREAS, Consultant desires to accept such engagement by the Company on
the terms and conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

1. ENGAGEMENTS. The Company hereby engages Consultant and Consultant
hereby accepts engagement as a consultant to the Company upon the terms and
conditions hereinafter set forth.

4. COMPENSATION AND BENEFITS.

b. The Company shall reimburse Consultant for all reasonable
expenses incurred by him in the discharge of his duties hereunder, including,
but not limited to, travel fare, hotel accommodations and other lodging, long
distance telephone tolls,

-1-
<PAGE>

couriers, postage, overnight and similar bulk and express package delivery
services. Consultant shall maintain detailed records of such expenses in such
form as the Company may request and make such records available to the Company
as and when requested.

5. DISCLOSURE OF INFORMATION. Consultant acknowledges that the
Company's trade secrets, private or secret processes as they exist from time to
time, customer lists and information concerning products, development, technical
information, procurement and sales activities and procedures, promotion and
pricing techniques and credit and financial data concerning customers (the
"Proprietary Information") are valuable, special and unique assets of the
Company, access to and knowledge of which are essential to the performance of
Consultant hereunder. In light of the highly competitive nature of the industry
in which the Company's business is conducted, Consultant agrees that all
Proprietary Information heretofore or in the future obtained by Consultant as a
result of Consultant's association with the Company shall be considered
confidential. In recognition of this fact, Consultant agrees that Consultant
will not disclose any of such Proprietary Information for Consultant's own
purposes or for the benefit of any person or other entity (except the Company)
under any circumstances unless such Proprietary Information has been publicly
disclosed generally or, upon written advice of legal counsel reasonably
satisfactory to the Company, Consultant is legally required to disclose such
Proprietary Information. Records prepared by Consultant or that come into
Consultant's possession during Consultant's association with the Company are and
remain the property of the Company, and when this Agreement terminates, such
records shall be left with the Company.

-2-
<PAGE>

6. TERMINATION OF AGREEMENT.

(i) The material breach of one or more provisions of this
Agreement by Consultant;

(ii) The arrest and conviction after all appeals of
Consultant for a felony, capital crime or any crime involving moral turpitude,
including but not limited to crimes involving illegal drugs;

(iii) The commission or participation by Consultant in an
injurious act of fraud or dishonesty against the Company;

8. NON-COMPETITION. The Consultant specifically agrees that, in the
case of his voluntary resignation from all of his positions, for a period of one
(1) year (the "Non-Competition Period") from and after the time of his voluntary
resignation, and subject to the exceptions for the Consultant's engagement in
other businesses or ventures as described in Section 3, above, the Consultant
shall not engage, in the United States of America, without the prior written
consent of the Board of Directors of the Company, directly or indirectly, (i)
own, control, or participate in the ownership or control of any line of business
or enterprise that directly competes with the Company in any business of the
Company existing or proposed at the time the Consultant shall cease to perform
services hereunder wherever located; (ii) interfere with or disrupt or attempt
to disrupt, or take any action that could

-3-
<PAGE>

reasonably be expected to disrupt, any past or present or prospective
relationship, contractual or otherwise, between the Company and any customer,
supplier, sales representative, or consultant of the Company; (iii) directly or
indirectly solicit for employment or attempt to employ, or assist any other
entity in employing or soliciting for employment, either on a full-time or
part-time or consulting basis, any consultant or executive (whether salaried or
otherwise, union or non-union) who within one (1) year of the time the
Consultant ceased to perform services hereunder had been employed by the
Company, or (iv) communicate with or solicit any person who was a customer of
the Company or any present or future customer of the Company (including without
limitation customers previously or in the future generated or produced by
Consultant), in any manner which interferes or might interfere with such
customer's relationship with the Company, or in an effort to obtain such
customer as a customer of any person which conducts business competitive with
the Company's business.

9. TERMINATION WITHOUT CAUSE. In the event this Agreement is terminated
without cause, upon termination: (i) all compensation due under the balance of
the term of this Agreement shall be paid to Consultant, (ii) all stock options
granted to Consultant shall vest, and (iii) the Company shall pay to Consultant
all legal fees and expenses incurred by Consultant as a result of termination or
Change in Control (including all such fees and expenses, if any, incurred in
contesting or disputing any such termination or in seeking to enforce any right
or benefit provided by this Agreement).

10. REMEDIES.

(a) Consultant acknowledges and agrees that the Company's remedy
at law for a breach or threatened breach of any of the provisions of Section 6,
above, would be inadequate. In recognition of this fact, in the event of a
breach by Consultant of any of the provisions of Section 6, above, Consultant
agrees that, in addition to the Company's remedy at law, all rights of
Consultant to payment or otherwise under this Agreement and all amounts then or
thereafter due Consultant from the Company under this Agreement may be
terminated. Nothing herein contained shall be construed as prohibiting the
Company from pursuing any other remedies available to it for such breach or
threatened breach.

-4-
<PAGE>

providing of services of the kind designed, developed, manufactured, marketed,
sold or provided by the Company or any other form of competition with the
Company. Nothing herein contained shall be construed as prohibiting the Company
from pursuing any other remedies available to it for such breach or threatened
breach.

12. INFORMATION.

a. Without the prior written consent of the Company or as
required by law, Consultant will not, at any time, either during or after his
retention by the Company, directly or indirectly divulge or disclose to any
person, firm, association, or the Company, or use for his own benefit, gain, or
others, any plans, products, data, results of tests and data, customer lists, or
any other trade secrets or confidential materials or like information of the
Company, including (but not by way of limitation) any and all information and
instructions, technical or otherwise, prepared or issued for the use of the
Company (collectively, the "Confidential Information"), it being the intent of
the Company, with which intent Consultant hereby agrees to restrict him from
dissemination or using any like information that is unpublished or not readily
available to the general public.

To the Company: ___________________________
___________________________
___________________________

-5-
<PAGE>

To Consultant: ___________________________
___________________________
___________________________

14. WAIVER OF BREACH. The waiver by the Company of a breach of any
condition of the Agreement by Consultant shall not be construed as a waiver of
any subsequent breach by Consultant.

17. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties. It may be changed only by agreement in writing signed by both
parties.

18. HEADINGS. The headings herein are for convenience of reference only
and shall not be deemed to be part of the substance of this Agreement.

-6-
<PAGE>

19. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed and original but all of which
together shall constitute one and the same agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

COMPANY:

EQUITY ONE, INC., a Maryland
corporation

Attest:

/s/ ILLEGIBLE By: /s/ CHAIM KATZMAN
- -------------------------------- ------------------------------
Authorize Signatory

CONSULTANT

/S/ DAVID VOOLKAN
- -------------------------------- ------------------------------
DAVID VOOLKAN

- -------------------------------

EXHIBIT 10.23

AGREEMENT FOR PURCHASE AND SALE

DATE: SEPTEMBER 24, 1997

NAME OF BUYER: EQUITY ONE (GAMMA) INC., AND/OR PERMITTED ASSIGNS

ADDRESS OF BUYER: 777 17TH STREET; PENTHOUSE

CITY: MIAMI BEACH STATE: FLORIDA ZIP: 33139

TELEPHONE: 305-672-1234 FACSIMILE: 305-672-6606

NAME OF SELLER: COMMERCIAL VENTURE SERVICES, INC.
A FLORIDA CORPORATION

ADDRESS OF SELLER: 351 SOUTH CYPRESS ROAD
SUITE 316

CITY: POMPANO BEACH State: FLORIDA ZIP: 33060

1. DESCRIPTION OF PROPERTY: Seller ("Seller") agrees to sell and the
above named Buyer ("Buyer") agrees to purchase, under the terms and conditions
set forth in this Agreement, all right, title and interest of the Seller in and
to the following:

A. The parcel of real property, known as LANTANA VILLAGE
SQUARE, located in Lantana, Palm Beach County, Florida and more fully described
below, and any improvements situated on such parcel, together with any and all
easements, covenants and other rights appurtenant to such parcels and owned by
Seller, (hereinafter the "Real Property"):

See Exhibit A attached hereto

B. Intangible Property (collectively "Intangible Property")
consisting of (i) any and all Leases and Contracts in effect on the Closing
Date, (ii) any and all refundable security deposits and other deposits and
interest thereon, if required by law (iii) any and all transferable licenses,
permits, licenses, certificates of occupancy, and other approval in effect at
the Closing Date and necessary for the current use and operation of the real
property or the personal property, (iv) any and all transferable warranties,
architectural or engineering plans and specifications and tests and studies,
development rights that exist as of the Closing Date and relate to the Real or
Personal Property.

C. All furniture, furnishings, fixtures, equipment and other tangible
personal property that is affixed to and/or located at the Real Property which
is owned by Seller on the Closing

<PAGE>

Date and used in connection with the management, operation or repair of the Real
Property excluding all tangible personal property owned by tenants of the Real
Property (collectively "Personal Property").

D. Real Property, Personal Property and Intangible Property may
sometimes be herein collectively referred to as the "Property".

2. PURCHASE PRICE: The total purchase price of the Property is $
6,850,000.00 (U.S.) payable as follows:

A. Initial deposit to be paid within 2 days
after Due Diligence Inspection Period Date to
Alan J. Marcus, Esquire
Trust Account $ 500,000.00
----------------

B. Total Deposit: $ 500,000.00
----------------

C. Wire transfer of funds
required at closing: $ 6,350,000.00
---------------

TOTAL PURCHASE PRICE
$ 6,850,000.00
---------------

The deposits to be paid by Buyer shall be held by ALAN J. MARCUS TRUST
ACCOUNT and shall be refundable to Buyer only as set forth herein and as set
forth in the Escrow Agreement executed in connection herewith.

3. ACCEPTANCE: If this offer is not executed by and delivered to all
parties on or before 2:00 p.m., September 24, 1997, this offer shall be deemed
withdrawn and null and void.

4. FACSIMILE; EFFECTIVE DATE: Facsimile copies of this Agreement,
signed and initialed in counterpart, shall be considered for all purposes,
including delivery, as originals. The Effective Date of this Agreement will be
(a) the date when the last one of Buyer and Seller has signed this offer, or (b)
if changes in this offer (after signature) have been made and initialed by the
parties, the date when the last one of Buyer or Seller has initialed those
changes.

2
<PAGE>

5. INSPECTIONS AND CONDITION OF PROPERTY:

A. Buyer shall have until 6:00 p.m., October 6, 1997, to
complete its due diligence inspection of the Real Property (the "Inspection
Period"). Buyer shall have until 6:00 p.m., October 20, 1997 to complete its due
diligence concerning the status of the tenants. To assist Buyer with this
inspection, Seller shall deliver to Buyer copies of all available leases,
contracts, agreements, licenses, permits, surveys, environmental reports, roof
reports, building inspection reports and other reports in Seller's possession
concerning the condition of the Property, as well as utility bills, year to date
income and expense statements, sales reports for the anchor tenants for the
current year and past three years; any other sales reports from any tenant
required to report for the current year and past three years, etc. concerning
the Real and Personal Property. During the Inspection Period, Buyer may conduct
such inspections, at Buyer's sole expense, as Buyer may deem necessary to
ascertain the physical condition of the Real Property. In the event the Real or
Personal Property is not acceptable to Buyer for any reason, Buyer shall provide
written notice of same to Seller, at Seller's address, prior to the expiration
of the Inspection Period. In such event, this Agreement shall be terminated and
of no further force and effect and Buyer and Seller shall be released of all
obligations hereunder and Buyer shall be refunded all deposits without further
notice. Failure of Buyer to deliver notice to Seller as required herein shall
constitute waiver of Buyer's right to give such notice and shall be deemed
acceptance of the Real and Personal Property by Buyer. Buyer shall (i) complete
its inspection Period; (ii) not disturb or interfere with the operation,
management or use of the Project by Seller, Seller's agents, any tenant of the
Project or by any such tenant's customers, invitee or guests; and (iii) not
damage or affect the physical structure of the Property. Buyer shall be
responsible for any and all losses, damages, charges and other costs associated
with such inspections and studies, and Buyer covenants and agrees to return the
Property to the same condition as existed prior to such inspections and studies.
Buyer agrees not to allow any liens to arise against the Property as a result of
such inspections and studies and agrees to indemnify and hold Seller harmless
from and against any and all claims, charges, actions, costs, suits, damages,
injuries, or other liabilities which arise, either directly or indirectly, from
Buyer's or its agent's or employee's entry onto the Property prior to Closing.

B. Buyer acknowledges that Buyer is purchasing the Property in
"AS IS, WHERE IS" Condition and Buyer further acknowledges that Seller has made
no warranties or representations, express or implied, in respect to the real and
personal property except as set forth herein and further, Buyer has been given
the opportunity and has made an independent investigation of the Property.

6. CLOSING:

A. The closing for delivery of the deed and payment of the
balance of the purchase price shall take place at Buyer's attorney's office at a
mutually agreeable time on November 5, 1997, unless extended by other provisions
hereof. On five days written notice, which shall include a statement confirming
that Buyer has completed its due diligence and title review, Buyer may extend
the Closing Date to on or before November 30, 1997.

B. Possession of the Property shall be transferred by Seller
to Buyer

3
<PAGE>

simultaneously with the closing of title.

7. FINANCING:

This is an all cash transaction.

8. SELLER'S REPRESENTATIONS AND WARRANTIES:

Seller represents and warrants to Buyer that as of the
Effective Date:

(a) the person executing this Agreement on behalf of Seller is
duly and expressly authorized to do so;

(b) that Seller has full right and authority to enter into
this Agreement;

(c) that this Agreement constitutes a valid and legally
binding obligation of Seller, enforceable against Seller in accordance with its
terms;

(d) that the conveyance contemplated herein does not and will
not violate any of the Seller's Corporate Agreements or restrictions;

(e) that Seller is a Florida corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction and is
qualified to do business in the State of Florida;

(f) that to Seller's knowledge the Property is in compliance
with building and zoning laws of applicable governmental agencies and is not
currently in violation of any material code requirements;

(g) the Seller has not received any notices from any
governmental agency that it is in violation of the Americans with Disabilities
Act; and

(h) Seller represents and warrants that it has no knowledge of
any material condition that adversely affects the Real Property.

9. BUYER'S REPRESENTATIONS AND WARRANTIES: Buyer represents and
warrants to Seller that the following are true, accurate and complete as of the
Effective Date:

(a) Buyer is duly organized Corporation, validly existing and
in good standing, and authorized to do business within the State of Florida.

(b) Each of the persons executing this Agreement on behalf of
Buyer is duly

4
<PAGE>

authorized to do so. Buyer has full right and authority to enter into this
Agreement and to contemplate the transaction contemplated herein. This Agreement
constitutes a valid and legally binding obligation of Buyer, enforceable against
Buyer in accordance with its terms.

(c) There are no actions, suits, claims or other matters
pending, or, to the Buyer's best knowledge and belief, contemplated or
threatened against Buyer that could affect Buyer's ability to perform its
obligations under this Agreement.

(d) Buyer has sufficient funds and worthy credit available to
consummate the Closing of the transaction described in this Agreement.

10. LIMITATIONS ON FUTURE LEASES AND RENTALS: Subsequent to the
Effective Date, Seller shall not, without Buyer's prior written consent, enter
into any leases or contracts except for (i) contracts to be completed or that
are to terminate at or before closing, or (ii) service contracts that are
terminable on not less than 30 days notice. Buyer shall have five (5) days to
approve any proposed leases, which approval shall not be unreasonably withheld.
In the event Buyer does not provide written consent to the proposed lease or
contract, Buyer's silence shall be deemed a consent to said lease or contract.

11. CONDITION OF PROPERTY AT CLOSING: Seller shall be obligated to
maintain the Property in the same condition as of the Effective Date, reasonable
wear and tear excepted. Seller shall be obligated to repair and correct any
adverse changes in the condition of the Property occurring subsequent to the
Effective Date hereof.

12. CONDITIONS PRECEDENT TO CLOSING

A. CONDITIONS PRECEDENT FOR BUYER: The obligation of Buyer to
purchase the Property from Seller under this Agreement is, subject to the
satisfaction, at Closing, of each of the following:

(i) The representations and warranties made by Seller in this
Agreement shall be true, accurate and complete in all material respects on and
as of the Closing Date with the same force and effect as if such representations
and warranties were made on and as of such date.

(ii) Seller shall have performed all covenants and obligations
required by this Agreement to be performed by Seller on or before Closing.

(iii) Title to the property shall conform with the
requirements of Paragraph 17 herein and Buyer shall have received a written
Commitment for Title Insurance, as described in Paragraph 17, indicating that an
owner's title insurance policy in accordance with the provisions of Paragraph 17
will be issued after the date of Closing and compliance with any requirements
contained

5
<PAGE>

therein. At Closing, said Commitment shall be "marked up" indicating
satisfaction of all requirements set forth in said Commitment and deleting all
standard exceptions; i.e. to wit, GAP, mechanics and or other liens,
encroachments, and easements, etc.; chapter 159 liens and assessments; liens or
assessments not shown in the public records; and or any exception thereby
seeking to impose any lien, assessment, and or other encumbrance against the
Property. Nothing contained herein shall limit, modify, and/or otherwise effect
Seller's obligation to deliver to Buyer, in any event, and at Seller's expense,
upon Closing, good, marketable and insurable title to the Property.

(iv) Seller shall furnish a written estoppel letter from each
tenant or Seller Certificate as set forth in Paragraph 18 of this Agreement.
Seller may extend the Closing Date until November 30, 1997, to provide Estoppel
Certificates for each Major Tenant, as Major Tenant is defined in Paragraph 18.

(v) All Leases for each of the tenants which occupy more than
3,500 square feet of the Property, shall be in good standing and effective and
that each such tenant of the Property shall be operating at the Property and in
full compliance with its lease obligations. In the event that at Closing, any
such tenant which occupies more than 3,500 square feet of the Property or any
combination of tenants which occupy more than 3,500 square feet of the Property
has vacated their premises or is in default or breach of its lease obligations
or has provided notice of any kind to that effect, Buyer may terminate this
Agreement, whereby Buyer shall be reimbursed its deposit and Buyer shall be
released of all obligations hereunder. In the event any tenant or combination of
tenants with a combined square footage of no more than 3,500 are in default of
their lease obligation, Seller agrees that Seller will escrow a sum equal to
four months' rent, common area maintenance charges and taxes (hereinafter
"Rent"), for each such tenant, however, Seller's obligation shall not exceed a
total escrow of more than $15,000.00. In the event of such an escrow, the Buyer
will be entitled to a disbursement from the escrowed funds for all lost Rent, up
to four months Rent for each such tenant. Notwithstanding the foregoing, if any
of the tenants known as Four Star Video, Discount Beverage and the 2,940 square
foot restaurant are in default of not more than one month's rental obligation,
such tenant shall not be deemed in default for purposes allowing the Buyer the
right to terminate this Agreement.

(vi) The ground leases for Arby's, Burger King, and the K-Mart
parcel shall be in good standing and in full force and effect.

B. CONDITIONS PRECEDENT FOR SELLER: The obligation of Seller
to sell the Property to Buyer under this Agreement is, subject to the
satisfaction, at closing, of each of the following:

(i) The representations and warranties made by Buyer in this
Agreement shall be true, accurate and complete in all material respects on and
as of the Closing Date with the same force and effect as if such representations
and warranties were made on and as of such date.

(ii) Buyer shall have performed all covenants and obligations
required by this Agreement to be performed by Buyer on or before Closing.

6
<PAGE>

13. CLOSING; DELIVERIES AT CLOSING: The closing of the transaction
contemplated in this Agreement ("Closing") shall take place on the date set
forth in Paragraph 6 of this Agreement.

A. At the time of Closing, Seller shall deliver to Buyer
the following items:

1. Warranty Deed.

2. Bill of Sale with respect to any Personal
Property included in the sale;

3. Mechanics' Lien Affidavit.

4. Title Affidavit.

5. Assignment of Leases, Rents and Security
Deposits;

6. Assignment of Contracts, if any;

7. Title evidence as set forth in Paragraph 17.

8. Appropriate corporate resolutions and an
incumbency certificate to evidence such
Officer's capacity and authority to
consummate Closing, a certified copy of
Articles of Incorporation and bylaws,
including all amendments thereto; and a
current Certificate of Good Standing;

9. Such other documents as may be reasonably
required in order to complete the purchase
and sale.

B. At the time of closing, Buyer shall deliver or cause to be
delivered to Seller the following items:

1. The earnest Deposit to be credited against
Purchase Price;

2. A corporate resolution and an incumbency
certificate to evidence Buyer's capacity and
authority to consummate Closing, a certified
copy of Buyer's Article of Incorporation and
bylaws, including all amendments thereto;
and if Buyer is a corporation, a current
Certificate of Good Standing in state in
which Buyer is incorporated;

3. Acceptance of Assignment of Contracts;

7
<PAGE>

4. Acceptance of the Assignment of Leases,
Rents and Security Deposits;

5. The balance of the Purchase Price and such
other funds necessary to pay all Closing and
other costs and adjustments to be paid by
Buyer under this Agreement (to be delivered
by wire transfer).

C. Each party agrees to execute and deliver at Closing a
settlement statement setting forth the charges, adjustments and credits to each
party and to execute and deliver such other documents and take such actions as
either party or the Escrow Agent might reasonably request to consummate the
transaction herein contemplated.

D. At Closing, the Escrow Agent shall (a) disburse all funds,
then (b) record, among the appropriate Public Records, all documents to be
recorded, and then (c) deliver all original documents and copies thereof, to the
appropriate parties.

14. RISK OF LOSS: Risk of loss prior to closing shall be borne by
Seller.

A. If between the time of execution of this Agreement and the
time of closing, the Property is damaged by fire or other casualty the following
shall apply, at Buyer's option:

1. Upon receipt of applicable insurance proceeds,
Seller shall have the obligation to repair or replace the damaged improvements
built upon the Real Property. If Buyer requires, Seller shall make such repairs
or replacements and this Agreement shall continue in full force and effect and
the Seller shall be entitled to extend the closing for a reasonable additional
period of time so as to enable Seller to complete such repairs or replacements;
or

2. Buyer may notify Seller that Buyer would rather
that Seller not repair or replace any such loss or damage and Seller shall
assign all right to and in any and all proceeds received from insurance or in
satisfaction of any claims or actions in connection with such loss or damage and
upon such assignment Buyer shall close without any purchase price reduction.

3. In the event the cost of repairs is in excess of
$100,000.00, either Seller or Buyer shall have the right to cancel this
Agreement in which event, this Agreement shall be deemed canceled and of no
further force or effect. Buyer shall be refunded its deposit monies, without
further notice, and the parties shall be released and discharged of all claims
and obligations hereunder.

B. CONDEMNATION

In the event that all or any substantial portion of the Real
Property is condemned or
8

<PAGE>

taken by eminent domain prior to Closing, Buyer may, at its option, either: (i)
terminate this Agreement by written notice thereof to Seller within ten (10)
days after Seller notifies Buyer of the condemnation and receive an immediate
refund of the Deposit, and all interest accrued thereon or (ii) proceed to close
the transaction contemplated herein pursuant to the terms hereof, in which event
Seller shall deliver to Buyer at the Closing any proceeds actually received by
Seller attributable to the Real Property from such condemnation or eminent
domain proceeding, net of any costs associated with such condemnation or eminent
domain proceeding, or an assignment of Seller's rights against the condemning
authority, and there shall be no reduction in the purchase price. In the event
Buyer fails to timely deliver written notice of termination as described in (i)
above, Buyer shall be deemed to have elected to proceed in accordance with (ii)
above.

15. EXPENSES OF CLOSING:

A. Seller shall pay the following costs incurred in this
sale:

(i) Seller's attorneys fees and costs;

(ii) The cost of recording any releases or corrective title
instruments;

(iii) All documentary stamp taxes and surtax on the deed that
will be due as a result of the completion of the sale;

(iv) All of the costs of delivery of the Evidence of Title
and Title Insurance Premiums, as required in Paragraph
17B, herein; and

(v) Any prepayment fees or any other costs associated with
payoff of any mortgages as well as any fees or costs
associated with the Casto Developers mortgage.

B. Buyer shall pay the following costs incurred in this
sale:

t (i) Buyer's attorney's fees and costs; and

(ii) the costs of recording the deed of conveyance.

16. PRORATIONS AND CREDITS:

A. PRORATIONS: Current real estate taxes, based on the latest
tax bill then available; personal property taxes and assessments, collected
rents, maintenance fees and other similar

9
<PAGE>

customarily proratable items shall be prorated as of the Closing Date with Buyer
being responsible for and being credited with those on the day of Closing. In
the event either party collect rent of which a portion belongs to the other
party, then the collecting party shall prorate such rent and deliver the other
party's share within 10 days of receipt. The provisions of the Paragraph are
intended to survive Closing. Seller shall have the right to collect any past due
rents and Buyer shall cooperate with Seller in the collection process for such
rents. Notwithstanding the foregoing, Buyer agrees to reimburse Seller for its
prorata share of the real estate taxes which are reimbursable to the Landlord by
Winn Dixie, Arby's, Burger King, Denny's, and Radio Shack.

B. CREDITS: Buyer shall be credited with the amount of any
prepaid rents paid to Seller by tenants of the Property for periods subsequent
to the Closing date and with the amount of any deposits for tenants of the
Property, including rental, cleaning, utility, key, damage and other deposits.

17. TITLE REQUIREMENTS:

A. Title to the property shall be insurable and shall be
conveyed from Seller to Buyer free and clear of all encumbrances except the
Permitted Exceptions which are set forth as Exhibit "C" and to the extent not
set forth on Exhibit "C":

1. Covenants, conditions, restrictions, limitations,
reservations, dedications, agreements, and easements of record (including but
not limited to, water, sewer, gas, electric and other utility agreements) at the
time of closing, provided that they do not contain provisions for reversion or
forfeiture of title in the event of violation and do not substantially impair
the use of the property for its customary purposes.

2. General and special taxes and assessments for current and
subsequent years.

3. Regulatory laws and ordinances of all appropriate
governmental authorities including but not limited to zoning restrictions.

4. Rights of parties in possession.

5. That certain mortgage from Casto Developers, as Mortgagee,
to Cris Developers, as Mortgagor, in the original principal sum of
$2,200,000.00.

6. That certain ground lease for the K- Mart store by and
between Commercial Venture Services, Inc. and Cris Developers.

B. Within 10 days of the Effective Date, Seller shall obtain
evidence of title consisting of a Commitment to issue Title Insurance from
Commonwealth Land Title issued through Gibraltar Title Insurance Co. along with
copies of all title exceptions and a certified survey of the Property for Buyer
to review. Buyer shall have 15 days from receipt of the Evidence of Title to

10
<PAGE>

review same. If any exceptions render the Property unacceptable for Buyer's use,
Buyer shall advise Seller of same and the provisions of Section 17.E. shall
apply. Seller shall be responsible for (i) all costs relating to the issuance of
the Owners Policy.

All exceptions for which the Buyer does not object shall be considered
to be Permitted Exceptions and shall be deemed acceptable by Buyer.

C. Except for the Permitted Exceptions, Seller shall be
obligated to deliver the property free and clear of any and all encroachments,
overlaps, boundary line disputes and other matters disclosed by a certified
survey other than those set forth in the survey referenced in Section 17.B. of
this Agreement. In the event the survey shows any such encroachment or that the
improvements presumed to be located on the real property in fact encroach on
setback lines, easements, or lands of others, or violate any restrictions of
record, covenant or applicable government regulation, same shall be treated as a
title defect which renders title unmarketable.

D. As a further requirement of title, at closing (i) the Title
Insurance Commitment shall be marked to indicate satisfaction of all
requirements set forth necessary in order to deliver insurable and marketable
title and (ii) the standard printed exceptions contained in American Land Title
Association Standard Form B Owners' Title Insurance Policy customarily issued
shall be deleted; i.e. to wit, parties in possession, GAP, mechanics and or
other liens, encroachments, and easements, etc.; chapter 159 liens and
assessments; liens or assessments not shown in the public records; and or any
exception thereby seeking to impose any lien, assessment, and or other
encumbrance against the Property. Nothing contained herein, shall limit, modify,
and/or otherwise effect Seller's obligation to deliver to Buyer, in any event,
and at Seller's expense, upon Closing, good, marketable and insurable title to
the Property. In the event any exception referenced herein cannot be deleted,
same shall be treated as a title defect.

E. If the title is not insurable at the time of Closing,
Seller shall have 90 days following the date for Closing within which to remedy
such defect and shall use diligent effort to cure such defect within 90 days of
said notice. If Seller shall fail to cure such defect within said 90 day period,
Buyer shall have the option of either accepting the title as it is or demanding
a refund of the Buyer's deposit. Buyer may also allow such additional time as
may be deemed necessary, in the discretion of the Buyer, for Seller to cure such
defect. Upon any such refund, this Agreement shall thereupon be terminated and
both parties shall be relieved of further liabilities hereunder.

18. TENANT ESTOPPEL LETTERS: Seller shall deliver to Buyer, on or
before November 4, 1997, an estoppel certificate (hereinafter the "Estoppel
Certificate") signed by the tenants known as Winn Dixie, Radio Shack, GNC,
Rite-Aid, Denny's, Arby's, Burger King, and for Cris Developers (the K-Mart Land
Lease) (hereinafter "Major Tenants"), indicating the amount of rent paid, the
date last paid, the amount of security deposits, any prepaid rents, etc. Buyer
has supplied such form acceptable to Buyer for Seller's use as Exhibit B
attached hereto. Buyer will accept a Major Tenant's standard estoppel
certificate. Buyer's obligation to close shall be subject to (1) receipt of such
Estoppel Letters and (2) said Estoppel Letters being consistent with the terms

11
<PAGE>

and conditions of the Leases of the tenants. For all other tenants (hereinafter
"Other Tenants"), Seller will make diligent effort to obtain Estoppel
Certificates from each of the Other Tenants, however, if Seller cannot deliver
estoppel certificates for each of the Other Tenants by October 17, 1997, Buyer
and Seller may further attempt to jointly obtain such Estoppel Certificates from
such tenants. If Buyer and Seller are unsuccessful in obtaining Estoppel
Certificates for each of the Other Tenants, Seller may provide a certificate in
a form satisfactory to Buyer for the Other Tenants occupying less than 3,600
square feet combined. Buyer will accept an Estoppel Certificate dated no earlier
than August 1, 1997 for the tenants known as ALOF Auto Tag, Dollar Store, Diann
Criss, H & R Block, Kleen Coin Laundry and Postal Depot Plus. If Estoppel
Certificates are not provided by the Other Tenants in excess of 3,600 square
feet combined, Buyer may either accept a certificate from the Seller or
terminate this Agreement, in which case, Buyer shall be refunded its deposit and
this Agreement shall be null and void.

19. ASSIGNMENT: This Agreement may be assigned to a controlled
affiliate of the Buyer without the consent of Seller, provided assignee accepts
assignment thereof and assumes the obligations contained therein. Buyer may
elect to change the name or the Corporate Purchaser and upon such change, shall
notify Seller, such change to be made within 10 days after the expiration of the
Inspection Period.

20. DEFAULT: Should Buyer fail to purchase on the date on which title
is to close in accordance with this Agreement, or fail to perform any of Buyer's
other obligations under this Agreement and such default is not cured within 10
days after written notice to Buyer, Seller may, at Seller's option, cancel this
Agreement by written notice to Buyer. In such event, Buyer's deposits and all
other sums paid to Seller (including any interest earned thereon) shall be
retained by Seller as liquidated and agreed damages for Buyer's default, and
this Agreement shall terminate. Seller has removed the Property from the market
and has incurred indirect expenses relative to sales, advertising and the like,
and Buyer recognizes that no other method could determine the precise damage
resulting and retention of all sums then paid as liquidated and agreed damages
shall be Seller's sole remedy in the event of Buyer's default. If this Agreement
is so canceled, Seller may sell the Property to any third party as though this
Agreement had never been made (without any obligation to account to Buyer for
any part of the proceeds of such sale). Buyer agrees not to file any action
against Seller seeking the return of any portion of said deposits or seek any
reduction in the amount of the liquidated and agreed upon damages if this
Agreement is terminated for Buyer's default. Should Seller default under this
Agreement or fails to perform any of Seller's other obligations under this
Agreement and such default is not cured within 10 days after written notice to
Seller, Buyer's sole and exclusive remedy shall be to (i) obtain a refund of all
deposits made, whereupon this Agreement shall terminate and neither party shall
have any liability to the other, or (ii) bring an action for specific
performance, without waiving Buyer's right to damages incurred as a result of
Seller's breach.

21. ESCROW AGENT: The Escrow Agent shall hold the deposit funds and
perform such duties as set forth in the Escrow Agreement attached hereto,
consistent with the provisions of this Agreement.

12
<PAGE>

22. MISCELLANEOUS PROVISIONS:

A. All written notices and demands provided under this
Agreement shall be hand delivered or sent via certified or registered mail,
return receipt requested, or by Federal Express or other air carrier service.
All notices and demands shall be deemed properly addressed if addressed as
follows and if mailed, shall be deemed given upon being deposited in the United
States mail, postage prepaid:

To Seller: To Buyer:

Janice Griffin, Esquire Alan J. Marcus, Esquire
c/o Berger, Shapiro & Davis 20803 Biscayne Blvd.; Suite 301
100 NE 3rd Avenue; Suite 400 Aventura, FL 33180
Fort Lauderdale, FL

B. This Agreement supersedes and any all prior understandings
and agreements between Seller, its agents and representatives and Buyer. It is
mutually understood and agreed that this Agreement represents the entire
understanding between Buyer and Seller. No representations or inducements made
prior to the signing of this Agreement, which are not expressly included in this
Agreement or imposed by law, shall be of any force or effect.

C. Neither this Agreement nor a memorandum thereof shall be
recorded in the office of the Clerk in any Circuit Court of the State of
Florida, or in any other Public Records of the State of Florida. Any recording
of same by Buyer shall be considered a breach of this Agreement.

D. The acceptance of the deed by Buyer at the closing of this
transaction shall be acknowledgment by Buyer of the full performance by Seller
of all of its agreements and responsibilities hereunder, and no performance of
any agreement, obligation, responsibility or representation of Seller shall
survive the closing of this transaction, except those specifically provided for
by statute and those specifically stated in this Agreement to survive the
closing.

E. Time shall be of the essence with regard to performance
pursuant to this Agreement.

F. Any disputes arising in connection with this Agreement
shall be settled according to Florida law and venue for any action in connection
with this Agreement shall be in Palm Beach County, Florida.

G. No modification of this Agreement shall be valid unless in
writing and signed by both parties.

H. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, and said counterparts shall
constitute but one and the same instrument

13
<PAGE>

which may be sufficiently evidenced by one such counterpart.

I. Should any part, clause, provision or condition of this
Agreement be held to be void, invalid or inoperative, the parties agree that
such invalidity shall not affect any other part, clause, provision or condition
thereof, and that the remainder of this Agreement shall be effective as though
such void part, clause, provision, or condition had not been contained herein.

J. In the event of any litigation arising from this Agreement
the prevailing party shall be entitled to recover attorneys fees and costs
incurred therewith.

23. BROKER: Seller acknowledges that Seller is and shall be responsible
to pay a commission ("Commission") to First Property Realty and Charles A. Von
Stein, Inc., for services performed in finding a Buyer ready, willing and able
to purchase the Property pursuant to this Agreement. Said fee is payable by
Seller at time of closing. Seller agrees to indemnify Buyer and hold Buyer
harmless for any and all claims concerning Commissions that may arise in favor
of any person claiming by, through or under Seller. Buyer agrees to indemnify
Seller and hold Seller's harmless for any and all claim concerning Commissions
that may arise in favor if any person claiming by, through or under Buyer.

IN WITNESS WHEREOF, the parties have executed this Agreement on the
dates set forth below.
<TABLE>
<CAPTION>

SELLER:

COMMERCIAL VENTURE SERVICES, INC.
a Florida Corporation

<S> <C>
By: Executed by Seller on September , 1997
--------------------------------------
Authorized Agent

EQUITY ONE (GAMMA) INC.

By: Executed by Seller on September , 1997.
---------------------------------------
DORON VALERO, Vice President

ESCROW AGENT:

14
<PAGE>

Executed by Seller on September , 1997.
- ------------------------------------------
ALAN J. MARCUS

</TABLE>

15
<PAGE>

ADDENDUM

ADDENDUM TO THE CONTRACT DATED SEPTEMBER 24, 1997 BY AND BETWEEN EQUITY ONE
(GAMMA) INC., BUYER AND COMMERCIAL VENTURE SERVICES, INC. FOR THE REAL PROPERTY
KNOWN AS LANTANA VILLAGE SQUARE LOCATED IN LANTANA, PALM BEACH COUNTY, FLORIDA.

PAGE 3, PARAGRAPH 5A, INSPECTION AND CONDITION OF PROPERTY (DUE DILIGENCE
INSPECTION PERIOD) IS HEREBY AMENDED AS FOLLOWS:

THE BUYER SHALL HAVE UNTIL 8:00 P.M., OCTOBER 17, 1997 TO COMPLETE ITS DUE
DILIGENCE INSPECTION OF THE REAL PROPERTY (INSPECTION PERIOD) INSTEAD OF 6:00
P.M., OCTOBER 6, 1997 AS NOTED IN THE ORIGINAL CONTRACT.

ALL OTHER TERMS AND CONDITIONS SHALL REMAIN THE SAME.

BUYER:

EQUITY ONE (GAMMA), INC.

BY: /s/ ILLEGIBLE EXECUTED ON OCT. 2, 1997
--------------------------------

SELLER:

COMMERCIAL VENTURE SERVICES, INC.
a Florida Corporation

BY: /s/ ILLEGIBLE EXECUTED ON OCT. 7, 1997
--------------------------------

EXHIBIT 23.2

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Amendment No. 2 to Registration Statement
333-33977 of Equity One, Inc. and subsidiaries on Form S-11 of our report dated
February 15, 1997 (July 15, 1997 as to Note 10) appearing in the Prospectus
relating the consolidated financial statements of Equity One, Inc. as of
December 31, 1996 and 1995 and for each of the three years in the period ended
December 31, 1996, which is part of this Registration Statement, and of our
report dated February 15, 1997 relating to the financial statement schedule
appearing elsewhere in this Registration Statement.

We also consent to the reference to us under the headings "Selected Financial
Data" and "Experts" in such Prospectus.

Deloitte & Touche LLP

Miami, Florida
October 10, 1997

<PAGE>

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Amendment No. 2 to Registration Statement
333-33977 of Equity One, Inc. and subsidiaries on Form S-11 of our report dated
October 1, 1997 relating to the statement of revenues and certain expenses of
Lantana Village Square for the year ended December 31, 1996 appearing elsewhere
in the Prospectus, which is part of this Registration Statement.

We also consent to the reference to us under the headings "Selected Financial
Data" and "Experts" in such Prospectus.

Deloitte & Touche LLP

Miami, Florida
October 10, 1997

<PAGE>

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Amendment No. 2 to Registration Statement
333-33977 of Equity One, Inc. and subsidiaries on Form S-11 of our report dated
July 22, 1997 relating to the statement of revenues and certain expenses of West
Lake Plaza Shopping Center for the period from January 1, 1996 through November
5, 1996 appearing elsewhere in the Prospectus, which is part of this
Registration Statement.

We also consent to the reference to us under the headings "Selected Financial
Data" and "Experts" in such Prospectus.

Deloitte & Touche LLP

Miami, Florida
October 10, 1997

EXHIBIT 99.1

CONSENT OF ROBERT L. COONEY

The undersigned, a nominee for director of Equity One, Inc., a Maryland
corporation (the "Company"), hereby (i) consents to being nominated for the
position of director of the Company and agrees to serve as such if elected, and
(ii) consents to being named as a prospective director and/or director nominee
in the Company's Registration Statement on Form S-11 relating to the Company's
initial public offering of its common stock, and in the Prospectus contained
therein proposed to be circulated in connection with such offering, and all
amendments thereto.

Executed this 10th day of October, 1997.

/s/ ROBERT L. COONEY
-----------------------------------
Robert L. Cooney