EQUITY ONE INC, 424B1, 1998-05-15

EQUITY ONE INC
424B1, 1998-05-15
REAL ESTATE INVESTMENT TRUSTS

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4,700,000 Shares
[GRAPHIC OMITTED]

EQUITY ONE, INC.

Common Stock ($.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
("REIT") 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 16 shopping centers,
two mixed use (office/retail) properties, one office building, one mini-
warehouse facility, one restaurant property and certain other properties
acquired for renovation or development.
Of the 4,700,000 shares of Common Stock offered hereby (the "Offering"),
3,330,398 shares are being sold by the Company (580,288 shares of which are
being sold directly by the Company to M.G.N. (USA), Inc. ("M.G.N."), an
affiliate of the Company), and 1,369,602 shares are being sold by a stockholder
of the Company (the "Selling Stockholder"). See "Certain Transactions". The
Company will not receive proceeds from the sale of shares by the Selling
Stockholder. Prior to the Offering, there has been no public market for the
Common Stock. For information relating to the factors considered in determining
the initial public offering price, see "Underwriting". Upon completion of the
Offering, the shares of Common Stock offered hereby will represent 45.9% of the
outstanding Common Stock (49.4% if the Underwriters' over-allotment option is
exercised in full).
To assist the Company in maintaining its qualification as a REIT, ownership by
any person is limited to 9.9% of the aggregate outstanding Common Stock,
although the Company's Board of Directors has previously exempted certain
existing stockholders from this ownership limitation. The Common Stock has
been approved for listing on the New York Stock Exchange, subject to official
notice of issuance, 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. The Company is in no way related to, or affiliated with, Equity
Inns, Inc., Equity Office Properties Trust or Equity Residential Properties
Trust, or any other publicly-traded REIT. See "Glossary" beginning on page 109
for definitions of certain terms used in this Prospectus.

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
18, INCLUDING:
/bullet/ Dependence on key tenants, particularly Winn-Dixie and Publix
supermarkets, increases the potential impact on the Company of adverse
developments in the business of, or its relationship with, such tenants.
/bullet/ All but two of the Company's properties are located in Florida,
and therefore the Company may be adversely affected by a downturn in the
general economic conditions in such state.
/bullet/ The Company plans to develop and redevelop properties, despite no
experience as a developer and limited experience as a redeveloper, which
may increase the risk of loss in such activities.
/bullet/ Management and affiliates of the Company will own 59.3% of the
outstanding Common Stock after the Offering, and the public stockholders'
ability to influence the Company is limited by their minority positions,
the Company's organizational documents and Maryland law.
/bullet/ Certain members of management, particularly the Company's Chief
Executive Officer and Chief Operating Officer, are subject to conflicts of
interest in that they may engage in other activities, including other real
estate activities.
/bullet/ The Company would be subject to adverse tax consequences if it
fails to qualify as a REIT.
/bullet/ Since the Company's initial annual distribution is estimated at
93.3% of cash available for distribution, the Company may be required to
fund distributions from working capital or borrowings or reduce such
distribution.

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 PROCEEDS TO
PRICE TO DISCOUNTS AND PROCEEDS TO SELLING
PUBLIC COMMISSIONS(1) COMPANY(1)(2) STOCKHOLDER
----------------------- ---------------- ------------------ ------------------
<S> <C> <C> <C> <C>
Per Share ......... $ 11.00 $ .77 $ 10.23 $ 10.23
Total(3) .......... $ 45,316,832.00(4) $ 3,172,178.24 $ 34,516,793.30 $ 14,011,028.46
</TABLE>

(1) The 580,288 shares purchased by M.G.N. directly from the Company are not
subject to underwriting discounts and commissions. See "Certain
Transactions".
(2) Before deduction of expenses payable by the Company estimated at
$1,000,000. The underwriters of the Offering have agreed to reimburse the
Company $300,000 for expenses incurred by the Company in connection with
the Offering. See "Certain Transactions" and "Underwriting".
(3) 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 $53,071,832.00,
Underwriting Discounts and Commissions will be $3,715,028.24, Proceeds to
Company will be $41,728,943.30 and Proceeds to the Selling Stockholder
will be $14,011,028.46.
(4) Does not include $6,383,168 for the 580,288 shares purchased by M.G.N.
directly from the Company.
The Common Stock is offered by the several Underwriters when, as and if
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 May 19, 1998, against payment therefor in
immediately available funds.

CREDIT SUISSE FIRST BOSTON
MORGAN KEEGAN & COMPANY, INC.
THE ROBINSON-HUMPHREY COMPANY
Prospectus dated May 13, 1998
<PAGE>

[PHOTOGRAPHS OF STORE FRONTS OF CERTAIN OF THE TENANTS
OF THE COMPANY'S LAKE MARY SHOPPING CENTRE, LAKE MARY, FLORIDA
FOUR CORNERS SHOPPING CENTER, TOMBALL, TEXAS
OAK HILL SHOPPING CENTER, JACKSONVILLE, FLORIDA
BIRD LUDLUM SHOPPING CENTER, MIAMI, FLORIDA
THE INSIDE FRONT COVER ALSO CONTAINS THE FOLLOWING CAPTION
"PHOTOGRAPHS DEPICT CERTAIN PROPERTIES, AND DO NOT INCLUDE ALL PROPERTIES,
OWNED BY THE COMPANY"]

[MAP OF FLORIDA INDICATING THE LOCATION OF THE COMPANY'S SHOPPING CENTERS]

[COMPANY LOGO]

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 ............................. 1
The Company ................................... 1
Summary Risk Factors .......................... 2
Business and Growth Strategies ................ 5
Market Data ................................... 7
The Properties ................................ 8
Distributions ................................. 10
Mortgage Indebtedness and
Credit Facilities ........................ 11
Financing Policies ............................ 12
Possible Conflicts of Interest ................ 13
Benefits of the Offering to Existing
Stockholders, Including Management ....... 13
Restrictions on Ownership of
Common Stock ............................. 13
Control of the Company ........................ 14
Tax Status of the Company ..................... 15
Company Information ........................... 15
The Offering .................................. 15
Summary Consolidated Financial Data ........... 16
RISK FACTORS ................................... 18
The Company Is Dependent Upon
Certain Key Tenants ...................... 18
Geographic Concentration of the
Company's Properties Creates a Risk
of a Negative Impact as a Result of
Economic Downturns in Such Areas ......... 19
The Company Will Be Subject to Risks
Associated with its Entry into New
Markets .................................. 19
The Company Is Subject to Risks
Associated with Construction and
Development Activities ................... 19
Certain Indebtedness of the Company
May Be in Default ........................ 20
The Company Relies on Key Personnel
Who Conduct Other Business
Activities ............................... 20
Directors, Executive Officers and
Affiliates Have the Ability to Control
the Company .............................. 21
The Company Is Subject to Risks
Involving the Performance of the
Terms of the Settlement Agreement ........ 21
The Company Is Subject to Possible
Conflicts of Interest .................... 21
REIT Distribution Requirements and
the Company's Financial Condition
Will Affect the Amount of
Distributions to Stockholders ............ 21
Estimated Initial Cash Available for
Distribution May Not Be Sufficient to
Make Distribution at Expected Levels...... 22

</TABLE>
<TABLE>
<CAPTION>
PAGE
----------
<S> <C>
The Company Is Subject to Risks
Associated with the Real Estate
Industry ................................. 22
Failure to Qualify as a REIT Would
Cause the Company to Be Taxed as a
Regular Corporation ...................... 23
Costs of Compliance with Laws Could
Have an Adverse Effect on the
Company .................................. 24
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 ....................... 26
The Company is Subject to Risks
Involving Litigation with Albertsons ..... 27
Management of the Company Has Broad
Discretion in Determining How to
Apply a Significant Portion of the
Proceeds of the Offering ................. 28
Stockholder Approval Is Not Required
to Engage in Investment Activity ......... 28
Changes in Interest Rates Could
Adversely Affect the Company ............. 28
The Purchasers of Common Stock Will
Experience Dilution ...................... 28
The Price of the Common Stock May Be
Adversely Affected by the Lack of a
Prior Public Market and Fluctuations
in the Stock Market; The Offering
Price Is Not Based Upon Property
Valuations ............................... 28
The Company Could Be Affected by
Damage to Property Not Covered by
Insurance ................................ 29
The Company is Susceptible to
Year 2000 System Risk .................... 29
Availability of Shares of Common Stock
for Future Sale Could Adversely
Affect the Price of the Common
Stock .................................... 29
The Ability to Effect a Change of
Control of the Company Is Limited ........ 29
USE OF PROCEEDS ................................ 32
DISTRIBUTION POLICY ............................ 33
DILUTION ....................................... 37
CAPITALIZATION ................................. 38
SELECTED CONSOLIDATED
FINANCIAL DATA .............................. 39
MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS
OF OPERATIONS ............................... 41
Results of Operations ......................... 41
</TABLE>

i
<PAGE>

<TABLE>
<CAPTION>
PAGE
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<S> <C>
Mortgage Indebtedness ....................... 43
Liquidity and Capital Resources ............. 44
Inflation ................................... 45
BUSINESS ..................................... 46
General ..................................... 46
Business and Growth Strategies .............. 47
Market Data ................................. 51
The Properties .............................. 55
Redevelopment and Development
Properties ............................. 57
Major Tenants ............................... 58
Lease Expirations ........................... 59
Additional Information Concerning
the Existing Properties ................ 60
Property Management, Leasing and
Related Service Business ............... 64
Competition ................................. 64
Regulations and Insurance ................... 65
Environmental Matters ....................... 65
Employees ................................... 66
Legal Proceedings ........................... 66
MANAGEMENT ................................... 68
Directors and Executive Officers ............ 68
Management and Key Employees ................ 68
Directors' Compensation ..................... 70
Committees of the Board of Directors ........ 70
Executive Compensation ...................... 71
Employment Agreements ....................... 71
Insurance ................................... 72
Stock Option Plan ........................... 72
CERTAIN TRANSACTIONS ......................... 74
Settlement of Dispute Among the
Company and Certain Affiliates ......... 74
Transfer of Assets and Related In-Kind-
Distribution ........................... 75
Investment Agreement ........................ 75
Acquisition of Global Realty &
Management, Inc. ....................... 76
Loans to Executive Officers ................. 76
Consulting Agreements ....................... 77
Managed Properties .......................... 77
Registration Rights ......................... 77
Benefits of Offering to Existing
Stockholders, Including Management ..... 78
Use Agreement ............................... 78
Service Agreement ........................... 78
Reimbursement of Offering Related
Expenses ............................... 78
Other ....................................... 78

</TABLE>
<TABLE>
<CAPTION>
PAGE
----------
<S> <C>
POLICIES WITH RESPECT TO
CERTAIN ACTIVITIES ........................ 78
Investment Policies ......................... 78
Financing Policies .......................... 79
Conflicts of Interest Policies .............. 80
Redevelopment and Development
Policies ............................... 80
Policies with Respect to
Other Activities ....................... 80
PRINCIPAL AND SELLING
STOCKHOLDERS .............................. 81
DESCRIPTION OF CAPITAL STOCK ................. 83
Common Stock ................................ 83
Preferred Stock ............................. 84
Warrants .................................... 84
Restrictions on Ownership and Transfer
of Common Stock ........................ 85
Anti-Takeover Effects of Certain
Provisions of Maryland Law, and the
Company's Charter and Bylaws ........... 87
Advance Notice of Director Nominations
and New Business ....................... 89
Limitation of Liability and
Indemnification of Directors
and Officers ........................... 89
Transfer Agent and Registrar ................ 90
SHARES ELIGIBLE FOR FUTURE
SALE ...................................... 90
FEDERAL INCOME TAX
CONSIDERATIONS ............................ 92
Taxation of the Company ..................... 92
Failure to Qualify for Taxation
as a REIT .............................. 98
Taxation of U.S. Stockholders ............... 98
Backup Withholding .......................... 99
Taxation of Certain Tax-Exempt
Stockholders ........................... 100
Taxation of Non-U.S. Stockholders ........... 100
Taxpayer Relief Act of 1997 ................. 103
Proposed Tax Legislation .................... 103
Other Tax Consequences ...................... 103
ERISA CONSIDERATIONS ......................... 104
Fiduciary Considerations .................... 104
Plan Assets Issue ........................... 104
UNDERWRITING ................................. 106
LEGAL MATTERS ................................ 108
EXPERTS ...................................... 108
ADDITIONAL INFORMATION ....................... 108
GLOSSARY ..................................... 109
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 AND THE NOTES THERETO 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, ASSUMES
CONSUMMATION OF THE SETTLEMENT EMBODIED IN THE SETTLEMENT AGREEMENT AND
COMPLETION OF THE IN-KIND DISTRIBUTION (BOTH AS DEFINED HEREIN), AND ASSUMES
THAT THE UNDERWRITERS' OVER-ALLOTMENT OPTION IS NOT EXERCISED AND (III) ALL
REFERENCES TO SQUARE FOOTAGE REFER TO GROSS LEASABLE AREA ("GLA") AND
PERCENTAGES OF GLA AND SQUARE FOOTAGE ARE APPROXIMATE. SEE "GLOSSARY" BEGINNING
ON PAGE 109 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
15 Supermarket Centers, one drug store anchored neighborhood shopping center, a
shopping center located in Northeast Miami-Dade County, Florida which is being
comprehensively redeveloped into a 300,000 square foot Supermarket Center ("Sky
Lake"), two mixed-use (office/retail) properties, one office building, one
mini-warehouse facility and one restaurant property (collectively, the
"Existing Properties"). The Existing Properties are located primarily in the
Miami, Orlando and Jacksonville metropolitan areas of Florida, and in Texas,
and contain an aggregate of 2.1 million square feet of GLA.

In January 1998, the Company acquired a Supermarket Center consisting of
an aggregate of 85,300 square feet of GLA located in Lantana, Florida ("Lantana
Village") and has recently entered into agreements to purchase a Supermarket
Center consisting of an aggregate of 110,200 square feet of GLA located in Fort
Myers, Florida ("Summerlin Square") and a drug store anchored neighborhood
shopping 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 6.25 acres of land adjacent to
certain of the Existing Properties and recently agreed to purchase 4.4 acres of
vacant land located in Southwest Miami-Dade County, Florida, and 10.5 acres of
vacant land as part of the acquisition of Summerlin Square, substantially all
of which is intended for retail development. The Company also has an option to
purchase (the "Option") 10.0 acres of land in Southwest Miami-Dade County,
Florida ("Coral Way"), which property is commercially zoned and has received
county site plan approval for the development of a 100,000 square foot
Supermarket Center, and 6.7 acres of vacant land adjacent to certain of the
Existing Properties. The Option is exercisable by the Company for a period of
five years. See "Certain Transactions".

1
<PAGE>

Radio Shack, NationsBank, Play It Again Sports, Burger King and Chili's, as
well as local tenants such as Swim 'N Fun Pool Supply, Vision Works, Dollar
General, Rent A Center and United Consumer Club. 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 December 31, 1997, the Company's supermarket Anchor Tenants, other Anchor
Tenants and non-Anchor Tenants contributed 22.9%, 22.3% and 54.8%,
respectively, of the Company's aggregate annualized minimum rents and accounted
for approximately 30.2%, 21.7% and 48.1%, respectively, of GLA.

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 high 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 occupy 85% or more of GLA),
appropriately tenanted and well maintained ("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 requires attractive and
sustainable rates of return, and in acquiring Underperforming Supermarket
Centers, the Company seeks opportunities to increase revenues primarily through
renovation and retenanting.

The Company believes that its 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 December 31, 1993 to
December 31, 1997, the Company increased total assets and GLA to $126.9 million
and 2.0 million square feet, respectively, from $28.5 million and 600,000
square feet, respectively. For the year ended December 31, 1997, total revenues
and net income increased to $20.5 million and $6.2 million, respectively, from
$2.1 million and $49,000, respectively, for the year ended December 31, 1993.
For a discussion of the growth in the Company's funds from operations, see
"Summary Consolidated Financial Data" and "Selected Consolidated Financial
Data".

SUMMARY RISK FACTORS

Prospective investors should carefully consider the matters discussed
under "Risk Factors" prior to making an investment in the Common Stock which,
individually or in the aggregate, could have a material adverse effect on the
Company's financial condition, results of operations, liquidity, funds from
operations and its ability to make distributions to stockholders. These risks
include:

/bullet/ The Company's results of operations are dependent on certain key
tenants, particularly Winn-Dixie and Publix supermarkets, which
represented approximately 11.9% and 3.6%, respectively, of the Company's
aggregate annualized minimum rental revenues (i.e., fixed

2
<PAGE>

base rentals, excluding tenant reimbursements and percentage rents) for
leases in effect at December 31, 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/ The Company plans to develop and redevelop properties, despite no
experience as a developer and limited experience as a redeveloper, which
may increase the risk of loss in development and redevelopment.

/bullet/ Management and affiliates of the Company will own 59.3% of the
outstanding Common Stock after the Offering, and the public stockholders'
ability to influence the Company is limited by their minority positions,
the Company's organizational documents and Maryland law.

/bullet/ The parties who currently control the Company have agreed to a
settlement of litigation which will effectively result in a transfer of
control of the Company to affiliates of Chaim Katzman, the Company's
Chairman of the Board, President and Chief Executive Officer. Certain
portions of the settlement are required to be performed after the
consummation of the Offering. Should such performance fail to occur,
litigation among the parties (including the Company) may be resumed
seeking relief, including damages, which may adversely affect the Company.
No assurance can be given that performance of the Settlement Agreement
after consummation of the Offering will occur, or of the effect of any
non-performance on the Company or control of the Company. See "Certain
Transactions".

/bullet/ The Company is dependent on key personnel, particularly 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.

/bullet/ The business and affairs of the Company are controlled by its
Board of Directors which is controlled by certain affiliated stockholders
who may change the investment and other policies of the Company without
the consent of stockholders, which may adversely affect the Company.

/bullet/ Certain members of the Company's management, particularly Messrs.
Katzman and Valero, 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 (as defined in the
Glossary and described under "Distribution Policy") to stockholders.

/bullet/ The Company's estimated annual distribution following the Offering
will represent 93.3% of the Company's estimated cash available for
distribution (99.8% of the Company's cash available for distribution if
the over-allotment option granted to the Underwriters is exercised in
full), without giving effect to the interest earned on excess proceeds of
the Offering to be used in connection with development and redevelopment
activities, potentially requiring the Company to fund distributions from
working capital or borrowings. See "Distribution Policy".

3
<PAGE>

/bullet/ The Company would be taxed as a corporation if it fails to qualify
as a REIT for federal income tax purposes in which event the Company's
liability for certain federal, state and local income taxes would decrease
cash available for distribution.

/bullet/ The value of the Company's real estate investments is affected by
economic and other conditions, 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 factors,
individually or in the aggregate, may negatively impact the Company's
ability to make distributions to stockholders.

/bullet/ The Company is potentially liable for environmental matters and
the costs of compliance with certain governmental regulations, which may
have an adverse effect on the Company.

/bullet/ The Company is subject to litigation with Albertsons, which may
have an adverse effect on the Company.

/bullet/ The Company may be in default under certain of its existing
mortgages and consummation of the Offering may constitute a further
default under such mortgages.

/bullet/ The Company is subject to 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
not being repaid with proceeds of the Offering of approximately $61.9
million as of December 31, 1997 having maturity dates ranging from
February 1998 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 Company is able to incur additional debt, thereby increasing
its debt service, which could adversely affect the Company.

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

/bullet/ Purchasers of Common Stock in the Offering will incur immediate
and substantial dilution of $3.24 per share in the net tangible book value
per share of Common Stock.

/bullet/ There has been no prior public market for the Common Stock, and an
active trading market might not develop, or might not be maintained, which
may negatively impact the ability to sell Common Stock and the price at
which shares of Common Stock may be resold.

/bullet/ Fluctuations in interest rates or equity markets may negatively
impact the price at which shares of Common Stock may be resold and may
limit the Company's ability to raise additional capital to finance future
development.

4
<PAGE>

/bullet/ The possible issuance of additional shares of Common Stock after
completion of the Offering, including (i) 1,306,124 shares issuable upon
the exercise of outstanding warrants to purchase Common Stock and (ii)
1,000,000 shares reserved for issuance upon exercise of stock options
granted under the Company's 1995 Stock Option Plan, pursuant to which
options to purchase 664,000 shares have been granted, may adversely affect
the market price of the Common Stock or result in additional dilution.

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 relationships 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) Lantana Village in 1998, (ii) West Lake Plaza Shopping Center
("West Lake") and Forest Edge Shopping Center ("Forest Edge") in 1996,
(iii) Lake Mary Shopping Centre ("Lake Mary") and Pointe Royale
Shopping Center ("Pointe Royale") in 1995 and (iv) Bird Ludlum
Shopping Center ("Bird Ludlum") in 1994. The Company will target
Performing Supermarket Centers which are adaptable to expansion,
renovation and redevelopment, and, in order to maximize property
management efficiencies and present attractive leasing opportunities
to tenants who seek multiple locations in one area, are located
proximate to other Company owned Supermarket Centers or to one
another. When entering new markets, the Company considers its ability
to increase and concentrate holdings in order to achieve economies of
scale. See "Business--Business and Growth Strategies".

The Company has recently entered into an agreement to acquire Summerlin
Square for approximately $10.0 million. Summerlin Square is a Performing
Supermarket Center located in Fort Myers, Florida, which contains 110,200
square feet of GLA, as well as two parcels containing an aggregate of 10.5
acres of adjacent vacant land, represents aggregate annualized minimum
rental revenues of approximately $1.1 million and is anchored by
Winn-Dixie and Rite-Aid. The vacant land adjacent to Summerlin Square is
commercially zoned and intended for retail development. The Company has
also entered into an agreement to acquire Beauclerc Village, subject to
satisfaction of certain conditions, for approximately $3.0 million.
Beauclerc Village is a performing drug store anchored neighborhood
shopping center located in Jacksonville, Florida which contains 67,930
square feet of GLA, represents aggregate annualized minimum rental
revenues of approximately $300,000 and is anchored by a Walgreens. The
Company anticipates that both of these acquisitions will be consummated by
May 1998; however there is no assurance that the acquisitions will be
consummated.

/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 also

5
<PAGE>

requires attractive location and market demographics, availability on
favorable terms, and willingness of supermarket and other Anchor Tenants to
commit to lease space. Examples of the Company's enhancement of
Underperforming Supermarket Centers include East Bay Plaza ("East Bay"), Four
Corners Shopping Center ("Four Corners"), and Parker Towne Centre ("Parker
Towne"). East Bay, which was acquired in July 1993 at a 48.0% occupancy rate,
was 88.0% occupied at December 31, 1997; Four Corners, which was acquired in
January 1993 at a 76.0% occupancy rate, was 93.3% occupied at December 31,
1997; and Parker Towne, which was acquired in December 1993 at a 40.0%
occupancy rate, was 65.7% occupied at December 31, 1997. While the Company has
increased occupancy by 64.2% and redeveloped space since its acquisition, the
retenanting of Parker Towne is proceeding at a slower pace than anticipated.
The Company believes that its 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. See "Business--Business and
Growth Strategies".

/bullet/ REDEVELOPMENT AND DEVELOPMENT OF SUPERMARKET CENTERS. The Company will
redevelop existing and develop new Supermarket Centers with
characteristics similar to those of the Existing Properties. The
Company will consider development only if the overall economics of
developing a property appear to be more favorable than acquiring
and/or redeveloping an existing property. For example, the Company
acquired Sky Lake, which is being comprehensively redeveloped into a
300,000 square foot Supermarket Center. The redevelopment is expected
to cost $18.4 million and to be completed by September 1999. In
addition, the Company owns 6.25 acres of land adjacent to certain of
the Existing Properties, substantially all of which is intended for
retail development. The Company also has agreed to acquire 4.4 acres
of vacant land located in Southwest Miami-Dade County, Florida for
future development, contingent upon, among other things, the rezoning
of such property for commercial use. Additionally, the Company has
agreed to acquire an aggregate of 10.5 acres of vacant land intended
for retail development in connection with its purchase of Summerlin
Square, and has an Option to purchase Coral Way, which has received
site plan approval for development of a 100,000 square foot
Supermarket Center. Although the Company intends to complete pending
property acquisitions upon satisfaction of conditions and anticipates
that it will exercise the Option for Coral Way, there is no assurance
the pending property acquisitions will be consummated or the Option
will be exercised.

The Company has not previously developed shopping centers and has not had
extensive experience in redeveloping properties, although it has done so
on both a whole property basis, such as the redevelopment of the Company's
mixed use (office/retail) property located in West Palm Beach, Florida
("Diana Building"), as well as on an individual basis in order to meet
specific tenant needs, including at Parker Towne, where more than 100,000
square feet have been redeveloped as leased. In addition, certain members
of management have extensive experience in development and redevelopment
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 operations. See "Management" and
"Business--Business and Growth Strategies".

/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. 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".

6
<PAGE>

MARKET DATA

GENERAL

The Company retained Robert Charles Lesser & Co. ("Lesser"), nationally
recognized experts in real estate consulting and urban economics, to assess the
economic and demographic characteristics of the State of Florida, as well as
the three metropolitan areas in Florida (Miami, Jacksonville and Orlando) in
which 19 of the 21 Existing Properties are located. The discussion of these
markets set forth below is derived from the findings set forth in a market
overview prepared by Lesser (the "Lesser Market Overview"). The selected
economic and demographic characteristics (population, employment, retail sales
and food store sales) are key factors which indicate the strength of a market
for owning and operating Supermarket Centers. While the Company believes that
Lesser's views of economic and demographic trends in these areas are
reasonable, there can be no assurance that these trends will in fact continue.

POPULATION

Florida represented approximately 5.4% of the total population of the
United States or 14.6 million people, ranking it as the fourth largest state in
the nation. For the period 1990 to 1997, the total population of Florida
increased by approximately 1.7% annually, as compared to an approximately 1.0%
increase nationwide. Orlando, Jacksonville and Miami, which are the Company's
key sub-markets in Florida, have experienced annual population growth rates of
2.3%, 1.7% and 1.1%, respectively, each of which is higher than the national
average. Orlando was the sixth fastest growing major metropolitan area in the
United States between 1990 and 1997. For the period 1997 to 2002, population in
Florida is expected to increase annually by 1.4%, as compared to an annual
population growth rate nationwide of 0.9%. In the submarkets of Orlando,
Jacksonville and Miami, population is expected to increase annually by 2.0%,
1.8% and 1.1%, respectively.

EMPLOYMENT

For the period 1990 to 1997, employment in Florida increased annually by
2.5%, as compared to an annual growth rate of 1.6% nationwide. In the
submarkets of Orlando, Jacksonville and Miami, employment increased annually by
3.7%, 2.8% and 1.3%, respectively. For the period 1997 to 2002, employment in
Florida is expected to increase annually by 1.9%, as compared to an annual
employment growth rate nationwide of 1.3%. In the submarkets of Orlando,
Jacksonville and Miami, employment is expected to increase annually by 2.2%,
1.3% and 1.5%, respectively.

RETAIL SALES

For the period 1990 to 1997, retail sales in Florida increased annually by
6.2%, as compared to an annual growth rate of 4.8% nationwide. In the
submarkets of Orlando, Jacksonville and Miami, retail sales increased annually
by 7.1%, 5.8% and 5.3%, respectively, each of which is higher than the national
average. For the period 1997 to 2002, retail sales in Florida are expected to
increase annually by 6.4%, as compared to 5.5% nationwide. In the submarkets of
Orlando, Jacksonville and Miami, retail sales are expected to increase annually
by 6.7%, 5.1% and 5.0%, respectively.

FOOD STORE SALES

For the period 1990 to 1997, food store sales in Florida increased
annually by 3.4%, as compared to an annual growth rate of 2.3% nationwide. In
the submarkets of Orlando, Jacksonville and Miami, food store sales increased
annually by 6.6%, 4.1% and 2.5%, respectively.

7
<PAGE>

THE PROPERTIES

EXISTING PROPERTIES

The Existing Properties, consisting primarily of Supermarket Centers,
contain an aggregate of 2.1 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 December 31,
1997, the Existing Properties (excluding Lantana Village, which was acquired by
the Company in January 1998 and the restaurant property, which was acquired in
May 1998) were 93.0% leased to approximately 376 tenants (not including 505
tenants of the Company's mini-warehouse facility). The following table provides
a brief description of each of the Existing Properties:

<TABLE>
<CAPTION>
NET OPERATING AVERAGE
INCOME FOR MINIMUM
GLA THE YEAR RENT PER PERCENT
(SQ. FT.) ENDED SQ. FT. AS OF PERCENT LEASED AT
DATE AT DEC. 31, DEC. 31, DEC. 31, LEASED AT DEC. 31, CERTAIN
PROPERTY(1) ACQUIRED 1997 1997 1997 ACQUISITION 1997 TENANTS
- --------------------- ---------- --------------- ----------------- --------------- ------------- ---------- ---------------------
<S> <C> <C> <C> <C> <C> <C> <C>
SOUTH FLORIDA
Bird Ludlum August 192,327 $2,326,820 $ 12.88 96% 100% Winn-Dixie, Eckerd,
Shopping Center 1994 Blockbuster Video,
Miami, FL Vision Works,
Rainbow Shops,
Radio Shack, Boat
US Marine,
Barnett Bank, GNC
Plaza Del Rey December 50,146 $ 576,998 $ 11.90 82% 98% Navarro,
Shopping Center 1992 Rent A Center
Miami, FL
Pointe Royale July 199,068 $1,013,789 $ 5.64 96% 100% Winn-Dixie, Best
Shopping Center(2) 1995 Buy, Dollar Bills,
Miami, FL Household Finance
Company
Pointe Royale July 18,000 -- -- -- -- --
Office Building 1995
Miami, FL
West Lake Plaza November 100,747 $ 860,461 $ 9.90 96% 100% Winn-Dixie, Burger
Shopping Center(2) 1996 King, United
Miami, FL Consumer Club
Diana Building February 18,707 $ 75,683 $ 14.44 -- 55% Fat Tuesday's
West Palm Beach, FL 1995
Equity One April 28,980(3) $ 286,812 $ 12.29 -- 100% City of Miami
Office Building 1992 Beach Parking
Miami Beach, FL Department
Sky Lake August 60,839(4) $ 266,956(5) $ 12.13 100% 100% Humana,
N. Miami Beach, FL 1997 First Union Bank,
McDonald's
CENTRAL FLORIDA
East Bay Plaza July 81,826 $ 336,705 $ 7.47 48% 88% Scotty's, Hollywood
Shopping Center 1993 Video, Albertsons(6)
Largo, FL
Eustis Square October 126,791 $ 722,057 $ 6.88 95% 91% Publix, Bealls,
Shopping Center 1993 Walgreens, US Pak
Eustis, FL N Ship
Forest Edge December 68,631 $ 374,901 $ 6.77 100% 100% Winn-Dixie, Auto
Shopping Center 1996 Zone
Orlando, FL
Lake Mary November 288,450 $3,005,855 $ 10.91 97% 99% K-Mart, Albertsons,
Shopping Centre 1995 General Cinema,
Lake Mary, FL Play It Again
Sports, Chili's
Einstein Bros.
Bagels,
NationsBank,
Swim N Fun
</TABLE>

8
<PAGE>

<TABLE>
<CAPTION>
NET OPERATING
INCOME FOR
GLA THE YEAR
(SQ. FT.) ENDED
DATE AT DEC. 31, DEC. 31,
PROPERTY(1) ACQUIRED 1997 1997
- --------------------------- ---------- ------------- -------------------
<S> <C> <C> <C>
NORTH FLORIDA
Atlantic Village June 100,559 $ 775,619
Shopping Center(7) 1995
Atlantic Beach, FL
Commonwealth February 71,021 $ 419,744
Shopping Center 1994
Jacksonville, FL
Fort Caroline Trading January 74,546 $ 464,683
Post(8) 1994
Jacksonville, FL
Monument Pointe January 75,328 $ 385,283(10)
Shopping Center(9) 1997
Jacksonville, FL
Oak Hill Shopping Center December 78,492 $ 465,989
Jacksonville, FL 1995
Mandarin Mini-Storage May 52,880 $ 215,412
Jacksonville, FL 1994
TEXAS
DALLAS AREA
Parker Towne Centre December 201,927 $ 467,077
Plano, TX 1993
HOUSTON AREA
Four Corners January 115,178 $ 852,353
Shopping Center 1993
Tomball, TX
TOTAL/WEIGHTED
AVERAGE 2,004,443 $13,893,197
========= =============
RECENTLY ACQUIRED/PROPOSED
ACQUISITION PROPERTIES
Lantana Village January 85,300 $ 683,030
Shopping Center(11) 1998
Lantana, FL
Summerlin Square (12) 110,200 $ 969,819
Shopping Center
Fort Myers, FL
Beauclerc Village (14) 66,575 $ 386,371
Shopping Center
Jacksonville, FL
Restaurant Property May 10,000 --
Miami Beach, FL 1998

<CAPTION>
AVERAGE
MINIMUM
RENT PER PERCENT
SQ. FT. AS OF PERCENT LEASED AT
DEC. 31, LEASED AT DEC. 31, CERTAIN
PROPERTY(1) 1997 ACQUISITION 1997 TENANTS
- --------------------------- --------------- --------------- ---------- --------------------
<S> <C> <C> <C> <C>
NORTH FLORIDA
Atlantic Village $ 7.92 100% 94% Publix, Blockbuster
Shopping Center(7) Music, Village Shoe
Atlantic Beach, FL Box
Commonwealth $ 6.83 100% 95% Winn-Dixie, Subway
Shopping Center
Jacksonville, FL
Fort Caroline Trading $ 6.97 83% 92% Winn-Dixie, Eckerd,
Post(8) McDonalds
Jacksonville, FL
Monument Pointe $ 6.16 94% 98% Winn-Dixie, Eckerd
Shopping Center(9) First Union Bank
Jacksonville, FL
Oak Hill Shopping Center $ 6.65 96% 100% Publix, Walgreens,
Jacksonville, FL Blockbuster Video,
Little Caesars
Mandarin Mini-Storage $ 5.58 98% 95% --
Jacksonville, FL
TEXAS
DALLAS AREA
Parker Towne Centre $ 5.21 40% 66% Minyards,
Plano, TX Blockbuster Video,
Dollar General
HOUSTON AREA
Four Corners $ 9.07 76% 93% Kroger, Eckerd,
Shopping Center Wendy's,
Tomball, TX Mailboxes Etc.,
Rent A Center
TOTAL/WEIGHTED
AVERAGE $ 8.58 84% 93%
======= === ===
RECENTLY ACQUIRED/PROPOSED
ACQUISITION PROPERTIES
Lantana Village $ 9.64 100% 100% Winn-Dixie,
Shopping Center(11) Rite-Aid, Denny's
Lantana, FL
Summerlin Square $ 11.89 96%(13) 96% Winn-Dixie, Eckerd
Shopping Center
Fort Myers, FL
Beauclerc Village $ 5.93 100%(13) 100% Walgreens, Old
Shopping Center America, Big Lots
Jacksonville, FL
Restaurant Property -- 100% -- LHD Restaurant
Miami Beach, FL Corp., dba El
Novillo
</TABLE>

- --------------
(1) Does not include any redevelopment and development properties other than
SkyLake.
(2) Eckerd has vacated these sites, but continues to make lease payments.
(3) Includes 3,000 square feet of GLA which is occupied by the Company.
(4) Does not include 240,000 square feet of vacant GLA which is to be
redeveloped. See "--Redevelopment and Development Properties", "Use of
Proceeds", and "Business--Redevelopment and Development Properties".
(5) Represents net operating income for the four and one-half months ended
December 31, 1997.
(6) 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.
(7) Walgreens has vacated the site, but continues to make lease payments.
(8) Since its acquisition in 1994, Winn-Dixie's space has been increased by an
aggregate of 7,200 square feet.
(9) The acquisition cost of this property was $3.7 million.
(10) Represents net operating income for the eleven months ended December 31,
1997.
(11) The acquisition cost of this property was $6.8 million.
(12) Under contract to purchase at a cost of $10.0 million.
(13) Represents percentage leased as of the date of contract.
(14) Under contract to purchase at a cost of $3.0 million.
See "Business--Existing Properties", "--Major Tenants", "--Lease
Expirations", and "--Additional Information Concerning the Existing
Properties".

9
<PAGE>

REDEVELOPMENT AND DEVELOPMENT PROPERTIES

EXISTING PROPERTY

SKY LAKE. In August 1997 the Company acquired Sky Lake, an existing
community shopping center, for $11.8 million. Sky Lake is located in the North
Miami Beach, Florida area. Approximately 150,000 residents with household
incomes averaging $51,000 are located within a three mile radius of Sky Lake.
The Company is conducting a comprehensive redevelopment program at Sky Lake in
order to create a Supermarket Center containing 300,000 square feet of GLA. The
Company expects that the redevelopment will cost approximately $18.4 million
and will occur in several phases which are expected to be completed by
September 1999. The Company has entered into an agreement with Publix for the
lease of 51,000 square feet of redeveloped GLA at Sky Lake. During the
redevelopment, the Company expects to receive certain rental revenue from
tenants who will continue operations during the redevelopment process. As of
December 31, 1997, 61,000 square feet of such GLA, representing approximately
$738,000 of aggregate annualized minimum rental revenue, had been leased,
substantially all of which related to out-parcels located on the property.

LAND FOR DEVELOPMENT. The Company owns 6.25 acres of vacant land adjacent
to certain of the Existing Properties, substantially all of which the Company
intends to develop as retail space. The Company expects to commence
construction on 5.0 acres adjacent to Lake Mary and 0.5 acres adjacent to its
Commonwealth Shopping Center ("Commonwealth") 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, using proceeds
of the Offering. In addition, the Company has agreed to acquire (i) 4.4 acres
of land located in Southwest Miami-Dade County, Florida for future development
contingent upon, among other things, the rezoning of such property for
commercial use and (ii) an aggregate of 10.5 acres of vacant land located in
Fort Myers, Florida for future development as part of its acquisition of
Summerlin Square.

OPTION PROPERTY

CORAL WAY. The Company has an Option, exercisable for a period of five
years from the consummation of the Offering, to acquire 10.0 acres of vacant
land at Coral Way for $2.0 million. Coral Way is commercially zoned and has
received county site plan approval for the development of a 100,000 square foot
Supermarket Center. Coral Way is located in a newly rezoned high growth area of
Southwest Miami-Dade County, Florida. The Company anticipates that it will
exercise this Option and develop this property as a Supermarket Center to be
completed by December 1999, although there can be no assurance that it will do
so. The acquisition and development costs of Coral Way are anticipated to be
$12.0 million. See "Certain Transactions".

LAND FOR DEVELOPMENT. The Company also has an Option, exercisable for a
period of five years from the consummation of the Offering, to purchase 0.50
acres of vacant land adjacent to the Equity One Office Building, which property
is commercially zoned, and 6.20 acres of vacant land adjacent to Bird Ludlum,
which property is residentially zoned, for a purchase price of $1.7 million and
$1.1 million, respectively. The Company anticipates that it will exercise the
Option with respect to the vacant land adjacent to the Equity One Office
Building, although there can be no assurance that it will do so.

There can be no assurance that Sky Lake or any other redevelopment or
development project, including the Company's purchase and development of Coral
Way, will be completed or, if completed, will be successful. See
"Business--Redevelopment and Development Properties", "Policies with Respect to
Certain Activities--Redevelopment and 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

10
<PAGE>

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
June 30, 1998, and is anticipated to be in a prorated amount based upon a
quarterly distribution of $0.25 per share (which if annualized, would be $1.00
per share or an annual distribution rate of approximately 9.1% based on an
initial public offering price of $11.00 per share). Additionally, the Company
anticipates that its Board of Directors will declare a distribution immediately
prior to the consummation of the Offering for stockholders of record with
respect to a prorata portion of the anticipated quarterly distribution of $0.25
per share based on the number of days between and including April 1, 1998 and
the day immediately preceding the closing date, and will effect the In-Kind
Distribution (see "Certain Transactions"). 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 through March 31, 1999, 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 93.3% of its
estimated cash available for distribution for the four quarters following the
consummation of the Offering (99.8% if the over-allotment option granted to the
Underwriters is exercised in full). Cash available for distribution is funds
from operations (as defined in footnote 3 to the "Summary Consolidated
Financial Data" set forth below) as adjusted for certain capital expenditures
and scheduled principal payments ("Cash Available for Distribution"). The
Company's intended distributions are based on pro forma net income for the four
quarters ended March 31, 1999, as adjusted for certain events and contractual
commitments described in "Distribution Policy". This calculation is 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 March
31, 1999. 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 2.5% of the distributions intended to be
paid by the Company for the four quarters 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 December 31, 1997, the Company had total indebtedness of $71.0
million, all of which was fixed rate mortgage indebtedness bearing interest at
a weighted average annualized rate of 8.0% and collateralized by 15 of the
Existing Properties. As of such date, the percentage of the net book value of
the Company's rental properties that were encumbered by debt was 59.5%. 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 the Diana Building. At December 31, 1997, no amount was drawn
under this letter of credit. The Company's mortgage indebtedness contains
customary terms and conditions typically found in mortgages including, among
others, the requirement to preserve and maintain the properties, the

11
<PAGE>

requirement to maintain insurance on the properties, and restrictions upon the
incurrence of liens on the properties and upon changes in control of the
Company. 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 for a revolving line of credit of up
to $35.0 million to finance the acquisition, development and redevelopment of
properties and for general corporate purposes (the "Acquisition Line of
Credit"), to be secured by certain of the Company's unencumbered Existing
Properties and other properties to be acquired by the Company. See "Use of
Proceeds". Borrowings under the Acquisition Line of Credit will be limited to
70% of the current aggregate market values of the properties securing such line
of credit, will bear interest at 225 basis points over the London Interbank
Offered Rate ("LIBOR") and be due three years after the execution of a
definitive loan document. The Acquisition Line of Credit is expected to provide
a revolving line of credit for three years with interest due and payable each
month and the outstanding principal balance together with any accrued, unpaid
interest due upon maturity. In addition, the proposed terms of the commitment
for the Acquisition Line of Credit allow the lender to cease funding and/or
accelerate the maturity date of the Acquisition Line of Credit if neither Chaim
Katzman, the Company's Chairman of the Board, President and Chief Executive
Officer, nor Doron Valero, the Company's Executive Vice President and Chief
Operating Officer, remain as the executives in control of the Company. The
Company expects that the Acquisition Line of Credit will be subject to
customary conditions, including, among other things, the payment of commitment
fees and the required delivery of various title, insurance, zoning and
environmental assurances on the secured properties, and will contain various
covenants, such as a prohibition on secondary financing on any of the secured
properties. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations--Liquidity and Capital Resources". There can be no
assurance that the Acquisition Line of Credit will become or remain available
to the Company.

The Company has a line of credit from City National Bank of Florida in the
amount of $2.5 million collateralized by its mixed office and retail property
located in Miami Beach, Florida ("Equity One Office Building"). The Company
anticipates that this line of credit will be terminated upon the effectiveness
of the Acquisition Line of Credit. As of the date of this Prospectus, $2.5
million was outstanding under this line of credit. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations--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
(defined as total debt plus the market value of outstanding Common Stock). 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. Following the Offering, total debt will constitute
approximately 35.9% of the Company's total market capitalization (based upon an
initial public offering price of $11.00 per share and assuming no exercise of
the Underwriters' over-allotment option). 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
Activities--Financing Policies", "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Indebtedness", "--Liquidity and
Capital Resources" and Note 5 of Notes to Consolidated Financial Statements.

12
<PAGE>

POSSIBLE CONFLICTS OF INTEREST

The Company is subject to possible conflicts of interest. Pursuant to his
employment agreement with the Company, Chaim Katzman, the Company's Chairman of
the Board, President and Chief Executive Officer, is only required to devote 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 Inc., a public company whose securities are traded on the Tel
Aviv Stock Exchange and whose primary activity is its substantial investment in
the Company. Mr. Katzman intends to continue to focus his primary business
activities on the Company and, accordingly, devotes substantially all of his
time to the affairs of the Company. Mr. Katzman also currently 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. Doron Valero, the Company's Executive Vice
President, Chief Operating Officer and director, currently serves as the
President and director of, or has an ownership interest in, several entities
which own apartment properties in Florida. Although the Company does not
currently engage in activities outside the United States or acquire residential
properties, no assurance can be given that it will not do so in the future or
that its interests will not conflict with those of Messrs. Katzman or Valero.
See "Risk Factors--The Company Is Subject to Possible Conflicts of Interest"
and "Management--Employment Agreements".

BENEFITS OF THE OFFERING TO EXISTING STOCKHOLDERS, INCLUDING MANAGEMENT

The Selling Stockholder will sell all of its shares of Common Stock in
connection with the Offering (other than shares of Common Stock purchasable
upon exercise of Series C Warrants). Additionally, the Company's 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 and/or
warrants 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 9.9% 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., and M.G.N. (USA), Inc., and the Selling
Stockholder, 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".

13
<PAGE>

CONTROL OF THE COMPANY

Upon consummation of the Offering (and following consummation of all of
the transactions contemplated under the Settlement Agreement (as defined
herein)), control of the Company will be as follows:

[GRAPHIC OMITTED]

See "Principal and Selling Stockholders".

14
<PAGE>

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 and others, in the opinion of Greenberg
Traurig Hoffman Lipoff Rosen & Quentel, P.A., tax counsel to the Company, the
Company has been organized in conformity with the requirements for
qualification as a REIT under the Code beginning with the taxable year of the
Company starting January 1, 1995, and the method of operation of the Company
and its subsidiaries since January 1, 1995 has enabled the Company, and the
proposed method of operation of the Company will enable the Company, to meet
the requirements for qualification and taxation as a REIT under the Code. 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 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 funds from operations 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--Failure to Qualify as a REIT Would Cause the
Company to Be Taxed as a Regular Corporation". 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>
Common Stock offered by the Company ........... 3,330,398 shares(1)
Common Stock offered by the Selling
Stockholder .................................. 1,369,602 shares
Shares outstanding after the Offering ......... 10,238,528 shares(1)(2)
Use of Proceeds ............................... The net proceeds will be used for the repayment of the
Mortgage Indebtedness, the Performing Supermarket
Center Acquisitions and the Renovation and
Development of Existing Properties. See "Use of
Proceeds".
Risks of Offering ............................. See "Risk Factors", beginning on page 18.
New York Stock Exchange symbol ................ "EQY"
</TABLE>

- ----------------
(1) Assumes no exercise of the Underwriters' over-allotment option. See
"Underwriting".
(2) Does not include as of December 31, 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
664,000 shares of Common Stock have been granted and (ii) 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".

15
<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, 1995, 1996 and 1997 contained elsewhere herein. The consolidated
financial statements as of and for the years ended December 31, 1993, 1994,
1995, 1996 and 1997 have been audited by Deloitte & Touche LLP, independent
auditors. The data set forth below should be read in conjunction with the
consolidated 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 December 31,
1997 set forth below is presented as if the Pro Forma Adjustments (as defined
herein) had occurred on December 31, 1997. The unaudited pro forma consolidated
statement of operations data for the year ended December 31, 1997 are presented
as if the Pro Forma Adjustments and the acquisitions of Sky Lake and Monument
Pointe Shopping Center ("Monument Pointe"), had occurred on January 1, 1997.
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. The pro forma consolidated financial data does
not purport to represent the Company's actual financial position as of December
31, 1997 had the Pro Forma Adjustments occurred on December 31, 1997, or the
actual results of operations for the year ended December 31, 1997 had the Pro
Forma Adjustments and the acquisitions of Sky Lake and Monument Pointe occurred
on January 1, 1997, or to project the Company's financial position or results
of operations as of any future date or for any future period.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------------
PRO FORMA HISTORICAL
----------- -----------------------------------------------------------------
1997 1997 1996 1995 1994 1993
----------- ------------ ------------ ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Total revenues .......................... $ 23,638 $ 20,545 $ 16,714 $ 11,348 $6,198 $ 2,070
Operating expenses ...................... 6,397 5,693 4,832 3,293 2,236 665
Depreciation and amortization ........... 2,850 2,392 2,067 1,496 996 298
Interest ................................ 5,379 5,681 5,380 3,498 2,099 734
General and administrative expenses ..... 731 581 515 549 504 324
-------- -------- -------- -------- ------ -------
Total expenses ........................ 15,357 14,347 12,794 8,836 5,835 2,021
-------- -------- -------- -------- ------ -------
Net income .............................. $ 8,281 $ 6,198 $ 3,920 $ 2,512 $ 233(2) $ 49
======== ======== ======== ======== ======== =======
Basic earnings per share(1) ............. $ 0.85 $ 0.96 $ 0.79 $ 0.56 $ 0.07 $ 0.03
======== ======== ======== ======== ======== =======
Diluted earnings per share (1) .......... $ 0.81 $ 0.87 $ 0.69 $ 0.47 $ 0.07 $ 0.03
======== ======== ======== ======== ======== =======
</TABLE>

<TABLE>
<CAPTION>
PRO FORMA DECEMBER 31,
----------- --------------------------------------------------------
1997 1997 1996 1995 1994 1993
----------- ----------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total rental properties, before accumulated
depreciation ............................. $151,239 $126,441 $106,706 $92,770 $52,047 $22,491
Total assets .............................. 149,351 126,903 111,822 94,470 63,644 28,526
Mortgage notes payable .................... 61,896 71,004 66,831 60,583 32,690 15,543
Total liabilities ......................... 67,565 73,323 68,727 64,331 33,846 15,922
Stockholders' equity ...................... 81,786 53,580 43,095 29,139 28,798 12,604
</TABLE>

16
<PAGE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------
PRO FORMA HISTORICAL
----------- ------------------------------------------------------------
1997 1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
OTHER DATA:
Funds From Operations(3) .................. $ 10,761 $ 8,220 $ 6,136 $ 3,973 $ 1,308 $ 347
Ratio of earnings to fixed charges(4) ..... 2.54 2.09 1.73 1.72 1.11 1.07
Cash flows from:
Operating activities(5) .................. 11,131 8,843 6,680 3,469 2,433 (289)
Investing activities(6) .................. (18,809) (6,173) (18,277) (37,211) (29,755) (20,414)
Financing activities(7) .................. (11,958) (2,023) 12,778 27,441 32,726 20,671
Gross leasable area (square feet)
(at end of period) ....................... -- 2,004 1,807 1,670 1,003 583
Occupancy (at end of period) .............. -- 93% 91% 90% 80% 60%
</TABLE>

- ----------------
(1) Calculated in accordance with SFAS No. 128.

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

(3) 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 consolidated historical operating results of the
Company, FFO should be examined in conjunction with the income (loss) as
presented in the audited consolidated 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". FFO is derived from pro forma and historical net
income as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------
PRO FORMA HISTORICAL
----------- -----------------------------------------------
1997 1997 1996 1995 1994 1993
----------- --------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Net income ................................... $ 8,281 $6,198 $3,920 $2,512 $ 233 $ 49
Add:
Real estate depreciation and amortization .. 2,836 2,378 2,037 1,461 945 298
Non-recurring items(*) ..................... (356) (356) 179 -- 130 --
FFO .......................................... $10,761 $8,220 $6,136 $3,973 $1,308 $347
</TABLE>

- ----------------
(*) Reflects pre-payment penalties, write-offs of unamortized loan costs
related to repayment of debt, lease termination fees and income tax
expense as non-recurring.

(4) For the purposes of calculating the ratio of earnings to fixed charges,
earnings include pre-tax income 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.
(5) Pro forma cash flow from operating activities represents pro forma net
income plus depreciation and amortization. The pro forma amounts do not
include the results from changes in working capital resulting from changes
in current assets and current liabilities, or other changes.
(6) Pro forma cash flow used in investing activities represents estimated
capital expenditures for the four quarters subsequent to the Offering from
proceeds of the Offering.
(7) Pro forma cash flow used in financing activities represents estimated
mortgage loan principal payments and estimated dividends and distributions
(based upon an initial annual distribution of $1.00 per share) for the
four quarters subsequent to the Offering.

17
<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 IS DEPENDENT UPON CERTAIN KEY TENANTS

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

As of December 31, 1997, 308,864 square feet and 118,110 square feet, or
15.4% and 5.9% of the aggregate GLA owned by the Company, were leased to
Winn-Dixie and Publix, respectively, and these leases represented approximately
$1.9 million and $600,000, or 11.9% and 3.6%, respectively, of the aggregate
annualized minimum rental revenues from the Existing Properties. Further,
Winn-Dixie leases space at Lantana Village, acquired by the Company in January
1998, representing $293,000 of annualized minimum rent, and Summerlin Square,
which the Company has a contract to acquire, representing $262,000 of
annualized minimum rent, and has agreed to lease expanded space at Commonwealth
representing $144,000 of annualized minimum rent. Moreover, Publix has agreed
to lease space at Sky Lake representing $635,000 of annualized minimum rent.

The Company's financial condition, results of operations, liquidity, FFO
and its ability to make expected 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 such
as, General Cinemas or Eckerd, 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. No
assurance can be given that any Anchor Tenants (or other 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 financial condition,
results of operations, liquidity, FFO and its ability to make expected
distributions to stockholders. In three instances, drug store Anchor Tenants
have vacated their leased space; Eckerd has

18
<PAGE>

vacated its leased space at Pointe Royale and West Lake, and Walgreens has
vacated its leased space at Atlantic Village. These leases represented
approximately $300,000 and $372,000 of the Company's revenues for the year
ended December 31, 1996 and 1997, respectively. Although these tenants have
vacated their respective leased space, each tenant has continued to pay rent in
accordance with the terms of its lease. See "--Reliance on Tenants in Certain
Industries", "--The Company is Subject to Risks Involving Litigation with
Albertsons", "Business--Additional Information Concerning the Existing
Properties", and "Business--Legal Proceedings".

IMPORTANT TENANTS ARE CONCENTRATED IN CERTAIN INDUSTRIES

As of December 31, 1997, 606,191 square feet and 108,669 square feet, or
30.2% and 5.4% 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 $900,000, or 22.9% and 5.9%, respectively, of the
aggregate annualized minimum rental revenues from the Existing Properties. The
Company's financial condition, results of operations, liquidity, FFO and its
ability to make expected distributions to stockholders 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 freestanding
structures. Eckerd presently leases and continues to occupy 3.0% of the
aggregate GLA owned by the Company, representing approximately 3.3% of the
aggregate annualized minimum rental revenues from Existing Properties at
December 31, 1997. Walgreens, another drugstore chain Anchor Tenant, has also
vacated its leased space in Atlantic Village to locate to nearby free standing
space.

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

The Existing Properties are located exclusively in Florida and Texas.
Approximately 84.1% of the Existing Properties (based on GLA) are located in
Florida and represented $14.2 million, or 89.5%, of annual minimum rental
revenues as of December 31, 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, FFO and its
ability to make expected distributions to stockholders.

THE COMPANY WILL BE SUBJECT TO RISKS ASSOCIATED WITH ITS ENTRY INTO NEW MARKETS

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.

THE COMPANY IS SUBJECT TO RISKS ASSOCIATED WITH CONSTRUCTION AND DEVELOPMENT
ACTIVITIES

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 existing properties. See "Summary--Business and Growth
Strategies", "--Properties--Redevelopment and Development Properties" and "Use
of Proceeds". The Company has not developed any new Supermarket Centers,
although its management has undertaken

19
<PAGE>

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

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

The Company intends to pursue 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 governmental 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 only after securing commitments
from Anchor Tenants, the Company will nevertheless be subject to 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.

CERTAIN INDEBTEDNESS OF THE COMPANY MAY BE IN DEFAULT

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 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 mortgage holders declare
defaults under the mortgage documents, the Company will, if required, prepay
such mortgages from existing resources, any excess Offering proceeds, drawings
under the Acquisition Line of Credit, or other sources of financing. The
repayment of these mortgages could, among other things, affect the Company's
ability to make distributions in the anticipated amounts.

THE COMPANY RELIES ON KEY PERSONNEL WHO CONDUCT OTHER BUSINESS ACTIVITIES

The Company's ability to successfully execute its acquisition and growth
strategy 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 only required to devote so much of his business
time, attention, skill and efforts as shall be required for the faithful
performance of his duties. The loss of the services of either Mr. Katzman or
Mr. Valero could have a material adverse effect on the Company's financial
condition, results of operations, liquidity, FFO and its ability 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 "--The Company Is Subject to Possible Conflicts of
Interest".

20
<PAGE>

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

Management and affiliates of the Company will own 59.3% of the outstanding
Common Stock after the Offering, and the public stockholders' ability to
influence the Company is limited by their minority positions, the Company's
organizational documents and Maryland law.

Certain stockholders of the Company have entered into agreements to
control the Company following the Offering. Such stockholders will directly and
indirectly own and/or control an aggregate of 57.5% of the issued and
outstanding Common Stock of the Company after giving effect to the Offering.
Pursuant to the agreements, the parties have granted an irrevocable power of
attorney (the "Irrevocable Proxy") to Globe Reit, which is an affiliate of Mr.
Katzman, under which Globe Reit has the power 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. The parties to these agreements
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. There can be no
assurance that this group of stockholders will control the Company in a manner
that is favorable to either the Company or the other stockholders. See "Certain
Transactions" and "Principal and Selling Stockholders".

THE COMPANY IS SUBJECT TO RISKS INVOLVING THE PERFORMANCE OF THE TERMS OF THE
SETTLEMENT AGREEMENT

The parties who currently control the Company have agreed to a settlement
of litigation which will effectively result in a transfer of control of the
Company to affiliates of Chaim Katzman, the Company's Chairman of the Board,
President and Chief Executive Officer. Certain portions of the settlement are
required to be performed after the consummation of the Offering. Should such
performance fail to occur, litigation among the parties (including the Company)
may be resumed seeking relief, including damages, which may adversely affect
the Company and Mr. Katzman. No assurance can be given that performance of the
Settlement Agreement after consummation of the Offering will occur, or of the
effect of any non-performance on the Company or control of the Company. See
"Certain Transactions".

THE COMPANY IS SUBJECT TO POSSIBLE CONFLICTS OF INTEREST

Pursuant to his employment agreement with the Company, Mr. Katzman is only
required to devote 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. Mr. Katzman intends to continue to focus his primary
business activities on the Company and, accordingly, devotes substantially all
of his time to the affairs of 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. Mr. Valero currently serves as the
President and director of, or has an ownership interest in, several entities
which own apartment properties in Florida. Although the Company does not
currently engage in activities outside the United States or acquire residential
properties, no assurance can be given that it will not do so in the future or
that its interests will not conflict with those of Messrs. Katzman or Valero.

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,
the amount of distributions by the Company will be dependent on a number of
other factors, including the Company's financial condition, results of
operations and cash flows, which in turn will be influenced by new investments
in properties, debt service, capital expenditures and construction and
development activities.

Distributions by the Company to its stockholders will be based principally
on Cash Available for Distribution, and for the 12 months following the
Offering are expected to be 93.3% of Cash Available

21
<PAGE>

for Distribution (99.8% if the Underwriters' over-allotment option is exercised
in full). See "Distribution Policy". Subject to changes in expenses, debt
service and capital requirements, increases in base rent from the Existing
Properties and rents from other properties owned or acquired by the Company in
the future should increase Cash Available for Distribution, while decreases in
or cessations of rents should decrease Cash Available for Distribution. 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 estimated initial annual distributions represent 93.3% of
the Company's estimated initial Cash Available for Distribution for the 12
months ending March 31, 1999 (99.8% if the underwriters' over-allotment option
is exercised in full). Accordingly, the Company may not be able to make its
estimated initial distribution of $1.00 per share to stockholders out of Cash
Available for Distribution as calculated under "Distribution Policy" below.
Under such circumstances, the Company could be required to fund distributions
through borrowings under available lines of credit (if any), 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 Distributions to Stockholders".

THE COMPANY IS SUBJECT TO RISKS ASSOCIATED WITH THE REAL ESTATE INDUSTRY

THE VALUE OF THE COMPANY'S PROPERTIES IS 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
governmental 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 financial
condition, results of operations, liquidity, 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 ADVERSELY 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 at December 31, 1997, leases covering 188,624 square feet,
118,641 square feet and 181,613 square feet (representing 10.7%, 6.7% and
10.2%, respectively, of the total occupied GLA), will expire in 1998, 1999 and
2000, respectively. Based upon existing annualized minimum rental revenue, such
leases will represent $2.0 million, $1.4 million and $1.8 million of the
Company's annualized minimum rental revenue for the years ended December 31,
1998, 1999 and 2000, respectively. No Anchor Tenant lease expires 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.

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<PAGE>

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 freestanding 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. Freestanding 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. 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, including
REITs such as Regency Realty Corp. and Excel Realty Trust, 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. Such competition may reduce the number of
suitable development and redevelopment properties and increase the bargaining
position of the owners of those properties.

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
financial condition, results of operations, liquidity, FFO and its ability to
pay expected distributions to stockholders. The Company may be unable to
increase revenues to the same extent that its fixed costs increase.

FAILURE TO QUALIFY AS A REIT WOULD CAUSE THE COMPANY TO BE TAXED AS A REGULAR
CORPORATION

Although the Company 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

23
<PAGE>

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 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 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".

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

LIABILITY FOR ENVIRONMENTAL MATTERS COULD ADVERSELY AFFECT THE COMPANY

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"), Chapter 403 of the Florida Statutes,
the Florida Dry Cleaning Contamination Clean-Up Act and the Dade County
(Florida) Pollution Protection Ordinance, 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 of such laws, including CERCLA, typically impose 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. 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.

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 assurance 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 Existing Properties include plant-on-premises dry
cleaners, gasoline service stations and tire centers, photo development firms
and other

24
<PAGE>

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. Groundwater impacts have also been detected
at Atlantic Village, which is located in an area where a former municipal
landfill was operated. Buried refuse consistent with known landfill parameters
has been identified by the Company's consultants on the Atlantic Village site.
While these sites are not regarded by management as significant environmental
risks, if a material environmental condition does in fact exist (or exists in
the future) at these or other properties, it could have a significant adverse
impact upon the Company's financial condition, results of operations, liquidity
and FFO. 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.

As noted, tenants at the shopping centers include plant-on-premisis dry
cleaners. As a result of environmental site assessments conducted in the past
few months, low levels of perchloroethylene have been detected in soils at the
Commonwealth, Fort Caroline and Eustis Square properties. The Company
understands that the owners of these cleaners are applying to participate in
state funded dry cleaner's programs. 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
estimated will approximate $250,000. In addition, $500,000 was 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 liability to the Company. See
"Business--Environmental Matters".

COMPLIANCE WITH LOCAL BUILDING CODES AND ORDINANCES COULD ADVERSELY AFFECT THE
COMPANY

In developing a project, the Company must obtain the approval of various
state and local government authorities such as county and municipal commissions
regarding land use and building permits, the State Department of Transportation
regarding driveway access, and county water and sewer authorities regulating
water use, waste disposal, and drainage permits on the Existing Properties.
Several local 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 Miami-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,
Miami-Dade and Broward counties in Florida enacted stringent building codes,
such as the South Florida Building Code, 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

25
<PAGE>

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

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.

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 "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Indebtedness" and Note 5 of Notes to Consolidated
Financial Statements.

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 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 financial condition, results of operations,
liquidity, FFO 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.

The Company has received a commitment for the $35.0 million Acquisition
Line of Credit from City National Bank of Florida. Borrowings under the
Acquisition Line of Credit will be limited to 70% of the current aggregate
market values of the properties securing such line of credit, will bear
interest at 225 basis points over LIBOR and be due three years after the
execution of a definitive loan agreement.

26
<PAGE>

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. In addition, the terms of the commitment for the Acquisition Line
of Credit allow the lender to cease funding and/or accelerate maturity of the
Acquisition Line of Credit if neither Mr. Katzman nor Mr. Valero remain as the
executives in control of the Company. There can be no assurance that the
Company will ultimately obtain the Acquisition Line of Credit or any other line
of credit. Nor can there be any assurance that if the Company does receive the
Acquisition Line of Credit, Mr. Katzman and Mr. Valero will not cease to act as
the executives in control of the Company, which could accelerate the maturity
date of and cease all future financing under the Acquisition Line of Credit.
The failure to obtain, or the loss of, the Acquisition Line of Credit or any
other line of credit would adversely affect the Company's ability to pursue the
acquisition and development and redevelopment of properties. In particular, the
success of the Company's redevelopment of Sky Lake is dependent on the receipt
of the Acquisition Line of Credit or other source of financing in an amount
necessary to complete the redevelopment project. If the Company is unable to
secure financing to complete the Sky Lake redevelopment, the Company may be
unable to recover its initial investment in such property. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources".

As of December 31, 1997, the Company had total indebtedness of
approximately $71.0 million, all of which was fixed rate mortgage indebtedness
collateralized by 15 of the Existing Properties. The Company's existing
mortgage indebtedness contains customary terms and conditions typically found
in mortgages including, among others, the requirement to maintain insurance on
the properties, the requirement to preserve and maintain the properties and
restrictions upon the incurrence of liens on the properties and upon changes in
control of the Company See "--Certain Indebtedness of the Company May Prohibit
the Sale of Shares of Common Stock".

Upon consummation of the Offering, the Company's debt as a percentage of
total market capitalization (i.e., the market value of the issued and
outstanding shares of Common Stock, plus total debt) will be approximately
35.9%. The Board of Directors has adopted a policy limiting the Company's
indebtedness to approximately 50.0% of its total market capitalization. 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 financial condition, results of operations, liquidity, FFO and its
ability to make expected distributions to its stockholders and an increased
risk of default on the Company's obligations.

THE COMPANY IS SUBJECT TO RISKS INVOLVING LITIGATION WITH ALBERTSONS

On February 26, 1998, Albertsons commenced an action against a subsidiary
of the Company in the Circuit Court for the Eleventh Judicial District in and
for Miami-Dade County, Florida, alleging breach of a letter agreement and
seeking injunctive relief and the payment of damages in excess of $10.0 million
representing lost profits and other damages. This action was commenced in
response to the subsidiary's entering into a lease agreement with Publix for
anchor space at Sky Lake, following unsuccessful negotiations with Albertsons
respecting the lease of such space. On March 18, 1998, the Company filed a
motion to dismiss the complaint based upon various procedural grounds (the
"Motion"). As set forth in the Motion, the subsidiary has asserted that it did
not execute any lease agreement and that although the parties engaged in a
series of negotiations, there was never an offer and acceptance or a "meeting
of the minds" respecting the lease of space at Sky Lake. At a hearing on the
Motion held on March 26, 1998, the court dismissed with prejudice Albertsons'
claim for specific performance upon finding that no written lease existed which
could be specifically enforced. A ruling on the remaining issues raised in the
Motion was deferred until a future date. In the event that the remaining issues
raised in the Motion are decided adversely to the Company and the action is not
dismissed, the Company intends to defend this action fully and vigorously.
Although the Company

27
<PAGE>

believes that it has meritorious defenses to this action, an unfavorable result
in this action could adversely affect the Company's financial condition,
results of operations, liquidity, FFO and the ability to make expected
distributions to stockholders. See "Business--Legal Proceedings". Moreover,
even if the Company prevails in the action, its future relationship with
Albertsons may be damaged, resulting in loss or dimunition of leases with
Albertsons and future opportunities. See "Business--Major Tenants".

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, specifically those
proceeds that have been allocated to redevelopment and development activities.
This amount would be increased to the extent the Underwriters' over-allotment
option is exercised, or to the extent any other 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, liquidity, FFO and the Company's ability to make
expected distributions to its stockholders.

CHANGES IN INTEREST RATES COULD ADVERSELY AFFECT THE COMPANY

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 likely adversely affect the market price of
the Common Stock. 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 $3.24 per share ($3.08 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 AND FLUCTUATIONS IN THE STOCK MARKET; THE OFFERING PRICE IS NOT BASED
UPON PROPERTY VALUATIONS

Prior to the Offering, there has been no public market for the Common
Stock. Although the Common Stock has been approved for listing on the New York
Stock Exchange, subject to official notice of issuance, there can be no
assurance that an active trading market for the Common Stock will develop or
that, if developed, will be sustained. In connection with the Offering, neither
the Company nor the Underwriters have obtained appraisals or other valuations
of the Company's properties. The initial public offering price of the Common
Stock has been determined by negotiation among the Representatives of the
several Underwriters and the Company and may not reflect the fair market value
of the Company's properties. The Offering price may not be indicative of the
market price for the

28
<PAGE>

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".

THE COMPANY COULD BE ADVERSELY AFFECTED BY DAMAGE TO PROPERTY NOT COVERED BY
INSURANCE

The Company believes that it carries (or causes its tenants to carry)
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 its properties is adequate and in accordance
with industry standards. There are, however, certain types of losses (such as
from hurricanes) which may be or become 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 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.

THE COMPANY IS SUSCEPTIBLE TO YEAR 2000 SYSTEM RISK

Computer systems generally record date information in two digit format. As
a result, the year 2000 will be recorded at "00", which may result in an
operating system making errors, failing to properly recognize dates, or
refusing to process data. The Company has retained outside consultants to
ensure that the Company's systems are year 2000 compliant, and expects to
accomplish all requisite hardware and software updates during 1998 at a cost
not to exceed $50,000. The Company intends to make inquiry of its customers and
suppliers concerning their compliance to the extent it may impact the Company,
and to take appropriate actions in response.

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
5,538,528 shares held by current stockholders will be available for sale under
Rule 144 of the Act. Additionally, 1,000,000 shares of Common Stock have been
reserved for issuance under the Company's 1995 Plan, under which options to
purchase 664,000 shares have been granted. The Company intends to register
under the Act all 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 stockholders, the Company has granted
various registration rights to such stockholders. 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 a

29
<PAGE>

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 MAY BE 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 immediately 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 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. The Company's Board of Directors has previously
exempted from such provisions of the MGCL any business combination with an
officer and/or director of the Company or any affiliate of an officer and/or
director of the Company.

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 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 of the corporation 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.

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 statute, 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

30
<PAGE>

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 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".

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
1999, 2000 and 2001, respectively. Beginning in 1999, directors of each class
will be chosen for three-year terms upon the expiration of their current terms,
with one class of directors elected annually by the stockholders. The staggered
terms of directors may delay, defer or prevent a change in control or other
transaction because control of the Company's Board of Directors could not be
obtained at a single annual meeting of stockholders.

CAUSE AND A SUPERMAJORITY VOTE ARE 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 two-thirds of all
votes entitled to be cast generally in the election of directors. This
provision, when coupled with the provision in the Bylaws authorizing the Board
of Directors to fill vacant directorships, precludes stockholders from removing
incumbent directors (except upon the existence of Cause and a substantial
affirmative vote) and filling the vacancies created by such removal with their
own nominees.

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 9.9% 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, M.G.N. and the Selling Stockholder.

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 or other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications and terms
and conditions of redemption 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 issuance of preferred stock could be
utilized, under certain circumstances, as a method of delaying, deferring or
preventing a change in control of the Company or other transaction that might
involve a premium price for holders of Common Stock or otherwise be in their
best interest. Although the Company has no present intention to issue any
shares of 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 by the secretary of
the Company 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 Company's Charter, a majority of the votes
entitled to be 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.

31
<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 initial public offering price of
$11.00 per share and after deducting the underwriting discounts and commissions
and estimated Offering expenses, are estimated to be approximately $33.5
million ($40.7 million if the Underwriters' over-allotment option is exercised
in full). See "Principal and Selling Stockholders" and "Underwriting".

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
- -------------------------------------------------------------- --------------- --------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Repayment of Mortgage Indebtedness(1) ........................ $14,808 44%
Performing Supermarket Center Acquisitions(2) ................ 13,000 39
Renovation and Development of Existing Properties(3) ......... 5,100 15
------- --
Redevelopment of Sky Lake and Other Acquisitions(4) .......... 609 2
Total ...................................................... $33,517 100%
======= ===
</TABLE>

- ----------------
(1) 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) $0.8 million outstanding under a mortgage loan related
to East Bay obtained in 1993 which accrues interest at an annual rate of
8.25% and is due and payable in August 2000; (iii) $3.9 million oustanding
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; (iv) $5.0 million outstanding under a mortgage loan related to Sky
Lake obtained in 1997 which accrues interest at an annual rate of 7.0% and
is due and payable in August 1998 and (v) $2.0 million oustanding 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, (collectively, the "Mortgage Indebtedness"). See "Management's
Discussion of Financial Condition and Results of
Operations--Indebtedness".

(2) Represents approximately (i) $3.0 million to acquire Beauclerc Village,
which the Company has an agreement to purchase, and (ii) $10.0 million to
acquire Summerlin Square and 10.5 acres of adjacent vacant land, which the
Company has an agreement to purchase (collectively, the "Performing
Supermarket Center Acquisitions").

(3) Represents approximately (i) $850,000 to renovate Atlantic Village, (ii)
$450,000 to renovate and develop a pad site containing 6,000 square feet
of GLA at Commonwealth, (iii) $800,000 to renovate the office building at
Point Royale and (iv) $3.0 million to develop approximately 50,000 square
feet of additional GLA at Lake Mary (collectively the "Renovation and
Development of Existing Properties").

(4) Represents approximately $609,000 for the renovation and/or development of
retail space at Sky Lake. While the Company intends to designate such
proceeds for the renovation and/or development of retail space at Sky
Lake, such proceeds may be used by the Company for the acquisition of
additional properties or other uses where such use of proceeds would be
more favorable than alternative financing and provided that funds are
available under the then existing credit facilities for the development of
Sky Lake.

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 preferred stock of other publicly
traded REITs.

32
<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 June 30,
1998, is anticipated to be in a prorated amount based upon a quarterly
distribution of $0.25 per share (which, if annualized, would equal $1.00 per
share), or an annual yield of approximately 9.1% based on an initial public
offering price per share of $11.00. See "--Dividends". 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 93.3% of its estimated Cash Available for Distribution for the
four quarters following the consummation of the Offering (99.8% if the
over-allotment option granted to the Underwriters is exercised in full). In the
event the Company is not able to make its estimated initial distribution of
$1.00 per share out of Cash Available for Distribution, the Company could be
required to fund such distribution through borrowings under available lines of
credit (if any) or reduce the amount of such distribution. 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
March 31, 1999. 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. See "Risk Factors--Estimated Initial Cash Available for
Distribution May Not Be Sufficient to Make Distributions at Expected Levels".

The Company's intended annual distribution for the four quarters ending
March 31, 1999 is based on pro forma net income for the 12 months ending March
31, 1999, 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 or 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 contractual
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".

33
<PAGE>

The following table illustrates the adjustments made by the Company to its
pro forma FFO for the 12 month period ended December 31, 1997 in order to
calculate estimated Cash Available for Distribution for the 12 month period
ending March 31, 1999:

<TABLE>
<CAPTION>
IN THOUSANDS
----------------
<S> <C>
Pro forma net income for the year ended December 31, 1997 ............................ $ 8,281 (1)
Plus: Pro forma real estate depreciation and amortization ............................ 2,836
Non-recurring items ................................................................. (356)
-----------
Pro forma FFO for the 12 months ended December 31, 1997 .............................. 10,761
-----------
Adjustments:
Net increase in contractual rental income for months in effect ...................... 471 (2)
Net increase from new leases ........................................................ 1,657 (3)
Net effect of lease expirations, assuming no renewals ............................... (735)(4)
Net decrease in interest expense .................................................... 442 (5)
-----------
Estimated adjusted pro forma FFO for the 12 months ending March 31, 1999 ............. 12,596
Non-real estate amortization ......................................................... 193 (6)
-----------
Estimated adjusted pro forma cash flows from operating activities for the 12 months
ending March 31, 1999 .............................................................. 12,789
Estimated non-development related capital expenditures ............................... (100)(7)
Scheduled debt principal payments .................................................... (1,719)(8)
-----------
Estimated Cash Available for Distribution for the 12 months ending March 31, 1999 .... $ 10,970(9)
===========
Total estimated initial distributions ................................................ $ 10,239
===========
Estimated initial annual distributions per share ..................................... $ 1.00
===========
Payout ratio based on estimated Cash Available for Distribution ...................... 93.3 %
===========
</TABLE>

- ----------------
(1) See pro forma consolidated financial statements and related notes.

(2) This adjustment gives effect to the net increase in rental revenues for
contractual rental increases for the 12 month period ending March 31,
1999.

(3) Gives effect to the net increase in rental revenues attributable to leases
in effect on December 31, 1997, which were not in effect for the full 12
month period from January 1, 1997 to December 31, 1997 and from new fully
executed leases commencing on or after January 1, 1998.

(4) This adjustment gives effect to the net decrease in rental revenues for the
12 month period ending March 31, 1999 with respect to that portion of the
12 month period that such leases are no longer in effect and which are
attributable to leases expiring on or after December 31, 1997, assuming no
renewals.

(5) 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 December 31, 1997 to the 12 months ending March 31,
1999.
(6) Represents the amortization of financing costs for the 12 months ending
March 31, 1999.
(7) Assumes non-development related capital expenditures of approximately $0.05
per square foot of GLA.

(8) Calculations based on pro forma debt outstanding for the 12 months ending
March 31, 1999 and the principal payments related to such indebtedness.

(9) Does not include interest earned on proceeds of the Offering pending their
final application in connection with proposed acquisitions and development
and/or redevelopment activities. See "Risk Factors--Estimated Initial Cash
Available For Distribution May Not Be Sufficient to Make Distributions at
Expected Levels".

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, 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

34
<PAGE>

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.
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 gain from the sale of an asset
held for more than one year. On November 10, 1997, the IRS issued Notice 97-64,
in which it stated that temporary Treasury regulations will be issued providing
that a REIT that designates a dividend as a capital gain dividend also may
designate the dividend as a 20% rate gain distribution, an unrecaptured section
1250 gain distribution (taxable at a 25% rate) or a 28% rate gain distribution,
to the extent the net capital gain of the REIT consists of long-term capital
gains that, in the hands of the REIT, would be treated as falling in,
respectively, the 20% group, the 25% group or the 28% group of long-term
capital gains (and if no additional designation is made, the dividend is a 28%
rate gain distribution). 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 "--Estimated Initial Cash
Available for Distribution May Not Be Sufficient to Make Distributions at
Expected Levels ". 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.
There can be no assurance that the Company will adopt such a program.

DIVIDENDS

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

On March 24, 1998, the Board of Directors declared and paid a quarterly
distribution of $0.25 per share to all stockholders of record. The Company
anticipates that its Board of Directors will declare a distribution immediately
prior to the consummation of the Offering for stockholders of record with
respect to a prorata portion of the anticipated quarterly distribution of $0.25
per share based on the number of days between and including April 1, 1998 and
the day immediately preceding the closing date. The Company also anticipates
that the Board of Directors will declare a distribution for the

35
<PAGE>

period from and including the closing date to June 30, 1998, with stockholders
of record as of a record date established after the closing date receiving the
appropriate prorata portion of the anticipated quarterly distribution of $0.25
per share. Finally, immediately prior to the consummation of the Offering, the
Company will effect the In-Kind Distribution.

During 1997, the Company paid cash dividends of $0.215 per share, $0.225
per share, $0.2625 per share and $0.25 per share on March 31, June 18,
September 16, and December 18, respectively, to all stockholders of record on
those dates. Gross dividends paid by the Company for the year ended December
31, 1997 were $6.3 million.

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.

36
<PAGE>

DILUTION

The net tangible book value of the Company's Common Stock as of December
31, 1997 was $51.3 million, or approximately $7.42 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.

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 3,330,398 shares of Common Stock in the Offering at
an initial public offering price of $11.00 per share, and the application of
the estimated net proceeds therefrom, the pro forma net tangible book value of
the Company as of December 31, 1997 would have been $79.5 million, or $7.76 per
share. This would represent an immediate increase in net tangible book value of
$0.34 per share to the existing stockholders and an immediate dilution in net
tangible book value of $3.24 per share to purchasers of Common Stock in the
Offering, as illustrated in the following table.

<TABLE>
<S> <C> <C>
Initial public offering price per share of Common Stock(1) ............. $ 11.00
Net tangible book value at December 31, 1997 ......................... $ 7.42
------
Increase per share attributable to new investors ..................... $ 0.34
------
Pro forma net tangible book value after the Offering(2) ................ $ 7.76
-------
Net tangible book dilution per share to new investors(2)(3)(4) ......... $ 3.24
=======
</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 $7.92 and dilution of net
tangible book value per share to new investors would be $3.08.
(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 664,000 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 $0.25
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 a
decrease in dilution to new investors of $0.06 per share.

The following table sets forth as of December 31, 1997, the difference
between the existing stockholders (excluding shares purchased by M.G.N. in the
Offering) 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 initial offering price of $11.00 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)(2)(3) 67.5%(4) $56,001 60.5% $ 8.11
Investors in Offering ......... 3,330,398 32.5 36,634 39.5 11.00
----------- -------- ------- -----
Total ....................... 10,238,528 100.0% $92,635 100.0%
============ ======== ======= =====
</TABLE>

- ----------------
(1) Does not include 580,288 shares of Common Stock purchased by M.G.N. in the
Offering.
(2) Sale of Common Stock by the Selling Stockholder in the Offering will cause
the number of shares held by existing stockholders to be reduced to
5,538,528 or 54.1% of the total number of shares of Common Stock
outstanding after the Offering and will increase the number of shares held
by new stockholders to 4,700,000 or 45.9% of the total number of shares
outstanding after the Offering. See "Principal and Selling Stockholders".
(3) Does not include (i) 705,000 shares of Common Stock reserved for issuance
upon exercise of the Underwriters' over-allotment option, (ii) 664,000
shares of Common Stock reserved for issuance upon the exercise of
outstanding options under the 1995 Plan, (iii) 336,000 shares of Common
Stock reserved for issuance upon the exercise of options available for
future grant under the 1995 Plan, and (iv) 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 6 of Notes to Financial
Statements.
(4) If the Underwriters exercise their over-allotment option in full, the
Company's existing stockholders will own 49.4% of the shares of Common
Stock outstanding upon consummation of the Offering. See "Principal
Stockholders".

37
<PAGE>

CAPITALIZATION

The following table sets forth the capitalization of the Company as of
December 31, 1997 and as adjusted for the Pro Forma Adjustments, including the
sale of the 3,330,398 shares of Common Stock offered by the Company hereby at
an initial public offering price of $11.00 per share, the application of the
estimated net proceeds therefrom, and the In-Kind-Distribution. See "Use of
Proceeds".

<TABLE>
<CAPTION>
DECEMBER 31, 1997
----------------------------
ACTUAL AS ADJUSTED(1)
---------- ---------------
(IN THOUSANDS)
<S> <C> <C>
Mortgage notes payable ..................................................... $ 71,004 $ 61,896
-------- --------
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; 10,238,528 shares issued and
outstanding, as adjusted(2) ............................................. 69 102
Additional paid-in capital ................................................. 55,036 83,784
Notes receivable from stock sales .......................................... (1,525) --
Retained earnings (deficit) ................................................ -- (2,100)
-------- --------
Total stockholders' equity ............................................... $ 53,580 $ 81,786
======== ========
</TABLE>

- ----------------
(1) See pro forma consolidated financial statements and related notes.

(2) Does not include at December 31, 1997 (i) 705,000 shares of Common Stock
reserved for issuance upon exercise of the Underwriters' over-allotment
option, (ii) 664,000 shares of Common Stock reserved for issuance upon the
exercise of outstanding options under the 1995 Plan, (iii) 336,000 shares
of Common Stock reserved for issuance upon the exercise of options
available for future grant under the 1995 Plan, and (iv) 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".

38
<PAGE>

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

The unaudited pro forma consolidated balance sheet data as of December 31,
1997 set forth below is presented as if the Pro Forma Adjustments had occurred
on December 31, 1997. The unaudited pro forma consolidated statement of
operations data for the year ended December 31, 1997 are presented as if the
Pro Forma Adjustments and the acquisitions of Sky Lake and Monument Pointe had
occurred on January 1, 1997. 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. The pro forma
consolidated financial data do not purport to represent the Company's actual
financial position as of December 31, 1997 had the Pro Forma Adjustments
occurred on December 31, 1997, or the actual results of operations for the year
ended December 31, 1997 had the Pro Forma Adjustments and the acquisitions of
Sky Lake and Monument Pointe occurred on January 1, 1997, or to project the
Company's financial position or results of operations as of any future date or
for any future period.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------
PRO FORMA HISTORICAL
----------- ----------------------------------------------------------------
1997 1997 1996 1995 1994 1993
----------- ------------ ------------ ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Total revenues .............................. $ 23,638 $ 20,545 $ 16,714 $ 11,348 $6,198 $ 2,070
Operating expenses .......................... 6,397 5,693 4,832 3,293 2,236 665
Depreciation and amortization ............... 2,850 2,392 2,067 1,496 996 298
Interest .................................... 5,379 5,681 5,380 3,498 2,099 734
General and administrative expenses ......... 731 581 515 549 504 324
-------- -------- -------- -------- ------ -------
Total expenses ............................ 15,357 14,347 12,794 8,836 5,835 2,021
-------- -------- -------- -------- ------ -------
Net income .................................. $ 8,281 $ 6,198 $ 3,920 $ 2,512 $ 233(2) $ 49
======== ======== ======== ======== ======== =======
Basic earnings per share(1) ................. $ 0.85 $ 0.96 $ 0.79 $ 0.56 $ 0.07 $ 0.03
======== ======== ======== ======== ======== =======
Diluted earnings per share(1) ............... $ 0.81 $ 0.87 $ 0.69 $ 0.47 $ 0.07 $ 0.03
======== ======== ======== ======== ======== =======
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------------------------------------------------------
PRO FORMA
1997 1997 1996 1995 1994 1993
---------- ----------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total rental properties, before
accumulated depreciation ......... $151,239 $126,441 $106,706 $92,770 $52,047 $22,491
Total assets ....................... 149,351 126,903 111,822 94,470 63,644 28,526
Mortgage notes payable ............. 61,896 71,004 66,831 60,583 32,690 15,543
Total liabilities .................. 67,565 73,323 68,727 64,331 33,846 15,922
Stockholders' equity ............... 81,786 53,580 43,095 29,139 28,798 12,604
</TABLE>

39
<PAGE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------------
PRO FORMA HISTORICAL
----------- --------------------------------------------------------------------
1997 1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
OTHER DATA:
Funds From Operations(3) ............. $ 10,761 $ 8,220 $ 6,136 $ 3,973 $ 1,308 $ 347
Ratio of earnings to fixed
charges(4) ........................... 2.54 2.09 1.73 1.72 1.11 1.07
Cash flows from:
Operating activities(5) ............. 11,131 8,843 6,680 3,469 2,433 (289)
Investing activities(6) ............. (18,809) (6,173) (18,277) (37,211) (29,755) (20,414)
Financing activities(7) ............. (11,958) (2,023) 12,778 27,441 32,726 20,671
Gross leasable area (square feet)
(at end of period) ................. -- 2,004 1,807 1,670 1,003 583
Occupancy (at end of period) ......... -- 93% 91% 90% 80% 60%
</TABLE>

- ----------------
(1) Calculated in accordance with SFAS No. 128.

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

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------
PRO FORMA HISTORICAL
----------- -------------------------------------------------------
1997 1997 1996 1995 1994 1993
----------- --------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Net income .......................................... $ 8,281 $6,198 $3,920 $2,512 $ 233 $ 49
Add:
Real estate depreciation and amortization ......... 2,836 2,378 2,037 1,461 945 298
Non-recurring items(*) ............................ (356) (356) 179 -- 130 --
FFO ................................................. $10,761 $8,220 $6,136 $3,973 $1,308 $347
</TABLE>

- ----------------
(*) Reflects pre-payment penalties, write-offs of unamortized loan costs
related to repayment of debt, lease termination fees and income tax
expense as non-recurring.

40
<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 December 31, 1997, 1996 and 1995,
respectively, information regarding the nature and composition of the Company's
revenues and expenses expressed as a percentage of the Company's total revenues
which are set forth in the financial statements included elsewhere herein. 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 additional rent paid by tenants based upon achievements of certain
specified levels of gross sales. "Recoveries from tenants" is the tenants'
share of real estate taxes, insurance and common area maintenance expenses. The
information set forth below presents an analysis of certain trends relating to
the components of the Company's revenues and expenses.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
Aggregate minimum rental revenue ............ 73.36% 75.55% 73.44%
Percentage rent ............................. 0.84% 0.92% 1.15%
Recoveries from tenants ..................... 18.03% 18.34% 17.20%
Other income ................................ 7.77% 5.19% 8.21%
------ ------ ------
Total Revenues .............................. 100.00% 100.00% 100.00%
------ ------ ------
Operating expenses .......................... 27.71% 28.91% 29.02%
Depreciation and amortization ............... 11.64% 12.37% 13.18%
Interest .................................... 27.65% 32.19% 30.82%
General and administrative expenses ......... 2.83% 3.08% 4.84%
------ ------ ------
Total costs and expenses .................... 69.83% 76.55% 77.86%
------ ------ ------
Net income .................................. 30.17% 23.45% 22.14%
====== ====== ======
</TABLE>

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996

Total revenues increased by approximately $3.8 million, or 22.7%, to $20.5
million in 1997 from $16.7 million in 1996 primarily due to the first full year
of operations for West Lake, acquired by the Company in November 1996, and
Forest Edge, acquired in December 1996, and the acquisition of Monument Pointe
in January 1997 and Sky Lake in August 1997. Of such increase, approximately
$1.0 million, $532,000, $535,000 and $769,000 were attributable to West Lake,
Forest Edge, Monument Pointe and Sky Lake, respectively.

Operating expenses increased by approximately $861,000, or 17.9%, to $5.7
million in 1997 from $4.8 million in 1996, primarily as a result of a full year
of operations for West Lake and Forest Edge, as well as the Company's
acquisition of Monument Pointe and Sky Lake. However, for such periods,
operating expenses as a percent of revenues decreased to 27.7% from 28.9% due
to operating efficiencies based, in part, on owning more properties and in
concentrated areas.

41
<PAGE>

Depreciation and amortization expense increased by approximately $325,000,
or 15.5%, to $2.4 million in 1997 from $2.1 million in 1996 primarily as a
result of an increase in depreciable assets resulting from the Company's
purchase of West Lake, Forest Edge, Monument Pointe and Sky Lake.

Interest expense increased by approximately $301,000, or 5.5%, to $5.7
million in 1997 from $5.4 million in 1996 primarily as a result of increased
mortgage indebtedness incurred by the Company in connection with its purchase
of West Lake, Forest Edge, Monument Pointe and Sky Lake.

General and administrative expenses increased by approximately $66,000, or
12.8%, to $581,000 in 1997 from $515,000 in 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 2.8% from approximately 3.0% 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 $2.3 million, or
59.0%, to $6.2 million in 1997 from $3.9 million in 1996, and FFO increased by
$2.1 million, or 34.4%, to $8.2 million in 1997 from $6.1 million in 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 primarily 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, approximately
$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 $2.1 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
56.0%, 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.

42
<PAGE>

MORTGAGE INDEBTEDNESS

The following table sets forth certain information regarding mortgage
indebtedness of the Company related to the Existing Properties as of December
31, 1997:

<TABLE>
<CAPTION>
BALANCE
INTEREST PROJECTED ANNUAL DUE AT
RATE AMOUNT INTEREST PAYMENTS MATURITY DATE MATURITY(2)(3)
---------- ---------- ------------------- ------------------ ---------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
SOUTH FLORIDA
Bird Ludlum ................... 7.68% $13,093 $1,006 February 2015 $ 0
Plaza Del Rey ................. 8.125 2,903 236 September 2011 0
Pointe Royale ................. 7.95 5,673 451 July 2010 2,502
West Lake ..................... 7.875 5,822 458 June 2006 4,157
Sky Lake(1) ................... 7.00 7,000 490 February 1998(4) 7,000
CENTRAL FLORIDA
East Bay(1) ................... 8.25 908 75 August 2000 859
Eustis Square ................. 9.00 5,311 478 July 2002 4,322
Forest Edge(1) ................ 8.25 1,997 165 October 2002 1,597
Lake Mary ..................... 7.85 12,796 1,004 December 2010 5,569
NORTH FLORIDA
Atlantic Village(1) ........... 8.15 3,929 320 July 2002 3,294
Fort Caroline ................. 9.35 2,366 221 March 2002 2,078
Monument Pointe ............... 10.06 2,636 265 June 2001 2,564
Oak Hill ...................... 7.625 2,385 182 February 2006 1,703
Mandarin Mini-Storage ......... 6.375 1,211 77 May 1999 1,172
TEXAS
Four Corners (1) .............. 9.49 2,974 282 February 2003 2,785
</TABLE>

- ----------------
(1) The Company intends to retire the mortgages on each of these properties
from the net proceeds of the Offering immediately following consummation
of the Offering.
(2) With respect to the mortgage indebtedness to be repaid from the proceeds of
the Offering, the mortgage indebtedness on Atlantic Village and Forest
Edge do not have any prepayment penalties. East Bay and Four Corners
mortgage indebtedness have prepayment penalties of 1.0% and 2.0% of the
outstanding principal, respectively. 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 is the greater of 1.0% of the
outstanding principal balance or the present value differences in interest
rates at the time of prepayment.
(3) Does not include mortgage indebtedness of $4.4 million related to Lantana
Village, which property was acquired by the Company in January 1998. This
mortgage indebtedness accrues interest at an annual rate of 6.95% and is
due and payable in February 2008. Projected annual interest payments
respecting this mortgage indebtedness is $306,000. Also does not include
mortgage indebtedness of $3.3 million related to Commonwealth which was
incurred in February 1998. This mortgage indebtedness accrues interest at
an annual rate of 7.00% and is due and payable in February 2008. Projected
annual interest payments respecting this mortgage indebtedness is
$231,000.
(4) In February 1998, the Sky Lake mortgage was paid down to $5.0 million and
extended to August 1998.

The Company's mortgage indebtedness outstanding at December 31, 1997 and
expected to remain outstanding after the application of the net proceeds of the
Offering will require balloon principal payments of approximately $1.2 million,
$2.6 million, $6.4 million, $5.9 million and $8.1 million in 1999, 2001, 2002,
2006 and 2010, respectively, in addition to normal amortization throughout the
terms of the mortgages. 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 "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" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources".

43
<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 $15.4 million in 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 December 31, 1997, the Company had total indebtedness of
approximately $71.0 million, all of which was fixed rate mortgage indebtedness
bearing interest at a weighted average annualized rate of 8.0% and
collateralized by 15 of the Existing Properties. As of such date, the
percentage of the net book value of the Company's rental properties that were
encumbered by debt was 59.5%. 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 the Diana
Building. See "Risk Factors--Certain Indebtedness May Prohibit the Sale of
Shares of Common Stock" for a discussion of certain other restrictions.

The Company has received a commitment for the $35.0 million Acquisition
Line of Credit from City National Bank of Florida to be secured by certain of
the Company's unencumbered Existing Properties and other properties to be
acquired by the Company. See "Use of Proceeds". Borrowings under the
Acquisition Line of Credit will be limited to 70% of the current aggregate
market values of the properties securing such line of credit, bear interest at
225 basis points over LIBOR and be due three years after the execution of a
definitive loan document. The Acquisition Line of Credit is expected to provide
a revolving line of credit for three years with interest due and payable
monthly and outstanding principal balance together with any accrued, unpaid
interest due upon maturity. In addition, the terms of the commitment for the
Acquisition Line of Credit allow the lender to cease funding and/or accelerate
the maturity date of the Acquisition Line of Credit if neither Mr. Katzman nor
Mr. Valero remains as the executives in control of the Company. The Company
expects that the Acquisition Line of Credit will be subject to customary
conditions, including, among other things, the payment of commitment fees and
the required delivery of various title, insurance, zoning and environmental
assurances on the secured properties, and will contain various covenants, such
as a prohibition on secondary financing on any of the secured properties.

The Company has 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. As of the date of this Prospectus, $2.5 million 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 December 31, 1997, no
amount was drawn under this letter of credit.

The Company's principal demands for cash are expected to be acquisition,
development and redevelopment 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 apply the proceeds of the Offering to acquisitions, redevelopment
and renovation as described under "Use of Proceeds", and to continue the
redevelopment of Sky Lake, and acquire and develop Coral Way, primarily using
available liquid assets, cash from operations, then remaining proceeds of the
Offering and borrowings under available lines of credit.

44
<PAGE>

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 and drawings under the Acquisition Line of Credit,
will be adequate to meet the capital and liquidity needs of the Company for at
least 12 months. The Company's short-term liquidity will be enhanced by
Offering proceeds which initially will be temporarily invested and by the
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 Is Dependent
upon Certain Key Tenants", "--The Company Is Subject to Risks Associated with
the Real Estate Industry", "--Failure to Qualify as a REIT Would Cause the
Company to Be Taxed as a Regular Corporation", "--Costs of Compliance with Laws
Could Have an Adverse Effect on 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".

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.

45
<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 Supermarket Centers, one drug
store anchored Neighborhood Shopping Center, one Community Shopping Center
which is being comprehensively redeveloped into a 300,000 square foot
Supermarket Center, two mixed-use (office/retail) properties, one office
building, one mini-warehouse facility and one restaurant property
(collectively, the "Existing Properties"). The Existing Properties are located
primarily in the Miami, Orlando and Jacksonville metropolitan areas of Florida,
and in Texas, and contain an aggregate of 2.1 million square feet of GLA.

In January 1998, the Company acquired Lantana Village, a Performing
Supermarket Center, and has recently agreed to purchase Summerlin Square, a
Performing Supermarket Center consisting of 110,200 square feet of GLA located
in Fort Myers, Florida, and Beauclerc Village, a performing drug store anchored
neighborhood shopping center consisting of 67,930 square feet of GLA located in
Jacksonville, Florida.

The Company also owns an aggregate of approximately 6.25 acres of land
adjacent to certain of the Existing Properties and recently agreed to acquire
4.4 acres of vacant land located in Southwest Miami-Dade County, Florida, and
10.5 acres of vacant land as part of the acquisition of Summerlin Square,
substantially all of which is intended for retail development. The Company also
has an Option to purchase Coral Way, which property is commercially zoned and
has received county site plan approval for the development of a 100,000 square
foot Supermarket Center and 6.7 acres of vacant land adjacent to certain of the
Existing Properties. The Option is exercisable by the Company for a period of
five years. See "Certain Transactions".

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, Walgreens and
Eckerd. Non-Anchor Tenants of the Supermarket Centers include such well known
national and regional businesses as Einstein Bros. Bagels, Rainbow Shops,
Little Caesars, Boat US Marine, Video Avenue, General Nutrition Center, Radio
Shack, NationsBank, Play It Again Sports, Burger King and Chili's, as well as
local tenants such as Swim 'N Fun Pool Supply, Vision Works, Dollar General,
Rent A Center and United Consumer Club. 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
December 31, 1997, the Company's supermarket Anchor Tenants, other Anchor
Tenants and other Non-Anchor Tenants contributed 22.9%, 22.3% and 54.8%,
respectively, of the Company's aggregate annualized minimum rents and accounted
for approximately 30.2%, 21.7% and 48.1%, respectively, of GLA.

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 high visibility, open air designs, ease of entry and
exit and ample parking. The Company acquires both Performing Supermarket
Centers, which typically are substantially fully leased, appropriately tenanted
and well maintained, and Underperforming Supermarket Centers which meet the
Company's turnaround criteria. In acquiring Performing Supermarket Centers, the
Company

46
<PAGE>

requires attractive and sustainable rates of return, and in acquiring
Underperforming Centers, the Company seeks opportunities to increase revenues
primarily through renovation and retenanting.

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 relationships 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 throughout the Southeast that offer
attractive and sustainable rates of return having demographic characteristics
similar to those of its present markets. Examples of the Company's acquisitions
of Performing Supermarket Centers include (i) Lantana Village in 1998, (ii)
West Lake and Forest Edge in 1996, (iii) Lake Mary and Point Royale in 1995 and
(iv) Bird Ludlum in 1994. The Company will target Performing Supermarket
Centers which are adaptable to expansion, renovation and redevelopment, and, in
order to maximize property management efficiencies and present attractive
leasing opportunities to tenants who seek multiple locations in one area, are
located proximate to other Company owned Supermarket Centers or to one another.
The Company will seek Supermarket Centers which offer 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

47
<PAGE>

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.

The Company has recently entered into an agreement to acquire Summerlin
Square for approximately $10.0 million. Summerlin Square is a Performing
Supermarket Center located in Fort Myers, Florida, which contains 110,200
square feet of GLA, as well as two parcels containing an aggregate of 10.5
acres of adjacent vacant land, represents aggregate annualized minimum rental
revenues of approximately $1.1 million and is anchored by Winn-Dixie and
Rite-Aid. The vacant land adjacent to Summerlin Square is commercially zoned
and intended for retail development. The Company has also entered into an
agreement to acquire Beauclerc Village subject to the satisfaction of certain
conditions, for approximately $3.0 million. Beauclerc Village is a performing
drug store anchored neighborhood shopping center which contains 67,930 square
feet of GLA representing aggregate annualized minimum rental revenues of
approximately $300,000 and is anchored by a Walgreens. The Company anticipates
that both of these acquisitions will be consummated by May 1998; 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 favorable 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
also 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 market knowledge, 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.

When evaluating such acquisitions, the Company considers factors similar
to those applied in the acquisition of Performing Supermarket Centers, and will
complete such acquisitions only after a careful due diligence process,
including an in-depth study of the reasons for the center's failure to perform,
the

48
<PAGE>

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, aids it in obtaining preleasing expressions of interest before the
decision to acquire the property is made.

Examples of the Company's ability to enhance Underperforming Supermarket
Centers include East Bay, Four Corners and Parker Towne. East Bay, which was
acquired in July 1993 at a 48.0% occupancy rate, was 88.0% occupied at December
31, 1997; Four Corners, which was acquired in January 1993 at a 76.0% occupancy
rate, was 93.3% occupied at December 31, 1997; and Parker Towne, which was
acquired in December 1993 at a 40.0% occupancy rate, was 65.7% occupied at
December 31, 1997. While the Company has increased occupancy at Parker Towne by
64.2% and redeveloped 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 Existing Properties. The Company will consider
development only if the overall economics of developing a property appear to be
more favorable than acquiring and/or redeveloping an existing property. For
example, the Company acquired Sky Lake, which is being comprehensively
redeveloped into a 300,000 square foot Supermarket Center. The redevelopment is
expected to cost $18.4 million and to be completed by September 1999. In
addition, the Company owns 6.25 acres of land adjacent to certain of the
Existing Properties, substantially all of which is intended for retail
development. The Company also has agreed to acquire 4.4 acres of vacant land
located in Southwest Miami-Dade County, Florida for future development,
contingent upon, among other things, the rezoning of such property for
commercial use. Additionally, the Company has agreed to acquire an aggregate of
10.5 acres of vacant land intended for future development in connection with
its purchase of Summerlin Square, and has an Option to purchase Coral Way,
which has received site plan approval for development of a 100,000 square foot
Supermarket Center. Although the Company intends to complete pending property
acquisitions upon satisfaction of conditions and anticipates that it will
exercise the Option for Coral Way, there is no assurance the pending property
acquisitions will be consummated or the Option will be exercised.

The Company has not previously developed shopping centers and has not had
extensive experience in redeveloping properties, although it has done so on
both a whole property basis, such as the redevelopment of the Diana Building,
as well as on an individual basis in order to meet specific tenant needs
including at Parker Towne, where more than 100,000 square feet have been
redeveloped as leased. In addition, members of management cumulatively have
extensive experience in development and redevelopment activities.

Although the Company previously has 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 development and redevelopment
operations. See "Risk Factors--The Company Is Subject to Risks Associated with
Construction and Development Activities" and "Management".

49
<PAGE>

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. Most of the Company's
lease agreements provide for percentage rents, indexed rent increases (based on
CPI or other criteria) and/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, at Commonwealth, the Company has invested
$1.3 million to expand 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 March 1998 and (ii) extend its lease for an additional 20-year period.
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 their 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. 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. See "Risk
Factors--The Company is Subject to Risks Involving Litigation with Albertsons"
and "Legal Proceedings".

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 opportunities for a return on its investment. 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 December 31, 1997 was 100% occupied and generated net
operating income of approximately $287,000, as well as providing the Company's
3,000 square foot executive offices rent free. See "Redevelopment and
Development Properties".

50
<PAGE>

MARKET DATA

GENERAL

The Company retained Lesser, nationally recognized experts in real estate
consulting and urban economics, to assess the economic and demographic
characteristics of the State of Florida, as well as the three metropolitan
areas in Florida (Miami, Jacksonville and Orlando) in which 19 of the 21
Existing Properties are located. The discussion of these markets set forth
below is derived from the findings set forth in the Lesser Market Overview. The
selected economic and demographic characteristics (population, employment,
retail sales and food store sales) are key factors which indicate the strength
of a market for owning and operating Supermarket Centers. While the Company
believes that Lesser's views of economic and demographic trends in these areas
are reasonable, there can be no assurance that these trends will in fact
continue.

POPULATION

Florida represented approximately 5.4% of the total population of the
United States or 14.6 million people, ranking it as the fourth largest state in
the nation. For the period 1990 to 1997, the total population of Florida
increased by approximately 1.7% annually, as compared to an approximately 1.0%
increase nationwide and a 1.4% increase throughout the Southeastern United
States. Orlando, Jacksonville and Miami, which are the Company's key
sub-markets in Florida, have experienced annual population growth rates of
2.3%, 1.7% and 1.1%, respectively, each of which is higher than the national
average. Orlando was the sixth fastest growing major metropolitan area in the
United States between 1990 and 1997. For the period 1997 to 2002, population in
Florida is expected to increase annually by 1.4%. In the submarkets of Orlando,
Jacksonville and Miami population is expected to experience annual population
growth rates of 2.0%, 1.8% and 1.1%, respectively, as compared to an annual
population growth rate nationwide of 0.9% and an annual growth rate of 1.2%
throughout the Southeast.

[GRAPHIC OMITTED]

51
<PAGE>

EMPLOYMENT

For the period 1990 to 1997, employment in Florida increased annually by
2.5%, as compared to an annual growth rate of 1.6% nationwide and an annual
growth rate of 2.2% throughout the Southeastern United States. In the
submarkets of Orlando, Jacksonville and Miami, employment increased annually by
3.7%, 2.8% and 1.3%, respectively. For the period 1997 to 2002, employment in
Florida is expected to increase annually by 1.9%, as compared to an annual
employment growth rate nationwide of 1.3% and an annual employment growth rate
of 1.4% throughout the Southeast. In the submarkets of Orlando, Jacksonville
and Miami, employment is expected to increase annually by 2.2%, 1.3% and 1.5%,
respectively.

[GRAPHIC OMITTED]

52
<PAGE>

RETAIL SALES

For the period 1990 to 1997, retail sales in Florida increased annually by
6.2%, as compared to an annual growth rate of 4.8% nationwide and an annual
growth rate of 5.8% throughout the Southeastern United States. In the
submarkets of Orlando, Jacksonville and Miami, retail sales increased annually
by 7.1%, 5.8% and 5.3%, respectively, each of which is higher than the national
average. For the period 1997 to 2002, retail sales in Florida are expected to
increase annually by 6.4%, as compared to 5.5% nationwide and 5.7% throughout
the Southeast. In the submarkets of Orlando, Jacksonville and Miami, retail
sales are expected to increase annually by 6.7%, 5.1% and 5.0%, respectively.

[GRAPHIC OMITTED]

53
<PAGE>

FOOD STORE SALES

For the period 1990 to 1997, food store sales in Florida increased
annually by 3.4%, as compared to an annual growth rate of 2.3% nationwide and
3.5% throughout the Southeastern United States. In the submarkets of Orlando,
Jacksonville and Miami, food store sales increased annually by 6.6%, 4.1% and
2.5%, respectively.

[GRAPHIC OMITTED]

54
<PAGE>

THE PROPERTIES

The Existing Properties consist primarily of Supermarket Centers and
contain an aggregate of approximately 2.1 million square feet of GLA. As of
December 31, 1997, the Existing Properties (excluding Lantana Village, which
was acquired by the Company in January 1998, and the restaurant property, which
was acquired in May 1998) were 93.0% leased to approximately 376 tenants (not
including 505 tenants of the Company's mini-warehouse facility). 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 December 31, 1997. All references to net rent per
square foot are calculated without giving effect to vacant space, unless
otherwise specified.

<TABLE>
<CAPTION>
NET
OPERATING
INCOME
NUMBER FOR THE
OF YEAR ENDED
DATE TENANTS DECEMBER 31,
PROPERTY(1) ACQUIRED GLA (UNITS) 1997
- -------------------- -------------- --------------- --------- -----------------
<S> <C> <C> <C> <C>
SOUTH FLORIDA
Bird Ludlum August 11, 192,327 48 $2,326,820
Shopping Center 1994
Miami, FL
Plaza Del Rey December 50,146 20 $ 576,998
Shopping Center 1992
Miami, FL
Pointe Royale July 27, 199,068 21 $1,013,789
Shopping Center(2) 1995
Miami, FL
Pointe Royale July 27, 18,000(3) -- --
Office Building 1995
Miami, FL
West Lake Plaza November 6, 100,747 26 $ 860,461
Shopping Center(2) 1996
Miami, FL
Diana Building February 15, 18,707 4 $ 75,683
W. Palm 1995
Beach, FL
Equity One April 10, 28,980(4) 10 $ 286,812
Office Building 1992
Miami Beach, FL
Sky Lake August 19, 60,839(5) 18 $ 266,956(6)
N. Miami 1997
Beach, FL
CENTRAL FLORIDA
East Bay Plaza July 23, 81,826 18 $ 336,705
Largo, FL 1993
Eustis Square October 22, 126,791 21 $ 722,057
Shopping Center 1993
Eustis, FL
Forest Edge December 31, 68,631 13 $ 374,901
Shopping Center 1996
Orlando, FL

<CAPTION>
AVERAGE AVERAGE
MINIMUM MINIMUM
BASE BASE INITIAL
RENT PER RENT PER ACQUISITION &
SQ. FT. SQ. FT. REDEVELOPMENT PERCENT CERTAIN TENANTS
PROPERTY(1) (ANCHORS) (LOCALS) COSTS LEASED LEASE EXPIRATION DATES
- -------------------- ----------- ---------- --------------- --------- -------------------------------
<S> <C> <C> <C> <C> <C>
SOUTH FLORIDA
Bird Ludlum $ 11.55 $ 13.56 $20,397,500 100% Winn-Dixie (2007),
Shopping Center Eckerd (2007), Blockbuster
Miami, FL Video (2003), Vision
Works (2008), Rainbow
Shops (2003), GNC (2001),
Radio Shack (2000), Boat
U.S. Marine (1998), Barnett
Bank (1998)
Plaza Del Rey $ 9.59 $ 12.82 $ 3,831,000 98% Navarro (2001),
Shopping Center Rent A Center (2000)
Miami, FL
Pointe Royale $ 4.14 $ 9.78 $ 8,725,000 100% Best Buy (2010),
Shopping Center(2) Winn-Dixie (2011),
Miami, FL Dollar Bills (2004)
Household Finance
Company (2001)
Pointe Royale -- -- -- -- --
Office Building
Miami, FL
West Lake Plaza $ 8.41 $ 11.97 $ 7,930,000 100% Winn-Dixie (2016),
Shopping Center(2) Burger King (2007),
Miami, FL United Consumer
Club (1998)
Diana Building $ 14.76 $ 14.06 $ 1,514,000 55% Fat Tuesday's (2001)
W. Palm
Beach, FL
Equity One -- $ 12.29 $ 1,748,000 100% City of Miami Beach
Office Building Parking Department (1998)
Miami Beach, FL
Sky Lake $ 18.23 $ 11.85 $11,722,000 100% Humana (1998)
N. Miami First Union (2001)
Beach, FL McDonalds (2016)
CENTRAL FLORIDA
East Bay Plaza $ 6.88 $ 7.94 $ 1,610,000 88% Scottys (2001), Albertsons(7),
Largo, FL Hollywood Video (2007)
Eustis Square $ 5.73 $ 10.48 $ 7,249,000 91% Publix (2004), Bealls (2005),
Shopping Center Walgreens (2024)(3),
Eustis, FL US Pak N Ship (1999)
Forest Edge $ 5.78 $ 9.99 $ 3,100,000 100% Winn-Dixie (2007),
Shopping Center AutoZone (2006)
Orlando, FL
</TABLE>

55
<PAGE>

<TABLE>
<CAPTION>
NET
OPERATING AVERAGE
INCOME MINIMUM
NUMBER FOR THE BASE
OF YEAR ENDED RENT PER
DATE TENANTS DECEMBER 31, SQ. FT.
PROPERTY(1) ACQUIRED GLA (UNITS) 1997 (ANCHORS)
- ----------------------- -------------- ------------ --------- ------------------- -----------
<S> <C> <C> <C> <C> <C>
Lake Mary November 9, 288,450 51 $3,005,855 $ 9.71
Shopping Centre 1995
Lake Mary, FL
NORTH FLORIDA
Atlantic Village June 30, 100,559 24 $ 775,619 $ 5.15
Shopping Center(8)(9) 1995
Atlantic Beach, FL
Commonwealth February 28, 71,021 14 $ 419,744 $ 6.10
Shopping Center 1994
Jacksonville, FL
Fort Caroline January 21, 74,546 9 $ 464,683 $ 6.69
Trading Post(10) 1994
Jacksonville, FL
Monument Pointe January 31, 75,328 15 $ 385,283(12) $ 4.90
Shopping Center(11) 1997
Jacksonville, FL
Oak Hill Village December 7, 78,492 19 $ 465,989 $ 5.15
Shopping Center 1995
Jacksonville, FL
Mandarin Mini-Storage May 10, 52,880 505 $ 215,412 --
Jacksonville, FL 1994
TEXAS
Four Corners January 22, 115,178 24 $ 852,353 $ 8.39
Shopping Center 1993
Tomball, TX
Parker Tower Centre December 9, 201,927 21 $ 467,077 $ 4.22
Plano, TX 1993
Total/Weighted
Average 2,004,443 881 $13,893,197 $ 6.91
========= === ============= ======
RECENTLY ACQUIRED/
PROPOSED ACQUISITION
PROPERTIES
Lantana Village January 1998 85,300 26 $ 683,030 $ 7.75
Shopping Center(13)
Lantana, FL
Summerlin Square (14) 110,200 25 $ 969,819 $ 6.12
Shopping Center
Fort Myers, FL
Beauclerc Village (16) 66,575 10 $ 386,371 $ 5.33
Shopping Center
Jacksonville, FL
Restaurant Property May 1998 10,000 1 -- --
Miami Beach, FL

<CAPTION>
AVERAGE
MINIMUM
BASE INITIAL
RENT PER ACQUISITION &
SQ. FT. REDEVELOPMENT PERCENT CERTAIN TENANTS
PROPERTY(1) (LOCALS) COSTS LEASED LEASE EXPIRATION DATES
- ----------------------- ---------- --------------- --------------- ---------------------------------
<S> <C> <C> <C> <C>
Lake Mary $ 13.27 $ 20,850,000 99% K-Mart (2013),
Shopping Centre Albertsons (2012),
Lake Mary, FL General Cinema (2010),
Play It Again Sports (1998),
Chili's (2010), Einstein Bros.
Bagels (2001), NationsBank
(2008), Swim N Fun (2001)
NORTH FLORIDA
Atlantic Village $ 11.12 $ 5,950,000 94% Publix (2004), Blockbuster
Shopping Center(8)(9) Music (2001), Village Shoe
Atlantic Beach, FL Box (1999)
Commonwealth $ 7.81 $ 3,650,000 95% Winn-Dixie (2017), Subway
Shopping Center (1998)
Jacksonville, FL
Fort Caroline $ 8.57 $ 3,705,000 92% Winn-Dixie (2015),
Trading Post(10) Eckerd (2004),
Jacksonville, FL McDonalds (2018)
Monument Pointe $ 10.56 $ 3,731,000 98% Winn-Dixie (2005), Eckerd
Shopping Center(11) (2005), First Union (1998),
Jacksonville, FL
Oak Hill Village $ 9.41 $ 3,450,000 100% Publix (2005),
Shopping Center Walgreens (2019)(9),
Jacksonville, FL BlockbusterVideo (1999),
Little Caesars (2000)
Mandarin Mini-Storage $ 5.58 $ 1,810,000 95% --
Jacksonville, FL
TEXAS
Four Corners $ 9.80 $ 4,750,000 93% Kroger (2005), Eckerd
Shopping Center (2004), Wendy's (2010),
Tomball, TX Mailboxes Etc. (2007),
Rent A Center (1999)
Parker Tower Centre $ 6.56 $ 4,157,000 66% Minyards (2011),
Plano, TX Blockbuster Video (2002),
Dollar General (2000)
Total/Weighted
Average $ 10.73 $119,879,500 93%
======= ============ ===
RECENTLY ACQUIRED/
PROPOSED ACQUISITION
PROPERTIES
Lantana Village $ 12.77 $ 6,750,000 100% Winn-Dixie (2011), Rite-Aid
Shopping Center(13) (2015), Denny's (2004)
Lantana, FL
Summerlin Square $ 20.36 $ 10,000,000 96%(15) Winn-Dixie (2006), Eckerd
Shopping Center (2006)
Fort Myers, FL
Beauclerc Village $ 10.51 $ 3,000,000 100%(15) Walgreens (2003), Old
Shopping Center America (2009),
Jacksonville, FL Big Lots (1999)
Restaurant Property -- $ 1,250,000 100% LHD Restaurant
Miami Beach, FL Corp., dba
El Novillo
</TABLE>

- --------------
(1) Does not include any redevelopment and development properties other than
Sky Lake.
(2) Eckerd has vacated these sites, but continues to make lease payments.
(3) Represents GLA following redevelopment. See "Use of Proceeds".
(4) Includes 3,000 square feet of GLA occupied by the Company.
(5) Does not include 240,000 square feet of vacant GLA which is to be
redeveloped. See "--Redevelopment and Development Properties" and "Use of
Proceeds".
(6) Represents net operating income for the four and one half months ended
December 31, 1997.
(7) 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.
(8) Walgreens has vacated this site, but continues to make lease payments.
(9) Pursuant to its lease agreement, Walgreens may terminate the lease in
2004.
(10) Since its acquisition in 1994, Winn-Dixie's space has been increased by an
aggregate of 7,200 square feet.
(11) The acquisition cost of this property was $3.7 million.
(12) Represents NOI for the eleven months ended December 31, 1997.
(13) The acquisition cost of this property was $6.8 million
(14) Under contract to purchase at a cost of $10.0 million.
(15) Represents percent leased as of the date of contract.
(16) Under contract to purchase at a cost of $3.0 million.

56
<PAGE>

REDEVELOPMENT AND DEVELOPMENT PROPERTIES

EXISTING PROPERTY

SKY LAKE. In August 1997 the Company acquired Sky Lake, an existing
Community Shopping Center, for $11.8 million. Sky Lake is located in the North
Miami Beach, Florida area. Approximately 150,000 residents with household
incomes averaging $51,000 are located within a three mile radius of Sky Lake.
The Company is conducting a comprehensive redevelopment program at Sky Lake to
create a Supermarket Center containing 300,000 square feet of GLA. The Company
expects that the redevelopment will cost approximately $18.4 million and will
occur in several phases which are expected to be completed by September 1999.
The Company has entered into an agreement with Publix for the lease of 51,000
square feet of redeveloped GLA at Sky Lake. During the redevelopment, the
Company expects to receive certain rental revenue from tenants who will
continue operations during the redevelopment process. As of December 31, 1997,
61,000 square feet of such GLA, representing approximately $738,000 of
aggregate annualized minimum rental revenue, had been leased, substantially all
of which related to out-parcels located on the property.

LAND FOR DEVELOPMENT. The Company owns 6.25 acres of vacant land adjacent
to certain of the Existing Properties, substantially all of which the Company
intends to develop as retail space. The Company expects to commence
construction on 5.0 acres adjacent to Lake Mary and 0.5 acres adjacent to
Commonwealth 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, using proceeds of the Offering. In
addition, the Company has agreed to acquire (i) 4.4 acres of land located in
Southwest Miami-Dade County, Florida for future development contingent upon,
among other things, the rezoning of such property for commercial use and (ii)
an aggregate of 10.5 acres of vacant land located in Fort Myers, Florida for
future development as part of its acquisition of Summerlin Square.

OPTION PROPERTY

57
<PAGE>

The following table provides additional information with respect to
properties held for redevelopment and development and properties under Option.

<TABLE>
<CAPTION>
NUMBER OF DEVELOPABLE CURRENT
PROPERTY LOCATION ACREAGE PARCELS SQUARE FEET ZONING
- ----------------------------------------------------- ------------------ --------- ----------- --------------- ------------
<S> <C> <C> <C> <C> <C>
REDEVELOPMENT/ DEVELOPMENT
PROPERTIES
Sky Lake(1) ......................................... Miami-Dade, FL 24.00 1 285,000 Retail
Sky Lake(1) ......................................... Miami-Dade, FL 1.50 2 15,000 Retail
Adjacent to Commonwealth ............................ Jacksonville, FL 0.50 1 6,000 Retail
Adjacent to Fort Caroline ........................... Jacksonville, FL 0.50 1 7,000 Retail
Adjacent to Oak Hill ................................ Jacksonville, FL 0.25 1 6,000 Retail
Adjacent to Lake Mary ............................... Lake Mary, FL 5.00 1 70,000 Retail
Adjacent to Lantana Village ......................... Lantana, FL 0.50 1 6,000 Retail
Vacant Land(2) ...................................... Miami-Dade, FL 4.40 2 40,000 Retail
Vacant Land(3) ...................................... Fort Myers, FL 10.00 1 90,000 Retail
Vacant Land(3) ...................................... Fort Myers, FL 0.50 1 5,000 Retail
----- - -------
Total--Redevelopment/Development Properties ......... 47.15 12 530,000
----- -- -------
OPTION PROPERTIES
Coral Way (4) ....................................... Miami-Dade, FL 10.00 1 100,000 Retail
Adjacent to Bird Ludlum ............................. Miami, FL 6.20 1 150 Units Residential
Adjacent to Equity One Office Building(4) ........... Miami Beach, FL 0.50 2 50,000 Office
----- -- ---------
Total--Option Properties ............................ 16.70 4 150,000
----- -- ---------
Total ............................................... 63.85 16 680,000
===== == =========
</TABLE>

- ----------------
(1) See "Additional Information Concerning the Existing Properties".

(2) Under contract to purchase.

(3) Represents commercially zoned vacant land adjacent to Summerlin Square,
which is currently under contract to purchase.

(4) The Company anticipates that it will exercise the Option to purchase this
property and expects that development of this property will be completed
by December 1999.

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

MAJOR TENANTS

The following table sets forth the GLA of the Existing Properties leased
to Supermarket Anchor Tenants, other Anchor Tenants and non-Anchor Tenants as
of December 31, 1997.

<TABLE>
<CAPTION>
SUPERMARKET OTHER NON-ANCHOR
ANCHOR TENANTS ANCHOR TENANTS TENANTS TOTAL
---------------- ---------------- ----------- -------------
<S> <C> <C> <C> <C>
Existing Properties (sq. ft.) .......... 606,191 435,503 811,731 1,853,425
Percentage of Total Leased GLA ......... 32.7% 23.5% 43.8% 100.00%
</TABLE>

58
<PAGE>

The following table sets forth as of December 31, 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(1) ............. 308,864 7 $1,886,286 11.86%
General Cinemas ........... 35,712 1 633,888 3.98
Albertsons ................ 63,139 1 568,251 3.57
Eckerd(2) ................. 59,700 6 532,418 3.35
K-Mart .................... 86,479 1 497,254 3.13
Publix(3) ................. 118,110 3 567,080 3.56
Kroger .................... 45,528 1 373,332 2.35
Best Buy .................. 91,472 1 365,888 2.30
Blockbuster Video ......... 23,609 4 309,503 1.95
Walgreens(4) .............. 34,996 3 265,720 1.67
Minyard's ................. 70,550 1 253,980 1.60
------- - ---------- -----
Total ................... 938,159 29 $6,253,600 39.32%
======= == ========== =====
</TABLE>

- ----------------
(1) Does not include Winn-Dixie at Lantana Village which occupies 39,473 square
feet of GLA and represents approximately $293,000 of annualized minimum
rents, 12,000 square feet of additional GLA to be leased by Winn-Dixie at
Commonwealth representing $144,000 of annualized minimum rents, or 45,500
square feet of GLA leased by Winn-Dixie at Summerlin Square, which the
Company has under contract, representing $262,000 of annualized minimum
rents.

(2) Includes two stores which Eckerd has vacated but for which it continues to
pay rent. Does not include the Eckerd lease at Summerlin Square, which the
Company has agreed to purchase.

(3) Does not include Publix to be developed at Sky Lake which will occupy
51,000 square feet of GLA and will represent approximately $635,000 of
annualized minimum rents.

(4) Includes a store which Walgreens has vacated but for which it continues to
pay rent. Does not include the Walgreens lease at Beauclerc Village, which
the Company has agreed to purchase.

LEASE EXPIRATIONS

The following table sets forth the anticipated expirations of the
Company's leases at December 31, 1997 (excluding renewal options,
month-to-month and the Company's mini-storage facility) for each year from 1998
through 2007 and thereafter.

<TABLE>
<CAPTION>
PERCENT OF AVERAGE
PERCENT OF AGGREGATE ANNUAL
NUMBER OF GLA TOTAL ANNUALIZED ANNUALIZED MINIMUM RENT
DECEMBER 31, LEASES (SQ. FT.) OCCUPIED GLA MINIMUM RENT MINIMUM RENT PER SQ. FT.
- -------------------------- ----------- ----------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
1998 ..................... 77 188,624 10.64% $ 2,043,484 13.31% $ 10.83
1999 ..................... 73 118,641 6.69 1,440,654 9.38 12.14
2000 ..................... 82 181,613 10.24 1,846,792 12.03 10.17
2001 ..................... 44 134,208 7.57 1,340,368 8.73 9.99
2002 ..................... 33 80,072 4.52 932,427 6.07 11.64
2003 ..................... 11 32,276 1.82 330,683 2.15 10.25
2004(1) .................. 9 158,064 8.92 932,094 6.07 5.90
2005 ..................... 7 182,051 10.27 1,067,712 6.95 5.86
2006 ..................... 3 19,340 1.09 147,914 0.96 7.65
2007 ..................... 10 87,199 4.92 1,158,744 7.55 13.29
Thereafter ............... 18 590,880 33.32 4,116,244 26.80 6.97
-- ------- ------ ----------- ------ --------
Total/Average(2) ......... 367 1,772,968 100.00% $15,357,116 100.00% $ 8.66
=== ========= ====== =========== ====== ========
</TABLE>

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

(2) The table does not include leases at Lantana Village, the lease with Publix
at Sky Lake, the expansion of Winn-Dixie's lease at Commonwealth, or any
leases at Summerlin Square or Beauclerc Village.

Historically, the Company has not incurred substantial costs associated
with Tenant Improvements relating to lease expirations or renewals. However,
the Company recently incurred an expense of $1.3

59
<PAGE>

million in connection with the expansion of Winn-Dixie's space at Commonwealth.
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, 1997, two of the Supermarket Centers, Bird Ludlum and
Lake Mary, had either 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 192,327 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 Caesars. 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. The remaining 6.2 acres of vacant land will be transferred to the
Partnership (as defined herein) immediately prior to the consummation of the
Offering and will be subject to the Option. See "Certain Transactions".

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, 1995, 1996 and 1997, Winn-Dixie reported sales of $22.3 million,
$23.6 million and $23.3 million, respectively.

The following table sets forth a schedule of lease expirations and other
information concerning leases 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 .................. 10 40,060 20.83% $ 552,828 22.32% $ 13.80
1999 .................. 7 9,233 4.80 115,320 4.66 12.49
2000 .................. 8 25,390 13.20 313,820 12.67 12.36
2001 .................. 7 15,700 8.16 199,233 8.05 12.69
2002 .................. 6 12,875 6.69 210,506 8.50 16.35
2003 .................. 5 17,617 9.16 201,362 8.13 11.43
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 .................. 4 63,952 33.25 732,250 29.57 11.45
Thereafter ............ 1 7,500 3.91 151,162 6.10 20.15
-- ------ ------ ---------- ------ --------
Total/Average ......... 48 192,327 100.00% $2,476,481 100.00% $ 12.88
== ======= ====== ========== ====== ========
</TABLE>

60
<PAGE>

The average annual rental income per square foot of GLA at Bird Ludlum for
the years ended December 31, 1994, 1995, 1996 and 1997 was $18.61, $17.31,
$16.89 and $17.00, respectively.

At the time of its acquisition by the Company, Bird Ludlum was 96.0%
leased. For the years ended December 31, 1994, 1995, 1996 and 1997, the
percentage of Bird Ludlum that was leased was 99.0%, 100.0%, 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) approximately $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 51 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
Cinemas, Chili's, Burger King, Einstein Bros. Bagels, Carvel Ice Cream, Radio
Shack, Little Caesars and H&R Block. For a discussion of competition, see
"--Competition". See also "Risk Factors--The Company is Subject to Risks
Involving Litigation with Albertsons".

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 August 31, 1994, 1995, 1996 and 1997, K-Mart
reported sales of $7.5 million, $7.7 million, $8.2 million and $9.8 million,
respectively. 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 May 31, 1994, 1995, 1996
and 1997, Albertsons reported sales of $23.8 million, $25.6 million, $27.5
million and $28.3 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 and other
information concerning leases 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 .................. 7 9,228 3.30% $ 147,002 4.73% $ 15.93
1999 .................. 11 17,156 6.14 246,703 7.94 14.38
2000 .................. 9 16,110 5.77 182,043 5.86 11.30
2001 .................. 9 20,648 7.39 257,687 8.29 12.48
2002 .................. 6 12,938 4.63 198,598 6.39 15.35
2003 .................. 2 2,082 0.75 30,397 0.98 14.60
2004 .................. 1 2,000 0.72 21,000 0.68 10.50
2005 .................. 0 0 0.00 0 0.00 0.00
2006 .................. 0 0 0.00 0 0.00 0.00
2007 .................. 1 3,909 1.40 137,988 4.44 35.30
Thereafter ............ 5 195,229 69.90 1,886,479 60.69 9.66
-- ------- ------ ---------- ------ --------
Total/Average ......... 51 279,300 100.00% $3,107,897 100.00% $ 11.13
== ======= ====== ========== ====== ========
</TABLE>

61
<PAGE>

The average rental income per square foot of GLA at Lake Mary for the
years ended December 31, 1995, 1996 and 1997 was $12.30, $12.30 and $12.95,
respectively.

At the time of its acquisition by the Company, Lake Mary was 97.0% leased.
For the years ended December 31, 1995, 1996 and 1997, the percentage of Lake
Mary that was leased was 100.0%, 100.0% and 99.8%, 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 a Publix. For the year ended December 31, 1997, Publix
reported sales of $20.6 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. Walgreens has vacated this site, but continues 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 a Winn-Dixie. For the year ended
June 30, 1997, Winn-Dixie reported sales of $12.5 million. In February 1998,
the Company invested $1.3 million to expand Winn-Dixie's space by 12,000 square
feet and in return Winn-Dixie (i) increased its monthly minimum rent by
approximately $12,000, starting March 1998 and (ii) extended 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 9 tenants which is located in Jacksonville, Florida. Fort Caroline
is situated on 9.6 acres and is anchored by a Winn-Dixie and Eckerd. For the
year ended June 30, 1997, Winn-Dixie reported sales of $15.3 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 15 tenants located in Jacksonville, Florida. Monument Pointe
is situated on 7.3 acres and is anchored by a Winn-Dixie and Eckerd. For the
year ended June 30, 1997, Winn-Dixie reported sales of $17.6 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 a Publix and Walgreens. For the year ended December 31,
1997, Publix reported sales of $13.5 million.

EAST BAY. East Bay is a 81,826 square foot Supermarket Center occupied by
18 tenants located in Largo, Florida (in the Tampa metropolitan area). East Bay
is situated on 10.3 acres and is anchored by an Albertsons, Scotty's and
Hollywood Video. Albertsons is located on property contiguous to the Company's
property which is not owned by the Company.

EUSTIS SQUARE. Eustis Square is a 126,791 square foot Supermarket Center
occupied by 21 tenants located in Eustis, Florida. Eustis Square is situated on
13.5 acres and is anchored by a Publix, Beall's and Walgreens. For the year
ended December 31, 1997, Publix reported sales of $11.2 million.

FOREST EDGE. Forest Edge is a 68,631 square foot Supermarket Center
occupied by 13 tenants located in Orlando, Florida. Forest Edge is situated on
8.2 acres and is anchored by a Winn-Dixie and AutoZone. For the year ended June
30, 1997, Winn-Dixie reported sales of $11.8 million.

62
<PAGE>

PLAZA DEL REY. Plaza Del Rey is a 50,146 square foot shopping center
occupied by 20 tenants located in Miami-Dade County, Florida. Plaza Del Rey is
situated on 4.6 acres and is anchored by a Navarro's. For the year ended
December 31, 1997, Navarro's reported sales of $10.1 million.

POINTE ROYALE. Pointe Royale is a 199,068 square foot Supermarket Center
occupied by 21 tenants located in Cutler Ridge, Miami-Dade County, Florida.
Pointe Royale is situated on 14.5 acres and is anchored by a Best Buy and
Winn-Dixie. For the year ended June 30, 1997, Winn-Dixie reported sales of
$16.3 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 26 tenants located in Kendall Lakes, Miami-Dade County, Florida. West Lake
is situated on 8.8 acres and is anchored by a Winn-Dixie and Burger King. For
the year ended June 30, 1997, Winn-Dixie reported sales of $12.2 million.
Eckerd has vacated this site, but continues to make lease payments.

SKY LAKE. Sky Lake is a Community Shopping Center which is being
comprehensively redeveloped into a 300,000 square foot Supermarket Center. Sky
Lake is situated on 25.5 acres and is to be anchored by a Publix occupying
51,000 square feet of GLA. As of December 31, 1997, 61,000 square feet of GLA
were leased (other than to Publix), substantially all of which related to
out-parcels located on the property. As of December 31, 1997, the Company had
invested $2.1 million towards the redevelopment of this property. See "--Legal
Proceedings".

LANTANA VILLAGE. Lantana Village is an 85,300 square foot Supermarket
Center occupied by 26 tenants located in Lantana, Florida. Lantana Village is
situated on 8.5 acres and is anchored by Winn-Dixie and Rite-Aid. For the year
ended June 30, 1997, Winn-Dixie reported sales of $16.0 million.

FOUR CORNERS. Four Corners is a 115,178 square foot Supermarket Center
occupied by 24 tenants located in Tomball, Texas (Houston metropolitan area).
Four Corners is situated on 12.0 acres and is anchored by a Kroger and Eckerd.
For the year ended October 31, 1997, Kroger reported sales of $22.5 million.

PARKER TOWNE. Parker Towne is a 201,927 square foot Supermarket Center
occupied by 21 tenants located in Plano, Texas (Dallas metropolitan area).
Parker Towne is situated on 19.2 acres and is anchored by a Minyard's. For the
year ended December 31, 1997, Minyard's reported sales of $23.3 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 comprised of three parcels, which, in the aggregate, total 0.7
acres. Purchased in 1992, this property was completely redeveloped by the
Company. The property is adjacent to the Miami Beach City Hall and proximate to
the Miami Beach Convention Center. The property adjacent to the Equity One
Office Building, consisting of 0.5 acres of vacant land, will be transferred to
the Partnership immediately prior to the consummation of the Offering and will
be subject to the Option. See "Certain Transactions".

DIANA BUILDING. The Diana building is a 18,707 square foot mixed use
(office/retail) property currently occupied by four 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 505 tenants located in Jacksonville, Florida. The
property is situated on 2.8 acres.

RESTAURANT PROPERTY. The Company recently acquired a 10,000 square foot
restaurant property for one of the Company's tenants, which is leasing the
facility pursuant to a long-term operating lease. This property is situated on
2.1 acres.

63
<PAGE>

PROPERTY MANAGEMENT, LEASING AND RELATED SERVICE BUSINESS

The Company's property management and substantially all of its leasing
activities and operating and administrative functions (including leasing,
legal, construction, data processing, 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 provide 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 years ended December 31, 1996 and 1997, the Company earned
management fees of $229,995 and $247,782, 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, including
REITs such as Regency Realty Corp. and Excel Realty Trust, 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. When
completed, Sky Lake will compete with a nearby Publix anchored shopping center.
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 Is Subject to Risks Associated with the Real Estate
Industry".

64
<PAGE>

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 approvals necessary to be
maintained by the Company. For a discussion of the ADA and governmental
approvals regarding land use, levels of density, and utility services, among
others, see "Risk Factors--Costs of Compliance Could Have an Adverse Effect on
the Company" and "--The Company Could be Affected by Damage 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 not
economically justifiable.

ENVIRONMENTAL MATTERS

Under various federal, state and local laws, ordinances and regulations,
including, without limitation, CERCLA, Chapter 403 of the Florida Statutes, the
Florida Dry Cleaning Contamination Clean-Up Act and the Miami-Dade County
(Florida) Pollution Protection Ordinance, 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.

The Company believes that the environmental studies conducted to date have
not revealed any significant environmental liability that would have a material
adverse effect on the Company's financial condition, results of operations,
liquidity and FFO; however, no assurance can be given that

65
<PAGE>

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 now known to
the Company, or that a material environmental condition does not otherwise
exist (or may not exist in the future). 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.

As noted, tenants at the shopping centers include plant-on-premises dry
cleaners. As a result of environmental site assessments conducted in the past
few months, low levels of perchloroethylene have been detected in soils at the
Company's Commonwealth, Fort Caroline and Eustis Square properties. The Company
understands that the owners of these cleaners are applying to participate in
state funded dry cleaner's programs. 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
clean-up and the establishment of the escrow account, the Company has concluded
that the property does not pose a material environmental liability.

EMPLOYEES

At December 31, 1997, the Company had 24 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

On February 26, 1998, Albertsons commenced an action against a subsidiary
of the Company (the "Subsidiary") in the Circuit Court for the Eleventh
Judicial District in and for Miami-Dade County, Florida, alleging breach of a
letter agreement and seeking injunctive relief and the payment of damages in
excess of $10,000,000 representing lost profits and other damages. This action
was commenced in response to the Subsidiary's entering into a lease agreement
with Publix respecting Publix's lease of anchor space at Sky Lake. The
complaint alleges that Albertsons and the Subsidiary entered into a letter
agreement which the parties intended to be memorialized into a formal lease
agreement and as to which the parties intended to be bound. The complaint
further alleges that representatives of the Subsidiary had on several occasions
verbally assured Albertsons that they had an agreement with respect to the
lease of space at Sky Lake and that the Subsidiary was not negotiating with any
other prospective tenant for the lease of the space to be occupied by
Albertsons. The complaint also alleges

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<PAGE>

that Albertsons incurred considerable expenses in connection with, among other
things, the preparation of site evaluations, construction plans and surveys of
the subject property. On March 18, 1998, the Company filed a motion to dismiss
the complaint based upon various procedural grounds (the "Motion"). As set
forth in the Motion, the Subsidiary has asserted that it did not execute any
lease agreement and that although the parties engaged in a series of
negotiations, there was never an offer and acceptance or a "meeting of the
minds" respecting the lease of space at Sky Lake. At a hearing on the Motion
held on March 26, 1998, the court dismissed with prejudice Albertsons' claim
for specific performance upon finding that no written lease existed which could
be specifically enforced. A ruling on the remaining issues raised in the Motion
was deferred until a future date. In the event that the remaining issues raised
in the Motion are decided adversely to the Company and the action is not
dismissed, the Company intends to defend the action fully and vigorously.
Although, the Company believes that it has meritorious defenses to this action,
an unfavorable result in this action could adversely affect the Company's
financial condition, results of operations, liquidity, FFO and ability to make
expected distributions to stockholders.

Except as described above, neither the Company nor the Existing Properties
are subject to any material litigation. Further, to the Company's knowledge,
except as described above, 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. For information concerning recently settled litigation concerning
control of the Company, see "Certain Transactions".

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<PAGE>

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

Upon completion of the Offering, the Company's Board of Directors will
consist of seven members, including Messrs. Katzman and Valero, who are current
directors and the Company's principal executive officers, four other current
independent directors, and a fifth independent director who will be elected by
the Board. Messrs. Makavy and Wulkan, current directors of the Company, will,
pursuant to the terms of the Settlement Agreement, resign from the Board of
Directors immediately prior to the consummation of the Offering. Shulamit
Rozen-Katzman, a current director of the Company and the wife of Chaim Katzman,
will also resign at such time.

Pursuant to the Company's Bylaws, the Board of Directors is divided into
three classes of directors with one class, consisting of approximately
one-third of the members of the Board of Directors, elected annually by
stockholders. The Company believes that classification of the Board of
Directors will help to enhance 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 a majority of the outstanding shares of Common Stock will be able to elect
all of the directors whose terms expire at that meeting. Under the Company's
Charter, the affirmative vote of a majority of the entire Board of Directors is
required to approve any matter. Subject to rights granted pursuant to any
employment agreements, officers of the Company serve at the pleasure of the
Board of Directors.

Upon consummation of the Offering, certain stockholders of the Company
will be parties to agreements to control the Company. Such stockholders will
directly and indirectly own and/or control an aggregate of 57.5% of the
outstanding shares of Common Stock (53.8% if the over-allotment option granted
to the Underwriters is exercised in full). Pursuant to an Irrevocable Proxy,
Globe Reit, an affiliate of Mr. Katzman, will have the power to vote all of the
shares of the Common Stock of the stockholders who are parties to the
agreements for the election of directors through May 2001. As a result of these
agreements, 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 and Selling Stockholders" and "Certain
Transactions".

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

<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITION WITH THE COMPANY TERM EXPIRES
- -------------------------- ----- ------------------------------------------------------- -------------
<S> <C> <C> <C>
Chaim Katzman ............ 48 Chairman of the Board, President, 2000
Chief Executive Officer and Director
Doron Valero ............. 40 Executive Vice President, 2000
Chief Operating Officer and Director
David Bookman ............ 41 Vice President, Chief Financial Officer and Treasurer N/A
Alan J. Marcus ........... 41 Vice President, General Counsel and Secretary N/A
Noam Ben-Ozer ............ 33 Director 2001
Shaiy Pilpel ............. 47 Director 1999
Yuval Yanai .............. 45 Director 1999
Robert L. Cooney ......... 63 Director 2001
Ronald Chase ............. 52 Director Nominee 2000
</TABLE>

MANAGEMENT AND KEY EMPLOYEES

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

68
<PAGE>

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., certified public accountants. 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 has served as the Company's Secretary since August 1997 and
will become Vice President and General Counsel of the Company upon consummation
of the Offering. Mr. Marcus has been a member of the Florida Bar since 1984 and
has maintained a private practice in Miami-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.

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.

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 was elected as a director in November 1997. Mr. Cooney
served as a Managing Director of Equity Capital Markets of Credit Suisse First
Boston Corporation from 1978 to 1996. 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 capital markets and investment
banking.

RONALD S. CHASE will become a director of the Company immediately upon
consummation of the Offering. Mr. Chase has been the President and owner of
Chase Holdings & Advisory Services, Inc.,

69
<PAGE>

which provides financial advisory services to corporations and litigation
attorneys, since June 1991. In addition, Mr. Chase is the owner and has served
as President of each of RSC Development, Inc., a residential developer, and
CFAT H20, Inc., a water treatment facility, both of which are located in Ocala,
Florida, since approximately November 1993. Mr. Chase is a certified public
accountant who formerly served as Managing Partner of Deloitte & Touche, LLP.
Mr. Chase has served as a director of Capital Factors Holding, Inc., a publicly
traded company, and Capital Factors, Inc., since September 1992, and as a
director of Union Planters Bank of Florida, formerly Capital Bank, since July
1993. Mr. Chase received his B.S. in Business Administration from the
University of California in 1965.

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 receive, upon election to the Board of Directors
and annually thereafter, options to purchase 6,000 shares of Common Stock.
These options become exercisable over two years. In addition, each non-employee
director 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 and a 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 and a Compensation Committee since 1997. 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 that
in 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, Eli Makavy and Doron Valero. Upon Mr. Makavy's
resignation, which will occur immediately prior to the consummation of the
Offering, an independent director will be appointed to the Executive Committee.
See "Certain Transactions". 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 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. The Compensation Committee, whose members
include Messrs. Pilpel, Ben-Ozer and Yanai, makes recommendations with respect
to compensation of officers and key employees, including the granting of
options under the 1995 Plan.

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<PAGE>

EXECUTIVE COMPENSATION

The following table sets forth the compensation paid by the Company, for
services rendered during the year ended December 31, 1997, to the Company's
Chief Executive Officer and to each other executive officer whose total salary
and bonus exceeded $100,000 during such year (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 YEAR SALARY BONUS COMPENSATION UNDERLYING OPTIONS
- ---------------------------------------- ------ ----------- ---------- -------------- -------------------
<S> <C> <C> <C> <C> <C>
Chaim Katzman .......................... 1997 $254,400 -- (1) --
Chairman of the Board, President, 1996 $240,000 -- (1) 200,000(2)
and Chief Executive Officer
Doron Valero ........................... 1997 $190,800 -- (1) 30,000(2)
Executive Vice President and 1996 $180,000 $50,000 (1) 198,000(2)
Chief Operating Officer
David Bookman .......................... 1997 $ 90,000 $41,000 (1) 20,000(2)
Vice President, Chief Financial Officer 1996 $ 72,364 -- (1) --
and Treasurer
</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 seven 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 only
required to devote so much of his time, attention, skill and efforts as shall
be required for the faithful performance of his duties. 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 for 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 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

71
<PAGE>

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".

INSURANCE

The Company has obtained a directors and officers liability insurance
policy, effective upon consummation of the Offering, which provides insurance
in the amount of $7.5 million per director and/or officer per occurrence.
Subject to typical exclusions, the policy insures (i) the officers and
directors of the Company from any claim arising out of an alleged wrongful act
by the directors and/or officers in their respective capacities and (ii) the
Company to the extent that the Company has indemnified its directors and/or
officers for such losses.

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, 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
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

72
<PAGE>

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
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 664,000 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 an aggregate of
160,500 shares are currently exercisable, options to purchase an aggregate of
310,750 shares are exercisable as of December 31, 1998, options to purchase an
aggregate of 466,000 shares are exercisable as of December 31, 1999, options to
purchase an aggregate of 621,250 shares are exercisable as of December 31,
2000, options to purchase an aggregate of 659,000 shares are exercisable as of
December 31, 2001 and options to purchase an aggregate of 664,000 shares are
exercisable as of December 31, 2002. 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, 336,000 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 years ended December
31, 1997 and 1996, and represents all options granted by the Company to such
Named Officers for the periods. 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
------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES IN EXERCISE PRICE EXPIRATION
NAME YEAR GRANTED (#) FISCAL YEAR ($/SH) DATE
- ------------------------- ------ ------------- -------------- ---------------- --------------
<S> <C> <C> <C> <C> <C>
Chaim Katzman ........... 1997 -- -- -- --
Chairman of the Board, 1996 200,000 40.2% $ 12.375(1) 12/31/05
President and Chief
Executive Officer
Doron Valero ............ 1997 30,000 20.5% $ 12.375 12/31/06
Executive Vice President 1996 198,000 39.8% (3) (4)
and Chief Operating
Officer
David Bookman ........... 1997 20,000 13.7% 12.375 12/31/06
Vice President, Chief 1996 -- -- -- --
Financial Officer
and Treasurer

<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATE OF
STOCK PRICE APPRECIATION
FOR OPTION TERM
---------------------------------------
NAME 5%($) 10%
- ------------------------- ------------------- -------------------
<S> <C> <C>
Chaim Katzman ........... -- --
Chairman of the Board, $ 1,601,349(2) $ 4,224,928(2)
President and Chief
Executive Officer
Doron Valero ............ $ 233,475 $ 591,677
Executive Vice President $ 1,201,011(2) $ 3,168,696(2)
and Chief Operating
Officer
David Bookman ........... $ 155,650 $ 394,451
Vice President, Chief -- --
Financial Officer
and Treasurer
</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.

(3) Of such options, (i) 150,000 have an exercise price of $12.375, subject to
the downward adjustment described in note (1) above, and (ii) 48,000 have
an exercise price of $8.25.

(4) Of such options, (i) 150,000 expire on December 31, 2006 and (ii) 48,000
expire on December 31, 1999.

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<PAGE>

CERTAIN TRANSACTIONS

SETTLEMENT OF DISPUTE AMONG THE COMPANY AND CERTAIN AFFILIATES

In January 1998, the Company, together with Gazit and Gazit (1995),
commenced an action (the "Company Action") in the Eleventh Judicial Circuit,
Miami-Dade County, Florida against Dan Overseas, Danbar Resources and Eli
Makavy and David Wulkan, directors of the Company who will resign immediately
prior to the consummation of the Offering (collectively, the "Dan Group"), in
connection with a dispute regarding the future course of the Company's business
operations, as well as amendments to the Company's Bylaws effected in October
1997 in anticipation of the Offering, which amendments had been unanimously
approved by the Company's Board of Directors. The Company commenced the Company
Action in response to communications received by the Company from the Dan Group
which: (i) questioned the validity of Bylaw amendments which reduced
supermajority approval requirements for certain corporate action; (ii)
contended that the Company had breached the terms of an Investment Agreement,
dated as of May 21, 1996, among the Company, Globe Reit, Gazit (1995), as
successor-in-interest to Gazit Holdings Inc., and Dan Overseas; and (iii)
contended that any action by the Company's Board of Directors under the amended
Bylaws would be ULTRA VIRES. In the Company Action, the Company sought, among
other things, a declaratory judgment as to the propriety of the Company's
conduct in amending the Bylaws and the effectiveness of the amended Bylaws.
Following the commencement of the Company Action, the Dan Group commenced an
action in Tel Aviv, Israel against the Company, Gazit Holdings, Inc. and Chaim
Katzman (the "Dan Action," and together with the Company Action, the
"Actions"). In the Dan Action, the Danbar Group renewed the allegations set
forth in the communications to the Company, and requested the Israeli court to
(i) declare Mr. Makavy's and Mr. Wulkan's assent to the Bylaws void due to
fraud, misrepresenation or mistake, and (ii) rescind the amendments to the
Company's Bylaws.

As a result of negotiations among the parties to the Actions, Gazit, two
Dan Group entities, an affiliate of the Dan Group and certain individuals
(including Messrs. Katzman, Makavy and Wulkan) entered into a Settlement
Agreement, dated March 6, 1998, as amended (the "Settlement Agreement"),
resolving the issues raised in the Actions. In general, the Settlement
Agreement provides that: (i) the Actions will be terminated and dismissed,
without prejudice, which occurred in March 1998; (ii) Dan Overseas will be
afforded the opportunity to sell all of its shares of Common Stock in the
Offering; (iii) upon consummation of the Offering, Gazit will purchase certain
capital stock of Globe Reit owned by an affiliate of Danbar Resources
(effectively providing Gazit with control of Globe Reit) and would undertake to
purchase the remaining capital stock of Globe Reit owned by Danbar Resources
within seven months after the consummation of the Offering; (iv) each of
Messrs. Makavy and Wulkan will resign from the Company's Board of Directors
immediately prior to the consummation of the Offering; (v) the consulting
agreements between the Company and each of Messrs. Makavy and Wulkan will be
terminated immediately prior to the consummation of the Offering; (vi) the
Shareholders Agreement will be terminated immediately prior to the consummation
of the Offering; (vii) Gazit will assume obligations of Dan Overseas under the
Investment Contract; (viii) prior to the consummation of the Offering, the
Company will effect the In-Kind Distribution and Gazit will escrow
approximately $1.2 million in order to purchase the assets received by Dan
Overseas in connection with the In-Kind Distribution and Dan Overseas will
escrow the assets to be purchased by Gazit; (ix) Gazit will undertake to
purchase or cause the purchase of all of the capital stock of Globe Reit owned
by certain individuals including Messrs. Makavy and Wulkan for an aggregate
price of $2.1 million; (x) the Bylaw amendments will be affirmed upon
consummation of the Offering; and (xi) upon consummation of the Offering and
consummation of all the transactions contemplated under the Settlement
Agreement, the parties will forever release and discharge the others from any
and all claims, demands and/or causes of action against one another and against
the Company.

In addition to the foregoing, the Company has granted Dan Overseas an
option to put the 293,430 shares of Common Stock issuable upon exercise of Dan
Overseas' Series C Warrants to the Company at a price of $15.50 per share or to
put the Series C Warrants to the Company at a price of $7.25 per Warrant, which
equals the Put Option price of $15.50 per Warrant less the Series C Warrant
price of

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$8.25 per Warrant (the "Put Option"). The Put Option is exercisable in whole or
in part by Dan Overseas from December 1, 1999 until December 15, 1999. The Put
Option would involve a maximum net expenditure by the Company of $2.1 million
if the shares of Common Stock are not sold by Dan Overseas prior to the
exercise of such option. See "--Registration Rights". The Settlement Agreement
further provides that if the Underwriters are unable to sell all of the shares
of Common Stock owned by Dan Overseas in the Offering, then Gazit shall have
the option to purchase all of such unsold shares of Common Stock at the
Offering price per share less underwriting fees. In the event that Gazit
determines not to exercise this option, the Settlement Agreement would be
terminated and of no further force and effect, in which case the Offering would
not be consummated. In connection with the second phase of Gazit's purchase of
the capital stock of Globe Reit owned by Danbar Resources, Gazit has the option
either to pay such purchase price (i) in cash or (ii) by a combination of cash
and the transfer of a number of shares of Company Common Stock and Series C
Warrants, along with applicable demand registration rights, owned by Gazit. In
the event that Gazit selects the alternative of transferring cash and shares of
Common Stock and Series C Warrants to Danbar Resources, Gazit would effectively
transfer a maximum of 605,673 shares of Common Stock and a number of Series C
warrants entitling Danbar Resources to purchase an additional 96,900 shares of
Common Stock (all of which shares would constitute approximately 6.4% of the
issued and outstanding Common Stock after the Offering).

The parties have placed in escrow certain funds, securities and agreements
necessary to perform the Settlement Agreement through the consummation of the
Offering, and Gazit has deposited 605,673 shares of Common Stock and Series C
Warrants to purchase 96,900 shares of Common Stock in escrow as partial
security for the performance of the agreement to purchase the second
installment of Globe Reit shares. Certain provisions of the Settlement
Agreement (principally the purchase by Gazit of the balance of the stock of
Globe Reit owned by Danbar Resources for approximately $9.5 million) are
required to be performed after the consummation of the Offering. No assurance
can be given that such performance will occur, or of the effect of
non-performance on the Company or control of the Company. The Company believes
that consummation of the Settlement Agreement is in the best interests of its
stockholders.

TRANSFER OF ASSETS AND RELATED IN-KIND DISTRIBUTION

Prior to the consummation of the Offering the Company will transfer
certain assets to a newly-formed limited partnership (the "Partnership") in
exchange for limited partnership interests (the "Partnership Interests"). A
limited liability company of which Globe Reit and Gazit will be members, will
be the general partner of the Partnership and will make an appropriate
contribution to the Partnership in return for its general partnership interest.
Included in the assets transferred to the Partnership will be Coral Way, 0.50
acres of vacant land adjacent to the Equity One Office Building and an
aggregate of 6.20 acres of vacant land adjacent to Bird Ludlum. See
"Business--Redevelopment and Development Properties". Additionally, the Company
will assign to the Partnership a promissory note from Chaim Katzman, the
Company's Chairman of the Board, President and Chief Executive Officer, in the
principal amount of $1.1 million, and a promissory note from Doron Valero, the
Company's Executive Vice President and Chief Operating Officer, in the
principal amount of $396,000, together with the rights to Common Stock securing
such notes. See "--Loans to Executive Officers". As part of this transaction,
the Partnership will grant the Company an Option, exercisable within five years
from the consummation of the Offering, to purchase Coral Way for $2.0 million,
the vacant land adjacent to the Equity One Office Building for $1.7 million and
the vacant land adjacent to Bird Ludlum for $1.1 million. Immediately prior to
the consummation of the Offering, the Company will distribute all of the
Partnership Interests to its stockholders pro rata in proportion to their
ownership of Common Stock (the "In-Kind Distribution").

INVESTMENT AGREEMENT

During 1996, the Company entered into an agreement with Globe Reit,
pursuant to which Globe Reit, through its wholly owned subsidiary M.G.N.,
agreed to purchase an aggregate of 2,000,000 shares

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<PAGE>

of Common Stock at a formula price over a period of time. As set forth in the
agreement, the per share purchase price of $12.375 increases at an annual rate
of 9.7% and decreases by amounts paid as dividends by the Company. In order to
facilitate the Offering, M.G.N. has agreed to purchase 580,288 shares of Common
Stock in the Offering at $11.00 per share in advance of its obligation to
purchase such shares under the Investment Agreement. 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".
Upon consummation of the Offering, Chaim Katzman, the Company's Chairman of the
Board, President and Chief Executive Officer, directly and indirectly will have
the power to control Globe Reit. See "Management--Directors and Executive
Officers" and "Principal and Selling Stockholders". As of the date of this
Prospectus, Globe Reit, through its wholly-owned subsidiary M.G.N., had
purchased an aggregate of 1,419,712 shares of Common Stock and 400,000 Series C
Warrants. The 580,288 shares of Common Stock being purchased by M.G.N. in the
Offering fulfill its remaining obligation to purchase Common Stock under to the
Investment Agreement. The Company believes that such sales of Common Stock and
warrants were made at full market value at the date of the agreement and on
substantially the same terms as the Company could have negotiated with other
unaffiliated third parties.

Further, pursuant to the agreement each of the Company, Globe Reit, Dan
Overseas and Gazit is 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.

Pursuant to the Settlement Agreement, upon consummation of the Offering,
Gazit will assume obligations of Dan Overseas under this agreement.

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
December 31, 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 at the time for
comparable transactions with other unaffiliated third parties. In connection
with the In-Kind Distribution, Mr. Katzman's promissory note and related
security interests will be transferred to the Partnership.

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

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<PAGE>

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 December 31, 1997, $396,000 was outstanding under this loan. In connection
with the In-Kind-Distribution, Mr. Valero's promissory note and related
security interests will be transferred to the Partnership.

CONSULTING AGREEMENTS

In January 1996, the Company entered into consulting agreements with each
of Eli Makavy and David Wulkan, directors of the Company who will resign
immediately prior to the consummation of the Offering, pursuant to which
Messrs. Makavy and Wulkan provided 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 received a
quarterly consulting fee of $7,500 and were eligible to receive options under
the 1995 Plan. To date, the Company has paid an aggregate of approximately
$70,000 to each of Messrs. Makavy and Wulkan and has issued an aggregate of
50,000 options to purchase Common Stock to each of such individuals at an
exercise price of $12.375 per share. Pursuant to the terms of each of the
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. Pursuant to the Settlement Agreement, upon
consummation of the Offering the consulting agreements will be terminated.

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.

REGISTRATION RIGHTS

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, including the Series C Warrants
held by Dan Overseas subject to the Put Option. 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, and Doron Valero with respect to the shares
of Common Stock owned by them (the "Registration Rights Agreement"). If Gazit
uses Company Common Stock and Series C Warrants as partial consideration for
the second phase of its purchase of the capital stock of Globe Reit owned by a
subsidiary of Dan Resources under a registration rights agreement entered into
by Equity One, such Common Stock and Series C Warrants will be transferred with
applicable demand registration rights. Except for Dan Overseas, which is
exercising registration rights pursuant to the Settlement Agreement, each of
the parties to the Registration Rights Agreement has waived its registration
rights in connection with the Offering.

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<PAGE>

BENEFITS OF OFFERING TO EXISTING STOCKHOLDERS, INCLUDING MANAGEMENT

The Selling Stockholder will sell all of its shares of Common Stock in
connection with the Offering. Additionally, the Company's 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 or warrants
which they hold to purchase additional shares of Common Stock.

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.

REIMBURSEMENT OF OFFERING RELATED EXPENSES

The Underwriters have agreed to reimburse the Company $300,000 for
expenses incurred in connection with the Offering. In turn, the Company has
agreed to reimburse the Selling Stockholder $300,000 for expenses incurred
directly and indirectly in connection with the Offering in addition to expenses
required to be paid by the Company pursuant to the Registration Rights
Agreement.

OTHER

The Company paid legal fees in the approximate amount of $95,160, $84,340
and $49,678 during the years ended December 31, 1995, 1996 and 1997,
respectively, to the Law Office of Alan J. Marcus. Mr. Marcus, the Secretary of
the Company, will become Vice President and General Counsel following
consummation of the Offering.

Robert L. Cooney, a director, served as a Managing Director of Equity
Capital Markets of Credit Suisse First Boston from 1978 to 1996. See
"Management--Management and Key Employees" and "Underwriting".

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

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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.
See "Federal Income Tax Considerations--Taxation of the Company".

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, at an initial offering price of $11.00, and use of the net proceeds
contemplated hereby, the ratio of the Company's total indebtedness to total
market capitalization will be approximately 35.9%. 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 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.

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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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PRINCIPAL AND SELLING 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 and Irrevocable Proxy, 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 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. Mr. 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. 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.

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 8,698,958 shares of Common Stock at
December 31, 1997, constituting 97.3% of the outstanding Common Stock. Upon
consummation of the Offering, the members of the Dan Group will cease to be
parties to the Control Agreements and Dan Overseas will sell all of its shares
of Common Stock in the Offering (other than shares of Common Stock purchasable
upon exercise of Series C Warrants), free of the Irrevocable Proxy, and the
Shareholders Agreement will be terminated. As a result of the foregoing, after
giving effect to the Offering and the sale of Common Stock by Dan Overseas, the
remaining members of the Affiliated Group will beneficially own 6,985,926
shares of Common Stock (including shares of Common Stock which may be acquired
within 60 days upon the exercise of options or warrants or pursuant to
contract) at December 31, 1997, constituting 61.6% of the outstanding Common
Stock.

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 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. In connection with the Settlement Agreement,
Messrs. Makavy and Wulkan will sell to Gazit all of the shares of capital stock
of Globe Reit beneficially owned by them and as a result thereof, Mr. Katzman
will effectively control Gazit and Globe Reit. The table set forth below does
not give effect to the beneficial ownership of Gazit and Danbar Resources of
Globe Reit. See "Certain Transactions".

Subject to the foregoing, the following table sets forth certain
information concerning the beneficial ownership of the Common Stock as of
December 31, 1997, and as adjusted to reflect the sale of 3,330,398 shares of
Common Stock by the Company and the sale of 1,369,602 shares of Common Stock by
the Selling Stockholder, 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 and director nominee of the Company, (iii) each of the Named Officers,
(iv) the Selling Stockholder and (v) all executive officers and directors of
the Company as a group. Unless otherwise indicated, the address of each named
person is c/o Equity One, Inc., 777 17th Street, Penthouse, Miami Beach,
Florida 33139.

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<TABLE>
<CAPTION>
SHARES SHARES TO BE
BENEFICIALLY OWNED BENEFICIALLY OWNED
PRIOR TO THE OFFERING AFTER THE OFFERING
----------------------- -------------------------------
NAME OF BENEFICIAL OWNER(1) NUMBER PERCENT SHARES OFFERED NUMBER PERCENT
- ------------------------------------------- ----------- --------- --------------- ------------------ ----------
<S> <C> <C> <C> <C> <C>
Affiliated Group(2) ....................... 8,698,958 97.3% -- 6,985,926 61.6%
Globe Reit Investments, Ltd.(3) ........... 3,460,000 43.9% -- 3,460,000 32.5%
Gazit (1995), Inc.(4) ..................... 3,072,592 41.2% -- 3,072,592 28.5%
Dan Overseas, Ltd.(5) ..................... 1,663,032 23.1% 1,369,602 293,430 2.8%
M.G.N. (USA), Inc.(6) ..................... 2,400,000 30.4% -- 2,400,000 22.6%
Chaim Katzman(7) .......................... 3,525,926 46.3% -- 3,525,926 32.2%
Doron Valero(8) ........................... 322,500 4.6% -- 322,500 3.1%
David Bookman(9) .......................... 5,004 * -- 5,004 *
Eli Makavy(10) ............................ 1,688,032 23.1% (11) 318,430(12) 3.0%
David Wulkan(13) .......................... 1,688,032 23.1% (14) 318,430(12) 3.0%
Shaiy Pilpel .............................. -- -- -- -- --
Noam Ben Ozer ............................. -- -- -- -- --
Yuval Yanai ............................... -- -- -- -- --
Shulamit Rozen-Katzman(15) ................ -- -- -- -- --
Robert Cooney ............................. -- -- -- -- --
Ronald Chase .............................. -- -- -- -- --
All executive officers and directors of the
Company as a group (11 persons before
the Offering and 9 persons after the
Offering)(15) ........................... 5,566,464 68.8% -- 5,245,534 47.4%
</TABLE>

- ----------------
* Less than 1%.

(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), (10), (11), (13) and (14) below.

(3) Includes (i) 1,060,000 shares of Common Stock owned by Globe Reit, (ii)
580,288 shares of Common Stock to be purchased by M.G.N. in the Offering,
(iii) 1,420,952 shares of Common Stock owned by M.G.N. and (iv) 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 (i) 2,530,456 shares of Common Stock owned by Gazit (1995) and
(ii) 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) Does not give effect to the Control Agreements.

(6) Includes (i) 1,420,952 shares of Common Stock owned by M.G.N., (ii)
398,760 shares of Common Stock issuable upon the exercise of presently
exercisable warrants to purchase Common Stock and (iii) 580,288 shares of
Common Stock to be purchased by M.G.N. in the Offering. Does not give
effect to the Control Agreements.

(7) Includes (i) 2,530,456 shares of Common Stock 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) 290,990 shares of Common Stock
owned by Mr. Katzman, (iv) 100,000 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 100,000 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) 192,000 shares of Common Stock owned by Mr. Valero, (ii)
130,500 shares of Common Stock issuable upon the exercise of options
granted to Mr. Valero under the 1995 Plan, which options are currently
exercisable. Does not include 97,500 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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(9) Includes 5,000 shares of Common Stock issuable upon the exercise of
options granted to Mr. Bookman under the 1995 Plan, which options are
currently exercisable. Does not include 35,000 shares of Common Stock
issuable upon exercise of options granted to Mr. Bookman under the 1995
Plan, which options are not currently exercisable.

(10) Includes (i) 1,369,602 shares of Common Stock 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) 25,000 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 25,000
shares of Common Stock issuable upon the exercise of options granted to
Mr. Makavy under the 1995 Plan, which options are not currently
exercisable. Does not give effect to the Control Agreements.

(11) Represents 1,369,602 shares of Common Stock owned by Dan Overseas, which
Mr. Makavy may be deemed to control, which are being sold in the Offering.
See footnote (5).

(12) Includes 293,430 shares of Common Stock issuable upon exercise of
presently exercisable warrants to purchase Common Stock owned by Dan
Overseas. Pursuant to the Settlement Agreement, Danbar Resources may
receive an aggregate of 605,623 shares of Common Stock and Series C
Warrants to purchase an aggregate of 96,900 shares of Common Stock from
Gazit. Such shares would represent approximately 6.9% of the total issued
and outstanding Common Stock following consummation of the Offering. Each
of Messrs. Makavy and Wulkan, by virtue of their ownership of the capital
stock of Danbar Resources, may be deemed to control Danbar Resources. See
"Certain Transactions".

(13) Includes (i) 1,369,602 shares of Common Stock 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) 25,000 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 25,000
shares of Common Stock issuable upon the exercise of options granted to
Mr. Wulkan under the 1995 Plan, which options are not currently
exercisable. Does not give effect to the Control Agreements.

(14) Represents 1,369,602 shares of Common Stock owned by Dan Overseas, which
Mr. Wulkan may be deemed to control, which are being sold in the Offering.
See footnote (5).

(15) 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 footnote (7)
above.

(16) See footnotes (7)-(11), (13) and (14) above. Also includes 2 shares of
Common Stock owned by Alan J. Marcus.

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 December 31, 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 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 Bylaws, copies of
which are exhibits to the Registration Statement of which this Prospectus is a
part. See "Additional Information".

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 as described below.

Holders of shares of Common Stock have no preference, conversion,
exchange, sinking fund or redemption 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

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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. 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 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 a provision decreasing the two-thirds vote requirement to a
majority of all the votes entitled to be cast on the matter. 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 a particular case.

The Charter authorizes issuances of additional shares of stock and the
classification or 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. 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 or other transaction 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 December 31, 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. See "Certain Transactions".

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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 shares of 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 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 ownership of shares of the
Company's 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
stock, any person (a "Prohibited Transferee") would acquire, either actually or
constructively under the applicable attribution rules of the Code, shares of
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 by the recipient of such dividend or
distribution to the trustee for the benefit of the charitable beneficiary and
any dividends or other distributions authorized but unpaid shall be paid when
due to the Trustee). 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 if the Prohibited Transferee did not
give value for the shares in connection with the event causing the shares to be
held in trust (e.g. a gift, devise or other such transaction), the fair market
value, on the date of transfer to the trust, of the shares so transferred and
(ii) the price per share recieved by the trustee from the sale or other
disposition of the shares held in the trust. 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.

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Shares of stock transferred to the 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 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.

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, M.G.N. and the Selling
Stockholder 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 9.9% 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 will 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 within 30 days after the end of each taxable year with the Company a
report containing information regarding their ownership of such shares, as set
forth in the

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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 of the Company 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.

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

The following summary of certain provisions of the MGCL and the Company's
Charter and Bylaws 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 an Interested Stockholder or an
affiliate thereof is prohibited for five years after the most recent date on
which the Interested Stockholder became 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 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 of the corporation prior to the
time that the Interested Stockholder becomes an Interested Stockholder. The
Board of Directors has previously exempted from such provisions of the MGCL any
business combination with an officer or director of the Company or any
affiliate of any officer or director of the Company.

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

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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.

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 statute,
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 of the Company, or
other transaction that a stockholder might consider in its best interest or
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 initially shall be seven, which
number may be increased or decreased by the Bylaws but may not be fewer than
the minimum number required by the MGCL (which under most circumstances is
three). Any vacancy may be filled, at any regular meeting or at any special
meeting called for that purpose, by the affirmative vote of a majority 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 plurality 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 enhance
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 in the election of directors. Consequently, at each
annual meeting of stockholders, the holders of a majority 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
delay, defer or prevent 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

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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 two-thirds of all votes entitled to be cast generally in the election
of directors. This provision, when coupled with the provision in the Bylaws
authorizing the Board of Directors to fill vacant directorships, precludes
stockholders from removing incumbent directors except upon the existence of
cause of removal and a substanital affirmative vote and filling the vacancies
created by such removal with their own nominees.

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 by the Secretary of the Company upon
the written demand of the holders shares entitled to cast not less than a
majority of all of the votes entitled to be cast at such 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 delay, defer or prevent 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.

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.

LIMITATION OF LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS

The MGCL permits a Maryland corporation to include in its charter a
provision limiting 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 contains
such a provision which eliminates such liability to the maximum extent
permitted by Maryland law. However, this provision does not limit the ability
of the Company or its stockholders to obtain other relief, such as an
injunction or recission.

The Company's Charter authorizes and the Bylaws 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, partner or trustee of such corporation, real estate
investment trust, partnership, joint

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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, or for a judgment of liability on the basis
that a personal benefit was improperly received, unless in either case, a court
orders indemnification and then only for expenses. In addition, the MGCL
permits a corporation to advance 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 him or on his behalf to repay the amount paid or reimbursed by the
corporation 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.

TRANSFER AGENT AND REGISTRAR

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

SHARES ELIGIBLE FOR FUTURE SALE

Upon consummation of the Offering, the Company will have 10,238,528 shares
of Common Stock outstanding (10,943,528 shares if the over-allotment option is
exercised in full). Of those shares, 4,119,712 of the shares sold in the
Offering (4,824,712 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 6,118,816 shares of Common Stock
(which includes the 580,288 shares of Common Stock to be sold by the Company to
M.G.N. in the Offering) 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 102,385 shares immediately
after the Offering, 109,435 if the over-allotment option is exercised in full)
or (ii) the average weekly trading volume in the Common Stock on all exchanges
and reported through the automated quotation system of a registered securities
association 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

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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
6,118,816 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
664,000 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. 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. This summary is based on current law, which is subject
to change, possibly retroactively. 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
("Greenberg Traurig"), the material federal tax considerations relevant to
purchasers of Common Stock, other than existing stockholders of the Company. A
copy of the tax opinion of Greenberg Traurig 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"). ACCORDINGLY,
EACH PROSPECTIVE PURCHASER, INCLUDING EXISTING STOCKHOLDERS, IS URGED TO
CONSULT HIS OR HER OWN TAX ADVISER REGARDING THE SPECIFIC FEDERAL INCOME TAX
CONSEQUENCES, AS WELL AS THE STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES,
TO HIM OR HER OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF A SHARE OF
COMMON STOCK IN LIGHT OF HIS OR HER PERSONAL INVESTMENT OR TAX CIRCUMSTANCES.

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 has 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, (i) the Company has been organized in
conformity with the requirements for qualification as a REIT under the Code
beginning with the taxable year of the Company starting January 1, 1995, and
the method of operation of the Company and its subsidiaries since January 1,
1995 has enabled the Company, and the proposed method of operation of the
Company will enable the Company, to meet the requirements for qualification and
taxation as a REIT under the Code; (2) 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; and (3) the distribution by the Company, immediately prior to the
issuance of its stock pursuant to the registered public offering, of limited
partner interests in a limited partnership holding certain

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parcels of vacant land and certain promissory notes, as described in the
Prospectus, will not result in the obligation to pay tax at the corporate
level. It must be emphasized that these opinions assume that representations
made by the Company to Greenberg Traurig relating to the organization of the
Company, the income, assets, operations and records of, and other matters
regarding, the Company, distributions by the Company and the direct and
indirect ownership of the Company's Common Stock are true, accurate and
complete. The opinions assume further that the statements in the Registration
Statement and the Prospectus and the documents attached thereto as exhibits are
and will remain true, correct and complete and that actions described in the
Prospectus have been or will be taken as described. In addition, Greenberg
Traurig has reviewed documentation and correspondence of and to the Company and
presentations and summaries of information of the Company, and spoken with
representatives of the Company, regarding the Company's income, assets,
operations and records. Greenberg Traurig has assumed that all factual matters
and analysis submitted to it and all of the other information furnished to it
are true, correct and complete. Any variation or difference in the facts from
those set forth or assumed could affect the conclusions reached by Greenberg
Traurig. Greenberg Traurig's opinions are based on the foregoing and are given
in reliance thereon and subject thereto. In addition, the opinions are limited
to the matters expressly set forth, and no opinion is to be implied or inferred
beyond the matters expressly stated. The opinions speak only as of the date
they were issued and are based on the Code, the Treasury regulations
thereunder, administrative pronouncements of the Internal Revenue Service and
judicial decisions, all as in effect on the date thereof. Those legal
authorities are subject to change either prospectively or retroactively, see
"--Failure to Quality", and Greenberg Traurig assumes no obligation to update
or supplement its opinions. Finally, the Company's qualification and taxation
as a REIT depend on the Company's ability to meet (through actual operating
results, distribution levels, diversity of stock ownership and other factors)
the various qualification tests imposed under the Code, the results of which
Greenberg Traurig has not investigated independently and will not investigate
independently, and some of which are outside the control of the Company to
satisfy. Accordingly, no assurance can be given that the actual results of the
Company's operations for any taxable year have satisfied or will satisfy the
REIT qualification tests under the Code.

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) 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

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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 has been filed with the Company's Form 1120 for
the tax year ended December 31, 1996.

In February 1998, the Clinton Adminstration proposed legislation that
would eliminate the seventh set of rules set forth above by preventing a REIT
from acquiring an asset from a C corporation in a transaction in which the
REIT's basis in the asset is determined by reference to the C corporation's
basis in the asset. This proposal would treat the C corporation as if it had
sold the asset for its fair market value. This proposal would apply to
acquisitions after December 31, 1998.

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 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 satisfied
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 will 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), and if it fails to comply with those regulations, it may be subject to a
financial penalty but not to disqualification as a REIT.

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.

In February 1998, the Clinton Administration stated it would propose
amendments to the rules relating to REIT qualification to impose an additional
requirement that no person (including any corporation, partnership, trust or
estate) can own more than 50% of the total combined voting power of

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all classes of voting stock or more than 50% of the total value of shares of
all classes of stock in the REIT. For purposes of determining a person's stock
ownership, constructive ownership rules similar to attribution rules contained
in section 856(d)(5) of the Code would apply. The Clinton Administration
proposes that this change be effective for entities electing REIT status for
taxable years beginning on or after the date of first committee action. This
proposed legislation, therefore, if enacted in the form proposed, would not
apply to the Company.

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
two 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). A third gross income
test applicable to tax years of REITS that began prior to August 6, 1997
provides that 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 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.

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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 applies 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 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 are 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

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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. The February 1998 proposed amendments of the Clinton
Administration to the REIT rules would change the third requirement set forth
above to prevent a REIT from owning more than 10% of the stock of any one
issuer measured not only by voting power but also by the value of the issuer's
outstanding stock. The Company has no plan at this time to acquire any stock
that would violate the rule proposed by the Clinton Administration.

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.

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

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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) 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. On November 10, 1997, the IRS issued
Notice 97-64, in which it stated that temporary Treasury regulations will be
issued providing that a REIT that designates a dividend as a capital gain
dividend also may designate the dividend as a 20% rate gain distribution, an
unrecaptured section 1250 gain distribution (taxable at a 25% rate) or a 28%
rate gain distribution, to the extent the net capital gain of the REIT consists
of long-term capital gains that, in the hands of the REIT, would be treated as
falling in, respectively, the 20% group, the 25% group or the 28% group of
long-term capital gains (and if no additional designation is made, the dividend
is a 28% rate gain distribution). A U.S. Stockholder that is a corporation may
be required to treat up to 20% of certain capital gain dividends as ordinary
income.

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 or, if and to
the extent the REIT, pursuant to Notice 97-64, discussed above, designates
undistributed long-term capital gains as a 20% rate gain distribution, an
unrecaptured section 1250 gain distribution or a 28% rate gain distribution, to
include in their income as

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long-term capital gains falling in, respectively, the 20% group, the 25% group
or the 28% group of long-term capital gains their proportionate share of the
undistributed long-term capital gains of the REIT falling within those
categories. 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 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

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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 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

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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 Treasury
regulations that will apply to payments made after December 31, 1998, 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 Department recently issued final regulations regarding
the withholding and information reporting rules discussed above. In general,
the new regulations do not alter the substantive withholding and information
reporting requirements but unify current certification procedures and forms and
clarify and modify reliance standards. The new regulations, for example,
require a Non-U.S. Stockholder that wishes to claim the benefit of a reduced
tax rate in an applicable tax treaty with respect to dividends received from a
U.S. corporation to satisfy certain certification and other requirements. In
addition, the new regulations require a corporation that is a REIT to withhold
tax at the 30% rate (or lower treaty rate) on the portion of a distribution
that is not designated as a capital gain dividend or a return of basis and at
the 35% rate described above on the portion of any distribution designated by
the REIT as a capital gain dividend. The new regulations generally are
effective for payments made after December 31, 1999, subject to certain
transition rules. THE DISCUSSION SET FORTH ABOVE IN "TAXATION OF NON-U.S.
STOCKHOLDERS" DOES NOT TAKE INTO ACCOUNT THE NEW REGULATIONS. PROSPECTIVE
NON-U.S. STOCKHOLDERS ARE STRONGLY URGED TO CONSULT THEIR OWN TAX ADVISERS
REGARDING THE NEW REGULATIONS.

TAXPAYER RELIEF ACT OF 1997

On August 5, 1997, President Clinton signed into law the Taxpayer Relief
Act of 1997 (H.R. 2014), which has 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 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; (ii) the class of
excess noncash items for purposes of the REIT distribution requirements is
expanded; and (iii) certain other Code provisions relating to REITs are
amended.

PROPOSED TAX LEGISLATION

In February 1998, the Clinton Administration indicated that it would
propose amendments to the rules relating to REIT qualification. Three of the
proposed changes are described above in "Federal Income Tax
Considerations--Taxation of the Company" in "--General" "--Requirements for
Qualification" and "--Asset Tests". A further proposal by the Clinton
Administration would restrict future activities of "stapled REITs". In
addition, on March 26, 1998, the Chairmen of the House Committee on Ways and
Means and the Senate of Finance introduced similar legislation relating to
stapled REITs. A stapled REIT consists of a REIT whose stock trades as a single
unit with the stock of a corporation that is not a REIT. The Company is not,
and would not qualify for the tax benefits of, a stapled REIT.

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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<PAGE>

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 100 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 May 13, 1998 (the "Underwriting Agreement"), the Underwriters
named below (the "Underwriters"), for whom Credit Suisse First Boston
Corporation, Morgan Keegan & Company, Inc. and The Robinson-Humphrey Company,
LLC are acting as representatives (collectively, the "Representatives"), have
severally but not jointly agreed to purchase from the Company and the Selling
Stockholder the following respective numbers of shares of Common Stock:

<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERWRITER -----------------
<S> <C>
Credit Suisse First Boston Corporation ...................... 985,738
Morgan Keegan & Company, Inc. ............................... 985,737
The Robinson-Humphrey Company, LLC .......................... 985,737
Barber & Bronson Incorporated ............................... 37,500
Bear, Stearns & Co. Inc. .................................... 75,000
BT Alex. Brown Incorporated ................................. 75,000
Chase Securities Inc. ....................................... 75,000
CIBC Oppenheimer Corp. ...................................... 75,000
Allen C. Ewing & Co. ........................................ 37,500
Friedman, Billings, Ramsey & Co., Inc. ...................... 75,000
Furman Selz LLC ............................................. 75,000
Invemed Associates, Inc. .................................... 75,000
ISG Capital Markets LLC ..................................... 37,500
McDonald & Company Securities, Inc. ......................... 37,500
Merrill Lynch, Pierce, Fenner & Smith Incorporated .......... 75,000
National Securities Corporation ............................. 37,500
Ormes Capital Markets, Inc. ................................. 37,500
Piper Jaffray Inc. .......................................... 37,500
Raymond James & Associates, Inc. ............................ 37,500
SBC Warburg Dillon Read Inc. ................................ 75,000
Charles Schwab & Co., Inc. .................................. 75,000
Southeast Research Partners, Inc. ........................... 37,500
Sutro & Co. Incorporated .................................... 37,500
Tucker Anthony Incorporated ................................. 37,500
-------
Total ..................................................... 4,119,712
=========
</TABLE>

The 580,288 shares of Common Stock to be purchased by M.G.N. in the
Offering will be purchased directly from the Company and will not be subject to
the Underwriting Agreement.

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

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<PAGE>

this Prospectus and, through the Representatives, to certain dealers at such
price less a concession of $.46 per share, and the Underwriters and such
dealers may allow a discount of $.10 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 Representatives.

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 and the Selling Stockholder have 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.

The Common Stock has been approved for listing on the New York Stock
Exchange subject to official notice of issuance.

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, the Selling Stockholder and the 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--The Price of the Common
Stock May Be Adversely Affected by the Lack of a Prior Market and Fluctuations
in the Stock Market; The Offering Price Is Not Based Upon Property Valuations".

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.

Robert L. Cooney, a director nominee, served as a Managing Director of
Equity Capital Markets of Credit Suisse First Boston from 1978 to 1996. See
"Management--Management and Key Employees" and "Certain Transactions".

The Underwriters have agreed to reimburse the Company up to $300,000 for
expenses incurred by the Company in connection with the Offering.

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<PAGE>

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 LLP, Baltimore,
Maryland, as to certain matters relating to Maryland law.

EXPERTS

The consolidated financial statements of the Company as of December 31,
1997 and 1996 and for each of the three years in the period ended December 31,
1997 included in this Prospectus, the related financial statement schedule
included elsewhere in the registration statement, and the financial statements
from which the selected financial data included in this Prospectus have been
derived, 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 statement of revenues and certain expenses of Lantana Village and
Summerlin Square for the year ended December 31, 1997 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 reports of such firm
given upon their authority as experts in accounting and auditing.

In addition, certain statistical information and analysis provided under
the captions "Prospectus Summary--Market Data" and "Business--Market Data" has
been prepared by Lesser and included herein in reliance upon the authority of
such firm as an expert in, among other things, real estate consulting and urban
economics.

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 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.

108
<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 LINE OF CREDIT" means a proposed line of credit of up to
$35.0 million among the Company, City National Bank of Florida and certain
participating lenders.

"ACRS" means the accelerated cost recovery system depreciation.

"ACTIONS" means the Dan Action and the Company Action.

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

"AFFILIATED GROUP" means Chaim Katzman and the stockholders of the Company
who are parties to the Control Agreements.

"AGGREGATE STOCK OWNERSHIP LIMIT" means not more than 9.9% (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 192,327
square feet of GLA located in Miami, Florida.

"BYLAWS" means the Bylaws of the Company.

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

"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act, as amended by the Superfund Amendments and Reauthorization Act
of 1986.

"CHARTER" means the charter 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 9.9% (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.

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<PAGE>

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

"COMPANY" means the business and property of Equity One, Inc., a Maryland
corporation, and its consolidated subsidiaries.

"COMPANY ACTION" means the action commenced by the Company in the Eleventh
Judicial Circuit, Miami-Dade County, Florida against the Dan Group.

"CONTROL AGREEMENTS" means the Investment Contract, the Shareholders
Agreement and the Irrevocable Proxy.

"CORAL WAY" means 10 acres of commercially zoned real property located in
Southwest Miami-Dade County, Florida, which property will be subject to the
Option.

"CPI" means the Consumer Price Index.

"DAN ACTION" means the action commenced by the Dan Group in Tel Aviv,
Israel against the Company, Gazit Holdings, Inc. and Chaim Katzman.

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

"DAN GROUP" means Danbar Resources, Dan Overseas, Eli Makavy and David
Wulkan.

"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 81,826 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 17 shopping center properties, two mixed
used (office/retail) properties, one office building, one mini-warehouse
facility and one restaurant property owned by the Company at the date of this
Prospectus.

"FFO" means Funds From Operations.

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

110
<PAGE>

"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
square feet 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).

"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.

"IN-KIND DISTRIBUTION" means the Company's distribution immediately prior
to the consummation of the Offering of Partnership Interests to its existing
stockholders pro rata in proportion to their ownership of Common Stock.

"INTERESTED STOCKHOLDER" means, for purposes of the MGCL, any person who,
after the date on which the Company had 100 or more beneficial owners of its
stock, 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 immediately 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 Company.

"INVESTMENT CONTRACT" means the 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.

"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.

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<PAGE>

"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 (1) to the table under "Use of Proceeds".

"MOTION" means the motion to dismiss the complaint of Albertsons filed by
the Subsidiary in the Circuit Court for the Eleventh Judicial District in and
for Miami-Dade County, Florida.

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

"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.

"OPTION" means the option to be granted by the Partnership to the Company
to purchase Coral Way and an aggregate of 6.75 acres of vacant land adjacent to
certain of the Existing Properties, which option is to be exercisable for a
period of five years.

"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 9.9% (by number or value, whichever is more restrictive) of the
outstanding shares of Common Stock.

"PARKER TOWNE" means the Parker Towne Centre comprising 201,927 square
feet of GLA located in Plano, Texas, in the Dallas metropolitan area.

"PARTNERSHIP" means a Florida limited partnership to which the Company
will transfer Coral Way, 6.75 acres of vacant land adjacent to certain of the
Existing Properties and certain promissory notes.

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<PAGE>

"PARTNERSHIP INTERESTS" means the limited partnership interests of the
Partnership.

"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.

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

"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 Miami-Dade County, Florida.

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

"PRO FORMA ADJUSTMENTS" means the pro forma adjustments referred to on
page F-2.

"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.

"PUT OPTION" means the option granted by the Company to Dan Overseas to
put the 293,430 shares of Common Stock issuable upon exercise of Dan Overseas'
Series C Warrants to the Company at an exercise price of $15.50 per share, or
to put the Series C Warrants to the Company at a price of $7.25 per Warrant
(which equals the Put Option price of $15.50 per Warrant less the Series C
Warrant price of $8.25 per Warrant) from December 1, 1999 to December 15, 1999.

"REDEVELOPMENT OF SKY LAKE AND OTHER ACQUISITIONS" means the Redevelopment
of Sky Lake and other property acquisitions referred to in footnote (4) 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), Globe Reit, Dan
Overseas, Eli Makavy, Doron Valero and David Wulkan with respect to their
Registrable Shares.

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

"REPRESENTATIVES" means Credit Suisse First Boston Corporation, Morgan
Keegan & Company, Inc. and The Robinson-Humphrey Company, LLC, as
representatives for the Underwriters.

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

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

"SELLING STOCKHOLDER" means Dan Overseas.

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<PAGE>

"SERIES C WARRANTS" means the warrants to purchase up to 1,306,124 shares
of Common Stock of the Company at an exercise price of $8.25 exercisable
through December 31, 1999.

"SETTLEMENT AGREEMENT" means the agreement as amended, among the Dan
Group, Gazit and Chaim Katzman, among others, resolving allegations raised in
the Actions.

"SHAREHOLDERS AGREEMENT" means the Stockholders Agreement, dated May 21,
1996, between Gazit and Danbar Resources.

"SKY LAKE" means the property which is known as Sky Lake Mall in
Miami-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.

"SUBSIDIARY" means the subsidiary of the Company which is party to an
action commenced by Albertsons in the Circuit Court for the Eleventh Judicial
District in and for Miami-Dade County, Florida.

"SUMERLIN SQUARE" means the Summerlin Square Shopping Center comprising
110,200 square feet of GLA located in Fort Myers, Florida.

"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 the Representatives and those parties named in the
Underwriting Agreement as underwriters of the Offering.

"UNDERWRITING AGREEMENT" means the Underwriting Agreement among the
Company, the Selling Stockholder and the Underwriters relating to the purchase
of the Common Stock offered hereby.

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

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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 December 31, 1997 ......... F-3
Pro Forma Consolidated Statement of Operations
for the year ended December 31, 1997 ............................... F-4
Notes to the Pro Forma Consolidated Financial Statements ............. F-5
HISTORICAL:
Independent Auditors' Report ......................................... F-7
Consolidated Balance Sheets as of December 31, 1997 and 1996 ......... F-8
Consolidated Statements of Operations for the years ended
December 31, 1997, 1996 and 1995 ................................... F-9
Consolidated Statements of Stockholders' Equity
for the years ended December 31, 1997, 1996 and 1995 ............... F-10
Consolidated Statements of Cash Flows
for the years ended December 31, 1997, 1996 and 1995 ............... F-11
Notes to Consolidated Financial Statements ........................... F-12
LANTANA VILLAGE SQUARE
Independent Auditors' Report ......................................... F-26
Statement of Revenues and Certain Expenses for the year ended
December 31, 1997 .................................................. F-27
Notes to Statement of Revenues and Certain Expenses .................. F-28
SUMMERLIN SQUARE - PROPOSED ACQUISITION PROPERTY
Independent Auditors' Report ......................................... F-29
Statement of Revenues and Certain Expenses for the year ended
December 31, 1997 .................................................. F-30
Notes to Statement of Revenues and Certain Expenses .................. F-31
</TABLE>

F-1
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The unaudited pro forma consolidated balance sheet as of December 31, 1997
is presented as if the Pro Forma Adjustmens all had occurred on December 31,
1997. The pro forma consolidated statement of operations for the year ended
December 31, 1997 is presented as if the Pro Forma Adjustments and the
acquisitions of Sky Lake and Monument Pointe all had occurred on January 1,
1997.

The "Pro Forma Adjustments" include (i) the sale of 3,330,398 shares of
Common Stock by the Company at an offering price of $11.00 per share, (ii) the
application of the proceeds thereof to retire indebtedness, to acquire
Beauclerc Village and Summerlin Square, to redevelop Sky Lake and develop the
Existing Properties, and to pay expenses of the Offering, as set forth under
"Use of Proceeds", (iii) the In-Kind Distribution, (iv) the acquisition of
Lantana Village, (v) the acquisition of the restaurant property (vi) the
incurrence of mortgage indebtedness in respect of Lantana Village and
Commonwealth, (vii) payments of a portion of the mortgage on Sky Lake and to
Winn-Dixie in respect of its expanded and extended lease at Commonwealth, and
(viii) certain costs in connection with the foregoing, as more fully set forth
in the notes to pro forma consolidated financial statements.

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. The pro forma consolidated financial
statements do not purport to represent the Company's actual financial position
as of December 31, 1997 had the Pro Forma Adjustments occurred on December 31,
1997, or the actual results of operations for the year ended December 31, 1997
had the Pro Forma Adjustments and the acquisitions of Sky Lake and Monument
Pointe occurred on January 1, 1997, 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 DECEMBER 31, 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 ............................................... $ 40,458 $ 1,350 F(1) $ 39,887
250 H(1)
$3,211E(1)
1,040 A(1)
Buildings and improvements ......................... 85,983 17,669 A(2) 111,352
1,000 H(2)
1,300 B
5,400 F(2)
------- ---------
126,441 28,009 3,211 151,239
Less accumulated depreciation ....................... (7,191) (7,191)
-------- --------- --------
Rental properties, net ............................. 119,250 28,009 3,211 144,048
Cash and cash equivalents ........................... 2,598 33,517 D 248
3,300 C(2)
1,040 A(1)
17,669 A(2)
14,808 C(1)
2,350 F(3)
2,000 C(3)
1,300 B
Accounts and other receivables, net ................. 892 892
Securities available for sale ....................... 45 45
Deposits ............................................ 1,339 1,339
Prepaid and other assets ............................ 1,252 1,252
Deferred expenses, net .............................. 1,527 1,527
-------- --------
Total assets ..................................... $126,903 $64,826 $42,378 $149,351
======== ======= ========= ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
LIABILITIES:
Mortgage notes payable .............................. $ 71,004 $14,808 C(1) 61,896
2,000 C(3)
$3,300C(2)
4,400 F(4)
Line of credit ...................................... 1,250 H(3) 1,250
Tenants' security deposits .......................... 764 764
Accounts payable and accrued expenses ............... 1,281 2,100 G 3,381
Deferred rental income .............................. 274 274
-------- --------
Total liabilities ................................ 73,323 16,808 11,050 67,565
-------- ------- --------- --------
STOCKHOLDERS' EQUITY:
Common stock and additional paid-in capital ......... 55,105 33,517 D 83,886
3,211 E(1)
1,525 E(2)
Notes receivable from stock sales ................... (1,525) 1,525 E(2)
Retained (deficit) .................................. 0 2,100 G $ (2,100)
-------- ------- --------- --------
Total stockholders' equity ....................... 53,580 6,836 35,042 81,786
-------- ------- --------- --------
Total liabilities and stockholders' equity .......... $126,903 $23,644 $46,092 $149,351
======== ======= ========= ========
</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 YEAR ENDED DECEMBER 31, 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 ...................................... $ 19,816 $3,183I $ 22,999
Investment revenue ................................. 729 (90)L 639
-------- ------ --------
Total revenues .................................. 20,545 3,093 23,638
-------- ------ --------
COSTS AND EXPENSES:
Operating expenses ................................. 5,693 704 I 6,397
Depreciation and amortization ...................... 2,392 458 I 2,850
Interest ........................................... 5,681 (302)J 5,379
General and administrative expenses ................ 581 150 k 731
-------- ------------- --------
Total costs and expenses ........................ 14,347 1,010 15,357
-------- ------- --------
Net income ......................................... $ 6,198 $2,083 $ 8,281
======== ======= ========
EARNINGS PER SHARE:
Basic earnings per share .......................... $ 0.96 $ 0.85
======== ========
Number of shares used in computing basic earnings
per share ....................................... 6,446 9,777
======== ========
Diluted earnings per share ........................ $ 0.87 $ 0.81
======== ========
Number of shares used in computing diluted earnings
per share ....................................... 7,106 10,169
======== ========
</TABLE>

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

F-4
<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 December 31, 1997 are as follows:

<TABLE>
<S> <C>
(A) Reflects the cost of the proposed property acquisitions and of the renovation and
development of the Existing
Properties
Redevelopment costs of Sky Lake ....................................................... $ 609
Purchase price of Beauclerc Village and Summerlin Square .............................. 13,000
Atlantic Village renovation costs ..................................................... 850
Commonwealth renovation costs ......................................................... 450
Lake Mary development costs ........................................................... 3,000
Point Royale office building renovation costs ......................................... 800
-------
Total proposed property acquisitions and renovation and development
of Existing Properties .............................................................. $18,709
=======
</TABLE>

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

<TABLE>
<S> <C>
(1) Land .............................................................................. $ 1,040
(2) Buildings and improvements ........................................................ 17,669
--------
$ 18,709
========
(B) Payment to Winn-Dixie in connection with the expansion of space at Commonwealth ...... $ 1,300
========
(C) (1) Reflects the payment in respect of mortgage notes payable ........................ $ 14,808
(2) Reflects the mortgage note payable incurred in February 1998 related to (3,300)
Commonwealth of $3,300
(3) Reflects the partial repayment of mortgage notes payable related to Sky Lake made
subsequent to
December 31, 1997 .................................................................. 2,000
(D) Reflects the sale of 3,330 shares of Common Stock in the Offering
Proceeds from the Offering ............................................................ $ 36,634
Costs associated with the Offering .................................................... (3,117)
--------
Net proceeds after expenses and loan fees .............................................. $ 33,517
========
Par value of Common Stock to be issued in the Offering ................................. $ 33
Additional paid-in capital from the net proceeds of the Offering ....................... 33,484
--------
$ 33,517
========
(E) Reflects distribution of the following assets in connection with the In-Kind
Distribution:
(1) Land ............................................................................... $ 3,211
(2) Notes receivable from stock sales .................................................. 1,525
--------
$ 4,736
========
(F) Reflects the purchase of Lantana Village in January 1998 allocated as follows:
(1) Land ............................................................................... $ 1,350
(2) Building ........................................................................... 5,400
--------
6,750
(3) Portion paid in cash ............................................................... 2,350
--------
(4) Portion financed by mortgage notes payable ......................................... $ 4,400
========
</TABLE>

(G) Represents a non-recurring charge of approximately $2.1 million to be
recorded upon finalization of the offering for the Company's put
obligation on certain warrants pursuant to the Settlement Agreement. The
pro forma consolidated statement of operations excludes this non-recurring
charge.

<TABLE>
<S> <C>
(H) Reflects the purchase of El Novillo in May 1998 allocated as follows:
(1) Land ............................................................... $ 250
(2) Building ........................................................... 1,000
------
(3) Portion financed by line of credit ................................. $1,250
======
</TABLE>

F-5
<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 year ended December 31, 1997 are as follows:

<TABLE>
<S> <C>
(I) Reflects the pro forma net effect of a full year of operations of Sky Lake, Monument
Pointe, Lantana Village,
Beauclerc Village and Summerlin Square shopping centers, and the ground lease on the
El Novillo restaurant
Rental income ......................................................................... $3,183
Operating expenses .................................................................... (704)
Depreciation and amortization ......................................................... (458)
------
$2,021
======
(J) Reflects the effect on interest expense as a result of the following:
Pro forma net effect of a full year of operations of Sky Lake, Monument Pointe,
Lantana Village, Beauclerc
Village and Summerlin Square shopping centers and the ground lease on the El Novillo $ 598
restaurant
Decrease in interest expense, including the amortization of deferred financing costs,
resulting from the repayment of mortgage notes payable .............................. (900)
------
(302)
======
(K) Reflects the increase in general and administrative expenses for the incremental costs
of operating as a public REIT ........................................................ $ 150
======
(L) Reflects the decrease in investment revenue as a result of the notes receivable
distributed
in connection with the In-Kind Distribution ........................................... $ (90)
======
</TABLE>

F-6
<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, 1997 and 1996,
and the related consolidated statements of operations, stockholders' equity and
cash flows for each of the three years in the period ended December 31, 1997.
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, 1997 and 1996 and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1997 in conformity with generally accepted accounting
principles.

DELOITTE & TOUCHE LLP

Miami, Florida
February 27, 1998
(March 6, 1998 as to Note 10)

F-7
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1997 AND 1996

(IN THOUSANDS EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
1997 1996
----------- ------------
<S> <C> <C>
ASSETS
RENTAL PROPERTIES:
Land .............................................. 40,458 $ 28,094
Buildings and improvements ........................ 85,983 78,612
------ --------
126,441 106,706
Less accumulated depreciation ...................... 7,191 4,849
------- --------
Rental properties, net ............................ 119,250 101,857
Cash and cash equivalents .......................... 2,598 1,951
Accounts and other receivables, net ................ 892 800
Securities available for sale ...................... 45 4,528
Deposits ........................................... 1,339 510
Prepaid and other assets ........................... 1,252 1,165
Deferred financing costs, net ...................... 1,527 1,011
------- --------
Total assets ................................... $126,903 $111,822
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Mortgage notes payable ............................. $ 71,004 $ 66,831
Tenants' security deposits ......................... 764 694
Accounts payable and accrued expenses .............. 1,281 950
Deferred rental income ............................. 274 252
-------- --------
Total liabilities .............................. 73,323 68,727
-------- --------
COMMITMENTS AND CONTINGENCIES (Note 7)
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; 6,908,130 and 5,768,418 shares
issued and outstanding for 1997 and
1996, respectively ............................... 69 58
Additional paid-in capital ......................... 55,036 44,562
Notes receivable from stock sales .................. (1,525) (1,525)
-------- --------
Total stockholders' equity ..................... 53,580 43,095
-------- --------
Total liabilities and stockholders' equity ......... $126,903 $111,822
======== ========
</TABLE>

See accompanying notes to the consolidated financial statements.

F-8
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
RENTAL INCOME .......................................................... $ 19,816 $ 16,337 $ 10,792
-------- -------- --------
INVESTMENT REVENUE:
Interest .............................................................. 424 239 497
Dividends ............................................................. 224 111 23
Realized gain on securities, net ...................................... 81 27 36
-------- -------- --------
Total investment revenue ............................................ 729 377 556
-------- -------- --------
COSTS AND EXPENSES:
Operating expenses .................................................... 5,693 4,832 3,293
Depreciation and amortization ......................................... 2,392 2,067 1,496
Interest .............................................................. 5,681 5,380 3,498
General and administrative expenses ................................... 581 515 549
-------- -------- --------
Total costs and expenses ............................................ 14,347 12,794 8,836
-------- -------- --------
Net Income ............................................................. $ 6,198 $ 3,920 $ 2,512
======== ======== ========
EARNINGS PER SHARE:
Basic earnings per share ............................................... $ 0.96 $ 0.79 $ 0.56
======== ======== ========
Number of shares used in computing basic earnings per share ............ 6,446 4,991 4,487
======== ======== ========
Diluted earnings per share ............................................. $ 0.87 $ 0.69 $ 0.47
======== ======== ========
Number of shares used in computing diluted earnings per share .......... 7,106 5,673 5,298
======== ======== ========
</TABLE>

See accompanying notes to the consolidated financial statements.

F-9
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

(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, 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
Notes receivable from issuance of
common stock ...................... $ (1,525) (1,525)
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)
------- -------- --------
Balance, December 31, 1996 .......... 58 44,562 (1,525) 43,095
Issuance of common stock ............ 11 10,596 10,607
Net income .......................... 6,198 6,198
Dividends paid ...................... (122) (6,198) (6,320)
------- -------- --------
Balance, December 31, 1997 .......... $69 $55,036 $ 0 $ (1,525) $ 0 $ 53,580
=== ======= ===== ======== ======== ========
</TABLE>

See accompanying notes to the consolidated financial statements.

F-10
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

(IN THOUSANDS)

<TABLE>
<CAPTION>
1997 1996 1995
----------- ------------ ------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income .............................................................. $ 6,198 $ 3,920 $ 2,512
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization .......................................... 2,611 2,282 1,578
Gain on sales of securities ............................................ (81) (27) (36)
Changes in assets and liabilities:
Accounts and other receivables ........................................ (96) 140 (625)
Deposits .............................................................. (79) 113 (262)
Prepaid and other assets .............................................. (133) (112) (75)
Accounts payable and accrued expenses ................................. 331 67 250
Income tax liability .................................................. 0 (34) (35)
Tenants' security deposits ............................................ 70 142 219
Deferred rental income ................................................ 22 189 (57)
--------- --------- ---------
Net cash provided by operating activities ............................ 8,843 6,680 3,469
--------- --------- ---------
INVESTING ACTIVITIES:
Acquisition and improvements to rental property ......................... (9,987) (13,936) (40,722)
Purchases of securities ................................................. (5,237) (7,029) (3,601)
Sales and prepayments of securities ..................................... 9,801 2,688 6,812
Deposits for acquisition of rental property ............................. (750) 0 0
Repayment of notes receivable ........................................... 0 0 300
--------- --------- ---------
Net cash used in investing activities ................................ (6,173) (18,277) (37,211)
--------- --------- ---------
FINANCING ACTIVITIES:
Due to stockholders ..................................................... 0 (2,216) 2,216
Repayments of mortgate notes payable .................................... (19,455) (4,352) (729)
Borrowings under mortgage notes payable ................................. 13,880 10,599 28,620
Deferred expenses ....................................................... (735) (289) (467)
Stock subscription and issuance ......................................... 10,607 13,215 623
Cash dividends paid to stockholders ..................................... (6,320) (4,179) (2,822)
--------- --------- ---------
Net cash (used in) provided by financing activities .................. (2,023) 12,778 27,441
--------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ..................... 647 1,181 (6,301)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ........................... 1,951 770 7,071
--------- --------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD ................................. $ 2,598 $ 1,951 $ 770
========= ========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest, net of amount capitalized ....................... $ 5,476 $ 4,752 $ 3,513
========= ========= =========
Cash paid for income taxes .............................................. $ 36
=========
SUPPLEMENTAL SCHEDULE OF CASH AND NONCASH INVESTING
AND FINANCING ACTIVITIES:
Conversion of common stock issued with put option to equity ............. $ 1,000
=========
Common stock issued for notes receivable ................................ $ 1,525
=========
Changes in unrealized depreciation in securities available for sale ..... $ 28
=========
Acquisition of rental property .......................................... $ 15,402
Cash paid for rental property ........................................... 5,654
---------
Assumption of mortgage notes payable .................................... $ 9,748
=========
</TABLE>

See accompanying notes to the consolidated financial statements.

F-11
<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 1997 and 1996, additional shares of
stock were issued to both affiliated and unaffiliated entities, reducing
Gazit's holdings in the Company to approximately 37% as of December 31, 1997
and 1996 (See Note 6). The Company was formed for the purpose of holding
various real estate subsidiaries located in the United States of America
("U.S." or "United States").

The Company currently owns and operates seventeen properties in Florida
and two properties in Texas, comprising approximately 86% and 14% of the total
rentable square footage, respectively. In addition, Winn-Dixie Stores Inc., and
Publix Supermarkets Inc., rent approximately 14% and 5% of the total rentable
square footage, respectively.

BASIS OF CONSOLIDATION - The consolidated financial statements include the
accounts of Equity One, Inc. and its wholly-owned subsidiaries. All
subsidiaries hereinafter are referred to as "the consolidated companies." All
intercompany 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, 1997 and 1996:

<TABLE>
<CAPTION>
L997 1996
--------- ---------
<S> <C> <C>
Cash ............................. $2,475 $1,828
Certificates of deposit .......... 123 123
------ ------
Total ......................... $2,598 $1,951
====== ======
</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. As of December 31, 1997 and 1996, all of the Company's securities
are classified as securities available for sale.

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

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 SFAS No. 121, ACCOUNTING FOR THE
IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF,
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

F-12
<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)
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.

DEFERRED EXPENSES - Deferred expenses consist of loan origination and
other fees directly related to 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 comprised of minimum rentals and
contingent rentals. Contingent rentals are generally received from tenants
based on their gross sales. For the years ended December 31, 1997, 1996 and
1995, contingent rentals recognized by the Company were approximately $172,
$153 and $87, respectively.

INCOME TAXES - There is no provision for income tax expense 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 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.

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 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 February 1997, SFAS No. 128, EARNINGS
PER SHARE was issued. SFAS No. 128, which supersedes APB Opinion No. 15 and was
adopted by the Company as of December 31, 1997, 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. The
1996 and 1995 earnings per share data have been restated to conform with this
pronouncement.

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

F-13
<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)
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. The Company adopted SFAS No. 129 in 1997, and the effects of
adoption are reflected in the consolidated financial statements.

In June 1997, SFAS No. 130, REPORTING COMPREHENSIVE INCOME was issued.
This statement establishes standards for reporting and display of comprehensive
income and its components in a full set of general-purpose financial
statements. This statement requires that all items that are required to be
recognized under accounting standards as components of comprehensive income be
reported in a financial statement that is displayed with the same prominence as
other financial statements. This statement is effective for fiscal years
beginning after December 15, 1997 and requires reclassification of comparative
financial statements for all earlier periods presented.

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 SFAS
No. 107, DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS. Considerable
judgment is required in interpreting market data to develop the estimates of
fair value. Accordingly, the estimates presented herein are not necessarily
indicative of the amounts the Company could realize in a current market
exchange. The use of different market assumptions and/or estimation methods may
have a material effect on the estimated fair value amounts. The Company has
used the following market assumptions and/or estimation methods:

CASH AND CASH EQUIVALENTS - The carrying amounts reported in the
consolidated balance sheets are reasonable estimates of fair value.

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.

MORTGAGE NOTES PAYABLE - The estimated fair value at December 31, 1997
and 1996 was $64,693 and $63,016, 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 pay to
terminate the agreement at the reporting date. The fair value at December
31, 1997 and 1996 was $0 and $1, 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 consolidated financial statements since that date and,
therefore, current estimates of fair value may differ significantly from
the amounts presented herein.

STOCK OPTION PLAN - On October 23, 1996, the Company adopted the Equity
One, Inc. 1995 Stock Option Plan, (the "Plan") which is described below. The
Company applies APB Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES,
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,

F-14
<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)
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 the 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 of the Company (the "Committee"), 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.

During 1996, the Company issued 450,000 options under the Plan to two
officers and two non-employee members of the Board 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 vest over a four year period,
112,500 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, 1997 and
1996, the per share price if exercised on that date was $12.05 and $12.20,
respectively. These options are considered "variable" options pursuant to APB
Opinion No. 25, based on the terms of such option (See Note 6).

On December 31, 1996, the Company issued 48,000 options under the Plan to
one officer of the Company at an exercise price of $8.25 per share. These
options were fully vested as of December 31, 1996 and expire on December 31,
1999 (See Note 6).

During 1997, the Company issued 146,000 options under the Plan to certain
employees, at an exercise price of $12.375 per share, fair market value on the
date of grant as determined by an independent valuation, which vest over a
period of three to four years, commencing on January 1, 1998, and on the first
day of each year, until all options vest. These options are not considered
"variable" options pursuant to APB Opinion No. 25, based on the terms of such
options (See Note 6).

The Company applies APB Opinion No. 25 and related interpretations in
accounting for its stock option plan to employees and non-employee members of
the Board. Compensation costs would have been increased by approximately
$658,000 and $658,000, for the year ended December 31, 1997 and 1996,
respectively, had the fair value of stock options granted been recognized as
compensation expense as prescribed by SFAS No. 123, ACCOUNTING FOR STOCK-BASED
COMPENSATION. The fair value of the stock options at the date of grant was
estimated using the minimum value method prescribed by SFAS No. 123 (See Note
6).

F-15
<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

Composition in the consolidated balance sheets:

<TABLE>
<CAPTION>
1997 1996
------ ---------
<S> <C> <C>
Debt securities ...................... $ 0 $ 550
Mortgage-backed securities ........... 45 2,878
U.S. Government obligations .......... 0 1,100
---- ------
Total ............................. $ 45 $4,528
==== ======
</TABLE>

As of December 31, 1997 and 1996, there were no material differences
between amortized cost and fair value. For the years ended December 31, 1997,
1996 and 1995, the Company had gross securities sales of $8,815, $2,411 and
$6,776 resulting in gross realized gains of $116, $32 and $52 and gross
realized losses of $35, $5 and $16, respectively.

Debt securities, mortgage-backed securities and U.S. government
obligations 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>
1997 1996
-------- -------
<S> <C> <C>
Tenants ............................................. $ 876 $746
Accrued interest receivable - institutions .......... 25 38
Employee loans and advances ......................... 20 16
Allowance for doubtful accounts ..................... (29) 0
----- ----
Total ............................................ $ 892 $800
===== ====
</TABLE>

F-16
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

4. RENTAL PROPERTY

Composition in the consolidated balance sheets:

<TABLE>
<CAPTION>
LAND,
BUILDINGS
AND BUILDING
EQUIPMENT IMPROVEMENTS TOTAL
----------- -------------- -----------
<S> <C> <C> <C>
COST
Balance at beginning of year ............ $102,976 $3,730 $106,706
Additions in the reporting year ......... 16,959 2,776 19,735
-------- ------ --------
Balance at end of year .................. 119,935 6,506 126,441
-------- ------ --------
ACCUMULATED DEPRECIATION
Balance at beginning of year ............ (4,476) (373) (4,849)
Depreciation for the year ............... (2,101) (241) (2,342)
-------- ------ --------
Balance at end of year .................. (6,577) (614) (7,191)
-------- ------ --------
Undepreciated balance
as of December 31, 1997 ................ $113,358 $5,892 $119,250
======== ====== ========
Undepreciated balance
as of December 31, 1996 ................ $ 98,500 $3,357 $101,857
======== ====== ========
</TABLE>

Rental property with a book value of approximately $107,145 serves as
collateral for recourse mortgage notes payable totaling $71,004 and $66,831 as
of December 31, 1997 and 1996, respectively (See Note 5).

Assets are depreciated on a straight-line basis, based on the following
annual percentages:

<TABLE>
<S> <C>
Buildings ............................... 2.50% - 3.33%
Building/leasehold improvements ......... 2.50% - 20.00%
Equipment ............................... 14.00% - 20.00%
</TABLE>

F-17
<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

Composition in the consolidated balance sheets:

<TABLE>
<CAPTION>
1997 1996
--------- ---------
<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) ................ $ 2,903 $ 3,015
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) ................... 2,974 3,001
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) .......................... 908 924
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) .......................... 5,311 5,482
Mortgage payable, 8.5%, interest only payable monthly through
January 1, 1996 with monthly installments of $21 including
interest commencing January 1, 1996, collateralized by rental property.
The mortgage payable was paid in full in May 1997. ........................ 0 2,351
Mortgage payable, 7.68% through February 15, 2015 payable in monthly
installments of $115 including interest, unpaid balance due
February 15, 2015, collaterized by rental property (Financed through
an Insurance Company) ..................................................... 13,093 13,221
Mortgage payable, 8.75%, payable in monthly installments of $19
including interest, collaterized by rental property. The mortgage
payable was paid in full in May 1997 (Financed through a Bank) ............ 0 2,247
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) ................... 1,210 1,227
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) ................... 3,929 4,044
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) ................... 2,385 2,445
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) ................... 2,366 2,419
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) ................... 5,674 5,816
</TABLE>

F-18
<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>
1997 1996
--------- ---------
<S> <C> <C>
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) ................ 12,796 13,109
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) ................... 1,997 2,058
Mortgage payable, 7.875%, through July 1, 2006 payable in monthly
installments of $50 and $46 for 1997 and 1996, respectively, 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-eight percentage rate. An
additional disbursement of $480 will be made by the lender after
certain conditions and terms were met, including but not limited to the
construction of a restaurant. The unpaid balance is due June 30, 2016,
collateralized by rental property (Financed through an Insurance
Company) .................................................................. 5,822 5,472
Mortgage payable, 10.06%, payable in monthly installments of $26
including interest, unpaid balance due June 1, 2001, collateralized by
rental property (Financed through an Insurance Company) ................... 2,636 0
Mortgage payable, 7.00%, interest only payable in monthly installments
of $49, unpaid balance is due February 15, 1998, collateralized by
rental property (Seller Financed) ......................................... 7,000 0
------ ------
Total ...................................................................... $71,004 $68,831
======= =======
</TABLE>

Principal maturities of the mortgage notes payable as of December 31, 1997
are as follows:

<TABLE>
<CAPTION>
YEAR ENDING
DECEMBER 31,
- --------------------------------
<S> <C>
1998 ......................... $ 8,744
1999 ......................... 3,063
2000 ......................... 2,880
2001 ......................... 4,643
2002 ......................... 13,284
Thereafter ................... 38,390
-------
Total ..................... $71,004
=======
</TABLE>

As of December 31, 1996, the Company had outstanding an off balance sheet
interest rate cap on a variable rate obligation, which protected the Company
from rising interest rates. This cap had a notional amount of $13,000. In
August, 1997, this interest rate cap agreement expired unexercised.

On February 19, 1998 the Company extended the short-term mortgage note
payable of 7.00% with a principal balance of $7,000 as of December 31, 1997
referred to above. The Company paid down

F-19
<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)
$2,000 from the original note amount. The new balance of $5,000 was extended
until August 19, 1998. All other terms of the note remain unchanged.

Interest costs incurred under the mortgage notes payable was $5,462 of
which $145 was capitalized in the years ended December 31, 1997.

6. STOCKHOLDERS' EQUITY

The Company had a two for one stock split on July 15, 1997 and changed the
par value of its common and preferred stock from $1.00 to $0.01. All share and
per share data and stockholders' equity accounts have been restated to reflect
the stock split and change in par value.

As of December 31, 1997 and 1996, the Company has authority to issue
45,000,000 and 15,000,000 shares, of which 40,000,000 and 10,000,000 are shares
of common stock and 5,000,000 are shares of preferred stock, respectively. The
Company had Class A warrants issued and outstanding to purchase 520,000 shares
of the Company's common stock as of December 31, 1996. During 1997 all Class A
warrants were exercised at $5.125 per share. On December 30, 1996, 235,610
Class B warrants were exercised at $8.25 per share and the remaining 906,124
Class B warrants were exchanged for 1,340,000 Class C warrants at an exercise
price of $8.25 per share which expire on December 31, 1999. The Company had
Class C warrants issued and outstanding to purchase 1,306,124 shares of the
Company's common stock as of December 31, 1997 and 1996.

During 1996, the Company entered into an agreement with Globe Reit,
pursuant to which Globe Reit agreed to purchase 2,000,000 shares of Common
Stock. At December 31, 1997, 580,288 shares remain to be purchased under this
agreement. 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. At December 31, 1997 the adjusted share price was $12.84. The
agreement expires November 1999.

During 1997, the Company paid cash dividends of $.215, $.225, $.2625 and
$.25 per share on March 31, June 18, September 15, and December 18,
respectively, to all stockholders of record on those dates. Gross dividends
paid were $6,320 for the year ended December 31, 1997.

During 1996, the Company paid cash dividends of $.375, $.20 and $.225 per
share 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.

Effective January 1, 1994 the Company acquired Global Realty and
Management, Inc. ("Global"), the property manager for all Florida rental
properties held by the Company. 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
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 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

F-20
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

6. STOCKHOLDERS' EQUITY--(CONTINUED)
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 by the
Company. 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 $12.375 per share under the Company's 1995 Stock Option
Plan (the "Plan").

During 1996, two officers, including the former stockholder of Global
discussed above, 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
consolidated financial statements as a reduction of stockholders' equity.

In accordance with SFAS No. 123, the following is a summary of the
Company's stock option activity for the years ended December 31, 1997 and 1996:

<TABLE>
<CAPTION>
1997 1996
------------------------ ------------------------
WEIGHTED WEIGHTED
AVERAGE AVERAGE
STOCK EXERCISE STOCK EXERCISE
OPTIONS PRICE OPTIONS PRICE
--------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Outstanding, beginning of year ..................... 498,000 $ 11.819 0
Granted ........................................... 146,000 12.375 498,000 $ 11.819
------- --------- ------- --------
Outstanding, end of year ........................... 644,000 $ 11.840 498,000 $ 11.819
======= ========= ======= ========
Exercisable, end of year ........................... 160,500 $ 10.914 48,000 $ 8.250
======= ========= ======= ========
Weighted average fair value of options granted under
SFAS No. 123 during the year ...................... $ 4.558 $ 4.558
========= ========
</TABLE>

The Company adopted the Plan effective January 1, 1996. Accordingly, no
1995 data is presented.

The following table summarizes information about the stock option plan as
of December 31, 1997:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------------------- ---------------------------
WEIGHTED
AVERAGE WEIGHTED WEIGHTED
REMAINING AVERAGE AVERAGE
RANGE OF NUMBER CONTRACTUAL LIFE EXERCISE NUMBER EXERCISE
EXERCISE PRICE OUTSTANDING (IN YEARS) PRICE EXERCISABLE PRICE
- ---------------- ------------ ------------------ ---------- ------------- -----------
<S> <C> <C> <C> <C> <C>
$ 8.250 48,000 0 $ 8.250 48,000 $ 8.250
12.050 450,000 4 12.050 112,500 12.125
12.375 146,000 4 12.375 0 0.000
</TABLE>

F-21
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

6. STOCKHOLDERS' EQUITY--(CONTINUED)
The fair value of each option grant was estimated on the grant date using
the minimum value method with the following assumptions:

<TABLE>
<CAPTION>
1997 1996
--------------- -----------
<S> <C> <C>
Dividend yield ........................ 8.08% - 8.30% 12.12%
Risk-free interest rate ............... 5.00% - 5.67% 5.00%
Expected option life (years) .......... 10 3
</TABLE>

In accordance with SFAS No. 128, the following is a reconciliation of the
numerators and denominators of the basic and diluted per-share computations for
income for the years ended December 31, 1997, 1996 and 1995.

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1997
--------------------------------------------
INCOME SHARES PER-SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
------------- --------------- ----------
<S> <C> <C> <C>
Net income ...................................... $6,198
======
BASIC EPS
Income available to common stockholders ......... $6,198 6,446,320 $ 0.96
====== --------- ======
EFFECT OF DILUTIVE SECURITIES
Series A Warrants ............................... 142,955
Series C Warrants ............................... 466,909
Stock Options ................................... 50,133
---------
659,997
---------
DILUTED EPS
Income available to common stockholders
+ assumed conversions .......................... $6,198 7,106,317 $ 0.87
====== ========= ======
</TABLE>

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1996
--------------------------------------------
INCOME SHARES PER-SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
------------- --------------- ----------
<S> <C> <C> <C>
Net income ...................................... $3,920
======
BASIC EPS
Income available to common stockholders ......... $3,920 4,991,321 $ 0.79
====== --------- ======
EFFECT OF DILUTIVE SECURITIES
Series A Warrants ............................... 199,504
Series C Warrants ............................... 450,924
Stock Options ................................... 30,857
---------
681,285
---------
DILUTED EPS
Income available to common stockholders
+ assumed conversions .......................... $3,920 5,672,606 $ 0.69
====== ========= ======
</TABLE>

F-22
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

6. STOCKHOLDERS' EQUITY--(CONTINUED)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1995
--------------------------------------------
INCOME SHARES PER-SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
------------- --------------- ----------
<S> <C> <C> <C>
Net income ...................................... $2,512
======
BASIC EPS
Income available to common stockholders ......... $2,512 4,486,673 $ 0.56
====== --------- ======
EFFECT OF DILUTIVE SECURITIES
Series A Warrants ............................... 430,606
Series C Warrants ............................... 380,578
---------
811,184
---------
DILUTED EPS
Income available to common stockholders
+ assumed conversions .......................... $2,512 5,297,857 $ 0.47
====== ========= ======
</TABLE>

7. FUTURE MINIMUM RENTAL INCOME, COMMITMENTS AND CONTINGENCIES

Future minimum rental income under noncancelable operating leases
approximates the following as of December 31, 1997:

<TABLE>
<CAPTION>
YEAR ENDING
DECEMBER 31,
- --------------------------------
<S> <C>
1998 ......................... $ 14,267
1999 ......................... 12,809
2000 ......................... 11,152
2001 ......................... 9,451
2002 ......................... 8,303
Thereafter ................... 50,672
--------
Total ..................... $106,654
========
</TABLE>

During 1996, the Company obtained a line of credit of $2,500 secured by
rental property. As of December 31, 1997 no amounts on this line of credit have
been used.

During 1996, the Company pledged a letter of credit for $1,500 as
additional security on one of its properties. As of December 31, 1997 this
pledged letter of credit remains outstanding. The letter of credit is
collateralized by rental property.

In February 1998, a prospective anchor tenant (the "Plaintiff") filed a
claim against the Company for breach of an alleged letter agreement relating to
a proposed lease agreement with the Plaintiff. The Plantiff's claim includes
(i) specific performance, (ii) damages for breach of a letter agreement of
approximately $10,000 (1) misappropriation of trade secrets, (2) promissory
estoppel, including approximately $250 for time, effort, and expenses and (3)
unjust enrichment. The Company believes that this claim is without merit and
will defend against it vigorously. An estimate of the range of loss (if any)
cannot be made at this time.

F-23
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

7. FUTURE MINIMUM RENTAL INCOME, COMMITMENTS AND CONTINGENCIES--(CONTINUED)
The Company is subject to other 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 or results of operations of the
Company.

8. RELATED PARTY TRANSACTIONS

Transactions with related parties are summarized below. See discussion of
certain additional related party transactions at Notes 6 and 12.

For the year ended December 31, 1995 an affiliated entity, Gazit USA,
Inc., provided the Company with office space, office services and certain
management and consulting services for a management fee. Such fee totaled $150
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 years ended December 31, 1997
and 1996 such fees totaled $10 and $10, respectively and is included as an
offset in general and administrative expenses in the accompanying consolidated
statements of operations.

As of December 31, 1997 and 1996, balances due from related parties are
non-interest bearing with no specified due dates.

The Company has entered into an employment agreement with a current
officer and director for a period of 7 years with an option to extend the
agreement for another 7 years. The individual, or a company under his control,
is entitled to remuneration of $240 per year, effective as of January 1, 1996
and options to purchase 200,000 shares in the Company at an exercise price of
$12.375 per share subject to adjustment. As of December 31, 1996, the Company
provided a $1,129 loan for a seven year period to the individual for the
purpose of exercising existing Class A warrants held by the individual. The
loan bears interest at 6.86% per year. The loan has been offset against
stockholders' equity.

For the years ended December 31, 1997 and 1996, the Company had
compensated Chaim Katzman, President and Doron Valero, Vice President and
significant stockholders, $254 and $191 in 1997, respectively and $240 and $230
in 1996, respectively.

Warrants and options have been issued to certain officers, directors and
affiliates. See Note 6.

F-24
<PAGE>

EQUITY ONE, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

9. CONDENSED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1997
Total revenue ...................... $ 4,806 $ 4,867 $ 5,187 $ 5,685
Net income ......................... 1,165 1,407 1,597 2,029
Basic earnings per share ........... $ 0.20 $ 0.23 $ 0.23 $ 0.29
Diluted earnings per share ......... $ 0.18 $ 0.20 $ 0.22 $ 0.27
1996
Total revenue ...................... $ 4,030 $ 4,012 $ 4,240 $ 4,432
Net income ......................... 907 923 1,138 952
Basic earnings per share ........... $ 0.20 $ 0.20 $ 0.21 $ 0.17
Diluted earnings per share ......... $ 0.17 $ 0.18 $ 0.18 $ 0.15
</TABLE>

10. SUBSEQUENT EVENT

On March 6, 1998, the Company proposed a plan to distribute certain assets
to its stockholders. The proposed plan provides for the transfer to a newly
formed partnership of 16.7 acres of land with a book value at December 31, 1997
of $3,211 and the notes receivable from stock sales totaling $1,525. The
Company will then distribute all of the partnership interests to its
stockholders and the book value of the assets will be treated as a distribution
and charged to additional paid-in capital. The Company will also retain an
option for five years to repurchase the land at option prices totaling $4,800.

* * * * * *

F-25
<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, 1997. 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 Lantana Village
Square for the year ended December 31, 1997 in conformity with generally
accepted accounting principles.

DELOITTE & TOUCHE LLP

Miami, Florida
March 17, 1998

F-26
<PAGE>

LANTANA VILLAGE SQUARE

STATEMENT OF REVENUES AND CERTAIN EXPENSES

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1997
------------------
<S> <C>
REVENUES:
Rental income ................................. $769,840
Recoverable expenses .......................... 175,499
Other income .................................. 1,923
--------
Total revenues ................................ 947,262
--------
CERTAIN EXPENSES:
Property operating ............................ 76,471
Real estate taxes ............................. 125,648
Insurance ..................................... 20,115
--------
Total certain expenses ..................... 222,234
--------
REVENUES IN EXCESS OF CERTAIN EXPENSES ......... $725,028
========
</TABLE>

See notes to the statement of revenues and certain expenses.

F-27
<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, was purchased on January 5, 1998 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, 1997 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, 1997 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.

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
certain 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. For the year ended December 31, 1997, no
contingent rentals were recognized by the Property.

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, 1997, the Property was
managed by Commercial Venture Services, Inc. for a property management fee paid
monthly based on a fixed monthly fee of $3,500.

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, 1997 are as
follows:

<TABLE>
<CAPTION>
DECEMBER 31 AMOUNT
- ------------------------ -------------
<S> <C>
1998 ............... $ 778,754
1999 ............... 699,256
2000 ............... 587,190
2001 ............... 567,889
2002 ............... 532,313
Thereafter .......... 4,127,616
----------
Total ............... $7,293,018
==========
</TABLE>

F-28
<PAGE>

INDEPENDENT AUDITORS' REPORT

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

We have audited the statement of revenues and certain expenses of
Summerlin Square (the "Property") for the year ended December 31, 1997. 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 Summerlin Square
for the year ended December 31, 1997 in conformity with generally accepted
accounting principles.

DELOITTE & TOUCHE LLP

Miami, Florida
March 18, 1998

F-29
<PAGE>

SUMMERLIN SQUARE

STATEMENT OF REVENUES AND CERTAIN EXPENSES

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1997
------------------
<S> <C>
REVENUES:
Rental income .................... $1,101,776
Recoverable expenses ............. 153,900
----------
Total revenues ................. 1,255,676
----------
CERTAIN EXPENSES:
Property operating ............... 60,800
Real estate taxes ................ 149,251
Insurance ........................ 41,989
----------
Total certain expenses ......... 252,040
----------
REVENUES IN EXCESS OF
CERTAIN EXPENSES ................ $1,003,636
==========
</TABLE>

See notes to the statement of revenues and certain expenses.

F-30
<PAGE>

SUMMERLIN SQUARE

NOTES TO THE STATEMENT OF REVENUES AND CERTAIN EXPENSES

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Summerlin Square ("Summerlin" or the "Property"), located in Fort Myers,
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, 1997 as recorded by the owner, Sunrise Limited Partnership.

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, 1997 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 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.

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
certain 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. For the year ended December 31, 1997,
contingent rentals recognized by the Property were approximately $10,869.

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, 1997, the Property was
managed by Sunrise Limited Parternship for a property management fee paid
monthly based on 4% of base rental income.

AGREEMENT FOR PURCHASE AND SALE - An agreement for purchase and sale was
signed on March 12, 1998 with Sunrise Limited Partnership. The closing date is
scheduled to take place on or before April 26, 1998.

F-31
<PAGE>

SUMMERLIN SQUARE

NOTES TO THE STATEMENT OF REVENUES AND CERTAIN EXPENSES--(CONTINUED)
2. OPERATING LEASES

<TABLE>
<CAPTION>
YEAR ENDING
DECEMBER 31 AMOUNT
- ---------------------------- -------------
<S> <C>
1998 ............... $ 991,082
1999 ............... 896,743
2000 ............... 866,150
2001 ............... 796,713
2002 ............... 727,171
Thereafter ......... 2,292,070
----------
Total ............ $6,569,929
==========
</TABLE>

F-32
<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 ................................... 1
Risk Factors ......................................... 18
Use of Proceeds ...................................... 32
Distribution Policy .................................. 33
Dilution ............................................. 37
Capitalization ....................................... 38
Selected Consolidated Financial Data ................. 39
Management's Discussion and Analysis of
Financial Condition and Results of
Operations ........................................ 41
Business ............................................. 46
Management ........................................... 68
Certain Transactions ................................. 74
Policies with Respect to Certain Activities .......... 78
Principal and Selling Stockholders ................... 81
Description of Capital Stock ......................... 83
Shares Eligible for Future Sale ...................... 90
Federal Income Tax Considerations .................... 92
ERISA Considerations ................................. 104
Underwriting ......................................... 106
Legal Matters ........................................ 108
Experts .............................................. 108
Additional Information ............................... 108
Glossary ............................................. 109
Index to Financial Statements ........................ F-1
</TABLE>

--------------------------
UNTIL JUNE 7, 1998, 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.

[GRAPHIC OMITTED]

EQUITY ONE, INC.

4,700,000 Shares

Common Stock
($.01 par value)

PROSPECTUS

CREDIT SUISSE FIRST BOSTON

MORGAN KEEGAN & COMPANY, INC.

THE ROBINSON-HUMPHREY
COMPANY

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