For the fiscal year ended December 31, 1999 OR

TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

For the transition period from ____ to ____

Commission File Number 1-11478

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days.

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

The aggregate market value of the voting stock held by non-affiliates of the Registrant was approximately $94

million based on the closing price on the New York Stock Exchange for such stock on March 17, 2000.

The number of shares of the Registrant's Common Shares of Beneficial Interest outstanding was 10,566,746 as of March 17, 2000.

TABLE OF CONTENTS

This Form 10-K, together with other statements and information publicly disseminated by the Company, contains certain statements that may be deemed to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this Form 10-K, that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future, including such matters as future capital expenditures, distributions and acquisitions (including the amount and nature thereof), the use of proceeds of offerings, expansion and other development trends of the real estate industry, business strategies, expansion and growth of the Company's operations and other such matters are forward-looking statements. Such statements are based on assumptions and expectations which may not be realized and are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Prospective investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those anticipated in the forward-looking statements. Risks and other factors that might cause such differences, some of which could be material, include, but are not limited to: the burden of the Company's substantial debt obligations; the necessity of future financings to repay the "balloon" payments required at the maturity of certain of the Company's debt obligations; the highly competitive nature of the real estate leasing market; adverse changes in the real estate markets including, among other things, competition with other companies; general economic and business conditions, which will, among other things, affect demand for retail space or retail goods, availability and creditworthiness of prospective tenants and lease rents; financial condition and bankruptcy of tenants, including disaffirmance of leases by bankrupt tenants; the availability and terms of debt and equity financing; risks of real estate acquisition, expansion and renovation; governmental actions and initiatives; environmental/safety requirements; and other changes and factors referenced herein under Item 1. Business and from time to time in the Company's reports filed with the Securities and Exchange Commission or otherwise publicly disseminated by the Company.

(a) General Description of Business

Kranzco Realty Trust (the "Trust") was formed on June 17, 1992 as a Maryland real estate investment trust ("REIT").

On November 19, 1992, the Trust consummated an initial public offering (the "IPO") of 6,400,000 of its common shares of beneficial interest (the "Shares"). On December 15, 1992, the Trust sold an additional 361,900 Shares as a result of the exercise of the over-allotment option granted to the underwriters in connection with the IPO.

On October 7, 1993, the Trust consummated a second public offering (the "Second Offering") of 2,200,000 Shares. On November 3, 1993, the Trust sold an additional 50,000 Shares as a result of the exercise of the over-allotment option granted to the underwriters in connection with the Second Offering.

The Trust and its consolidated subsidiaries are hereinafter referred to as the "Company".

(b) Developments During the 1999 Fiscal Year

In June 1999, the Company sold one of its free-standing properties located in Tucson, AZ for approximately $864,000 and recorded a net loss on the sale of approximately $18,000. In July and August 1999, the Company completed the sale of three additional free-standing properties located in Raynham, MA, Roseville, MN, and Minnetonka, MN as well as a 61,000 square foot shopping center in Orange, CT. Total proceeds on the sales were approximately $9,887,000 and the net gain was approximately $545,000. The proceeds of the sales were used to pay down debt obligations and for general corporate purposes, including the continuing program of upgrading and expanding existing properties. In September 1999, the Company sold a parcel of land at its center in Bainbridge, GA, and recorded a gain of approximately $59,000. The net proceeds from the sale of approximately $235,000 was used to repay debt outstanding on the property. In the third quarter of 1999, the Company finalized the condemnation of a small portion of land at one of its properties by the respective township authority. Gross proceeds were approximately $99,000 and the Company recorded a loss of $51,000 related to the transaction.

During 1999, the Company had two anchor tenants, Bradlees and Caldor, which were in bankruptcy under Chapter 11 of the bankruptcy code. In general, in a Chapter 11 proceeding, the tenant is required to pay the full rental to the landlord for the store on a current basis unless the lease is disaffirmed. In January 1999, Bradlees announced that they emerged from Chapter 11. The Bradlees store is located in Bethlehem, Pennsylvania and is approximately 85,899 square feet. This store is open and operating with rental obligations being paid on a timely basis in accordance with the lease. In January 1999, Caldor announced that it would discontinue operations and close all stores during 1999. Caldor was a tenant of the Company with three stores representing approximately $2.8 million or 3.6% of the Company's annual revenues. The Caldor stores were located in Towson, Maryland, Bristol, Pennsylvania and Hamilton Township, New Jersey and were approximately 94,600, 113,160 and 119,935 square feet, respectively. The Towson lease is guaranteed by The May Department Stores Company. The lease for the store in Hamilton, New Jersey was purchased by Bradlees in April 1999 in a bankruptcy court auction. Management has signed a lease with Ames Department Stores, Inc. for approximately 71,550 square feet of the Bristol location in the fourth quarter. The store is expected to be open by the end of the first quarter in 2000. The Company has several other tenants currently operating under Chapter 11 of the Bankruptcy Code. These tenants continue to pay rent to the Company, have not rejected their leases and, in the aggregate, will pay approximately 1.4% of the Company's annual revenues.

(c) Financial Information About Industry Segments

The Company is in the business of owning, managing, operating, leasing, acquiring, developing, investing in and disposing of neighborhood and community shopping centers and free-standing properties. The Company internally evaluates all properties as one segment and accordingly does not report segment information. See the Consolidated Financial Statements and Notes thereto included in Item 8 of this Annual Report on Form 10-K for certain financial information required by Item 1.

(d) Narrative Description of Business

General At March 17, 2000, the Company owned and operated 62 neighborhood and community shopping centers and free-standing properties (the "Properties") aggregating approximately 9.0 million square feet of GLA located in Connecticut, Georgia, Florida, Kentucky, Maryland, Michigan, Mississippi, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee and Virginia.

The Company is self-administered and self-managed and does not engage or pay a REIT advisor because the Company provides management, leasing, accounting, legal, design and construction expertise through its own personnel or, where appropriate, through outside professionals.

The Company's executive offices are located at 128 Fayette Street, Conshohocken, Pennsylvania 19428 and its telephone number is (610) 941-9292.

Operating Strategies The Company's primary business objective is to achieve growth in its funds from operations by enhancing the operating performance of the Properties and, through selective acquisitions, the value of its portfolio. The Company's operating strategies are to: (i) focus on the neighborhood and community shopping center business; (ii) actively manage its properties for long-term growth in funds from operations and capital appreciation; (iii) increase portfolio occupancy by capitalizing on management's reputation and long-standing relationships with national and regional tenants and extensive experience in marketing to local tenants, as well as the negotiating leverage inherent in a large portfolio of properties; (iv) maintain, renovate, expand and reconfigure its properties; (v) optimize the tenant mix in each shopping center; (vi) develop or ground lease outparcels or expansion areas existing from time to time at its properties for use as restaurants, banks, auto centers, cinemas or other facilities; and (vii) benefit from economies of scale by spreading overhead expenses over a larger asset base.

Acquisition Strategies/Investment Strategies The Company intends to make acquisitions in a manner consistent with the requirements of the Internal Revenue Code of 1986, as amended (the "Code") applicable to REITs and related regulations with respect to the composition of the Company's portfolio and the derivation of income unless, because of circumstances or changes in the Code (or any related regulation), the trustees (the "Trustees") of the Company determine that it is no longer in the best interests of the Company to qualify as a REIT. The Company's acquisition strategy is to opportunistically acquire properties which need replacement anchor tenants or where the Company's management expertise and reputation can enhance value. That strategy includes acquiring and rehabilitating properties in new markets with strong demographic characteristics in order to reduce the Company's sensitivity to regional economic cycles. The Company does not intend to invest in excess of 15% of its assets in any single property.

The Company will generally acquire 100% fee simple or leasehold interests in real property consistent with the Company's acquisition strategies set forth above. However, the Company may make equity investments through joint ventures with developers, owners or other persons which may provide for, among other terms, (i) a cumulative preference as to cash distributions; (ii) a participation in net cash flows from operations; and (iii) a participation in the appreciation of the value of the underlying real property. The Company contemplates that it would maintain at least equal control over the underlying real property to be operated by any joint venture (including possibly the day-to-day management of the real property) and additional investments in or sale or financing of such underlying real property. The Company may also acquire investments in real property or real estate oriented companies through issuance of debt or equity securities in exchange for investments or by such other methods as the Trustees deem to be in the best interests of the Company.

Financing Strategies The Company intends to maintain a conservative ratio of debt to estimated value of the Company's real estate assets (as determined by the Trustees, taking into consideration the tenants in occupancy, gross rental revenues, geographic location and other factors affecting the value of the Company's properties) ("Debt Ratio") of generally not more than 50%, depending on current market conditions. At December 31, 1999, the Company had a Debt Ratio of approximately 59% and a ratio of debt to total market capitalization, based upon the closing price of the Company's stock on the New York Stock Exchange as of December 31, 1999, of approximately 70%. The Company intends to finance acquisitions with the most appropriate sources of capital, as determined by the Trustees, which may include available cash flows from operations, the issuance of equity securities, the sale of investments and, within the debt guidelines described above, bank and other institutional borrowings and the issuance of debt securities. Future borrowings by the Company for acquisitions may be either on a secured or unsecured basis. In this regard, the Company has obtained several credit facilities as described below.

The Company has a $1.0 million unsecured credit facility from First Union National Bank (the "First Union Facility"). Amounts borrowed under the line of credit bear interest at the bank's prime rate, which was 8.5% at December 31, 1999. As of December 31, 1999, there was $750,000 of outstanding borrowings under the First Union Facility. The facility's expiration date is April 30, 2000.

In 1998, the Company increased its secured line of credit from Salomon Brothers Realty Corp. to $100 million from $50 million (the "Salomon Facility"). Fifteen of the Company's shopping centers or portions thereof secure the Salomon Facility. Amounts borrowed under the Salomon Facility will bear interest at a rate equal to the one month London Interbank Offering Rate ("LIBOR") plus a spread of 175 basis points, which was 8.23% as of December 31, 1999. The term of the Salomon Facility was extended to July 2000, with an option for a one year renewal. As of December 31, 1999, the Company had $47,765,000 of outstanding borrowings under this facility.

The Company has three balloon payments on debt obligations due in 2000. Two mortgages totalling $11 million collateralized by two properties are due in the fourth quarter of 2000. The Company intends to refinance the mortgages on these properties. The Salomon Facility, due in July 2000, will be extended at the Company's option, subject to meeting certain requirements of the Salomon Facility documents, if the proposed merger with CV Reit, Inc. is not consummated at that time.

Operating Practices Virtually all operating and administrative functions, such as leasing, data processing, maintenance, finance, accounting, construction and legal, are centrally managed at the Company's headquarters. In addition, the Company maintains regional offices at The Village of Mableton in Mableton, Georgia, The Mall at Cross County in Yonkers, New York and Marumsco Plaza, in Woodbridge, Virginia. On-site functions such as security, maintenance, landscaping, sweeping, plumbing, electrical and other similar activities are either performed by the Company or subcontracted. The cost of these functions are passed through to tenants to the extent permitted by their respective leases.

The Company has proprietary sophisticated computer software systems designed to support its operating and administrative functions and to optimize management's ability to own, operate and manage additional properties without significant increase in its general and administrative expenses. The Company's systems allow instant access to floor plans, store availability, lease data, tenants' sales history, cash flows and budgets. The Company believes its systems to be as advanced as any in the industry.

Competition All of the Company's properties are located in developed retail and commercial areas. There are generally numerous other neighborhood and community shopping centers within a five-mile radius of each of the properties. In addition, with respect to some of the Company's properties there are one or more regional malls within a 10-mile radius. The amount of rentable space in the area could have a material effect on the Company's ability to rent space and the rents charged. In addition, the Company will be competing with others who may have greater financial resources and experience than the Company and its officers and Trustees for tenants and acquisitions.

Employees As of December 31, 1999, the Company had approximately 60 full and part-time employees. None of the Company's employees are subject to a collective bargaining agreement and the Company has experienced no labor-related work stoppages. The Company considers its relations with its personnel to be good.

Business Risks The Company is subject to risks arising in connection with the underlying real estate, including defaults under or nonrenewal of tenant leases, tenant bankruptcies, competition, inability to rent unleased space, failure to generate sufficient income to meet operating expenses, including debt service (including "balloon" payments on certain financial obligations), capital expenditures and tenant improvements, environmental matters, financing availability and costs, and changes in real estate and zoning laws. The success of the Company also depends upon certain key personnel, its ability to maintain its qualification as a REIT, compliance with the terms and conditions of its mortgages and the credit facilities and trends in the national and local economy, including income tax laws, governmental regulations and legislation and population trends.

Tax Status The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Code. So long as the Company qualifies for taxation as a REIT, the Company generally will not be subject to Federal income tax to the extent it distributes at least 95% of its REIT taxable income to its shareholders. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to Federal income tax (including any applicable alternative minimum tax) on its taxable income at regular corporate rates. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income and property and to federal income and excise taxes on its undistributed income.

Shopping Center Properties The Company owns and operates 62 neighborhood and community shopping centers and free-standing properties located in Connecticut, Georgia, Florida, Kentucky, Maryland, Michigan, Mississippi, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee and Virginia. The Properties were designed to attract local area customers and are typically anchored by a supermarket, discount department store or drugstore, and are diversified in size, ranging from 387,000 square feet of gross leasable area to only 17,000 square feet of gross leasable area. Typical tenants are Wal-Mart (at 11 Properties), Kmart (8), A & P SuperFresh Supermarkets (2), Pathmark Supermarkets (5), Stop & Shop (4), The Sports Authority (2), Food Lion (5), Ames (2), Kroger (3), Home Depot (1), Fashion Bug (15), Marshalls/TJ Maxx (4), Cato (14), Eckerd Drug (6), Drug Emporium (3), Toys "R" Us (1) and Kids "R" Us (3). At 36 of the Properties, free-standing restaurants, retail stores or banks, such as McDonalds, Ponderosa, Pizza Hut, First Union National Bank, Auto Zone, Tire America and Somerset Tire Service, are businesses located on Out-Parcels. Three of the Properties are community malls of 288,000 square feet, 262,000 square feet and 177,000 square feet, respectively. One is anchored by Kmart and Ames Department Stores while another is anchored by Kids "R" Us, The Sports Authority, Circuit City, National Wholesale Liquidators and TJ Maxx. The third is anchored by Ames Department Stores. Thirteen of the Properties contain additional land for expansion of existing stores and thirty one of the Properties have Out-Parcels available for development of free-standing buildings for use as restaurants, banks, auto centers, cinemas and other operations.

The Properties are smaller than regional malls, depend less on long travel times and the sale of major consumer goods and focus on everyday purchases from a smaller customer base. Discount stores and supermarkets attract convenience goods shoppers and bring customers to the smaller satellite shops. Shopping centers of this kind are typically less vulnerable to shifts in population and traffic patterns and rely heavily on weekly advertising by the anchor tenants.

Consistent with its intention to retain its shopping centers for long-term investment, the Company intends to continue to pursue a program of regular physical maintenance, together with major renovations and refurbishing, to preserve and increase the value of the Properties. These projects usually include or will include renovating existing facades, installing uniform signage, resurfacing parking lots and increasing parking lot lighting.

A substantial portion of the income from the Properties consists of rent received under long-term leases. Most of the leases provide for the payment of fixed minimum rent monthly in advance and for the payment by tenants of a pro rata share of the real estate taxes, insurance, utilities and common area maintenance of the shopping center. Certain of the major tenant leases provide that the landlord is obligated to pay certain of these expenses above or below specific levels. Except for Wal-Mart, Pathmark Supermarkets, Kmart and Stop & Shop, which represented approximately 7%, 4%, 4% and 3%, respectively, no tenant represented more than 3% of the aggregate minimum rent of the Properties as of December 31, 1999. Minimum rent revenues and operating expense reimbursements accounted for approximately 97% of the total revenues of the Company for the year ended December 31, 1999. A majority of the leases associated with the Properties also provide for the payment of percentage rent calculated as a percentage of a tenant's gross sales above predetermined thresholds. Percentage rent accounted for appoximately 2% of the total revenues of the Company for the year ended December 31, 1999.

The leases of space at the Properties typically require the landlord to provide maintenance of a shopping center's common areas, including cleaning, lighting, paving, security, landscaping and insurance, the costs of which are typically reimbursed to the landlord by the tenants. The landlord is also typically required to make roof and structural repairs as needed, which in some cases are without reimbursement. The leases for larger shopping center tenants often restrict the ability of tenants to assign or sublet their spaces and require tenants to use the space they lease for the purposes designated in the leases and to operate their businesses on a continuous basis. However, certain of the leases with major tenants contain modifications of these provisions as a result of the financial condition, stability or desirability of such tenants. If a tenant assigns or subleases its space, the original tenant generally will remain liable for the payment of rent under the lease.

Three of the Properties and a portion of another are subject to long-term ground leases where a third party owns and has leased the underlying land to the Company to operate a shopping center. The Company pays rent for the use of the land and generally is responsible for all costs and expenses associated with the building and improvements. At the end of the lease term, unless extended, the land, together with all improvements thereon, will revert to the land owner without compensation to the Company.

As of March 1, 2000, the occupancy rate for the Properties was approximately 91%. The property table set forth below gives more specific information with respect to each of the Properties as of March 1, 2000.

Corporate Headquarters The Company leases from Norman M. Kranzdorf, its President and Chief Executive Officer, a three-story building containing approximately 20,000 gross square feet located at 128 Fayette Street, Conshohocken, Pennsylvania 19428, which serves as the Company's headquarters. This lease was extended to January 14, 2004 and provides that the Company will pay a rental of $153,720 per annum. The lease also requires the Company to pay for all real estate taxes, utilities, repairs and other costs and expenses in connection with the use and occupancy of the building.

The Company is not presently involved in any material litigation nor, to its knowledge, is any material litigation threatened against the Company or its properties. The Company is involved in routine litigation arising in the ordinary course of business and which is expected to be covered by the Company's liability insurance.

No matter was submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report.

(a) Market Information

The Shares have been listed on the New York Stock Exchange ("NYSE") since November 19, 1992 under the symbol "KRT." On March 17, 2000, the last reported sale price of the Shares on the NYSE was $8.875 per share. The following table shows the high and low sales price for the Shares for the fiscal periods indicated as reported by the New York Stock Exchange Composite Tape and the cash distributions per Common Share paid by the Company with respect to each such period.

(b) Holders

The approximate number of holders of record of the Shares was 1,240 as of March 17, 2000.

(c) Recent Sales of Unregistered Securities

On April 1, 1999, July 1, 1999, October 1, 1999 and January 1, 2000, Shares were issued to the non-employee trustees of the Company (the "Trustee Shares"). Trustee Shares issued to Dr. Peter Linneman, Mr. Bernard Korman, Mr. Gerald Finn and Mr. E. Donald Shapiro totalled 2,836, 2,688, 2,666 and 2,836, respectively, for the above periods. The Trustee Shares were issued to such individuals in lieu of (i) their annual trustee fee of $18,000, and (ii) a fee of $1,500 for each regular Board meeting attended. The Trustee Shares were valued based on the closing price of the Shares on the New York Stock Exchange on the last business day of the fiscal quarter preceding the date of grant. No underwriter was used in connection with the issuance of the Trustee Shares. For the fiscal year 1999, the non-employee trustees received an aggregate of 11,026 Shares having an aggregate value of $117,000 at the respective dates of grant.

On July 1, 1999, the Company issued 17,131 restricted Shares (the "Employee Shares") to certain employees. The Employee Shares were valued based on a per share price of $13.44 and were issued as bonuses for performance. The Employee Shares vest over periods from one to three years from the date of issuance, although employees are immediately entitled to the distributions from the date of grant. No underwriter was used in connection with the issuance of the Employee Shares.

The issuance of the Trustee Shares and the Employee Shares were exempt from registration under the Securities Act of 1993, as amended (the "Act"), as transactions by an issuer not involving any public offering in accordance with Section 4(2) of the Act.

(d) Distributions

The Company declared distributions to common shareholders aggregating $1.61 per Share during the fiscal year ended December 31, 1999. The fourth quarter distribution of $0.325 per common share which was declared on December 14, 1999 and paid in January 2000 is reportable in the year 2000. Of the remaining distribution, it was determined that $0.3356 per share is a return of capital, $0.0709 per share is unrecaptured section 1250 gain, $0.009 per share is 20% gain and $0.8695 per share is ordinary income for 1999.

The Company has paid regular quarterly cash distributions on the Shares since it commenced operations as a REIT in November 1992.

Future distributions paid by the Company will be at the discretion of the Trustees and will depend on the actual cash flow of the Company, its financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Code and such other factors as the Trustees deem relevant.

The Company has adopted a dividend reinvestment plan pursuant to which shareholders may elect to automatically reinvest their distributions in Shares. To fulfill its obligations under this dividend reinvestment plan, the Company will, from time to time, repurchase Shares in the open market or issue new Shares.

The following table sets forth on a historical basis Selected Financial Data for the Company. This information should be read in conjunction with the financial statements of the Company (including the related notes thereto) and Management's Discussion and Analysis of the Financial Condition and Results of Operations. The historical Selected Financial Data for Kranzco Realty Trust has been derived from the audited financial statements.

As of December 31, 1999 the Company had total mortgages and notes payable of $353,208,000 of which $293,027,000 bear interest at fixed rates ranging from 7.00% to 9.375%. The weighted average interest rate of all of the Company's mortgages and notes payable as of December 31, 1999 was 7.92%. As of December 31, 1999, the Company is required to make aggregate principal payments on all of its outstanding indebtedness of $61,409,000 in 2000, $5,294,000 in 2001, $4,371,000 in 2002, $193,895,000 in 2003, $15,497,000 in 2004 and $72,742,000 thereafter. The Company has three balloon payments on debt obligations due in 2000. Two mortgages totalling $11 million collateralized by two properties are due in the fourth quarter of 2000. The Company intends to refinance the mortgages on these properties. The Salomon Facility, due in July 2000, will be extended at the Company's option, subject to meeting certain requirements of the Salomon Facility documents, if the proposed merger with CV Reit, Inc. is not consummated at that time.

In June 1996, the Company successfully completed the refinancing of substantially all of its variable rate debt and a portion of its fixed rate debt. The Company entered into a seven year, secured, fixed rate real estate mortgage loan in the principal amount of $181,700,000 (the "Mortgage Loan"), at a weighted average interest rate of 7.96%, which is inclusive of trustee and servicer fees. The entire principal balance of the Mortgage Loan is due in June 2003. The Mortgage Loan is secured by twenty-seven of the Company's properties (the "Mortgaged Properties"). As a condition of the Mortgage Loan, the Company was required to establish a Sinking Fund Account and a Capital and TI Reserve Account. The balance in the Sinking Fund Account was $498,000 as of December 31, 1999. All funds in the Capital and TI Reserve Account may be used on a current basis to fund capital improvements, repairs, alterations, tenant improvements and leasing commissions at the Mortgaged Properties. The balance in the Capital and TI Reserve Account was $1,000 as of December 31, 1999.

In 1998, the Company partially funded the purchase of nine shopping center properties through a 10-year 7% fixed rate $65,900,000 mortgage with Salomon Brothers Realty Corp. As of December 31, 1999, the outstanding principal balance on this mortgage was $65,194,000.

As of December 31, 1999, the Company has three floating rate mortgages with principal outstanding of $11,666,000. The interest rate on two of the mortgages is equal to the sum of Moody's A Corporate Bond Index Daily Rate minus 0.125% per annum, rounded up to the next highest 1/8 percentage rate. The rates are reset once a year. As of December 31, 1999, the rates of these two mortgages were 6.875% and 7.125%. The Company refinanced a $4,800,000 mortgage in the fourth quarter of 1999. This mortgage has an interest rate payable of London Interbank Offering Rate ("LIBOR") plus 250 basis points, which was 8.59% as of December 31, 1999, and is due in December 2000.

The Company has a $1.0 million unsecured line of credit from First Union National Bank. Amounts borrowed under the line will bear interest at the bank's prime rate, which was 8.50% at December 31, 1999. The facility has been extended through April 30, 2000, and there was $750,000 of borrowings outstanding under this facility as of December 31, 1999.

In 1997, the Company obtained a secured first mortgage loan facility of up to $50 million from Salomon Brothers Realty Corp. (the "Salomon Facility"). In 1998, the Company doubled this Salomon Facility to $100 million from $50 million. The maturity of the Salomon Facility was extended two years to July 2000, with an option for a one-year extension, subject to meeting certain requirements of the Salomon Facility documents. Currently, fifteen of the Company's shopping centers or portions thereof secure the mortgage loan facility. Amounts borrowed under the Salomon Facility bear interest at a rate equal to the one-month London Interbank Offering Rate ("LIBOR") plus a spread of 175 basis points, which was 8.23% as of December 31, 1999. The Salomon Facility requires that the following covenants be met: consolidated equity will not fall below $150 million; the ratio of consolidated income available for debt service will not be less than 1.30 to 1.0; and debt to market cap will not be above 70%. The Company is in compliance with these covenants. There was $47,765,000 of outstanding borrowings under this facility as of December 31, 1999. The proceeds of the Salomon Facility were used by the Company for funding property acquisitions, general corporate purposes and capital needs.

In June 1999, the Company sold one of its free-standing properties located in Tucson, AZ for approximately $864,000 and recorded a net loss on the sale of approximately $18,000. In July and August 1999, the Company completed the sale of three additional free-standing properties located in Raynham, MA, Roseville, MN, and Minnetonka, MN as well as a 61,000 square foot shopping center in Orange, CT. Total proceeds on the sales were approximately $9,887,000 and the net gain was approximately $545,000. The proceeds of the sales were used to pay down debt obligations and for general corporate purposes, including the continuing program of upgrading and expanding existing properties. In September 1999, the Company sold a parcel of land at its center in Bainbridge, GA, and recorded a gain of approximately $59,000. The net proceeds from the sale of approximately $235,000 was used to repay debt outstanding on the property. In the third quarter of 1999, the Company finalized the condemnation of a small portion of land at one of its properties by the respective township authority. Gross proceeds were approximately $99,000 and the Company recorded a loss of $51,000 related to the transaction.

The National Association of Real Estate Investment Trusts ("NAREIT") defines funds from operations as income before depreciation and amortization of real estate assets and significant non-recurring events, less gains plus losses on sale of real estate. Funds from operations does not represent cash flows from operations as defined by generally accepted accounting principles and is not necessarily indicative as a measure of liquidity of the Company. Also, funds from operations should not be construed as an alternative to net income as defined by generally accepted accounting principles as an indicator of the Company's operating performance. Funds from operations for common shareholders increased $2,126,000 or 12% from $17,817,000 for the year ended December 31, 1998 to $19,943,000 for the year ended December 31, 1999.

The Company has several tenants who are operating under Chapter 11 of the United States Bankruptcy code. These tenants continue to pay current rent and operate their stores under Chapter 11 and are individually less than 1% and in the aggregate approximately 1.4% of the Company's annual revenues. The Company believes that it is adequately reserved for these tenants.

During the year ended December 31, 1999, the Company invested approximately $10,219,000 in the expansion and improvement of its shopping center properties. The Company expects to meet its short-term liquidity requirements through net cash flow provided from operations, existing cash, long-term or short-term borrowings and the Capital and TI Reserve account. The Capital and TI Reserve account may be utilized by the Company for the funding of costs related to capital improvements, repairs, alterations, tenant improvements and leasing commissions in the centers secured by the Mortgage Loan. To meet its long-term liquidity requirements, such as refinancing its balloon mortgages, financing acquisitions and major capital improvements, the Company intends to either utilize long-term borrowings, issue debt securities and/or issue additional equity securities.

Management believes it has adequate access to capital to continue to meet its short-term and long-term requirements and objectives.

The Company had completed a review of its Information Technology ("IT") Systems and non-IT Systems regarding Year 2000 compliance in the fourth quarter of 1999. All phone systems, desktop computer systems and network systems within the Company’s offices were tested for Year 2000 compliance and any occurrences of noncompliance were corrected and successfully tested prior to January 1, 2000. In shopping centers where the Company is responsible for computer controlled systems that are vulnerable to the Year 2000 problem such as HVAC, elevators or alarms, all systems were believed to be compliant and the Company has not experienced any noncompliant issues. The Company has not performed an exhaustive study of systems that are designated as the tenant’s responsibilty in leases, however all fire alarms were evaluated and found to be Year 2000 compliant. One tenant has been notified of a potential monitoring (not functional) problem with its sprinkler system. All of the Company’s tenants were notified of the issues regarding the Year 2000.

Tenants of the Company's properties and vendors of the Company may own or maintain IT and non-IT systems which are not Year 2000 compliant. The Company has not received any notices from tenants or vendors regarding systems that are out of compliance.

Costs for the review and modifications of IT and non-IT systems have not been separated from ongoing expenses due to their small amounts. No money has been spent outside of normal internal salaries for both operations (non-IT) and IT personnel and normal operations have not been interrupted. Similarly, no budget has been allocated for future costs relating to Year 2000 issues. The Company did not experience any interruptions to business operations as a result of the turn of the century.

Net income for common shareholders increased $413,000 from $3,879,000 or $0.37 per common share in 1998 to $4,292,000 or $0.41 per common share in 1999. This increase is due to a combination of factors as described below, but is primarily attributable to two charges in 1998. The Company reserved approximately $250,000 of costs incurred in the terminated transaction with NAI (see above for additional details). The Company also recorded a charge of approximately $2,863,000 related to straight-line rentals and pre-petition rents, primarily for the three Caldor stores.

Minimum rent increased $5,264,000 or 9% from $56,823,000 for the year ended December 31, 1998 to $62,087,000 for the year ended December 31, 1999. The increase was primarily due to the additional rents from a full year of operations of the ten centers acquired by the Company in 1998 (approximately $6,232,000 increase from prior year), combined with a decrease in the minimum rents of approximately $454,000 from the Company's existing shopping centers and net of rents lost of approximately $514,000 for centers sold in 1998 and 1999.

Percentage rent increased $102,000 or 8% from $1,233,000 for the year ended December 31, 1998 to $1,335,000 for the year ended December 31, 1999. The increase was primarily due to an additional $335,000 of percentage rent being recognized at the nine properties purchased in the third quarter of 1998. Due to a change in accounting rules, the Company may only recognize contingent rent on an accrual basis only after the respective tenant has reached its sales threshold. As a result of this change, there was a reduction of approximately $75,000 in percentage rent in the fourth quarter of 1999.

Expense reimbursements increased $1,020,000 or 8% from $12,800,000 for the year ended December 31, 1998 to $13,820,000 for the year ended December 31, 1999. The increase was due to the additional revenues recorded from the ten centers purchased in 1998 of approximately $889,000, as well as an increase in the recovery of reimbursable expenses incurred in 1999 versus 1998.

Other income increased $369,000 or 244% from $151,000 for the year ended December 31, 1998 to $520,000 for the year ended December 31, 1999. The increase was primarily due to the recovery of bad debts written off in previous years as well as a settlement received from the previous owner of one of the Company's properties regarding a tenant matter.

Interest expense increased $5,472,000 or 25% from $21,764,000 for the year ended December 31, 1998 to $27,236,000 for the year ended December 31, 1999. The increase is primarily due to the interest expense incurred in connection with the additional ten centers acquired in 1998 of approximately $3,500,000 for the year. The Company also incurred an additional $1,720,000 of interest expense in 1999 as compared to 1998 as a result of additional borrowings made on the Salomon Facility. In addition, interest expense was reduced by capitalized interest on projects under construction and land under development in the amount of $850,000 and $555,000 during 1998 and 1999, respectively.

Depreciation and amortization increased $2,281,000 or 16% from $14,582,000 for the year ended December 31, 1998 to $16,863,000 for the year ended December 31, 1999. Depreciation expense on buildings and improvements increased approximately $1,472,000 in 1999 versus 1998 due to the ten additional centers acquired in 1998. The remaining increase in depreciation and amortization was primarily due to the depreciation expense recorded in 1999 for improvements made in the current year.

Real estate taxes increased $652,000 or 9% from $7,404,000 for the year ended December 31, 1998 to $8,056,000 for the year ended December 31, 1999. The increase was primarily due to the increase in expense from the additional ten centers acquired in 1998 of $355,000. The increase was offset by the capitalization of real estate taxes on projects under construction of $142,000 and $76,000 during the years 1998 and 1999, respectively.

Operations and maintenance expenses decreased $1,915,000 or 15% from $12,362,000 for the year ended December 31, 1998 to $10,447,000 for the year ended December 31, 1999. The decrease was primarily due to the Company's provision in 1998 of $2,863,000 of straight-line rents and pre-petition rent receivables for certain tenants in bankruptcy, primarily Caldor. The additional increase relates primarily to additional monies spent in 1999 for snow removal of approximately $475,000 as well as an increase in repairs at the centers of approximately $166,000.

General and administrative expenses increased $364,000 or 10% from $3,476,000 for the year ended December 31, 1998 to $3,840,000 for the year ended December 31, 1999. The increase is primarily due to an increase in professional fees as well as an increase in salary costs over the prior year.

Net income for common shareholders decreased $3,173,000 from $7,052,000 or $0.68 per common share in 1997 to $3,879,000 or $0.37 per common share in 1998. This decrease is due to a combination of factors as described below, but is primarily attributable to two charges in 1998. The Company reserved approximately $250,000 of costs incurred in the terminated transaction with NAI (see above for additional details). The Company also recorded a charge of approximately $2,863,000 related to straight-line rentals and pre-petition rents, primarily for the three Caldor stores.

Minimum rent increased $9,244,000 or 19% from $47,579,000 for the year ended December 31, 1997 to $56,823,000 for the year ended December 31, 1998. The increase was primarily due to the additional rents from a full year of operations of the twenty centers acquired by the Company in 1997 (approximately $5,594,000 increase from prior year), as well as an increase in the minimum rents of approximately $2,468,000 from the ten shopping centers purchased by the Company in 1998. The remaining increase of approximately $1,182,000 was an increase in the minimum rents of the Company's shopping centers owned prior to 1997.

Expense reimbursements increased $1,635,000 or 15% from $11,165,000 for the year ended December 31, 1997 to $12,800,000 for the year ended December 31, 1998. The increase was primarily due to higher common area maintenance expenses in 1998 (see operations and maintenance expenses below), as well as the additional reimbursements from the operations of the ten centers acquired by the Company during 1998 of approximately $514,000.

Interest income increased $57,000 or 21% from $278,000 for the year ended December 31, 1997 to $335,000 for the year ended December 31, 1998. The increase was primarily due to the additional cash on hand in the beginning of the year which represented the net proceeds from the issuance of the Company's Series D Preferred Shares in December 1997. These proceeds were invested in a money market fund.

Interest expense increased $2,877,000 or 15% from $18,887,000 for the year ended December 31, 1997 to $21,764,000 for the year ended December 31, 1998. The increase is primarily due to the operations of the ten centers acquired by the Company in 1998 of approximately $1,425,000 as well as a full year of interest expense for the four centers acquired by the Company in December 1997 of approximately $1,872,000. In addition, interest expense was reduced by capitalized interest on projects under construction and land under development in the amount of $947,000 and $850,000 during 1997 and 1998, respectively.

Depreciation and amortization increased $2,048,000 or 16% from $12,534,000 for the year ended December 31, 1997 to $14,582,000 for the year ended December 31, 1998. The increase was primarily due to the additional depreciation of approximately $553,000 for the operations of the ten centers acquired by the Company in 1998 and the additional depreciation for a full year for the twenty centers acquired in 1997.

Real estate taxes increased $820,000 or 12% from $6,584,000 for the year ended December 31, 1997 to $7,404,000 for the year ended December 31, 1998. The increase was primarily due to the additional real estate taxes of approximately $366,000 for the ten centers acquired by the Company in 1998. The remaining increase was due to a full years expense recorded in 1998 for the twenty centers purchased in 1997. The increase was offset by the capitalization of real estate taxes on projects under construction of $188,000 and $142,000 during the years 1997 and 1998, respectively.

Operations and maintenance expenses increased $4,016,000 or 48% from $8,346,000 for the year ended December 31, 1997 to $12,362,000 for the year ended December 31, 1998. The increase was primarily due to the Company's provision of $2,863,000 of straight-line rents and pre-petition rent receivables for certain tenants in bankruptcy, primarily Caldor. The additional increase relates to additional monies spent in 1998 for repairs at the centers as well as an increase in insurance costs for the additional centers purchased in 1998 and the full year's effect for those centers purchased during 1997.

General and administrative expenses increased $599,000 or 21% from $2,877,000 for the year ended December 31, 1997 to $3,476,000 for the year ended December 31, 1998. The increase is primarily due to salaries which were capitalized in 1997 in connection with acquisitions. Due to a change in accounting rules, internal salary costs, even though directly attributable to the project, are no longer permitted to be capitalized as part of the acquisition costs. The Company also recorded a $250,000 charge for transaction costs related to the December termination of a proposed exchange offer with NAI. In lieu of the proposed exchange offer, the Company made a $1,000,000 investment for a minority interest in NAI.

The Company's primary exposure to market risk is to changes in interest rates. The Company has both fixed and variable rate debt. The Company has $353,208,000 of debt outstanding as of December 31, 1999 of which $293,027,000, or 83%, has been borrowed at fixed rates ranging from 7.00% to 9.375% with maturities through 2009. As these debt instruments mature, the Company typically refinances such debt at their existing market interest rates which may be more or less than interest rates on the maturing debt. Changes in interest rates have different impacts on the fixed and variable rate portions of the Company's debt portfolio. A change in interest rates on the fixed debt impacts the net market value of the debt but has no impact on interest incurred or cash flows. Interest rate changes on variable debt impacts the interest incurred and cash flows but does not impact the net market value of the debt instrument.

To illustrate the risk inherent with a change in interest rates, a sensitivity analysis assuming a 100 basis point move in interest rates from their actual levels at December 31, 1999 with all other variables held constant was estimated by the Company. As of December 31, 1999, a 100 basis point increase in market interest rates would result in a decrease in the net market value of the fixed debt portfolio of approximately $7,461,000 and a 100 basis point decrease in market interest rates would result in an increase in the net market value of the debt portfolio of approximately $5,358,000.

Based on the variable rate debt of the Company as of December 31, 1999, a 100 basis point increase in interest rates would result in an additional $602,000 in interest incurred per year and a 100 basis point decline would lower interest incurred by $602,000 per year.

The response to this Item 8 is included as a separate section of Item 14 in Part IV of this Annual Report on Form 10-K.

None.

Norman M. Kranzdorf, President and Chief Executive Officer, 69, a co-founder of the Company, has been a trustee of the Company since its organization in June 1992. Mr. Kranzdorf was the President of Kranzco Realty, Inc., a general commercial real estate management and brokerage company ("Kranzco Realty") from 1979, when he founded it, to 1992. He served as President of Amterre Development Inc ("Amterre") from 1972 to 1981. Amterre, the successor to Food Fair Properties, Inc., owned and operated over 50 shopping centers, as well as other single-tenant retail properties, on the Eastern seaboard. Mr. Kranzdorf was also an officer and director of Kranzco Management, Inc., a general commerical real estate management and brokerage company and wholly-owned subsidiary of Kranzco Realty, from 1980, when it was founded, to 1992. He is a former trustee of the International Council of Shopping Centers and a former member of the Board of Governors of the National Association of Real Estate Investment Trusts. Mr. Kranzdorf is a member of the Board's Executive Committee and Executive Compensation Committee. Mr. Kranzdorf is a Class III Trustee.

Edmund Barrett, Executive Vice President and Chief Operating Officer, 66, has been a trustee of the Company since June 1995, the Chief Operating Officer of the Company since December 1994, the Director of Leasing from 1992 to May 1997 and Executive Vice President of the Company since 1992. Previously, he was the Assistant Director of Development of Kranzco Realty from 1987 to 1988 and a Vice President of Kranzco Realty from 1988 to 1992. Mr. Barrett is a Class II Trustee.

Robert H. Dennis, Vice President, Chief Financial Officer and Treasurer, 53, has been a trustee of the Company since 1994 and Vice President, Chief Financial Officer and Treasurer of the Company since its organization in June 1992. Prior thereto he was the Chief Financial Officer and Assistant Secretary of Kranzco Realty from 1981 to 1992. Mr Dennis is a Class II Trustee.

Gerald C. Finn, Trustee, 69, has been a trustee of the Company since 1998. He is the founder of New America Network, Inc. ("New America"), an international brokerage and real estate services company, and has served as a Director and the Chief Executive Officer of New America since 1974. He also served as President and Chief Operating Officer from 1974 until 1995. He was elected as Chairman of the Board in May, 1990. Prior to his association with New America, Mr. Finn was an active real estate broker and developer for his own account and for the account of various entities in which he had an equity interest. He is a licensed real estate broker and a member of the National Association of Corporate Real Estate Executives, International Council of Shopping Centers, Urban Land Institute and National Board of Realtors. Mr. Finn is a Class II Trustee.

Bernard J. Korman, Trustee, 68, has been a trustee of the Company since May 1997. Mr. Korman is Chairman of Philadelphia Health Care Trust, a non-profit organization. Mr. Korman, served as President and Chief Executive Officer of MEDIQ Incorporated (AMEX) (healthcare services) from 1981 to 1995 and as Chairman of PCI Services, Inc. from 1992 to 1996. Mr. Korman currently is a director of The Pep Boys, Inc. (NYSE) (auto supplies), The New America High Income Fund, Inc. (NYSE) (financial services), NutraMax Products, Inc. (NASDAQ) (consumer healthcare products), Omega Healthcare Investors, Inc. (NYSE) (a REIT) and Omega Worldwide, Inc. (NASDAQ) (real estate company). Mr. Korman is a member of the Board's Executive Committee, Executive Compensation Committee and Audit Committee. Mr. Korman is a Class III Trustee.

Dr. Peter D. Linneman, Trustee, 49, has been a trustee of the Company since November 1992. Dr. Linneman is the Principal of Linneman Associates, a financial and real estate strategic advisory firm and has been a Professor of Finance and Public Policy at the Wharton School of the University of Pennsylvania since 1979. He has been the Albert Sussman Professor of Real Estate at the Wharton School since 1987 and was a director of the Wharton Real Estate Center from 1986-1998. In addition, he is an Urban Land Institute Research Fellow and a member of the National Association of Real Estate Investment Trusts. Dr. Linneman was a founder and Senior Managing Director of Equity International Properties. Dr. Linneman was formerly Chairman and trustee of Rockefeller Center Properties Trust (a REIT) and a trustee of Gables Residential Property Trust (a REIT) and Universal Health Realty Trust (a REIT). Dr. Linneman is a member of the Board's Audit Committee and Incentive Plan Committee. Dr. Linneman is a Class I Trustee.

E. Donald Shapiro, Trustee, 68, has been a trustee of the Company since June 1994. Mr. Shapiro is The Joseph Solomon Distinguished Professor of Law at New York Law School since 1983. Mr. Shapiro also serves as a director of each of the following entities: Loral Space and Communications (formerly Loral Corporation) (NYSE) (satellite communications) (since 1973); GHI (health care provider) (not for profit) (since 1974); Vasomedical, Inc. (medical products) (NASDAQ) (since 1992); Vion, Inc. (formerly Mela Rx) (drug) (NASDAQ) (since 1992); United Industrial Corporation (defense industry) (NYSE) (since 1996); and Frequency Electronics (space and communication components) (AMEX) (since 1998). Mr. Shapiro is a member of the Board's Audit Committee, Executive Committee and Executive Compensation Committee. Mr. Shapiro is a Class I Trustee.

To the Company's knowledge, based solely on a review of the copies of such reports furnished to the Company and written representations from certain reporting persons that no other reports were required for such persons, the Company believes that, during the fiscal year ended December 31, 1999, all filing requirements pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended, applicable to the Company's executive officers, trustees and greater than 10% beneficial owners were complied with, except Gerald C. Finn failed to file a Form 4 and a Form 5 on a timely basis with respect to the purchase of 500 Common Shares.

The following table sets forth certain information with respect to the cash and other compensation paid or accrued by the Company for services rendered by Norman M. Kranzdorf, the Company's President and Chief Executive Officer , Robert H. Dennis, the Company's Vice President, Chief Financial Officer and Treasurer and Edmund Barrett, the Company's Executive Vice President and Chief Operating Officer (collectively, the "Named Executives"), during the fiscal years ended December 31, 1999, 1998 and 1997. Other than the Named Executives, no executive officer of the Company earned a total salary and bonus exceeding $100,000 during the fiscal year ended December 31, 1999.

		Restricted Common Shares Issued in Last Fiscal Year
Name	Number of Shares Issued	Percent of Total Restricted Shares to Employees In Fiscal Year	Price at Date of Issue	Value at Date of Grant
Norman M. Kranzdorf	4,706	27%	$13.44	$63,249
Robert H. Dennis	2,653	15%	$13.44	$35,656
Edmund Barrett	2,396	14%	$13.44	$32,202

During the fiscal year ended December 31, 1999, none of the Named Executives exercised any options granted to them. The following table sets forth certain information with respect to the unexercised options held as of the end of such fiscal year by the Named Executives.

Trustees' Compensation

Each non-employee trustee of the Company receives an annual fee of $18,000 and a fee of $1,500 for each quarterly meeting attended. In December 1995, the trustees agreed to receive these fees in the form of Common Shares beginning in 1996. The shares are awarded quarterly on the first business day of the fiscal quarter and are valued based on the closing price of the Common Shares on the New York Stock Exchange on the last business day of the previous quarter. Each trustee is entitled to cash payments of $500 for each separate committee meeting attended, $1,000 for each trip to visit properties which are the subject of possible acquisition by the Company, and is entitled, pursuant to the provisions of the Trustee Plan, to grants of options to purchase Common Shares. Employees of the Company who are also trustees are not paid any trustees' fees. In addition, the Company reimburses the trustees for travel expenses incurred in connection with their activities on behalf of the Company. During the fiscal year ended December 31, 1999, Mr. Kranzdorf and Mr. Barrett were each issued 3,000 options pursuant to the Trustee Plan.

Under the terms of the Incentive Plan each non-employee trustee of the Company is granted options each year to purchase 1,500 Common Shares at a price equal to the then fair market value of Common Shares on the date of grant. Additionally, each non-employee trustee shall be granted options each year to purchase an additional 1,500 Common Shares at a price equal to the then fair market value of Common Shares on the date of grant, provided that the Company's funds from operations per Common Share, as defined, have increased at least 4% over the prior year's funds from operations per common share. In accordance with the terms of the Incentive Plan, on March 13, 2000 the Company awarded 3,000 options to purchase Common Shares to each of the Company's non-employee trustees at an exercise price of $8.44 per Common Share.

Prior to the Company's initial public offering in November 1992, the Option Plans were adopted by the Board and all of the then current shareholders. The Option Plans are administered by the Option Plans Committee established for such purpose. The current members of such committee are Messrs. Kranzdorf and Barrett (the "Administrators"). The Option Plans provide for the grant of options to purchase Common Shares to eligible participants. The persons entitled to participate in the Trustee Plan are those trustees of the Company or trustees or directors of any of the Company's subsidiaries or affiliates as the Administrators of the Option Plans shall select from time to time. Eligible participants of the Employee Plan consist of those key employees (other than trustees or directors) of the Company, or any of its subsidiaries or affiliates, as the Administrators shall select from time to time. Options are granted by the Administrators based upon such factors as the Administrators may deem proper and relevant. The Option Plans were designed to attract, retain and motivate key employees by granting them options to purchase Common Shares. The Option Plans provide for the grant of a maximum of 700,000 Common Shares under the Trustee Plan and 300,000 Common Shares under the Employee Plan, and permit the granting of share options to employees which are either incentive options or non-qualified options.

Subject to the terms of Option Plans, the Administrators determine the recipients of options and the number of options to be granted under the Option Plans. As of December 31, 1999 options to purchase 430,300 and 187,950 Common Shares were outstanding under the Trustee Plan and Employee Plan, respectively, all of which were exercisable as of December 31, 1999. During the fiscal year ended December 31, 1999, 3,000 options were issued to each of Mr. Kranzdorf and Mr. Barrett from the Trustee Plan.

The Incentive Plan was approved by the shareholders of the Company at the Company's 1995 annual meeting of shareholders held in June 1995. The Incentive Plan is administered by the Incentive Plan Committee which consists of Messrs. Finn and Linneman. In general, it is intended that members of the Incentive Plan Committee will not be employees of the Company.

The purpose of the Incentive Plan is to align the interests of the Company's trustees, executive officers, key employees, advisors and consultants with those of the shareholders and to enable the Company to attract, compensate and retain trustees, executive officers, key employees, advisors and consultants and provide them with appropriate incentives and rewards for their performance. Awards to trustees, executive officers, key employees and other individuals under the Incentive Plan may take the form of options to purchase Common Shares, including corresponding share appreciation rights and reload options, and in the case of employees, restricted share awards and share purchase awards.

All employees, trustees, and certain other key individuals are currently eligible to participate in the Incentive Plan subject to certain restrictions that apply to members of the Incentive Plan Committee. Awards under the Incentive Plan may be granted in combination with other awards, including options granted under the Option Plans. The maximum number of Common Shares that may be the subject of awards under the Incentive Plan is 1,000,000 Common Shares. The Incentive Plan provides that in any given year, the maximum number of Common Shares with respect to which options or share appreciation rights may be granted to any employee is 100,000 Common Shares. As of December 31, 1999, options to purchase 310,500 Common Shares were outstanding under the Incentive Plan. During the fiscal year ended December 31, 1999, 1,500 options were issued to each of Messrs. Korman, Linneman, Finn and Shapiro.

On April 20, 1993, the Board established an Executive Compensation Committee, the function of which is to review and make recommendations to the Board and the Plan Administrators regarding compensation for the executive officers of the Company. The Executive Compensation Committee consists of Messrs. Kranzdorf, Korman and Shapiro. Other than Mr. Kranzdorf, who is the President and Chief Executive Officer of the Company, none of the members of the Executive Compensation Committee are employees of the Company.

Prior to the Company's initial public offering in November 1992, the Option Plans were adopted by the Board and all of the then current shareholders of the Company. In connection with the creation of the Option Plans, the Board established the Option Plans Committee to administer the Option Plans. The Option Plans Committee, which determines those key employees entitled to grants of options under the Option Plans, is composed of Messrs. Kranzdorf and Barrett, each of whom is an employee of the Company.

On June 6, 1995, the shareholders approved the Incentive Plan. The Board then established the Incentive Plan Committee to administer the plan. The Incentive Plan Committee, the function of which is to determine the trustees, executive officers, key employees and other individuals who will be eligible for awards under the plan, consists of Messrs. Linneman and Gerald C. Finn, neither of whom are employees of the Company.

To the Company's knowledge, there were no other interrelationships involving the trustees of the Company and compensation decisions requiring disclosure.

The following table sets forth information regarding the beneficial ownership of the Common Shares, including Common Shares as to which a right to acquire ownership exists (for example, through the exercise of stock options) within the meaning of rule 13d-3(d)(1) under the Securities Exchange Act, as amended, by each person known by the Company to own beneficially more than 5% of the Common Shares, each trustee and Named Executive, and all trustees and executive officers as a group as of March 1, 2000 (unless otherwise indicated). As permitted by applicable Securities and Exchange Commission rules, no separate information with respect to the Common Shares beneficially owned by each of the other executive officers of the Company is given because no such officer earned $100,000 or more in compensation in the fiscal year ended December 31,1999.

The Company leases from Norman Kranzdorf a three-story building containing approximately 20,000 square feet located at 128 Fayette Street, Conshohocken, Pennsylvania, which serves as the Company's headquarters. The lease for the Company's headquarters expires on January 14, 2004 and provides that the Company will pay a rental of $153,720 per annum. The lease also provides that the Company will pay for all real estate taxes, utilities, repairs and other costs and expenses in connection with the use and occupancy of the building.

In September 1998, the Company announced that it had commenced a tender offer for 80% of the outstanding shares of New America Network, Inc. ("NAN") and Gerald C. Finn and Jeffrey Finn, its principal shareholders. Gerald C. Finn (a Class II Trustee) is Chairman and Chief Executive Officer and the owner of approximately 75% of NAN's outstanding shares of common stock. The proposed transaction involved an exchange offer by the Company for 80% of NAN's outstanding common shares for convertible subordinated notes. The Company would have then spun-off the shares of NAN's common stock to its shareholders on a one-for-one basis and retained a 9.8% interest. If Gerald Finn had converted his note in its entirety, he would have owned approximately 300,000 shares, or 2.8%, of the Company's outstanding Common Shares. The transaction was terminated in December 1998. In December 1998, the Company purchased 842,851 newly issued shares of New America Network, Inc., representing a 6.1% interest in NAN for $1 million. As of June 1999 the Company acquired an additional 200,000 newly issued shares of New America Network, Inc. in exchange for a note receivable in the face amount of $250,000. As of December 31, 1999, the Company owns approximately 7.2% of the outstanding common shares of New America Network, Inc.

On March 19, 1997 the Company entered into Severance Benefits Agreements with Norman M. Kranzdorf, Robert H. Dennis, Edmund Barrett, Bengt Danielsson, Michael Warrington and Michael Kranzdorf pursuant to which such individuals are entitled to certain compensation upon a change in control of the Company. Each agreement provides that upon a change in control and so long as such individual is an employee of the Company immediately prior to such a change in control, (a) the individual shall receive a lump sum severance payment equal to a multiple of the individual's annual compensation during the calendar year preceding the calendar year during which the change in control has occurred; the multiple is three, two and one, with respect to (i) Norman M. Kranzdorf, (ii) Robert H. Dennis and Edmund Barrett, and (iii) Bengt Danielsson, Michael Warrington and Michael Kranzdorf, respectively, (b) all restricted Common Shares then owned by the individual shall immediately vest and no longer be subject to repurchase or other forfeiture restrictions, (c) the Company will continue to provide life, accident, medical and dental insurance to the individual for a period of 18 months after the change in control, and (d) in the event the individual holds any options to purchase Common Shares on the date of the change in control, such individual shall be entitled to receive an amount equal to, generally, the number of options to purchase Common Shares then owned by the individual multiplied by the amount, if any, that (i) the exercise price of the options or the closing price of the Common Shares on the date of the change in control, whichever is less, exceeds (ii) the average closing price of the Common Shares during the six months prior to the date of the change in control ("Closing Share Value"). If the closing price of the Common Shares as of the date of the change in control is greater than the exercise price of such option then the individual can retain the option or receive in exchange therefore cash equal to the number of shares underlying the options multiplied by the amount by which the Closing Share Value exceeds the exercise prices of the options. In addition, Norman M. Kranzdorf is entitled to receive an additional sum to cover certain resulting income and excise tax liabilities that may be incurred on all of the foregoing. Furthermore, the Severance Benefits Agreement of each individual other than Norman M. Kranzdorf provides that, to the extent that any of the foregoing benefits granted to such individual would cause him to be liable for excise tax liabilities, the benefits available to him shall be reduced to an amount which would not require the payment of any such excise tax, but only if doing so yields a greater after tax amount to such individual.

In addition, the Company entered into Severance Benefits Agreements with Peter Linneman and E. Donald Shapiro on March 19, 1997, and Bernard Korman and Gerald Finn on July 30, 1998, trustees of the Company, pursuant to which, if such individual is a trustee immediately prior to a change in control, upon such a change in control and, in the event the trustee holds any options to purchase Common Shares on the date of the change in control, such individual shall be entitled to receive an amount based on the formula described in clause (d) of the preceding paragraph. In addition, the Severance Benefits Agreement of each trustee provides that, to the extent that the foregoing benefits granted to such trustee would cause him to be liable for excise tax liabilities, the benefits available to him shall be reduced to an amount which would not require the payment of any such excise tax, but only if doing so yields a greater after tax amount to such trustee.

(a)(1) Financial Statements

(4) Reports on Form 8-K

A Report on Form 8-K dated December 14, 1999 was filed by the Company with the Securities and Exchange Commission on December 14, 1999. The Company reported they had entered into an Agreement and Plan of Reorganization and Merger with KRT Trust, CV Reit, Inc. and Kramont Realty Trust pursuant to which KRT Trust (the contemplated successor to the business of Kranzco) and CV Reit, Inc. will merge into Kramont Realty Trust, which will operate under the name of Kramont Realty Trust.

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

KRANZCO REALTY TRUST

(Registrant)

By: /s/ Norman M. Kranzdorf

Norman M. Kranzdorf

Chief Executive Officer

Dated: March 17, 2000

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

FINANCIAL STATEMENTS, PAGE

*Report of Independent Public Accountants , F-1

*Consolidated Balance Sheets as of December 31, 1999 and 1998 , F-2

*Consolidated Statements of Operations for the years ended

December 31, 1999, 1998 and 1997 , F-3

*Consolidated Statements of Beneficiaries' Equity for the years ended

December 31, 1999, 1998 and 1997 , F-4

*Consolidated Statements of Cash Flows for the years ended

December 31, 1999, 1998 and 1997 , F-5

*Notes to Consolidated Financial Statements , F-6

*Schedule III - Real Estate and Accumulated Depreciation - December 31, 1999 , S-1

*Notes to Schedule III , S-5

To the Shareholders and Trustees of Kranzco Realty Trust:

We have audited the accompanying consolidated balance sheets of Kranzco Realty Trust (a Maryland trust) and subsidiaries as of December 31, 1999 and 1998, and the related consolidated statements of operations, beneficiaries' equity and cash flows for the three years then ended. These financial statements and the schedule referred to below are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Kranzco Realty Trust and subsidiaries as of December 31, 1999 and 1998, and the results of their operations and their cash flows for the three years then ended in conformity with accounting principles generally accepted in the United States.

Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedule listed in the index of financial statement schedules in Item 14 is presented for purposes of complying with the Securities and Exchange Commission's rules and are not a required part of the basic financial statements. This schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein to the basic financial statements taken as a whole.

Philadelphia, Pennsylvania

March 3, 2000