CV REIT Inc · 10-K · For 12/31/99

Filed On 3/21/00   ·   SEC File 1-08073   ·   Accession Number 18934-0-3

Annual Report   ·   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Form 10-K Dated 12/31/99                              48    170K 
 2: EX-21       Subsidiaries of the Registrant                         2±     5K 
 3: EX-27       FDS 12/99                                              1      4K 

10-K   ·   Form 10-K Dated 12/31/99
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1 

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 ___________
 FORM 10-K
 ___________

(Mark One)                                                                      
X    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE                   
SECURITIES EXCHANGE ACT OF 1934  [NO FEE REQUIRED]                

 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: 1-8073

 CV REIT, INC.
(Exact name of the Registrant as specified in its charter)

Delaware                       59-0950354         
(State of Incorporation) (I.R.S. Employer Identification No.)   

 100 Century Boulevard, West Palm Beach, Florida 33417
 (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: 561-640-3155

 Securities registered pursuant to Section 12(b) of the Act:

 Title of each class           Name of each exchange on which registered
Common stock, par value                 New York Stock Exchange           
$.01 per share                                                    

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 (or for such  shorter  period that the  Registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days. Yes X No                                     

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

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AGGREGATE MARKET VALUE OF THE VOTING STOCK  
HELD BY NONAFFILIATES OF THE REGISTRANT   

      Common  Stock,  par value $.01 per share  ("Common  Stock"),  was the only
class of voting stock of the Registrant  outstanding on December 31, 1999. Based
on the last sale price of the Common  Stock on the New York  Stock  Exchange  as
reported  by the  consolidated  transaction  reporting  system  on March 7, 2000
($9.25),  the aggregate market value of the 6,513,285 shares of the Common Stock
held by  persons  other  than  officers,  directors  and  persons  known  to the
Registrant to be the  beneficial  owner (as that term is defined under the rules
of the  Securities  and  Exchange  Commission)  of more than five percent of the
Common Stock on that date was  approximately  $60.2  million.  By the  foregoing
statements,  the Registrant does not intend to imply that any of these officers,
directors or  beneficial  owners are  affiliates  of the  Registrant or that the
aggregate  market value,  as computed  pursuant to rules of the  Securities  and
Exchange  Commission,  is in any way  indicative  of the amount  which  could be
obtained for such shares of Common Stock.                                       

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY 
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:  

      Indicate by check mark whether the  Registrant has filed all documents and
reports  required  to be filed by  Section  12,  13, or 14(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.                                                           

Yes ___ No ___

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)  

      Indicate  the  number of shares  outstanding  of each of the  Registrant's
classes of common stock, as of the latest practicable date:                     

7,966,621 shares of Common Stock, par value $.01
per share, were outstanding as of March 7, 2000.

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PART I

Item 1.     Business                                                            

Background                                                                      

CV Reit,  Inc.,  together with its  subsidiaries,  has operated as a real estate
investment  trust (REIT) under Sections 856 through 860 of the Internal  Revenue
Code since  January 1,  1982.  A company  that  qualifies  as a REIT may,  if it
distributes at least 95% of its ordinary  taxable income (90% effective in 2001)
for a taxable year,  deduct dividends paid to stockholders  with respect to such
taxable year from taxable income.  We intend to operate in such a manner that we
will continue to qualify as a REIT. In any year in which we qualify, we will not
be taxed under the Code on income  distributed to our stockholders  attributable
to that year.                                                                   

After our qualification as a REIT in 1982, our operating  strategy  consisted of
investing  in  real  estate  mortgage  notes  receivable,   primarily  loans  to
developers. Due to economic conditions in the real estate market and the economy
in general, in the early 1990's we decided to limit new loan commitments, repaid
all of our  outstanding  borrowings  (other  than our  long-term  collateralized
mortgage obligations) and began to seek alternative real estate investments with
proven and experienced personnel to manage and enhance such a portfolio.        

Effective  December  31, 1997,  we acquired a number of shopping  centers and an
interest in Drexel Realty,  Inc., a real estate  management and leasing company.
In connection with this  transaction,  we created an Umbrella  Partnership  REIT
(UPREIT)  structure by forming an Operating  Partnership,  Montgomery  CV Realty
L.P.  (we refer to the  Operating  Partnership,  together  with its wholly owned
subsidiaries as the OP). The OP then acquired 100% of the ownership interests in
nine shopping  centers and an office  building,  located in Pennsylvania and New
Jersey,  and a 95%  economic  interest in Drexel from Louis P.  Meshon,  Sr.. In
addition,  we transferred  substantially  all of our net assets (or the economic
benefit) to the OP. As a result,  we  indirectly  currently own 84.5% of the OP,
are its sole general  partner and operate as a  self-administered,  self-managed
equity REIT with Mr.  Meshon as President  and Chief  Executive  Officer.  As of
December  31,  1999,  the OP owned twenty  neighborhood  or  community  shopping
centers  and two  office  buildings,  located  in  Pennsylvania,  New Jersey and
Florida, comprising approximately 1.9 million square feet.                      

Recent Development - Proposed Merger                                            

On December 10, 1999, we signed a definitive merger agreement and reorganization
plan with Kranzco Realty Trust, a shopping  center REIT, to merge our operations
and create a new community  shopping  center UPREIT to be called  Kramont Realty
Trust.  Terms of the merger call for common  shareholders  of both  companies to
each receive one share of Kramont common stock for each outstanding  share of CV
Reit and Kranzco  common  stock on a tax-free  basis.  The merger  agreement  is
subject  to  approval  by  shareholders  of both  companies  and  certain  other
conditions.                                                                     

Mr. Meshon will assume the same titles and responsibilities at the newly created
Kramont and our designees  will hold the majority of the board seats.  Corporate
headquarters  will be  located  at the OP's  existing  facilities,  in  Plymouth
Meeting, Pennsylvania.                                                          

Kramont is expected to own 84 properties,  substantially comprising neighborhood
and community  shopping  centers,  encompassing  approximately 11 million square
feet in 16 states with an asset base of approximately $800 million.             

The  merger  will  be  accounted  for  as a  purchase  by CV  Reit  of  Kranzco.
Accordingly,  Kranzco's  assets  and  liabilities  will  be  recorded  at  their
estimated fair values based on the consideration given by CV Reit.              

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Operating Strategies                                                            

Our primary  business  objectives are to increase Funds From Operations  (please
refer to  Management's  Discussion  and  Analysis of Results of  Operations  and
Financial  Condition for a definition of Funds From  Operations)  and to enhance
the value of our properties. It has been our operating strategy to achieve these
objectives through:                                                             

   Efficient  operation of our properties  including active leasing and property
   management, maintenance of high occupancy levels, increasing rental rates and
controlling operating and capital costs.                                  

   Acquisition of additional properties which satisfy our criteria, at favorable
prices, including properties requiring renovation or re-leasing.          

   Completion  of  strategic  renovations  and  expansions  to further  maximize
operating cash flow.                                                      

Attainment of greater access to financing sources.                        

Assets                                                                          

At December 31, 1999, the book value of our assets  amounted to $257.8  million,
including  $173.1  million in income  producing real estate and $63.4 million in
real estate  mortgage notes  receivable.  A description of our principal  assets
follows:                                                                        

Real Estate - Income Producing                                                  

The OP,  directly or indirectly,  owns 100% of twenty  neighborhood or community
shopping centers and two office buildings,  located in Pennsylvania,  New Jersey
and Florida,  comprising  1,891,000  square feet.  The properties are diverse in
size,  ranging from 8,000 square feet to 202,000  square feet of gross  leasable
area and average  86,000 square feet.  The shopping  centers  generally  attract
local area  customers and are  typically  anchored by a  supermarket,  drugstore
and/or discount  stores.  The centers are smaller than regional malls and do not
depend on  customers  who  travel  long  distances.  The tenant  base  generally
concentrates  on  everyday  purchases  from  local  customers.  Anchors  attract
shoppers who then also often  patronize the smaller shops. At December 31, 1999,
97.6% of our gross leasable area was leased to tenants under  operating  leases.
Substantially  all of our income  producing real estate is pledged as collateral
for borrowings.                                                                 

The following table sets forth certain pertinent information, as of December 31,
1999,  regarding  these  properties.  Except for  Century  Plaza and the Century
Village  Administration  Building,  which we built,  each of the properties were
acquired by the OP on December 31, 1997, or during 1998 and 1999:               

Year                  
of                  
Latest            Lease 
                 Year     Renovation Leasable Occupancy              Expiration/
         Originally     or      Square   Rate as of Principal   Option
                Built    Expansion  Footage  12/31/99   Tenants     Expiration
________________________________________________________________________________
Shopping Centers                                                                
Century Plaza                                                                   
Deerfield                                                                       
Beach, FL        1976      1991      85,151   96.7%      Broward       2001     
                                                County Library
Chalfont Village                                                                
 Shopping Center 1968      N/A       46,051   83.6%      Better Bodies 2005/2010
New Britain, PA                                                                 

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Cherry Square                                                                   
Shopping Center  1991      N/A       75,005  100.0%      Redners       2016/2021
Northampton, PA                                           Supermarket           

Chesterbrook                                                                    
Village Center   1980      1995     122,316   95.9%      Genuardi      2010/2030
Wayne, PA                                                 Markets               

Collegeville                                                                    
Shopping Center  1978      1994     110,518  100.0%      Acme          2003/2038
Collegeville, PA                                                                

County Line                                                                     
Plaza            1970      1998     175,023  100.0%      Ames          2002/2017
Souderton, PA                                            Clemens       2007/2027
                                           Markets
Danville Plaza   1971      1987      24,052   96.4%      CVS Pharmacy  2007/2027
Danville, PA                                                                    

Dickson City                                                                    
Center           1972      1990      47,224  100.0%      Office Max    2006/2016
Dickson City, PA                                                                

Gilbertsville                                                                   
Shopping Center  1974      N/A       85,748   97.7%      Weis Markets  2004/2014
Gilbertsville, PA                                                               

Lakewood Plaza                                                                  
Shopping Center  1962      N/A      202,499   99.7%      Shop Rite     2010/2030
Lakewood, PA                                              Supermarkets          

Marlton Shopping                                                                
Center-Phase II  1986      N/A      155,587   95.6%      Burlington    2002/2030
Evesham, NJ                                               Coat Factory          
                                                         T.J. Maxx     2001/2011
Marlton Shopping                                                                
Center-Phase I   1985      N/A      146,542  100.0%      Super Fresh   2007/2047
Evesham, NJ                                               Markets               

Mount Carmel                                                                    
Plaza            1988      N/A       14,504   90.3%      CVS Pharmacy  2002/2012
Glenside, PA                                                                    

New Holland                                                                     
Plaza            1977      N/A       65,730   85.7%      Weis Markets  2000/2015
New Holland, PA                                                                 

North Penn                                                                      
Marketplace      1983      N/A       57,898  100.0%      Eckerd Drugs  2003/2018
Upper Gwynedd, PA                                                               

Rio Grande Plaza 1991      1997     138,747  100.0%      JC Penney     2012/2042
Rio Grande, NJ                                           Peebles       2012/2022
                                                         Sears         2006/2026
Village at                                                                      
Newtown          1989      N/A      177,032   96.2%      Genuardi      2008/2018
Newtown, PA                                               Markets               

Whitemarsh                                                                      
Shopping Center  1969      1996      67,546  100.0%      Clemens       2017/2027
Conshohocken, PA                                          Markets               

Woodbourne                                                                      
Square           1985      N/A       29,976   93.6%      Rehab Place        2000
Langhorne, PA                                             at Oxford Valley      

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555 Scott Street                                                                
Center           1961      N/A        8,400  100.0%      Pet Supplies  2000/2005
Wilkes-Barre, PA                                          Plus                  

Office Buildings                                                                
Century Village                                                                 
Administration                                                                  
Building         1970      1995      25,100  100.0%      First Choice  2000     
W. Palm Beach, FL                                        Health Care Services 

Plymouth Plaza   1974      1994      30,026   97.5%      Drexel Realty 2004     
Plymouth Meeting, PA                                                            
     ---------  ------
Totals                            1,890,675   97.6%                             
     =========  ======

Mortgage Notes Receivable                                                       

At December 31, 1999, our mortgage notes  receivable  amounted to $63.4 million,
collateralized  by first  mortgages  on the  recreation  facilities  at the four
completed  Century Village adult condominium  communities in southeast  Florida,
including an  aggregate  of $35 million due from H. Irwin Levy,  Chairman of the
Board and a principal stockholder of our company, or Hilcoast Development Corp.,
of which Mr.  Levy is  Chairman  of the Board,  Chief  Executive  Officer  and a
majority  stockholder.  As of December 31, 1999, none of the mortgage notes were
delinquent.                                                                     

The notes  provide for  self-amortizing  equal  monthly  principal  and interest
payments in the aggregate amount of $9.5 million per annum, through January 2012
and $2.9 million  thereafter  through  2023,  and bear  interest at annual rates
principally  ranging from 11% to 13.5%.  The notes are pledged as collateral for
certain borrowings.  Please refer to Item 13. Certain  Relationships and Related
Transactions regarding related party transactions with Hilcoast and Mr. Levy.   

Investments in Unconsolidated Affiliates                                        

Self-Storage Warehouse Partnerships                                       

We own 45%-50% general and limited  partnership  interests in three partnerships
whose principal assets consist of self-storage  warehouses  located in southeast
Florida, with an aggregate of approximately 2,800 units and 320,000 square feet,
managed by independent  parties.  Our partners in these partnerships are certain
members of the Granados family. We have no financial  obligation with respect to
such  partnerships  except  under  state law,  as general  partners.  We receive
monthly distributions from each of the partnerships based on cash flows.        

Drexel                                                                    

Effective  December  31, 1997,  we acquired a 95%  economic  interest in Drexel,
which  for  over 25  years  has  been  engaged  in the  development,  brokerage,
construction, leasing and management of real estate. In addition to managing our
properties,   Drexel  currently  manages  seven  other  properties   located  in
Pennsylvania and New Jersey.  During 1999 and 1998,  management contracts for 19
additional  properties  were  terminated,  primarily  as a  result  of  Drexel's
decision to concentrate mainly on management,  leasing and renovation of our own
properties.  It is not  contemplated  that Drexel will seek any additional third
party management contracts in the future.  Currently, 99% of the voting stock of
Drexel is  beneficially  owned by Mr. Meshon and held in a voting trust and 100%
of the  non-voting  stock is owned by the OP.  Mr.  Meshon  currently  serves as
President of Drexel.                                                            

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Other Real Estate                                                               

We own certain real estate  acquired by deed in lieu of foreclosure and held for
resale,  consisting of three parcels of unimproved  commercial land, totaling 38
acres  located  in  southeast  Florida,  with a book  value of $5.5  million  at
December 31, 1999, net of a $2.4 million allowance for losses.                  

Industry Factors                                                                

Ownership  of  commercial  real estate  involves  risks  arising from changes in
economic  conditions   generally  and  in  the  commercial  real  estate  market
specifically,  as well as risks which result from property-specific factors such
as the failure or inability to make needed  capital  improvements,  competition,
reductions  in revenue  arising from  decreased  occupancy or  reductions in the
level of rents  obtainable,  and factors  which  increase the cost of operating,
financing and refinancing  properties such as escalating interest rates and wage
rates,  increased taxes, fuel costs and other operating expenses and casualties.
All of these  kinds of risks  can  result  in  reduced  net  operating  revenues
available for  distribution.  Our ability to manage the  properties  effectively
notwithstanding  such  risks  and  economic  conditions  will  affect  the funds
available for distribution.                                                     

The results of  operations of our company also depend upon the  availability  of
suitable  opportunities  for investment and reinvestment of our funds and on the
yields  available  from time to time on real estate  investments,  which in turn
depend to a large extent on the type of investment involved, prevailing interest
rates,  the nature and  geographical  location of the property,  competition and
other factors,  none of which can be predicted with  certainty.  Our competitors
for acceptable investments include insurance companies, pension funds, and other
REIT's which may have  investment  objectives  similar to ours and some of which
may have greater  financial  resources than ours. We are not aware of statistics
which  would  allow us to  determine  our  position  with  respect to all of our
competitors in the commercial real estate investment industry.                  

Employees                                                                       

On December 31,  1999,  we employed 71 persons,  substantially  all of whom were
employed by Drexel or a wholly owned subsidiary of Drexel.                      

Item 2.  Properties                                                             

Please refer to Item 1. Business - Real Estate - Income  Producing,  Investments
in Unconsolidated Affiliates and Other Real Estate.                             

Item 3.  Legal Proceedings                                                      

We are  subject  to various  claims  and  complaints  relative  to our  business
activities.  In our opinion,  the ultimate disposition of these matters will not
have a material adverse effect on our financial position.                       

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Item 4.     Submission of Matters to a Vote of Security Holders                 

No matter was submitted to a vote of security  holders during the fourth quarter
of 1999.                                                                        

 PART II

Item 5.  Market for Our Common Stock and Related Security Holders Matters       

Our common stock is listed for trading on the New York Stock  Exchange under the
symbol CVI.  The  following  table sets forth the high and low sales  prices per
share and the  dividends  per share which we declared on our common  stock,  for
each quarter during the past two years.                                         

Market Price Range  
               ____________________        Dividends
                High        Low           Declared
               _______     ________        _________

1999                                                                            
First Quarter                 12.69       11.25          $  .29                 
Second Quarter                13.63       10.38             .29                 
Third Quarter                 13.06       11.75             .29                 
Fourth Quarter                12.56        9.00             .29                 
                                        ______
                                        $ 1.16
                                        ======
1998                                                                            
First Quarter                 15.25       13.25          $  .29                 
Second Quarter                14.31       13.00             .29                 
Third Quarter                 13.63       12.00             .29                 
Fourth Quarter                13.00       11.50             .29                 
                                        ______
                                        $ 1.16
                                        ======

As of March 7, 2000 there were 7,966,621 shares of common stock  outstanding and
approximately 1,700 holders of record.                                          

Through our wholly owned subsidiary,  Montgomery CV Realty Trust (the Trust), we
indirectly  own 7,966,621 OP units  (representing  the sole general  partnership
interest and 84.5% of the limited  partnership  interest in the OP). The holders
of  substantially  all of the remaining  15.5%, or 1,462,406 OP units,  have the
right to require the OP to redeem their OP units for cash at any time.  However,
upon a holder  giving  notice of the  exercise of this right,  the Trust has the
right to acquire  such  holder's  OP units in  exchange  for cash or, if certain
conditions are satisfied, an equal number of shares of our common stock.        

We expect to continue to qualify as a REIT. A corporation,  which qualifies as a
REIT  may,  if it  distributes  at least 95% of  ordinary  taxable  income  (90%
effective in 2001) for a taxable year,  deduct  dividends  paid to  stockholders
with respect to such taxable year from taxable income.                          

A REIT is not  required to  distribute  capital gain income but to the extent it
does not,  it must pay the  applicable  capital  gain  income  tax unless it has
ordinary  losses  to offset  such  capital  gain  income.  We have  historically
distributed  to our  stockholders  capital gain income  arising  from  principal
repayments on our mortgage notes receivable  (please refer to Item 1. Business -
Mortgage Notes  Receivable)  which are being reported on the installment  method
for tax purposes.                                                               

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Item 6.  Selected Financial Data                                                
(dollars in millions, except share data)                                        

                               Year Ended December 31,
________________________________________________________________________________
                            1999        1998        1997         1996       1995
________________________________________________________________________________
Revenues:                                                                       
  Rent                     $25.6       $17.2       $ 2.7        $ 1.1      $  .7
  Interest and other         8.0         8.8        10.6         11.7       12.2
                           _____       _____       _____        _____      _____
Total revenues             $33.6       $26.0       $13.3        $12.8      $12.9
                           =====       =====       =====        =====      =====
Income before income                                                            
 taxes                     $ 7.2       $ 8.8       $ 8.5        $ 9.4      $ 8.4
                           =====       =====       =====        =====      =====
Net income                 $ 7.2       $15.9(b)    $ 8.5        $ 9.6      $ 9.4
                           =====       =====       =====        =====      =====
Funds From Operations                                                           
 (FFO) (a)                 $10.8       $ 9.5       $ 9.1        $ 9.0      $ 8.7
                           =====       =====       =====        =====      =====
Per common share:                                                               
Net income, basic                                                           
   and diluted             $ .91       $1.99       $1.07        $1.20      $1.18
                           =====       =====       =====        =====      =====
  Dividends declared       $1.16       $1.16       $1.16        $1.14      $1.08
                           =====       =====       =====        =====      =====
Average common                                                              
shares outstanding,                                                       
   basic and diluted   7,966,621   7,966,621   7,966,621   7,966,621   7,966,621
                       =========   =========   =========   =========   =========
At Year End:                                                                    
Total assets              $257.8      $225.4      $171.9      $118.9      $120.0
                          ======      ======      ======      ======      ======
Borrowings                $156.3      $121.9       $66.3       $35.1       $37.1
                          ======      ======      ======      ======      ======
Stockholders' equity:                                                           
  Total                    $77.6       $79.6       $72.9       $73.7       $73.2
                           =====       =====       =====        =====      =====
  Per common share         $9.74       $9.99       $9.16       $9.25       $9.19
                           =====       =====       =====        =====      =====
___________                                                                     
(a)  Please refer to Item 7. Management's  Discussion and Analysis of Results of
Operations and Financial Condition for a definition of FFO.           

(b)  Includes $7 million  benefit  arising  from the  reversal  of deferred  tax
 liability. Please refer to Note 9 to Consolidated Financial Statements.

Item 7.  Management's  Discussion  and Analysis of Results of Operations  and   
Financial Condition                                                             

 Results of Operations

Net Income                                                                      

 1999 Compared to 1998

For the year ended  December 31,  1999,  net income was  $7,247,000  or $.91 per
share compared to $15,850,000 or $1.99 per share for the same period of 1998.   

Net income for 1998 includes a $2,347,000  gain from the sale of real estate,  a
$7,041,000  deferred  income tax benefit (please refer to Note 1 to Consolidated
Financial  Statements) and $300,000 of  non-recurring  expenses,  principally in
connection  with the settlement of  litigation.  In addition,  depreciation  and
amortization   increased  by   $1,371,000   in  1999  due  to  shopping   center
acquisitions.  Excluding these  non-operational  items,  net income increased by
$1,856,000.  The discussion  below  highlights the major components which caused
this increase.                                                                  

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During 1999,  rent revenue and operating  expenses  increased by $8,400,000  and
$2,437,000, respectively (a net rental income increase of $5,963,000), primarily
due to the acquisition of ten shopping  centers since the beginning of 1998. The
increase  also  reflects  improved   operating  results  from  income  producing
properties owned as of December 31, 1997.                                       

Interest income  decreased by $846,000 during 1999,  attributable to a reduction
in the average  balance of mortgage notes  receivable and cash. The reduction in
the average balance outstanding  principally results from repayments by Hilcoast
of a line of  credit  and  other  notes in  1998.  Those  repayments  as well as
available  cash  balances  have  generally  been  utilized  to acquire  shopping
centers.  The Company's  remaining  mortgage notes  receivable are long term and
require self-amortizing payments through 2023.                                  

Interest  expense  increased by  $3,388,000 in 1999  principally  as a result of
increased borrowings to finance shopping center acquisitions.                   

General and  administrative  expenses increased by $75,000 during 1999 primarily
due to higher professional fees and performance related bonuses.                

Equity in income of unconsolidated  affiliates decreased by $309,000 principally
due to the decision by our management  company (Drexel) to concentrate mainly on
management,  leasing and renovation of our own income  producing  properties and
acquisitions of additional shopping centers. As a result,  Drexel has terminated
various management contracts for properties owned by third parties.             

Minority  interests  in income of OP  decreased  by $511,000  during  1999.  The
decrease was due to a  $2,073,000  reduction  in income  attributable  to the OP
(which  reflects the  aforementioned  $2,347,000  gain on sale of real estate in
1998) and a reduction in minority interests, due to redemptions, from an average
of 17.4% in 1998 to an average of 15.6% in 1999.                                

 1998 Compared to 1997

Net income for the year ended  December  31, 1998 was  $15,850,000  or $1.99 per
share compared to $8,515,000 or $1.07 per share for 1997.                       

Net income for 1998 includes a $2,347,000  gain from the sale of real estate,  a
$7,041,000  deferred income tax benefit and $300,000 of non-recurring  expenses,
principally  in  connection  with the  settlement  of  litigation.  In addition,
depreciation  and  amortization  increased by $2,298,000 due to shopping  center
acquisitions.  Excluding these  non-operational  items,  net income increased by
$545,000. The discussion below highlights the major components which caused this
increase.                                                                       

During 1998, rent revenue,  operating expenses and interest expense increased by
$14,452,000,  $4,314,000  and  $5,049,000,  respectively,  primarily  due to the
acquisition of nine shopping centers and an office building on December 31, 1997
and seven additional shopping centers in 1998.                                  

Interest income decreased by $1,758,000 during 1998,  primarily  attributable to
an approximately  $11.2 million reduction in the average balance of our mortgage
notes  receivable.  These notes  principally  consisted  of a line of credit and
certain  other loans to Hilcoast,  which were repaid  during  1998.  The average
interest rate on these notes  approximated 10.9% and the repayments as well as a
substantial  portion of our cash  balances  were  generally  utilized to acquire
shopping centers in 1998 or reinvested in lower yielding short-term  investments
(averaging  approximately  5% during  1998),  pending the  completion of certain
planned acquisitions.                                                           

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General  and  administrative  expenses  increased  by  $1,039,000  during  1998,
reflecting  increases in personnel and other costs due to the 1997  acquisition,
and in legal fees primarily in connection with certain litigation which has been
settled.                                                                        

Minority  interests  in income of OP amounted  to  $1,855,000,  representing  an
average of 17.4% of the income  attributable  to the OP.  There were no minority
interests prior to December 31, 1997.                                           

Funds From Operations (FFO)                                                     

FFO, as defined by the National  Association of Real Estate  Investment  Trusts,
consists  of  net  income  (computed  in  accordance  with  generally   accepted
accounting  principles)  before  depreciation and amortization of real property,
certain  non-recurring items,  extraordinary items, gains and losses on sales of
real estate and income taxes.                                                   

The following schedule  reconciles FFO to net income for the years presented (in
thousands):                                                                     

                                                     1999       1998        1997
                                                 _______________________________

Net income ...................................   $  7,247   $ 15,850    $  8,515
Deferred income tax benefit ..................         --     (7,041)         --
Depreciation and amortization of real property                                  
  (including unconsolidated affiliates)* .....      3,576      2,391         573
Gain on sale of real estate* .................         --     (1,917)         --
Non-recurring items, principally                                                
  settlement of litigation ...................         --        252          --
                                                 ________   ________    ________
FFO ..........................................   $ 10,823   $  9,535    $  9,088
                                                 ========   ========    ========

*Net of amounts attributable to minority interests.                             

We believe that FFO is an appropriate  measure of operating  performance because
real  estate  depreciation  and  amortization  charges  are  not  meaningful  in
evaluating the operating  results of our  properties  and certain  non-recurring
items,  such as the gain on the sale of real  estate  and  deferred  income  tax
benefit,  would distort the  comparative  measurement of performance and are not
relevant to ongoing operations.  However,  FFO does not represent cash generated
from  operating  activities in accordance  with  generally  accepted  accounting
principles  and should not be considered as an  alternative to either net income
as a measure  of our  operating  performance  or to cash  flows  from  operating
activities as an indicator of liquidity or cash  available to fund all cash flow
needs. In addition,  since other REITs may not calculate FFO in the same manner,
FFO presented may not be comparable to that reported by other REITs.            

 Liquidity and Capital Resources

Consolidated Statements of Cash Flows                                           

As of December 31, 1999,  unrestricted  cash and cash  equivalents  decreased to
$3.5  million  from $3.8  million and $12 million at December 31, 1998 and 1997,
respectively.                                                                   

Net cash  provided by  operating  activities,  as  reported in the  Consolidated
Statements of Cash Flows,  increased to $11 million in 1999 from $9.9 million in
1998 and $8.9 million in 1997. These amounts  generally reflect the OP's FFO and
net changes in other assets and liabilities.                                    

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Net cash used by investing activities amounted to $1.4 million in 1999, and $6.8
million in 1998.  In 1997,  investing  activities  provided  $7.8 million of net
cash.  The 1999 amounts  reflect $1.6 million of capital  improvements  and $1.2
million of cash required in connection  with the  acquisitions of three shopping
centers,  partially  offset by $1.6  million of  collections  on mortgage  notes
receivable.  The 1998  amounts  principally  consist  of $21.4  million  of cash
required in connection with the  acquisitions of seven shopping centers and $2.1
million  of  capital  improvements,  partially  offset by $12.7  million  of net
collections on mortgage notes receivable and $4.2 million received from the sale
of real  estate.  The 1997  amounts  principally  consist of $7.2 million of net
collections  on mortgage  notes  receivable  and the maturity of $6.4 million of
short-term  investments,  partially  offset by $5.6 million of cash  required in
connection with the acquisition of nine shopping centers and an office building.

Net cash used in  financing  activities  decreased  to $9.9 million in 1999 from
$11.2  million in 1998 and $11.4  million in 1997.  In each of the three  years,
cash dividends  declared amounted to $1.16 per share, or $9.2 million.  The 1999
amounts also include cash  distributions of $1.7 million to minority  interests,
partially  offset by $1.6  million of net  proceeds  from  borrowings.  The 1998
amounts  include cash  distributions  of $1.5 million to minority  interests and
$3.7 million for the  redemption of  approximately  300,000 OP units,  partially
offset by $3.2 million of net borrowings.  The 1997 amounts include $2.2 million
of repayments of borrowings. There were no minority interests prior to 1998.    

Borrowings                                                                      

At December 31, 1999,  our  borrowings  increased to $156.3  million from $121.9
million at December 31, 1998. The $34.4 million increase  included $32.1 million
borrowed under our line of credit (see below) to finance three  shopping  center
acquisitions in 1999 and $5.2 million in connection with refinancings. Scheduled
principal  payments over the next five years are $117 million with $39.3 million
due thereafter.                                                                 

Our  borrowings  are  collateralized  by a  substantial  portion  of our  income
producing real estate and our mortgage notes receivable.  We expect to refinance
certain of these borrowings, at or prior to maturity, through new mortgage loans
on our real estate.  The ability to do so,  however,  is dependent  upon various
factors, including the income level of the properties, interest rates and credit
conditions within the commercial real estate market.  Accordingly,  there can be
no assurance that such refinancing can be achieved.                             

At December  31,  1999,  borrowings  consisted  of $106.5  million of fixed rate
indebtedness,  with a weighted  average interest rate of 7.70% and $49.8 million
of variable  rate  indebtedness,  principally  under our line of credit,  with a
weighted  average  interest rate of 8.23%.  At December 31, 1998, our fixed rate
indebtedness  was $105 million,  with a weighted  average interest rate of 7.97%
and our variable rate  indebtedness  was $16.9  million with a weighted  average
interest rate of 7.37%.  Continued  interest rate increases on our variable rate
indebtedness  could have an adverse effect on our future  operating  results and
cash flow.                                                                      

Under our  three-year  non-revolving  line of  credit,  we can borrow up to $100
million.  Advances under the line of credit: (1) must be secured by assets based
on specified  aggregate loan to value and debt service coverage ratios, (2) bear
interest  at an annual  rate of one month  LIBOR plus 1.75% and (3) may be drawn
through  March 31,  2000 and must be repaid by certain  dates  during the twelve
months ended March 31, 2001.  Additional  provisions include a 1% commitment fee
(which has been  paid),  a minimum  net worth  covenant  and  cross-default  and
cross-collateralization requirements. Advances under the line of credit are used
to fund acquisitions, expansions, renovations, financing and refinancing of real
estate,   including  reimbursement  of  equity  advances,  and  require  certain
performance covenants.  As of December 31, 1999, the unused facility amounted to
$51  million of which  $10.3  million  was  available  to be  borrowed  based on
collateral   already  pledged  under  the  line  of  credit.  We  are  currently
negotiating  an  extension  of our line of  credit  and we  expect to be able to
extend the dates  through  which  advances may be drawn and repaid.  There is no
assurance,  however,  that  we  will  be  successful  in  doing  so.  We have an
additional  $1.2  million  available   principally  under  an  unsecured  credit
facility.                                                                       

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Capital Resources                                                               

Our  operating  funds are  generated  from rent  revenue  from income  producing
properties  and, to a much lesser extent,  interest income on our mortgage notes
receivable.  We  believe  that our  operating  funds will be  sufficient  in the
foreseeable  future to fund  operating  and  administrative  expenses,  interest
expense,  recurring  capital  expenditures and  distributions to stockholders in
accordance with REIT requirements.  Sources of capital for non-recurring capital
expenditures and scheduled  principal payments,  including balloon payments,  on
outstanding  borrowings  are expected to be obtained from property  refinancing,
scheduled  principal  repayments  on our  mortgage  notes  receivable,  sales of
non-strategic  other real estate,  our line of credit and/or  potential  debt or
equity financing in the public or private markets.                              

Acquisitions                                                                    

During 1999,  we completed  the  acquisition  of three  shopping  centers for an
aggregate  purchase  price  of  $33.3  million,   including  transaction  costs,
substantially all of which was financed by mortgage debt. In connection with one
of the  acquisitions,  we were required to deposit an additional $1 million with
the lender for future capital improvements.                                     

During 1998, we acquired seven shopping centers for purchase prices  aggregating
$74.6 million,  including transaction costs, which consisted of $21.4 million of
cash  and  the  incurrence  or  assumption  of  $53.2  million  of  liabilities,
principally mortgage debt.                                                      

On December 31, 1997, we completed the acquisition of nine shopping  centers and
an office  building and a 95% economic  interest in Drexel.  The purchase  price
amounted to $61.7  million (net of cash  acquired),  consisting  of 1,787,010 OP
units, valued at $21.2 million;  the assumption of $34.9 million of liabilities,
principally  mortgage debt;  and, cash in the amount of $5.6 million,  including
transaction costs.                                                              

Our  policy has been to acquire  additional  properties  only if they are income
producing  and any proposed  acquisition  requires a resolution by a majority of
our Board of  Directors  that the  acquisition  will not  adversely  affect  our
ability to pay a quarterly dividend of at least 29 cents per share. Under the OP
agreement,  all of the  activities of the OP must  generally be conducted with a
view toward enabling the OP to make quarterly  distributions  to all partners of
at least 29 cents per OP unit and such additional amount, if required, to enable
us to pay a  regular  quarterly  dividend  of at least 29 cents per share to our
stockholders.  As of December  31, 1999,  there were  1,462,406 OP units held by
minority interests.                                                             

As discussed under Item 1. Business - Recent  Development - Proposed Merger,  on
December 10, 1999, we signed a definitive  merger  agreement and  reorganization
plan with  Kranzco  to merge our  operations  and create  Kramont.  Terms of the
merger call for common  shareholders of both companies to each receive one share
of Kramont common stock for each outstanding share of CV Reit and Kranzco common
stock on a tax-free  basis.  The merger  agreement  is  subject to  approval  by
shareholders of both companies and certain other conditions.                    

Mr. Meshon will assume the same titles and responsibilities at the newly created
Kramont and our designees  will hold the majority of the board seats.  Corporate
headquarters  will be  located  at the OP's  existing  facilities,  in  Plymouth
Meeting, Pennsylvania.                                                          

Kramont is expected to own 84 properties,  substantially comprising neighborhood
and community  shopping  centers,  encompassing  approximately 11 million square
feet in 16 states with an asset base of approximately $800 million.             

We believe the merger will provide benefits to our shareholders.  However, there
may be certain disadvantages, including but not limited to the following:       

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If the merger is  completed,  certain  common stock  dividend  protections  that
currently  exist  in our  certificate  of  incorporation  and by  laws  will  be
terminated.  Our common  shareholders are currently not subject to the rights of
any preferred  shareholders.  Upon  completion of the merger,  the rights of our
common  shareholders  will be  subject  to the  rights  of  Kramont's  preferred
shareholders. In addition, certain holders of Kranzco preferred shares will have
appraisal rights in connection with the merger. Assertion of appraisal rights by
a  significant  number of those  holders may have a material  adverse  effect on
Kramont's cash flow.  Kramont may be required to incur costs in connection  with
obtaining  consents  from  lenders.  The  inability to obtain  certain  material
consents may have a material adverse effect on Kramont's cash flow. Kramont will
have  operations  in a number of different  states.  There is no assurance  that
costs,  management's  time and  effort,  or other  factors  associated  with the
integration  of our  company  and  Kranzco  would not  adversely  affect  future
combined results of operations or the benefits of expected cost savings.        

In the  event  the  merger  is  terminated,  depending  on the  reason  for such
termination,  we may be required to pay Kranzco a break-up  fee of $5 million or
an expense fee of up to $1.5 million or both.  The  obligation  to pay such fees
may deter others from offering to engage in a different  transaction  with us in
the event the merger is not consummated.                                        

 Inflation

During recent  years,  the rate of inflation has remained at a low level and had
minimal impact on our operating results.                                        

Most of the tenant leases  contain  provisions  designed to lessen the impact of
inflation. These provisions include escalation clauses, which generally increase
rental rates annually based on cost of living indexes (or based on stated rental
increases which are currently higher than recent cost of living increases),  and
percentage  rentals based on tenants' gross sales,  which generally  increase as
prices  rise.  Many of the leases  are for terms of less than ten  years,  which
increases our ability to replace those leases, which are below market rates with
new leases at higher base and/or percentage  rentals.  In addition,  most of the
leases  require the tenants to pay their  proportionate  share of  increases  in
operating  expenses,  including common area  maintenance,  real estate taxes and
insurance.                                                                      

However, in the event of significant  inflation,  our operating results could be
adversely affected if general and  administrative  expenses and interest expense
increase  at a rate higher  than rent  income or if the  increase  in  inflation
exceeds rent  increases for certain  tenant leases which provide for stated rent
increases (rather than based on cost of living indexes).                        

 Year 2000 Issue

As many computer  systems,  software  programs and other equipment with embedded
chips or processors  (collectively  referred to as information systems) use only
two digits rather than four to define the applicable year, they may be unable to
process  accurately  certain  data,  during or after the year 2000. As a result,
business and governmental  entities are at risk for possible  miscalculations or
systems  failures  causing  disruptions  in their business  operations.  This is
commonly known as the Year 2000 ("Y2K")  issue.  The Y2K issue concerns not only
information  systems  used  solely  within a  company  but also  concerns  third
parties,  such as customers,  vendors and creditors,  using information  systems
that may interact with or affect a company's operations.                        

We have not experienced any material disruption in our business or operations as
a  result  of Y2K  issues.  However,  there  is no  assurance  that we will  not
experience interruptions in the future.                                         

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Recently Issued Accounting Pronouncements 

In June 1998,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting Standards No.133,  "Accounting for Derivative  Instruments
and Hedging Activities" (SFAS 133). SFAS 133 requires companies to recognize all
derivative contracts as either assets or liabilities in the balance sheet and to
measure  them at fair  value.  SFAS  133 was to  become  effective  for  periods
beginning after June 15, 1999;  however,  SFAS 133 has been amended by SFAS 137,
which delayed the effective date to periods  beginning  after June 15, 2000. The
adoption of this  pronouncement is not expected to have a material impact on our
financial statements or disclosures.                                            

Forward Looking Information: Certain Cautionary Statements  

Certain statements contained in "Management's Discussion and Analysis of Results
of Operations and Financial Condition" and elsewhere in this Form 10-K, that are
not related to  historical  results,  are forward  looking  statements,  such as
anticipated   liquidity   and  capital   resources,   completion   of  potential
acquisitions and  collectibility of real estate mortgage notes  receivable.  The
matters  referred to in forward  looking  statements are based on assumptions of
future  events which may not prove to be accurate and which could be affected by
the  risks and  uncertainties  involved  in our  business;  accordingly,  actual
results may differ  materially  from those  projected and implied in the forward
looking statements.  These risks and uncertainties  include, but are not limited
to,  the effect of  conditions  in the  commercial  real  estate  market and the
economy in general,  the level and volatility of interest  rates,  the impact of
current or pending  legislation and  regulation,  as well as certain other risks
described  in the  Form  10-K.  Subsequent  written  and  oral  forward  looking
statements  attributable  to our  company  or  persons  acting on its behalf are
expressly qualified in their entirety by cautionary statements in this paragraph
and elsewhere described in this Form 10-K and in other reports we filed with the
Securities and Exchange Commission.                                             

Item 8.  Financial Statements and Supplementary Data                            

Table of Contents to Consolidated Financial Statements  

                                                                          Page
                                                                          ------

Report of Independent Certified Public Accountants                         16   

Consolidated Financial Statements:                                              

Balance Sheets - December 31, 1999 and 1998                              17 
Statements of Income - Years Ended December 31, 1999, 1998 and 1997      18 
Statements of Stockholders'Equity - Years Ended December 31, 1999,          
1998 and 1997                                                           19
Statements of Cash Flows - Years Ended December 31, 1999, 1998 and 1997  20 
  Notes to Consolidated Financial Statements                               21-31

Consolidated Financial Statements Schedules:                                    

     Schedule III - Real Estate and Accumulated Depreciation               32-33
  Schedule IV  - Mortgage Loans on Real Estate                          34

Schedules,  other than those  listed  above,  are omitted  because  they are not
required,  or because the information  required is included in the  consolidated
financial statements or the notes thereto.                                      

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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS  

To the Board of Directors of CV Reit, Inc.                                      
West Palm Beach, Florida                                                        

We have audited the  accompanying  consolidated  balance sheets of CV Reit, Inc.
and  subsidiaries as of December 31, 1999 and 1998 and the related  consolidated
statements of income,  stockholders' equity and cash flows for each of the three
years in the period ended  December 31, 1999. We have also audited the schedules
listed in the accompanying  index. These financial  statements and the schedules
are the  responsibility of the Company's  management.  Our  responsibility is to
express an opinion on these financial  statements and the schedules based on our
audits.                                                                         

We  conducted  our  audits  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  statements and schedules 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 consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial  position of CV Reit, Inc. and
subsidiaries at December 31, 1999 and 1998, and the results of their  operations
and their cash flows for each of the three  years in the period  ended  December
31, 1999, in conformity with generally accepted accounting principles.          

Also, in our opinion,  the schedules present fairly,  in all material  respects,
the information set forth therein.                                              

New York, New York                                          BDO SEIDMAN, LLP    
March 3, 2000                                                                   

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CV REIT, INC. AND SUBSIDIARIES  
 CONSOLIDATED BALANCE SHEETS

(dollars in thousands)  

                                                              December 31,
                                                                 1999       1998
                                                            ____________________
ASSETS                
______                
Real estate - income producing,                                                 
net of accumulated  depreciation                                            
(Notes 2, 4, 6 and 8)                                                       
    Land .................................................   $ 18,302   $ 14,980
    Buildings ............................................    154,774    127,428
                                                             ________   ________
                                                              173,076    142,408
Mortgage notes receivable (Notes 5 and 8) ................     63,385     64,988
Investments in unconsolidated affiliates .................      3,390      3,323
Cash and cash equivalents (includes $890                                        
  and $930 restricted) ...................................      4,385      4,775
Other real estate (net of allowance for                                         
  losses of $2,401) ......................................      5,503      5,463
Receivables and accrued income ...........................      2,164      1,713
Prepaid expenses and other ...............................      5,858      2,752
                                                             ________   ________
                                                             $257,761   $225,422
                                                             ========   ========
LIABILITIES AND STOCKHOLDERS' EQUITY                
Liabilities:                                                                    
  Borrowings (Notes 2 and 6) .............................   $156,329   $121,933
  Accounts payable and other liabilities .................      7,024      6,283
                                                             ________   ________
     Total liabilities ...................................    163,353    128,216
Minority interests in Operating Partnership                                     
 (Notes 2 and 12) ........................................     16,846     17,650
                                                             ________   ________
Commitments and contingencies (Notes 6 and 7)                                   

Stockholders' equity (Note 11):                                                 
Common stock, $.01 par-shares authorized                                    
   20,000,000; outstanding 7,966,621 .....................         80         80
  Additional paid-in capital .............................     18,490     18,490
  Retained earnings ......................................     58,992     60,986
                                                             ________   ________
      Total stockholders' equity .........................     77,562     79,556
                                                             ________   ________
                                                             $257,761   $225,422
                                                             ========   ========

See accompanying notes to consolidated financial statements.  

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CV REIT, INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF INCOME   
(dollars in thousands, except share data)   

                                                     Year Ended December 31,
                                                    1999        1998        1997
                                               _________________________________
Revenues:                                                                       
  Rent ....................................... $  25,555   $  17,155   $   2,703
Interest, principally from mortgage notes                                   
    (Notes 5, 8 and 10) ......................     8,008       8,854      10,612
                                               _________   _________   _________
                                                  33,563      26,009      13,315
                                               _________   _________   _________
Expenses:                                                                       
  Interest  (Note 6) .........................    11,743       8,355       3,306
  Operating ..................................     7,621       5,184         870
  Depreciation and amortization ..............     4,078       2,707         409
  General and administrative .................     1,768       1,693         654
                                               _________   _________   _________
                                                  25,210      17,939       5,239
                                               _________   _________   _________
                                                   8,353       8,070       8,076

Equity in income of unconsolidated affiliates        238         547         439
Gain on sale of real estate (Note 4(d)) ......        --       2,347          --
Non-recurring items, principally settlement                                     
  of litigation ..............................        --        (300)         --
Minority interests in income of Operating                                       
  Partnership ................................    (1,344)     (1,855)         --
                                               _________   _________   _________
Income before income tax benefit .............     7,247       8,809       8,515

Deferred income tax benefit ..................        --      (7,041)         --
                                               _________   _________   _________
Net income ................................... $   7,247   $  15,850   $   8,515
                                               =========   =========   =========
Per Common Share:                                                               
  Net income, basic and diluted .............. $     .91   $    1.99   $    1.07
                                               =========   =========   =========
  Dividends declared ......................... $    1.16   $    1.16   $    1.16
                                               =========   =========   =========
Average common shares outstanding,                                          
    basic and diluted ........................ 7,966,621   7,966,621   7,966,621
                                               =========   =========   =========

See accompanying notes to consolidated financial statements.

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CV REIT, INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY   
(in thousands)  

                  Additional
                      Common     Paid in      Retained
                                   Stock     Capital      Earnings       Total
                               _________________________________________________

Balance at December 31, 1996 ...   $  80     $ 18,490      $ 55,103   $  73,673 
 Net income for the year ......      --         --           8,515       8,515
  Cash dividends declared ......      --         --          (9,241)     (9,241)
                                  _____     ________      ________   _________
Balance at December 31, 1997 ...      80       18,490        54,377      72,947 
 Net income for the year ......      --         --          15,850      15,850
  Cash dividends declared ......      --         --          (9,241)     (9,241)
                                  _____     ________      ________   _________
Balance at December 31, 1998 ...      80       18,490        60,986      79,556 
 Net income for the year ......      --         --           7,247       7,247
  Cash dividends declared ......      --         --          (9,241)     (9,241)
                                  _____     ________      ________   _________
Balance at December 31, 1999 ...   $  80     $ 18,490      $ 58,992   $  77,562 
                                  =====     ========      ========   =========

See accompanying notes to consolidated financial statements.    

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CV REIT, INC. AND SUBSIDIARIES  
 CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)  

                                                   Year Ended December 31,
                                                    1999       1998       1997
                                              ________________________________
CASH FLOWS FROM OPERATING ACTIVITIES:                                           
 Net income                                     $  7,247   $ 15,850   $  8,515
Adjustments  to reconcile  net income to net                                
cash provided by operating activities:                                  
     Depreciation and amortization                 4,078      2,707        409
Equity in depreciation and amortization                             
        of unconsolidated affiliates                   176        171        175
Minority interests in income of                                     
       Operating Partnership                       1,344      1,855          -
     Gain on sale of real estate                       -     (2,347)         -
     Deferred income tax benefit                       -     (7,041)         -
Changes in assets and liabilities,                                  
net of effects from acquisitions:                               
(Increase) decrease in receivables                          
           and accrued income                       (451)    (1,073)        36
(Increase) decrease in prepaid                              
           expenses and other                     (1,953)      (996)        11
Increase (decrease) in accounts                             
            payable and other liabilities             565        743       (242)
                                                ________   ________   ________
Net cash provided by operating activities          11,006      9,869      8,904 
                                                ________   ________   ________
CASH FLOWS FROM INVESTING ACTIVITIES:                                           
  Acquisitions of real estate                      (1,173)   (21,364)    (5,577)
  Capital improvements                             (1,635)    (2,069)       (59)
  Fundings on mortgage notes receivable                 -     (5,190)   (16,112)
 Collections on mortgage notes receivable          1,603     17,854     23,268
 Proceeds from the sale of real estate                 -      4,151          -
 Maturity of short-term investments                    -          -      6,436
  Other                                              (243)      (146)      (162)
                                                ________   ________   ________
Net cash (used) provided by investing                                           
 activities                                       (1,448)    (6,764)     7,794
                                                ________   ________   ________
CASH FLOWS FROM FINANCING ACTIVITIES:                                           
 Proceeds from borrowings                         24,858      8,366          -
  Repayments of borrowings                        (23,298)    (5,196)    (2,201)
  Cash dividends paid                              (9,204)    (9,249)    (9,209)
 Distributions to minority interests              (1,718)    (1,470)         -
 Redemption of Operating Partnership units          (546)    (3,665)         -
                                                ________   ________   ________
Net cash used in financing activities              (9,908)   (11,214)   (11,410)
                                                ________   ________   ________
Net (decrease) increase in unrestricted cash                                    
 and cash equivalents                               (350)    (8,109)     5,288
Unrestricted cash and cash equivalents at the                                   
 beginning of the period                           3,845     11,954      6,666
                                                ________   ________   ________
Unrestricted cash and cash equivalents at the                                   
 end of the period                              $  3,495   $  3,845   $ 11,954
                                                ========   ========   ========
Supplemental disclosure of cash flow information:                               
 Cash paid for interest                         $ 11,038   $  7,542   $  3,296
                                                ========   ========   ========
Acquisitions of real estate:                                                    
  Fair value of assets acquired                  $(34,264)  $(74,561)  $(61,711)
 Liabilities assumed or incurred                  33,091     53,047     34,913
 Operating Partnership units issued                    -        150     21,221
                                                 _______   ________    _______
Cash paid for acquisitions, net of cash                                     
    acquired (Note 2)                             $(1,173)  $(21,364)  $ (5,577)
                                                ========   ========   ========

See accompanying notes to consolidated financial statements   

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CV REIT, INC. AND SUBSIDIARIES  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  

(1) Summary of Significant Accounting Policies                                  

Organization and Business                                                       

CV Reit, Inc. ("CV Reit") is a real estate investment trust ("REIT") which until
December  31, 1997,  was  principally  engaged in  investing  in mortgage  notes
receivable.  Effective December 31, 1997, CV Reit and its subsidiaries converted
to an  Umbrella  Partnership  REIT  (UPREIT)  structure  as part of a series  of
transactions  which closed on that date and which included the following:  (1) a
newly created Operating  Partnership,  Montgomery CV Realty L.P.  (together with
its wholly-owned subsidiaries hereinafter collectively referred to as the "OP"),
acquired 100% of the ownership  interests in nine shopping centers and an office
building, and a 95% economic interest in Drexel Realty, Inc. ("Drexel"),  a real
estate  management  and  leasing  company  (Note  2) and  (2) CV  Reit  and  its
subsidiaries transferred  substantially all of their net assets (or the economic
benefit) to the OP. As a result, CV Reit indirectly  currently owns 84.5% of the
OP,  is the OP's sole  general  partner  and  operates  as a  self-administered,
self-managed  equity  REIT.  As of  December  31,  1999,  the  OP  owned  twenty
neighborhood or community shopping centers and two office buildings,  located in
Pennsylvania,  New Jersey and  Florida,  comprising  approximately  $1.9 million
square feet (Note 3).                                                           

Principles of Consolidation                                                     

The accompanying  consolidated  financial  statements include the accounts of CV
Reit and all subsidiaries  ("the  Company"),  including the OP. The Company owns
99% of the  non-voting  common stock of, and a 95% economic  interest in Drexel,
and owns  45%-50%  interests  in certain  real  estate  partnerships,  which are
accounted  for on the  equity  method.  Significant  intercompany  accounts  and
transactions have been eliminated in consolidation.                             

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.                               

Real Estate - Income Producing ("Real Estate")                                  

Real Estate is carried at cost, net of accumulated depreciation,  and is subject
to operating leases. Depreciation is provided over the estimated useful lives of
the assets (7 to 40 years) on the straight-line method.                         

The Company  evaluates its  long-lived  assets,  including its Real Estate,  for
impairment  based on the  undiscounted  future  cash  flows of the  asset.  If a
long-lived  asset is  identified  as  impaired,  the value of the asset  must be
reduced to its fair value.                                                      

Revenue Recognition                                                             

 Rental  revenue is  recognized on a  straight-line  basis over the terms of the
leases.  Certain leases provide for reimbursement to the Company of the tenants'
share of common area maintenance  costs,  insurance and real estate taxes, which
are recorded on the accrual basis.                                              

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Mortgage Notes Receivable, Other Real Estate and Allowance For Losses           

Mortgage  notes  receivable  are carried at the lower of cost or  estimated  net
realizable value.  Accrual of interest is discontinued when management believes,
after considering economic and business conditions and collection efforts,  that
timely collection is doubtful.                                                  

Other real estate principally consists of three parcels of unimproved commercial
land,  totaling 38 acres located in southeast Florida,  acquired by deed in lieu
of foreclosure and held for resale (Note 3). These properties are carried at the
lower of cost or fair value less selling  costs.  Carrying  costs and subsequent
declines in net realizable value are charged to operations as incurred.         

The  allowance  for  losses  is  established  through  a  provision  charged  to
operations  based  upon  an  evaluation  by  management  of its  mortgage  notes
receivable  and other real estate.  In evaluating  possible  losses,  management
takes  into  consideration   appropriate   information  which  may  include  the
borrower's cash flow  projections,  historical  operating  results and financial
strength,  pending  sales,  adverse  conditions  that may affect the  borrower's
ability to repay, appraisals and current economic conditions.                   

Dividends and Income Taxes                                                      

The  Company has  elected to qualify as a REIT under the  provisions  of Section
856-860 of the  Internal  Revenue  Code.  As a REIT,  the  Company is  currently
required  to  distribute  at  least  95%  of  its  ordinary  taxable  income  to
stockholders  (90%  effective  in 2001) and may deduct such  distributions  from
taxable income. A REIT is not required to distribute  capital gain income but to
the  extent it does not,  it must pay the  applicable  capital  gain  income tax
unless it has ordinary losses to offset such capital gain income.               

The  federal  income  tax  characteristics  of  dividends  paid  by the  Company
consisted of:                                                                   

                                        1999        1998        1997
                                        ______      ______      ______
Ordinary income                            88.3%       65.4%       89.1%  
Capital gain distribution                  11.7%       34.6%       10.9%  

The Company  accounts  for income taxes based upon SFAS No.109  "Accounting  for
Income  Taxes",  which  requires,  among other things,  a liability  approach to
calculating deferred income taxes                                               

As a result of the  acquisitions  described in Note 2 and the OP structure,  the
Company  does not expect to be subject to federal  income taxes in the future as
it intends to distribute ordinary and capital gain income.  Accordingly,  during
1998, the Company reversed the existing net deferred tax liability,  which arose
from sales  reported  on the  installment  method for income tax  purposes,  and
recorded a deferred tax benefit of $7,041,000.                                  

As  of  December  31,  1999,  the  Company  has  aggregate  net  operating  loss
carryforwards  for tax purposes of  approximately  $15.7 million,  expiring $7.1
million in 2007 and $8.6 million in 2006                                        

Net Income Per Common Share                                                     

Basic net income per common  share is computed  using net income  divided by the
weighted  average  number of common shares  outstanding.  Diluted net income per
common share includes the effect of potentially dilutive securities.  During the
years presented, the Company had no dilutive securities since the exercise price
of all  outstanding  options  exceeded the average market price of the Company's
common stock for the year,  accordingly,  basic and diluted net income per share
are identical.                                                                  

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Statements of Cash Flows                                                        

For  financial  statement  purposes,  the Company  considers  all highly  liquid
investments  with  initial  maturities  of  three  months  or  less  to be  cash
equivalents.                                                                    

Reclassifications                                                               

Certain  1998 and 1997  amounts  have been  reclassified  to conform to the 1999
financial  statement  presentation.  These  reclassifications  had no  impact on
operating results previously reported.                                          

New Pronouncements                                                              

In June 1998,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting Standards No.133,  "Accounting for Derivative  Instruments
and Hedging Activities" (SFAS 133). SFAS 133 requires companies to recognize all
derivative contracts as either assets or liabilities in the balance sheet and to
measure  them at fair  value.  SFAS  133 was to  become  effective  for  periods
beginning after June 15, 1999;  however,  SFAS 133 has been amended by SFAS 137,
which delayed the effective date to periods  beginning  after June 15, 2000. The
adoption of this  pronouncement is not expected to have a material impact on the
Company's financial statements or disclosures.                                  

(2) Acquisitions                                                                

During 1999, the OP purchased three shopping centers, aggregating 324,000 square
feet,  located in  Pennsylvania  and New Jersey.  The aggregate  purchase prices
amounted to $33.3 million,  including  transaction  costs,  substantially all of
which  was  financed  by  mortgage  debt.  The OP was  required  to  deposit  an
additional  $1  million  with the  lender  in  connection  with  future  capital
improvements.                                                                   

During 1998, the OP purchased seven shopping centers, aggregating 796,000 square
feet,  located in  Pennsylvania  and New Jersey.  The aggregate  purchase prices
amounted to $74.6 million, including transaction costs, which consisted of $21.4
million  of  cash  and  the   incurrence  or  assumption  of  $53.2  million  of
liabilities, principally mortgage debt.                                         

On December 31, 1997, the OP completed the acquisition of nine shopping  centers
and an  office  building,  located  in  Pennsylvania  and New  Jersey,  from two
separate groups, the Montgomery Parties and the Levy Parties (Note 8), and a 95%
economic  interest in Drexel from Louis P. Meshon,  Sr.  Effective  December 31,
1997, Mr. Meshon became President,  Chief Executive Officer and a director of CV
Reit.  The purchase  price  amounted to $61.7  million  (net of cash  acquired),
consisting of 1,787,010 OP units issued to the sellers,  valued at $11.88 per OP
unit, or $21.2 million, based on the closing price of the Company's common stock
(into which the OP units were  redeemable - Note 12) on April 28, 1997, the date
the  acquisition  was publicly  announced;  the  assumption  of $34.9 million of
liabilities,  principally mortgage indebtedness; and, cash in the amount of $5.6
million, including transaction costs.                                           

All  of  the  acquisitions   were  accounted  for  under  the  purchase  method;
accordingly,  the operating  results of the net assets  acquired are included in
the consolidated financial statements from their respective purchase dates.     

The following  unaudited  proforma data summarizes the  consolidated  results of
operations for the years indicated as if the 1999  acquisitions  had occurred on
January 1, 1998.  The proforma  results do not purport to be  indicative  of the
results  of  operations   which  would  have  actually  been  reported  had  the
acquisitions  been  consummated on those dates,  or which may be reported in the
future (in thousands, except per share data):                                   

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                                                              1999        1998
                                                           _________    ________
Revenues ...............................................     $34,959     $30,312
Net income before tax benefit ..........................     $ 7,429     $ 9,167
Net income .............................................     $ 7,429     $16,208
Net income per common share, basic and diluted .........     $   .93     $  2.03

(3) Recent Developments                                                         

Proposed Merger                                                                 

On December  10, 1999,  the Company  signed a definitive  merger  agreement  and
reorganization  plan with Kranzco Realty Trust  ("Kranzco"),  a shopping  center
REIT, to merge  operations and create a new community  shopping center UPREIT to
be called Kramont Realty Trust ("Kramont").  Terms of the merger call for common
shareholders of both companies to each receive one share of Kramont common stock
for each  outstanding  share of CV Reit and Kranzco  common  stock on a tax-free
basis.  The merger  agreement  is subject to  approval by  shareholders  of both
companies and certain other conditions.                                         

The Company's  President and Chief Executive Officer will assume the same titles
and  responsibilities  at the newly created Kramont with the Company's designees
holding the majority of the board seats.  Corporate headquarters will be located
at the OP's existing facilities, in Plymouth Meeting, Pennsylvania.             

Kramont is expected to own 84 properties,  substantially comprising neighborhood
and community  shopping  centers,  encompassing  approximately 11 million square
feet in 16 states with an asset base of approximately $800 million.             

The merger  will be  accounted  for as a  purchase  by the  Company of  Kranzco.
Accordingly,  Kransco's  assets  and  liabilities  will  be  reocrded  at  their
estimated fair values based on consideration given by the Company.              

(4) Real Estate                                                                 

(a) Real  Estate is  located in  Pennsylvania,  New  Jersey  and  Florida  and  
consists of (in thousands):                                                     

                                                      December 31,
                                                      1999              1998
                                                    ____________________________
Land .......................................        $  18,302         $  14,980 
Shopping centers ...........................          156,949           125,670 
Office buildings ...........................            4,933             4,900 
                                                   _________         _________
Totals .....................................          180,184           145,550 
Less accumulated depreciation ..............           (7,108)           (3,142)
                                                   _________         _________
Net Real Estate ............................        $ 173,076         $ 142,408 
                                                   =========         =========

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(b) Real Estate is leased to tenants  under  leases  expiring  at various  dates
through 2017, some of which contain  renewal options of up to 30 years.  Most of
the leases  require fixed base rentals  payable  monthly in advance;  additional
rental based on reimbursements  of common area  maintenance,  insurance and real
estate taxes and, in some leases,  based on a percentage of tenants' sales; and,
rent  increases  based on  cost-of-living  indexes.  During  1999 and 1998,  the
Company  recognized  income  from  reimbursements  of common  area  maintenance,
insurance,  real  estate  taxes and  percentage  rent of $6.5  million  and $4.4
million,  respectively.  As of December 31, 1999,  future  minimum rental income
under  noncancellable  operating leases,  excluding rentals from the exercise of
renewal options, is as follows (in thousands):                                  

Year ending December 31,                                                  

2000               $ 19,654                 
2001                 17,712                 
2002                 15,006                 
2003                 12,798                 
2004                 10,711                 
Thereafter           36,866                 
  ________
Total              $112,747                 
  ========

(c) Real Estate with a net book value of $166.1  million,  at December 31, 1999,
is pledged as collateral for borrowings (Note 6).                               

(d) On May 15,  1998,  the  Company  sold a motel for net cash  proceeds of $4.2
million and recognized a gain of $2.3 million.                                  

(5) Mortgage Notes Receivable                                                   

At December 31, 1999, the Company's mortgage notes receivable consisted of $24.7
million  due  from  Hilcoast  Development  Corp.   ("Hilcoast")  (the  "Hilcoast
Recreation   Note"),   collateralized  by  first  mortgages  on  the  recreation
facilities  at a  Century  Village  adult  condominium  community  in  southeast
Florida, and $38.7 million,  collateralized by first mortgages on the recreation
facilities  at three other  Century  Village  communities  in southeast  Florida
(collectively,  the "Recreation  Notes").  The Hilcoast Recreation Note provides
for  self-amortizing  equal monthly  principal and interest payments due through
July 31,  2023,  bears  interest  at 11% per  annum,  and may not be  prepaid by
Hilcoast  without  a  prepayment   penalty.   The  remaining   Recreation  Notes
principally  provide for  self-amortizing  equal monthly  principal and interest
payments due through 2012,  with  interest  rates  averaging 13% per annum,  and
contain certain  prepayment  prohibitions.  The Recreation  Notes are pledged as
collateral for certain borrowings (Note 6).                                     

The  mortgage  notes  receivable  at  December  31,  1999  mature as follows (in
thousands):                                                                     

One year or less                          $  1,649      
After one year through five years            9,746      
After five years                            51,990      
                                    ________
Totals                              $ 63,385
                                    ========

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(6) Borrowings                                                                  

(a) Borrowings consist of (in thousands):                                       

                                                              December 31,
                                                               1999         1998
                                                           _____________________
Mortgage notes payable through                                                  
September 2008, interest ranging                                              
from 6.09% to 10.28%, collateralized                                          
 by Real Estate (Note 4)  ............................     $ 78,720     $ 74,528

Mortgage notes payable through March                                            
2001 under $100 million credit facility,                                      
(the "Line of Credit"), interest                                              
at one month LIBOR (6.48% at December                                         
31, 1999), plus 1.75%, collateralized by                                      
Real Estate (Note 4) and the Hilcoast                                         
 Recreation Note (Note 5)  ...........................       49,036       16,950

Collateralized Mortgage Obligations,                                            
net of unamortized discount of $439,000                                       
and $553,000 based on an effective interest                                   
rate of 8.84%, collateralized by certain of                                   
the Recreation Notes (Note 5), quarterly                                      
self-amortizing principal and interest                                        
 payments required through March 2007  ...............       27,823       30,455

$1 million revolving credit facility,                                           
interest at one month LIBOR plus 1.8%, maturing                               
 June 2000, collateralized by Real Estate.............          750           --
                                                           ________     ________
Totals ...............................................     $156,329     $121,933
                                                           ========     ========

In March and May  1999,  the  Company  entered  into  three  interest  rate swap
contracts with an aggregate  notional  amount of $28.7 million,  which expire in
2004. The interest rate swaps have an effective interest rate of 6.63%.         

(b) Effective March 31, 1998, the Company entered into the Line of Credit with a
financial  institution which provides the Company with a $100 million three year
non-revolving  line of credit.  Advances  under the Line of Credit:  (1) must be
secured by assets  based on specified  aggregate  loan to value and debt service
coverage  ratios,  (2) bear  interest  at an annual rate of one month LIBOR plus
1.75% and (3) may be drawn  through March 31, 2000 and must be repaid by certain
dates  during the twelve  months  ended March 31,  2001.  Additional  provisions
include a 1% commitment fee, a minimum net worth covenant and  cross-default and
cross-collateralization requirements. Advances under the Line of Credit are used
to fund acquisitions, expansions, renovations, financing and refinancing of real
estate,   including  reimbursement  of  equity  advances,  and  require  certain
performance covenants.  As of December 31, 1999, the unused facility amounted to
approximately  $51 million of which $10.3  million was  available to be borrowed
based on collateral already pledged under the Line of Credit.                   

(c) The OP has agreed that it will not make certain  prepayments or refinancings
of certain of the mortgage  notes prior to various dates not later than July 31,
2002, without the consent of certain of the limited partners of the OP.         

(d) Maturities of borrowings are as follows (in thousands):                     

2000              $  21,789                 
2001                 36,474                 
2002                  4,664                 
2003                 18,770                 
2004                 35,327                 
Thereafter           39,305                 
  ________
Total              $156,329                 
  ========

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(7) Contingencies                                                               

The Company is subject to various claims and complaints relative to its business
activities.  In the opinion of  management,  the ultimate  disposition  of these
matters  will not have a  material  adverse  effect on the  Company's  financial
position.                                                                       

(8) Related Party Transactions                                                  

Hilcoast/H. Irwin Levy ("Mr. Levy")                                       

(a) On July 31,  1992,  Hilcoast,  an  affiliate  of the  Company  on that date,
acquired certain assets from a previous borrower of the Company,  subject to the
borrower's  indebtedness to the Company,  principally consisting of the Hilcoast
Recreation  Note (Note 5),  which as of December 31,  1999,  had an  outstanding
balance  of $24.7  million.  Mr.  Levy,  Chairman  of the Board and a  principal
stockholder  of the  Company,  is the  Chairman  of the Board,  Chief  Executive
Officer and a majority stockholder of Hilcoast.  During 1999, 1998 and 1997, the
Company  recognized  interest  income of $2.7  million,  $3.1  million  and $4.3
million, respectively, from Hilcoast.                                           

(b) Effective July 31, 1992, the Company and Hilcoast  entered into a consulting
and  advisory   agreement  under  which  Hilcoast  provides  certain  investment
advisory,  consulting  and  administrative  services to the  Company,  excluding
matters related to the Hilcoast  Recreation Note. The agreement provides for the
payment of $10,000 per month to Hilcoast,  plus reimbursement for reasonable out
of pocket  expenses.  The  agreement may be terminated by Hilcoast upon 180 days
notice and by the Company upon 30 days notice.  During 1999,  1998 and 1997, the
Company paid $115,000,  $110,000 and $120,000,  respectively,  to Hilcoast under
this agreement, plus expense reimbursement.                                     

(c) Mr. Levy owns the  recreation  facilities  at a Century  Village  community,
acquired from the Company in 1981,  which is collateral for one of the Company's
Recreation Notes, which had an outstanding  balance of $10.3 million at December
31, 1999 (Note 5). The note bears interest at 13.25%,  requires  self-amortizing
equal monthly payments of principal and interest in the aggregate amount of $1.7
million per annum  through 2011 and may not be prepaid.  During  1999,  1998 and
1997, the Company recognized  interest income of $1.4 million,  $1.4 million and
$1.5 million, respectively, on this note.                                       

(d) Companies  controlled  by Mr. Levy and certain  members of his family lease,
manage  and  operate  the   recreation   facilities  at  four  Century   Village
communities, which are collateral for the Company's Recreation Notes (Note 5).  

(e) Two of the shopping  centers  purchased by the OP on December 31, 1997 (Note
2) were  acquired  from the Levy Parties (Mr. Levy and members of his family) in
exchange for 390,717 OP units (valued at approximately $4.6 million),  including
78,149 OP units  (valued at  approximately  $900,000)  issued to Mr.  Levy.  The
economic basis used to determine the acquisition price was the same as that used
for the other properties acquired on that date.                                 

(f) The Company leases  approximately  2,500 square feet of an office  building,
located in West Palm Beach, on a month to month basis, to a company owned by Mr.
Levy and a member of his  family at a monthly  rental of  approximately  $2,100,
plus an allocation of utility expenses.                                         

Alan Shulman                                                              

On May 15, 1998, the Company sold a motel (Note 4(d)),  which had been leased to
a corporation controlled by Alan Shulman, a director of the Company. In 1998 and
1997, the Company recognized rent income of $223,000 and $489,000, respectively,
under the lease.                                                                

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Stanley S. Cohen                                                          

Stanley S.  Cohen,  a director  of the  Company,  is a partner and member of the
Executive Committee of the law firm of Fox, Rothschild,  O'Brien & Frankel, LLP.
During 1999 and 1998, we paid $487,487 and $380,093,  respectively, to that firm
for legal services.                                                             

(9) Major Tenants and Borrowers                                                 

During 1999, there were no tenants or borrowers who accounted for 10% or more of
the  Company's  revenues.   During  1998,  interest  income  from  one  borrower
(Hilcoast)  provided 12% of total  revenues.  During 1997,  interest income from
four  borrowers   provided  33%  (Hilcoast),   16%,  14%  and  11%  (Mr.  Levy),
respectively, of total revenues.                                                

(10) Fair Value of Financial Instruments                                        

The estimated fair values of the Company's financial instruments are as follows:

                              December 31,
                               1999                     1998
                               _________________________________________________
                    Carrying                  Carrying
                                  Amount   Fair Value       Amount    Fair Value
                               _________________________________________________
Real estate  mortgage  notes                                                    
receivable .................   $  63,385    $  79,238    $  64,988    $  90,835 

Cash and cash equivalents ..       4,385        4,385        4,775        4,775 

Borrowings .................    (156,329)    (156,734)    (121,933)    (124,274)

Real  estate  mortgage  notes  receivable  - The fair  value of the fixed  rate,
Recreation  Notes (Note 5) is  estimated  by  discounting  the future cash flows
using the current rates at which similar loans would be made with similar credit
ratings and for the same remaining maturities.                                  

Borrowings  - Rates  currently  available  to the Company for debt with  similar
terms  and  remaining  maturities  are used to  estimate  the fair  value of the
Company's borrowings.                                                           

(11) Stockholders' Equity                                                       

Stock Options                                                                   

The Company applies APB Opinion 25,  "Accounting for Stock Issued to Employees",
and related interpretations in accounting for its three stock option plans - the
Montgomery  CV Trust  Executive  Stock  Option Plan (the "CV Plan"),  the Drexel
Realty,  Inc. 1997 Stock Option Plan (the "Drexel  Plan") and the CV Reit,  Inc.
Non-Employee Director 1998 Stock Option Plan (the "Director Plan").             

Under  the CV  Plan,  the  Drexel  Plan and the  Director  Plan,  qualified  and
nonqualified stock options to purchase up to 150,000 shares,  400,000 shares and
150,000 shares,  respectively,  of the Company's  common stock may be granted to
certain executives,  employees and non-employee  directors.  The maximum term of
the options granted under each of the plans is ten years.                       

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Statement of Financial Accounting  Standards No.123 (SFAS 123),  "Accounting for
Stock-Based Compensation", requires the Company to provide pro forma information
regarding net income and net income per common share as if compensation cost for
stock options  granted under the plans,  if applicable,  had been  determined in
accordance with the fair value based method prescribed in SFAS 123.             

The Company  estimates  the fair value of each stock option at the grant date by
using the Black-Scholes option-pricing model with the following weighted average
assumptions  used for grants:  expected  lives of ten years;  dividend  yield of
8.51%, volatility at 46%, risk free interest rate of 5.63% for 1999 and dividend
yield of 8.44%, volatility at 46%, risk free interest rate of 5.71% for 1998.   

Under accounting provisions of SFAS 123, the Company's net income and net income
per share,  would have been reduced to the pro forma amounts indicated below (in
thousands, except per share data):                                              

                                                     Year Ended December 31,
                                                       1999               1998
                                                  ______________________________
Net income:                                                                     
  As reported ...........................          $   7,247          $   15,850
  Pro forma .............................          $   7,095          $   15,567

Net income per share:                                                           
  As reported ...........................          $     .91          $     1.99
  Pro forma .............................          $     .89          $     1.95

Changes in options outstanding are summarized as follows:                       

                                                                        Weighted
                                                             Weighted    Average
                                                              Average       Fair
                                                             Exercise  Per Share
                                                            Price Per of Options
                                                  Shares        Share    Granted
                                                ________________________________
1997:                                                                           
  Granted - equal to market value .............  225,000     $   13.69  $   2.94

1998:                                                                           
  Granted - equal to market value .............   45,000         14.14      3.02

1999:                                                                           
  Granted - equal to market value .............   25,000         12.50      2.08
                         _______
Balance December 31, 1999 .....................  295,000                        
                         =======

At December 31, 1999, the weighted  average  remaining  contractual  life of the
295,000  options  outstanding  was  7.54  years.  A  total  of  155,500  of  the
outstanding  options were  exercisable with a weighted average exercise price of
$13.61 per share.                                                               

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Redemption Rights                                                               

Holders of the 1,462,406 OP units at December 31, 1999 have the right to require
the OP to  redeem  their OP units at any  time.  However,  upon a holder  giving
notice of the exercise of this right,  the Company has the right to acquire such
holder's OP units in exchange for cash or, if certain  conditions are satisfied,
an equal number of shares of the Company's common stock.                        

During 1999, the OP redeemed 43,018 OP units for $546,000 in cash,  resulting in
an  increase  in CV Reit's  indirect  ownership  of the OP from  84.2% to 84.5%.
During  1998,  the OP  redeemed  302,552  OP  units  for $3.7  million  in cash,
resulting in an increase in CV Reit's indirect ownership of the OP from 81.7% to
84.2%.                                                                          

(12) Segment Reporting                                                          

Effective  December 31, 1997,  the Company  became an equity REIT engaged in the
acquisition,  leasing and  management  of  neighborhood  or  community  shopping
centers,  located in  Pennsylvania,  New Jersey and Florida.  Prior to 1998, the
Company's only principal  business segment  consisted of investments in mortgage
notes  receivable.  Although the Company no longer invests in new mortgage notes
receivable, it continues to hold its Recreation Notes (Note 5) and, as a result,
the following segment disclosure  includes  information on those investments (in
thousands):                                                                     

  Income
 Producing
 Real Estate
             Principally    Mortgage
               Shopping        Notes
                                      Centers   Receivable    Other Consolidated
                                   _____________________________________________
Year Ended December 31, 1999:                                                   
Total revenues                       $ 25,480       $7,878   $  205     $33,563 
                                    ========       ======   ======     =======
Net operating income before                                                     
 interest expense                   $ 18,020       $7,878   $   44     $25,942
                                    ========       ======   ======     =======
Net operating income after                                                      
 interest expense                    $ 9,685       $4,470   $   44     $14,199
                                    ========       ======   ======     =======
Net operating income from reportable                                            
 segments                                                              $14,199
    Depreciation and amortization                                        (4,078)
    General, administrative and other                                    (1,530)
    Minority interests in income of OP                                   (1,344)
                                                                       _______
Net income                                                              $ 7,247 
                                                                       =======
Year Ended December 31, 1998:                                                   
Total revenues                       $ 16,853       $8,471   $  685     $26,009 
                                    ========       ======   ======     =======
Net operating income before                                                     
 interest expense                   $ 11,868       $8,471   $  486     $20,825
                                    ========       ======   ======     =======
Net operating income after                                                      
 interest expense                    $ 6,554       $5,430   $  486     $12,470
                                    ========       ======   ======     =======
Net operating income from reportable                                            
 segments                                                              $12,470
    Depreciation and amortization                                        (2,707)
    General, administrative and other                                    (1,446)
   Gain on sale of real estate                                           2,347
    Minority interests in income of OP                                   (1,855)
                                                                       _______
Income before income tax benefit                                        $ 8,809 
                                                                       =======

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Income
 Producing
 Real Estate
             Principally    Mortgage
              Shopping       Notes
                                      Centers    Receivable   Other Consolidated
                                  ______________________________________________

At December 31, 1999:                                                           
Investment in real estate and                                               
    mortgage notes receivable .   $173,076 (a)    $ 63,385   $  8,893   $245,354
                                  ========        ========   ========   ========
  Borrowings ..................   $119,520        $ 36,809   $   --     $156,326
                                  ========        ========   ========   ========
At December 31, 1998:                                                           
Investment in real estate and                                               
    mortgage notes receivable .   $142,708 (a)    $ 64,988   $  8,786   $216,482
                                  ========        ========   ========   ========
  Borrowings ..................   $ 91,478        $ 30,455   $   --     $121,933
                                  ========        ========   ========   ========

(a) Includes  $34,634 and $75,397 of additions  during the years ended  December
31, 1999 and 1998, respectively.                                                

(13) Selected Quarterly Financial Data (Unaudited)                              

Selected quarterly financial data follows (in thousands, except per share data):

                                 Quarter Ended
                                    March 31,   June 30,    Sept. 30,    Dec.31,
                                 _______________________________________________
1999:                                                                           
  Revenues .....................      $7,582      $8,488      $8,575      $8,917
  Net income ...................       1,829       1,545       1,826       2,047
  Per common share .............         .23         .19         .23         .26

1998:                                                                           
  Revenues .....................      $5,248      $5,993      $7,226      $7,542
  Net income (a) ...............       1,877       3,680       1,556       8,737
  Per common share .............         .24         .46         .20        1.09

(a)   The  quarter  ended June 30, 1998  includes  the  Company's  share of $2.3
      million  gain on sale of real estate and the quarter  ended  December  31,
      1998 includes $7 million benefit arising from reversal of net deferred tax
liability.                                                          

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                                                        [Enlarge/Download Table]

                         CV Reit, Inc. and Subsidiaries                                                                             
             Schedule III - Real Estate and Accumulated Depreciation                                                                
                                December 31, 1999                                                                                   
                                 (in thousands)                                                                                     

                                                     Costs                                                                          
                                                   Capitalized  Gross Amount at           Accum-                              Depre-
                                      Initial      Subsequent   Which Carried at          ulated                              ciable
                                   Cost to Company     to       Close of Year             Depre-     Date of        Date      Life  
  Description        Encumbrances  Land   Building Acquisition Land     Building   Total  ciation  Construction   Acquired   (Years)
-------------------- ------------ ---------------- ----------- -----------------  ------- -------  ------------  ---------  --------
                                                                                                                                    
Shopping Centers                                                                                                                    
 Pennsylvania                                                                                                                       
  Chalfont Village                                                                                                                  
   Shopping Center   $    -       $ 157   $ 1,417   $   7        $ 157  $  1,424   $1,581 $   10       1968         1999          40
  Cherry Square                                                                                                                     
    Shopping Center   5,100         683     6,148       1          683     6,149    6,832     95       1991         1999          40
  Chesterbrook                                                                                                                      
   Village Center     7,788       1,336    12,023     156        1,336    12,179   13,515    633       1980         1997          40
  Collegeville                                                                                                                      
   Shopping Center    4,710         718     6,461      46          718     6,507    7,225    232       1978         1998          40
  County Line Plaza   5,051         539     4,852   2,405          539     7,257    7,796    399       1970         1997          40
  Danville Plaza        805         156     1,400      36          156     1,436    1,592     72       1971         1997          40
  Dickson City                                                                                                                      
   Center                 -         450     3,844       -          450     3,844    4,294    192       1972         1997          40
  Gilbertsville                                                                                                                     
   Shopping Center    2,615         382     3,445     121          382     3,566    3,948    133       1974         1998          40
  Lakewood Plaza                                                                                                                    
   Shopping Center   18,750       2,459    22,134     289        2,459    22,423   24,882    415       1962         1999          40
  Mount Carmel Plaza    807         210     1,892       4          210     1,896    2,106     95       1988         1997          40
  New Holland Plaza     934         117     1,051       -          117     1,051    1,168     37       1977         1998          40
  North Penn                                                                                                                        
   Marketplace        2,991         532     4,219     137          532     4,356    4,888    164       1983         1998          40
  Village at Newtown 22,300       2,766    24,891      71        2,766    24,962   27,728  1,099       1989         1998          40
  Whitemarsh                                                                                                                        
   Shopping Center    7,104       1,077     9,694      61        1,077     9,755   10,832    485       1969         1997          40
  Woodbourne Square   1,915         427     3,840      38          427     3,878    4,305    194       1985         1997          40
  555 Scott                                                                                                                         
   Street Center          -          74       662       -           74       662      736     33       1961         1997          40
 New Jersey                                                                                                                         
  Marlton Shopping                                                                                                                  
   Center-Phase II    9,300 (1)   1,252    11,272      98        1,252    11,370   12,622    434       1986         1998          40
  Marlton Shopping                                                                                                                  
   Center-Phase I    11,650       1,658    14,922       1        1,658    14,923   16,581    560       1985         1998          40
  Rio Grande Plaza    7,744       1,442    12,975      20        1,442    12,995   14,437    651       1991         1997          40
 Florida                                                                                                                            
  Century Plaza      10,200 (1)   1,429     5,973     340        1,429     6,313    7,742    649       1976         1996       15-39
Office Buildings                                                                                                                    
 Century Village                                                                                                                    
  Administration                                                                                                                    
   Building, Florida      -           -       750     220            -       970      970    327       1970         1991        5-30
 Plymouth Plaza,                                                                                                                    
   Pennsylvania       2,306         438     3,938      28          438     3,966    4,404    199       1974         1997          40
                   --------    --------  --------  ------      -------  -------- -------- ------                                    
                   $122,070    $ 18,302  $157,803  $4,079      $18,302  $161,882 $180,184 $7,108                                    
                   ========    ========  ========  ======      =======  ======== ======== ======                                    

(1) These encumbrances are cross collateralized under mortgages in the amount of                                                    
$19.5 million at December 31, 1999.                                                                                                 

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CV Reit, Inc. and Subsidiaries
 Schedule III - Real Estate and Accumulated Depreciation
 December 31, 1999
(in thousands)

The changes in total real estate  assets for the three years ended  December 31,
1999, are as follows:                                                           

                                         1999           1998            1997
                                        _________      _________       _________

Balance, beginning  of year ......      $ 145,550      $  73,748       $  12,423
New property acquisitions ........         32,999         73,881          61,266
Capital improvements .............          1,635          2,069              59
Sale of real estate ..............           --           (4,148)           --  
                                        _________      _________       _________

Balance, end  of year ............      $ 180,184      $ 145,550       $  73,748
                                        =========      =========       =========

The changes in accumulated  depreciation  for the three years ended December 31,
1999, are as follows:                                                       

                                               1999         1998          1997
                                              _______      _______      ________

Balance, beginning  of year ............      $ 3,142      $ 2,740       $ 2,359
Depreciation for the year ..............        3,966        2,656           381
Sale of real estate ....................         --         (2,254)         --  
                                              _______      _______       _______

Balance, end  of year ..................      $ 7,108      $ 3,142       $ 2,740
                                              =======      =======       =======

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                                                        [Enlarge/Download Table]

                         CV REIT, INC. AND SUBSIDIARIES                                                   
                   SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE                                            
                                December 31, 1999                                                         
                             (dollars in thousands)                                                       



                                                                                               Carrying   
                                           Final                                    Face       Amount of  
                            Interest      Maturity                                 Amount of   Mortgages  
      Description             Rate          Date         Periodic Payment Terms    Mortgages      (a)     
-----------------------    -----------   ----------   --------------------------  ----------  ------------
                                                                                                          
Permanent -                                                                                               
  Recreation Facilities                                                                                   
  Century Village at:                                                                                     
    Boca Raton, FL           13.25%       12/31/11      Level P & I due monthly     $ 12,533   $10,338    
    West Palm Beach, FL      13.25%       01/15/12      Level P & I due monthly       18,342    15,131    
    Deerfield Beach, FL                                                                                   
     (2nd mortgage)          13.50%       01/15/12      Level P & I due monthly       13,235    10,975    
    Deerfield Beach, FL       8.84%       03/01/07      Level P & I due monthly        3,485     2,213    
    Pembroke Pines, FL        11%         07/31/23      Level P & I due monthly       25,000    24,728    
                                                                                               -------    
                                                                                              $ 63,385 (b)
                                                                                              ========    

Note: All loans are first mortgages except where noted, there are no prior liens                          
and no delinquent principal or interest.                                                                  

(a) The tax carrying value of the notes is approximately $29.5 million.                                   
(b) The changes in the carrying amounts are summarized as follows:                                        

                                            1999           1998           1997                            
                                         _________      _________      _________                          
    Balance, beginning of period         $ 64,988       $ 77,652       $ 84,808                           
    Advances on new mortgage loans              -          5,190         16,112                           
    Collections of principal               (1,603)       (17,854)       (23,268)                          
                                         _________      _________      _________                          
    Balance, end of period               $ 63,385       $ 64,988       $ 77,652                           
                                         =========      =========      =========                          


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Item 9.  Disagreement on Accounting and Financial Disclosure                    

None                                        

PART III

Item 10. Directors and Executive Officers of the Company                        

Directors                                                                       

Set forth below are the names of our directors,  their ages,  their offices,  if
any, their  principal  occupations  or employment  for the past five years,  the
length of their tenure as directors  and the names of other public  companies in
which they hold directorships:                                                  

H. Irwin Levy, Chairman                                                         

     Mr. Levy, 73, became a director and Chairman of the Board in December 1997.
     Mr. Levy is Chairman of the Board,  Chief Executive  Officer and a majority
     stockholder  of Hilcoast.  Since 1995,  he has also served as a director of
     nStor  Technologies,  Inc.,  an American  Stock  Exchange  listed  computer
     storage company. Mr. Levy was our Chairman of the Board and Chief Executive
     Officer from 1985 to July 1992. He is currently of counsel to the West Palm
     Beach law firm of Levy,  Kneen Mariani,  Curtin,  Kornfeld,  and del Russo,
which provides legal services to our company.                         

Louis P. Meshon, Sr.                                                            

     Mr. Meshon, 59, became a director, Chief Executive Officer and President in
     December  1997.  Mr.  Meshon has  served as  President  of Drexel  since he
     co-founded  that  company in 1974.  In  December  1997,  we  acquired a 95%
     economic interest in Drexel. Mr. Meshon is a member of the Wharton School's
Real Estate Advisory Board.                                           

Stanley Brenner                                                                 

     Mr. Brenner,  74, has been a director since 1988. Mr. Brenner was a partner
     of Laventhol & Horvath,  certified public  accountants,  for more than five
     years until his  retirement  in 1990.  From April 1991 until May 1996,  Mr.
     Brenner served as our consultant and was our Interim  President from August
1996 to December 1997.                                                

Stanley S. Cohen                                                                

     Mr. Cohen,  60, became a director in December  1997. Mr. Cohen is a partner
     and a member of the Executive Committee of the law firm of Fox, Rothschild,
     O'Brien & Frankel, LLP in Philadelphia,  Pennsylvania, which provides legal
     services  to our  company.  Mr.  Cohen  previously  served  for 11 years as
     Co-Chairman  of that firm's Real Estate  Department.  Mr.  Cohen  presently
     serves as an  appointee of the Majority  Leader of the  Pennsylvania  State
     House of Representatives to the Pennsylvania Economic Development Financing
     Authority,  which  grants loans to encourage  economic  development  within
     Pennsylvania, and served as an appointee of the Governor of Pennsylvania to
the Pennsylvania Commission for Women.                                

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Allyn L. Levy                                                                   

Mr.  Levy,  71, has been a director  since 1993. Mr. Levy served as Chairman and
     Chief Executive Officer of Patriot Bancorporation of Boston, Massachusetts,
     and its predecessor,  Harbor National Bank of Boston, from 1975 until 1986.
     Since 1986, Mr. Levy has been a private  investor.  Mr. Levy is not related
to H. Irwin Levy.                                                     

Milton S. Schneider                                                             

     Mr.Schneider,50, became a director in December 1997. Mr. Schneider is Chief
     Executive Officer of The Glenville Group,  Inc.,  headquartered in Plymouth
     Meeting,   Pennsylvania,   involved  in  the  development,   ownership  and
     management of  commercial  and  residential  properties.  Mr.  Schneider is
     Chairman  of Togar  Property  Company,  an  apartment  development  company
     located in  Malvern,  Pennsylvania.  In  addition,  Mr.  Schneider  is Vice
     Chairman of Parkland Management Company, a financial services company,  and
Vice Chairman of Horvitz Newspapers, Inc.                             

Alan L. Shulman                                                                 

      Mr. Shulman,  67, has been a director since 1985 and served as Chairman of
      the Board  from  August  1992  until May 1996.  Mr.  Shulman  is a private
      investor and was previously a general partner of Unitel Associates,  Ltd.,
      a Florida  limited  partnership  engaged in the ownership and operation of
      Holiday  Inn  motel  properties,  for more  than  twenty  years  until its
      dissolution in 1987. Mr. Shulman also serves as a director of Engle Homes,
      a NASDAQ  listed real estate  development  company,  and was a director of
      Island  National  Bank from its  inception  in 1989 until  April  1997.  A
      company controlled by Mr. Shulman leased,  operated and managed a Days Inn
     Motel in West Palm Beach, Florida, which we owned until sold in May 1998.

Committees of the Board of Directors and Meetings                               

Our Board of Directors met 6 times during the year ended December 31, 1999. Each
of the directors attended at least 75% of the meetings.                         

The Audit Committee,  consisting of Messrs. Shulman and Brenner, met once during
the past year. The Audit  Committee is responsible  for overseeing the financial
reporting  process  and  the  effectiveness  of our  internal  controls  and for
recommendations  to the full Board of Directors,  including the  designation  of
independent auditors on an annual basis.                                        

The  Acquisition  Committee  consists of Messrs.  Meshon and H. Irwin Levy. If  
requested by the Board, the Acquisition  Committee reviews for  recommendation  
to the Board, or rejection,  proposed  acquisitions  of real property.  During  
1999,  the  Acquisition  Committee  did  not  meet  since  this  function  was  
performed by the full Board of Directors.                                       

The Board of Directors has no standing nomination or compensation  committees or
other committees performing similar functions.                                  

Executive Officers                                                              

The  following  are the  executive  officers of our company  (and our  company's
wholly-owned subsidiary, Montgomery CV Realty Trust), their respective ages, the
year in which each was first elected an officer and the office held by each.    

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Officer's Name       Age   Office                                Officer Since  
________________________________________________________________________________

H. Irwin Levy         73   Chairman of the Board                     1997       
Louis P. Meshon,Sr.   59   President and Chief Executive Officer     1997       
Elaine Hauff          37   Vice President and Treasurer              1992       
Etta Strehle          44   Chief  Financial Officer of the Trust     1999       
Orilla Floyd          66   Secretary                                 1996       

COMPLIANCE WITH SECTION 16(a) OF
THE SECURITIES EXCHANGE ACT OF 1934 

Section 16(a) of the Securities  Exchange Act of 1934, as amended,  requires our
directors and executive  officers,  and persons who own more than ten percent of
our  outstanding  common  stock,  to  file  with  the  Securities  and  Exchange
Commission  (SEC)  initial  reports  of  ownership  and  reports  of  changes in
ownership  of common  stock.  Such  persons are  required by SEC  regulation  to
furnish us with copies of all such reports they file.                           

To our  knowledge,  based  solely  on a review  of the  copies  of such  reports
furnished to us and written representations that no other reports were required,
the officers,  directors and greater than ten percent  beneficial  owners of our
company have complied with all applicable Section 16(a) filing requirements.    

Item 11. Executive Compensation                                                 

The following table sets forth,  for the years ended December 31, 1999, 1998 and
1997, the compensation awarded to, earned by, or paid to those persons who were,
during  1999 (i) our  Chief  Executive  Officer  and (ii)  the  other  executive
officers whose compensation is required to be disclosed pursuant to the rules of
the SEC (the Named  Officers).  The only  compensation  we paid to our executive
officers was base salary and annual bonuses.                                    

Summary Compensation Table

                                         Annual Compensation
Name and Principal Position      Year           Salary ($)     Bonus ($)        
________________________________________________________________________________

Louis P. Meshon, Sr.             1999          $285,000       $97,027  (3)      
President and Chief Executive  1998          $279,744       $17,829  (3)    
Officer (1)                                                               
Etta Strehle                     1999          $117,422  (4)  $12,962  (4)      
Chief Financial Officer of                                                  
the Trust(2)                                                              

(1)   Mr. Meshon was elected  President and Chief Executive  Officer effective  
December 31, 1997.                                                  
(2)   Ms.  Strehle  was  appointed  Chief  Financial   Officer  of  the  Trust  
effective February 1, 1999.                                         
(3)   Performance  bonus  pursuant  to  Mr.  Meshon's  Employment   Agreement.  
    Amount  attributable  to 1999 is  expected  to be paid in March 2000 and
amount attributable to 1998 was paid in April 1999.                 
(4)   Includes $15,042, which was allocated to Drexel.                          

Option/Stock Appreciation Rights (SAR) Grants                                   

There were no options to purchase our common stock or SAR's granted  during 1999
to the Named Officers Aggregated Year End Options Values                        

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Aggregated Year End Options Values                                              

The following table sets forth information  regarding  unexercised stock options
held by the Named  Officers as of  December  31,  1999.  No stock  options  were
exercised by the Named  Officers  during 1999. No SAR's have been granted or are
outstanding.                                                                    

           Shares             Number of Unexercised       Value of Unexercised
          Acquired             Options at December        In-the-Money Options
              on      Value          31, 1999 (#)        at December 31, 1999($)
           Exercise Realized ___________________________________________________
   Name      (#)       ($)   Exercisable Unexercisable Exercisable Unexercisable
________________________________________________________________________________

Louis P.      0         0      60,000(1)    90,000(1)       0           0       
Meshon,Sr.                                                                      
Etta Strehle  0         0       4,000(2)     6,000(2)       0           0       

(1)   These  options were granted on December  31, 1997 and are  exercisable  in
      equal annual  installments  of 30,000  shares,  commencing on December 31,
      1998.  Unexercisable  options  are  subject to  forfeiture  under  certain
circumstances.                                                      

(2)   These  options  were granted on May 1, 1998 and are  exercisable  in equal
      annual  installments  of 2,000  shares,  commencing  on December 31, 1998.
      Unexercisable   options   are   subject  to   forfeiture   under   certain
circumstances.                                                      

Board Compensation                                                              

Except for  Messrs.  Meshon and H. Irwin Levy,  our  directors  receive  monthly
compensation  of $1,000,  are paid $1,000 for attending  each Board of Directors
meeting and $500 for attending each committee meeting.  Pursuant to the CV Reit,
Inc.  Non-Employee  Director  1998 Stock  Option Plan,  non-employee  directors,
excluding Mr. H. Irwin Levy,  receive annual grants of options to purchase 5,000
shares of our common stock and the Board has the authority to grant, in its sole
discretion,  a stock option to purchase up to 20,000  shares of our common stock
on the date any individual first commences service as a non-employee director.  

Compensation Committee Interlocks and Insider Participation                     

We have no Compensation Committee. The Chief Executive Officer's salary is based
upon his  Employment  Agreement,  as discussed  below.  Other  executive  salary
decisions are determined in an annual review based upon  recommendations  of the
Chief  Executive  Officer and/or our financial  consultants  and approved by the
Chairman of the Board.                                                          

Board Compensation Report                                                       

Since our Board does not have a  Compensation  Committee,  the entire  Board has
provided the following Compensation Report:                                     

Executive  Compensation  Policy  - Our  overall  compensation  philosophy  is to
attract and retain  quality  talent,  which is critical  to our  short-term  and
long-term  success,  and to create a  mutuality  of interest  between  executive
officers and stockholders through compensation structures that share the rewards
and risks of strategic decision making.                                         

We examine market  compensation  levels and trends observed in the labor market.
Market information is used as a frame of reference for annual salary adjustments
and starting salary offers.  Executive salary decisions are generally determined
in  an  annual  review  of  each   individual's   performance,   decision-making
responsibilities,  experience and team-building  skills.  In certain  instances,
these reviews include recommendations by our financial consultants.             

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Mr.  Meshon's   compensation   arrangement  has  been  established   under  an  
Employment Agreement, dated December 31, 1997 (see below).                      

Base  Compensation - Our approach to base  compensation is to offer  competitive
salaries in  accordance  with market  practices  prevalent  in our  geographical
areas.  In addition,  effective in 1999, we are sponsoring a 401(k) - retirement
plan which covers  substantially  all employees  meeting certain minimum age and
service requirements.  The plan provides for employer contributions equal to 50%
of amounts contributed by the employee.  The employer  contributions are limited
to 1.5% of the employee's salary. Mr. Meshon's Employment Agreement provides for
a base salary of $285,000,  subject to increases at the sole  discretion  of the
Trust,  in the event that there is a  substantial  increase  in the scope of his
responsibilities,  and annually  commencing  in December  2000.  Pursuant to his
Employment  Agreement,  in the  event  we do not  pay a  quarterly  dividend  to
stockholders of at least $.29 per common share, under certain circumstances, Mr.
Meshon's  base  salary may be reduced  by 50% and remain at such  reduced  level
until we have paid  quarterly  dividends  of at least $.29 per common  share for
four consecutive quarters. In that event, no performance bonus (see below) shall
be paid doing the period for which such decrease has been in effect.            

Bonus Compensation - Under his Employment  Agreement,  Mr. Meshon is entitled to
an annual  performance bonus generally equal to 5% of the annual  improvement in
our FFO, as determined by our independent auditors.  In addition,  Mr. Meshon is
entitled to receive a bonus,  based upon a formula  set forth in his  Employment
Agreement,  in the event fees are paid by third  parties to Drexel in connection
with the  termination,  on or before  December  31,  2000,  of certain  existing
management  and leasing  agreements  between those third parties and Drexel.  No
bonuses have been paid to Mr.  Meshon other than the 1998  performance  bonus of
$17,829,  which was paid in April 1999. The 1999 performance bonus of $97,027 is
expected to be paid in March 2000.                                              

We generally  reward our other  executive  officers with annual bonuses based on
performance  on specific  projects  or  transactions,  taking  into  account the
overall performance of our company. Input from our financial consultants and the
Chief  Executive  Officer is  considered  when  establishing  bonuses  for other
executive officers. A balance is made between overall corporate  performance and
performance of the specific areas under a  participant's  direct  control.  This
balance supports the accomplishment of overall objectives and rewards individual
contributions and tasks assigned to our executives.                             

Equity-Based  Compensation - Stock options provide additional  incentives to key
employees to maximize  shareholder value.  Options generally vest over specified
periods to encourage continued  employment.  In accordance with this philosophy,
on December 31, 1997, we adopted the Montgomery CV Trust  Executive Stock Option
Plan  which  provides  for the  issuance  to  certain  executives  of options to
purchase a maximum of 150,000 shares of common stock,  all of which were granted
to Mr. Meshon on December 31, 1997.  Mr.  Meshon's  options are  exercisable  in
equal annual  installments  of 30,000  shares,  commencing on December 31, 1998.
Unexercisable options are subject to forfeiture under certain circumstances.    

Employment  Agreement - As discussed  above,  effective  December  31, 1997,  we
entered  into an  Employment  Agreement  with Mr.  Meshon  pursuant to which Mr.
Meshon  serves as  President  and Chief  Executive  Officer of the  Company  and
President  and Chief  Operating  Officer  of the Trust for five  years,  with an
automatic extension provision except under certain circumstances. In addition to
the  compensation  provisions  discussed  above,  if,  during  the  term  of the
Employment  Agreement,  Mr.  Meshon's  employment  is terminated  for Cause,  as
defined, or Mr. Meshon resigns without Good Reason, as defined, all or a portion
of 227,577 OP Units owned by Mr. Meshon was to be transferred to the Trust.  The
number of OP Units subject to transfer is being reduced on a pro rata basis over
five years.  Mr.  Meshon  acquired  those OP Units in exchange for his shares of
Drexel on December 31, 1997.                                                    

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In the  event of Mr.  Meshon's  death or  disability,  we are  required  to make
severance payments for one year equal to Mr. Meshon's base salary,  plus certain
fringe benefits in the event of disability.  In the event Mr. Meshon  terminates
his  employment  for Good  Reason,  as  defined,  or after the  occurrence  of a
Significant Event, as defined (which includes a change in control and a transfer
of substantially all our assets and business),  we are required to pay severance
benefits  equal  to the  greater  of  the  aggregate  sum  of  all  compensation
(including  bonuses based on  historical  averages) due to Mr. Meshon during the
remaining  term of his  Employment  Agreement,  or 199% of Mr.  Meshon's  annual
salary for the year prior to  termination.  In  addition,  Mr.  Meshon  would be
entitled to receive certain fringe benefits for up to three years.              

Respectfully submitted,                                                         

H. Irwin Levy, Chairman                                                         
Stanley Brenner                                                                 
Stanley S. Cohen                                                                
Allyn L. Levy                                                                   
Louis P. Meshon, Sr.                                                            
Milton S. Schneider                                                             
Alan L. Shulman                                                                 

Stock Performance Graph                                                         

The following graph sets forth the cumulative total shareholder return (assuming
reinvestment of dividends) to our stockholders during the five year period ended
December 31, 1999,  as well as an overall stock market index (S&P 500 Index) and
our peer group index (REIT Industry Index):                                     

                   12/31/94  12/31/95  12/31/96   12/31/97  12/31/98  12/31/99
                    ____________________________________________________________
CV Reit, Inc.        100.00    140.42    188.96     205.84    206.11     162.10 
S&P 500 Index        100.00    137.43    168.98     225.37    289.78     350.72 
REIT Industry Index  100.00    115.27    155.92     187.51    154.69     147.54 

Total returns assume $100 invested on December 31, 1994 in our common stock, the
S&P 500 Index and the REIT Industry Index with reinvestment of dividends.       

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Item 12. Security Ownership of Certain Beneficial Owners and Management         

The following table sets forth, as of February 1, 2000, information with respect
to the  beneficial  ownership  of our common  stock by (i) persons  known to own
beneficially  (as defined under applicable rules of the SEC) more than 5% of our
outstanding  shares of common stock,  (ii) all directors,  and all directors and
executive  officers  of our company as a group,  beneficially  owned (as defined
under the  applicable  rules of the SEC) shares of our company,  and OP Units of
limited  partnership  interests  in our  approximately  84.5% owned  subsidiary,
Montgomery CV Realty, L.P.:                                                     

                                Amount and
                                                   Nature of    Percent of Class
                                                 Beneficial     Common    OP
       Name and Address          Title of Class    Ownership(1)    Stock   Units
________________________________________________________________________________

H. Irwin Levy                     Common Stock      747,797 (2)    9.4%         
100 Century Boulevard             OP Units           78,149 (5)              *  
West Palm Beach, FL  33417                                                      

Alan J. Evans and Robert J.       Common Stock      655,759 (3)    8.2%         
Cartagena, Trustees                                                             
100 Century Boulevard                                                           
West Palm Beach, FL  33417                                                      

Louis P. Meshon, Sr.              Common Stock       60,790         *           
580 W. Germantown Pike,Suite 200  OP Units          674,249(4)(5)(6)        7.2%
Plymouth Meeting, PA  19462                                                     

Alan L. Shulman                   Common Stock       35,680         *           
100 Century Boulevard                                                           
West Palm Beach, FL  33417                                                      

Allyn L. Levy                     Common Stock       35,000(7)      *           
100 Century Boulevard                                                           
West Palm Beach, FL  33417                                                      

Stanley Brenner                   Common Stock       17,500         *           
100 Century Boulevard                                                           
West Palm Beach, FL  33417                                                      

Stanley S. Cohen                  Common Stock       16,810(8)      *           
200 Market Street                                                               
Philadelphia, PA  19103                                                         

Milton S. Schneider               Common Stock       15,000         *           
580 W.Germantown Pike,Suite 202   OP Units           20,957(5)(9)            *  
Plymouth Meeting, PA  19462                                                     

All executive officers and                                                      
directors as a group (10)       Common Stock      932,577        11.5%      
                                  OP Unit           773,355(4)(5)           8.2%

* Less than 1%.                                                                 

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(1)  Unless otherwise  indicated,  each stockholder listed has the sole power to
     vote and direct  disposition of the shares shown as  beneficially  owned by
     such stockholder.  For purposes of this table, a person or group of persons
     is deemed to have "beneficial ownership" of the following shares which such
     person or group has the right to acquire  pursuant  to options  exercisable
     within 60 days:  Allyn L. Levy - 15,000  shares;  Alan L.  Shulman - 15,000
     shares;  Stanley Brenner -15,000 shares;  Stanley S. Cohen - 15,000 shares;
     Milton S. Schneider - 15,000 shares;  Louis P. Meshon, Sr. - 60,000 shares;
all directors and executive officers as a group - 139,000 shares.     

(2)  Includes  102,292  shares owned by a  corporation  controlled  by Mr. Levy.
     Excludes  175,000  shares  owned by Mr.  Levy's  wife.  Mr. Levy  disclaims
beneficial ownership of the excluded shares.                          

(3)  Shares owned by a family trust established by Mr. Evans's deceased wife, of
which Messrs. Evans and Cartagena are Trustees.                       

(4)  Subject to adjustment under certain circumstances.                         

(5)  The Trust  owns  7,966,621  OP Units  (representing  84.5% of the OP).  The
     holders of  substantially  all the remaining  15.5%, or 1,462,406 OP Units,
     have the right to require  the OP to redeem  their OP Units for cash at any
     time.  However,  upon a holder giving notice of the exercise of this right,
     the Trust has the right to acquire  such  holder's OP Units in exchange for
     cash or, if certain conditions are satisfied,  an equal number of shares of
our common stock.                                                     

(6)  Includes  89,909 OP Units  jointly  owned with Mr.  Meshon's wife and 4,573
owned by companies controlled by Mr. Meshon.                          

(7)  Held by a  revocable  trust,  of which Mr.  Levy is the  trustee and income
beneficiary.                                                          

(8)  Includes  1,000 shares  jointly owned with Mr.  Cohen's wife.  Excludes 145
     shares owned by Mr. Cohen's wife. Mr. Cohen disclaims  beneficial ownership
of the excluded shares.                                               

(9)  Excludes  34,013 OP Units  owned by Mr.  Schneider's  wife.  Mr.  Schneider
disclaims beneficial ownership of the excluded shares.                

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Item 13. Certain Relationships and Related Transactions                         

H. Irwin Levy/Hilcoast                                              

During December 1981 and January 1982, we sold each of the recreation facilities
at the Century  Villages in West Palm Beach,  Deerfield  Beach and Boca Raton in
separate  transactions  to different  purchasers,  including Mr. Levy, for sales
prices based upon independent  appraisals.  We sold the recreation facilities at
Boca Raton to Mr.  Levy for $18  million,  subject  to a lease to a  corporation
currently owned by Mr. Levy. (The annual net rental to Mr. Levy on that lease is
$2.2  million.) At closing,  Mr. Levy issued a 30-year  non-recourse  promissory
note to our  company  in the  principal  amount  of $12.5  million  which  bears
interest at 13.25% per annum and may not be prepaid.  At December 31, 1999,  the
outstanding  balance on this note was $10.3 million.  During 1999, we recognized
$1.4 million in interest income on this note.                                   

Since 1990,  companies  owned by Mr. Levy and/or  certain  members of his family
have  leased,  managed and  operated the  recreation  facilities  at the Century
Villages  in West  Palm  Beach,  Deerfield  Beach  and  Boca  Raton,  which  are
collateral  for  certain  notes we hold  with an  outstanding  balance  of $38.7
million  (including  the $10.3  million  discussed  above) at December 31, 1999.
During 1999, we leased  approximately 2,500 square feet of office space to those
companies on a month-to-month  basis for $2,100 per month, plus an allocation of
utility expenses.                                                               

Mr.  Levy is  Chairman  of the Board,  Chief  Executive  Officer  and a majority
stockholder  of Hilcoast  which as of December 31, 1999,  owed us $24.7 million,
consisting  of an 11% mortgage  note  collateralized  by first  mortgages on the
recreation  facilities at the Century Village at Pembroke  Pines,  Florida adult
condominium  project.  The Hilcoast  note  requires  equal  monthly  payments of
principal and interest aggregating  approximately $2.9 million per annum through
2023 and may not be prepaid by Hilcoast  without a  prepayment  penalty.  During
1999,  we  recognized  $2.7  million in  interest  income  from  Hilcoast on the
Hilcoast note.                                                                  

Effective  July 31, 1992,  we entered into a consulting  and advisory  agreement
under which  Hilcoast  provides  certain  investment  advisory,  consulting  and
administrative  services  to  our  company,  excluding  matters  related  to the
Hilcoast  note.  The agreement  provides for the payment of $10,000 per month to
Hilcoast,   plus  reimbursement  for  reasonable   out-of-pocket  expenses.  The
agreement  may be terminated by Hilcoast upon 180 days notice and by our company
upon 30 days notice.  During 1999, we paid $115,000 under this  agreement,  plus
expense reimbursement.                                                          

On December  31,  1997,  the OP  acquired  nine  shopping  centers and an office
building  for a  purchase  price  of  approximately  $61.7  million.  Two of the
shopping  centers  were  acquired  from Mr.  Levy and  members  of his family in
exchange for 390,717 OP Units (valued at approximately $4.6 million),  including
78,149 OP Units  (valued at  approximately  $900,000)  issued to Mr.  Levy.  The
economic basis used to determine the acquisition price was the same as that used
for the other properties acquired by the OP on that date.                       

Stanley S. Cohen                                                    

Mr.  Cohen is a partner  and a member of the  Executive  Committee  of the law  
firm  of Fox,  Rothschild,  O'Brien  &  Frankel,  LLP.  During  1999,  we paid  
$487,487 to that firm for legal services.                                       

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 PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K       

(a)(1) List of Consolidated Financial Statements:                               

Report of Independent Certified Public Accountants                
Consolidated Balance Sheets - December 31, 1999 and 1998          
     Consolidated Statements of Income - Years Ended December 31, 1999, 1998
and 1997                                                      
       Consolidated Statements of Stockholders' Equity -Years Ended December 31,
1999, 1998, and 1997                                          
     Consolidated  Statements of Cash Flows - Years Ended December 31, 1999,
1998 and 1997                                                 

Notes to Consolidated Financial Statements                          

(2) List of Consolidated Financial Statements Schedules:                  

Schedule III - Real Estate and Accumulated Depreciation           
Schedule IV  - Mortgage Loans on Real Estate                      

(3) See Exhibit Index at page 44 of this Form 10-K                        

(b)   Reports on Form 8-K:                                                      

 On December 17, 1999,  the  Registrant  filed on Form 8-K  reporting  under
 Item 5. and Item 7. the  Agreement  and Plan of  Reorganization  and Merger
With Kranzco Realty Trust                                                 

Exhibit                                                                         
Number      Description                                                         

3.1  Amended Certificate of Incorporation of CV Reit, Inc., filed with Secretary
     of State of Delaware on December  31, 1997.  (Incorporated  by reference to
    Appendix C to the proxy statement of the Company filed November 11, 1997.)

3.2  Amended and Restated By-laws of CV Reit, Inc. (Incorporated by reference to
    Appendix D to the proxy statement of the Company filed November 11, 1997.)

10.1 Agreement between Cenvill Investors, Inc. and H. Irwin Levy, dated December
     31,  1981.  (Incorporated  by  reference  to Exhibit  (2)(i) to the current
     report on Form 8-K filed by the  Company to report  event of  December  31,
1981.)                                                                

10.2 Agreement of Lease between Cenvill Investors,  Inc. and B.R.F., Inc., dated
     December  30, 1981.  (Incorporated  by reference to Exhibit (2) (ii) to the
     current report on Form 8-K filed by the Company to report event of December
31, 1981.)                                                            

10.3 Agreement  dated  January 15,  1982,  between  Century  Village,  Inc.  and
     Benenson Capital  Company.  (Incorporated by reference to Exhibit (2)(i) to
     the current report on Form 8-K filed by Cenvill  Investors,  Inc. (File No.
0-03427) to report event of January 15, 1982.)                        

10.4 Agreement  dated January 15, 1982,  between  Century Village East, Inc. and
     CVRF Deerfield  Limited.  (Incorporated by reference to exhibit (2) (ii) to
     the current report on Form 8-K filed by Cenvill  Investors,  Inc. (File No.
0-03427) to report event of January 15, 1982.)                        

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10.5 Indenture for Collateralized Mortgage Obligations, dated as of December 30,
     1991 between Recreation Mortgages,  Inc. (Issuer) and Bankers Trust Company
     (Trustee).  (Incorporated  by reference to Exhibit  (10)(xvi) to the Annual
     Report on Form 10-K of the Company for the fiscal year ended  December  31,
1991.)                                                                

10.6 Restated Loan  Agreement,  dated July 31, 1992,  between CV Reit,  Inc. and
     Cenvill Development Corp. and certain  subsidiaries and affiliates thereof.
     (Incorporated by reference to Exhibit (10)(xi) to the Annual Report on Form
10-K of the Company for the fiscal year ended December 31, 1992.)     

10.7 Proposal for the Acquisition of Certain Assets, dated June 19, 1992, by and
     among CV Reit, Inc., Cenvill Development Corp. and certain subsidiaries and
     affiliates thereof.  (Incorporated by reference to Exhibit (10)(xiv) to the
     Annual  Report  on Form  10-K of the  Company  for the  fiscal  year  ended
December 31, 1992.)                                                   

10.8 Order  granting  Motion of  Debtor's  [sic] for  Approval of Sale of Assets
     dated July 17, 1992.  (Incorporated by reference to Exhibit (10)(xv) to the
     Annual  Report  on Form  10-K of the  Company  for the  fiscal  year  ended
December 31, 1992.)                                                   

10.9 Consulting and Advisory  Agreement,  dated July 31, 1992,  between CV Reit,
     Inc. and Hilcoast  Development Corp.  (Incorporated by reference to Exhibit
     (10)(xviii) to the Annual Report on Form 10-K of the Company for the fiscal
year ended December 31, 1992.)                                        

10.10Letter  Agreements,  dated July 11,  1994 and  August 3,  1995,  between CV
     Reit, Inc. and Hilcoast Advisory  Services,  Inc.  extending the Consulting
     and Advisory  Agreement  to July 31, 1995 and July 31, 1996,  respectively.
     (Incorporated  by reference to Exhibit  10(vi) to the  Quarterly  Report on
Form 10-Q of the Company for the quarter ended September 30, 1995.)   

10.11Letter Agreement,  dated July 12, 1996,  between CV Reit, Inc. and Hilcoast
     Advisory Services,  Inc. extending the Consulting and Advisory Agreement to
     July 31, 1997. (Incorporated by reference to Exhibit 10(i) to the Quarterly
     Report on Form 10-Q of the  Company  for the quarter  ended  September  30,
1996.)                                                                

10.12Letter agreement,  dated June 10, 1997,  between CV Reit, Inc. and Hilcoast
     Advisory Services,  Inc. extending the Consulting and Advisory Agreement to
     December 31,  1997.  (Incorporated  by  reference  to Exhibit  10(i) to the
     Quarterly  Report on Form 10-Q of the Company  for the  quarter  ended June
30,1997.)                                                             

10.13Definitive  Master  Agreement,  dated  September  19, 1997,  among CV Reit,
     Inc.,  Montgomery CV Realty Trust,  and Drexel Realty,  Inc., Royce Realty,
     Inc., Louis P. Meshon,  Sr. and certain of the Meshon Parties named therein
     and the Levy Parties named therein.  (Incorporated by reference to Appendix
A to the Company's proxy statement filed on November 11, 1997.)       

10.14Amended and Restated  Agreement of Limited  Partnership  of  Montgomery  CV
     Realty L.P. dated December 31, 1997. (Incorporated by reference to Appendix
B to the Company's proxy statement filed on November 11, 1997.)       

10.15Supplemental  Indenture  No.  2 for  Collateralized  Mortgage  Obligations,
     dated as of December 30, 1997 between Recreation Mortgages,  L.P., (Issuer)
     and Bankers  Trust  Company  (Trustee).  (Incorporated  by reference to the
     Annual  Report on Form 10-K of the Company  for fiscal year ended  December
31, 1997.)                                                            

10.16Real Estate  Purchase  Agreement  dated  September  29, 1997 by and between
     Newtown  Village  Partnership  and RCEK,  Inc., or its nominee or assignee.
     (Incorporated by reference to Exhibit 2.1 to the current report on Form 8-K
filed by CV Reit, Inc. on April 14, 1998.)                            

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10.17Letter Amendment to Real Estate Purchase  Agreement dated December 15, 1997
     by and between Newtown Village Partnership and RCEK, Inc.  (Incorporated by
     reference  to  Exhibit  2.2 to the  current  report on Form 8-K filed by CV
Reit, Inc. on April 14, 1998.)                                        

10.18Assignment of Real Estate  Purchase  Agreement  dated January 26, 1998 from
     RCEK,  Inc. to Newtown  Village Plaza  Associates,  L.P.  (Incorporated  by
     reference  to  Exhibit  2.3 to the  current  report on Form 8-K filed by CV
Reit, Inc. on April 14, 1998.)                                        

10.19Second  Amendment to Real Estate Purchase  Agreement dated February 5, 1998
     by and  between  Newtown  Village  Partnership  and Newtown  Village  Plaza
     Associates,  L.P.  (Incorporated by reference to Exhibit 2.4 to the current
report on Form 8-K filed by CV Reit, Inc. on April 14, 1998.)         

10.20Third Amendment to Real Estate  Purchase  Agreement dated March 31, 1998 by
     and  between  Newtown   Village   Partnership  and  Newtown  Village  Plaza
     Associates,  L.P.  (Incorporated by reference to Exhibit 2.5 to the current
report on Form 8-K filed by CV Reit, Inc. on April 14, 1998.)         

10.21Loan and  Credit  Facility  Agreement  dated as of  March  31,  1998 by and
     between  Montgomery CV Realty L.P. as Borrower,  Century Plaza  Associates,
     L.P.  and CV  Reit,  Inc.,  as  guarantors,  and GMAC  Commercial  Mortgage
     Corporation,  as Lender.  (Incorporated  by reference to Exhibit 5.1 to the
current report on Form 8-K filed by CV Reit, Inc. on April 15, 1998.) 

10.22$7,650,000  Promissory  Note dated as of April 9, 1998 from  Montgomery  CV
     Realty L.P.  to GMAC  Commercial  Mortgage  Corporation.  (Incorporated  by
     reference  to  Exhibit  5.2 to the  current  report on Form 8-K filed by CV
Reit, Inc. on April 15, 1998.)                                        

10.23Mortgage and Security  Agreement dated as of April 9, 1998 by Century Plaza
     Associates, L.P. to GMAC Commercial Mortgage Corporation.  (Incorporated by
     reference  to  Exhibit  5.3 to the  current  report on Form 8-K filed by CV
Reit, Inc. on April 15, 1998.)                                        

10.24Guaranty  and  Suretyship  Agreement  dated as of April 9, 1998 by CV Reit,
     Inc. to GMAC Commercial Mortgage Corporation. (Incorporated by reference to
     Exhibit  5.4 to the  current  report on Form 8-K filed by CV Reit,  Inc. on
April 15, 1998.)                                                      

10.25Contribution  Agreement dated May 29, 1998 by and between Marlton  Crossing
     Shopping   Center  Limited   Partnership  and  Montgomery  CV  Realty  L.P.
     (Incorporated by reference to Exhibit 2.1 to the current report on Form 8-K
dated June 24, 1998, filed by CV Reit, Inc. on July 7, 1998.)         

10.26Assignment and Assumption of Contribution  Agreement dated June 22, 1998 by
     and between Montgomery CV Realty L.P. and Marlton Plaza Associates II, L.P.
     (Incorporated by reference to Exhibit 2.2 to the current report on Form 8-K
dated June 24, 1998 filed by CV Reit, Inc. on July 7, 1998.)          

10.27Mortgage  and Security  Agreement  dated as of June 24, 1998 by and between
     Marlton  Plaza  Associates  II,  L.P.,  as  Borrower,  and GMAC  Commercial
     Mortgage Corporation, as Lender.  (Incorporated by reference to Exhibit 2.3
     to the current  report on Form 8-K dated June 24,  1998,  filed by CV Reit,
Inc. on July 7, 1998.)                                                

10.28$11,650,000  Promissory  Note dated as of June 24, 1998 from Marlton  Plaza
     Associates II, L.P. to GMAC Commercial Mortgage Corporation.  (Incorporated
     by  reference  to Exhibit 2.4 to the current  report on Form 8-K dated June
24, 1998, filed by CV Reit, Inc. on July 7, 1998.)                    

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10.29Real  Estate  Purchase  Agreement  dated  January  27,  1998 by and between
     Seller and  Purchaser.  (Incorporated  by  reference  to Exhibit 2.1 to the
     current report on Form 8-K dated June 25, 1998,  filed by CV Reit,  Inc. on
July 7, 1998.)                                                        

10.30Amendment to Real Estate  Purchaser  Agreement  dated  February 26, 1998 by
     and between Seller and Purchaser. (Incorporated by reference to Exhibit 2.2
     to the current  report on Form 8-K dated June 25,  1998,  filed by CV Reit,
Inc. on July 7, 1998.)                                                

10.31Second Amendment to Real Estate Purchase  Agreement dated March 31, 1998 by
     and between Seller and Purchaser. (Incorporated by reference to Exhibit 2.3
     to the current  report on Form 8-K dated June 25,  1998,  filed by CV Reit,
Inc. on July 7, 1998.)                                                

10.32Mortgage  and Security  Agreement  dated as of June 25, 1998 by and between
     Marlton Plaza Associates,  L.P., as Borrower,  and GMAC Commercial Mortgage
     Corporation,  as Lender.  (Incorporated  by reference to Exhibit 2.4 to the
     current report on Form 8-K dated June 25, 1998,  filed by CV Reit,  Inc. on
July 7, 1998.)                                                        

10.33$9,300,000  Promissory  Note dated as of June 25, 1998 from  Marlton  Plaza
     Associates, L.P. to GMAC Commercial Mortgage Corporation.  (Incorporated by
     reference  to Exhibit 2.5 to the current  report on Form 8-K dated June 25,
1998, filed by CV Reit, Inc. on July 7, 1998.)                        

10.34Guaranty  and  Suretyship  Agreement  dated as of June 25, 1998 by CV Reit,
     Inc. to GMAC Commercial Mortgage Corporation. (Incorporated by reference to
     Exhibit 2.6 to the current report on Form 8-K dated June 25, 1998, filed by
CV Reit, Inc. on July 7, 1998.)                                       

10.35Guaranty and Suretyship  Agreement  dated as of June 25, 1998 by Montgomery
     CV Realty L.P. to GMAC Commercial  Mortgage  Corporation.  (Incorporated by
     reference  to Exhibit 2.7 to the current  report on Form 8-K dated June 25,
1998, filed by CV Reit, Inc. on July 7, 1998.)                        

10.36Second  Amendment to Loan and Credit  Facility  Agreement dated as of March
     8, 1999,  by and between  Montgomery CV Realty,  L.P. as Borrower,  Century
     Plaza  Associates,  L.P.  and  CV  Reit,  Inc.,  as  Guarantors,  and  GMAC
     Commercial  Mortgage  Corporation as Lender.  (Incorporated by reference to
     Exhibit 10.36 Annual Report on Form 10-K of the Company for the fiscal year
ended December 31, 1998.)                                             

10.37$18,500,000 Note dated March 8, 1999 between Montgomery CV Realty,  L.P. as
     Borrower and GMAC Commercial Mortgage Corporation as Lender.  (Incorporated
     by reference to Exhibit 10.37 Annual Report on Form 10-K of the Company for
the fiscal year ended December 31, 1998.)                             

10.38Collateral,  Pledge, Assignment and Security Agreement, dated March 8, 1999
     between   Montgomery  CV  Realty,   L.P.  and  GMAC   Commercial   Mortgage
     Corporation.  (Incorporated  by reference to Exhibit 10.38 Annual Report on
Form 10-K of the Company for the fiscal year ended December 31, 1998.)

10.39Agreement  of  Sale  dated  January  21,  1999  by and  between  Lakewood-9
     Investors,  L.P.  and  ARC-Lakewood-9,  L.L.C.  Montgomery  CV Realty  L.P.
     (Incorporated by reference to Exhibit 2.1 to the current report on Form 8-K
dated March 31, 1999, filed by CV Reit, Inc. on April 7, 1999.)       

10.40Reinstatement  and  Amendment  Agreement of Sale dated  February 5, 1999 by
     and  between  Lakewood-9   Investors,   L.P.  and  ARC-Lakewood-9,   L.L.C.
     Montgomery CV Realty L.P.  (Incorporated by reference to Exhibit 2.2 to the
     current report on Form 8-K dated March 31, 1999,  filed by CV Reit, Inc. on
April 7, 1999.)                                                       

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10.41Assignment  of  Agreement of Sale dated March 17, 1999 from  Montgomery  CV
     Realty L.P. to Lakewood Plaza 9 Associates, L.P. (Incorporated by reference
     to Exhibit  2.3 to the  current  report on Form 8-K dated  March 31,  1999,
filed by CV Reit, Inc. on April 7, 1999.)                             

10.42Agreement  of Plan of  Reorganization  and  Merger  among  CV  Reit,  Inc.,
     Kranzco Realty Trust,  KRT Trust and Kramont  Realty Trust,  dated December
     10, 1999 (Incorporated by reference to Exhibit 2.1 to the current report on
     Form 8-K dated  December 10, 1999,  filed by CV Reit,  Inc. on December 17,
1999.)                                                                

10.43Press  Release,   dated  December  13,  1999,   issued  by  CV  Reit,  Inc.
     (Incorporated  by reference  to Exhibit 99.1 to the current  report on Form
    8-K dated December 10, 1999, filed by CV Reit, Inc. on December 17, 1999.)

11   Statement regarding computation of per share earnings. Omitted; computation
can be clearly determined from material contained in the report.      

21   Subsidiaries of the Company.                                               

27   Financial Data Schedule                                                    

SIGNATURES

Pursuant to the requirements of Section 13 and 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.                           

                             CV REIT, INC.

                                            /s/ Elaine Hauff
March 16, 2000                                  By: ----------------------------
                                            Elaine Hauff, Vice President
                             and Treasurer

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.                                   

                                             /s/ H. Irwin Levy
March 16, 2000                                  --------------------------------
                                              H.  Irwin  Levy,  Chairman  of
                                        the Board of Directors

                                               /s/ Louis P. Meshon
March 16, 2000                                  --------------------------------
                                              Louis P. Meshon, President and
                        Director

                                            /s/ Elaine Hauff
March 16, 2000                                  --------------------------------
                                            Elaine Hauff, Vice President
                                         and Treasurer, (Principal
                                     Financial Officer and
                                             Principal Accounting Officer)

                                               /s/ Stanley Brenner
March 16, 2000                                  --------------------------------
                                         Stanley Brenner, Director

                                                /s/ Stanley S. Cohen
March 16, 2000                                  --------------------------------
                                          Stanley S. Cohen, Director

                                          /s/ Allyn Levy
March 16, 2000                                  --------------------------------
                                    Allyn Levy, Director

                                                   /s/ Milton S. Schneider
March 16, 2000                                  --------------------------------
                                             Milton S. Schneider, Director

                                               /s/ Alan L. Shulman
March 16, 2000                                  --------------------------------
                                         Alan L. Shulman, Director

Dates Referenced Herein   and   Documents Incorporated By Reference

				Referenced-On Page
This 10-K Filing		Date		First		Last			Other Filings
		6/19/92		45
		7/17/92		45
		7/31/92		27		45
		12/31/92		45
		7/11/94		45
		12/31/94		40					10-K, DEF 14A
		7/31/95		45
		8/3/95		45
		9/30/95		45					10-Q
		7/12/96		45
		7/31/96		45
		9/30/96		45					10-Q
		12/31/96		19					10-K
		4/28/97		23
		6/10/97		45
		7/31/97		45
		9/19/97		45
		9/29/97		45
		11/11/97		44		45
		12/15/97		46
		12/30/97		45
		12/31/97		3		45			10-K, DEF 14A
		1/1/98		23
		1/26/98		46
		1/27/98		47
		2/5/98		46
		2/26/98		47
		3/31/98		26		47			10-Q, 8-K, 8-K/A
		4/9/98		46
		4/14/98		45		46
		4/15/98		46					8-K
		5/1/98		38
		5/15/98		25		27
		5/29/98		46
		6/22/98		46
		6/24/98		46					8-K, 8-K/A
		6/25/98		47					8-K, 8-K/A
		6/30/98		31					10-Q
		7/7/98		46		47
		12/31/98		10		47			10-K, DEF 14A
		1/21/99		47
		2/1/99		37
		2/5/99		47
		3/8/99		47
		3/17/99		48
		3/31/99		47		48			10-Q, 8-K, 8-K/A
		4/7/99		47		48
		6/15/99		15		23
		12/10/99		3		48
		12/13/99		48
		12/17/99		44		48			8-K
For The Period Ended		12/31/99		1		44
		2/1/00		41
		3/3/00		16
		3/7/00		2		8
		3/16/00		48
Filed On / Filed As Of		3/21/00
		3/31/00		12		26			10-Q
		6/15/00		15		23
		12/31/00		25		39
		3/31/01		12		26
		7/31/02		26
		7/31/23		25
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