SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)


   X    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
------- EXCHANGE ACT OF 1934


For the quarterly period ended March 31, 2002


                                       OR

        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
------- EXCHANGE ACT OF 1934


                         Commission File Number 1-13239

                               AEGIS REALTY, INC.
                              --------------------
             (Exact name of Registrant as specified in its charter)



        Maryland                                         13-3916825
----------------------------------                   ------------------
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                        Identification No.)



625 Madison Avenue, New York, New York                    10022
----------------------------------------                -----------
(Address of principal executive offices)                (Zip Code)



Registrant's telephone number, including area code (212) 421-5333



         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
                                               -----     -----



                          PART I. FINANCIAL INFORMATION

                          Item 1. Financial Statements

                       AEGIS REALTY, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheets
                             (Dollars in thousands)



                                                                            MARCH 31,       DECEMBER 31,
                                                                                 2002             2001
                                                                        ----------------- -----------------
                                                                           (Unaudited)
                                                                                     
ASSETS
Real estate, net                                                            $    172,105      $     171,357
Investment in partnerships                                                         5,431              5,475
Loans receivable from affiliate                                                    2,283              2,289
Cash and cash equivalents                                                          3,277              2,917
Accounts receivable-tenants, net of allowance for
   doubtful accounts of $423,000 and $378,000,
   respectively                                                                    2,855              3,005
Deferred costs, net                                                                3,964              4,086
Other assets                                                                       1,485                909
                                                                            ------------      -------------
   TOTAL ASSETS                                                             $    191,400      $     190,038
                                                                            ============      =============

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
   Notes payable                                                            $     67,558      $      66,148
   Accounts payable and other liabilities                                          4,307              3,768
   Distributions payable                                                           2,291              2,116
                                                                            ------------      -------------

   TOTAL LIABILITIES                                                              74,156             72,032
                                                                            ------------      -------------

Minority interest of unitholders in the
   Operating Partnership                                                           6,185              6,235
                                                                            ------------      -------------
Commitments and Contingencies

STOCKHOLDERS' EQUITY:
   Common stock; $.01 par value;
      50,000,000 shares authorized; 8,054,631 shares
      issued and 8,052,847 shares outstanding
      in 2002 and 2001                                                                80                 80
   Additional paid in capital                                                    125,399            125,379
   Distributions in excess of net income                                         (14,420)           (13,688)
                                                                            ------------      -------------

   TOTAL STOCKHOLDERS' EQUITY                                                    111,059            111,771
                                                                            ------------      -------------
   TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                               $    191,400      $     190,038
                                                                            ============      =============


           See accompanying notes to consolidated financial statements


                                       2


                       AEGIS REALTY, INC. AND SUBSIDIARIES
                      Consolidated Statements of Operations
                                   (Unaudited)
                             (Dollars in thousands)



                                                                                        THREE MONTHS ENDED
                                                                                             MARCH 31,
                                                                                ---------------------------------
                                                                                      2002                 2001
                                                                                ---------------------------------
                                                                                              
Revenues:
   Rental income                                                                $       5,110       $       4,996
   Tenant reimbursements                                                                1,444               1,252
   Early lease termination                                                                  -                  14
   Income from equity investments                                                          97                  96
   Interest income                                                                         63                 130
   Other                                                                                   30                  28
                                                                                -------------       -------------
   Total revenues                                                                       6,744               6,516
                                                                                -------------       -------------

Expenses:

   Repairs and maintenance                                                                559                 404
   Operating                                                                              483                 347
   Real estate taxes                                                                      646                 620
   Interest                                                                               860               1,274
   Management fees                                                                        616                 630
   General and administrative                                                             187                 252
   Depreciation and amortization                                                        1,521               1,453
   Other                                                                                  363                 246
                                                                                -------------       -------------
   Total expenses                                                                       5,235               5,226
                                                                                -------------       -------------

Income before minority interest                                                         1,509               1,290

Minority interest in income of
   the Operating Partnership                                                             (134)               (112)
                                                                                -------------       -------------


Net income                                                                      $       1,375       $       1,178
                                                                                =============       =============
Net income per share:

   Basic                                                                        $         .17       $         .15
                                                                                =============       =============
   Diluted                                                                      $         .17       $         .15
                                                                                =============       =============

Weighted average shares
   outstanding:
   Basic                                                                            8,054,036           8,050,487
                                                                                =============       =============
   Diluted                                                                          8,066,562           8,050,487
                                                                                =============       =============

           See accompanying notes to consolidated financial statements


                                       3


                       AEGIS REALTY, INC. AND SUBSIDIARIES
            Consolidated Statement of Changes in Stockholders' Equity
                            (Dollars in thousands)

                                   (Unaudited)



                                  COMMON STOCK             ADDITIONAL    DISTRIBUTIONS
                           ---------------------------      PAID-IN      IN EXCESS OF
                             SHARES           AMOUNT        CAPITAL       NET INCOME      TOTAL
                           -----------    ------------     ----------    -------------  ----------
                                                                          
Balance at
   January 1, 2002          8,052,847      $       80      $125,379      $(13,688)      $111,771

Net income                                                                  1,375          1,375
Issuance of shares of
   common stock                 1,784                            20                           20
Distributions                                                              (2,107)       (2,107)
                            ---------      ----------      --------      --------       --------
Balance at
   March 31, 2002           8,054,631      $       80      $125,399      $(14,420)      $111,059
                            =========      ==========      ========      ========       ========



See accompanying notes to consolidated financial statements


                                       4


                       AEGIS REALTY, INC. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                                   (Unaudited)
                             (Dollars in thousands)



                                                                                   THREE MONTHS ENDED
                                                                                             MARCH 31,
                                                                           --------------------------------------
                                                                                    2002                2001
                                                                           -----------------   ------------------
                                                                                         
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                                      $      1,375         $      1,178
Adjustments to reconcile net income to net cash
   provided by operating activities:
   Depreciation and amortization                                                       1,531                1,393
   Minority interest in income of
      the Operating Partnership                                                          134                  112
   Distributions from equity investments
      in excess of income                                                                 33                   33
   Changes in operating assets and liabilities:
   Accounts receivable-tenants                                                           105                  563
   Allowance for doubtful accounts                                                        45                   55
   Other assets                                                                         (486)                (148)
   Due to Advisor and affiliates                                                         (69)                 421
   Accounts payable and other liabilities                                                539                  162
   Leasing commissions and costs                                                        (159)                 (59)
                                                                                ------------         ------------
   Net cash provided by operating activities                                           3,048                3,710
                                                                                ------------         ------------

CASH FLOWS FROM INVESTING ACTIVITIES:

   Improvements to real estate                                                        (1,945)                (889)
   Dispositions (acquisitions) of real estate                                              -                  100
   Increase in deferred acquisition expenses                                               -                 (157)
   Repayments of loans receivable from affiliate                                           6                    6
   Principal payments received on mortgage loans                                           -                    9
                                                                                ------------         ------------

   Net cash used in investing activities                                              (1,939)                (931)
                                                                                ------------         ------------

CASH FLOWS FROM FINANCING ACTIVITIES:

   Proceeds from notes payable                                                         1,500                1,500
   Periodic repayments of notes payable                                                  (89)                 (82)
   Distributions paid to stockholders                                                 (1,933)              (1,932)
   Increase in deferred loan costs                                                       (43)                 (10)
   Distributions paid to minority interest                                              (184)                (184)
                                                                                ------------         ------------
   Net cash used in financing activities                                                (749)                (708)
                                                                                ------------         ------------


           See accompanying notes to consolidated financial statements


                                       5




                                                                                   THREE MONTHS ENDED
                                                                                             MARCH 31,
                                                                           --------------------------------------
                                                                                    2002                2001
                                                                           -----------------   ------------------
                                                                                         
Net increase in cash and cash equivalents                                                360                2,071

Cash and cash equivalents at the beginning of
   the period                                                                          2,917                1,474
                                                                               -------------          -----------


Cash and cash equivalents at the end of the period                             $       3,277          $     3,545
                                                                               =============          ===========


SUPPLEMENTAL INFORMATION:


   Interest paid                                                               $         861          $     1,010
                                                                               =============          ===========
















           See accompanying notes to consolidated financial statements


                                       6


                       AEGIS REALTY, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                 March 31, 2002
                                   (Unaudited)

NOTE 1 - GENERAL

Aegis Realty, Inc. ("Aegis" or the "Company") is a Maryland corporation that has
qualified as a real estate investment trust ("REIT") under the Internal Revenue
Code of 1986 as amended (the "Code"). The Company was formed to acquire, own,
operate and renovate primarily supermarket-anchored neighborhood and community
shopping centers. As of March 31, 2002, the Company owned a portfolio of 28
retail properties containing a total of approximately 3.0 million gross
leaseable square feet and held partnership interests in two suburban garden
apartment properties.

The Company was formed on October 1, 1997 as the result of the consolidation
(the "Consolidation") of four publicly registered, non-listed limited
partnerships, Summit Insured Equity L.P. ("Insured I"), Summit Insured Equity
L.P. II ("Insured II"), Summit Preferred Equity L.P. and Eagle Insured, L.P.
(the "Partnerships", and each individually a "Partnership"). One of the general
partners of the Partnerships was an affiliate of Related Capital Company
("Related"), a nationwide, fully integrated real estate financial services firm.
Pursuant to the Consolidation, the Company issued shares of its common stock,
par value $.01 per share (the "Common Stock") to all partners in the
Partnerships in exchange for their interests in the Partnership based upon each
partner's proportionate interest in the Common Stock issued to their Partnership
in the Consolidation.

The Company is governed by a board of directors comprised of two independent
directors and three directors who are affiliated with Related. The Company has
engaged Related Aegis LP (the "Advisor"), a Delaware limited partnership and an
affiliate of Related, to manage its day to day affairs.

The Company owns all of its assets directly or indirectly through Aegis Realty
Operating Partnership, LP, a Delaware limited partnership (the "Operating
Partnership" or "OP"), of which the Company is the sole general partner and
holder of 91.31% of the units of partnership interest (the "OP Units") at March
31, 2002. At March 31, 2002, 5.54% of the OP Units are held by the sellers of
three of the retail properties and 3.15% were held by affiliates of Related.

During 2001, the Company announced it had terminated a planned acquisition of
the assets of PO'B Montgmery & Company (POB).

In light of the decision to terminate the acquisition of POB, the Company, at
the direction of the Board of Trustees, has retained Robertson Stephens to
assist in developing an appropriate marketing strategy for the potential sale of
the Company or its assets. If acceptable values cannot be achieved, the Board of
Trustees will then pursue alternative strategies with the goal of maximizing
stockholder value. The Company has discontinued its pursuit of additional
investments and is focusing on the continuation of active management, leasing
and redevelopment of the property portfolio in order to maintain the value of
its portfolio upon a sale.

The consolidated financial statements include the accounts of the Company and
its subsidiary partnerships. All intercompany accounts and transactions with the
subsidiary partnerships have been eliminated in consolidation. Unless otherwise
indicated, the "Company", as hereinafter used, refers to Aegis Realty, Inc. and
its consolidated subsidiary partnerships.

The accompanying consolidated financial statements have been prepared without
audit. In the opinion of management, the financial statements contain all
adjustments (consisting of only normal recurring adjustments) necessary to
present fairly the financial position of the Com-


                                       7


pany as of March 31, 2002 and the results of its operations and its cash flows
for the three months ended March 31, 2002 and 2001. However, the operating
results for the interim periods may not be indicative of the results for the
full year.

Certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America ("GAAP") have been condensed or
omitted. It is suggested that these financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Company's Form 10-K for the year ended December 31, 2001.

The consolidated financial statements of the Company are prepared on the accrual
basis of accounting in conformity with GAAP, which requires the Advisor to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements as well as the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates and assumptions.

The Company has no items of other comprehensive income; therefore, the Company's
net income and comprehensive income are the same for all periods presented.

In June 2001, the Financial Accounting Standards Board issued Statement No. 141,
"Business Combinations" (SFAS 141) and Statement No. 142, "Goodwill and Other
Intangible Assets" (SFAS 142). These statements establish new standards for
accounting and reporting for business combinations and for goodwill and
intangible assets resulting from business combinations. SFAS 141 applies to all
business combinations initiated after June 30, 2001. The Company implemented
SFAS 142 on January 1, 2002. Implementation of these statements did not have a
material impact on the Company's financial statements.

In June of 2001, the FASB issued SFAS No, 143, "Accounting for Asset Retirement
Obligations" (effective January 1, 2003). SFAS No. 143 requires the recording of
the fair value of a liability for an asset retirement obligation in the period
in which it is incurred. Management believes the implementation of SFAS No. 143
will not have a material impact on the financial statements.

In August of 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment of Disposal of Long Lived Assets". SFAS No. 144 supercedes
existing accounting literature dealing with impairment and disposal of
long-lived assets, including discontinued operations. It addresses financial
accounting and reporting for the impairment of long-lived assets and for
long-lived assets to be disposed of, and expands current reporting for
discontinued operations to include disposals of a "component" of an entity
that has been disposed of or is classified as held for sale. The Company
implemented SFAS No. 144 on January 1, 2002. Implementation of this
statements did not have a material impact on the Company's financial
statements.

Certain amounts in the 2001 financial statements have been reclassified to
conform to the 2002 presentation.


                                       8


NOTE 2 - REAL ESTATE

The components of real estate are as follows:



                                                                             MARCH 31,       DECEMBER 31,
                                                                              2002               2001
                                                                        ----------------- -----------------
                                                                                     
Land                                                                        $ 42,041,873       $ 42,041,873
Buildings and improvements                                                   163,058,080        161,165,742
                                                                             -----------        -----------
                                                                             205,099,953        203,207,615
Less:  Accumulated depreciation                                              (32,994,688)       (31,851,076)
                                                                             -----------        -----------


                                                                            $172,105,265       $171,356,539
                                                                             ===========        ===========


Amounts estimated to be recoverable from future operations and ultimate sales
are greater than the carrying value of each property owned at March 31, 2002.
However, the carrying value of certain properties may be in excess of their fair
value as of such date.

NOTE 3 - DEFERRED COSTS

The components of deferred costs are as follows:



                                                                             MARCH 31,       DECEMBER 31,
                                                                              2002               2001
                                                                        ----------------- -----------------
                                                                                     
Deferred loan costs                                                        $   3,551,340      $   3,508,151
Deferred leasing commissions and costs                                         3,434,745          3,330,350
                                                                            ------------       ------------
                                                                               6,986,085          6,838,501

Less:  Accumulated amortization                                               (3,022,245)        (2,752,725)
                                                                            ------------       ------------


                                                                           $   3,963,840      $   4,085,776
                                                                            ============       ============
















                                       9


NOTE 4 - NOTES PAYABLE

As of March 31, 2002 and December 31, 2001, the Company had notes payable with
outstanding balances totaling $67,558,441 and $66,147,599, respectively. Further
information regarding the notes is as follows:



                                                                                                                      COLLATERAL/
                       DATE OF                       MONTHLY                                                           CARRYING
                        NOTE/                        PAYMENT       OUTSTANDING        OUTSTANDING      BALLOON         VALUE AT
                      MATURITY        INTEREST     OF PRINCIPAL      BALANCE            BALANCE        PAYMENT/        MARCH 31,
NOTEHOLDER              DATE           RATE        AND INTEREST     AT 3/31/02        AT 12/31/01      DUE DATE          2002
----------            --------        --------     ------------    -----------        -----------      --------       -----------
                                                                                                 
(a)                   12/29/97        (b)          Interest        $44,693,000(c)     $43,193,000(c)                  (d)
                      12/29/03                     only

Heller                6/24/97 (e)     8.50%        $19,992           2,489,862          2,496,829       $2,307,314    Barclay Place/
  Financial, Inc.     7/1/07                                                                            7/1/07        $ 3,776,212

Nomura                10/28/97 (f)    7.54%        $33,130           3,659,551          3,689,580                     Village At
  Asset Capital       11/11/22                                                                                        Waterford/
  Corporation                                                                                                         $ 6,126,165

Chase Bank            12/16/96 (g)    8.875%       $51,717           6,208,918          6,226,054       $5,808,553    Oxford Mall/
                      1/1/07                                                                            1/1/07        $ 8,513,148

Merrill Lynch         9/18/97 (h)     7.73%        $79,509          10,507,110         10,542,136       $9,634,530    Southgate/
  Credit              10/1/07                                       ----------         ----------       10/1/07       $15,326,346
  Corporation

                                                                   $67,558,441        $66,147,599
                                                                    ==========         ==========




                                       10


(a) The Credit Facility is shared among Fleet Bank (28.57%), KeyBank National
Association (28.57%), Citizens Bank of Rhode Island (28.57%) and Sovereign Bank
(14.29%).

In connection with the Credit Facility, the Company must comply with various
financial covenants including maximum loan to value ratios, interest and fixed
charge coverage ratios, and net worth requirements. In connection with the
Company's quarterly covenant compliance certification since the second quarter
of 2001 and through the current period, the Company was in compliance with all
but one of these covenants. The Company was not in compliance with a covenant
requiring that aggregate distributions by the Company during any consecutive
four quarters not exceed ninety percent of the Company's funds from operations
("FFO") for such periods. Unlike the covenant provisions based on adjusted net
income, under the covenant in question, the Company's FFO is not adjusted for
extraordinary or nonrecurring items. As a result, FFO was significantly reduced
by nonrecurring expenses related to the termination of the POB transaction (Note
1). The Company received a permanent waiver on this covenant from each of the
syndicate banks of the Credit Facility for each of the quarters' of
non-compliance.

(b) The interest rate under the Credit Facility can float 1/2% under Fleet
Bank's base rate or can be fixed in 30, 60, 90 and 180 day periods at various
spreads over the indicated Euro-contract, ranging from 1.75% to 2.125% depending
on the Company's ratio of total debt to total assets. The Company has currently
elected the 30 day rate which was 1.88% at March 31, 2002.

(c) Outstanding balance of an $80 million senior revolving credit facility
("Credit Facility").

(d) The Credit Facility was collateralized at March 31, 2002 by nineteen Retail
Properties and one investment in a partnership with carrying values of
$108,089,997 and $4,813,933, respectively. In addition, the obligation under the
Credit Facility is guaranteed by the Company, Summit Insured I, Summit Insured
II (two of the Company's subsidiaries) and TCR-Pinehurst Limited Partnership
(one of the two partnerships in which the Company has invested).

(e) Note was assumed upon purchase by the Company on March 30, 1998 of the
property collateralizing the note.

(f) Note was assumed upon purchase by the Company on April 22, 1998 of the
property collateralizing the note.

(g) Note was assumed upon purchase by the Company on November 24, 1998 of the
property collateralizing the note.

(h) Note was assumed upon purchase by the Company on December 9, 1998 of the
property collateralizing the note .

NOTE 5 - COMMON STOCK AND STOCK OPTIONS

Each independent director is entitled to receive annual compensation for serving
as a director in the aggregate amount of $17,500 payable in cash (maximum of
$7,500 per year) and/or shares of Common Stock valued based on the fair market
value at the date of issuance. As of March 31, 2002 and December 31, 2001,
10,204 and 8,420 shares, respectively, having an aggregate value at the date of
issuance of $105,000 and $85,000, respectively, have been issued to the
Company's two independent directors as compensation for their services. For the
three months


                                       11


ended March 31, 2002, the dilutive effect, calculated using the treasury stock
method, of the 241,522 stock options granted August 12, 2001, was 6,140 shares.

NOTE 6 - RELATED PARTY TRANSACTIONS

Pursuant to the Advisory Agreement, the Advisor receives (i) acquisition fees
equal to 3.75% of the acquisition price of properties acquired; (ii) mortgage
selection fees based on the principal amount of mortgage loans funded; (iii)
asset management fees equal to .375% of the total invested assets of the
Company; (iv) a 1.5% liquidation fee based on the gross sales price of the
assets sold by the Company in connection with a liquidation of the Company's
assets; and (v) reimbursement of certain administrative costs incurred by the
Advisor on behalf of the Company.

The Company's Retail Properties are managed by RCC Property Advisors (the
"Property Manager"), an affiliate of the Advisor, for a fee equal to 4.5% of the
gross rental receipts from the Retail Properties, which is competitive with such
fees paid in the areas in which the properties are located. The Property Manager
also receives standard leasing commissions for space leased to new tenants and
for lease renewals and is reimbursed for certain expenses.

The costs incurred to related parties for the three months ended March 31, 2002
and 2001 were as follows:



                                                                                      THREE MONTHS ENDED
                                                                                           MARCH 31,
                                                                                ---------------------------------
                                                                                    2002                2001
                                                                                ---------------------------------
                                                                                              
Expense reimbursements                                                          $      70,112       $      70,112
Property management fees                                                              303,288             317,845
Leasing commissions and costs                                                         164,033              78,469
Asset management fees                                                                 188,986             193,087
                                                                                 ------------        ------------

                                                                                $     726,419       $     659,513
                                                                                 ============        ============



NOTE 7 - EARNINGS PER SHARE

Basic and diluted net income per share in the amount of $.17 and $.15 for the
three months ended March 31, 2002 and 2001, respectively, equals net income for
the period of $1,375,437 and $1,178,039, respectively, divided by the weighted
average number of shares outstanding for the periods (8,054,036 and 8,050,487,
respectively for the basic earnings per share and 8,066,562 and 8,050,487, for
the diluted earnings per share).

There is no difference between basic and diluted net income per share with
respect to the conversion of the minority interests' OP Units outstanding at
March 31, 2002 and 2001 into an additional 765,780 shares of Common Stock
because the earnings of an OP Unit are equivalent to the earnings of a share of
Common Stock.

NOTE 8 - COMMITMENTS AND CONTINGENCIES

The Company is subject to routine litigation and administrative proceedings
arising in the ordinary course of business. Management does not believe that
such matters will have a material adverse impact on the Company's financial
position, results of operations or cash flows.

NOTE 9 - SUBSEQUENT EVENT

In May 2002, K-Mart notified the Company it closed its store located in the
Centre Stage Shopping Center in Springfield, Tennessee.


                                       12


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

LIQUIDITY AND CAPITAL RESOURCES

The Company requires long-term liquidity in order to invest in and maintain its
portfolio of Retail Properties and other investments. To date, this long-term
liquidity has come from proceeds from the Credit Facility, notes payable assumed
upon the purchase of certain properties and the issuance of shares of the
Company's Common Stock or OP Units in exchange for real estate. Although the
Credit Facility may be increased, the Company's charter dictates leverage of no
more than 50% of the Company's total market value. On a short-term basis, the
Company requires funds to pay its operating expenses and those of the Retail
Properties, to make improvements to the Retail Properties, pay its debt service
and make distributions to its stockholders. The primary sources of the Company's
short-term liquidity needs are the cash flow received from the Retail Properties
and interest income.

In light of the decision to terminate the proposed acquisition of PO'B
Montgomery, Inc., the Board of Directors has instructed management to focus on
pursuing the sale of the Company or its assets. In this regard, management has
retained Robertson Stephens to assist in developing an appropriate marketing
strategy. If acceptable values cannot be achieved, the Board of Directors will
then pursue alternative transactions with the goal of maximizing stockholder
value.

In order to maintain its REIT status, the Company is required to distribute at
least 90% of its taxable income. Funds generated from operations are expected to
be sufficient to allow the Company to meet this requirement.

The Advisor believes that the stability of the Company's operations and its
ability to maintain liquidity are enhanced by the following factors:

(i)  Geographic diversity of its portfolio of real estate and its mortgage note.

(ii) 45% of total revenues for the three months ended March 31, 2002 were earned
from shopping center anchor tenants which are national and/or credit tenants.

(iii) No single asset accounts for more than 8% of total revenues for the three
months ended March 31, 2002.

(iv) Leases that provide for recovery of actual common area maintenance charges
and real estate taxes, thereby minimizing any effects from inflation.

(v) Leases that provide for increases in rents based on a percentage of tenants'
sales.

During the three months ended March 31, 2002, cash and cash equivalents of the
Company and its consolidated subsidiaries increased approximately $360,000. This
increase was primarily due to cash provided by operating activities, $3,048,000
and net proceeds from notes payable, $1,411,000, which exceed improvements to
real estate ($1,945,000), distributions paid to stockholders, ($1,933,000) and
distributions paid to minority interest ($184,000). Included in the adjustments
to reconcile the net income to cash provided by operating activities is
depreciation and amortization in the amount of $1,531,000.

The Company anticipates that cash generated from operations will provide for all
major repairs, replacements and tenant improvements on its real estate and will
provide sufficient liquidity to fund the Company's operating expenditures, debt
service and distributions.


                                       13


The Company has the following problem assets which may adversely affect future
operations and liquidity:

(i) Safeway, the anchor tenant of Cactus Village Shopping Center closed its
facility in December 1991 due to poor sales. The tenant is currently in arrears
as it relates to a contractual increase in minimum rent of $.10 per square foot
per year (approximately $4,200 per year). The aggregate arrears as of March 31,
2002 is $21,987. With the exception of this amount, the tenant continues to
fully abide by all aspects of its lease which will expire in September 2006. The
Company is currently negotiating, with Safeway, final terms which would enable
Safeway to buy-out and terminate its lease.

(ii) In July 1994, A&P closed its store in the Mountain Park Plaza Shopping
Center due to reduced sales and increased competition. The Company received
rental payments from the vacated tenant pursuant to the terms of the lease. In
December 2000, A&P bought out its lease for $300,000 and the Company entered
into a new lease with Publix. The former A&P space has been demolished and is
under reconstruction as of March 31, 2002. The Company's estimated cost to
reconstruct this space is $3,500,000 (prior to tenant reimbursement of
approximately $650,000) of which approximately $1,300,000 was paid in 2001.
Publix is expected to take occupancy of the new space in July 2002.

(iii) White Oaks Plaza shopping center, located in Spindale, NC, was deemed to
be impaired. The Company determined that it needed to analyze this property for
potential impairment due to three anchors vacating their spaces and increased
competition in the surrounding area. Two of these anchors, Walmart and Winn
Dixie, are still paying rent and are current in their rent payments. Using
undiscounted cash flows compared to the book value of approximately $6.2 million
resulted in a deficit, indicating impairment. The Company recognized a loss on
impairment of $2.5 million during the fourth quarter of 2001, resulting from
comparing discounted cash flows (at a market discount rate for this type of
property) to the book value.

(iv) Office Max, one of the anchor tenants of Town West which was under
sublease, vacated its space in February 2000 but the original lessee is still
obligated to pay rent. The lessee stopped paying rent in April 2001 and has been
in default since that date. The Company has reserved 50% of the outstanding
balance of $127,450 at March 31, 2002.

(v) Food Lion, located in Barclay Place, closed their store in December 2000.
They are still obligated to pay rent through the expiration of its lease. To
date, Food Lion is current with all rent payments.

(vi) The Company has been notified that K-Mart, which has filed for
bankruptcy, has closed its store located in the Centre Stage Shopping Center
in Springfield, Tennessee. The store has approximately 86,479 square feet of
gross leasable area and represents approximately $397,000 in annualized base
rent. Rental payments are current and K-Mart is continuing to pay rent;
however, the Company cannot currently assess how the closing of the store
will affect 2002 operating results until more details are provided by K-Mart.

In connection with the Credit Facility (Note 4), the Company must comply with
various financial covenants including maximum loan to value ratios, interest and
fixed charge coverage ratios, and net worth requirements. In connection with the
Company's quarterly covenant compliance certification since the second quarter
of 2001 and through the current period, the Company was in compliance with all
but one of these covenants. The Company was not in compliance with a covenant
requiring that aggregate distributions by the Company during any consecutive
four quarters not exceed ninety percent of the Company's funds from operations
("FFO") for such period. Unlike the covenant provisions based on adjusted net
income, under the covenant in question, the Company's FFO is not adjusted for
extraordinary or nonrecurring items. As a result, FFO was significantly reduced
by nonrecurring expenses related to the termination of the POB transaction (Note
1). The Company received a permanent waiver on this


                                       14


covenant from each of the syndicate banks of the Credit Facility for each of the
quarters of non-compliance.

In May 2002, a distribution of $1,933,111 ($.24 per share), which was declared
in March 2002, was paid to the stockholders from cash flow from operations for
the quarter ended March 31, 2002.

Management is not aware of any trends or events, commitments or uncertainties,
which have not otherwise been disclosed that will or are likely to impact
liquidity in a material way.

RESULTS OF OPERATIONS

Rental income increased approximately $114,000 for the three months ended March
31, 2002 as compared to 2001 primarily due to the increase of minimum rent for
Southgate, Rolling Hills, Governors Square and Westbird and minimum unrealized
straight line rent for Rolling Hills, Oxford and Southgate.

Tenant reimbursements increased approximately $192,000 for the three months
ended March 31, 2002 as compared to 2001 due to the increase of the
reimbursements of common charges at Westbird, Winery Square, Governors Square
and Rolling Hills and the reimbursements of insurance for Pablo Plaza, Birdneck,
Winery Square and Cape Henry.

Interest income decreased approximately $67,000 for the three months ended March
31, 2002 as compared to 2001 primarily due to the repayment of the Woodgate
mortgage loan in April 2001.

Repairs and maintenance increased approximately $155,000 for the three months
ended March 31, 2002 as compared to 2001 primarily due to an increase in
miscellaneous maintenance costs of Westbird and Waterford and painting costs at
White Oak Plaza and Crossroads.

Operating expenses increased approximately $136,000 for the three months ended
March 31, 2002 as compared to 2001 primarily due to the unamortized lease costs
of Marketplace, Southgate and Waterford and the legal expenses of Pablo Plaza
and Waterford.

Interest expense decreased approximately $414,000 for the three months ended
March 31, 2002 as compared to 2001, primarily due to the lower interest rate of
the Credit Facility.

Other expenses increased approximately $117,000 for the three months ended March
31, 2002 as compared to 2001 primarily due to the increase in insurance premiums
of Pablo Plaza, Westbird, Birdneck and Cape Henry.

FUNDS FROM OPERATIONS AND FUNDS AVAILABLE FOR DISTRIBUTION

Funds from operations ("FFO"), represents income (or loss) before minority
interest (computed in accordance with accounting principles generally accepted
in the United States) ("GAAP"), excluding gains (or losses) from debt
restructuring or repayments and sales of property, plus depreciation and
amortization and including funds from operations for unconsolidated joint
ventures calculated on the same basis. Income computed in accordance with GAAP
includes straight-lining of property rentals for rent escalations in the amounts
of $46,432 and $15,426 for the three months ended March 31, 2002 and 2001,
respectively. FFO is calculated in accordance with the National Association of
Real Estate Investment Trusts ("NAREIT") definition. FFO does not represent cash
generated from operating activities in accordance with GAAP which is disclosed
in the Consolidated Statements of Cash Flows included in the financial
statements for the applicable periods, and is not necessarily indicative of cash
available to fund cash needs. There are no material legal or functional
restrictions on the use of FFO. FFO should not be considered as an alternative
to net income as an indicator of the Company's operating perform-


                                       15


ance or as an alternative to cash flows as a measure of liquidity. Management
considers FFO a supplemental measure of operating performance and along with
cash flow from operating activities, financing activities and investing
activities, it provides investors with an indication of the ability of the
Company to incur and service debt, to make capital expenditures and to fund
other cash needs.

Funds available for distribution ("FAD") represents FFO plus recurring principal
receipts from mortgage loans less reserves for lease commissions, recurring
capital expenditures (excluding property acquisitions) and debt principal
amortization. FAD should not be considered an alternative to net income as a
measure of the Company's financial performance or to cash flow from operating
activities (computed in accordance with GAAP) as a measure of the Company's
liquidity, nor is it necessarily indicative of sufficient cash flow to fund all
of the Company's needs.














                                       16


FFO, as calculated in accordance with the NAREIT definition, and FAD for the
three months ended March 31, 2002 and 2001 are summarized in the following
table:



                                                                                         THREE MONTHS ENDED
                                                                                              MARCH 31,
                                                                                     ----------------------------
                                                                                         2002             2001
                                                                                     ----------------------------
                                                                                                
Income before minority interest                                                      $ 1,509,550      $ 1,289,783
Depreciation and amortization of real property                                         1,333,306        1,283,279
Depreciation and amortization from equity investments                                     60,740           60,362
                                                                                      ----------       ----------

Funds From Operations ("FFO")                                                          2,903,596        2,633,424

Amortization of deferred financing costs                                                 197,965          183,924
Principal payments received on mortgage loans                                                  -            9,365
Straight-lining of property rentals for rent escalations                                 (46,432)         (15,426)
Improvements to real estate                                                           (1,944,916)        (889,033)
Principal repayments on notes payable                                                    (89,158)         (82,650)
Leasing commissions and costs                                                           (144,261)         (39,272)
                                                                                      ----------       ----------

Funds Available for Distribution ("FAD")                                             $   876,794      $ 1,800,332
                                                                                      ==========       ==========
Distributions to stockholders and minority interest                                  $ 2,116,471      $ 2,116,061
                                                                                      ==========       ==========
FFO payout ratio                                                                           72.9%            80.4%
                                                                                      ==========       ==========

Cash flows from:
Operating activities                                                                 $ 3,047,829      $ 3,710,131
                                                                                      ==========       ==========
Investing activities                                                                 $(1,938,780)     $  (931,163)
                                                                                      ==========       ==========
Financing activities                                                                 $  (748,817)     $  (708,377)
                                                                                      ==========       ==========

Weighted average common shares and OP Units outstanding
   Basic                                                                               8,822,816        8,819,267
                                                                                      ==========       ==========

   Diluted                                                                             8,832,342        8,819,267
                                                                                      ==========       ==========


FORWARD-LOOKING STATEMENTS

Certain statements made in this report may constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended and Section 21E of the Securities Exchange Act of 1934, as amended. Such
forward-looking statements include statements regarding the intent, belief or
current expectations of the Company and its management and involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among other things, the
following: general economic and business conditions, which will, among other
things, affect the demand for retail space or retail goods, availability and
creditworthiness of prospective tenants, lease rents and the terms and
availability of financing; adverse changes in the real estate markets including,
among other things, competition with other companies; risks of real estate
development and acquisition; governmental actions and initiatives; and
environment/safety requirements. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date
hereof.


                                       17


INFLATION

Inflation did not have a material effect on the Company's results for the
periods presented.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The debt financing used to raise capital for the acquisition of the Company's
investments exposes the Company to fluctuations in market interest rates. Market
interest rates are highly sensitive to many factors, including governmental
policies, domestic and international political considerations and other factors
beyond the control of the Company.

Cash flows from the Company's investments do not fluctuate with changes in
market interest rates. In addition, as of March 31, 2002, approximately 35% of
the Company's total notes payable outstanding are fixed rate notes, and so the
payments on these instruments do not fluctuate with changes in market interest
rates. In contrast, payments required under the Credit Facility vary based on
market interest rates, primarily the 30 day Euro-contract rate. Thus, an
increase in market interest rates would result in increased payments under the
Credit Facility, without a corresponding increase in cash flows from the
Company's investments in the same amounts. For example, based on the $44,693,000
outstanding under the Credit Facility at March 31, 2002, the Company estimates
that an increase of 1% in the 30 day Euro-contract rate would decrease the
Company's annual net income by approximately $447,000; a 2% increase in the 30
day Euro-contract rate would decrease annual net income by approximately
$894,000. For the same reasons, a decrease in market interest rates would
generally benefit the Company, as a result of decreased payments under the
Credit Facility without corresponding decreases in cash flows from the Company's
investments. Various financial vehicles exist which would allow Company
management to mitigate the impact of interest rate fluctuations on the Company's
cash flows and earnings. Management may engage in such hedging strategies in the
future, depending on management's analysis of the interest rate environment and
the costs and risks of such strategies.



                                       18


                           PART II. OTHER INFORMATION


Item 1.  Legal Proceedings

         See Part 1.  Financial Statements - Note 8 which is incorporated herein
         by reference.

Item 2.  Changes in Securities and Use of Proceeds - None

Item 3.  Defaults Upon Senior Securities - None

Item 4.  Submission of Matters to a Vote of Security Holders - None

Item 5.  Other Information - Michael Wirth has resigned his position as Chief
         Financial Officer of the Company effective May 15, 2002, in order to
         pursue other endeavors. The Company has begun a search for a new CFO
         and anticipates that the position will be filled within 90 days. In the
         interim, Alan Hirmes, the Senior Vice President of the Company, will
         function as the CFO.

Item 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibits:

         (b)  Reports on Form 8-K:

              No reports on Form 8-K were filed during this quarter.



                                       19


                                   SIGNATURES

Pursuant to the requirements 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.


                               AEGIS REALTY, INC.
                                  (Registrant)



Date:  May 15, 2002             By: /s/ Stuart J. Boesky
                                    --------------------
                                    Stuart J. Boesky
                                    Director, Chairman of the
                                    Board, President and
                                    Chief Executive Officer




Date:  May 15, 2002             By: /s/ Michael I. Wirth
                                    --------------------
                                    Michael I. Wirth
                                    Chief Financial Officer