UNITED STATES
                   SECURITIES AND EXCHANGE COMMISSION
                          Washington, DC   20549
                               FORM 10-K

(X)   ANNUAL REPORT  PURSUANT TO SECTION 13 OR15(d) OF THE SECURITIES EXCHANGE 
      ACT OF1934 For the fiscal year ended  December 31, 1997
                                        
                                        

()   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
     EXCHANGE ACT OF 1934
             For the transaction period from_____to_____
                    Commission File Number 1-12298

                     REGENCY REALTY CORPORATION
        (Exact name of registrant as specified in its charter)

              FLORIDA                                     59-3191743
      (State of other jurisdiction of                     (I.R.S. Employer
      incorporation or organization)                   identification No.)

    121 West Forsyth Street, Suite 200                 (904) 356-7000
    Jacksonville, Florida    32202              (Registrant's telephone No.)
    (Address of principal executive offices)  (zip code)

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

                          Common Stock, $.01 par value
                                (Title of Class)

                             New York Stock Exchange
                     (Name of exchange on which registered)

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

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

The  aggregate  market value of the voting stock held by  non-affiliates  of the
Registrant was approximately  $302,578,000 based on the closing price on the
New York Stock Exchange for such stock on March 16, 1998. The approximate number
of shares of  Registrant's  Common Stock  outstanding was 24,304,576 as of March
16, 1998.
                      Documents Incorporated by References

Portions of the Registrant's  Proxy Statement in connection with its 1998 Annual
Meeting of Shareholders are incorporated by reference in Part III.


<PAGE>



                                TABLE OF CONTENTS
                                                                  Form 10-K
Item No.                                                         Report Page

                                     PART I

1. Business..................................................................1

2. Properties................................................................3

3. Legal Proceedings.........................................................6

4. Submission of Matters to a Vote of Security Holders.......................6

                                     PART II

5. Market for the Registrant's Common Equity and Related 
   Shareholder Matters.......................................................6

6. Selected Consolidated Financial Data......................................8

7. Management's Discussion and Analysis of Financial Condition and
    Results of Operations....................................................9

8. Consolidated Financial Statements and Supplementary Data.................15

9. Changes in and Disagreements with Accountants on Accounting
    and Financial Disclosure................................................15

                                    PART III

10 .Directors and Executive Officers of the Registrant......................15

11. Executive Compensation..................................................16

12. Security Ownership of Certain Beneficial Owners and Management..........16

13. Certain Relationships and Related Transactions..........................16

                                     PART IV

14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K.......16




<PAGE>

                                     PART I

Item 1.  Business

Organization  and  Shopping  Center  Business:   Regency  Realty   Corporation's
("Regency"  or the  "Company")  principal  business  is  owning,  operating  and
developing grocery anchored  neighborhood infill shopping centers in the Eastern
Unites States.  Infill refers to shopping  centers within a targeted  investment
market  offering  sustainable  competitive  advantages such as barriers to entry
resulting  from zoning  restrictions,  growth  management  laws,  or limited new
competition from development or expansions. The Company is focused on building a
platform of grocery  anchored  neighborhood  shopping  centers  because  grocery
stores provide  convenience  shopping of daily  necessities and foot traffic for
adjacent local tenants, and should withstand adverse economic conditions.

The Company, a Florida corporation  organized in 1993, commenced operations as a
real estate  investment  trust in 1993 with the completion of its Initial Public
Offering  ("IPO"),  and was the  successor  to the real  estate  business of The
Regency Group, Inc. which had operated since 1963.

At December 31, 1997,  the Company's 89 properties  contained 10 million  square
feet of gross leasable area ("GLA") and were 92.8% leased.  86 of the properties
are neighborhood  shopping centers, and 70 are grocery anchored.  The properties
are  located  primarily  in Florida  (53% of GLA) and Georgia  (25% of GLA).  At
December 31, 1997,  approximately 9.8%, 5.0%, 3.0%, and 2.5% of annualized total
rent  is  received  from  Publix,   Winn-Dixie,   Kroger,   and  Harris  Teeter,
respectively.  For more specific data and information about the properties owned
by the Company see Item 2. Properties,  and Item 7. Management's  Discussion and
Analysis,  included  elsewhere  in this Form 10-K.  The  Company  also  performs
property  management and leasing on approximately 4 million square feet owned by
third parties that generate fees and have the potential for creating synergistic
relationships that lead to additional acquisition,  development,  management and
leasing opportunities.

Operating and Investment Philosophy:  The Company's key operating and investment
objectives are (1) to generate superior  shareholder returns by sustaining above
average annual  increases in funds from  operations and long term growth in free
and clear cash flow, (2) to create the largest real estate  portfolio of quality
grocery anchored neighborhood shopping centers in targeted infill markets in the
Eastern United States,  (3) to build the strongest  possible  capital  structure
through conservative financial management that will cost effectively provide the
capital  to fund the  Company's  growth  strategy,  and (4) to put in place  the
people and  processes  necessary to enable the Company to  implement  its Retail
Operating  System,  a  system  which  incorporates   research  based  investment
strategies and value added leasing and management systems.

Management believes that the key to successful  implementation of its strategies
is to continue to exploit the Company's competitive strengths which include, its
cohesive and experienced management team, its research capabilities,  its strong
capital  structure,  its  access to  competitively  priced  capital,  its client
relationships,  its market expertise in targeted  markets,  its growing critical
mass of quality grocery anchored  neighborhood shopping centers, and its vibrant
targeted investment markets that enjoy a favorable environment for retail sales.

As of December 31, 1997,  the Company has  acquired 67  properties  at a cost of
$646.5 million since its IPO in 1993. The Company's total market  capitalization
at December 31, 1997 was $1.04 billion. At December 31, 1997, the Company's debt
to total market  capitalization  was 32.4%.  The Company intends to continue its
emphasis on acquiring and  developing  grocery  anchored  neighborhood  shopping
centers that are the most significant shopping centers serving a targeted market
that offer daily necessities and convenience.

Acquisitions and Developments:  On March 7, 1997, the Company acquired,  through
its partnership, Regency Retail Partnership, L.P. ("RRLP"), substantially all of
the assets of Branch Properties,  L.P. ("Branch"),  a privately held real estate
firm based in Atlanta,  Georgia,  for $232.4  million.  The assets acquired from
Branch included 100% fee simple interests in 19 operating shopping centers and 1
center under  development,  and also partnership  interests (ranging from 50% to
93%) in four partnerships with outside investors that owned 4 operating shopping
centers and 2 centers under development. At closing and during 1997, RRLP issued
3,572,427  units of limited  partnership  interest (the "Units") and the Company
issued  155,797  shares of common stock in exchange for the assets  acquired and
the liabilities assumed from Branch.  Additional Units and shares of common
stock may be issued  during  1998 and 1999 based on the  performance  of certain
properties,  limited to 722,997 Units issued in 1998 and 1,020,061  Units issued
in total during 1998 and 1999.
                                       1

<PAGE>
During  1997,  in addition  to the Branch  Properties,  the Company  acquired 13
grocery anchored  shopping  centers for $163.3 million  representing 1.9 million
SF, two of which are partially operating while undergoing redevelopment.  During
1996, the Company acquired 13 grocery anchored shopping centers representing 1.4
million square feet for $107.1 million.

On March 11, 1998, the Company, through RRLP, acquired the real estate assets of
entities  comprising  the Midland  Group  ("Midland")  consisting of 21 shopping
centers (the "Midland  Properties")  plus a development  pipeline of 11 shopping
centers.  Of the 21 centers  acquired,  20 are anchored by Kroger.  Eight of the
shopping  centers  included in the development  pipeline will be owned through a
joint  venture  in which  the  Company  will own less than a 50%  interest  upon
completion  of  construction.  At closing and during 1998,  the Company will pay
approximately  $230.4  million.  Subsequent to 1998, the Company  expects to pay
approximately  $12.7  million to acquire  equity  interests  in the  development
pipeline as the properties reach stabilization. The Company may also be required
to make payments aggregating $10.5 million through the year 2000 contingent upon
increases in net income from existing properties,  the development pipeline, and
new  properties  developed  or  acquired  in  accordance  with the  contribution
agreement.

The Company finances the acquisition of shopping centers through the issuance of
Units in RRLP,  the  assumption of existing debt, and from its $150 million line
of credit (the  "Line").  On February  24,  1998,  the  Company  entered  into a
commitment  agreement  with its lenders to  increase  the  unsecured  commitment
amount of the Line to $300 million,  provide for a $150 million  competitive bid
facility,  and reduce the  interest  rate on the line  based upon  achieving  an
investment  grade rating from two  agencies of BBB- or higher.  Once ratings are
achieved,  the interest rate on the Line will be reduced to Libor plus .95%, and
further  reduced  if the  Company  receives  ratings  better  than  the  minimum
requirement  from both  agencies.  During the 1st  quarter of 1998,  the Company
received  investment  grade ratings from Moody's of Baa2,  and S&P of BBB-.  The
Company repays the Line with proceeds from the sale of common stock.

During  1996,  the  Company  entered  into  a  Stock  Purchase   Agreement  (the
"Agreement") with SC-USREALTY.  Under the Agreement,  the Company agreed to sell
7,499,400  shares of common stock to SC-USREALTY at a price of $17.625 per share
(the fair market  value of the  Company's  Common Stock on the date the terms of
the Agreement were reached) representing total maximum proceeds of approximately
$132 million.  During 1996, the Company sold  SC-USREALTY  3,651,800  shares for
approximately  $64.4  million and during 1997,  the Company  sold the  remaining
3,847,600 shares generating proceeds of approximately $67.8 million all of which
was used to pay down the Line.

As part of the Agreement,  SC-USREALTY also has  participation  rights entitling
them to  purchase  additional  equity in the  Company  at the same price as that
offered to other purchasers in order to preserve their pro rata ownership in the
Company.  In  connection  with the Units and  shares of common  stock  issued in
exchange for Branch's assets on March 7, 1997,  SC-USREALTY  acquired  1,750,000
shares for $38.7 million.

On July 11, 1997, the Company sold 2,415,000  shares to the public at $27.25 per
share. In connection with that offering,  SC-USREALTY purchased 1,785,000 shares
at $27.25  directly  from the  Company.  On August 11,  1997,  the  Underwriters
exercised the over-allotment option and the Company issued an additional 129,800
shares to the public and 95,939 shares to SC-USREALTY at $27.25 per share. Total
net  proceeds  from the sale of common  stock to the public and  SC-USREALTY  of
approximately  $117  million  were used to reduce the  balance of the Line.  The
unused commitment  currently available under the Line for future acquisition and
development activity is approximately $101.9 million at December 31, 1997.

     Matters  Relating  to the Real Estate  Business:  The Company is subject to
certain  business  risks  arising in  connection  with owning real estate  which
include, among others, (1) the bankruptcy or insolvency of, or a downturn in the
business of, any of its anchor tenants,  (2) the  possibility  that such tenants
will not renew their leases as they expire,  (3) vacated anchor space  affecting
the entire  shopping  center because of the loss of the departed anchor tenant's
customer  drawing power, (4) risks relating to leverage,  including  uncertainty
that the Company will be able to  refinance  its  indebtedness,  and the risk of
higher  interest  rates,  (5)  the  Company's  inability  to  satisfy  its  cash
requirements for operations and the possibility that the Company may be required
to borrow  funds to meet  distribution  requirements  in order to  maintain  its
qualification  as  a  REIT,  (6)  potential  liability  for  unknown  or  future
environmental   matters  and  costs  of  compliance   with  the  Americans  with
Disabilities  Act, and (7) the risk of uninsured  losses.  Unfavorable  economic
conditions  could also  result in the  inability  of  tenants in certain  retail
sectors to meet their lease obligations and otherwise could adversely affect the
                                       2

<PAGE>
Company's ability to attract and retain desirable tenants.  The Company believes
that the shopping  centers are relatively well  positioned to withstand  adverse
economic  conditions  since they typically are anchored by grocery stores,  drug
stores and discount  department stores that offer day-to-day  necessities rather
than luxury goods.

Compliance  with  Governmental  Regulations:  The  Company  like  others  in the
commercial real estate industry,  is subject to numerous  environmental laws and
regulations  particularly  as they  pertain  to dry  cleaning  plants.  Although
potential liability could exist for unknown or future environmental matters, the
Company  believes that dry cleaning  tenants are  operating in  accordance  with
current laws and  regulations  and has  established  procedures to monitor these
operations.

Competition:   There  are  numerous  shopping  center  developers,  real  estate
companies  and other  owners of real estate that  operate in the Eastern  United
States that compete with the Company in seeking  retail tenants to occupy vacant
space, for the acquisition of shopping  centers,  and for the development of new
shopping centers.

Changes in Policies:  The Company's Board of Directors  determines the Company's
policies with respect to certain activities,  including its debt capitalization,
growth,  distributions,  REIT status, and investment and operating policies. The
Board of Directors has no present  intention to amend or revise these  policies.
However,  the  Board of  Directors  may do so at any time  without a vote of the
Company's stockholders.

Employees: The Company's headquarters are located in Jacksonville,  Florida. The
Company  presently  maintains  nine offices in which it conducts  management and
leasing  activities  located in Florida,  Georgia,  North  Carolina,  Ohio,  and
Missouri.  As of March 16, 1998, the Company had approximately 360 employees and
believes that relations with its employees are good.


I
tem 2. Properties

The Company's  properties  summarized by state  including  their gross  leasable
areas (GLA) follows:

<TABLE>
<CAPTION>
     Location                    December 31, 1997                              December 31, 1996
     --------                    -----------------                              -----------------
                  # Properties         GLA          % Leased       # Properties         GLA           % Leased
                  ------------------------------------------      -------------------------------------------
     <S>             <C>         <C>               <C>                 <C>      <C>                   <C>

     Florida           45          5,267,894         91.5%               34        3,958,423           94.7%
     Georgia           25          2,539,507         92.4%                6          592,351           90.5%
     North Carolina     6            554,332         99.0%                3          260,094           98.6%
     South Carolina     1             79,743         84.3%                0                0              NA
     Tennessee          3            208,386         98.5%                0                0              NA
     Ohio               2            629,920         89.1%                0                0              NA
     Alabama            3            516,080         99.9%                5          516,080           99.7%
     Mississippi        2            185,061         96.9%                2          185,061          100.0%
                     ----        -----------       -------             -----    ------------          -------  
     Total             89          9,980,923         92.8%               50       5,512,009            95.0%
                     ====        ===========       =======             =====    ============          =======  
</TABLE>

                                       3

<PAGE>
The  following  table  summarizes  the largest  tenants  occupying the Company's
shopping  centers  based upon  percentage  of total annual rent  exceeding 1% at
December 31, 1997:

<TABLE>
<CAPTION>
                              Summary of Principal Tenants > 1% of Annualized Total Rent
                                       (including Properties Under Development)

                                                        % to Company            % to Company        # of
            Tenant                  SF          Owned GLA        Rent (1)         Rent (1)         Stores
             ------                 --          ---------        --------         --------         ------
          <S>                    <C>               <C>           <C>                  <C>             <C> 
          Publix                 1,209,726         12.1%         $10,079,616          9.8%            28
          Winn Dixie               687,513          6.9%          $5,160,365          5.0%            15
          Kroger                   359,456          3.6%          $3,095,298          3.0%             6
          Harris Teeter            184,563          1.8%          $2,576,534          2.5%             4
          Walgreens                177,365          1.8%          $2,324,358          2.3%            13
          Eckerd                   197,569          2.0%          $2,163,965          2.1%            20
          Blockbuster              122,893          1.2%          $2,063,840          2.0%            19
          K-Mart                   341,264          3.4%          $1,975,338          1.9%             4
          Wal-Mart                 393,487          3.9%          $1,907,608          1.9%             5
          Brunos                   119,840          1.2%          $1,085,574          1.1%             3
          AMC Theater               72,616          0.7%          $1,075,485          1.0%             1
          ----------------------
         (1) Rent includes  annual base rent,  percentage  rent, and  reimbursements  for
             common area  maintenance,  real estate  taxes,  and insurance as of December 31,1997
</TABLE>


The Company's leases have lease terms generally ranging from three to five years
for tenant space under 5,000 square feet. Leases greater than 10,000 square feet
generally have lease terms in excess of five years,  mostly  comprised of anchor
tenants.  Many of the anchor leases contain  provisions  allowing the tenant the
option of extending the term of the lease at  expiration.  The Company's  leases
provide for the monthly payment in advance of fixed minimum rentals,  additional
rents  calculated as a percentage of the tenant's  sales,  the tenant's pro rata
share of real estate taxes, insurance, and common area maintenance expenses, and
reimbursement  for utility costs if not directly  metered.  The following  table
sets forth a schedule of lease expirations for the next ten years, assuming that
no tenants exercise renewal options:

<TABLE>
<CAPTION>
                                                                          Future
                                                         Percent of       Minimum       Percent of
                              Lease                        Total        Rent Under        Total
                           Expiration       Expiring      Company        Expiring        Minimum
                              Year            GLA           GLA           Leases         Rent (2)
                              ----            ---           ---           ------         --------
                           <S>           <C>             <C>           <C>                <C>    

                               (1)          261,091         2.9%        $2,697,050         3.0%
                              1998          798,530         8.8%         9,027,940        10.1%
                              1999          859,765         9.5%        10,207,450        11.5%
                              2000          731,694         8.1%         9,241,225        10.4%
                              2001          719,133         7.9%         8,698,419         9.8%
                              2002          892,399         9.9%         8,555,657         9.6%
                              2003          487,519         5.4%         4,386,541         4.9%
                              2004          318,523         3.5%         2,861,126         3.2%
                              2005          231,293         2.6%         2,350,900         2.6%
                              2006          431,671         4.8%         3,926,686         4.4%
                              2007          435,279         4.8%         3,645,314         4.1%
                                         ------------    -------        -----------       -----
                           10 Yr Total    6,166,897        68.1%       $65,598,308        73.7%
                                         ------------    -------        -----------       -----
</TABLE>


                  (1) leased  currently  under month to month rent or in process
                  of renewal (2) total  minimum rent  includes  current  minimum
                  rent and future contractual rent steps for all properties, but
                  excludes  additional rent such as percentage rent, common area
                  maintenance, real estate taxes and insurance reimbursements.

See the property  table below and also see Item 7,  Management's  Discussion and
Analysis for further information about the Company's properties.
                                       4

<PAGE>

<TABLE>
<CAPTION>

The following table describes the Company's properties owned at December 31, 1997:

                                                              Gross
                                     Year         Year       Leasable      Percentage  Grocery        Grocery        
Property Name                      Acquired    Constructed  Area (GLA)       Leased      GLA           Anchor        
- -------------                      --------    -----------  ----------       ------      ---           ------        
<S>                                  <C>          <C>      <C>                <C>       <C>    <C>

FLORIDA
Jacksonville / North Florida
Anastasia Shopping Plaza             1993         1988       102,342           98.3%    48,555           Publix
Bolton Plaza                         1994         1988       172,938           97.4%         -                 
Carriage Gate                        1994         1978        76,833           86.2%         -                 
Courtyard                            1987         1987        67,794           46.4%    66,446    Albertsons(t)
Ensley Square (j)                    1997         1977        62,361           97.1%    47,786        Delchamps
Millhopper                           1993         1974        84,444           88.3%    37,244           Publix
Newberry Square                      1994         1986       181,006           96.2%    39,795           Publix
Old St. Augustine Plaza              1996         1990       170,220          100.0%    42,112           Publix
Palm Harbor                          1996         1991       168,448           97.1%    45,254           Publix
Pine Tree Plaza (d)                  1997         1998        60,488           95.5%    37,888           Publix
Regency Court                        1997         1992       218,665           99.0%         -                 
South Monroe Commons (d)             1996         1998        80,214           82.0%    48,466       Winn-Dixie
Village Commons (j)                  1988         1988       105,895           91.2%         -                 
Tampa / Orlando
Mainstreet Square                    1997         1988       107,159           88.8%    56,000       Winn-Dixie
Mariner's Village                    1997         1986       117,665           95.0%    45,500       Winn-Dixie
Market Place - St. Petersburg        1995         1983        90,296          100.0%    36,464           Publix
Peachland Promenade                  1995         1991        82,082           97.4%    48,890           Publix
Regency Square at Brandon            1986         1986       341,751           81.1%         -                 
Seven Springs                        1994         1986       162,580           95.1%    35,000       Winn-Dixie
Terrace Walk                         1990         1990        50,926           56.8%         -
Town Square                          1997         1986        42,969          100.0%    14,074    Kash 'N Karry
University Collections               1996         1984       106,627           97.7%    40,143 Kash N Karry (t)
Village Center-Tampa                 1995         1993       181,096           98.7%    36,434           Publix
West Palm Beach / Treasure Coast
Boynton Lakes Plaza                  1997         1993       130,724           89.4%    44,000       Winn-Dixie
Chasewood Plaza                      1992         1986       141,034           90.1%    39,795           Publix
Chasewood Storage                    1992         1986        42,810           99.9%         -
East Port Plaza                      1997         1991       231,656           99.4%    42,112           Publix
Martin Downs Village Center          1992         1985       121,998           92.0%         -                 
Martin Downs Village Shoppes         1992         1988        49,235           91.5%         -
Ocean Breeze                         1992         1985       111,551           93.2%    36,464           Publix
Ocean East (j)                       1996         1997       112,894           77.5%    38,100 Stuarts Fine Foods
Tequesta Shoppes                     1996         1986       109,766           91.8%    39,795           Publix   
Town Center at Martin Downs          1996         1996        64,546          100.0%    56,146           Publix
Wellington Market Place              1995         1990       178,555           91.2%    46,475       Winn-Dixie   
Wellington Town Square               1996         1982       105,150           93.8%    36,464           Publix   
Miami / Ft. Lauderdale
Aventura                             1994         1974       102,876           92.1%    35,908           Publix   
Berkshire Commons                    1994         1992       106,434          100.0%    65,537           Publix   
Garden Square                        1997         1991        90,258           96.3%    42,112           Publix   
North Miami                          1993         1988        42,500          100.0%    32,000           Publix   
Palm Trails Plaza (d)                1997         1998        76,067           78.3%    59,562       Winn-Dixie
Tamiami Trail                        1997         1987       110,867           93.8%    42,112           Publix   
University Market Place              1990         1990       129,121           63.1%    63,139    Albertsons(t)   
Welleby                              1996         1982       109,949           90.0%    46,779           Publix   
   subtotal                                                5,002,790           91.5%

<FN>
(d) property under development or redevelopment
(j) property owned by joint venture - Regency's interest is less than 100%
(R) or last renovation
(t) tenant owns its own building
</FN>
</TABLE>

                                       5


<PAGE>

<TABLE>
<CAPTION>
                                          Drug
Property Name                             Store      Other Anchors or Majors
- -------------                            --------     -----------------------
<S>                                     <C>          <C>  

FLORIDA
Jacksonville / North Florida
Anastasia Shopping Plaza             
Bolton Plaza                                         Wal-Mart
Carriage Gate                                        TJ Maxx
Courtyard                            
Ensley Square (j)                    
Millhopper                                Eckerd
Newberry Square                                      Kmart
Old St. Augustine Plaza                   Eckerd     Waccamaw
Palm Harbor                               Eckerd     Bealls
Pine Tree Plaza (d)                  
Regency Court                                        CompUSA, Office Depot, Sports Authority
South Monroe Commons (d)                  Eckerd
Village Commons (j)                                  Wal-Mart (t), Stein Mart
Tampa / Orlando
Mainstreet Square                       Walgreen's
Mariner's Village                       Walgreen's
Market Place - St. Petersburg             Eckerd
Peachland Promenade                                  Ace Hardware
Regency Square at Brandon                            TJ Maxx, AMC, Staples, Marshalls, Michaels
Seven Springs                                        Kmart
Terrace Walk                         
Town Square                              Rite Aid
University Collections                    Eckerd
Village Center-Tampa                    Walgreen's   Stein Mart
West Palm Beach / Treasure Coast
Boynton Lakes Plaza                     Walgreen's
Chasewood Plaza                         Walgreen's
Chasewood Storage                    
East Port Plaza                         Walgreen's   Kmart, Sears Homelife
Martin Downs Village Center             Walgreen's   Coastal Care
Martin Downs Village Shoppes         
Ocean Breeze                            Walgreen's   Coastal Care
Ocean East (j)                                       Coastal Care
Tequesta Shoppes                        Walgreen's
Town Center at Martin Downs          
Wellington Market Place                 Walgreen's   United Artists
Wellington Town Square                    Eckerd
Miami / Ft. Lauderdale
Aventura                                  Eckerd     Humana
Berkshire Commons                       Walgreen's
Garden Square                             Eckerd
North Miami                               Eckerd
Palm Trails Plaza (d)                
Tamiami Trail                             Eckerd
University Market Place                              Linens Supermarket
Welleby                                 Walgreen's
<FN>

(d) property under development or redevelopment
(j) property owned by joint venture - Regency's interest is less than 100%
(R) or last renovation
(t) tenant owns its own building
</FN>
</TABLE>

                                       6

<PAGE>

<TABLE>
<CAPTION>
                                                              Gross
                                     Year         Year       Leasable      Percentage  Grocery        Grocery        
Property Name                      Acquired    Constructed  Area (GLA)       Leased      GLA           Anchor        
- -------------                      --------    -----------  ----------       ------      ---           ------        
<S>                                  <C>          <C>      <C>                <C>       <C>       <C>

GEORGIA
Atlanta
Ashford Place                        1997         1993        53,345          100.0%         -                      
Braelin Village (j)                  1997         1991       225,922           95.4%    63,986           Kroger     
Briarcliff LaVista                   1997         1962        39,201          100.0%         -                      
Briarcliff Village                   1997         1990       192,660           94.1%         -                      
Buckhead Court                       1997         1984        55,227           95.8%         -                      
Cambridge Square                     1996         1979        68,725           91.4%    32,000       Winn-Dixie
Cromwell Square                      1997         1990        81,826           83.6%         -                     
Cumming 400                          1997         1994       126,899           98.9%    56,146           Publix     
Dunwoody Hall                        1997         1986        79,974          100.0%    34,632              A&P     
Dunwoody Village (j)                 1997         1975       114,657           96.3%    26,950          Bruno's
Loehmann's Plaza                     1997         1986       137,635           86.5%         -                      
Lovejoy Station                      1997         1995        77,336           98.2%    47,955           Publix
Memorial Bend                        1997         1995       177,278           83.6%    56,146           Publix     
Orchard Square                       1995         1987        85,940           89.8%    36,990              A&P    
Paces Ferry Plaza                    1997         1987        61,693          100.0%         -
Powers Ferry Square                  1997         1987        97,809          100.0%     7,216          Harry's     
Powers Ferry Village                 1997         1994        78,995           99.9%    47,955           Publix    
Rivermont Station                    1997         1996        90,323           98.0%    58,261    Harris Teeter    
Roswell Village (d)                  1997         1997       144,071           85.4%    37,888           Publix    
Russell Ridge                        1994         1995        98,556          100.0%    63,296           Kroger
Sandy Plains Village                 1996         1992       168,513           75.9%    60,009           Kroger     
Sandy Springs Village                1997         1997        48,245          100.0%    41,354           Kroger
Trowbridge Crossing (d) (j)          1997         1997        64,060           86.4%    37,888           Publix
Other Markets
LaGrange Marketplace                 1993         1989        76,327           93.6%    46,733       Winn-Dixie     
Parkway Station                      1996         1983        94,290           91.4%    42,130           Kroger
    subtotal                                               2,539,507           92.4%

NORTH CAROLINA
Charlotte
Carmel Commons                       1997         1979       132,647           95.7%    14,300     Fresh Market     
City View                            1996         1993        77,550          100.0%    44,000       Winn-Dixie    
Union Square                         1996         1989        97,191          100.0%    33,000    Harris Teeter    
Raleigh / Durham
Glenwood Village                     1997         1983        42,864          100.0%    27,764    Harris Teeter
Woodcroft                            1996         1984        85,353          100.0%    26,752        Food Lion     
Asheville
Oakley Plaza                         1997         1988       118,727          100.0%    42,317            Bi-Lo    
    subtotal                                                 554,332           99.0%
<FN>

(d) property under development or redevelopment
(j) property owned by joint venture - Regency's interest is less than 100%
(R) or last renovation
(t) tenant owns its own building
</FN>
</TABLE>

                                       7

<PAGE>

<TABLE>
<CAPTION>

Property Name                           Drug                                
- -------------                          Store      Other Anchors or Majors
                                      ----------  -----------------------
<S>                                 <C>            <C>    

GEORGIA                                     
Atlanta                                 
Ashford Place                                      Pier 1 Imports
Braelin Village (j)                                Kmart
Briarcliff LaVista                   Drug Emporium
Briarcliff Village                      Eckerd     TJ Maxx, Office Depot
Buckhead Court                                     Outback Steakhouse
Cambridge Square                     
Cromwell Square                        CVS Drug    Haverty's Furniture
Cumming 400                                        Big Lots
Dunwoody Hall                           Eckerd
Dunwoody Village (j)                 
Loehmann's Plaza                        Eckerd     Loehmann's
Lovejoy Station                      
Memorial Bend                                      TJ Maxx
Orchard Square                         CVS Drug
Paces Ferry Plaza                    
Powers Ferry Square                 Drugs for Less
Powers Ferry Village                   CVS Drug
Rivermont Station                      CVS Drug
Roswell Village (d)                     Eckerd     Ace Hardware
Russell Ridge                        
Sandy Plains Village                               Ace Hardware
Sandy Springs Village                
Trowbridge Crossing (d) (j)          
Other Markets
LaGrange Marketplace                    Eckerd
Parkway Station                      
                            
NORTH CAROLINA
Charlotte
Carmel Commons                          Eckerd     Piece Goods
City View                              CVS Drug
Union Square                           CVS Drug    Consolidated Theatres
Raleigh / Durham
Glenwood Village                     
Woodcroft                               Eckerd     True Value
Asheville
Oakley Plaza                           CVS Drug    Baby Superstore, Western Auto
<FN>


(d) property under development or redevelopment
(j) property owned by joint venture - Regency's interest is less than 100%
(R) or last renovation
(t) tenant owns its own building
</FN>
</TABLE>

                                       8

<PAGE>

<TABLE>
<CAPTION>

                                                 Gross
                                     Year         Year       Leasable      Percentage  Grocery        Grocery        
Property Name                      Acquired    Constructed  Area (GLA)       Leased      GLA           Anchor        
- -------------                      --------    -----------  ----------       ------      ---           ------        

<S>                                  <C>          <C>      <C>                <C>      <C>       <C>

OHIO
Cincinatti
Hyde Park Plaza                      1997         1995       374,743           96.1%   138,592   Kroger,Thriftway  
Columbus
Kingsdale (d)                        1997         1998       255,177           78.9%    55,000         Big Bear  
   subtotal                                                  629,920           89.1%

ALABAMA
Birmingham
Villages of Trussville               1993         1987        69,300          100.0%    38,380          Bruno's  
West County Marketplace              1993         1987       129,155          100.0%    42,848   Food World (t)  
Montgomery
Country Club                         1993         1991        67,622           99.6%    35,922       Winn-Dixie  
Other Markets
Bonner's Point                       1993         1985        87,280          100.0%    34,700       Winn-Dixie  
Marketplace - Alexander City         1993         1987       162,723          100.0%    47,668       Winn-Dixie
  subtotal                                                   516,080           99.9%

TENNESSEE
Nashville
Harpeth Village (j)                  1997         1998        70,091           95.4%    54,510          Bruno's
Marketplace - Murphreesburo (j)      1997         1997        23,500          100.0%         -                   
Peartree Village                     1997         1997       114,795          100.0%    65,538    Harris Teeter  
    subtotal                                                 208,386           98.5%

MISSISSIPPI
Columbia Marketplace                 1993         1988       136,002           95.8%    41,895       Winn-Dixie  
Lucedale Marketplace                 1993         1989        49,059          100.0%    35,059        Delchamps  
  subtotal                                                   185,061           96.9%

SOUTH CAROLINA
Charleston
Merchants Village (d)                1997         1997        79,743           84.3%    37,888           Publix

Total                                                      9,980,923           92.8%

<FN>
(d) property under development or redevelopment
(j) property owned by joint venture - Regency's interest is less than 100%
(R) or last renovation
(t) tenant owns its own building
</FN>
</TABLE>

                                       9

<PAGE>

<TABLE>
<CAPTION>

                                         Drug
Property Name                            Store      Other Anchors or Majors
- -------------                           --------    -----------------------
<S>                                    <C>          <C>    


OHIO
Cincinatti
Hyde Park Plaza                        Walgreen's   Barnes & Noble, Old Navy, Micheals
Columbus
Kingsdale (d)                                       Stein Mart, The Limited, S&K Menswear
                             
ALABAMA
Birmingham
Villages of Trussville                  CVS Drug
West County Marketplace                  Eckerd     Wal-Mart
Montgomery
Country Club                             Harco
Other Markets
Bonner's Point                                      Wal-Mart
Marketplace - Alexander City         
                             
TENNESSEE
Nashville
Harpeth Village (j)                  
Marketplace - Murphreesburo (j)                     Office Max
Peartree Village                         Eckerd     Office Max
                             
MISSISSIPPI
Columbia Marketplace                                Wal-Mart
Lucedale Marketplace                                Wal-Mart (t)
                             

SOUTH CAROLINA
Charleston
Merchants Village (d)                

<FN>
                       

(d) property under development or redevelopment
(j) property owned by joint venture - Regency's interest is less than 100%
(R) or last renovation
(t) tenant owns its own building
</FN>
</TABLE>


                                       10


<PAGE>

Item 3. Legal Proceedings

 The Company is not presently  involved in any litigation nor, to its knowledge,
is any litigation threatened against the Company,  except for routine litigation
arising in the ordinary  course of business  such as "slip and fall"  litigation
which is expected to be covered by  insurance.  In the opinion of  management of
the Company,  such litigation is not expected to have a material  adverse effect
on the business, financial condition or results of operations of the Company.


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

None


                                     PART II


Item 5.Market for the Registrant's Common Equity and Related Shareholder Matters

The  Company's  common stock is traded on the New York Stock  Exchange  ("NYSE")
under  the  symbol  "REG".  The  Company  currently  has   approximately   3,500
shareholders.  The  following  table  sets forth the high and low prices and the
cash  dividends  declared on the Company's  common stock by quarter for 1997 and
1996.

<TABLE>
<CAPTION>
                                                   1997                                      1996
                                    -----------------------------------      -------------------------------------
                                                                Cash                                         Cash
                                      High          Low       Dividends         High          Low         Dividends
                                      Price        Price      Declared          Price        Price        Declared
         <S>                        <C>             <C>             <C>         <C>          <C>            <C>

         March 31                   $ 28.000        25.000          .42         17.500       15.875         .405
         June 30                      28.125        24.875          .42         21.125       16.500         .405
         September 30                 28.250        24.875          .42         22.375       19.250         .405
         December 31                  28.000        24.250          .42         26.250       21.125         .405
</TABLE>



On March 7, 1997, the Company acquired, through its partnership,  Regency Retail
Partnership,   L.P.  ("RRLP"),   substantially  all  of  the  assets  of  Branch
Properties, L.P. ("Branch"), a privately held real estate firm based in Atlanta,
Georgia,  for $232.4 million.  The assets acquired from Branch included 100% fee
simple   interests  in  19  operating   shopping  centers  and  1  center  under
development,  and also partnership  interests  (ranging from 50% to 93%) in four
partnerships with outside investors that owned 4 operating  shopping centers and
2 centers under  development.  At closing and during 1997, RRLP issued 3,572,427
units of limited  partnership  interest  (the  "Units")  and the Company  issued
155,797  shares of common  stock in  exchange  for the assets  acquired  and the
liabilities assumed from Branch. The Units are redeemable on a one-for-one basis
in exchange for shares of common stock. On June 13, 1997, 3,027,080  partnership
units were converted to common stock. In connection with the Units and shares of
common  stock  issued in exchange  for  Branch's  assets,  SC-USREALTY  acquired
1,750,000  shares  during  August and  December,  1997 at  $22.125  per share in
accordance with their rights as provided for in the Agreement.

Additional  Units and shares of common stock may be issued on the  fifteenth day
after  the  first,  second  and  third  anniversaries  of the  closing  (each an
"Earn-Out  Closing"),  based  on the  performance  of  certain  properties  (the
"Property Earn-Out"), and additional shares of common stock may be issued at the
first and second  Earn-Out  Closings  based on revenues  earned from third party
management  and leasing  contracts  (estimated to be  approximately  $750).  The
formula for the Property  Earn-Out  provides for  calculating  any  increases in
value on a property-by-property  basis, based on any increases in net income for
certain properties in the Partnership's  portfolio as of February 15 of the year
of calculation.  The Property  Earn-Out is limited to 722,997 Units at the first
Earn-Out  Closing and 1,020,061  Units at all Earn-Out  Closings  (including the
first Earn-Out Closing).  The acquisition of Branch is discussed further in note
2,  Acquisition  and  Development  of Real  Estate,  of the  notes  to the  1997
consolidated financial statements.
                                       11


<PAGE>
The Company declares  quarterly cash dividends on the 2.5 million Class B common
shares  outstanding.  At December  31,  1997,  the Class B common was owned by a
single  shareholder.  During 1997, a  distribution  of $.5140 per share was paid
quarterly.  During 1996, a distribution  of $.4961 per share was paid quarterly.
The 2.5 million  Class B common shares are  convertible  into  2,975,468  common
shares, subject to certain ownership limitations.

Under the loan  agreement  with the  lenders of the  Company's  acquisition  and
development  line of  credit,  distributions  may not  exceed  95% of Funds from
Operations  ("FFO") based on the  immediately  preceding four  quarters.  FFO is
defined in accordance  with the NAREIT  definition  as described  under Item 7.,

Management's Discussion and Analysis. Also in the event of any monetary default,
the Company will not make distributions to shareholders.

Item6.Selected Consolidated Financial Data (in thousands, except per share data)

The following table sets forth Selected Financial Data on a historical basis for
the five years ended December 31, 1997, for the Company and the commercial  real
estate business of The Regency Group, Inc. ("TRG" or "Regency Properties"),  the
predecessor of the Company.  This information should be read in conjunction with
the financial  statements of the Company  (including  the related notes thereto)
and Management's  Discussion and Analysis of the Financial Condition and Results
of  Operations,  each  included  elsewhere  in this Form  10-K.  The  historical
Selected  Financial Data for Regency Realty Corporation for the four year period
ended  December  31, 1997 and for the period  from July 9, 1993 to December  31,
1993, have been derived from the audited  financial  statements.  The historical
Selected  Financial  Data for the Regency  Properties as of November 5, 1993 has
been derived from audited financial statements.

                                       12

<PAGE>

<TABLE>
<CAPTION>

Item 6.  Selected Consolidated Financial Data  (in thousands, except per share data) - (continued)
                                                                                                              Regency
                                                            Regency Realty Corporation                       Properties
                                        ------------------------------------------------------------------- -------------
                                                                                              Period Ended  Period Ended
                                                      Year Ended December 31,                   Dec. 31,      Nov. 5,
                                        ----------------------------------------------------
                                           1997         1996         1995          1994           1993          1993
                                           ----         ----         ----          ----           ----          ----
                                                                                                              (note 1)
<S>                                     <C>          <C>          <C>           <C>           <C>           <C>
Operating Data:
Revenues:
  Rental revenues                          $89,306       43,433        31,555        25,673          3,094         7,375
  Management,  leasing and
     brokerage fees                          8,448        3,444         2,426         2,332            572         2,247
  Equity in income of real estate
     partnership investments                    33           70             4            17              3            18
                                        -----------  -----------  ------------  ------------  ------------- -------------
       Total revenues                       97,787       46,948        33,985        28,022          3,669         9,640
                                        -----------  -----------  ------------  ------------  ------------- -------------

Operating expenses:
  Operating, maintenance and real
     estate taxes                           22,904       12,065         8,683         7,140            862         3,365
  General and administrative                 9,964        6,048         4,894         4,531            736         2,835
  Depreciation and amortization             16,303        8,059         5,854         5,266            679         1,564
                                        -----------  -----------  ------------  ------------  ------------- -------------
      Total operating expenses              49,171       26,172        19,431        16,937          2,277         7,764
                                        -----------  -----------  ------------  ------------  ------------- -------------

Interest expense, net of income             18,667       10,811         8,969         5,701            496         3,937
                                        -----------  -----------  ------------  ------------  ------------- -------------
      Income before minority interests      29,949        9,965         5,585         5,384            895       (2,061)

Minority interest of redeemable
  operating partnership units              (2,042)            -             -             -              -             -
Minority interest of limited partners        (505)            -             -             -              -           126
Equity in loss of unconsolidated
  partnership                                    -            -             -             -              -         (111)
Other non-recurring income, net                  -            -             -             -              -         3,291
                                        -----------  -----------  ------------  ------------  ------------- -------------
  Net income                                27,402        9,965         5,585         5,384            895         1,245
  Preferred stock dividends                      -           58           591           283              -             -
                                        -----------  -----------  ------------  ------------  ------------- -------------
  Net income for common
    stockholders                           $27,402        9,907         4,994         5,101            895         1,245
                                        ===========  ===========  ============  ============  ============= =============
  Earnings per share (EPS):
              Basic                          $1.28         0.82          0.75          0.80           0.14           n/a
              Diluted                        $1.23         0.82          0.75          0.80           0.14           n/a
                                        ===========  ===========  ============  ============  ============= =============
Other Data:
Common stock outstanding including
  Class B common if converted               26,967       13,590         9,704         6,455          6,333           n/a
Redeemable partnership units                   574           59             -             -              -             -
  outstanding to minority interests
Company owned gross leasable area            9,981        5,512         3,981         3,182          2,337         1,145
Number of properties (at end of period)         89           50            36            30             23             8

Balance Sheet Data:
Real estate investments at cost           $834,402      393,403       279,046       217,539        152,821             -
Total assets                               826,849      386,524       271,005       214,082        153,653             -
Total debt                                 278,050      171,607       115,617       107,998         53,521             -
Stockholders' equity                       513,627      206,726       147,007       101,760         97,416             -
<FN>
Note 1: Such  Combined  Financial  Statements  have been prepared to reflect the
historical  combined  operations of the Regency  Properties  associated with the
ownership  of  the  properties  and  the   management,   leasing,   acquisition,
development and brokerage  business acquired by the Company from TRG on November
5,  1993 in  connection  with the  Company's  Initial  Public  Offering  ("IPO")
completed November 5, 1993.
</FN>
</TABLE>

                                       13

<PAGE>

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

The following  discussion  should be read in conjunction  with the  accompanying
Consolidated   Financial   Statements   and  Notes  thereto  of  Regency  Realty
Corporation (the "Company") appearing elsewhere herein.  Certain statements made
in the following discussion may constitute  "forward-looking  statements" within
the  meaning of the  Private  Securities  Litigation  Reform  Act of 1995.  Such
statements  involve  unknown  risks and  uncertainties  of business and economic
conditions pertaining to the operation,  acquisition, or development of shopping
centers  including the retail business  sector,  and may cause actual results of
the Company in the future to  significantly  differ from any future results that
may be implied by such forward-looking statements.

Shopping Center Business

The Company's  principal  business is owning,  operating and developing  grocery
anchored  neighborhood  infill  shopping  centers in the Eastern  Unites States.
Infill refers to shopping centers within a targeted  investment  market offering
sustainable  competitive  advantages  such as barriers to entry  resulting  from
zoning  restrictions,  growth  management  laws, or limited new competition from
development  or  expansions.   The  Company's  properties  summarized  by  state
including their gross leasable areas (GLA) follows:

<TABLE>
<CAPTION>

     Location                          December 31, 1997                       December 31, 1996
     --------                          -----------------                       -----------------
                              # Properties    GLA    % Leased          # Properties    GLA     % Leased
                              -------------------------------          ---------------------------------
     <S>                        <C>      <C>             <C>            <C>         <C>           <C>
     
     Florida                       45     5,267,894      91.5%            34        3,958,423      94.7%
     Georgia                       25     2,539,507      92.4%             6          592,351      90.5%
     North Carolina                 6       554,332      99.0%             3          260,094      98.6%
     South Carolina                 1        79,743      84.3%             -                -         NA
     Tennessee                      3       208,386      98.5%             -                -         NA
     Ohio                           2       629,920      89.1%             -                -         NA
     Alabama                        5       516,080      99.9%             5          516,080      99.7%
     Mississippi                    2       185,061      96.9%             2          185,061     100.0%
     Total                      -----    ----------      ----           -----       ---------     ------   
                                   89    9,980,923       92.8%            50        5,512,009      95.0%
                                =====    ==========      ====           =====       =========     ======
</TABLE>

The Company is focused on building a platform of grocery  anchored  neighborhood
shopping  centers because grocery stores provide  convenience  shopping of daily
necessities,  foot  traffic for adjacent  local  tenants,  and should  withstand
adverse  economic  conditions.  The Company's  current  investment  markets have
continued to offer strong stable economies, and accordingly, the Company expects
to  realize  growth in net  income as a result of  increasing  occupancy  in the
portfolio,  increasing  rental rates,  development  and  acquisition of shopping
centers in targeted markets,  and redevelopment of existing shopping centers. At
December 31, 1997, 51 of the Company's  shopping centers are anchored by the 1st
or 2nd most  dominant or preferred  grocery  store in its  particular  market as
measured by total market  sales,  based upon  internal  research.  The following
table  summarizes  the four largest  tenants  occupying the  Company's  shopping
centers,  the average remaining years on their current leases, and their average
annual sales per square foot in the stores that they occupy:

<TABLE>
<CAPTION>

                                                                      Average         Regency      All Corporate
     Grocery          Number of        % of           % of        Remaining Lease       Store          Stores
      Anchor            Stores       Total GLA     Annual Rent          Term          Sales PSF      Sales PSF*
                        ------       ---------     -----------          ----          ---------   -  ----------
     <S>                  <C>          <C>              <C>             <C>              <C>             <C> 
     Publix               28           12.1%            9.8%            12 yrs           $509            $416
     Winn Dixie           15            6.9%            5.0%            11 yrs           $284            $278
     Kroger                6            3.6%            3.0%            10 yrs           $427            $403
     Harris Teeter         4            1.8%            2.5%            16 yrs           $433            $362
</TABLE>


     --Corporate  information  pertains  to all stores  operated  by the
       tenant and was acquired from publicly available data.
                                       14

<PAGE>
Acquisition and Development of Shopping Centers

The Company acquired 35 shopping centers during 1997 (the "1997  Acquisitions"),
5 of which are partially operating while undergoing  redevelopment scheduled for
completion during 1998. The Company also completed the development of 3 shopping
centers and began  development  on 2 shopping  centers  scheduled for completion
during 1998.  The  following  summarizes  the  locations of the  Company's  1997
acquisition and development activity:

<TABLE>
<CAPTION>
                            Completed         In Process         Completed        In Process         GLA at
          Location         Acquisitions     Redevelopments       Development      Development      Completion
          --------         ------------     --------------       -----------      -----------      ----------
     <S>                 <C>               <C>                  <C>             <C>                 <C>    
     Florida                    10                1                   -                2            1,329,093
     Georgia                    19                2                   -                -            1,947,156
     North Carolina              3                -                   -                -              294,238
     South Carolina              1                1                   -                -               79,743
     Tennessee                   -                -                   3                -              208,386
     Ohio                        2                1                   -                -              629,920
                         ---------         --------             --------        --------            ----------                  
     Total                      35               5                    3                2            4,488,536
                         =========         ========             ========        ========            ==========
     GLA                 4,123,869          603,819              208,386         156,281
                         =========         ========             ========        ========             
     Total Investment
     at Completion
     (in thousands)       $373,858          $53,399              $32,183        $15,794             $ 421,835
                         =========         ========             ========        =======             =========
</TABLE>

On March 7, 1997, the Company acquired, through its partnership,  Regency Retail
Partnership,   L.P.  ("RRLP"),   substantially  all  of  the  assets  of  Branch
Properties, L.P. ("Branch"), a privately held real estate firm based in Atlanta,
Georgia,  for $232.4 million.  The assets acquired from Branch included 100% fee
simple   interests  in  19  operating   shopping  centers  and  1  center  under
development,  and also partnership  interests  (ranging from 50% to 93%) in four
partnerships with outside investors that owned 4 operating  shopping centers and
2 centers under  development.  The Company also assumed the third party property
management  contracts of Branch on approximately 3 million SF of shopping center
GLA that generate management fees and leasing commission revenues.

At closing and during 1997, RRLP issued  3,572,427 units of limited  partnership
interest (the "Units") and the Company  issued 155,797 shares of common stock in
exchange for the assets  acquired and the liabilities  assumed from Branch.  The
Units are  redeemable  on a  one-for-one  basis in exchange for shares of common
stock. On June 13, 1997,  3,027,080  partnership  units were converted to common
stock.  The purchase  price of Branch,  as recorded in the  Company's  financial
statements,  includes  approximately  $96.4  million for Units and common  stock
issued (based upon $26.85,  the fair market value of the Company's  common stock
on the date the acquisition was publicly announced), $27.3 million in cash, $7.8
million for transaction  costs and to establish  reserves,  and $97.2 million of
assumed debt.

Additional  Units and shares of common stock may be issued on the  fifteenth day
after  the  first,  second  and  third  anniversaries  of the  closing  (each an
"Earn-Out  Closing"),  based  on the  performance  of  certain  properties  (the
"Property Earn-Out"), and additional shares of common stock may be issued at the
first and second  Earn-Out  Closings  based on revenues  earned from third party
management  and leasing  contracts  (estimated to be  approximately  $750).  The
formula for the Property  Earn-Out  provides for  calculating  any  increases in
value on a property-by-property  basis, based on any increases in net income for
certain properties in the Partnership's  portfolio as of February 15 of the year
of calculation.  The Property  Earn-Out is limited to 722,997 Units at the first
Earn-Out  Closing and 1,020,061  Units at all Earn-Out  Closings  (including the
first Earn-Out Closing).

During  1997,  in addition  to the Branch  Properties,  the Company  acquired 13
grocery  anchored  shopping  centers for $163.3  million for cash including debt
assumed of $31.4 million representing 1.9 million SF, two of which are partially
operating while undergoing  redevelopment.  During 1996, the Company acquired 13
grocery  anchored  shopping  centers  representing  1.4 million  square feet for
$107.1  million (the "1996  Acquisitions").  These  acquisitions  are  discussed
further in note 2,  Acquisition and Development of Real Estate,  of the notes to
the 1997 consolidated financial statements.
                                       15

<PAGE>
Liquidity and Capital Resources

Net cash provided by operating activities was $43.0 million,  $16.0 million, and
$15.9  million  for  the  years  ended   December  31,  1997,   1996  and  1995,
respectively,  and  is  the  primary  source  of  funds  to  pay  dividends  and
distributions  on outstanding  common stock and Units,  maintain and operate the
shopping  centers,  and pay  interest  and  scheduled  principal  reductions  on
outstanding  debt.  Changes in net cash  provided  by  operating  activities  is
further  discussed  below  under  results  from  operations.  Net  cash  used in
investing  activities was $188.5  million,  $109.8  million,  and $61.5 million,
during 1997, 1996, and 1995, respectively, as discussed above in Acquisitions of
Shopping Centers.  Net cash provided by financing activities was $153.8 million,
$98.7 million, and $46.2 million during 1997, 1996, and 1995, respectively.

The Company paid dividends and distributions of $37 million,  $16.2 million, and
$10.8  million,  during  1997,  1996,  and 1995,  respectively  (see  Funds from
Operations  below for further  discussion on payment of  dividends).  In January
1997, the Company  increased its quarterly  common dividend and distribution per
Unit to $.42 per  share  vs.  $.405 per  share in 1996 and  during  1997  issued
additional  common shares and Units as discussed  below.  In January  1998,  the
Company  increased its quarterly  common dividend and  distribution  per Unit to
$.44 per share, and accordingly,  total dividends and distributions  expected to
be paid by the Company during 1998 will increase substantially over 1997.

The Company's total indebtedness at December 31, 1997 and 1996 was approximately
$278.0  million and $171.6  million,  respectively,  of which $199.1 million and
$94.1 million had fixed  interest rates  averaging 7.3% and 7.6%,  respectively.
The weighted  average  interest rate on total debt at December 31, 1997 and 1996
was 7.3% and  7.5%,  respectively.  During  1997,  the  Company,  as part of its
acquisition  activities,  assumed  approximately  $142.4  million  of  debt,  as
compared to $3.9 million during 1996. The cash portion of the purchase price for
the 1997  Acquisitions  was  financed  from the  Company's  $150 million line of
credit (the "Line").  At December 31, 1997 and 1996, the balance of the Line was
$48.1 million and $73.7 million,  respectively.  The Line has a variable rate of
interest  equal to the London  Inter-bank  Offered Rate ("Libor") plus 150 basis
points.

On February 24,  1998,  the Company  entered into an agreement  with the various
banks that provide the Line to increase the unsecured  commitment amount to $300
million,  provide for a $150 million  competitive  bid facility,  and reduce the
interest  rate on the line based upon  achieving an  investment  grade rating of
BBB- or higher  from  Standard & Poors  (S&P) and a Baa3  rating or higher  from
Moody's Investor Service (Moody's). Once ratings are achieved, the interest rate
on the Line will be  reduced  to Libor plus  .95%,  and  further  reduced if the
Company receives ratings better than the minimum requirement from both agencies.
During the 1st quarter of 1998, the Company  received  investment  grade ratings
from Moody's of Baa2, and a rating of BBB- from S&P.

During  1996,  the  Company  entered  into  a  Stock  Purchase   Agreement  (the
"Agreement") with SC-USREALTY.  Under the Agreement,  the Company agreed to sell
7,499,400  shares of common stock to SC-USREALTY at a price of $17.625 per share
(the fair market  value of the  Company's  Common Stock on the date the terms of
the Agreement were reached) representing total maximum proceeds of approximately
$132 million.  During 1996, the Company sold 3,651,800 shares to SC-USREALTY for
approximately  $64.4  million and the  proceeds  were used to pay down the Line.
During March and June,  1997, the Company issued the remaining  3,847,600 shares
to SC-USREALTY  generating  proceeds of  approximately  $67.8 million which were
used to pay down the Line,  completing  the  issuance of common  stock under the
original commitment.

As part of the Agreement,  SC-USREALTY also has  participation  rights entitling
them to  purchase  additional  equity in the  Company  at the same price as that
offered to other purchasers in order to preserve their pro rata ownership in the
Company.  In  connection  with the Units and  shares of common  stock  issued in
exchange for Branch's assets on March 7, 1997,  SC-USREALTY  acquired  1,750,000
shares during  August and  December,  1997 at $22.125 per share (the fair market
value of the Company's  common stock on the date the agreement to acquire Branch
was entered into) in accordance with their rights. For further discussion of the
Branch  acquisition or the  Agreement,  see notes 2 and 6, to the Company's 1997
consolidated financial statements.
                                       16

<PAGE>

On July 11, 1997, the Company sold 2,415,000  shares to the public at $27.25 per
share. In connection with that offering,  SC-USREALTY purchased 1,785,000 shares
at $27.25  directly  from the  Company.  On August 11,  1997,  the  Underwriters
exercised the over-allotment option and the Company issued an additional 129,800
shares to the public and 95,939 shares to SC-USREALTY at $27.25 per share. Total
net  proceeds  from the sale of common  stock to the public and  SC-USREALTY  of
approximately  $117  million  were used to reduce the  balance of the Line.  The
unused commitment  currently available under the Line for future acquisition and
development activity is approximately $101.9 million at December 31, 1997.

The  Company  qualifies  and  intends to continue to qualify as a REIT under the
Internal  Revenue  Code.  As a REIT,  the  Company is allowed to reduce  taxable
income  by  all  or  a  portion  of  its   distributions  to  stockholders.   As
distributions  have exceeded  taxable  income,  no provision for federal  income
taxes has been made.  While the Company  intends to continue to pay dividends to
its  stockholders,  the Company  will  reserve  such  amounts of cash flow as it
considers  necessary  for the proper  maintenance  and  improvement  of its real
estate, while still maintaining its qualification as a REIT.

The Company's  real estate  portfolio has grown  substantially  during 1997 as a
result of the  acquisitions  and  developments  discussed  above.  In 1998,  the
Company intends to exceed its 1997 level of acquisitions  and  development.  The
Company expects to meet the related capital  requirements from borrowings on the
Line,  and from  additional  public  equity  and debt  offerings.  Because  such
acquisition and development activities are discretionary in nature, they are not
expected to burden the  Company's  capital  resources  currently  available  for
liquidity  requirements.  The Company  expects  that cash  provided by operating
activities,  unused  amounts  available  under the Line,  and cash  reserves are
adequate to meet liquidity requirements.

Recent Events

On March 11,  1998,  the Company  acquired  the real  estate  assets of entities
comprising the Midland Group ("Midland")  consisting of 21 shopping centers (the
"Midland Properties") plus a development pipeline of 11 shopping centers. Of the
21 centers  acquired,  20 are anchored by Kroger.  Eight of the shopping centers
included in the  development  pipeline  will be owned through a joint venture in
which  the  Company  will  own  less  than a 50%  interest  upon  completion  of
construction.  At closing and during 1998,  the Company  will pay  approximately
$230.4  million for the  properties  and to pay  transaction  costs  through the
issuance of units of RRLP  valued at $26.58 per unit (the fair  market  value of
the Company's  common stock on the date the terms of the acquisition were agreed
to) or cash of $47 million,  the  assumption of $92.5 million of debt, and $90.9
million to pay off existing  secured real estate  loans.  The Company will incur
additional  costs to establish  reserves,  pay  severance,  and prepay  existing
assumed  loans.  Subsequent to 1998,  the Company  expects to pay  approximately
$12.7 million to acquire  equity  interests in the  development  pipeline as the
properties  reach  stabilization.  The  Company  may  also be  required  to make
payments  aggregating  $10.5  million  through  the year  2000  contingent  upon
increases in net income from existing properties,  the development pipeline, and
new  properties  developed  or  acquired  in  accordance  with the  contribution
agreement.

Results from Operations

Comparison of 1997 to 1996

Revenues  increased $50.8 million or 108% to $97.8 million in 1997. The increase
was due  primarily  to the 1997  Acquisitions  and 1996  Acquisitions  providing
increases in revenues of $49.8 million  during 1997.  At December 31, 1997,  the
real estate  portfolio  contained  approximately 10 million SF, was 92.8% leased
and had average rents of $9.34 per SF. Minimum rent  increased  $35.4 million or
102%,  and  recoveries  from tenants  increased  $9.3 million or 121%. On a same
property basis  (excluding the 1997 and 1996  Acquisitions)  revenues  increased
$960 or 2%,  primarily  due to higher  percentage  rents and  operating  expense
recoveries from tenants. Revenues from property management,  leasing, brokerage,
and  development  services  provided on properties not owned by the Company were
$8.4 million in 1997 compared to $3.4 million in 1996,  the increase due to fees
earned from third property  management and leasing contracts acquired as part of
the acquisition of Branch.  At December 31, 1997, the Company  managed  shopping
centers  and  office  buildings  owned  entirely  by  third  parties  containing
approximately 4.4 million SF vs. 1.2 million SF at December 31, 1996.
                                       17

<PAGE>
Operating  expenses  increased  $23.0  million or 88% to $49.2  million in 1997.
Combined  operating  and  maintenance,  and real estate  taxes  increased  $10.8
million or 89% during 1997 to $22.9  million.  The increases are due to the 1997
and 1996  Acquisitions  generating  operating and maintenance  expenses and real
estate tax  increases of $10.6 million  during 1997.  On a same property  basis,
operating and maintenance  expenses and real estate taxes increased $226, or 2%.
General and administrative  expense increased 64.7% during 1997 to $10.0 million
due to the hiring of new  employees  and related  office  expenses  necessary to
manage the 52 shopping centers acquired during 1996 and 1997, as well as, the 44
shopping  centers that the Company began managing for third parties during 1997.
Depreciation  and  amortization  increased  $8.2  million  during  1997  or 102%
primarily  due to the 1997 and 1996  Acquisitions  generating  $7.7  million  in
depreciation and amortization.

Interest  expense  increased to $19.7 million in 1997 from $11.5 million in 1996
or 71% due primarily to increased  average  outstanding loan balances related to
the financing of the 1997 and 1996  Acquisitions  on the Line and the assumption
of debt, as discussed under  Acquisition and Development of Shopping Centers and
Liquidity and Capital Resources.

Net income for common stockholders was $27.4 million in 1997 vs. $9.9 million in
1996, a $17.5  million or 177%  increase for the reasons  previously  described.
Diluted  earnings per share in 1997 was $1.23 vs. $0.82 in 1996,  an increase of
50% due to the increase in net income combined with the dilutive impact from the
increase in weighted  average  common  shares and  equivalents  of 12.4  million
primarily  due to the  Acquisition  of the Branch  Properties,  the  issuance of
shares to SC-USREALTY,  and the public offering discussed  previously (see notes
2,  6  and  7,  to  the  1997  consolidated  financial  statements  for  related
discussions).

Comparison of 1996 to 1995

Revenues increased $13 million or 38% to $46.9 million in 1996. The increase was
due primarily to the 1996  Acquisitions  discussed above, and 6 shopping centers
purchased  during  1995  for  $53.3  million  ("1995  Acquisitions"),  providing
increases in revenues of $10 million during 1996. At December 31, 1996, the real
estate portfolio  contained  approximately  5.5 million SF, was 95.4% leased and
had average rents of $8.73 per SF.  Minimum rent  increased $9.7 million or 39%,
and  recoveries  from tenants  increased $1.9 million or 32%. On a same property
basis (excluding the 1996 and 1995  Acquisitions)  revenues increased $3 million
or 10%,  primarily  due to  increased  based rent from 3 new anchor  tenants who
opened  during 1996 at 3 of the  Company's  shopping  centers  (the "1995 Anchor
Expansions").   Revenues  from  property  management,  leasing,  brokerage,  and
development  services  provided on properties not owned by the Company were $3.4
million in 1996  compared  to $2.4  million in 1995,  the  increase  due to fees
earned on build to suit development activity. At December 31, 1996 and 1995, the
Company managed  shopping  centers and office  buildings owned entirely by third
parties containing approximately 1.2 million SF.

Operating  expenses  increased  $6.7  million  or 29% to $26.2  million in 1996.
Combined operating and maintenance, and real estate taxes increased $3.4 million
or 39% during 1996 to $12.1 million.  The increases are due to the 1996 and 1995
Acquisitions  generating  operating and maintenance expenses and real estate tax
increases of $2.7 million during 1996. On a same property  basis,  operating and
maintenance  expenses and real estate taxes increased $651, or 11% primarily due
to the 1995 Anchor Expansions.  General and administrative expense increased 24%
during 1996 to $6 million due to the hiring of new employees and related  office
expenses  necessary to manage the 20 shopping  centers  acquired during 1995 and
1996.  Depreciation and  amortization  increased $2.2 million during 1996 or 38%
primarily due to the 1996 and 1995 Acquisitions and the 1995 Anchor Expansions.

Net interest  expense  increased  to $10.1  million in 1996 from $8.4 million in
1995 or 21% due primarily to increased average outstanding loan balances related
to the 1996 and 1995  Acquisitions.  Outstanding  debt at December  31, 1996 was
$171.6 million vs. $115.6 million in 1995. Preferred stock dividends declined as
a result of the full  conversion of the remaining  Series A preferred stock into
common stock during 1996.

Net income for common  stockholders was $9.9 million in 1996 vs. $5 million
in 1995, a $4.9 million or 98%  increase for the reasons  previously  described.
Diluted earnings per share in 1996 was $0.82 vs. $0.75 in 1995, an increase
                                       18

<PAGE>
of 9.3% due to the increase in net income combined with the dilutive impact from
the increase in weighted average common shares and equivalents of 722 due to the
issuance of shares to SC-USREALTY discussed previously (see notes 2, 6 and 7, to
the 1997 consolidated financial statements for related discussions).

Funds from Operations

The Company considers funds from operations  ("FFO"), as defined by the National
Association  of  Real  Estate  Investment  Trusts  as net  income  (computed  in
accordance with generally accepted  accounting  principles)  excluding gains (or
losses) from debt  restructuring and sales of income producing property held for
investment,  plus  depreciation  and  amortization  of real  estate,  and  after
adjustments for unconsolidated investments in real estate partnerships and joint
ventures,  to be the industry  standard for  reporting  the  operations  of real
estate investment  trusts ("REITs").  Adjustments for investments in real estate
partnerships  are calculated to reflect FFO on the same basis.  While management
believes  that FFO is the most relevant and widely used measure of the Company's
performance, such amount does not represent cash flow from operations as defined
by  generally  accepted  accounting  principles,  should  not be  considered  an
alternative   to  net  income  as  an  indicator  of  the  Company's   operating
performance,  and is not  indicative  of cash  available  to fund all cash  flow
needs.  Additionally,  the Company's  calculation of FFO, as provided below, may
not be comparable to similarly titled measures of other REITs.

FFO increased by 149% from 1996 to 1997 as a result of the acquisition  activity
discussed  above  under  "Results  of  Operations".  FFO for the  periods  ended
December 31, 1997 and 1996 are summarized in the following table:


<TABLE>
<CAPTION>

                                                                      1997               1996              1995
                                                                      ----               ----              ----
<S>                                                               <C>                <C>                <C>    

Net income for common stockholders                                $ 27,402              9,907             4,994
Add (subtract):
  Real estate depreciation and amortization, net                    15,671              8,049             5,833
  Gain on sale of office building                                    (451)                  -                 -
  Minority interests in net income of
    Redeemable partnership units                                     2,042                  -                 -
                                                                    ------             ------            ------
Funds from operations                                             $ 44,663             17,956            10,827
                                                                    ======             ======            ======

Cash flow provided by (used by):
  Operating activities                                            $ 43,044             16,004            15,892
  Investing activities                                            (188,533)          (109,842)          (61,504)
  Financing activities                                             153,782             98,730            46,153
</TABLE>


Environmental Matters

The Company like others in the commercial  real estate  industry,  is subject to
numerous  environmental  laws and  regulations and the operation of dry cleaning
plants at the Company's shopping centers is the principal environmental concern.
The Company  believes  that the dry cleaners are  operating in  accordance  with
current laws and  regulations  and has  established  procedures to monitor their
operations.   Based  on   information   presently   available,   no   additional
environmental  accruals  were made and  management  believes  that the  ultimate
disposition  of currently  known matters will not have a material  effect on the
financial position,  liquidity, or operations of the Company. See note 11 of the
consolidated financial statements for further discussion.
                                       19

<PAGE>
Inflation

Inflation has remained  relatively  low during the past three years and has
had a minimal  impact on the  operating  performance  of the  shopping  centers,
however,  substantially all of the Company's long-term leases contain provisions
designed to mitigate the adverse impact of inflation.  Such  provisions  include
clauses  enabling the Company to receive  percentage  rentals  based on tenants'
gross sales, which generally increase as prices rise, and/or escalation clauses,
which  generally  increase  rental  rates  during the terms of the leases.  Such
escalation clauses are often related to increases in the consumer price index or
similar  inflation  indices.  In addition,  many of the Company's leases are for
terms of less than ten years,  which permits the Company to seek increased rents
upon re-rental at market rates. Most of the Company's leases require the tenants
to pay their share of operating  expenses,  including  common area  maintenance,
real estate  taxes,  insurance  and  utilities,  thereby  reducing the Company's
exposure to increases in costs and operating expenses resulting from inflation.
Year 2000 System Conversions

The Company has  conducted a  comprehensive  review of its  computer  systems to
identify the systems that could be affected by the "Year 2000" problem and is in
process of resolving the issue.  The Year 2000 problem is the result of computer
programs  being  written  using  two  digits  rather  than  four to  define  the
applicable year. Any of the Company's programs that have time sensitive software
may  recognize a date using "00" as the year 1900  rather than 2000.  This could
result in major system  failure and  miscalculations.  During 1997,  the Company
converted  its  operating   system,   and  its  general   accounting  and  lease
administration  software  systems  to  versions  containing  modifications  that
corrected  for the Year 2000  problem.  Both  suppliers  have received ITAA 2000
certification  from The  Information  Technology  Association  of  America,  the
industry's century date change certification  program. The Company will continue
to assess its other internal systems and reprogram or upgrade as necessary.  The
Company is also reviewing the Year 2000 system conversions of other companies of
which it does business in order to determine their compliance.



I
tem 8.   Consolidated Financial Statements and Supplementary Data

The Consolidated  Financial  Statements and supplementary  data included in this
Report are listed in Part IV, Item 14(a).



Item 9.   Changes in and Disagreements with Accountants on Accounting and 
          Financial Disclosure

None.

                                    PART III

Item 10.  Directors and Executive Officers of the Registrant

Information  concerning the directors of the Company is  incorporated  herein by
reference  to the  Company's  definitive  proxy  statement  to be filed with the
Securities and Exchange  Commission  within 120 days after the end of the fiscal
year  covered  by this Form 10-K with  respect  to its 1998  Annual  Meeting  of
Shareholders.
                                       20

<PAGE>
The following table provides  information  concerning the executive  officers of
the Company,  several of which were officers of TRG for five years or more prior
to the Company's acquisition of TRG's real estate business in November, 1993.

<TABLE>
<CAPTION>
- ---------------------------------- ---------------------------------------------------------------
                                                     Position with the Company;
              Name                                  Principal Occupations During
             (Age)                                       Past Five Years
- ---------------------------------- ---------------------------------------------------------------
<S>                                <C>    

Martin E. Stein, Jr. (45)          Chairman,   Chief  Executive   Officer  and  Director  of  the
                                   Company, and President, Chief Executive Officer and Director
                                   of TRG
- ---------------------------------- ---------------------------------------------------------------

Bruce M. Johnson (50)              Managing  Director and Chief Financial Officer of the Company,
                                   and  previously  Vice  President of Investment  Management and
                                   Acquisitions of TRG.
- ---------------------------------- ---------------------------------------------------------------

Robert C. Gillander, Jr. (44)      Managing   Director  of  Investments  for  the  Company,   and
                                   previously Vice President of Development of TRG
- ---------------------------------- ---------------------------------------------------------------

James D. Thompson (42)             Managing   Director  of  Operations   for  the  Company,   and
                                   previously  Vice  President of Asset  Management  in North and
                                   Central Florida regions of TRG.
- ---------------------------------- ---------------------------------------------------------------

Lee S. Wielansky (46)              Managing   Director  of  Investments   of  the  Company,   and
                                   previously  President and Chief  Executive  Officer of Midland
                                   Development Group from 1993 to 1998.
- ---------------------------------- ---------------------------------------------------------------
</TABLE>


Item 11.   Executive Compensation

Incorporated herein by reference to the Company's  definitive proxy statement to
be filed with the Securities and Exchange  Commission  within 120 days after the
end of the fiscal year covered by this Form 10-K with respect to its 1998 Annual
Meeting of Shareholders.


Item 12.   Security Ownership of Certain Beneficial Owner and Management

Incorporated herein by reference to the Company's  definitive proxy statement to
be filed with the Securities and Exchange  Commission  within 120 days after the
end of the fiscal year covered by this Form 10-K with respect to its 1998 Annual
Meeting of Shareholders.


Item 13.   Certain Relationships and Related Transactions

Incorporated herein by reference to the Company's  definitive proxy statement to
be filed with the Securities and Exchange  Commission  within 120 days after the
end of the fiscal year covered by this Form 10-K with respect to its 1998 Annual
Meeting of Shareholders.

                                     PART IV


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

     (a) Financial Statements and Financial Statement Schedules:

The  Company's  1997  financial  statements  and financial  statement  schedule,
together with the report of KPMG Peat Marwick LLP dated February 3, 1998, except
for Note 12 as to which  the date is March 1,  1998,  are  listed  on the  index
immediately preceding the financial statements at the end of this report.

     (b) Reports on Form 8-K:

         None
                                       21


<PAGE>
     (c)  Exhibits:

3. Articles of Incorporation

     # (i) Restated Articles of Incorporation of Regency Realty Corporation as 
           amended to date.

     #(ii) Restated Bylaws of Regency Realty Corporation.

4. See  exhibits  3(i) and  3(ii) for  provisions  of the  Articles  of
   Incorporation  and Bylaws of  Regency  Realty  Corporation  defining
   rights of security holders.

10.Material Contracts

   ~*(a) Regency Realty Corporation 1993 Long Term Omnibus Plan

   ~*(b) Form of Stock Purchase Award Agreement

   ~*(c) Form of Management  Stock Pledge  Agreement,  relating to the Stock 
         Purchase Award Agreement filed as Exhibit 10(b)

   ~*(d) Form of Promissory Note, relating to the Stock Purchase Award Agreement
         filed as Exhibit 10(b)

   ~*(e) Form of Option Award Agreement for Key Employees

   ~*(f) Form of Option Award Agreement for Non-Employee Directors

   ~*(g) Annual Incentive for Management Plan

   ~*(h) Form of Director/Officer Indemnification Agreement

   ~*(i) Form of Non-Competition  Agreement between Regency Realty Corporation
         and Joan W.  Stein,  Robert L.  Stein, Richard W. Stein,the Martin E. 
        Stein Testamentary Trust A and the Martin E. Stein Testamentary Trust B.
- -------------------------
~     Management contract or compensatory plan or arrangement filed pursuant to 
      S-K 601(10)(iii)(A).
#     Included as an exhibit to the Company's Form 10-Q filed August 11, 1997 
      and incorporated herein by reference.
*     Included as an exhibit to the Pre-effective Amendment No. 2 to the 
      Company's S-11 filed October 5, 1993, and incorporated herein by reference
**    Included as an exhibit to the Company's Form 10-Q filed December 13, 1993,
      and incorporated herein by reference
***   Included as an exhibit to the Company's Form 10-Q filed November 14, 1996,
      and incorporated herein by reference
+     Included as an exhibit to the Company's Form 10-Q filed May 12, 1994, and 
      incorporated herein by reference
++    Filed as appendices to the Company's definitive proxy statement dated 
      August 2, 1996 and incorporated herein by reference.
+++   Filed as an exhibit to the Company's Form 8-K report filed March 14, 1997 
      and incorporated herein by reference.
@     Filed as an exhibit to the Company's Form 10-K filed March 25, 1997 and 
      incorporated herein by reference.
@@    Included as an exhibit to the Company's Form 10-Q filed May 15, 1997 and 
      incorporated herein by reference.
@@@   Included  as an exhibit to the  Company's  Form 8-K/A  report  filed
      March 19, 1998 and incorporated herein by reference.
                                       22

<PAGE>
    ~*(j) Form of Employment Agreement with Martin E. Stein, Jr.

 ~*** (k) Form of Employment Agreements entered into with the following 
          executive officers:

               (i)      Bruce M. Johnson
              (ii)      Robert C. Gillander, Jr.
             (iii)      James D. Thompson

    (l)  The following documents,  all dated November 5, 1993,
         relating to a $51 million loan from Salomon  Brothers
         Inc. to corporations and subsidiaries wholly owned by the Company.

         **    (i)     Loan Agreement  between RSP IV Criterion,  Ltd.,  Regency
                       Rosewood Temple Terrace,  Ltd., Treasure Coast Investors,
                       Ltd., Landcom Regency Mandarin, Ltd., RRC FL SPC, Inc., 
                       RRC AL SPC, Inc.,  RRC MS SPC, Inc.,and RRC GA SPC, Inc. 
                       (as borrowers) and RRC Lender,  Inc.(as lender)

         **   (ii)     Promissory Note in the original principal amount of $51 
                       million

         **  (iii)     Undertaking executed by the Registrantand RRC FL SPC,Inc.
                       RRC AL SPC, Inc., RRC MS SPC, Inc., and RRC GA SPC, Inc.

         **   (iv)     Certificate  Purchase  Agreement  between  RRC  Lender,  
                       Inc.  (as  seller)  and  Salomon Brothers, Inc.
                       (as lender)

   (m)  The  following  documents  relating to the purchase by Security  Capital
        U.S.  Realty and Security Capital Holdings, S.A. of up to 45% of the 
        Registrant's outstanding common stock:

         ++  (i)      Stock Purchase Agreement dated June 11, 1996.

         ++ (ii)      Stockholders' Agreement dated July 10, 1996.
- --------------------------
~     Management contract or compensatory plan or arrangement filed pursuant to 
      S-K 601(10)(iii)(A).
#     Included as an exhibit to the Company's Form 10-Q filed August 11, 1997 
      and incorporated herein by reference.
*     Included as an exhibit to the Pre-effective Amendment No. 2 to the 
      Company's S-11 filed October 5, 1993, and incorporated herein by reference
**    Included as an exhibit to the Company's Form 10-Q filed December 13, 1993,
      and incorporated herein by reference
***   Included as an exhibit to the Company's Form 10-Q filed November 14, 1996,
      and incorporated herein by reference
+     Included as an exhibit to the Company's Form 10-Q filed May 12, 1994, and 
      incorporated herein by reference
++    Filed as appendices to the Company's definitive proxy statement dated 
      August 2, 1996 and incorporated herein by reference.
+++   Filed as an exhibit to the Company's Form 8-K report filed March 14, 1997 
      and incorporated herein by reference.
@     Filed as an exhibit to the Company's Form 10-K filed March 25, 1997 and 
      incorporated herein by reference.
@@    Included as an exhibit to the Company's Form 10-Q filed May 15, 1997 and 
      incorporated herein by reference.
@@@   Included  as an exhibit to the  Company's  Form 8-K/A  report  filed
      March 19, 1998 and incorporated herein by reference.
                                       23

<PAGE>

                 +++ (A)  First Amendment of Stockholders' Agreement dated 
                          February 10, 1997.

         ++ (iii)    Registration Rights Agreement dated July 10, 1996.

  +(n)  Stock  Grant  Plan  adopted on  January  31,  1994 to grant  stock to
        employees.

 ~@(o)  Criteria for Restricted Stock Awards under 1993 Long Term Omnibus Plan.

 ~@(p)  Form of 1996 Stock Purchase Award Agreement.

 ~@(q)  Form of 1996 Management  Stock Pledge  Agreement  relating
        to the Stock Purchase Award Agreement filed as Exhibit 10(p).

 ~@(r) Form of Promissory Note relating to 1996 Stock Purchase Award Agreement 
       filed as Exhibit 10(p).

@@ (s) Revolving Line of Credit Agreement dated May 30,1994 between RRC GA ONE, 
       Inc., as Borrower and Wachovia Bank of Georgia, N.A., as Lender.

@@ (t) First  Modification to Revolving Line of Credit  Agreement
       dated April 30, 1995 between RRC GA ONE, Inc., as Borrower and
       Wachovia Bank of Georgia, N.A., as Lender.

@@ (u) Second  Modification  to Revolving Line of Credit  Agreement dated 
       December 19, 1995 between RRC GA ONE, Inc., as Original  Borrower,  
       Regency Realty Group, Inc. and New Borrower and Regency Realty  
       Corporation,  Inc., as Guarantor, and Wachovia Bank of Georgia, N.A., 
       as Lender.

@@ (v) Third  Modification  to Revolving  Line of Credit  Agreement  dated April
       30, 1996 between  Regency Realty Group,Inc. as Borrower, and Wachovia 
       Bank of Georgia, N.A., as Lender.

@@ (w) Fourth  Modification  to Revolving Line of Credit  Agreement dated 
       November 1, 1996 between Regency Realty Group,Inc. as Borrower, and 
       Wachovia Bank of Georgia, N.A., as Lender.

@@ (x) Fifth  Modification  to Revolving Line of Credit  Agreement dated 
       December 31, 1996 between Regency Realty Group,Inc. as Borrower, and 
       Wachovia Bank of Georgia, N.A., as Lender.

- --------------------------
~     Management contract or compensatory plan or arrangement filed pursuant to 
      S-K 601(10)(iii)(A).
#     Included as an exhibit to the Company's Form 10-Q filed August 11, 1997 
      and incorporated herein by reference.
*     Included as an exhibit to the Pre-effective Amendment No. 2 to the 
      Company's S-11 filed October 5, 1993, and incorporated herein by reference
**    Included as an exhibit to the Company's Form 10-Q filed December 13, 1993,
      and incorporated herein by reference
***   Included as an exhibit to the Company's Form 10-Q filed November 14, 1996,
      and incorporated herein by reference
+     Included as an exhibit to the Company's Form 10-Q filed May 12, 1994, and 
      incorporated herein by reference
++    Filed as appendices to the Company's definitive proxy statement dated 
      August 2, 1996 and incorporated herein by reference.
+++   Filed as an exhibit to the Company's Form 8-K report filed March 14, 1997 
      and incorporated herein by reference.
@     Filed as an exhibit to the Company's Form 10-K filed March 25, 1997 and 
      incorporated herein by reference.
@@    Included as an exhibit to the Company's Form 10-Q filed May 15, 1997 and 
      incorporated herein by reference.
@@@   Included  as an exhibit to the  Company's  Form 8-K/A  report  filed
      March 19, 1998 and incorporated herein by reference.
                                       24

<PAGE>

@@(y) Third  Amendment to Credit  Agreement  dated March 7, 1997
      between  Regency Realty  Corporation as Borrower,  each of the
      Guarantors  signatory  hereto,  each of the Lenders  signatory
      hereto,  and Wells Fargo Bank,  N.A. and successor in interest
      to Wells Fargo Realty Advisors Funding, Inc., as Agent.

@@(z) Fourth  Amendment to Credit Agreement dated March 24, 1997
      between  Regency Realty  Corporation as Borrower,  each of the
      Guarantors  signatory  hereto,  each of the Lenders  signatory
      hereto,  and Wells Fargo Bank,  N.A. and successor in interest
      to Wells Fargo Realty Advisors Funding, Inc., as Agent.

@@@ (aa) Second Amended and Restated Agreement of Limited Partnership of Regency
         Centers, L.P.

21.      Subsidiaries of the Registrant

23.      Consent of KPMG Peat Marwick LLP

27.      Financial Data Table


________________________
~     Management contract or compensatory plan or arrangement filed pursuant to 
      S-K 601(10)(iii)(A).
#     Included as an exhibit to the Company's Form 10-Q filed August 11, 1997 
      and incorporated herein by reference.
*     Included as an exhibit to the Pre-effective Amendment No. 2 to the 
      Company's S-11 filed October 5, 1993, and incorporated herein by reference
**    Included as an exhibit to the Company's Form 10-Q filed December 13, 1993,
      and incorporated herein by reference
***   Included as an exhibit to the Company's Form 10-Q filed November 14, 1996,
      and incorporated herein by reference
+     Included as an exhibit to the Company's Form 10-Q filed May 12, 1994, and 
      incorporated herein by reference
++    Filed as appendices to the Company's definitive proxy statement dated 
      August 2, 1996 and incorporated herein by reference.
+++   Filed as an exhibit to the Company's Form 8-K report filed March 14, 1997 
      and incorporated herein by reference.
@     Filed as an exhibit to the Company's Form 10-K filed March 25, 1997 and 
      incorporated herein by reference.
@@    Included as an exhibit to the Company's Form 10-Q filed May 15, 1997 and 
      incorporated herein by reference.
@@@   Included  as an exhibit to the  Company's  Form 8-K/A  report  filed
      March 19, 1998 and incorporated herein by reference.
                                       25


<PAGE>

                                   SIGNATURES

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

                                          REGENCY REALTY CORPORATION

Date: March 20, 1998                By:   /s/ Martin E. Stein, Jr.
                                         ------------------------
                                              Martin E Stein, Jr., 
                                              Chairman of the Board
                                              and Chief Executive Officer

Date: March 20,1998                 By:   /s/ Bruce M. Johnson
                                         -------------------------
                                              Bruce M. Johnson, 
                                              Managing Director and
                                              Principal Financial Officer

Date: March 20, 1998                By:   /s/ J. Christian Leavitt
                                          ------------------------
                                              J. Christian Leavitt, 
                                              Vice President, 
                                              Treasurer, Secretary and 
                                              PrincipalAccounting Officer

         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:

Date: March 20, 1998                        /s/ Martin E. Stein, Jr.
                                            ------------------------
                                                Martin E. Stein, Jr., 
                                                Chairman of the Board
                                                and Chief Executive Officer

Date: March 20, 1998                        /s/ Joan W. Stein
                                            -------------------------
                                                Joan W. Stein, Chairman Emeritus
                                                and Director

Date: March 20, 1998                       /s/ Edward L. Baker
                                           --------------------------
                                               Edward L. Baker, Director

Date: March 20, 1998                       
                                           --------------------------
                                               Raymond L. Bank, Director

Date: March 20, 1998                       /s/ J. Alexander Branch, III
                                           ---------------------------
                                               J. Alexander Branch, Director

Date: March 20, 1998                       /s/ A. R. Carpenter
                                           ----------------------------
                                               A. R. Carpenter, Director

Date: March 20, 1998                       /s/ J. Dix Druce, Jr.
                                           ----------------------------
                                               J. Dix Druce, Jr., Director

Date: March 20, 1998                       /s/ Albert D. Ernest, Jr.
                                          ----------------------------
                                              Albert D. Ernest, Jr., Director

Date: March 20, 1998                      /s/ Douglas S. Luke
                                          ----------------------------
                                              Douglas S. Luke, Director
                                       26


<PAGE>

Date: March 20, 1998                      /s/ Mary Lou Rogers
                                          ----------------------------
                                             Mary Lou Rogers, Director

Date: March 20, 1998                      /s/ Jonathan L. Smith
                                          ----------------------------
                                             Jonathan L. Smith, Director

Date: March 20, 1998                      /s/ Richard W. Stein
                                          -----------------------------
                                             Richard W. Stein, Director

Date: March 20, 1998                      /s/ Lee S. Wielansky
                                          ----------------------------
                                             Lee S. Wielansky, Director
                                       27

<PAGE>



                   REGENCY REALTY CORPORATION


                 INDEX TO FINANCIAL STATEMENTS




Regency Realty Corporation

 Independent Auditors' Report                                               F-2
 Consolidated Balance Sheets as of December 31, 1997 and 1996               F-3
 Consolidated Statements of Operations for the years ended
   December 31, 1997, 1996, and 1995                                        F-4
 Consolidated Statements of Stockholders' Equity for the years ended
   December 31, 1997, 1996 and 1995                                         F-5
 Consolidated Statements of Cash Flows for the years ended
   December 31, 1997, 1996, and 1995                                        F-8
 Notes to Consolidated Financial Statements                                F-10


Financial Statement Schedule

  Independent Auditors' Report on Financial Statement Schedule              S-1

  Schedule III - Regency Realty Corporation Combined Real Estate and
   Accumulated Depreciation - December 31, 1997                             S-2



  All other  schedules  are omitted  because  they are not  applicable  or
  because   information   required  therein  is  shown  in  the  financial
  statements or notes thereto.

                                     F-1

<PAGE>






                        Independent Auditors' Report


The Shareholders and Board of Directors
Regency Realty Corporation:


We have audited the accompanying  consolidated  balance sheets of Regency Realty
Corporation  as of  December  31, 1997 and 1996,  and the  related  consolidated
statements of operations,  stockholders'  equity, and cash flows for each of the
years in the  three-year  period ended  December 31,  1997.  These  consolidated
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the  financial  position of Regency  Realty
Corporation  as of  December  31,  1997  and  1996,  and the  results  of  their
operations and their cash flows for each of the years in the  three-year  period
ended  December  31,  1997 in  conformity  with  generally  accepted  accounting
principles.



                                                   /s/ KPMG Peat Marwick LLP  
                                                   ---------------------------
                                                   KPMG Peat Marwick LLP
                                                   





Jacksonville, Florida 
February 3, 1998, except for Note 12, 

as to which the date is March 1, 1998

                                       F-2

<PAGE>
                                               REGENCY REALTY CORPORATION
                                               Consolidated Balance Sheets
                                               December 31, 1997 and 1996

<TABLE>
<CAPTION>
                                                                              1997                    1996
<S>                                                                      <C>                       <C>    
Assets
Real estate investments, at cost (notes 2, 4, 5 and 9):
     Land                                                                 $ 177,245,784             84,186,483
     Buildings and improvements                                             622,555,583            304,820,998
     Construction in progress - development for investment                   13,427,370              1,665,144
     Construction in progress - development for sale                         20,173,039              1,695,062
                                                                           ------------            -----------
                                                                            833,401,776            392,367,687
     Less:  accumulated depreciation                                         40,795,801             26,213,225
                                                                           ------------            -----------
                                                                            792,605,975            366,154,462

     Investments in  real estate partnerships (note 3)                          999,730              1,035,107
                                                                           ------------            -----------
                  Net real estate investments                               793,605,705            367,189,569

Cash and cash equivalents (note 4)                                           16,586,094              8,293,229
Tenant receivables, net of allowance for
     uncollectible accounts of $1,162,570
     and $832,091 at December 31, 1997 and
     1996, respectively                                                       9,546,584              5,281,419
Deferred costs, less accumulated amortization
     of $3,842,914 and $2,519,019 at December 31,
     1997 and 1996, respectively                                              4,252,991              3,961,439
Other assets                                                                  2,857,217              1,798,393
                                                                           ------------            -----------
                                                                          $ 826,848,591            386,524,049
                                                                           ============            ===========

Liabilities and Stockholders' Equity
Liabilities:
     Mortgage loans payable (note 4)                                        229,919,242             97,906,288
     Acquisition and development line of credit (note 5)                     48,131,185             73,701,185
     Accounts payable and other liabilities                                  11,597,232              6,300,640
     Tenants' security and escrow deposits                                    2,319,941              1,381,673
                                                                           ------------            -----------
                Total liabilities                                           291,967,600            179,289,786
                                                                           ------------            -----------

Redeemable operating partnership units (notes 2 and 6)                       13,777,156                508,486
Limited partners' interest in consolidated partnerships (note 2)              7,477,182                      -
                                                                           ------------            -----------
                                                                             21,254,338                508,486
                                                                           ------------            -----------
                                                                                                       
Stockholders'  equity  (notes  2, 6, 7 and 8)  
     Common  stock  $.01 par value per share:
         150,000,000 shares authorized; 23,992,037
         and 10,614,905 shares issued and outstanding
         at  December 31, 1997 and 1996, respectively                           239,920                106,149
    Special common stock - 10,000,000 shares authorized:
         Class B $.01 par value per share, 2,500,000
         shares issued and outstanding                                           25,000                 25,000
     Additional paid in capital                                             535,498,878            223,080,831
     Distributions in excess of net income                                  (20,494,893)           (13,981,770)
     Stock loans                                                             (1,642,252)            (2,504,433)
                                                                           -------------           ------------
         Total stockholders' equity                                         513,626,653            206,725,777
                                                                           -------------           ------------
Commitments and contingencies (notes 9,11 and 12)
                                                                          $ 826,848,591            386,524,049
                                                                          =============            ===========
</TABLE>

See accompanying notes to consolidated financial statements.



                                       F-3

<PAGE>

<TABLE>
<CAPTION>
   
                                               REGENCY REALTY CORPORATION
                                         Consolidated Statements of Operations
                                     Years ended December 31, 1997, 1996 and 1995

                                                                      1997            1996             1995
                                                                      ----            ----             ----
<S>                                                              <C>                <C>             <C>    

Revenues:
  Minimum rent (note 9)                                          $ 70,102,765       34,705,905      25,044,201
  Percentage rent                                                   2,151,379          997,981         672,986
  Recoveries from tenants                                          17,051,827        7,729,404       5,837,773
  Management, leasing and brokerage fees                            8,447,615        3,444,287       2,425,733
  Equity in income of investments in                                
     real estate partnerships (note 3)                                 33,311           69,990           4,226
                                                                  -----------       ----------      ----------
         Total revenues                                            97,786,897       46,947,567      33,984,919
                                                                  -----------       ----------      ----------

Operating expenses:
  Depreciation and amortization                                    16,303,159        8,058,643       5,853,730
  Operating and maintenance                                        14,212,555        7,655,934       5,682,967
  General and administrative (note 10)                              9,963,926        6,048,140       4,894,432
  Real estate taxes                                                 8,691,576        4,409,460       3,000,557
                                                                  -----------       ----------      ----------
         Total operating expenses                                  49,171,216       26,172,177      19,431,686
                                                                  -----------       ----------      ----------

Interest expense (income):
  Interest expense                                                 19,667,483       11,476,555       9,422,738
  Interest income                                                  (1,000,227)        (666,031)       (454,207)
                                                                  -----------       ----------      ----------
         Net interest expense                                      18,667,256       10,810,524       8,968,531
                                                                  -----------       ----------      ----------

         Income before minority interests                          29,948,425        9,964,866       5,584,702
                                                                  -----------       ----------      ----------

Minority interest of redeemable partnership units                   2,041,823                -               -
Minority interest of limited partners'                                504,947                -               -
                                                                  -----------       ----------      ----------
          Total minority interests                                  2,546,770                -               -
                                                                  -----------       ----------      ----------
                                                                                           
           Net income                                              27,401,655        9,964,866       5,584,702

Preferred stock dividends                                                   -           57,721         590,904
                                                                  -----------       ----------      ----------
                                                                          
           Net income for common stockholders                    $ 27,401,655        9,907,145       4,993,798
                                                                  ===========       ==========      ==========

Net income per share (note 7):
         Basic                                                   $       1.28               .82             .75
                                                                  ===========       ===========     ===========
         
         Diluted                                                 $       1.23               .82             .75
                                                                  ===========       ===========     ===========


</TABLE>



See accompanying notes to consolidated financial statements.
                                                  


                                              F-4


<PAGE>


<TABLE>
<CAPTION>
                           REGENCY REALTY CORPORATION

                 Consolidated Statements of Stockholders' Equity
                                                   
                  Years ended December 31, 1997, 1996 and 1995
                                                                                              Additional     Distributions   
                                                 Preferred     Common          Class B          Paid In      in excess of    
                                                   Stock        Stock       Common Stock        Capital       Net Income     
                                                   -----        -----       ------------        -------       ----------     
<S>                                         <C>               <C>          <C>               <C>            <C>    
Balance at December 31, 1994                $    5,748,835       64,546                -     101,069,294     (2,719,738)     

Common stock issued as compensation                      -          516                -         831,083              -      
Series B Preferred stock issued (note 6)        18,250,000            -                -               -              -      
Series B Preferred stock converted
     to Class B common stock                   (18,250,000)           -            9,125      18,240,875              -      
Class B common stock issued (note 6)                     -            -           15,875      31,734,125              -      
Series A  Preferred stock converted
     to common stock                            (3,832,567)       2,225                -       3,830,342              -      
Partial forgiveness of stock loans (note 8)              -            -                -               -              -      
Cash dividends declared:
     Preferred stock                                     -            -                -               -       (590,904)     
     Common stock, $1.58 per share                       -            -                -               -    (10,347,248)     
Stock issuance costs                                     -            -                -        (484,478)             -      
Net income                                               -            -                -               -      5,584,702      
                                               -----------    ---------    -------------     -----------      ---------    

Balance at December 31, 1995                $    1,916,268       67,287           25,000     155,221,241     (8,073,188)     

Common stock issued to SC-USREALTY(note 6)               -       36,518                -      63,373,745              -         
Common stock purchased by executive
     officers (note 8)                                   -          800                -       1,339,200              -      
Common stock issued as compensation                      -          532                -       1,091,375              -      
Common stock purchased by directors                      -           69                -         139,931              -      
Series A Preferred stock converted
     to common stock                            (1,916,282)         943                -       1,915,339              -      
Series A Preferred stock converted -
     partial share payment                              14            -                -               -              -      
Partial forgiveness of stock loans (note 8)              -            -                -               -              -      
Cash dividends declared:
     Preferred stock                                     -            -                -               -         (57,721)    
     Common stock, $1.62 per share                       -            -                -               -     (15,815,727)    
Net income                                               -            -                -               -       9,964,866     
                                               -----------    ---------    -------------     -----------    ------------   

Balance at December 31, 1996                $            -      106,149           25,000     223,080,831    (13,981,770)     
                                                                                            

Common stock issued to SC-USREALTY(note 6)               -       75,135                -     158,475,802              -        
Common stock issued in secondary
     offering, net (note 6)                              -       25,448                -      65,487,586              -      
Common stock issued as compensation,
     purchased by directors or officers,
     or issued under stock options                       -        1,359                -       3,026,241              -      
Common stock issued for partnership
     units redeemed (note 2)                             -       30,271                -      81,246,827              -       
Common stock issued to acquire real
     estate (note 2)                                     -        1,558                -       4,181,591              -       
Partial forgiveness or repayment of
     stock loans (note 8)                                -            -                -               -              -      
Cash dividends declared:
     Common stock, $1.68 per share                       -            -                -               -     (33,914,778)    
Net income                                               -            -                -               -      27,401,655     
                                               -----------    ---------    -------------     -----------      ----------   
Balance at December 31, 1997                $            -      239,920           25,000     535,498,878    (20,494,893)     
                                               ===========    =========    =============     ===========    ============   
</TABLE>

See accompanying notes to consolidated financial statements.
                          
                                      F-5

<PAGE>

<TABLE>
<CAPTION>
                           REGENCY REALTY CORPORATION

                 Consolidated Statements of Stockholders' Equity
                                                                                                                                 
                  Years ended December 31, 1997, 1996 and 1995
                                                                             Total
                                                         Stock          Stockholders'
                                                         Loans              Equity
                                                         -----              ------
<S>                                             <C>                      <C>    
Balance at December 31, 1994                    $     (2,402,978)          101,759,959

Common stock issued as compensation                            -               831,599
Series B Preferred stock issued (note 6)                       -            18,250,000
Series B Preferred stock converted
     to Class B common stock                                   -                     -
Class B common stock issued (note 6)                           -            31,750,000
Series A  Preferred stock converted
     to common stock                                           -                    -
Partial forgiveness of stock loans (note 8)              252,944               252,944
Cash dividends declared:
     Preferred stock                                           -              (590,904)
     Common stock, $1.58 per share                             -           (10,347,248)
Stock issuance costs                                           -              (484,478)
Net income                                                     -             5,584,702
                                                  --------------         -------------

Balance at December 31, 1995                    $     (2,150,034)         147,006,574

Common stock issued to SC-USREALTY,(note 6)                    -            63,410,263
Common stock purchased by executive
     officers (note 8)                                (1,273,000)               67,000
Common stock issued as compensation                            -             1,091,907
Common stock purchased by directors                            -               140,000
Series A Preferred stock converted
     to common stock                                           -                     -
Series A Preferred stock converted - 
     partial share payment                                     -                    14
Partial forgiveness of stock loans (note 8)              918,601               918,601
Cash dividends declared:
     Preferred stock                                           -               (57,721)
     Common stock, $1.62 per share                             -           (15,815,727)
Net income                                                     -             9,964,866
                                                  --------------         -------------

Balance at December 31, 1996                    $     (2,504,433)          206,725,777
                                                 

Common stock issued to SC-USREALTY(note 6)                   -             158,550,937
Common stock issued in secondary
     offering, net (note 6)                                                 65,513,034
Common stock issued as compensation,
     purchased by directors or officers,
     or issued under stock options                            -              3,027,600
Common stock issued for partnership
     units redeemed (note 2)                                  -             81,277,098
Common stock issued to acquire real
     estate (note 2)                                          -              4,183,149
Partial forgiveness or repayment of
     stock loans (note 8)                                862,181               862,181
Cash dividends declared:
     Common stock, $1.68 per share                             -           (33,914,778)
Net income                                                     -            27,401,655
                                                  --------------         --------------
Balance at December 31, 1997                    $     (1,642,252)          513,626,653
                                                   ==============        ==============
</TABLE>

See accompanying notes to consolidated financial statements.
                                      F-6


<PAGE>

<TABLE>
<CAPTION>

                                                   REGENCY REALTY CORPORATION
                                               Consolidated Statements of Cash Flows
                                           Years ended December 31, 1997, 1996 and 1995

                                                                              1997              1996                1995
                                                                              ----              ----                ----
<S>                                                                    <C>                 <C>                 <C>   

Cash flows from operating activities:
    Net income                                                         $ 27,401,655           9,964,866          5,584,702
    Adjustments to reconcile net income to net
       cash provided by operating activities:
            Depreciation and amortization                                16,303,159           8,058,643          5,853,730
            Deferred financing cost amortization                            907,224             699,424            582,362
            Minority interest of redeemable partnership units             2,041,823                   -                  -
            Minority interest of limited partners                           504,947                   -                  -
            Equity in income of investments in real estate
               partnerships                                                 (33,311)            (69,990)            (4,226)
           Gain on sale of office building                                 (450,902)                   -                 -
           Changes in assets and liabilities:
              (Increase) decrease in tenant receivables                  (3,596,964)         (2,660,656)             9,879
               Increase in deferred leasing commissions                  (1,120,184)           (585,889)          (479,454)
               Increase in other assets                                  (1,641,108)         (1,019,637)          (619,800)
               Increase in tenants' security deposits                       480,743             405,158            304,378
               Increase in accounts payable and other liabilities         2,247,138           1,212,000          4,660,370
                                                                       ------------          -----------        ----------
                   Net cash provided by operating activities             43,044,220          16,003,919         15,891,941
                                                                       ------------          -----------        ----------

Cash flows from investing activities:
    Acquisition and development of real estate                         (162,244,207)       (102,933,980)       (59,537,217)
    Investment in real estate partnership                                         -            (881,309)                 -
    Capital improvements                                                 (5,226,138)         (2,898,250)        (1,978,643)
    Construction in progress for resale                                 (23,776,953)         (3,360,206)                 -
    Proceeds from sale of property                                        2,645,229                   -                  -
    Distributions received from real
        estate partnership investments                                       68,688             231,581             12,146
                                                                        ------------       ------------        -----------
                   Net cash used in investing activities               (188,533,381)       (109,842,164)       (61,503,714)
                                                                        ------------       ------------        -----------
                                                                                                       
Cash flows from financing activities:
    Net proceeds from common stock issuance                             225,094,980          63,617,263           (484,478)
    Series B preferred stock issued                                               -                   -         18,250,000
    Class B common stock issued                                                   -                   -         31,750,000
    Proceeds from issuance of redeemable
        partnership units                                                 2,255,140                   -                  -
    Distributions to redeemable partnership unit holders                 (1,954,375)            (16,846)                 -
    Distributions to limited partners
        in consolidated partnerships                                     (1,124,480)                  -                  -
    Dividends paid to stockholders                                      (33,914,778)        (16,179,518)        (10,760,237)
    (Repayment) or proceeds  from acquisition and
        development line of credit, net                                 (25,570,000)         51,361,382         (18,736,629)
    Proceeds from mortgage loans payable                                 15,972,920           1,518,331          26,773,540
    Repayments of mortgage loans payable                                (26,408,932)           (808,068)           (417,851)
    Deferred financing costs                                               (568,449)           (762,771)           (221,708)
                                                                        ------------       -------------       -------------
                  Net cash provided by financing activities             153,782,026          98,729,773          46,152,637
                                                                        ------------       -------------       ------------
                  Net increase in cash and cash equivalents               8,292,865           4,891,528             540,864
                                                                        ------------       -------------       ------------
Cash and cash equivalents at beginning of period                          8,293,229           3,401,701           2,860,837
                                                                        ------------       -------------       ------------
Cash and cash equivalents at end of period                             $ 16,586,094           8,293,229           3,401,701
                                                                        ===========        =============       ============
</TABLE>


                                      F-7



<PAGE>

<TABLE>
<CAPTION>


                                              REGENCY REALTY CORPORATION
                                          Consolidated Statements of Cash Flows
                                       Years Ended December 31, 1997, 1996 and 1995
                                                        -continued-


                                                                           1997                 1996                1995
                                                                           ----                 ----                ----
<S>                                                                    <C>                  <C>                 <C>    

Supplemental  disclosure  of  cash  flow  information 
   cash  paid  for  interest (including capitalized interest 
   of approximately $1,896,000, $381,000, and $285,000            
   in 1997, 1996 and 1995, respectively)                               $ 20,527,091          10,979,841          9,147,175
                                                                        ===========         ===========         ==========
                                
Supplemental disclosure of non cash transactions:
   Mortgage loans assumed from sellers of real estate                  $142,448,966           3,918,752                  -
                                                                       ============         ===========         ==========
                                                                                                         
Redeemable operating partnership units and
  common stock issued to sellers of real estate                        $ 96,380,706             525,332                  -
                                                                       ============         ===========         ==========
                                                                                                                          
</TABLE>



See accompanying notes to consolidated financial statements.


                                      F-8


<PAGE>





                          REGENCY REALTY CORPORATION


                  Notes to Consolidated Financial Statements

                          December 31, 1997 and 1996



1.     Summary of Significant Accounting Policies


       (a)    Organization and Principles of Consolidation

              Regency  Realty  Corporation  (the  Company)  was  formed  for the
              purpose of managing, leasing, brokering, acquiring, and developing
              shopping centers. The Company also provides  management,  leasing,
              brokerage  and  development  services for real estate not owned by
              the Company.

              The accompanying  consolidated  financial  statements  include the
              accounts  of  the  Company,   its  wholly  owned   qualified  REIT
              subsidiaries,    and   its   majority   owned   subsidiaries   and
              partnerships.    All   significant   intercompany   balances   and
              transactions  have been eliminated in the  consolidated  financial
              statements.  The Company owns approximately 91% of the outstanding
              units  of  Regency   Retail   Partnership,   L.P.,   ("RRLP")  and
              partnership  interests  ranging  from 51% to 93% in four  majority
              owned real estate partnerships (the "Majority Partnerships").  The
              equity  interests  of third  parties held in RRLP and the Majority
              Partnerships are included in the consolidated financial statements
              as redeemable  operating  partnership units, and limited partners'
              interests in consolidated partnerships.

       (b)    Revenues

              The Company leases space to tenants under  agreements with varying
              terms.  Leases are accounted for as operating  leases with minimum
              rent  recognized  on a  straight-line  basis  over the term of the
              lease  regardless  of when  payments  are due.  Accrued  rents are
              included in tenant receivables.  Minimum rent has been adjusted to
              reflect the effects of recognizing  rent on a straight line basis.
              Substantially all of the lease agreements contain provisions which
              provide  additional  rents  based  on  tenants'  sales  volume  or
              reimbursement  of the  tenants'  share of real  estate  taxes  and
              certain  common area  maintenance  (CAM) costs.  These  additional
              rents are  reflected on the accrual  basis.  Management,  leasing,
              brokerage  and  development  fees are  recognized  as revenue when
              earned.

       (c)    Real Estate Investments

              Land,  buildings and improvements are recorded at cost. All direct
              and  indirect  costs  clearly  associated  with  the  acquisition,
              development and  construction of real estate projects owned by the
              Company are  capitalized  as  buildings  and  improvements,  while
              maintenance  and repairs which do not improve or extend the useful
              lives of the  respective  assets are  reflected in  operating  and
              maintenance expense. The property cost includes the capitalization
              of interest  expense  incurred  during  construction in accordance
              with generally accepted accounting principles.

              Depreciation  is  computed  using the  straight  line  method over
              estimated  useful  lives  up to  forty  years  for  buildings  and
              improvements,  term of lease for tenant improvements,  and five to
              seven years for furniture and equipment.

                                      F-9


<PAGE>
                           REGENCY REALTY CORPORATION

                   Notes to Consolidated Financial Statements

                           December 31, 1997 and 1996
       (d)    Income Taxes

              The Company qualifies and intends to continue to qualify as a REIT
              under the Internal Revenue Code. As a REIT, the Company is allowed
              to reduce taxable income by all or a portion of its  distributions
              to stockholders. As distributions have exceeded taxable income, no
              provision   for  federal   income  taxes  has  been  make  in  the
              accompanying consolidated financial statements.

              Earnings and profits,  which determine the taxability of dividends
              to  stockholders,  differ from net income  reported for  financial
              reporting  purposes  primarily  because of  different  depreciable
              lives and bases of rental properties and differences in the timing
              of recognition of earnings upon disposition of properties.

     Regency Realty Group,  Inc. and Regency Realty Group II, Inc. file separate
tax  returns  and are  subject  to  Federal  and  State  income  taxes.  The two
Management  Companies had combined  taxable  income of $277,227 and $150,674 for
the years ended December 31, 1997 and 1996, respectively, and incurred a taxable
loss for the year ended December 31, 1995.  Regency Realty Group, Inc. had a net
operating loss  carryforward of $1,057,644 at December 31, 1997, and accordingly
paid no income tax in 1997.  No income tax benefit has been recorded for the net
operating  loss  carryforwards.  Regency  Realty Group II, Inc. paid $330,441 in
Federal and State income tax in 1997, and had no operations prior to 1997.

              At December 31, 1997, the net book basis of real estate assets
              exceeds the tax basis by  approximately  $39.6 million,  primarily
              due to  the  difference  between  the  cost  basis  of the  assets
              acquired and their carryover  basis recorded for tax purposes.  At
              December 31, 1996, the tax basis of real estate assets exceeds the
              net book basis by  approximately  $1.9  million  primarily  due to
              higher depreciation expense for book purposes.

              The following  summarizes  the tax status of dividends paid during
the years ended December 31:

<TABLE>
<CAPTION>
                                                               1997             1996           1995
                                                               ----             ----           ----
                        <S>                                   <C>               <C>            <C> 
                        Dividend per Share                    $1.68             1.62           1.58
                        Ordinary Income                          85%              77%            64%
                        Capital Gain                              -                -              -
                        Return of Capital                        15%              23%            36%
</TABLE>


        (e)   Deferred Costs

              Deferred  costs  consist  of  internal  and  external  commissions
              associated  with  leasing  the  rental  property  and  loan  costs
              incurred  in  obtaining  financing  which are  limited  to initial
              direct and incremental  costs. The net leasing  commission balance
              was  $1,738,701  and  $1,108,374  at  December  31, 1997 and 1996,
              respectively.  The  net  loan  cost  balance  was  $2,514,290  and
              $2,853,065 at December 31, 1997 and 1996, respectively. Such costs
              are deferred and amortized using the straight-line method over the
              terms of the respective leases and loans.

       (f)    Fair Value of Financial Instruments

              The  fair  value  of the  Company's  mortgage  loans  payable  and
              acquisition and development  line of credit are estimated based on
              the current  rates  available  to the Company for debt of the same
              remaining  maturities.  Therefore,  the  Company  considers  their
              carrying value to be a reasonable estimation of their fair value.

       (g)    Earnings Per Share

              The Company adopted the provisions of Statement of Financial  
              Accounting  Standards ("SFAS") No. 128,"Earnings per Share",  on 
              December 31, 1997. This statement  governs the  computation,  pre
              sentation, and disclosure requirements for earnings per share 
              ("EPS") for entities with publicly held

                                      F-10

<PAGE>
                           REGENCY REALTY CORPORATION

                   Notes to Consolidated Financial Statements

                           December 31, 1997 and 1996

       (g)    Earnings per Share (continued)

              common stock.  Effective  December 31, 1997 the Company has  
              calculated  EPS in accordance  with SFAS No. 128 and all periods 
              presented have been restated.

              Net income per share of common  stock is  computed  based upon the
              weighted  average  number of common  shares and share  equivalents
              outstanding  during  the  year.  When  dilutive,   stock  options,
              redeemable  partnership  units,  and  Class  B  common  stock  are
              included as share  equivalents  (see note 7 for the calculation of
              earnings per share).

       (h)    Cash and Cash Equivalents

              Any instruments  which have an original maturity of ninety days or
              less when purchased are considered cash equivalents.

       (i)    Estimates

              The  preparation  of  financial   statements  in  conformity  with
              generally accepted  accounting  principles  requires the Company's
              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.

        (j)   Impairment of Long-Lived Assets

              The Company  adopted the  provisions of SFAS No. 121,  "Accounting
              for the Impairment of Long-Lived  Assets and for Long-Lived Assets
              to be Disposed Of", on January 1, 1996.  This  Statement  requires
              that  long-lived  assets and certain  identifiable  intangibles be
              reviewed   for   impairment   whenever   events  or   changes   in
              circumstances  indicate  that the carrying  amount of an asset may
              not be recoverable.  Recoverability  of assets to be held and used
              is measured by a comparison of the carrying  amount of an asset to
              future net cash flows  expected to be generated  by the asset.  If
              such assets are  considered to be impaired,  the  impairment to be
              recognized is measured by the amount by which the carrying  amount
              of the assets  exceed the fair value of the  assets.  Adoption  of
              this  Statement  did not have a material  impact on the  Company's
              financial position, results of operations, or liquidity.

       (k)    Stock Option Plan

              Prior to January  1, 1996,  the  Company  accounted  for its stock
              option  plan in  accordance  with  the  provisions  of  Accounting
              Principles  Board ("APB")  Opinion No. 25,  "Accounting  for Stock
              Issued  to  Employees",  and  related  interpretations.  As  such,
              compensation  expense  would be recorded on the date of grant only
              if the current market price of the  underlying  stock exceeded the
              exercise  price.  On January 1, 1996, the Company adopted SFAS No.
              123,  "Accounting  for Stock-Based  Compensation",  which requires
              entities to recognize as expense over the vesting  period the fair
              value  of  all   stock-based   awards   on  the  date  of   grant.
              Alternatively,  SFAS No. 123 also  allows  entities to continue to
              apply the  provisions  of APB Opinion No. 25 and provide pro forma
              net  income  and pro  forma  earnings  per share  disclosures  for
              employee  stock option  grants made in 1995 and future years as if
              the  fair-value-based  method  defined  in SFAS  No.  123 had been
              applied.  The  Company  has  elected  to  continue  to  apply  the
              provisions  of APB  Opinion  No.  25 and  provide  the  pro  forma
              disclosure provisions of SFAS No. 123.

       (l)    Reclassifications

              Certain  reclassifications  have been made to the 1995 and 1996 
              amounts to conform to classifications adopted in 1997.

                                      F-11

<PAGE>
                                            REGENCY REALTY CORPORATION

                                    Notes to Consolidated Financial Statements

                                            December 31, 1997 and 1996

2.      Acquisitions of Shopping Centers

       On March 7, 1997, the Company acquired, through its partnership,  Regency
       Retail  Partnership,  L.P.  ("RRLP"),  substantially all of the assets of
       Branch  Properties,  L.P.  ("Branch"),  a privately held real estate firm
       based in Atlanta,  Georgia,  for $232.4 million. The assets acquired from
       Branch  included  100% fee  simple  interests  in 19  operating  shopping
       centers and 1 center under  development,  and also partnership  interests
       (ranging  from 50% to 93%) in four  partnerships  with outside  investors
       that owned 4 operating  shopping centers and 2 centers under development.
       The Company also assumed the third party property management contracts of
       Branch on  approximately  3 million SF of shopping  center gross leasable
       area  ("GLA")  that  generate  management  fees  and  leasing  commission
       revenues.

       At closing  and  during  1997,  RRLP  issued  3,572,427  units of limited
       partnership  interest (the "Units") and the Company issued 155,797 shares
       of common stock in exchange for the assets  acquired and the  liabilities
       assumed from Branch.  The Units are redeemable on a one-for-one  basis in
       exchange  for  shares  of  common  stock.  On June  13,  1997,  3,027,080
       partnership  units were converted to common stock.  The purchase price of
       Branch, as recorded in the Company's  consolidated  financial statements,
       includes  approximately  $96.4  million for Units and common stock issued
       (based upon $26.85,  the fair market value of the Company's  common stock
       on the date the  acquisition  was publicly  announced),  $27.3 million in
       cash, $7.8 million for transaction costs and to establish  reserves,  and
       $97.2 million of assumed debt. Limited partners' interest in consolidated
       partnerships of $7.9 million was recorded for the four  partnerships with
       outside investors.  For purposes of determining  minority  interest,  the
       Company owned 32.6% of the outstanding Units in the Partnership until the
       approval by the Company's  shareholders at its annual meeting on June 12,
       1997,  at which  time  3,027,080  of the  outstanding  Units held by Unit
       Holders were redeemed for Common Stock.  At completion of the redemption,
       the  Company  owned  approximately  91% of the  outstanding  Units of the
       Partnership.

       Additional  Units  and  shares  of  common  stock  may be  issued  on the
       fifteenth  day after the  first,  second and third  anniversaries  of the
       closing (each an "Earn-Out  Closing"),  based on the  performance  of the
       properties  acquired  (the  "Property  Earn-Out").  The  formula  for the
       Property  Earn-Out  provides  for  calculating  increases  in  value on a
       property-by-property  basis, based on increases in net income of the year
       of calculation.  The Property Earn-Out is limited to 721,997 units at the
       first  Earn-Out  Closing and  1,020,061  units at all  Earn-Out  Closings
       (including the first Earn-Out Closing).

       Including the  acquisition  of the  properties  from Branch,  the Company
       acquired or completed  development of 38 shopping  centers in 1997 and 13
       shopping centers in 1996 (the "Acquisitions") accounted for as purchases,
       at  cost  totaling  approximately  $406.9  million  and  $107.1  million,
       respectively,  through the issuance of common stock,  partnership  units,
       assumed  mortgage loans and cash.  The operating  results are included in
       the  Company's  consolidated  financial  statements  from the  date  each
       property was  acquired.  The following  unaudited  pro forma  information
       presents the  consolidated  results of operations as if the  Acquisitions
       had  occurred  on  January  1,  1996,  after  giving  effect  to  certain
       adjustments  including  depreciation  expense,   additional  general  and
       administration  costs,  interest  expense  on new debt  incurred,  and an
       increase in the weighted  average  common shares  outstanding  for common
       stock,  operating  partnership  units, and Class B common stock issued to
       acquire  the  shopping  centers as if shares and units had been issued on
       January 1, 1996.  Pro forma  revenues  would have been $112.9 million and
       $102.4 million in 1997 and 1996,  respectively.  Pro forma net income for
       common  stockholders  would have been $27.8  million and $10.5 million in
       1997 and 1996,  respectively.  Pro forma basic net income per share would
       have  been  $1.20  and $.63 in 1997 and  1996,  respectively.  Pro  forma
       diluted   net  income   per  share   would  have  been  $1.17  and  $.60,
       respectively.  This data does not purport to be  indicative of what would
       have  occurred had the  Acquisitions  been made on January 1, 1996, or of
       results which may occur in the future.

                                      F-12


<PAGE>

                           REGENCY REALTY CORPORATION

                   Notes to Consolidated Financial Statements

                           December 31, 1997 and 1996

3.     Investments In Real Estate Partnerships

       The Company  accounts for all  investments in which it owns less than 50%
       using the equity  method.  The  Company has a 10%  investment  in Village
       Commons  Shopping  Center and during 1996  acquired a 25%  investment  in
       Ocean  East  Mall.  The  Company's  combined   investment  in  these  two
       partnerships  was $999,730 and  $1,035,107 at December 31, 1997 and 1996,
       respectively.  Net income is  allocated  in  accordance  with each of the
       partnership agreements.

4.     Mortgage Loans Payable

       Mortgage  loans  payable  secured by real estate  rental  property are as
       follows:

<TABLE>
<CAPTION>

                                                                                    1997                1996
                                                                                    ----                ----
         <S>                                                                          <C>                   <C>
         6.72%mortgage  loan,  held  by a  trust  created  for  
              the  benefit  of investors who purchased mortgage  
              pass-through  certificates,  non recourse to the 
              Company, interest only paid monthly, due in full 
              November 5, 2000                                               $  51,000,000         51,000,000

         7.04%to 7.97%  mortgage  notes,  payable  in  monthly  
              installments  of $206,108 including principal and 
              interest,  maturing from December 15, 2000
              to December 15, 2010                                              29,064,254                  -

         8.52% mortgage note, interest only, payable monthly
              maturing December 15, 2001                                        24,750,000                  -

         7.60%to 8.01% mortgage notes payable in monthly principal 
              installments of $39,646 maturing from June 28, 2001 
              to August 17, 2002                                                22,005,752         22,465,410

         7.92% to 8.95% mortgage notes, payable in monthly
              installments of $117,628, including principal
              and interest, maturing from October 1, 2005
              to August 1, 2009                                                 13,282,672                  -

         8.40%mortgage  note,  payable  in  monthly installments of
              $102,646 including principal and interest, maturing 
              on June 1, 2017                                                   12,916,746                  -

         7.84% mortgage note, payable in monthly
              installments of $92,119 including principal
              and interest, maturing on September 1, 2005                       12,490,525                  -

         9.50% mortgage note, payable in monthly
              installments of $78,633 including principal
              and interest, maturing on March 1, 2002                            8,713,253          8,823,403

         9.80% mortgage note, payable in monthly
              installments of $73,899, including principal
              and interest, maturing on February 1, 1999                         7,892,935          8,000,421
</TABLE>

                                      F-13

<PAGE>

                                            REGENCY REALTY CORPORATION

                                    Notes to Consolidated Financial Statements

                                            December 31, 1997 and 1996

<TABLE>
<CAPTION>

4.     Mortgage Loans Payable (continued)
         <S>                                                                  <C>                  <C>        

         7.94% mortgage note, payable in monthly
              installments of $52,214 including principal
              and interest, maturing on December 21, 2002                        6,612,868                  -

         9.75% mortgage note, payable in monthly
              installments of $55,630 including principal
              and interest, maturing on January 1, 1998                          5,864,972                  -

         8.625% mortgage note, payable in monthly
              installments of $23,225 including principal
              and interest, maturing on June 1, 2003                             2,295,238                  -

         7.90%to 8.10%  mortgage  notes,  payable  in  monthly  
             installments  of $21,595, including principal and 
             interest,  maturing from April 1, 2012
             to June 1, 2017                                                     2,189,049                  -

         6.987% to 7.863% (Libor + 1.25%) mortgage notes, 
             interest only, payable monthly maturing
              from November 30, 1998 to June 12, 2000                           24,122,500                  -

         Construction notes payable, interest only
              payable monthly at Libor + 1.5% and Prime +1/4%                    4,682,835          1,518,331
              maturing December, 2001

         7.375% (Libor + 1.5%)  mortgage  note,  payable  in  
              monthly  principal installments of $4,438,
              maturing on August 1, 1998                                         2,035,643                  -

         8.28%mortgage  note,   payable  in  monthly   installments  
             of  $37,598 including principal and interest, paid in 
             full during 1997                                                            -          3,801,821

         8.72% mortgage note, rate adjusts annually,
              payable in monthly installments of $23,105
              including principal and interest,  paid in
              full during 1997                                                           -          2,296,902
                                                                               -----------         ----------

             Total mortgage loans payable                                     $ 229,919,242        97,906,288
                                                                               ============        ==========
</TABLE>


       Principal maturities on the mortgage loans are as follows:

       Year                                           Amount

       1998                                          27,168,334
       1999                                           9,518,649
       2000                                          64,633,229
       2001                                          39,361,601
       2002                                          26,759,455
       Thereafter                                    62,477,974
                                                   ------------
          Total                                     229,919,242

       As part of their  borrowing  arrangements,  the  Company is  expected  to
       maintain  escrow  balances  for the payment of real  estate  taxes on the
       mortgaged  properties,  and in the case of the $51,000,000 mortgage loan,
       also  maintain  interest,  insurance and  specified  capital  improvement
       escrows.  Escrow  balances  recorded  as cash and cash  equivalents  were
       $3,292,325 and $1,069,337 at December 31, 1997 and 1996, respectively.

                                      F-14


<PAGE>
                                            REGENCY REALTY CORPORATION

                                    Notes to Consolidated Financial Statements

                                            December 31, 1997 and 1996
5.     Acquisition and Development Line of Credit

       The Company has a $150 million  unsecured  revolving line of credit which
       is used  to  finance  real  estate  acquisitions  and  developments.  The
       interest  rate is based upon LIBOR plus 1.5% with  interest  only for two
       years, and if then  terminated,  becomes a two year term loan maturing in
       May, 2000 with principal due in seven equal quarterly  installments.  The
       borrower may request a one year  extension of the interest only revolving
       period annually in May of each year.

       On February 24,  1998,  the Company  entered into a commitment  agreement
       with the various  banks that provide the Line to increase  the  unsecured
       commitment amount to $300 million, provide for a $150 million competitive
       bid  facility,  and  reduce  the  interest  rate on the line  based  upon
       achieving an investment grade rating of BBB- or higher.  Once ratings are
       achieved,  the  interest  rate on the Line will be  reduced to Libor plus
       .95%, and further reduced if the Company receives ratings better than the
       minimum  requirement  from two agencies.  During the 1st quarter of 1998,
       the Company  received  investment  grade ratings from Moody's of Baa2 and
       S&P of BBB-.

6.     Stockholders' Equity

       On June 11, 1996, the Company entered into a Stockholders  Agreement (the
       "Agreement")  with  SC-USREALTY   granting  it  certain  rights  such  as
       purchasing  common  stock,  nominating  representatives  to the Company's
       Board of Directors,  and subjecting  SC-USREALTY to certain  restrictions
       including  voting and ownership  restrictions.  The  Agreement  primarily
       granted  SC-USREALTY  (i) the  right  to  acquire  7,499,400  shares  for
       approximately $132 million and also participation  rights entitling it to
       purchase  additional  equity in the  Company,  at the same  price as that
       offered to other purchasers,  each time that the Company sells additional
       shares of capital  stock or options  or other  rights to acquire  capital
       stock, in order to preserve  SC-USREALTY's  pro rata ownership  position;
       and (ii) the right to nominate a proportionate number of directors on the
       Company's  Board,  rounded down to the nearest whole  number,  based upon
       SC-USREALTY's  percentage  ownership of outstanding common stock (but not
       to exceed 49% of the Board).  As of December  31, 1997,  SC-USREALTY  has
       acquired  all of the  7,499,400  shares  related  to  the  Agreement.  In
       connection  with the Units and shares of common  stock issued in exchange
       for  Branch's  assets (see note 2,  Acquisitions  of  Shopping  Centers),
       SC-USREALTY acquired 1,750,000 shares during August and December, 1997 at
       $22.125 per share in accordance  with their rights as provided for in the
       Agreement.

       For a period of at least five  years  (subject  to  certain  exceptions),
       SC-USREALTY  is precluded  from,  among other things,  (i) acquiring more
       than  45% of the  outstanding  common  stock  on a  diluted  basis,  (ii)
       transferring  shares  without  the  Company's  approval  in a  negotiated
       transaction that would result in any transferee  beneficially owning more
       than 9.8% of the Company's capital stock, or (iii) acting in concert with
       any third parties as part of a 13D group.  Subject to certain exceptions,
       SC-USREALTY  is required to vote its shares either as  recommended by the
       Board of Directors or  proportionately in accordance with the vote of the
       other shareholders.

       On July 11,  1997,  the Company  sold  2,415,000  shares to the public at
       $27.25 per share. In connection with that offering, SC-USREALTY purchased
       an additional  1,785,000  shares at $27.25 directly from the Company.  On
       August 11, 1997, the Underwriters exercised the over-allotment option and
       the Company issued an additional  129,800 shares to the public and 95,939
       shares to SC-USREALTY  at $27.25 per share.  Total proceeds from the sale
       of common  stock to the  public and  SC-USREALTY  of  approximately  $117
       million  net of offering  expenses  was used to reduce the balance of the
       Company's line of credit.

       In  connection  with the  purchase of a shopping  center on February  28,
       1996, the Company issued 28,848 Partnership  Operating Units to a limited
       partner  convertible  on a one for one basis into shares of common  stock
       after the first anniversary of the issuance date.

                                      F-15

<PAGE>
                                           REGENCY REALTY CORPORATION

                                    Notes to Consolidated Financial Statements

                                            December 31, 1997 and 1996
6.     Stockholders' Equity (continued)

       The  Company  completed  a  $50,000,000   private  placement  by  issuing
       2,500,000  shares of non-voting Class B common stock to a single investor
       on December 20, 1995 (the  "Private  Placement").  The proceeds  from the
       Private Placement were used to acquire five shopping centers. The Company
       initially issued $18,250,000 of

       Series B preferred stock on October 26, 1995 to fund the acquisition of a
       shopping center.  These shares were  subsequently  converted into Class B
       common  stock.  The Class B common stock is  convertible  into  2,975,468
       shares of common stock beginning on the third anniversary of the issuance
       date,  subject  to certain  limitations  defined  in the  agreement.  The
       dividend on each share of Class B common is payable  when and if declared
       by the Board of  Directors  pari  passu with any  dividend  on the common
       stock of the Company.

7.     Earnings Per Share

       The following  summarizes the  calculation of basic and diluted  earnings
       per share for the years  ended,  December 31,  1997,  1996,  and 1995 (in
       thousands except per share data):

<TABLE>
<CAPTION>

         Basic Earnings Per Share (EPS) Calculation:                              1997             1996            1995
         -------------------------------------------                              ----             ----            ----
         <S>                                                                 <C>                 <C>               <C>    

         Weighted average common shares outstanding                             17,424             7,331           6,630
                                                                               =======            ======           =====

         Net income for common  stockholders                                 $  27,402            9,907            4,994
         
             Less: dividends paid on Class B common stock                        5,140            3,879                -
                                                                               -------            ------           -----
                                                                                                  
         Net income for Basic EPS                                                22,262            6,028           4,994
                                                                               =======            =====            =====
         Basic EPS                                                                1.28             0.82             0.75
                                                                               =======            =====            =====
         Diluted Earnings Per Share (EPS) Calculation:
         Weighted average shares outstanding for Basic EPS                      17,424            7,331            6,630
         Redeemable operating partnership units                                  1,243               18                -
         Incremental shares to be issued under common 
            stock options using the Treasury method                                 80                3                -

         Contingent units or shares for the acquisition
           of real estate
                                                                                   955                -               -
                                                                               -------            -----           -----
         Total diluted shares                                                   19,702            7,352           6,630
                                                                               =======            =====           =====

         Net income for Basic EPS                                            $  22,262            6,028           4,994
           Add: minority interest of redeemable partnership units                2,042                -               -
                                                                               -------            -----           -----
         Net income for Diluted EPS                                             24,304           46,028           4,994
                                                                               =======           ======           =====
         Diluted EPS                                                              1.23             0.82            0.75
                                                                             $ =======           ======           =====
</TABLE>

       
       Class B common stock is not included in the above calculation  because it
       is anti-dilutive.

                                      F-16

<PAGE>
                                           REGENCY REALTY CORPORATION

                                    Notes to Consolidated Financial Statements

                                            December 31, 1997 and 1996

8.     Long-term Stock Incentive Plans

       In 1993,  the  Company  adopted a Long  Term  Omnibus  Plan (the  "Plan")
       pursuant  to which  the  Board of  Directors  may  grant  stock and stock
       options to officers, directors and other key employees. The Plan provides
       for the issuance of up to 12% of the Company's common shares  outstanding
       not to exceed 3 million shares of authorized  but unissued  common stock.
       Stock  options  are granted  with an exercise  price equal to the stock's
       fair market value at the date of grant.  All stock  options  granted have
       ten year terms,  and with  respect to officers  and other key  employees,
       become  fully  exercisable  after five years from the date of grant,  and
       with respect to directors, become fully exercisable after one year.

       At  December  31,  1997,  there were  approximately  1.3  million  shares
       available for grant under the Plan. The per share  weighted-average  fair
       value of stock options  granted  during 1997 and 1996 was $3.26 and $3.04
       on the date of grant using the Black  Scholes  option-pricing  model with
       the  following  weighted-average  assumptions:  1997 - expected  dividend
       yield 6.3%, risk-free interest rate of 6.3%, expected volatility 21%, and
       an  expected  life of 5.7 years;  1996 - expected  dividend  yield  6.6%,
       risk-free interest rate of 5.9%, expected volatility 21%, and an expected
       life of five years.  The Company applies APB Opinion No. 25 in accounting
       for its Plan and,  accordingly,  no compensation cost has been recognized
       forits stock options in the consolidated financial statements.

       Had the Company  determined  compensation cost based on the fair value at
       the grant date for its stock  options  under SFAS No. 123, the  Company's
       net  income for common  stockholders  would have been  reduced to the pro
       forma amounts indicated below (in thousands except per share data):

<TABLE>
<CAPTION>

          Net income for
       common stockholders                            1997                     1996                   1995
       -------------------                            ----                     ----                   ----


         <S>                                         <C>                      <C>                    <C>  
         As reported                                 $27,402                  9,907                  4,994
         Net income per share:
              Basic                                     1.28                   0.82                  0.75
              Diluted                                   1.23                   0.82                  0.75

         Pro forma                                    25,777                  9,897                  4,994(*)
         Net income per share:
              Basic                                     1.18                   0.82                  0.75
              Diluted                                   1.15                   0.82                  0.75
         
         -------------------
              *  The options  granted  during  1995 were issued on December  31,
                 1995 and accordingly had no effect to income.
</TABLE>


       Pro forma net  income  for  common  stockholders  reflects  only  options
       granted in 1997, 1996 and 1995. Therefore, the full impact of calculating
       compensation  cost for stock  options under SFAS No. 123 is not reflected
       in the pro forma net  income for common  stockholders  amounts  presented
       above because  compensation  cost is reflected over the options'  vesting
       period and compensation cost for options granted prior to January 1, 1995
       is not considered.

                                      F-17


<PAGE>
                                           REGENCY REALTY CORPORATION

                                    Notes to Consolidated Financial Statements

                                            December 31, 1997 and 1996

8.     Long-term Stock Incentive Plans (continued)

       Stock option activity during the periods indicated is as follows:

<TABLE>
<CAPTION>
                                                                        Number of              Weighted-Average
                                                                          Shares                Exercise Price
              <S>                                                        <C>                        <C>           
              Outstanding, December 31, 1994                               191,000                  $19.16
                  Granted                                                    6,000                   17.25
                  Forfeited                                                (11,000)                  19.25
                                                                         ----------                         
              Outstanding, December 31, 1995                               186,000                   19.09
                  Granted                                                   12,000                   24.67
                                                                         ----------
              Outstanding, December 31, 1996                               198,000                   19.43
                                                                         ----------
                  Granted                                                1,252,276                   25.39
                  Forfeited                                                 (7,000)                  23.54
                  Exercised                                               (124,769)                  19.25
                                                                         ----------
              Outstanding, December 31, 1997                             1,318,507                  $25.08
                                                                         =========
</TABLE>


The following table presents  information  regarding all options  outstanding at
December 31, 1997.

<TABLE>
<CAPTION>
                                    Weighted
                                     Average                                        Weighted
               Number of            Remaining               Range of                 Average
                Options            Contractual              Exercise                Exercise
              Outstanding             Life                   Prices                   Price
            <S>                     <C>                 <C>                     <C>    
                 61,231             6.1 years           $   16.75  - 19.25       $       18.77
              1,155,800             9.0 years                        25.25               25.25
                101,476             6.8 years                26.25 - 27.75               26.99
            ------------            ---------            ------------------      -------------

              1,318,507             8.7 years           $   16.75 - 27.75        $       25.08
            ===========             ===========         ==================       =============
</TABLE>



The following table presents information regarding options currently exercisable
at December 31, 1997.

<TABLE>
<CAPTION>
                                                                           Weighted
                           Number of               Range of                 Average
                            Options                Exercise                Exercise
                          Exercisable               Prices                   Price

                           <S>                <C>                          <C>       
                             61,231            $ 16.75 - 19.25             $  18.77
                            240,500              25.25 - 26.25                25.27
                             76,476                      26.88                26.88
                           ---------          ----------------             --------
                            378,207            $ 16.75 - 26.88             $  24.54
                           =========          ================             ========

</TABLE>

                                      F-18

<PAGE>
                                           REGENCY REALTY CORPORATION

                                    Notes to Consolidated Financial Statements

                                            December 31, 1997 and 1996

Also as part of the Plan, in 1993 and 1996,  certain  officers  purchased common
stock at fair market  value  directly  from the  Company,  of which 90% and 95%,
respectively,  was financed by a stock purchase loan provided by the Plan. These
recourse loans are fully secured by stock, bear interest at fixed rates of 7.34%
to 7.79% and mature after ten years.  The Board of Directors  may  authorize the
forgiveness of all or a portion of the principal  balance based on the Company's
achievement of specified  financial  objectives,  and total  stockholder  return
performance  targets.  During  1997,  1996,  and 1995,  $601,516,  $646,598  and
$379,418 was  forgiven,  respectively,  and is included as a charge to income on
the  consolidated  statements of operations.  The Company also has a performance
based  restricted  stock  plan for  officers  whereby  a portion  of the  shares
authorized  under the Plan may be granted upon the  achievement of certain total
stockholder  return  performance  targets.  Shares granted under the plan become
fully  vested by January 1, 2000.  During  1997 and 1996,  the  Company  charged
$259,600 and  $809,400 to income on the  consolidated  statement  of  operations
related to the restricted stock plan.

9.     Operating Leases

       The Company's  properties  are leased to tenants under  operating  leases
       with  expiration  dates  extending to the year 2041.  Future minimum rent
       under  noncancelable  operating leases as of December 31,1997,  excluding
       tenant  reimbursements  of operating  expenses and  excluding  additional
       contingent rentals based on tenants' sales volume are as follows:

                Year ending December 31,                       Amount

                      1998                                $  82,113,717
                      1999                                   73,918,555
                      2000                                   65,821,489
                      2001                                   53,281,014
                      2002                                   45,529,249
                      Thereafter                            306,007,382
                                                            -----------
                         Total                             $626,671,406
       At  December  31,  1997,  the  real  estate  portfolio  as  a  whole  was
       approximately 92.8% leased.

       The  shopping  centers'  tenant  base  includes  primarily  national  and
       regional supermarkets,  drug stores, discount department stores and other
       retailers  and,  consequently,  the credit  risk is  concentrated  in the
       retail industry. There were no tenants which individually represented 10%
       or more of the Company's  combined minimum rent. The combined  annualized
       rent  from  the  Company's  four  largest   retail  tenants   represented
       approximately 20% of annualized minimum rent at December 31, 1997.

10.    Related Party Transactions

       The Company  provides  management,  leasing,  and brokerage  services for
       certain  commercial real estate properties of The Regency Group, Inc. and
       its affiliates  ("TRG"),  a corporation  wholly-owned by certain officers
       and  stockholders  of the Company.  Fees for such services are charged to
       TRG based on current market rates.  From time to time,  certain personnel
       of the Company may provide administrative services to TRG, pursuant to an
       agreement.  The cost of such  services  are  reimbursed  by TRG  based on
       percentage  allocations of management  time and general  overhead made in
       compliance with applicable regulations of the Internal Revenue Service.

11.    Contingencies

       The  Company  like others in the  commercial  real  estate  industry,  is
       subject to numerous  environmental laws and regulations and the operation
       of dry cleaning plants at the Company's shopping centers is the principal
       environmental  concern.  The Company  believes  that the dry cleaners are
       operating  in  accordance  with  current  laws  and  regulations  and has
       established procedures to monitor their operations. While the Company has
       registered  the plants  located in Florida  under a state funded  program
       designed  to  substantially  fund the  clean  up,  if  necessary,  of any
       environmental  issues,  the owner or  operator is not  relieved  from the
       ultimate  responsibility  for clean up. The Company also has  established
       

                               F-19

<PAGE>
                                           REGENCY REALTY CORPORATION

                                    Notes to Consolidated Financial Statements

                                            December 31, 1997 and 1996

       due diligence procedures to identify and evaluate potential environmental
       issues on properties under  consideration for acquisition.  In connection
       with  acquisitions   during  1997  and  1996,  the  Company   established
       environmental reserves of $1,944,633 and $600,000, respectively. While it
       is not possible to predict with certainty,  management  believes that the
       reserves  are adequate to cover future  clean-up  costs  related to these
       sites.  The Company's  policy is to accrue  environmental  clean-up costs
       when it is probable that a liability has been incurred and that amount is
       reasonably  estimable.  Based  on  information  presently  available,  no
       additional  environmental accruals were made and management believes that
       the  ultimate  disposition  of  currently  known  matters will not have a
       material effect on the financial  position,  liquidity,  or operations of
       the Company.

12.    Subsequent Event

       On March  11,  1998,  the  Company  acquired  the real  estate  assets of
       entities  comprising  the  Midland  Group  ("Midland")  consisting  of 21
       shopping centers (the "Midland  Properties") plus a development  pipeline
       of 11 shopping centers.  Of the 21 centers  acquired,  20 are anchored by
       Kroger  and King  Soopers,  a Kroger  subsidiary.  Eight of the  shopping
       centers  included in the  development  pipeline  will be owned  through a
       joint venture in which the Company will own less than a 50% interest upon
       completion of construction.

       At closing and during  1998,  the Company will pay  approximately  $230.4
       million  for the 21  properties  and pay  transaction  costs  through the
       issuance of units of RRLP  interest  valued at $26.58 per unit or cash to
       $47 million,  the  assumption of $92.5 million of debt, and $90.9 million
       to pay off  existing  secured real estate  loans.  The Company will incur
       additional  costs  to  establish  reserves,  pay  severance,  and  prepay
       existing  assumed loans.  Subsequent to 1998, the Company  expects to pay
       approximately   $12.7  million  to  acquire   equity   interests  in  the
       development pipeline as the properties reach  stabilization.  The Company
       may also be required to make payments  aggregating  $10.5 million through
       the year 2000  contingent  upon  increases  in net income  from  existing
       properties,  the development  pipeline,  and new properties  developed or
       acquired in accordance with the contribution agreement.

13.    Market and Dividend Information (Unaudited)

       The Company trades on the New York Stock Exchange under the symbol "REG".
       The Company currently has approximately 3,500 shareholders. The following
       table sets forth the high and low prices and the cash dividends  declared
       on the Company's common stock by quarter for 1997 and 1996.

<TABLE>
<CAPTION>
                                                   1997                                      1996
                                    -----------------------------------      -------------------------------------
                                                                Cash                                      Cash
                                      High          Low       Dividends         High          Low       Dividends
                                      Price        Price      Declared          Price        Price      Declared

         <S>                        <C>             <C>             <C>         <C>          <C>            <C>       
         March 31                   $ 28.000        25.000          .42         17.500       15.875         .405
         June 30                      28.125        24.875          .42         21.125       16.500         .405
         September 30                 28.250        24.875          .42         22.375       19.250         .405
         December 31                  28.000        24.250          .42         26.250       21.125         .405
</TABLE>

                                      F-20

<PAGE>
                                          REGENCY REALTY CORPORATION

                                    Notes to Consolidated Financial Statements

                                            December 31, 1997 and 1996


14.    Summary of Quarterly Financial Data (Unaudited)

       Presented below is a summary of the consolidated quarterly financial data
       for the years ended December 31, 1997 and 1996.

<TABLE>
<CAPTION>
                                                                First          Second        Third        Fourth
                                                               Quarter         Quarter      Quarter       Quarter
                                                                   (amounts in thousands, except per share data)
         <S>                                                   <C>              <C>          <C>    
         1997:
         Revenues                                              $ 17,733         24,626       26,790       28,638
         Net income for common stockholders                       4,037          4,727        8,743        9,895
         Net income per share:
             Basic                                                  .25            .26          .34          .37
             Diluted                                                .25            .26          .32          .35

         1996:
         Revenues                                              $ 10,501         10,952       12,030       13,464
         Net income for common stockholders                       2,576          2,597        3,025        1,709
         Net income per share:
             Basic                                                  .24            .24          .26          .09
             Diluted                                                .24            .24          .26          .09
</TABLE>

                      
                                      F-21


<PAGE>






                          Independent Auditors' Report
                         On Financial Statement Schedule


The Shareholders and Board of Directors
Regency Realty Corporation


Under date of February 3, 1998, except for Note 12 as to which the date is March
1, 1998,  we  reported  on the  consolidated  balance  sheets of Regency  Realty
Corporation  as of  December  31, 1997 and 1996,  and the  related  consolidated
statements of operations,  stockholders'  equity, and cash flows for each of the
years in the  three-year  period ended  December  31, 1997,  as contained in the
annual report on Form 10-K for the year 1997.  In connection  with our audits of
the  aforementioned  consolidated  financial  statements,  we also  audited  the
related financial statement schedule as listed in the accompanying index on page
F-1 of the  annual  report  on Form  10-K  for the  year  1997.  This  financial
statement  schedule  is the  responsibility  of the  Company's  management.  Our
responsibility  is to express an opinion  on the  financial  statement  schedule
based on our audits.

In our opinion,  the related financial  statement  schedule,  when considered in
relation  to the  basic  consolidated  financial  statements  taken  as a whole,
presents fairly, in all material respects, the information set forth therein.






                                                      KPMG Peat Marwick LLP



Jacksonville, Florida
February 3, 1998



                                      S-1




<PAGE>


<TABLE>
<CAPTION>
                           REGENCY REALTY CORPORATION                                            Schedule III


                Combined Real Estate and Accumulated Depreciation
                                December 31, 1997
                                                                                                                           
                                                                                                                           
                                       Initial Cost                                     Total Cost                         
                                 ----------------------- Cost Capitalized   ----------------------------------             
                                             Building &    Subsequent to                Building &                         
                                   Land     Improvements    Acquistion      Land       Improvements      Total             
                                   ----     ------------    ----------      ----       ------------      -----             

<S>                              <C>        <C>            <C>           <C>           <C>            <C>


Anastasia Shopping Plaza         1,072,451   3,617,493       112,404     1,072,451      3,729,897      4,802,348           
Ashford Place                    2,803,998   9,943,994        79,313     2,803,998     10,023,307     12,827,305           
Aventura                         2,751,094   9,317,790       117,291     2,751,094      9,435,081     12,186,175           
Berkshire Commons                2,294,960   8,151,236        36,131     2,294,960      8,187,367     10,482,327           
Bolton Plaza                     2,660,227   6,209,110     1,168,755     2,634,663      7,403,429     10,038,092           
Bonner's Point                     859,854   2,878,641       129,319       859,854      3,007,960      3,867,814           
Boynton Lakes                    2,783,000  10,043,027             -     2,783,000     10,043,027     12,826,027           
Braelin Village                  4,191,214  12,389,585        29,000     4,191,214     12,418,585     16,609,799           
Briarcliff LaVista                 694,120   2,462,819             -       694,120      2,462,819      3,156,939           
Briarcliff Village               4,597,018  16,303,813             -     4,597,018     16,303,813     20,900,831           
Buckhead Court                   1,737,569   6,162,941       101,703     1,737,569      6,264,644      8,002,213           
Cambridge Square                   792,000   2,916,034         9,503       792,000      2,925,537      3,717,537           
Carmel Commons                   2,466,200   8,903,187       394,450     2,466,200      9,297,637     11,763,837           
Carriage Gate                      740,960   2,494,750       973,938       740,960      3,468,688      4,209,648           
Chasewood Plaza                  1,675,000  11,390,727     4,316,793     2,476,486     14,906,034     17,382,520           
City View                        1,207,204   4,341,304        23,534     1,207,204      4,364,838      5,572,042           
Columbia Marketplace             1,280,158   4,285,745       147,651     1,280,158      4,433,396      5,713,554           
Country Club                     1,105,201   3,709,452        71,058     1,105,201      3,780,510      4,885,711           
Courtyard                        1,761,567   4,187,039       194,673     1,761,567      4,381,712      6,143,279           
Cromwell Square                  1,771,892   6,285,288             -     1,771,892      6,285,288      8,057,180           
Cumming 400                      2,374,562   8,420,776         1,506     2,374,562      8,422,282     10,796,844           
Dunwoody Hall                    1,819,209   6,450,922        13,824     1,819,209      6,464,746      8,283,955           
Dunwoody Village                 2,326,063   7,216,045       107,404     2,326,063      7,323,449      9,649,512           
East Port Plaza                  3,257,023  11,611,363        98,247     3,257,023     11,709,610     14,966,633           
Ensley Square                      915,493   3,120,928             -       915,493      3,120,928      4,036,421           
Garden Square                    2,073,500   7,614,748         5,250     2,073,500      7,619,998      9,693,498           
Glenwood Village                 1,194,198   4,235,476        48,930     1,194,198      4,284,406      5,478,604           
Harpeth Village                  2,283,874   5,559,498             -     2,283,874      5,559,498      7,843,372           
Hyde Park Plaza                  9,240,000  33,340,181         2,650     9,240,000     33,342,831     42,582,831           
Kingsdale                        3,866,500  14,019,614             -     3,866,500     14,019,614     17,886,114           
LaGrange Marketplace               983,923   3,294,003        92,936       983,923      3,386,939      4,370,862           
Loehmann's Plaza                 3,981,525  14,117,891             -     3,981,525     14,117,891     18,099,416           
Lovejoy Station                  1,540,000   5,581,468         1,654     1,540,000      5,583,122      7,123,122           
Lucedale Marketplace               641,565   2,147,848        54,535       641,565      2,202,383      2,843,948           
Mainstreet Square                1,274,027   4,491,897         9,666     1,274,027      4,501,563      5,775,590           
Mariner's Village                1,628,000   5,907,835       106,970     1,628,000      6,014,805      7,642,805           
Marketplace - Alexander City     1,211,605   4,056,242     2,827,753     1,758,433      6,337,167      8,095,600           
Marketplace - Murphreesburo      2,432,942   1,755,643     1,813,070     2,432,942      3,568,713      6,001,655           
Market Place - St. Petersburg    1,287,000   4,662,740       145,115     1,287,000      4,807,855      6,094,855           
Martin Downs Shoppes               700,000   1,207,861       865,494       817,135      1,956,220      2,773,355           
Martin Downs Village Center      2,000,000   5,133,495     2,419,646     2,437,664      7,115,477      9,553,141           
Memorial Bend                    3,256,181  11,546,660             -     3,256,181     11,546,660     14,802,841           
Merchants Village                1,054,306   3,162,919             -     1,054,306      3,162,919      4,217,225           
Millhopper                       1,073,390   3,593,523       142,278     1,073,390      3,735,801      4,809,191           
<FN>

(*)   The year acquired or year constructed is in Item 2. Properties in the Company's Form 10-K.
</FN>
</TABLE>

                                      S-2

<PAGE>

<TABLE>
<CAPTION>
 
                                                                                  Schedule III
                                                                                   -continued- 
                                                               Total Cost,                                              
                                                                  Net of                                         
                                           Accumulated          Accumulated                                       
                                          Depreciation         Depreciation          Mortgages                         
                                          ------------         ------------          ---------                         
<S>                                       <C>                 <C>                  <C>

Anastasia Shopping Plaza                    454,375            4,347,973                    -
Ashford Place                               270,924           12,556,381            4,737,136
Aventura                                  1,635,974           10,550,201            8,713,253
Berkshire Commons                           833,858            9,648,469            7,892,935
Bolton Plaza                                703,549            9,334,543                    -
Bonner's Point                              427,867            3,439,947            1,613,000
Boynton Lakes                                     -           12,826,027                    -
Braelin Village                             303,120           16,306,679           12,490,525
Briarcliff LaVista                           59,584            3,097,355            1,667,855
Briarcliff Village                          438,272           20,462,559           13,439,036
Buckhead Court                              150,456            7,851,757                    -
Cambridge Square                             72,374            3,645,163                    -
Carmel Commons                              173,087           11,590,750                    -
Carriage Gate                               544,405            3,665,243            2,377,489
Chasewood Plaza                           2,187,169           15,195,351            8,000,000
City View                                   162,095            5,409,947                    -
Columbia Marketplace                        543,836            5,169,718            2,586,000
Country Club                                453,904            4,431,807            2,264,000
Courtyard                                 1,097,497            5,045,782            1,378,000
Cromwell Square                             168,957            7,888,223            4,518,368
Cumming 400                                 226,366           10,570,478            6,489,309
Dunwoody Hall                               173,531            8,110,424                    -
Dunwoody Village                            138,770            9,510,742            5,864,972
East Port Plaza                             221,661           14,744,972                    -
Ensley Square                                60,018            3,976,403                    -
Garden Square                                47,723            9,645,775            6,612,868
Glenwood Village                            102,842            5,375,762            2,295,238
Harpeth Village                                   -            7,843,372            4,682,835
Hyde Park Plaza                             496,340           42,086,491           24,750,000
Kingsdale                                    86,841           17,799,273                    -
LaGrange Marketplace                        409,552            3,961,310            1,645,000
Loehmann's Plaza                            379,505           17,719,911           10,000,000
Lovejoy Station                              69,796            7,053,326                    -
Lucedale Marketplace                        269,896            2,574,052            1,390,000
Mainstreet Square                            89,814            5,685,776                    -
Mariner's Village                           111,949            7,530,856                    -
Marketplace - Alexander City                677,302            7,418,298            4,933,946
Marketplace - Murphreesburo                  76,255            5,925,400            2,035,643
Market Place - St. Petersburg               245,981            5,848,874                    -
Martin Downs Shoppes                        278,923            2,494,432            1,313,000
Martin Downs Village Center               1,056,091            8,497,050            4,150,000
Memorial Bend                               279,358           14,523,483            8,545,536
Merchants Village                            67,584            4,149,641                    -
Millhopper                                  739,083            4,070,108            2,401,000
<FN>
(*)   The year acquired or year constructed is in Item 2. Properties in the Company's Form 10-K.
</FN>
</TABLE>

                                      S-3

<PAGE>

<TABLE>
<CAPTION>
                                                                                                       Schedule III       
                                                                                                       -continued-        
                                                                                                                           
                                         Initial Cost                                         Total Cost                   
                                  ----------------------------- Cost Capitalized ---------------------------------------  
                                                  Building &     Subsequent to                 Building &                 
                                    Land         Improvements     Acquistion      Land        Improvements      Total     
                                    ----         ------------     ----------      ----        ------------      -----     
<S>                            <C>              <C>              <C>          <C>           <C>             <C>

Newberry Square                   2,341,460       8,466,651         671,840     2,341,460      9,138,491     11,479,951   
North Miami Shopping Center         603,750       2,021,250          85,432       603,750      2,106,682      2,710,432   
Oakley Plaza                      1,772,540       6,406,975          20,481     1,772,540      6,427,456      8,199,996   
Ocean Breeze                      1,250,000       3,341,199       2,358,464     1,527,400      5,422,263      6,949,663   
Old St. Augustine Plaza           2,047,151       7,355,162          36,833     2,047,151      7,391,995      9,439,146   
Orchard Square                    1,155,000       4,135,353         248,460     1,155,000      4,383,813      5,538,813   
Paces Ferry Plaza                 2,811,522       9,967,557         222,957     2,811,522     10,190,514     13,002,036   
Palm Harbour                      2,899,928      10,998,230         315,287     2,899,928     11,313,517     14,213,445   
Paragon Cable Building              570,000       2,472,537               -       570,000      2,472,537      3,042,537   
Parkway Station                   1,123,200       4,283,917         115,856     1,123,200      4,399,773      5,522,973   
Peachland Promenade               1,284,562       5,143,564          58,119     1,284,562      5,201,683      6,486,245   
Peartree Village                  5,196,653       8,732,711       4,408,150     5,196,653     13,140,861     18,337,514   
Pine Tree Plaza                     539,000       1,995,927               -       539,000      1,995,927      2,534,927   
Powers Ferry Square               3,607,647      12,790,749           6,762     3,607,647     12,797,511     16,405,158   
Powers Ferry Village              1,190,822       4,223,606               -     1,190,822      4,223,606      5,414,428   
Quadrant                          2,342,823      15,541,967       1,315,295     2,343,699     16,856,386     19,200,085   
Regency Square at Brandon           577,975      18,156,719       7,307,792     4,491,461     21,551,025     26,042,486   
Regency Court                     3,571,337      12,664,014           3,480     3,571,337     12,667,494     16,238,831   
Rivermont Station                 2,887,213      10,445,109               -     2,887,213     10,445,109     13,332,322   
Roswell Village                   2,304,345       6,777,200               -     2,304,345      6,777,200      9,081,545   
Russell Ridge                     2,153,214               -       6,546,957     2,215,341      6,484,830      8,700,171   
Sandy Plains Village              2,906,640      10,412,440           1,635     2,906,640     10,414,075     13,320,715   
Sandy Springs Village               733,126       2,565,411          65,000       733,126      2,630,411      3,363,537   
Seven Springs                     1,737,994       6,290,048       1,424,083     1,757,441      7,694,684      9,452,125   
Tamiami Trails                    2,046,286       7,462,646               -     2,046,286      7,462,646      9,508,932   
Tequesta Shoppes                  1,782,000       6,426,042         120,447     1,782,000      6,546,489      8,328,489   
Terrace Walk                      1,196,286       2,935,683          92,305     1,196,286      3,027,988      4,224,274   
Town Center at Martin Downs       1,364,000       4,985,410           7,903     1,364,000      4,993,313      6,357,313   
Town Square                         438,302       1,555,481               -       438,302      1,555,481      1,993,783   
Trowbridge Crossing                 910,263       1,914,551               -       910,263      1,914,551      2,824,814   
Union Square                      1,578,654       5,933,889         108,926     1,578,654      6,042,815      7,621,469   
University Collection             2,530,000       8,971,597          90,249     2,530,000      9,061,846     11,591,846   
University Marketplace            3,250,562       7,044,579       2,209,804     3,532,046      8,972,899     12,504,945   
Village Center                    3,885,444      10,799,316         295,220     3,885,443     11,094,537     14,979,980   
Villages of Trussville              973,954       3,260,627          88,634       973,954      3,349,261      4,323,215   
Welleby Plaza                     1,496,000       5,371,636         253,171     1,496,000      5,624,807      7,120,807   
Wellington Market Place           5,070,384      13,308,972         222,784     5,070,384     13,531,756     18,602,140   
Wellington Town Square            1,914,000       7,197,934         574,179     1,914,000      7,772,113      9,686,113   
West County Marketplace           1,491,462       4,993,155         123,569     1,491,462      5,116,724      6,608,186   
Westland One                        198,344       1,747,391          60,445       198,344      1,807,836      2,006,180   
Woodcroft Shopping Center         1,419,000       5,211,981         312,251     1,419,000      5,524,232      6,943,232   

                               -------------    ------------     ----------   -----------   ------------    ----------- 
                                170,813,416      582,552,737     46,435,214   177,245,784    622,555,583    799,801,367 
                               =============    ============     ===========  ===========   ============    =========== 
 
<FN>
                                     
(*)   The year acquired or year constructed is in Item 2. Properties in the Company's Form 10-K.
</FN>
</TABLE>

                                      S-4

<PAGE>

<TABLE>
<CAPTION>
                                                                                     Schedule III              
                                                                                     -continued-
                                                               Total Cost,
                                                                 Net of
                                          Accumulated          Accumulated
                                          Depreciation         Depreciation          Mortgages
                                          ------------         ------------          ---------
<S>                                       <C>                 <C>                  <C>

Newberry Square                            1,072,541           10,407,410            6,656,968
North Miami Shopping Center                  488,954            2,221,478            1,160,000
Oakley Plaza                                 126,236            8,073,760                    -
Ocean Breeze                                 748,808            6,200,855            2,805,000
Old St. Augustine Plaza                      209,150            9,229,996                    -
Orchard Square                               219,788            5,319,025                    -
Paces Ferry Plaza                            269,031           12,733,005            5,065,000
Palm Harbour                                 393,904           13,819,541                    -
Paragon Cable Building                       242,120            2,800,417                    -
Parkway Station                              206,224            5,316,749                    -
Peachland Promenade                          420,484            6,065,761            4,280,979
Peartree Village                             196,402           18,141,112           12,916,746
Pine Tree Plaza                                    -            2,534,927                    -
Powers Ferry Square                          309,526           16,095,632                    -
Powers Ferry Village                         102,184            5,312,244            2,949,686
Quadrant                                   4,356,804           14,843,281                    -
Regency Square at Brandon                  5,449,050           20,593,436           12,000,000
Regency Court                                306,445           15,932,386            5,732,000
Rivermont Station                            130,374           13,201,948                    -
Roswell Village                              125,446            8,956,099                    -
Russell Ridge                                445,001            8,255,170            6,403,370
Sandy Plains Village                         368,719           12,951,996                    -
Sandy Springs Village                         56,976            3,306,561                    -
Seven Springs                                868,180            8,583,945                    -
Tamiami Trails                                77,983            9,430,949                    -
Tequesta Shoppes                             216,001            8,112,488                    -
Terrace Walk                                 545,763            3,678,511              683,000
Town Center at Martin Downs                  135,242            6,222,071                    -
Town Square                                   37,632            1,956,151            1,525,500
Trowbridge Crossing                           36,818            2,787,996            1,800,000
Union Square                                 211,085            7,410,384                    -
University Collection                        270,068           11,321,778                    -
University Marketplace                     1,553,812           10,951,133                    -
Village Center                               577,869           14,402,111                    -
Villages of Trussville                       427,292            3,895,923            1,775,000
Welleby Plaza                                336,416            6,784,391                    -
Wellington Market Place                      767,986           17,834,154                    -
Wellington Town Square                       292,551            9,393,562                    -
West County Marketplace                      683,268            5,924,918            3,190,000
Westland One                                 391,646            1,614,534                    -
Woodcroft Shopping Center                    135,538            6,807,694                    -

                                          ----------          -----------         ------------
                                          40,795,801          759,005,566          227,730,193
                                          ==========          ===========         ============
<FN>

(*)   The year acquired or year constructed is in Item 2. Properties in the Company's Form 10-K.
</FN>
</TABLE>

                                      S-5


<PAGE>

                                                                  Schedule III
                                                                   -continued-



Depreciation and amortization of the Company's investment in buildings and 
improvements reflected in the statement of operations is calculated over the 
estimated useful lives of the assets as follows:

       Buildings and improvements                      up to 40 years

The aggregate cost for Federal income tax purposes was approximately 
$719,377,653 at December 31, 1997.


The changes in total real estate assets for the period ended December 31, 1997
 and 1996:



<TABLE>
<CAPTION>

                                                                  1997                     1996
                                                           --------------------    ------------------
                 <S>                                    <C>                        <C>

                 Balance, beginning of period                      389,007,481            278,731,167
                      Developed or acquired properties             408,475,251            107,378,064
                      Sale of property                              (2,907,503)                     -
                      Improvements                                   5,226,138              2,898,250
                                                           --------------------    ------------------
                 Balance, end of period                 $          799,801,367            389,007,481
                                                           ====================    ==================
</TABLE>



The changes in accumulated depreciation for the period ended December 31, 1997 
and 1996:

<TABLE>
<CAPTION>

                                                                  1997                      1996
                                                           --------------------    ------------------
                 <S>                                    <C>                        <C>     
                 Balance, beginning of period                       26,213,225             18,631,310
                      Sale of property                                (713,176)                     -
                      Depreciation for period                       15,295,752              7,581,915
                                                           --------------------    ------------------
                 Balance, end of period                 $           40,795,801             26,213,225
                                                           ====================    ==================
</TABLE>

                                      S-6





                                     Equity Ownership of
                        Subsidiaries of Regency Realty Corporation
                                       March 23, 1998

<TABLE>
<CAPTION>
                                                                                          NATURE OF                % OF
                ENTITY                JURISDICTION              OWNER(S)                   INTEREST           OWNERSHIP
- ------------------------------------ --------------- ------------------------------ -------------------- ---------------
<S>                                     <C>          <C>                            <C>                          <C>    

Regency Realty Group, Inc.              Florida      The Regency Group, Inc.        Common Stock                    93%
(formerly Regency                                    Regency Centers, L.P.          Common Stock                     7%
Realty Group II, Inc.)                               Regency Centers, L.P.          Preferred Stock                100%
RRC Lender, Inc.                        Florida      Regency Realty Group, Inc.     Common Stock                   100%
Village Commons Shopping Center         Florida      Regency Realty Group, Inc.     General Partnership**           10%
Chestnut Powder LLC                     Georgia      Regency Realty Group, Inc.     Member
Marietta Outparcel, Inc.                Georgia      Regency Realty Group, Inc.     Common Stock                   100%
Barnett Shoales, LLC                    Georgia      Regency Realty Group, Inc.     Member
Edmunson Orange Corp.                   Tennessee    Regency Realty Group, Inc.     Common Stock                   100%
RRC FL SPC, Inc.                        Florida      Regency Realty Corporation     Common Stock                   100%
RRC GA SPC, Inc.                        Georgia      Regency Realty Corporation     Common Stock                   100%
RRC AL SPC, Inc.                        Alabama      Regency Realty Corporation     Common Stock                   100%
RRC MS SPC, Inc.                        Mississippi  Regency Realty Corporation     Common Stock                   100%
RRC General SPC, Inc.                   Florida      Regency Realty Corporation     Common Stock                   100%
RRC Limited SPC, Inc.                   Florida      Regency Realty Corporation     Common Stock                   100%
RRC FL Five,
 Inc.                       Florida      Regency Realty Corporation     Common Stock                   100%
RRC FL Seven, Inc.                      Florida      Regency Realty Corporation     Common Stock                   100%
RRC Acquisitions, Inc.                  Florida      Regency Realty Corporation     Common Stock                   100%
RRC Acquisitions Two, Inc.              Florida      Regency Realty Corporation     Common Stock                   100%
Regency Office Partnership, L.P.        Delaware     Regency Centers, L.P.          General Partnerhsip**           50%
                                                     Regency Realty Corporation     Limited Partnership             50%
Regency Centers, L.P.                   Delaware     Regency Realty Corporation     General Partnership**             %
                                                     Regency Realty Corporation     Limited Partnership               %
                                                     Outside Investors              Limited Partnership 1             %
Equiport Associates, L.P.               Georgia      Regency Centers, L.P.          General Partnership**           55%
Branch/HOP Associates, L.P.             Georgia      Regency Centers, L.P.          General Partnership**        50.01%
Old Fort Associates, L.P.               Georgia      Regency Centers, L.P.          General Partnership**        66.70%
Fieldstone Associates, L.P.             Georgia      Regency Centers, L.P.          General Partnership**           70%
Roswell Village, Ltd.                   Georgia      Regency Centers L.P.           General Partnership**          100%
Treasure Coast Investors, Ltd.          Florida      RRC General SPC, Inc.          General Partnership**           99%
                                                     RRC Limited SPC, Inc.          Limited Partnership              1%
Regency Rosewood Temple Terrace,        Florida      RRC General SPC, Inc.          General Partnership**           99%
Ltd.                                                 RRC Limited SPC, Inc.          Limited Partnership              1%
Landcom Regency Mandarin, Ltd.          Florida      RRC General SPC, Inc.          General Partnership**           99%
                                                     RRC Limited SPC, Inc.          Limited Partnership              1%
RSP IV Criterion, Ltd.                  Florida      RRC General SPC, Inc.          General Partnership**           99%
                                                     RRC Limited SPC, Inc.          Limited Partnership              1%
RRC Operating Partnership of            Georgia      Regency Centers, L.P.          General Partnership**           16%
Georgia L.P.                                                                        
Regency Ocean East Partnership          Florida      Regency Centers, L.P.          General Partnership**           25%
Limited                                                                             
Regency Retail Centers of Ohio,         Ohio         Regency Realty Corporation     Common Stock                   100%
Inc.
Hyde Park Partners, L.P.                Ohio         Regency Retail Centers of      General Partnership**        98.95%
                                                     Ohio, Inc.                     
                                                     Midland Hyde Park Partners,    General Partnership**         1.00%
                                                     L.P.                           
                                                     Midland Hyde Park Partners,    Limited Partnership            .05%
                                                     L.P.
R&M Western Partnership, L.P.           Delaware     Regency Realty Group, Inc.     General Partnership**         1.00%
                                                     Regency Centers, L.P.          Limited Partnership          24.00%
Delk Spectrum, L.P.                     Georgia      Regency Realty Corporation     General Partnership**         6.21%
                                                     Outside Investors              Limited Partnership          93.79%
</TABLE>


- -----------------
** General Partner has liability for debts of the Partnership
                                                                         
1  Redeemable for shares of Regency Realty Corporation Common Stock










                          Independent Auditors' Consent




The Board of Directors
Regency Realty Corporation:


We consent to incorporation by reference in the  registration  statements,  (No.
33-86886,  No. 333-930, No. 333-2546,  and No. 333-31077,  and No. 333-37911) on
Form S-3 and (No.  333-24971) on Form S-8, of Regency Realty  Corporation of our
reports dated February 3, 1998, except for note 12 as to which the date is March
1,  1998,  relating  to  the  consolidated  balance  sheets  of  Regency  Realty
Corporation  as of  December  31, 1997 and 1996,  and the  related  consolidated
statements of operations,  stockholders'  equity, and cash flows for each of the
years in the three-year  period ended  December 31, 1997, and related  schedule,
which  reports  appear in the  December  31, 1997 annual  report of Form 10-K of
Regency Realty Corporation.






                                                   KPMG PEAT MARWICK LLP



Jacksonville, Florida
March 23, 1998






<TABLE> <S> <C>
                                               
<ARTICLE>                                                              5
<LEGEND>                                      
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM REGENCY
REALTY CORPORATION'S REPORT FOR THE PERIOD ENDED 12/31/97
</LEGEND>                                     
<CIK>                                                               0000910606
<NAME>                                              REGENCY REALTY CORPORATION
<MULTIPLIER>                                                           1
                                                     
<S>                                                         <C>
<PERIOD-TYPE>                                                     12-MOS
<FISCAL-YEAR-END>                                            DEC-31-1997
<PERIOD-END>                                                 DEC-31-1997
<CASH>                                                        16,586,094
<SECURITIES>                                                           0
<RECEIVABLES>                                                 10,709,154
<ALLOWANCES>                                                   1,162,570
<INVENTORY>                                                            0
<CURRENT-ASSETS>                                                       0
<PP&E>                                                       834,401,506
<DEPRECIATION>                                                40,795,801
<TOTAL-ASSETS>                                               826,848,591
<CURRENT-LIABILITIES>                                                  0
<BONDS>                                                                0
<PREFERRED-MANDATORY>                                                  0
<PREFERRED>                                                            0
<COMMON>                                                         239,920
<OTHER-SE>                                                   513,386,733
<TOTAL-LIABILITY-AND-EQUITY>                                 826,848,591
<SALES>                                                                0
<TOTAL-REVENUES>                                              97,786,897
<CGS>                                                                  0
<TOTAL-COSTS>                                                 22,904,131
<OTHER-EXPENSES>                                              16,303,159
<LOSS-PROVISION>                                                       0
<INTEREST-EXPENSE>                                            19,667,483
<INCOME-PRETAX>                                               27,401,655
<INCOME-TAX>                                                           0
<INCOME-CONTINUING>                                           27,401,655
<DISCONTINUED>                                                         0
<EXTRAORDINARY>                                                        0
<CHANGES>                                                              0
<NET-INCOME>                                                  27,401,655
<EPS-PRIMARY>                                                       1.28
<EPS-DILUTED>                                                       1.23
        

</TABLE>