SECURITIES AND EXCHANGE COMMISSION
                                     UNITED STATES
                                Washington, DC   20549

                                      FORM 8-K/A

                                    CURRENT REPORT

     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


        Date of Report (Date of earliest event reported) March 7, 1997

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



         Florida                        1-12298                59-3191743
(State or other jurisdiction         (Commission             (IRS Employer
     of incorporation)                File Number)          Identification No.)


  121 West Forsyth Street, Suite 200
       Jacksonville, Florida                                    32202
(Address of principal executive offices)                      (Zip Code)


Registrant's telephone number including area code:          (904)-356-7000



                                 Not Applicable
          (Former name or former address, if changed since last report)


<PAGE>


Item 7.     FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL INFORMATION

A.   BRANCH PROPERTIES, L.P. AND PREDECESSOR
          Audited Financial Statements for
            the year ended December 31, 1996

B.   Pro Forma Financial Information
     



<PAGE>


BRANCH PROPERTIES, L.P.
AND PREDECESSOR
INDEX TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------


FINANCIAL STATEMENTS                                                    Page

  Report of Independent Accountants...................................... 1

  Consolidated Balance Sheets as of December 31, 1996 and 1995........... 2

  Consolidated/Combined Statements of Operations for the years
     ended December 31, 1996, 1995 and 1994.............................. 3

  Consolidated/Combined Statements of Partners' and Owners' Equity
     for the years ended December 31, 1996, 1995 and 1994................ 4

  Consolidated/Combined Statements of Cash Flows for the year
     ended December 31, 1996, the periods from December 19, 1995,
     through December 31, 1995, January 1, 1995 through
     December 18, 1995 and the year ended December 31, 1994.............. 5

  Notes to Financial Statements.......................................... 6





<PAGE>


March 14, 1997
To the Participants and Administrator of the
President Baking Company, Inc. Merit Plan
Page 1










                   REPORT OF INDEPENDENT ACCOUNTANTS



March 7, 1997


To the Partners of Branch Properties, L.P.

In our opinion,  the  accompanying  consolidated  balance sheets and the related
consoli  dated/combined  statements  of  operations,  of  partners'  and owners'
equity,  and of  cash  flows  present  fairly,  in all  material  respects,  the
financial position of Branch Properties, L.P. and Predecessor (the "Company") at
December 31, 1996 and 1995 and the results of their  operations  for each of the
three years in the period  ended  December 31, 1996 and their cash flows for the
year ended  December  31,  1996,  the periods  from  December  19, 1995  through
December 31, 1995,  January 1, 1995 through December 18, 1995 and the year ended
December 31, 1994 in conformity with generally accepted  accounting  principles.
These financial  statements are the responsibility of the Company's  management;
our responsibility is to express an opinion on these financial  statements based
on our audits.  We conducted our audits of these  statements in accordance  with
generally accepted auditing standards which 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,
assessing the  accounting  principles  used and  significant  estimates  made by
management,  and evaluating the overall  financial  statement  presentation.  We
believe  that our audits  provide a reasonable  basis for the opinion  expressed
above.




Price Waterhouse LLP
Atlanta, Georgia



                                  1



<PAGE>


BRANCH PROPERTIES, L.P.
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
- -------------------------------------------------------------------------------


                                                            December 31,
                                                         1996          1995
ASSETS
Investment in real estate
  Land                                                $  45,422     $  35,383
  Buildings and land improvements                       110,738        85,540
  Tenant improvements                                       837           625
  Furniture, fixtures and equipment                       1,497         1,253
                                                      ---------     ---------
                                                                           
                                                        158,494       122,801
  Less: accumulated depreciation and amortization       (12,891)      (10,180)
                                                      ---------     ---------
                                                                             
    Operating real estate assets                        145,603       112,621
Developments held for resale, including $7,553
  under construction                                     11,365             - 
Construction in progress                                 16,983             -
                                                      ---------      ---------
                                                        173,951       112,621

Cash and cash equivalents                                   325         1,468
Tenant receivables                                        2,194         1,553
Deferred charges, net                                     1,489         1,016
Other assets                                              4,837         2,436
Investment in unconsolidated property partnership           937           898
                                                      ---------      --------
                                                                           
        Total assets                                  $ 183,733     $ 119,992
                                                      =========      ========
                                                                                


LIABILITIES AND PARTNERS' EQUITY
Notes payable                                         $ 119,096     $  81,277
Security deposits and unearned rents                        701           369
Accounts payable and accrued expenses                     7,030         2,679
Other liabilities                                         1,530           182
                                                      ---------      --------
                                                                             

                                                        128,357        84,507
Minority interest in consolidated property
  partnerships                                            6,915         5,538
Commitments and contingencies                                 -             -
Partners' equity                                         48,461        29,947
                                                      ---------      --------
                                                                          
        Total liabilities and partners' equity        $ 183,733     $ 119,992
                                                      =========     ========= 
See accompanying notes to the financial statements.

                                         2


<PAGE>


BRANCH PROPERTIES, L.P. AND PREDECESSOR
CONSOLIDATED/COMBINED STATEMENTS OF OPERATIONS
(Dollars in Thousands)
- -------------------------------------------------------------------------------



                                                             Predecessor
                                               Branch         Year ended
                                           Properties, LP    December 31,
                                                1996       1995        1994
Revenues
  Rental                                    $  16,599   $  12,270   $   8,762
  Tenant reimbursements                         3,254       2,398       1,442
  Third-party management                        3,627       3,758       4,471
  Acquisition and development                     828       1,201       1,928
  Other income, net                               321         398         995
                                            ---------    ---------  ---------
                                                                                
         Total revenues                        24,629      20,025      17,598
                                            ---------   ---------   ---------   

Expenses
  Property operating and maintenance            3,558       2,572       1,918
  Third-party management                        3,097       3,969       4,120
  Acquisition and development                     953       1,176       1,418
  Real estate taxes                             1,596       1,192         868
  Interest                                      7,366       6,534       3,962
  Depreciation and amortization                 3,165       2,382       1,811
  General and administrative                    2,547         830         551
  Formation expenses                              108       1,274           -
  Minority interest in consolidated/
    combined property partnerships                482         211         (14)
                                            ---------   ---------    --------   

        Total expenses                         22,872      20,140      14,634
                                            ---------   ---------    --------   

   Income (loss) before extraordinary item      1,757        (115)      2,964
  Extraordinary item                              (76)     (1,385)          -
                                            ---------   ---------    --------
                                                                                
        Net income (loss)                   $   1,681   $  (1,500)  $   2,964
                                            =========   =========   ========= 
                                                                                



                 See accompanying notes to the financial statements.

                                         3


<PAGE>


BRANCH PROPERTIES, L.P. AND PREDECESSOR
CONSOLIDATED/COMBINED STATEMENTS OF PARTNERS' AND OWNERS' EQUITY
(Dollars in Thousands)
- -------------------------------------------------------------------------------



                                           General  Limited  Predecessor
                                            Partner Partners   Equity    Total

Predecessor                             

PARTNERS' AND OWNERS' EQUITY,
 DECEMBER 31, 1993                       $     -   $    -     $15,951  $15,951
  Capital contributions                        -        -       5,528    5,528
  Capital distributions                        -        -      (4,833)  (4,833)
  Deemed capital contributions                 -        -         329      329
  Net income                                   -        -       2,964    2,964
                                           -------   ------    ------   ------
 PARTNERS' AND OWNERS' EQUITY,
 DECEMBER 31, 1994                             -        -      19,939   19,939
  Capital contributions                        -        -         606      606
  Capital distributions                        -        -      (2,830)  (2,830)
  Deemed capital distributions                 -        -        (152)    (152)
  Distributions of net capital of
    Initial Properties to partners
    and owners in conjunction with
    the Business Combination                   -        -      (3,800)  (3,800)
      loss                                                     (1,500)  (1,500)
                                           -------   ------    ------   ------
PARTNERS' AND OWNERS' EQUITY,
 DECEMBER 18, 1995                             -        -      12,263   12,263
                                          
Branch Properties, L.P.

  Reclassification of predecessor
    equity in connection with
    the Business Combination              (2,497)   14,760    (12,263)       - 
  Proceeds from Equity Commitment,
    net of offering costs of $1,075            -     7,033          -    7,033
  Units issued in satisfaction of
    notes payable and other liabilities        -     2,830          -    2,830

  Acquisition of unaffiliated
    interests and non-controlled
    interests where cash
    consideration was involved                 -     7,821          -    7,821
                                          -------   ------     ------   ------
PARTNERS' EQUITY,
 DECEMBER 31, 1995                        (2,497)   32,444          -   29,947
  Adjustment to acquisition of
    unaffiliated interests where
    cash consideration was
    involved at December 19, 1995              -    (1,340)         -   (1,340)
  Capital contributions                        -        66          -       66
  Capital distributions paid                (216)   (3,684)         -   (3,900)
  Capital distributions declared             (72)   (1,328)         -   (1,400)
  Subordinate units issued to 
    certain key employees                     -        150          -      150
  Proceeds from Equity Commitment             -     23,257          -   23,257
  Net income                                  86     1,595          -    1,681
                                          -------- --------   -------  ------- 
PARTNERS' EQUITY, DECEMBER 31, 1996      $(2,699)  $51,160    $     -  $48,461
                                         ========  =======    =======  =======

See accompanying notes to the financial statements.
                                           4


<PAGE>


BRANCH PROPERTIES, L.P. AND PREDECESSOR
CONSOLIDATED/COMBINED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
- -------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                        Branch Properties,
                                                              L.P.                      Predecessor
                                                 ---------------------------    -----------------------------
                                                                   Period from  Period from
                                                                   December 19,  January 1,
                                                                      1995         1995
                                                      Year ended     through      through      Year ended
                                                     December 31,  December 31,  December 18,  December 31,
                                                        1996          1995         1995          1994
<S>                                                   <C>           <C>          <C>          <C>    

CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss)                                   $ 1,681       $       -    $(1,500)     $ 2,964
  Adjustments to reconcile
   net income (loss) to net
   cash provided by (used in)
   operating activities
    Depreciation                                        3,112               -      2,226        1,669
    Amortization                                          282               -        607          368
    Bad debt expense                                      277               -          -            -             
    Write-off of deferred financing
     and leasing costs                                     76               -        234            -
    (Gain) on sale of real estate assets                  (95)                       (69)           -
    Minority interest in consolidated
     /combined property partnerships                      482               -        211          (14)
    Equity in net income of
     unconsolidated property
      partnership                                         (39)              -         (7)           -
    Subordinate units issued to
      key employees                                       150               -          -            -
   Changes in assets, (increase) decrease
    Developments held for resale                      (13,865)              -          -            - 
    Tenant receivables                                   (918)              -       (620)        (318)
    Deferred charges                                     (163)              -       (225)         (95)
    Other assets                                       (2,401)              -       (385)        (662)
   Changes in liabilities, increase (decrease)
    Security deposits and unearned rents                  332               -         84          108
    Accounts payable and accrued expenses               1,009          (1,361)     2,558         (508)
    Other liabilities                                   1,348               -       (109)       1,034
                                                      -------          ------      -----        -----
      Net cash provided by (used in)
        operating activities                           (8,732)         (1,361)     3,005        4,546
                                                       ------          ------      -----        ----- 
CASH FLOWS FROM INVESTING ACTIVITIES
  Construction of real estate
     assets, net of payables                          (19,314)               -    (1,371)      (3,399)
  Acquisition of shopping centers                     (25,274)               -    (5,358)     (22,975)
  Tenant improvements                                    (206)               -      (229)        (442)
  Proceeds from sale of real estate assets              3,364                -       693            -
  Investment in unconsolidated
    property partnership                                    -                -      (891)           -   
  Purchase of non-controlled 
    interests of certain
    investors in the Initial Properties                     -           (1,994)        -            -  
  Other capital expenditures                             (888)               -      (657)        (343)
                                                      -------           ------     ------      -------
                                                
      Net cash (used in) investing activities         (42,318)          (1,994)   (7,813)     (27,159)
                                                      -------           ------    ------      -------
</TABLE>



<PAGE>
BRANCH PROPERTIES, L.P. AND PREDECESSOR
CONSOLIDATED/COMBINED STATEMENTS OF CASH FLOWS
Continued
(Dollars in Thousands)
- -------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                        Branch Properties,
                                                              L.P.                      Predecessor
                                                 ---------------------------    -----------------------------
                                                                   Period from  Period from
                                                                   December 19,  January 1,
                                                                      1995         1995
                                                      Year ended     through      through      Year ended
                                                     December 31,  December 31,  December 18,  December 31,
                                                        1996          1995         1995          1994
<S>                                                  <C>              <C>        <C>          <C>    


                                                              
CASH FLOWS FROM FINANCING ACTIVITIES
  Payment of financing costs                            (518)            (453)      (386)        (371)
  Debt proceeds                                       59,984           36,286     37,013       25,978
  Debt payments                                      (28,439)         (36,230)   (31,699)      (6,519)
  Deemed capital (distributions) contributions                                      (152)         329
  Contributions from minority interest
    in consolidated/combined property
    partnerships                                           -                -      2,320        3,021
  Distributions to minority interests
   in consolidated/combined property 
   partnerships                                         (543)               -          -            -
  Capital contributions                                   66                -        606        5,528
  Capital distributions                               (3,900)               -     (2,830)      (4,833)
  Distributions of net capital of
    Initial Properties to partners
    and owners in conjunction with the
    Business Combination                                   -           (1,813)    (1,987)           - 
  Proceeds from the Equity Commitment                 23,257            8,108          -            - 
  Payment of offering costs                                -           (1,075)         -            -   
                                                     -------           ------     ------       ------
                                                          
      Net cash provided by financing activities       49,907            4,823      2,885       23,133
                                                     -------           ------     ------      ------- 
                                                       
  Net increase (decrease) in 
    cash and cash equivalents                         (1,143)           1,468     (1,923)         520
  Cash and cash equivalents, beginning of period       1,468                -      1,923        1,403
                                                     -------           ------     ------       ------
                                                        
  Cash and cash equivalents, end of period           $   325           $1,468     $    -      $ 1,923
                                                      ======           ======     ======      =======                               
</TABLE>


                    See accompanying notes to the financial statements.

                                            5


<PAGE>


BRANCH PROPERTIES, L.P. AND PREDECESSOR
NOTES TO THE FINANCIAL STATEMENTS
(Dollars in Thousands)
- ------------------------------------------------------------------------------


1.  ORGANIZATION AND BASIS OF PRESENTATION

    Organization and formation of the company
    Branch Properties,  L.P. ("BPL"), a limited  partnership,  was formed in the
    State of Georgia on October  20,  1995 by the  partners/shareholders  of the
    Branch  Group  ("BG" or  "Predecessor")  for the purpose of  continuing  the
    shopping  center and management  company  operations then being conducted by
    BG. At that date, BG was not a legal entity but rather a  combination  of 14
    partnership and corporate  entities which collectively owned 15 neighborhood
    and  community   shopping   centers  (the  "Initial   Properties")  and  the
    management,  leasing,  acquisition and development  businesses of Branch and
    Associates, Branch Realty Management, Inc. and certain other affiliates (the
    "Branch Entities") which had varying ownership interests in common.

    On December 19, 1995, the Initial  Properties  and the Branch  Entities were
    transferred to BPL in exchange for  partnership  units and the assumption of
    debt and other liabilities.  Concurrently, BPL received a commitment from an
    investor  for $40,000 of equity (the  "Equity  Commitment")  and  obtained a
    $50,000  thirty-five month term facility (the "Term Facility") and a $30,000
    master commitment (the "Master  Commitment") from a bank. These transactions
    are collectively referred to herein as the "Business Combination".

    The net proceeds from the Business Combination of $43,319,  which represents
    $7,033 from the Equity  Commitment,  $4,803 from the Term Facility,  $13,700
    from the Master  Commitment and $17,783 from the refinancing of certain debt
    arrangements of the Initial Properties, were used as follows: (i) $37,535 to
    repay debt on the Initial  Properties  (including  prepayment  penalties and
    accrued  interest),  (ii)  $1,994 to  acquire  non-controlled  interests  of
    certain  investors in the Initial  Properties,  (iii) $1,813  distributed to
    certain  owners of the  Initial  Properties,  (iv)  $1,977  to fund  certain
    reserves and to pay other expenses incurred in connection with the formation
    of BPL,  consisting  primarily of financial  advisory,  legal and accounting
    fees ("Formation Expenses").

    As referred to herein, "The Company" shall mean BPL or BG, its Predecessor.

    Basis of presentation
    For  the  periods   after  the  Business   Combination,   the   accompanying
    consolidated  financial  statements  include the  accounts  of BPL.  For the
    periods  prior  to  the  Business  Combination,  the  accompanying  combined
    financial  statements reflect the combined accounts of the Predecessor.  The
    results of operations for the period from December 19, 1995 through December
    31, 1995 were not  significant  and have been  reflected in the statement of
    operations of the Predecessor.

    The Business  Combination was structured to allow the partners and owners of
    the  entities  in BG to  receive  partnership  interests  ("Units")  in BPL.
    Purchase  accounting  was  applied to the  acquisition  of all  unaffiliated
    entities  and certain  non-controlled  interests in  affiliated  entities in
    which cash  consideration  was paid. The  acquisition of all other interests
    was accounted for as

                                      6


<PAGE>


BRANCH PROPERTIES, L.P. AND PREDECESSOR
NOTES TO THE FINANCIAL STATEMENTS
(Dollars in Thousands)
- ------------------------------------------------------------------------------


    a reorganization of entities under common control and, accordingly, has been
    reflected  at  historical  cost in a manner  similar  to that in  pooling of
    interests accounting.

    During  1996,  the  Company  sold  a  shopping  center  for a net  price  of
    approximately  $2,993.  Since  the  property  was  included  in the  Initial
    Properties,  the basis  assigned as of the date of the Business  Combination
    was adjusted based on the sales price ultimately received. The effect of the
    adjustment in the amount of $1,340 was recorded as a reduction in equity.

    All significant  inter-entity or intercompany balances and transactions have
    been eliminated in  consolidation/combination.  The financial  statements of
    the  Company  have been  adjusted  for the effect of minority  interests  in
    certain shopping centers.  Equity interests in property  partnerships of 50%
    or less are presented using the equity method of accounting.

    Certain items in the  consolidated/combined  financial  statements have been
    reclassified for comparative purposes.


2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    Nature of business
    The Company is engaged in the management,  operation,  leasing,  investment,
    acquisition and development of neighborhood  and community  shopping centers
    primarily  located in the southeastern  United States.  The Company provides
    services for shopping centers it owns and for centers owned by third parties
    and affiliated entities.

    The Company owned nineteen  operating  shopping centers at December 31, 1996
    and  seventeen  operating  shopping  centers at December 31, 1995 with total
    leasable  space of 1,897,238 and 1,675,100,  respectively.  The centers were
    97.10% and 96.57%  leased at December  31, 1996 and 1995,  respectively.  At
    December 31, 1996  approximately  81%, 17%, and 2% (on a gross leasable area
    basis)  of  BPL's   operating   properties   are  located  in  the  Atlanta,
    north/central Florida, and Raleigh metropolitan areas, respectively.

    Revenue recognition
    Minimum rental income is recognized on a  straight-line  basis over the term
    of the lease  regardless  of when  payments are due.  Accrued  straight-line
    rents   receivable  of  $811  and  $503  at  December  31,  1996  and  1995,
    respectively,  are included in tenant receivables.  Certain lease agreements
    contain  provisions  which  provide for  additional  rents based on tenants'
    sales volume and  reimbursement  of the tenants' share of real estate taxes,
    certain common area maintenance and other costs.  These additional rents and
    reimbursements are reflected on the accrual basis.


                                      7


<PAGE>


BRANCH PROPERTIES, L.P. AND PREDECESSOR
NOTES TO THE FINANCIAL STATEMENTS
(Dollars in Thousands)
- ------------------------------------------------------------------------------


    Cash and cash equivalents
    For  purposes of the  statement  of cash flows,  the Company  considers  all
    investments  purchased with an original  maturity of three months or less to
    be cash equivalents.

    Deferred charges
    Included  in  deferred  charges  are  certain  expenditures  related  to the
    financing and leasing of the shopping centers. Financing costs are amortized
    using the interest  method over the terms of the related debt.  Amortization
    of  deferred  financing  costs  is  included  in  interest  expense  on  the
    statements of operations.  Leasing costs are amortized over the terms of the
    related leases.

    Real estate assets and depreciation
    Real estate assets are stated at cost.  Ordinary repairs and maintenance are
    expensed as incurred;  major  replacements  and improvements are capitalized
    and depreciated over their estimated useful lives.  Depreciation is computed
    on a straight-line  basis over the useful lives of the assets  (building and
    related land improvements - 20-40 years; furniture, fixtures and equipment -
    5-7  years).  Tenant  improvements  are  depreciated  over the  terms of the
    related leases.

    Sales of  investments  in real estate and  developments  held for resale are
    recognized at closing.

    On January 1, 1996, the Company  adopted  Statement of Financial  Accounting
    Standards No. 121 (FAS 121),  "Accounting  for the  Impairment of Long-Lived
    Assets and for  Long-Lived  Assets to be Disposed of." FAS 121 requires that
    long-lived  assets  to be  held  and  used  by an  entity  be  reviewed  for
    impairment  whenever  events or changes in  circumstances  indicate that the
    carrying amount of an asset may not be recoverable. In performing the review
    for  recoverability,  the entity estimates the future cash flows expected to
    result from the use of the asset and its eventual disposition. If the sum of
    the expected future cash flows  (undiscounted  and without interest charges)
    is less  than the  carrying  amount  of the  asset,  an  impairment  loss is
    recognized.  Otherwise an impairment loss is not recognized.  Measurement of
    an  impairment  loss that an entity  expects  to hold and use is used in the
    fair value of the asset.  Developments  held for resale are  recorded at the
    lower of carrying amount or fair value less disposition  costs. The adoption
    of  FAS  121  had  no  significant  effect  on  the  consolidated  financial
    statements of the Company.

    General and administrative expenses
    Certain  general  and  administrative  expenses  are  allocated  to property
    operating  and  maintenance,  third-party  management  and  acquisition  and
    development  expenses  based on the relative  payroll costs included in each
    category.

    Interest and real estate taxes
    Interest and real estate taxes incurred during the  construction  period are
    capitalized and amortized over the lives of the constructed assets. Interest
    paid (net of capitalized  amounts of $811,  $230 and $440 during 1996,  1995
    and 1994) aggregated $7,117,  $6,042 and $3,567 for the years ended December
    31, 1996, 1995 and 1994, respectively.

                                      8


<PAGE>


BRANCH PROPERTIES, L.P. AND PREDECESSOR
NOTES TO THE FINANCIAL STATEMENTS
(Dollars in Thousands)
- ------------------------------------------------------------------------------


    Interest rate swap agreements
    Swap receipts and payments under interest rate swap agreements designated as
    a hedge are  recognized as  adjustments  to interest  expense when earned or
    incurred and are reflected as operating  activities in the statement of cash
    flows.

    Use of estimates
    The  preparation  of  financial  statements  in  conformity  with  generally
    accepted  accounting  principles  requires  management to make estimates and
    assumptions  that affect the reported  amounts of assets and liabilities and
    disclosure of contingent assets and liabilities at the date of the financial
    statements  and the reported  amounts of revenues  and  expenses  during the
    reporting period. Actual results could differ from those estimates.

    Partners'  capital  contributions,  distributions  and  profit and loss with
    respect to BPL Partners' capital contributions, distributions and profit and
    loss are allocated in accordance with the partnership agreement.

    In conjunction with the Business Combination, the partnership issued 360,000
    and  4,305,537  of  Priority  Units to the  general  and  limited  partners,
    respectively  and 500,000 and 100,000 of  Subordinated  Units to the general
    and limited partners, respectively.  Additional Priority Units may be issued
    to certain partners in the Initial  Properties subject to the achievement of
    certain operating results.  The initial capital  contributed by each partner
    in  the  Business  Combination  has  been  allocated  as  specified  in  the
    partnership  agreement.  The  issuance  of  additional  Units is  subject to
    certain restrictions as defined in the partnership agreement.

    In October 1996, the General  Partner issued 187,500  Subordinated  Units to
    certain key  employees  of which 37,500 vest and become  nonforfeitable  one
    year from the occurrence of a REIT transaction as defined in the partnership
    agreement.  The Company recognized  compensation expense of $150,000 in 1996
    based on the estimated value of vested units.

    Distributions  of Net  Operating  Cash Flow and Net  Proceeds  from  Capital
    Transactions  (as defined)  will  generally be made in  accordance  with the
    Partnership  Agreement  which  provides  for  stated  preferred  returns  to
    Priority Unit holders.

    Allocation  of net income  and loss  generally  follows  the  allocation  of
    distributions of Net Operating Cash Flow as outlined above.

    Owners'  capital  contributions,  distributions  and  profit  and loss  with
    respect  to  entities   included  in  BG  Owners'   capital   contributions,
    distributions and profit and loss are allocated in accordance with the terms
    of individual partnership agreements. Generally these items are allocated in
    proportion to the respective  ownership  interests.  Certain agreements also
    provide for a preference return to certain partners.

                                      9


<PAGE>


BRANCH PROPERTIES, L.P. AND PREDECESSOR
NOTES TO THE FINANCIAL STATEMENTS
(Dollars in Thousands)
- ------------------------------------------------------------------------------


    Deemed capital contributions and distributions
    Branch and  Associates  (an entity  included  in BG) had  historically  made
    advances to its partners  using funds not required for the  operation of the
    shopping  centers.  In addition,  Branch and  Associates  held a 99% limited
    partnership  interest in Branch Investment  Partners,  L.P.  ("BIP"),  which
    owned  Cumming 400  shopping  center (one of the  Initial  Properties).  BIP
    contributed  the assets and  liabilities  of Cumming 400 and  certain  other
    partnership interests to the Company; however BIP also held other assets and
    liabilities   which  were  not  part  of  the  Business   Combination.   The
    consolidated/combined  financial  statements  have  been  adjusted  for  all
    periods to  eliminate  the  advances to its  partners and the net assets and
    related income of BIP not included in the Business Combination.  The changes
    in net assets  eliminated,  the related  investment and interest income, and
    advances   have  been   reflected  as  deemed   capital   distributions   or
    contributions.  Management  believes that this results in a more  meaningful
    presentation of BG's  historical  operating  results and financial  position
    since  these net assets  and  advances  were not  included  in the  Business
    Combination and will not be part of the Company's ongoing future operations.
    Accordingly,  the following  amounts have been  eliminated from the combined
    financial statements:
                                                                December 31,
                                                             1995        1994

    Net liabilities eliminated at end of period         $    (185)  $    (185)
    Net liabilities eliminated at beginning of period        (185)       (244)
                                                         --------    ---------
                                                               
                                                                          (59)
    Investment and interest income                            (93)        380
    Net (advances) repayments during the period               (59)          8
                                                         ---------    -------   

      Deemed capital (distributions) contributions      $    (152)  $     329
                                                         ---------   --------   



3.  DEFERRED CHARGES

    Deferred charges consist of the following:
                                                               December 31,
                                                            1996        1995

    Deferred financing costs                            $   1,013   $     729
    Leasing costs                                             827         370
                                                          -------    --------
                                                                           
                                                            1,840       1,099
    Less: accumulated amortization                           (351)        (83)
                                                          -------    --------   

                                                        $   1,489   $   1,016
                                                          -------    --------   




                                      10


<PAGE>


BRANCH PROPERTIES, L.P. AND PREDECESSOR
NOTES TO THE FINANCIAL STATEMENTS
(Dollars in Thousands)
- ------------------------------------------------------------------------------


4.  TRANSACTIONS WITH AFFILIATES

    The Company provides management, acquisition, leasing and financial services
    to various entities in which certain owners of the Company have an interest.
    Financial  services  are also  provided to the owners of the  Company.  Fees
    received for such services are as follows:

                                                            December 31,
                                                         1996    1995     1994

         Acquisition fees                              $    -   $   2   $ 390
         Management fees                                  779     799     698
         Financial services fees                          166     239     197
         Leasing commissions                              204     455     224

    Acquisition  fees  are  earned  from  services  provided  to  affiliates  in
    connection  with the  purchase of real estate and range from 3% to 5% of the
    purchase  price.  Management  fees are earned from  managing  the day to day
    operation  of  properties  at 3% to 5% of gross  rent  collected.  Financial
    services  fees  are  earned  from  providing  tax  preparation  and  related
    services.  Leasing  commissions are earned as a result of leasing activities
    provided to various  properties by the Company and generally range from 2.5%
    to 5% of gross rents collected.

    In connection with the Equity  Commitment,  the Company is required to pay a
    monthly  administrative  fee to a unitholder  of the  Company.  During 1996,
    these fees totalled $300.


5.  NOTES PAYABLE

    Notes payable at December 31, 1996 and 1995 are comprised of the following:

                                                               December 31,
                                                             1996       1995

         Mortgage notes payable                          $  80,662   $ 59,857
         Master commitment                                  13,055     13,700
         Term facility                                      18,303      4,803
         Other construction notes payable                    4,080          -
         Build-to-suit facility                              1,946          -
         Line of credit                                        741      2,500
         Other notes payable                                   309        417
                                                           -------    -------   
                                                         $ 119,096   $ 81,277
                                                           -------    -------
                                                                             



                                      11


<PAGE>


BRANCH PROPERTIES, L.P. AND PREDECESSOR
NOTES TO THE FINANCIAL STATEMENTS
(Dollars in Thousands)
- ------------------------------------------------------------------------------


    Mortgage notes payable
    Mortgage  notes payable are comprised of 14 loans at December 31, 1996.  The
    mortgage  notes  payable  are  generally  due  in  monthly  installments  of
    principal  and interest or interest only and mature at various dates through
    2012.

    Interest rates on fixed rate mortgage notes payable  aggregating  $66,539 at
    December  31, 1996 range from 7.04% to 9.75%  (weighted  average of 8.00% at
    December 31, 1996).  Interest  rates on variable rate mortgage notes payable
    aggregating  $14,123 at December 31, 1996  averaged  6.58% and are generally
    based on prime and/or LIBOR  indices.  At December 31, 1996,  the prime rate
    was 8.25% and LIBOR ranged from 5.7375% to 5.8188% for one,  three,  six and
    twelve month indices.

    Master commitment
    The Master Commitment represents a $30,000 commitment from a bank to provide
    funding for  development  of and/or term  financing for the  acquisition  of
    shopping  centers.  The Company may draw on the Master Commitment in amounts
    not to exceed 75% of the lesser of the actual cost or value of each shopping
    center  financed.  Interest  on loans made under the  Master  Commitment  is
    payable monthly at rates  generally based on prime and/or LIBOR.  The Master
    Commitment  also  contains  restrictions  on  borrowings  based  on  certain
    performance tests as defined in the debt agreement. At December 31, 1996 the
    rate on the two outstanding loans was approximately  7.63%. The loans mature
    in 1999.

    Term facility
    The Term  Facility  represents  a  $50,000  credit  facility  from a bank to
    provide  funding for the  acquisition or  refinancing  of shopping  centers.
    Interest on loans made under the Term  Facility is payable  monthly at rates
    generally  based on prime and/or  LIBOR.  The Term  Facility  also  contains
    restrictions on borrowings based on certain  performance tests as defined in
    the debt  agreement.  At December 31, 1996 the rate on the four  outstanding
    loans was approximately 7.09%. The loans mature in November 1998.

    Other construction notes payable
    Other  construction notes payable represent three construction loans to fund
    development  of three shopping  centers.  Two of the notes with an aggregate
    principal  balance of $2,380  require  monthly  payments of interest only at
    rates  generally  based on prime and/or LIBOR. At December 31, 1996 the rate
    on the loans was  approximately  7.49%. One note with a principal balance of
    $2,208 matures during 1998. The other note with a balance of $172 matures in
    2001. The remaining  construction note in the amount of $1,700 is payable to
    a unitholder of the Company at a fixed rate of 9.00%. Interest and principal
    are due at maturity in June of 1997.

    Build-to-suit facility
    The build-to-suit  facility represents a $15,000 credit facility from a bank
    to provide funding for the construction of certain retail projects. Interest
    on loans made under the build-to-suit facility

                                      12


<PAGE>


BRANCH PROPERTIES, L.P. AND PREDECESSOR
NOTES TO THE FINANCIAL STATEMENTS
(Dollars in Thousands)
- ------------------------------------------------------------------------------


    is payable  monthly at rates  generally  based on prime  and/or  LIBOR.  The
    build-to-suit  facility also contains  restrictions  on borrowings  based on
    certain performance tests as defined in the debt agreement.  At December 31,
    1996 the rate on the four  outstanding  loans was  approximately  7.59%. The
    loans mature at various dates during 1997.

    Line of credit
    The Company  maintains  a $3,000 line of credit with a bank to fund  general
    business  operations.  The line is renewable  annually.  Interest is payable
    monthly at rates based on prime and/or LIBOR.

    Other notes payable
    Other notes  payable at December  31, 1996  represent  various  loans due in
    monthly  installments  of principal and interest at rates ranging from 8.28%
    to 13.67%. The notes are  collateralized by the related furniture,  fixtures
    and equipment.

    Interest rate swap agreements
    During 1995, the Company entered into three interest rate swap agreements to
    protect the Company from fluctuations in interest rates on its variable rate
    debt. At December 31, 1996, the  agreements had notional  amounts of $1,650,
    $5,100 and $1,250 with  maturity  dates of June 12, 1998,  June 12, 2000 and
    June 12,  1998 and fixed  rates of 6.08%,  6.25%,  and 6.08%,  respectively.
    Notional  amounts do not quantify risk or represent assets or liabilities of
    the Company,  but are used in the calculation of interest payments under the
    contracts.   These   financial   instruments  are  with  a  major  financial
    institution,  the credit worthiness of which is subject to continuing review
    and full performance is expected.

    Extraordinary item
    The  extraordinary  items  resulted  from mortgage  prepayment  penalties of
    $1,142 in 1995 and the write-off of deferred financing costs of $76 and $243
    in 1996 and 1995, respectively.

    The  aggregate  maturities  of the above  mortgages  and other notes payable
    based on the existing terms discussed above are as follows:

            1997                                        $   5,628
            1998                                           37,148
            1999                                           14,028
            2000                                           12,750
            2001                                            1,228
            2002 and thereafter                            48,314
                                                          -------

                                                        $ 119,096
                                                          -------



                                      13


<PAGE>


BRANCH PROPERTIES, L.P. AND PREDECESSOR
NOTES TO THE FINANCIAL STATEMENTS
(Dollars in Thousands)
- ------------------------------------------------------------------------------


    Pledged assets
    All real  estate  assets  included  in the  accompanying  balance  sheet are
    pledged as collateral on the above mortgages and notes payable.


6.  INVESTMENT IN UNCONSOLIDATED PROPERTY PARTNERSHIP

    As  described  in Note 1,  the  Company's  interest  in a 50% or less  owned
    property  partnership  is included  in the  financial  statements  using the
    equity  method of  accounting.  At December  31, 1996 and 1995,  the Company
    effectively held a 30% interest in Roswell Village, Ltd.


7.  SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
    ACTIVITIES

    The following  items did not provide or use cash during 1996 and accordingly
    are not reflected in the statement of cash flows:

      The  Company  assumed  a loan  in the  amount  of  $8,774  during  1996 in
      connection with the purchase of a shopping center.

      The Company granted a minority  interest in two shopping center properties
      in exchange for a parcel of land and certain  development  services in the
      amount of $1,439.

      The Company sold two  developments  held for resale  whereby the purchaser
      assumed debt of $2,500.

      The Company  declared and accrued a distribution of $1,400 at December 31,
      1996.

    The following  items did not provide or use cash during 1995 and accordingly
    are not reflected in the statement of cash flows.

      As a result of the application of purchase  accounting for the exchange of
      units for property  interest in connection with the Business  Combination,
      real estate assets  increased by $10,643,  deferred  charges  decreased by
      $1,000,  tenant  receivables  decreased  by $1,822  and  partners'  equity
      increased by $7,821.

      The Company  assumed two loans  totaling  $7,570 during 1995 in connection
      with the purchase of shopping centers.

      In conjunction with the Business Combination,  $2,830 of Units were issued
      in  satisfaction  of $1,830 of unsecured notes payable and $1,000 of other
      liabilities.

    See  Notes 1 and 2 for  discussion  of  additional  non-cash  investing  and
    financing activities.

                                      14


<PAGE>


BRANCH PROPERTIES, L.P. AND PREDECESSOR
NOTES TO THE FINANCIAL STATEMENTS
(Dollars in Thousands)
- ------------------------------------------------------------------------------



8.  OPERATING LEASES

    The  shopping  centers  are leased to tenants  under  operating  leases with
    expiration  dates  extending to the year 2018.  Future minimum rentals under
    noncancelable operating leases, excluding tenant reimbursements of operating
    expenses and additional  contingent  rentals based on tenants' sales volume,
    as of December 31, 1996 are as follows:

            1997                                        $  17,086
            1998                                           14,853
            1999                                           12,067
            2000                                           10,410
            2001                                            7,902
            2002 and thereafter                            48,304

    Minimum  rents,  as presented  in the  consolidated/combined  statements  of
    operations   for  the  three  years  ended   December  31,   1996,   contain
    straight-line adjustments for rental revenue increases over the terms of the
    respective lease agreements in accordance with generally accepted accounting
    principles.  The  aggregate  rental  revenue  increases  resulting  from the
    straight-line  adjustments  for the years ended December 31, 1996,  1995 and
    1994 were $308, $251 and $189, respectively.

    No single  tenant  collectively  accounts for more than 10% of the Company's
total rental revenues.


9.  INCOME TAXES

    BPL is a  partnership  and is not subject to Federal and state income taxes.
    Accordingly,   no  recognition  has  been  given  to  income  taxes  in  the
    accompanying  consolidated  financial  statements of BPL since the income or
    loss is to be included in the tax returns of the individual partners.  BPL's
    tax  return  is  subject  to   examination   by  federal  and  state  taxing
    authorities.  If such  examinations  result in adjustments  to  distributive
    shares of taxable income or loss,  the tax liability of the partner's  would
    be adjusted accordingly.

    Two of the entities included in the combined financial  statements of BG are
    foreign  corporations  and are  subject to Federal and state  income  taxes;
    however,  the amounts  accrued or paid for income taxes were not material in
    relation to the combined financial  statements.  All other entities included
    in the combined  financial  statements  of BG are either  partnerships  or S
    Corporations  and are  not  subject  to  Federal  and  state  income  taxes.
    Accordingly,   no  recognition  has  been  given  to  income  taxes  in  the
    accompanying  financial  statements  of BG since  the  income or loss of the
    other  entities  is to be  included  in the tax  returns  of the  individual
    owners.  The tax returns of the other entities are subject to examination by
    Federal and state taxing authorities.

                                      15


<PAGE>


BRANCH PROPERTIES, L.P. AND PREDECESSOR
NOTES TO THE FINANCIAL STATEMENTS
(Dollars in Thousands)
- ------------------------------------------------------------------------------


    If such examinations result in adjustments to distributive shares of taxable
    income or loss,  the tax liability of the owners of the other entities would
    be adjusted accordingly.


10. PROFIT SHARING PLAN

    The employees of the Company are eligible to participate in a profit sharing
    plan pursuant to Section  401(k) of the Internal  Revenue Code.  The Company
    matches 25% of the  participant's  contributions to the plan up to a maximum
    of 4% of  compensation.  Contributions of $25, $25 and $24 were made for the
    years ended December 31, 1996, 1995 and 1994, respectively.


11. COMMITMENTS AND CONTINGENCIES

    Office and equipment leases
    BPL is party to office and equipment operating leases with terms expiring in
    years 1995 through 2001.  Future  minimum lease  payments for  noncancelable
    office and equipment leases at December 31, 1996 are as follows:

             1997                                       $     368
             1998                                             337
             1999                                             340
             2000                                             347
             2001                                             175

    The Company incurred $365, $408 and $370 of rent expense for the years ended
    December 31, 1996, 1995 and 1994, respectively.

    Contingencies
    BPL is party to various legal actions which are  incidental to its business.
    Management  believes that these  actions will not have a materially  adverse
    effect on the consolidated financial statements.

    Purchase commitments
    At December 31, 1996, the Company had entered into agreements to acquire two
    additional shopping centers for an aggregate purchase price of $16,440.  The
    acquisition of both centers was completed by January 31, 1997 and was funded
    with $9,800 of new debt and $6,940 from the Equity Commitment.  In addition,
    at December 31,  1996,  the Company had entered into an agreement to acquire
    land for future  development at an aggregate  purchase price of $820,  which
    was completed by February 28, 1997.



                                      16


<PAGE>


BRANCH PROPERTIES, L.P. AND PREDECESSOR
NOTES TO THE FINANCIAL STATEMENTS
(Dollars in Thousands)
- ------------------------------------------------------------------------------


12. DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

    The  following  disclosures  of  estimated  fair  value were  determined  by
    management  using available  market  information  and appropriate  valuation
    methodologies.  Considerable  judgment is necessary to interpret market data
    and develop  estimated  fair value.  Accordingly,  the  estimates  presented
    herein are not necessarily indicative of the amounts Branch could realize on
    disposition of the financial  instruments.  The use of different assumptions
    and/or estimation  methodologies may have a material effect on the estimated
    fair value amounts.

    Cash  equivalents,  tenant  receivables,  other  assets,  accounts  payable,
    accrued expenses, mortgages and notes payable, interest rate swap agreements
    and other  liabilities are carried at amounts which  reasonably  approximate
    their fair values.

    Disclosure  about fair value of financial  instruments is based on pertinent
    information  available  to  management  as of  December  31,  1996 and 1995.
    Although  management  is not aware of any factors  that would  significantly
    affect  the  reasonable  fair  value  amounts,  such  amounts  have not been
    comprehensively  revalued for purposes of these financial  statements  since
    that date and current estimates of fair value may differ  significantly from
    the amounts presented herein.


13. SUBSEQUENT EVENTS

    As discussed in Note 2, certain partners in the Initial  Properties have the
    right to earn  additional  Priority  Units  subject  to the  achievement  of
    certain operating results. On January 1, 1997, the Company issued a total of
    38,044 Priority Units in satisfaction of this obligation.

    On February 28, 1997,  the Company drew the remaining  balance of the Equity
    Commitment in the amount of $1,135.

    On March 7, 1997, the Company transferred substantially all of its assets to
    Regency Realty  Corporation in exchange for approximately  $97,831 in common
    stock and/or common stock  equivalents  and the assumption of  approximately
    $122,144 of debt (net of minority interests).  In addition,  the unitholders
    of the Company have the right to earn  additional  shares subject to certain
    performance  criteria as defined in the Contribution  Agreement  between the
    parties.



                                      17


<PAGE>


       
                               Regency Realty Corporation
                           Pro Forma Consolidating Balance Sheet
                                     December 31, 1996
                                         (Unaudited)
                       (In thousands, except share and per share data)



<TABLE>
<CAPTION>

                                                  Regency Retail L.P. ("Partnership")
                                             ----------------------------------------                               Regency
                                                 Branch        Pro Forma   Partnership   Regency        Other     Realty Corp.
                                              Properties L.P. Adjustments  Pro Forma   Realty Corp.  Adjustments   Pro Forma
                                           ---------------  -----------  ----------- ------------  -----------    -----------
   <S>                                       <C>             <C>          <C>         <C>           <C>           <C>


                     Assets
   Real estate rental property, at cost      $      156,997    56,425 (a)   213,422       390,673            -      604,095
       Less: accumulated depreciation                12,891         -        12,891        26,213            -       39,104
                                             --------------  -----------  ----------- ------------  -----------   ----------
        Real estate rental property, net            144,106    56,425       200,531       364,460            -      564,991
                                             --------------  -----------  ----------- ------------  -----------   ----------
   Construction in progress                          28,575         -        28,575         1,695            -       30,270
   Investments in unconsolidated
       real estate partnerships                         710         -           710         1,035            -        1,745
   Investment in Regency Retail, L.P.                     -         -             -             -       26,000 (c)       -
                                                                                                         4,183 (d)
                                                                                                       (30,183)(e)
                                             --------------  -----------  ----------- ------------  -----------   ----------
      Total investments in real estate, net         173,391    56,425       229,816       367,190            -      597,006
                                             --------------  -----------  ----------- ------------  -----------   ----------

   Cash and cash equivalents                            325         -           325         8,293            -        8,618
   Accounts receivable and other assets              10,017    (4,866)(a)     5,151        11,041            -       16,192
                                             --------------  -----------  ----------- ------------  -----------   ----------
                                             $      183,733    51,559       235,292       386,524            -      621,816
                                             ==============  ===========  =========== ============  ===========   ==========
      Liabilities and Stockholders' Equity
   Securitized mortgage loan                 $            -         -             -        51,000            -       51,000
   Other mortgage loans                             119,096   (25,728)(b)    93,368        46,906            -      140,274
   Acquisition and development
     line of credit                                       -         -             -        73,701            -       73,701
                                             --------------  -----------  ----------- ------------  -----------   ----------
    Total Notes Payable                             119,096   (25,728)       93,368       171,607            -      264,975

   Tenant security and escrow deposits                  701         -           701         1,382            -        2,083
   Accounts payable & other liabilities               8,560     5,250 (a)    13,538         6,301            -       19,839
                                                                 (272)(b)
                                             --------------  -----------  ----------- ------------  -----------   ----------
       Total Liabilities                            128,357   (20,750)      107,607       179,290            -      286,897
                                             --------------  -----------  ----------- ------------  -----------   ----------

   Minority Interests in Consolidated
       Partnerships                                   6,915         -         6,915             -            -        6,915
                                             --------------  -----------  ----------- ------------  -----------   ----------

   Redeemable Partnership Units                      48,461    46,309 (a)   120,770           508      (30,183)(e)   91,095
                                                               26,000 (b) 
                                             --------------  -----------  ----------- ------------  -----------   ----------
 Stockholders' Equity
  Common stock and additional paid in capital             -         -             -       223,212       26,000 (c)  253,395
                                                                                                         4,183 (d)
  Distributions in excess of net income                   -         -             -       (16,486)           -      (16,486)

                                             --------------  -----------  ----------- ------------  -----------   ----------
       Total Stockholders' Equity                         -         -             -       206,726       30,183       236,909
                                             --------------  -----------  ----------- ------------  -----------   ----------
                                             $      183,733    51,559       235,292       386,524            -       621,816
                                             ==============  ===========  =========== ============  ===========   ==========
</TABLE>


   See notes to pro forma consolidating balance sheet


<PAGE>
                             Regency Realty Corporation
                    Notes to Pro Forma Consolidating Balance Sheet
                                      (Unaudited)
                   (In thousands, except share and per share data)


     Adjustments to Pro Forma Consolidating  Balance Sheet - Regency Retail L.P.
     ("Partnership") Pro Forma


(a)  To reflect the  allocation of the total  purchase price of $100,020 and the
     assumption of existing  liabilities  including  outstanding debt and tenant
     security  deposits.  The  total  purchase  price is  comprised  of  $94,770
     resulting  from the  issuance of  3,529,598  redeemable  partnership  units
     ("Units")  in the  Partnership,  and  additional  liabilities  incurred  of
     $5,250.  The Units are  valued  based upon  $26.85 per share,  which is the
     average  closing price of Regency's  common stock shortly  before and after
     the  date  of the  acquisition  announcement.  The  additional  liabilities
     incurred as part of the  transaction are comprised of $750 for the issuance
     of  Units  in the  future  as  part of the  agreement,  $2,750  for  legal,
     accounting,  consultants,  real  estate  transfer  costs,  and other  costs
     related to the acquisition,  and $1,750 for severance  payments to existing
     Branch  employees  to be  terminated.  The  total  purchase  price has been
     allocated to the assets and  liabilities  based upon  estimated fair market
     value.

(b)  To reflect a partial  paydown of existing  mortgage loans ($25,728) and the
     partial  payment of other  liabilities  ($272)  from  proceeds of new Units
     issued (1,175,142) to Regency for cash.

     Other Adjustments to Pro Forma Consolidating Balance Sheet - Regency Realty
     Corporation

(c)  To reflect the issuance of 1,475,178  Regency common shares at $17.625 to a
     stockholder  (Security  Capital) for cash and the subsequent  investment of
     the proceeds by Regency into additional Units of the Partnership.

(d)  To reflect the  redemption  of 155,797  Units into Regency  common stock at
     $26.85 per share.  The Unit  holders  may redeem  their  units for  Regency
     common stock subject to stockholder  approval at the meeting expected to be
     held during May,  1997;  however,  the Unit  holders are not  obligated  to
     redeem  their units for Regency  common  stock.  Outstanding  Units not yet
     redeemed  for  Regency  common  stock of  3,373,801  are shown as  minority
     interest  in the pro forma  consolidated  financial  statements  until they
     exercise their redemption right.
      
(e)  To reflect the  elimination  of  Regency's  investment  in the  Partnership
     (initial  investment  of  $26,000  plus the market  value of 155,727  Units
     redeemed for Regency common stock.)


<PAGE>


                                Regency Realty Corporation
                         Pro Forma Consolidating Statement of Operations
                             For the Year Ended December 31, 1996
                                          (Unaudited)
                         (In thousands, except share and per share data)


<TABLE>
<CAPTION>


                                               Regency Retail L.P. ("Partnership")
                                               ----------------------------------                                Regency
                                               Branch        Pro Forma  Partnership   Regency    Consolidation Realty Corp.
                                            Properties L.P  Adjustments  Pro Forma  Realty Corp.  Adjustments    Pro Forma
                                            --------------  ----------- ----------- ------------ ------------- ------------
<S>                                          <C>             <C>         <C>         <C>           <C>          <C>

Real estate operation revenues:
      Minimum rent                           $    16,449            -      16,449      34,706             -        51,155
      Percentage rent                                150            -         150         998             -         1,148
      Recoveries from tenants                      3,254            -       3,254       7,729             -        10,983
      Other recoveries and income                    321            -         321           -             -           321
      Acquisition and development fees               828            -         828          70             -           898
      Leasing and brokerage                        2,748            -       2,748       2,782             -         5,530
      Management fees                                879            -         879         592             -         1,471
      Equity income of unconsolidated
         partnerships                                  -            -           -          70             -            70
                                             --------------  ----------- ----------- ------------  -----------  ----------
       Total real estate operation revenues       24,629            -      24,629      46,947             -        71,576
                                             --------------  ----------- ----------- ------------  -----------  ----------
 Real estate operation expenses:
      Depreciation and amortization                3,165        1,976 (b)   5,141       8,758             -        13,899
      Operating and maintenance                    7,608            -       7,608       7,656             -        15,264
      General and administrative                   2,547            -       2,547       6,048             -         8,595
      Real estate taxes                            1,596            -       1,596       4,409             -         6,005
                                             --------------  ----------- ----------- ------------  -----------  ----------
       Total real estate operation expenses       14,916        1,976      16,892      26,871             -        43,763
                                             --------------  ----------- ----------- ------------  -----------  ----------
 Other expense (income)
      Interest expense                             7,366       (2,144)(a)   5,222      10,777             -        15,999
      Interest income                                  -            -           -        (666)            -          (666)
      Branch formation expenses                      108            -         108           -             -           108
                                             --------------  ----------- ----------- ------------  -----------  ----------
         Net other expense                         7,474       (2,144)      5,330      10,111             -        15,441
                                             --------------  ----------- ----------- ------------  -----------  ----------
 Minority interest in consolidated                  (482)           -        (482)          -        (1,298) (c)   (1,780)
      property partnerships
                                             --------------  ----------- ----------- ------------  ----------   ----------
      Income before extraordinary item             1,757          168       1,925       9,965        (1,298)       10,592
         from continuing operations

 Preferred stock dividends                             -            -           -         (58)            -           (58)
                                             --------------  ----------- ----------- ------------  ----------   ----------
      Income before extraordinary item
         for common stockholders             $     1,757          168       1,925       9,907        (1,298)        10,534
                                             ==============  =========== =========== ============  ===========  ==========
      Earnings per share (note (d)):
         Primary                                                                                                  $  0.77
                                                                                                                ==========
         Fully diluted                                                                                            $  0.75
                                                                                                                ==========
</TABLE>


 See notes to pro forma consolidating statement of operations





<PAGE>

                            Regency Realty Corporation
               Notes to Pro Forma Consolidating Statements of Operations
                                     (Unaudited)
    





(a)   To  reflect  a  reduction  in  interest  expense  due to the  issuance  of
      additional Units to Regency for cash and the subsequent paydown of certain
      outstanding  mortgage  loans in the  amount  of $25.7  million.  (based on
      weighted average rate of 8.33% on current outstanding debt).

 (b)  To  reflect an  increase  in  depreciation  expense  due to the  increased
      carrying value of the real estate rental property acquired as part of this
      transaction.

                                                         December 31,
                                                            1996
                                                      ---------------
       Operating real estate assets, net                   144,106,000
       Purchase price allocation to real
           estate investment                                56,424,706
                                                       ---------------
       Adjusted book value                                 200,530,706
           Estimated % of book value
             allocated to depreciable property                     78%
                                                       ---------------
       Depreciation basis of real estate investment        156,413,951
           Estimated average useful life                            32
                                                       ---------------
       Annual depreciation expense                           4,887,936
       Depreciation expense recorded                         2,912,294
                                                       ===============
       Pro Forma depreciation adjustment                     1,975,642
                                                       ===============


 (c)  Minority interest in Regency Retail L.P.

      At  closing,  the  Company  invested  $26  million in the  Partnership  in
      exchange  for  Units,  and  issued  155,797  shares of Common  stock.  For
      purposes of determining minority interest,  the Company owned 32.6% of the
      outstanding  Units  in the  Partnership.  If  approved  by  the  Company's
      shareholders,  the outstanding Units held by minorities will be redeemable
      for Common stock.  Minority  interest has been  reflected in the pro forma
      income statement as if the outstanding Units have not been redeemed.


<PAGE>


                            Regency Realty Corporation
               Notes to Pro Forma Consolidating Statements of Operations
                                     (Unaudited)





 (d)  Earnings per Share
                                                                 December 31,
                                                                    1996
                                                               ---------------
      Primary Common Shares and Per Share Calculation:
          Regency - weighted average shares outstanding              10,341,239
          Units redeemed for Regency common stock                       155,797
          Units redeemable for Regency common
           stock upon shareholder approval                            3,373,801
          Redeemable Units issuable in the
           future not contingent                                         33,898
          Issuance of Regency common stock to stockholder             1,475,178
                                                                ---------------
                    Total Primary Shares                             15,379,913
                                                                ---------------

          Income from continuing operations
            before extraordinary item
            for common stockholders                                  10,534,443
          Minority Interest in Partnership                            1,297,915
                                                                ---------------
                    Income for Primary Shareholders                  11,832,358
                                                                ---------------

          Primary earnings per share                         $             0.77
                                                                ===============


      Fully Diluted Common Shares and Per Share Calculation:
          Contingent Units or common stock that                       1,020,061
          could be issued to previous Branch owners
          in 1998,  1999, and 2000 if
          earned per the terms of the
          Contribution Agreement (note 1).
                                                                ---------------
                    Total Fully Diluted Shares                       16,399,974
                                                                ---------------

          Required increase in income from real 
            estate  operations  necessary to
            earn contingent shares, less
            applicable depreciation on
            increased purchase price.                                  438,718
                                                               ---------------

          Income from continuing operations
            before extraordinary item for common
            stockholders for computation
            of fully diluted earnings per share                     12,271,076
                                                               ===============

          Fully diluted earnings per share                      $         0.75
                                                               ===============


          Note 1: Since issuance of additional  consideration is contingent upon
          increased earnings, net income has been adjusted to give effect to the
          increase in earnings  specified  by the  Contribution  Agreement  that
          results in the largest potential dilution, and outstanding shares have
          been  adjusted to include  those  shares  contingently  issuable  upon
          attainment of the increased earnings level.


<PAGE>








 
                                  SIGNATURES


Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.



                                            REGENCY REALTY CORPORATION
                                            (registrant)



March 20, 1997                            By: /s/ J. Christian Leavitt
                                         --------------------------------------

                                           J. Christian Leavitt
                                           Secretary and Treasurer