SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2002

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

For the transition period from ________ to ________

Commission file number 1-12566

G & L REALTY CORP.
(Exact name of Registrant as specified in its charter)

Maryland (State or other jurisdiction of incorporation or organization)		95-4449388 (I.R.S. Employer Identification No.)

439 N. Bedford Drive Beverly Hills, California (Address of Principal Executive Offices)		90210 (Zip Code)

Registrant’s telephone number, including area code: (310) 273-9930

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

Yes

G&L REALTY CORP.

INDEX

				Page Number

Part I		Financial Information

	Item 1	Financial Statements
			Condensed Consolidated Balance Sheets as of September 30, 2002 (unaudited) and December 31, 2001	3
			Condensed Consolidated Statements of Operations for the Three and Nine Month Periods Ended September 30, 2002 and 2001 (unaudited)	4
			Condensed Consolidated Statements of Cash Flows for the Nine Month Periods Ended September 30, 2002 and 2001 (unaudited)	5 – 6
			Notes to Condensed Consolidated Financial Statements (unaudited)	7 – 17
	Item 2		Management’s Discussion and Analysis of Financial Condition and Results of Operations	18 – 24
	Item 3		Quantitative and Qualitative Disclosures About Market Risk	25 – 26
	Item 4		Controls and Procedures	26
Part II		Other Information
	Item 1		Legal Proceedings	27
	Item 2		Changes in Securities	27
	Item 3		Defaults Upon Senior Securities	27
	Item 4		Submission of Matters to a Vote of Security Holders	27
	Item 5		Other Information	27
	Item 6		Exhibits and Reports on Form 8-K	27 – 30

Signature				31

Page 2

G&L REALTY CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

				September 30, 2002			December 31, 2001

				(Unaudited)
ASSETS
Rental properties (Note 3):
		Land		$	28,840		$	28,599
		Buildings and improvements, net			141,523			137,410
		Projects under development			109			—

			Total rental properties		170,472			166,009
Cash and cash equivalents					1,873			2,039
Restricted cash					3,442			4,252
Tenant rent and reimbursements receivable, net					7,290			6,197
Unbilled rent receivable, net					2,964			2,661
Mortgage loans and notes receivable, net					1,955			11,976
Investments in unconsolidated affiliates (Note 6)					4,144			4,581
Deferred charges and other assets, net (Note 4)					6,400			7,309

	TOTAL ASSETS			$	198,540		$	205,024

LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
		Notes payable		$	190,729		$	192,698
		Accounts payable and other liabilities			6,884			10,313
		Distributions payable			160			270
		Tenant security deposits			1,432			1,561

			Total liabilities		199,205			204,842
Commitments and Contingencies (Note 8)					—			—
Minority interest in consolidated affiliates					(1,154	)		(719	)
Minority interest in Operating Partnership					—			—
STOCKHOLDERS’ EQUITY (Note 5):
		Preferred shares - $.01 par value, 10,000,000 shares authorized, liquidation preference of $25.00 per share
		•	Series A Preferred - 1,495,000 shares issued and outstanding as of September 30, 2002 and December 31, 2001		15			15
		•	Series B Preferred - 1,380,000 shares issued and outstanding as of September 30, 2002 and December 31, 2001		14			14
		Common shares - $.01 par value, 50,000,000 shares authorized, 710,199 shares issued and outstanding as of September 30, 2002 and December 31, 2001			7			7
		Additional paid-in capital			40,827			40,827
		Distributions in excess of net income			(35,134	)		(34,722	)
		Notes receivable from stockholders			(5,240	)		(5,240	)

			Total stockholders’ equity		489			901

	TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY			$	198,540		$	205,024

See accompanying notes to Condensed Consolidated Financial Statements

Page 3

G&L REALTY CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

			For the Three Month Periods Ended September 30,						For the Nine Month Periods Ended September 30,

			2002			2001			2002			2001

REVENUES:
	Rent		$	7,120		$	6,867		$	21,759		$	19,957
	Patient revenues			6,549			5,289			18,125			15,650
	Tenant reimbursements			658			413			2,200			1,436
	Parking			393			347			1,152			1,128
	Interest and loan fees (Note 9)			214			445			2,246			1,444
	Lease termination income			—			—			—			2,613
	Other income			573			398			1,386			984

		Total revenues		15,507			13,759			46,868			43,212

EXPENSES:
	Property operations			2,388			2,328			6,800			6,543
	Skilled nursing operations			5,553			4,793			15,915			14,076
	Depreciation and amortization			1,553			1,544			4,685			4,512
	Provision for doubtful accounts, notes and bonds receivable			174			202			738			507
	Interest			4,175			3,255			13,354			9,795
	General and administrative			793			834			2,396			2,542

		Total expenses		14,636			12,956			43,888			37,975

Income from operations before minority interests and equity in (loss) earnings of unconsolidated affiliates				871			803			2,980			5,237
Equity in (loss) earnings of unconsolidated affiliates				(96	)		83			2			(92	)
Minority interest in consolidated affiliates				(85	)		(68	)		(223	)		(201	)
Corporate income tax expense				(120	)		(212	)		(120	)		(212	)

Income from operations before discontinued operations				570			606			2,639			4,732
Discontinued operations (Notes 2 and 9)
	Gain (loss) from discontinued operations (Including gain on disposal of $2,458 and loss on disposal of $138)			—			—			2,320			—

Net income				570			606			4,959			4,732
Dividends on preferred stock				(1,790	)		(1,790	)		(5,371	)		(5,371	)

Net loss available to common stockholders			$	(1,220	)	$	(1,184	)	$	(412	)	$	(639	)

See accompanying notes to Condensed Consolidated Financial Statements

Page 4

G&L REALTY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

				Nine Months Ended September 30,

				2002			2001

				(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
	Net income			$	4,959		$	4,732
	Adjustments to reconcile net income to net cash provided by Operating activities:
		Depreciation and amortization			4,685			4,512
		Amortization of deferred loan costs			714			514
		Net gain on sale of assets			(2,320	)		—
		Loss on change in value of interest rate hedge			857			—
		Minority interests			223			201
		Equity in (income) loss of unconsolidated affiliates			(2	)		92
		Provision for doubtful accounts, notes and bonds receivables			949			507
		Unbilled rent receivable, net			(413	)		(126	)
		(Increase) decrease in:
			Tenant rent and reimbursements receivable		(1,975	)		(372	)
			Prepaid expense and other assets		(582	)		(1,370	)
			Accrued interest and loan fees receivable		(338	)		(201	)
		Increase (decrease) in:
			Accounts payable and other liabilities		(3,501	)		302
			Tenant security deposits		(103	)		175

Net cash provided by operating activities					3,153			8,966

CASH FLOWS FROM INVESTING ACTIVITIES:
Sale of real estate assets					5,141			—
Additions to rental properties					(1,366	)		(2,621	)
Pre-acquisition costs					122			(150	)
Construction in progress					(109	)		171
Leasing commissions					(105	)		(430	)
Investment in mortgage loans and notes receivable					(310	)		(354	)
Contributions to unconsolidated affiliates					(1,463	)		(280	)
Distributions from unconsolidated affiliates					1,571			398
Principal payments received from mortgage loans and notes receivable					9,333			98

Net cash provided by (used in) investing activities					12,814			(3,168	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Notes payable proceeds					9,513			12,300
Repayment of notes payable					(21,379	)		(12,239	)
Payment of deferred loan costs					58			(738	)
Decrease in restricted cash					1,304			143
Minority interest equity contribution					25			—
Distributions					(5,654	)		(6,783	)

Net cash used in financing activities					(16,133	)		(7,317	)

See accompanying notes to Condensed Consolidated Financial Statements

Page 5

G&L REALTY CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

		Nine Months Ended September 30,

		2002			2001

		(Unaudited)
NET DECREASE IN CASH AND CASH EQUIVALENTS			(166	)		(1,519	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD			2,039			2,791

CASH AND CASH EQUIVALENTS, END OF PERIOD		$	1,873		$	1,272

SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period for interest		$	13,660		$	9,215

NONCASH INVESTING AND FINANCING ACTIVITIES
Distributions declared not yet paid		$	—		$	370

Preferred distributions due to minority partner		$	44		$	44

Transfers from projects under development to building		$	—		$	376

Acquisition of property and other assets for assumption of note payable:
	Restricted cash	$	597
	Land		1,390
	Buildings and improvements		10,760
	Deferred charges and other assets		463
	Note receivable		(1,269	)

	Total	$	11,941

Assumption of note payable for property and other assets:
	Note payable	$	11,941

See accompanying notes to Condensed Consolidated Financial Statements

Page 6

G&L REALTY CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1. GENERAL

G&L Realty Corp. (the “Company”) was formed as a Maryland corporation to continue the ownership, management, acquisition and development activities previously conducted by G&L Development, a California general partnership, the Company’s predecessor. All of the Company’s assets are held by, and all of its operations are conducted through, the following entities:

		G&L Realty Partnership, L.P., a Delaware limited partnership (the “Operating Partnership”)
		G&L Senior Care Partnership, L.P., a Delaware limited partnership (the “Senior Care Partnership”)
		G&L Realty Financing Partnership II, L.P., a Delaware limited partnership (the “Realty Financing Partnership”)*
		G&L Medical Partnership, L.P., a Delaware limited partnership (the “Medical Partnership”)*
		G&L Gardens, LLC, an Arizona limited liability company (“Maryland Gardens”)*
		435 North Roxbury Drive, Ltd., a California limited partnership (the “Roxbury Partnership”)
		GL/PHP, LLC, a Delaware limited liability company (“GL/PHP”)*
		G&L Hampden, LLC, a Delaware limited liability company (“Hampden”)*
		G&L Valencia, LLC, a California limited liability company (“Valencia”)
		G&L Tustin, LLC, a California limited liability company (“Tustin”)*
		G&L Holy Cross, LLC, a California limited liability company (“Holy Cross”)*
		G&L Burbank, LLC, a California limited liability company (“Burbank”)*
		GLH Pacific Gardens, LLC, a California limited liability company (“Pacific Gardens”)
		G&L Hoquiam, LLC, a California limited liability company (“Hoquiam”)
		G&L Lyons, LLC, a California limited liability company (“Lyons”)
		G&L Coronado (1998), LLC, a California limited liability company (“Coronado”)
		GLH Tarzana, LLC, a California limited liability company (“Tarzana”)
		G&L Heritage Care, LLC, a Delaware limited liability company (“Heritage”)
		G&L Massachusetts, LLC, a Delaware limited liability company (“Massachusetts”)
		G&L Aspen, LLC, a California limited liability company (“Aspen”)
		G&L Tustin II, LLC, a Delaware limited liability company (“Tustin II”)
		G&L Tustin III, LLC, a Delaware limited liability company (“Tustin III”)
		G&L St. Thomas More, Inc., a Maryland corporation (“St. Thomas More”)

*	The Realty Financing Partnership, the Medical Partnership, Maryland Gardens, GL/PHP, Hampden, Tustin, Holy Cross, and Burbank are herein collectively referred to as the “Financing Entities” and individually as the “Financing Entity.”

The Company, as the sole general partner and as owner of an approximately 95% ownership interest, controls the Operating Partnership and the Senior Care Partnership. The Company controls the Financing Entities through wholly owned subsidiaries incorporated either in the State of Delaware or the State of California (collectively, the “Subsidiaries” and individually, a “Subsidiary”). Each Subsidiary either (i) owns, as sole general partner or sole managing member, a 1% ownership interest in its related Financing Entity or (ii) owns no interest and acts as the manager of the Financing Entity. The remaining 99% ownership interest in each Financing Entity, which is owned 1% by a Subsidiary, is owned by the Operating Partnership, acting as sole limited partner or member.Financing Entities in which a Subsidiary owns no interest are 100% owned by the Operating Partnership.

Page 7

G&L REALTY CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

References in these consolidated financial statements to the Company include its operations, assets and liabilities including the operations, assets and liabilities of the Operating Partnership, the Senior Care Partnership, the Subsidiaries, the Financing Entities, the Roxbury Partnership (in which the Operating Partnership owns a 32.81% partnership interest and is the sole general partner), Pacific Gardens (in which the Operating Partnership owns a 93% membership interest and is a co-managing member), Tarzana (in which the Operating Partnership owns a 85% membership interest and is a co-managing member) and Hoquiam, Lyons, Coronado, Heritage, Massachusetts, Aspen, Tustin II, Tustin III and St. Thomas More (in which the Operating Partnership or the Senior Care Partnership own a 100% interest).

In addition to the Subsidiaries, the Company also owns interests in various unconsolidated affiliates. Although the Company’s investment represents a significant portion of the capital of such unconsolidated affiliates and the Company exercises influence over the activities of these entities, the Company does not have the requisite level of voting control to include the assets, liabilities and operating activities of these entities in the consolidated financial statements of the Company. The entities in which the Company has unconsolidated financial interests are as follows:

	GLN Capital Co., LLC (“GLN”)
	G&L Grabel, San Pedro, LLC (“San Pedro”)
	G&L Penasquitos, LLC (“Penasquitos LLC”)
	G&L Penasquitos, Inc. (“Penasquitos Inc.”)
	G&L Parsons on Eagle Run, LLC (“Eagle Run”)
	G&L Parsons on Eagle Run, Inc. (“Eagle Run Inc.”)
	Lakeview Associates, LLC (“Lakeview”)
	Tustin Heritage Place, LLC (“Heritage Place”)
	Pac Par MOB, LLC (“Pacific Park”)
	G&L Radius Realty, LLC (“Radius”)
	G&L Aurora, LLC (“Aurora”)

GLN, San Pedro, Penasquitos Inc., Penasquitos LLC, Eagle Run, Eagle Run, Inc., Lakeview, Heritage Place, Pacific Park, Radius and Aurora are herein collectively referred to as the “Unconsolidated Affiliates” and individually as “Unconsolidated Affiliate”.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business - The Company is a self-managed Real Estate Investment Trust (“REIT”) that acquires, develops, manages, finances and leases healthcare properties. The Company’s business currently consists of investments in healthcare properties. Investments in healthcare property consist of acquisitions, made either directly or through joint ventures, in medical office buildings (“MOBs”), skilled nursing facilities (“SNFs”) and assisted living facilities (“ALFs”).

Basis of Presentation - The accompanying condensed consolidated financial statements include the accounts of the Company and its Subsidiaries. The interests in the Roxbury Partnership, Pacific Gardens, Tarzana, the Operating Partnership and the Senior Care Partnership that are not owned by the Company, have been reflected as minority interests in the Operating Partnership. All significant intercompany accounts and transactions have been eliminated in consolidation.

The information presented as of and for the three-month and nine-month periods ended September 30, 2002 and 2001 has not been audited by independent accountants, but includes all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the results for such periods. The results of operations for the nine months ended September 30, 2002 are not necessarily indicative of results that might be expected for the full fiscal year.

Certain information and footnote disclosures normally included in annual financial statements have been omitted. The Company believes that the disclosures included in these financial statements are adequate for a fair presentation and conform to reporting requirements established by the Securities and Exchange Commission (“SEC”). These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes included in the Company’s annual report on Form 10-K as filed with the SEC.

Page 8

G&L REALTY CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

Recent accounting pronouncements—On January 1, 2002, the Company adopted the provisions of SFAS 142 “Goodwill and Other Intangible Assets” (“SFAS 142”) and SFAS 144 “Accounting for the Impairment or Disposal of Long-Lived Assets” (SFAS 144”). SFAS 142 discontinues the practice of amortizing goodwill and other intangible assets and requires a periodic review process for impairment. SFAS 144 addresses financial accounting and reporting for the disposal of long-lived assets and supercedes FAS 121 “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of”. The adoption of these statements did not have a material effect on the Company’s results of operations or financial condition.

In April 2002, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 145,Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections (“SFAS 145”). The most significant provisions of this statement relate to the rescission of Statement No. 4 “Reporting Gains and Losses from Extinguishment of Debt” and it also amends other existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their applicability under changed conditions. Under SFAS 145, any gain or loss on extinguishment of debt that was classified as an extraordinary item in prior periods presented that does not meet certain defined criteria must be reclassified. The provisions of SFAS 145 are effective for fiscal years beginning after May 15, 2002. Management does not expect that the adoption of this statement will have a material effect on the Company’s results of operations or financial condition.

In June 2002, FASB issued SFAS 146, “Accounting for Costs Associated with Exit or Disposal Activities” (“SFAS 146”). SFAS 146 addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force Issue No. 94-3“Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity”. SFAS 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. The provisions of SFAS 146 are effective for exit or disposal activities that are initiated after December 31, 2002. Management does not expect that the adoption of this statement will have a material effect on the Company’s results of operations or financial condition.

3. BUILDINGS AND IMPROVEMENTS

Buildings and improvements consist of the following:

		September 30, 2002			December 31, 2001

		(in thousands)
Buildings and improvements		$	162,510		$	155,774
Tenant improvements			12,103			11,983
Furniture, fixtures and equipment			4,834			3,526

			179,447			171,283
Less accumulated depreciation and amortization			(37,924	)		(33,873	)

	Total	$	141,523		$	137,410

Rental property is recorded at cost less accumulated depreciation. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows:

Buildings and improvements			40 years
Tenant improvements			Life of lease
Furniture, fixtures and equipment			5 years

Expenditures for maintenance and repairs are charged to operations as incurred. Significant renovations and all external costs directly related to acquisitions are capitalized.

Page 9

G&L REALTY CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

4. DEFERRED CHARGES AND OTHER ASSETS

Deferred charges and other assets consist of the following:

		September 30, 2002			December 31, 2001

		(in thousands)
Deferred loan costs		$	6,651		$	7,467
Pre-acquisition costs			—			257
Leasing commissions			1,900			1,974
Prepaid expense and other assets			954			483

			9,505			10,181
Less accumulated amortization			(3,105	)		(2,872	)

	Total	$	6,400		$	7,309

5. STOCKHOLDERS’ EQUITY

Distributions in excess of net income– The Company has elected to be treated, for federal income tax purposes, as a REIT. As such, the Company is required to distribute annually, in the form of distributions to its stockholders, at least 90% of its taxable income. In reporting periods in which distributions exceed net income, stockholders’ equity will be reduced by the distributions in excess of net income in such period and will be increased by the excess of net income over distributions in reporting periods in which net income exceeds distributions. For tax reporting purposes, a portion of the dividends declared represents a return of capital. The following table reconciles net income and distributions in excess of net income for the nine months ended September 30, 2002 and for the year ended December 31, 2001:

	September 30, 2002			December 31, 2001

		(in thousands)
Distributions in excess of net income at beginning of period	$	(34,722	)	$	(32,602	)
Net income during period		4,959			6,130
Less: Distributions declared		(5,371	)		(8,250	)

Distributions in excess of net income	$	(35,134	)	$	(34,722	)

Page 10

G&L REALTY CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

6. INVESTMENTS IN UNCONSOLIDATED AFFILIATES

The Company has investments in various unconsolidated affiliates as described in Note 1. The following table provides a summary of the Company’s investment in each of these entities as of September 30, 2002. (In thousands).

	GLN			San Pedro			Penasquitos LLC			Penasquitos Inc.			Aurora		Heritage Place

Opening balance at beginning of period	$	807		$	1,351		$	(358	)	$	20		$	—	$	—
Equity in earnings (loss) of affiliates		5			122			(41	)		—			—		—
Cash contributions		1			—			69			—			2		—
Cash distributions		(813	)		—			—			—			—		—

Equity, before inter-company adjustments		—			1,473			(330	)		20			2		—

Intercompany transactions:
Receivable (payable), net		18			(8	)		291			(20	)		—		14

Investment in unconsolidated affiliates	$	18		$	1,465		$	(39	)	$	—		$	2	$	14

	Pacific Park			Eagle Run, Inc.			Eagle Run		Radius		Lakeview			Total

Opening balance at beginning of period	$	—		$	(501	)	$	375	$	—	$	398		$	2,092
Equity in earnings (loss) of affiliates		39			47			35		17		(222	)		2
Cash contributions.		—			—			—		1,162		163			1,397
Cash distributions		—			(343	)		—		—		—			(1,156	)

Equity, before inter-company adjustments		39			(797	)		410		1,179		339			2,335

Intercompany transactions:
Receivable (payable), net		(654	)		30			48		—		2,090			1,809

Investment in unconsolidated affiliates	$	(615	)	$	(767	)	$	458	$	1,179	$	2,429		$	4,144

Page 11

G&L REALTY CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

Following is a summary of the condensed financial information of each of the unconsolidated affiliates as of and for the three months ended September 30, 2002. (In thousands).

					GLN			San Pedro			Penasquitos LLC			Penasquitos Inc.			Aurora		Heritage Place

Financial Position:
				Land	$	—		$	2,011		$	641		$	—		$	—	$	750
				Buildings		—			4,218			6,103			—			—		—
				Notes receivable, net		—			—			—			—			—		—
				Other assets		8			374			1,227			—			2		238
				Notes payable		—			(4,566	)		(8,385	)		—			—		(940	)
				Other liabilities		(8	)		(855	)		(359	)		(10	)		—		(48	)

Net assets					$	—		$	1,182		$	(773	)	$	(10	)	$	2	$	—

Partner’s equity:
				G&L Realty Partnership, L.P	$	—		$	1,473		$	(330	)	$	20		$	2	$	—
				Others		—			(291	)		(443	)		(30	)		—		—

Total equity					$	—		$	1,182		$	(773	)	$	(10	)	$	2	$	—

Operations:
	Revenues				$	9		$	893		$	682		$	—		$	—	$	—
	Expenses					—			(722	)		(764	)		—			—		—

Net income (loss)					$	9		$	171		$	(82	)	$	—		$	—	$	—

Allocation of net (loss) income:
			G&L Realty Partnership, L.P.		$	5		$	122		$	(41	)	$	—		$	—	$	—
		Others				4			49			(41	)		—			—		—

Net income (loss)					$	9		$	171		$	(82	)	$	—		$	—	$	—

		Pacific Park			Eagle Run Inc.			Eagle Run			Radius			Lakeview			Total

Financial Position:
	Land	$	822		$	—		$	1,191		$	200		$	947		$	6,562
	Buildings		2,911			—			4,569			5,793			7,451			31,045
	Notes receivable, net		—			—			—			—			—			—
	Other assets		1,564			438			1,468			1,010			310			6,639
	Notes payable		(4,593	)		—			(7,025	)		(5,467	)		(7,113	)		(38,089	)
	Other liabilities		(457	)		(1,390	)		(45	)		(8	)		(1,022	)		(4,202	)

Net assets		$	247		$	(952	)	$	158		$	1,528		$	573		$	1,955

Partner’s equity:
	G&L Realty Partnership, L.P	$	39		$	(797	)	$	410		$	1,179		$	339		$	2,335
	Others		208			(155	)		(252	)		349			234			(380	)

Total equity		$	247		$	(952	)	$	158		$	1,528		$	573		$	1,955

Operations:
	Revenues	$	585		$	2,611		$	709		$	294		$	405		$	6,188
	Expenses		(506	)		(2,518	)		(639	)		(272	)		(849	)		(6,270	)

Net income (loss)		$	79		$	93		$	70		$	22		$	(444	)	$	(82	)

Allocation of net (loss) income:
	G&L Realty Partnership, L.P.	$	39		$	47		$	35		$	17		$	(222	)	$	2
	Others		40			46			35			5			(222	)		(84	)

Net income (loss)		$	79		$	93		$	70		$	22		$	(444	)	$	(82	)

Page 12

G&L REALTY CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

7. SEGMENT INFORMATION

The Company’s business currently consists of the following segments:

	•	Medical office buildings – These investments consist of 24 high quality MOBs, two retail facilities and one parking facility totaling approximately 875,000 square feet and all located in Southern California. These properties are owned either directly by the Company or indirectly through joint ventures.

	•	Skilled nursing facilities – These investments consist of eight SNFs and one senior apartment complex which is located adjacent to the SNF in Phoenix, Arizona. The SNFs are located in Hampden, Massachusetts; Phoenix, Arizona; Hoquiam, Washington; Hyattsville, Maryland and Chico, California. Seven of the SNFs and the apartment complex are owned 100% by the Company. On April 10, 2002, the Company acquired, through a joint venture, a 75% interest in a 120-bed SNF in Massachusets. In addition, the Company currently holds the operating licenses in three of the eight SNFs. On March 15, 2000, the Company obtained licenses from the Commonwealth of Massachusetts to operate the three SNFs owned by the Company in Hampden, Massachusetts. The Company then entered into a management agreement with a third-party company to manage the facility. As a result, all of the assets, liabilities, revenues and expenses of these SNFs are reflected in the condensed consolidated financial statements of the Company and the segment information provided below. The Company will be required to pay the applicable corporate income tax on any net income produced by the SNFs located in Hampden, Massachusetts, although the Company’s REIT status will not be affected. While the Company does not intend to hold these operating licenses for the long term, the Company believes it is currently in the best interests to own the licenses to operate these facilities.

	•	Assisted living facilities – These investments consist of five ALFs, all owned through joint ventures. The five ALFs contain over 350 units that are typically occupied by residents who require a less intense level of care in comparison to the SNFs.

	•	Debt obligations – These investments consist of short-term secured and unsecured loans made to third parties to facilitate the acquisition of healthcare facilities. As of September 30, 2002, the Company had eight loans outstanding with a net book value of $1.9 million.

The tables on the following pages reconcile the Company’s income and expense activity for the nine months ended September 30, 2002 and 2001 and balance sheet data as of September 30, 2002.

Page 13

G&L REALTY CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

2002 Reconciliation of Reportable Segment Information
For the nine months ended September 30, 2002

						Medical Office		Skilled Nursing		Assisted Living			Debt Obligations		Other			Total

						(In thousands)
Revenue:
			Rents, tenant reimb. and parking			$	20,891	$	2,047	$	2,173		$	—	$	—		$	25,111
		Patient revenues					—		18,125		—			—		—			18,125
		Interest and loan fees					33		25		—			2,154		34			2,246
	Other income						568		769		—			—		49			1,386

					Total revenues		21,492		20,966		2,173			2,154		83			46,868

Expenses:
	Property operations						6,042		520		170			68		—			6,800
	Skilled nursing operations						—		15,915		—			—		—			15,915
	Depreciation and amortization						3,255		1,014		384			—		32			4,685
	Corporate tax expense						—		120		—			—		—			120
	Interest						6,514		1,434		1,882			150		3,374			13,354
	Provision for doubtful accounts and notes receivable						10		498		150			80		—			738
	General and administrative						—		—		—			—		2,396			2,396

				Total expenses			15,821		19,501		2,586			298		5,802			44,008

Income (loss) from operations							5,671		1,465		(413	)		1,856		(5,719	)		2,860
Equity in earnings (loss) of unconsolidated affiliates							162		17		(182	)		5		—			2

Income (loss) from operations before minority interests						$	5,833	$	1,482	$	(595	)	$	1,861	$	(5,719	)	$	2,862

2001 Reconciliation of Reportable Segment Information
For the nine months ended September 30, 2001

						Medical Office		Skilled Nursing		Assisted Living			Debt Obligations			Other			Total

						(In thousands)
Revenue:
			Rents, tenant reimb. And parking			$	19,105	$	1,356	$	2,060		$	—		$	—		$	22,521
			Patient revenues				—		15,650		—			—			—			15,650
			Interest and loan fees				113		6		1			1,212			112			1,444
			Lease termination income				2,613		—		—			—			—			2,613
		Other income					193		748		—			—			43			984

					Total revenues		22,024		17,760		2,061			1,212			155			43,212

Expenses:
	Property operations						5,994		308		133			108			—			6,543
	Skilled nursing operations						—		14,076		—			—			—			14,076
	Depreciation and amortization						3,316		776		383			—			37			4,512
	Provision for doubtful accounts and notes receivable						44		414		—			49			—			507
	Corporate tax expense						—		212		—			—			—			212
	Interest						6,801		1,261		1,136			539			10			9,747
	General and administrative						—		—		—			—			2,542			2,542

				Total expenses			16,155		17,047		1,652			696			2,589			38,139

Income (loss) from operations							5,869		713		409			516			(2,434	)		5,073
Equity in earnings (loss) of unconsolidated affiliates							152		—		(242	)		(2	)		—			(92	)

Income (loss) from operations before minority interests						$	6,021	$	713	$	167		$	514		$	(2,434	)	$	4,981

Page 14

G&L REALTY CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

2002 Reconciliation of Reportable Segment Information
As of September 30, 2002

		Medical Office		Skilled Nursing		Assisted Living			Debt Obligations		Other			Total

		(In thousands)
Rental properties, net		$	110,143	$	39,159	$	20,989		$	—	$	181		$	170,472
Mortgage loans and notes receivable, net			—		268		—			1,687		—			1,955
Cash and cash equivalents			1,341		953		(3	)		—		(418	)		1,873
Restricted cash			2,280		869		233			—		60			3,442
Tenant rent and reimb. receivable, net			630		4,107		2,243			—		310			7,290
Unbilled rent receivable, net			2,964		—		—			—		—			2,964
Investment in unconsolidated affiliates			850		1,180		2,096			18		—			4,144
Deferred loan costs, net			3,399		734		558			—		—			4,691
Deferred lease costs, net			755		—		—			—		—			755
Prepaid expense and other			552		360		42			—		—			954

	Total assets	$	122,914	$	47,630	$	26,158		$	1,705	$	133		$	198,540

8. COMMITMENTS AND CONTINGENCIES

Neither the Company, the Operating Partnership, the Financing Entities, the Subsidiaries, Maryland Gardens, the Roxbury Partnership, Valencia, Pacific Gardens, Hoquiam, Lyons, Coronado, Tarzana, Heritage, Massachusetts, Aspen, Tustin II, Tustin III, St. Thomas More, the Unconsolidated Affiliates nor any of the assets within their portfolios of MOBs, parking facilities, and retail space (the “Properties”) is currently a party to any material litigation, except as discussed below.

In February 2000, the Operating Partnership filed a declaratory relief action in the New Jersey State Court seeking a determination that LaSalle National Bank (“LaSalle”) did not have any rights against certain assets held by the Operating Partnership. In December 2001, the Operating Partnership entered a settlement agreement with LaSalle whereby it would pay LaSalle $1.1 million and assign certain claims in full satisfaction of any amounts owed by the Operating Partnership to LaSalle. The Operating Partnership paid the $1.1 million to LaSalle in January 2002.

In November 1999, Landmark Healthcare Facilities, LLC (“Landmark”) filed a lawsuit against Valencia, a subsidiary of the Company, entitled Landmark Healthcare Facilities, LLC v. G&L Valencia, LLC, case number 816391 in the Superior Court of California, County of Orange, claiming that Landmark is entitled to approximately $600,000 plus interest under an agreement for the development of an MOB in Valencia, California. In December 1999, the Company filed a counter suit to recover approximately $400,000 plus interest that was already paid under the development agreement and for a judgment and declaration that all of Landmark’s rights, title and interest in Valencia have been terminated or assigned to the Company. On July 5, 2001, the court issued a ruling in favor of the Company in an amount in excess of $900,000. In January 2002, the Company accepted a settlement offer for $310,000 to be paid off over 10 months. The Company was repaid in full in May 2002.

In January 2001, the Company settled a lawsuit with Cigna Healthcare, Inc and Cigna Healthcare of California (“Cigna”) and received a settlement of $4.1 million. The settlement ended litigation against Cigna for delinquent rent, future rent and other amounts owed under a lease at the Company’s MOB located in Irwindale, California. At the time of the settlement the total delinquent rent was approximately $1.5 million. The Company recorded lease termination income of $2.6 million in the first quarter of 2001 for the remainder of the proceeds.

There are a number of stockholder class actions pending against the Company and its directors that arose out of the proposal by Daniel M. Gottlieb, the Chief Executive Officer of the Company, and Steven D. Lebowitz, the

Page 15

G&L REALTY CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

President of the Company, to acquire all of the outstanding shares of the Company’s common stock not then owned by them. The first suit, Lukoff v. G & L Realty Corp. et al., case number BC 241251, was filed in the Superior Court for the State of California, County of Los Angeles, on December 4, 2000. A second suit, Abrons v. G & L Realty Corp. et al., case number 24-C-00-006109, was filed in the Circuit Court for Baltimore City, Maryland, on December 14, 2000. This suit was voluntarily dismissed without prejudice on June 7, 2001, and re-filed in the Superior Court for the State of California, County of Los Angeles, case number BC 251479, on May 31, 2001. Morse v. G & L Realty Corp. et al., case number 221719-V, was filed in the Circuit Court for Montgomery County, Maryland, on May 17, 2001. Another suit, Harbor Finance Partners v. Daniel M. Gottlieb et al., case number BC 251593, was filed in the Superior Court for the State of California, County of Los Angeles, on June 1, 2001. In addition, on April 5, 2002, four former stockholders filed an individual suit in the Superior Court for the State of California, County of Los Angeles, Lyle Weisman, et al., v. G&L Realty Corp., et al., case number BC 271401. All these actions assert claims for breach of fiduciary duty and seek compensatory damages and other relief. The Lukoff, Abrons and Harbor Finance actions have been consolidated for all purposes. The Morse action has been stayed by stipulation of the parties subject to approval of the court.

The Company is the guarantor on a $300,000 letter of credit in favor of NVHF Affiliates, LLC (“NVHF”), a non-profit low-income apartment owner. In December 1999, the Company purchased $1.3 million of subordinated bonds issued by NVHF for the acquisition of an apartment complex located in Tulsa, Oklahoma. In order to facilitate the acquisition of the property, the Company agreed to guarantee a letter of credit issued by the Bank of Oklahoma. The letter of credit was established to pay the interest payments on the secured debt of the property in the event the cash flow of the property was insufficient to meet such payments. To date, the letter of credit has not been accessed and the property is current on its interest payments to all debt holders. The Company’s maximum liability under the guarantee is $300,000, although the Company does not anticipate having to pay anything under this letter of credit. As such, the Company has recorded no liability on its balance sheet related to this guarantee as of September 30, 2002. In addition, the Company holds an unsecured promissory note from NVHF in the amount of $562,000. The Company has held the note for almost three years and NVHF is current on all payments due under the terms of the note.

9. ACQUISITIONS, DISPOSITIONS AND FINANCINGS

In January 2002, the Company received proceeds of $4.6 million related to the sale of a 183-bed hospital located in Tustin, California. The Company used $2.3 million of these proceeds to repay an outstanding loan on the hospital that was due in January 2002. Under SFAS 144, the Company is required to recognize any gain or loss on the sale of an asset as a gain or loss from discontinued operations in the statement of operations. The Company recorded a gain from discontinued operations of $2.5 million related to this sale.

In January 2002, the Company received proceeds of $10.8 million related to the repayment of two notes receivable from Heritage Care, Inc, the operator of a SNF located in Hyattsville, Maryland (the “Heritage Care Notes”). The Company used the proceeds to repay an outstanding loan balance of $8.3 million secured by the Heritage Care Notes. The Company recognized $1.5 million of non-recurring interest income in the first quarter as a consequence of the early repayment of the Heritage Care Notes. Upon repayment of the notes, the Company purchased the SNF for $14.9 million which included the assumption of a new $11.9 million loan bearing interest at 7.05% per annum, due in January 2027 and secured by the SNF.

In January 2002, the Company received cash proceeds of $0.7 million as return of capital related to its investment in GLN. In May 1997, the Company, through GLN, funded a secured loan of approximately $1.5 million to a limited partnership created to acquire a recreational vehicle park in Florida for approximately $1.2 million. The loan provided for monthly interest only payments and was in default as of December 31, 2001. In January 2002, the borrower sold the property for approximately $1.8 million and repaid the outstanding loan balance due GLN.

In April 2002, the Company acquired, through a joint venture, a 120-bed SNF in Massachusetts for approximately $6.5 million. The Company funded approximately $1.0 million in order to acquire a 75% interest in

Page 16

G&L REALTY CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

this property through a joint venture with Radius Development Ring, LLC, the operator of the facility. The joint venture borrowed $5.5 million to finance the property acquisition. The loan bears interest at 6.9% per annum and is due in 35 years. The Company’s interest in the joint venture will be reduced to 50% after the Company has received a return of its initial capital contribution plus a preferred return on its initial contribution.

In May 2002, the Company received proceeds of $0.3 million related to the sale of a SNF located in Paso Robles, California. Under SFAS 144, the Company is required to recognize any gain or loss on the sale of an asset as a gain or loss from discontinued operations in the statement of operations. The Company recorded a loss from discontinued operations of $0.1 million related to this sale.

Page 17

Item 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Company’s Unaudited Condensed Consolidated Financial Statements and Notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the Company’s 2001 Annual Report on Form 10-K as previously filed with the SEC.

Information contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contains forward-looking statements. These statements can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “estimate” or “continue” or the negative thereof or other comparable terminology. Any one factor or combination of factors could cause the Company’s actual operating performance or financial results to differ substantially from those anticipated by management. Factors influencing the Company’s operating performance and financial results include, but are not limited to, changes in the general economy, the supply of, and demand for, healthcare related real estate in markets in which the Company has investments, the availability of financing, governmental regulations concerning, but not limited to, new construction and development, the creditworthiness of tenants and borrowers, environmental issues, healthcare services and government participation in the financing thereof, and other risks and unforeseen circumstances affecting the Company’s investments which may be discussed elsewhere in this Quarterly Report on Form 10-Q and the Company’s 2001 Annual Report on Form 10-K as previously filed with the SEC.

Results of Operations

Comparison of the Nine Month Period Ended September 30, 2002 versus the Nine Month Period Ended September 30, 2001.

Total revenues increased by $3.7 million, or 9%, from $43.2 million in the nine months ending September 30, 2001, to $46.9 million for the same period in 2002. The increase was due to an increase in rental revenues and tenant reimbursements of $2.8 million, an increase in patient revenues of $2.5 million and an increase in interest and loan fee income of $0.8 million. These increases were offset by a $2.2 million decrease in lease termination and other income.

Patient revenues relating to the skilled nursing facilities operated by the Company increased by $2.4 million, or 15%, from $15.7 million in the nine months ending September 30, 2001, to $18.1 million for the same period in 2002 due to increased occupancy and higher patient reimbursement rates.

Rents, tenant reimbursements and parking revenues increased by $2.6 million, or 12%, from $22.5 million in the first nine months of 2001, to $25.1 million for the same period in 2002. The January 2002 acquisition of a SNF in Hyattsville, Maryland accounted for $1.1 million of this increase. In addition, the Company re-leased its MOB located in Irwindale, California accounting for an increase of $0.3 million. The MOB was vacant for the first six months of 2001. Increased occupancy and rental rates per the terms of its lease agreements at the Company’s MOB properties accounted for an additional $1.7 million increase in rental revenue. These increases were offset by a decrease of $0.3 million due to the January 2002 sale of the hospital located in Tustin, California.

Interest and loan fee income increased by $0.8 million, or 57%, from $1.4 million in the nine months ending September 30, 2002, to $2.2 million for the same period in 2002. This increase was due to fees associated with the early repayment of the Company’s two notes receivable related to a SNF located in Hyattsville, Maryland.

The Company recognized lease termination income in the amount of $2.6 million in the first quarter of 2001. This was related to the settlement of a lawsuit for delinquent rent, future rent and other amounts owed under a lease at the Company’s MOB located in Irwindale, California. The Company sued the tenant, which had been in default on their rent since December 1999, to recover the delinquent rent payments as well as all future rent through the end of the lease which expired on November 30, 2004. In January 2001, the Company received a settlement in the amount of $4.1 million. At the time of the settlement the total delinquent rent was approximately $1.5 million.

Page 18

Total expenses increased by $5.9 million, or 16%, from $38.0 million for the nine months ended September 30 2001, to $43.9 million for the same period in 2002.

Increased skilled nursing operating costs at the three Hampden SNFs accounted for $1.8 million of this increase in total expenses. This increase was primarily related to rising liability insurance and staffing costs.

Property operating expenses increased approximately $0.3 million, or 5%, from $6.5 million for the nine months ending September 30, 2001 to $6.8 million for the same period in 2002. Increased electricity, insurance and repairs and maintenance costs at the Company’s MOB properties accounted for this increase.

Depreciation and amortization expense increased $0.2 million, or 4%, from $4.5 million for the nine months ended September 30, 2001, to $4.7 million for the same period in 2002. This increase was related to the acquisition of the SNF in Hyattsville, Maryland in January 2002 as well as additions to building improvements and leasing commissions at the end of 2001 and during 2002.

Interest expense increased $3.6 million, or 37%, from $9.8 million for the nine months ended September 30, 2001, to $13.4 million for the same period in 2002. This increase was due to a $0.9 million loss on the decline in the fair market value of the LIBOR interest rate cap associated with the $35 million loan with GMAC as well as an increase of $2.5 million in interest expense relating to the same loan. In addition, the Company recorded $0.7 million of pre-payment fees and the write-off of deferred loan fees relating to the early repayment of $7.3 million in loans secured by an ALF located in Tarzana, California. These increases were offset by a $0.5 million decrease in interest expense on the Company’s variable rate mortgages due to lower interest rates. While the Company recognized a $0.9 million loss related to the decline in the fair market value of its LIBOR interest rate cap, the value of the LIBOR interest rate cap fluctuates based upon current prevailing market interest rates. For the year ended December 31, 2001, the Company recognized a $0.5 million gain on the fair market value of its LIBOR interest rate cap, thus, the net effect on earnings since the Company’s purchase of this financial instrument has been a $0.4 million loss.

General & administrative costs decreased $0.1 million, or 4%, from $2.5 million for the nine months ended September 30, 2001, to $2.4 million for the same period in 2002. This decrease was attributed to a non-recurring first quarter 2001 write off of acquisition and construction costs related to a discontinued development project.

Provisions for doubtful accounts, notes and bonds receivable increased by $0.2 million, or 40%, from $0.5 million for the nine months ended September 30, 2001, to $0.7 million for the same period in 2002. This increase is the result of the Company’s concern about the collectibility of its rents receivable related to its SNF located in Hoquaim, Washington.

Equity in earnings of unconsolidated affiliates increased $0.1 million for the nine months ended September 30, 2002 compared to the same period in 2001. This increase was primarily the result of increased occupancy rates at the Penasquitos and Eagle Run ALFs. In addition, income related to the Company’s 50% investment in a 23,000 square foot MOB located in Aliso Viejo, California contributed to the increase.

Corporate income tax expense decreased by $0.1 million, or 50%, from $0.2 million for the nine months ended September 30, 2001, to $0.1 million for the same period in 2002. This estimated tax liability is related to federal taxes due on net income earned at the Company’s skilled nursing facilities located in Hampden, Massachusetts.

The Company recognized a net gain on the sale of assets in the amount of $2.3 million in the nine months ending September 30, 2002. The sale, in January 2002, of a 183-bed hospital located in Tustin, California to Pacific Health Corporation, the operator of the hospital, accounted for a gain of $2.4 million. This gain was offset by a loss of $0.1 million due to the sale, in May 2002, of a SNF located in Paso Robles, California.

Net income increased $0.3 million, from $4.7 million for the nine months ended September 30, 2001 to $5.0 million for the same period in 2002. This increase was primarily due to the $2.3 million gain on sale of assets, the $2.5 million increase in patient revenues, the $2.8 million increase in rents, tenant reimbursements and parking revenues and the $0.8 million increase in interest and loan fee income. These were offset by the

Page 19

$3.6 million increase in interest expense, the $2.6 million decrease in lease termination income and the $1.8 million increase in skilled nursing operations.

Comparison of the Three Month Period Ended September 30, 2002 versus the Three Month Period Ended September 30, 2001.

Total revenues increased by $1.7 million, or 12%, from $13.8 million in the third quarter of 2001, to $15.5 million for the same period in 2002.

Patient revenues relating to the skilled nursing facilities operated by the Company increased by $1.2 million, or 23%, from $5.3 million in the third quarter of 2001, to $6.5 million for the same period in 2002 due to increased occupancy.

Rents, tenant reimbursements and parking revenues increased by $0.6 million, or 8%, from $7.6 million in the third quarter of 2001, to $8.2 million for the same period in 2002. The January 2002 acquisition of a SNF in Hyattsville, Maryland accounted for $0.4 million of this increase. Increased occupancy and rental rates per the terms of its lease agreements at the Company’s MOB properties accounted for an additional $0.5 million increase in rental revenue. These increases were offset by a decrease of $0.1 million due to the January 2002 sale of the hospital located in Tustin, California.

Interest and loan fee income decreased by $0.2 million, or 50%, from $0.4 million in the third quarter of 2001, to $0.2 million for the same period in 2002. This decrease is due to the repayment of the Company’s two notes receivable related to a SNF located in Hyattsville, Maryland in January 2002.

Total expenses increased by $1.8 million, or 14%, from $13.0 million for the three months ended September 30, 2001, to $14.8 million for the same period in 2002.

Increased skilled nursing operating costs at the three Hampden SNFs accounted for $0.8 million of this increase in total expenses. This increase was primarily related to rising insurance and staffing costs.

Property operating expenses increased approximately $0.1 million, or 4%, from $2.3 million in the third quarter of 2001 to $2.4 million for the same period in 2002. Increased insurance costs at the Company’s MOB properties accounted for this increase.

Interest expense increased $0.9 million, or 27%, from $3.3 million for the three months ended September 30, 2001, to $4.2 million for the same period in 2002. This increase was due to an increase of $0.8 million in interest expense associated with the $35 million loan with GMAC obtained in October 2002. In addition, the Company recorded a loss of $0.3 million related to the decline in the fair market value of the LIBOR interest rate cap associated with the same loan. These increases were offset by a $0.2 million decrease in interest expense on the Company’s variable rate mortgages due to lower interest rates.

Provisions for doubtful accounts, notes and bonds receivable remained unchanged, from $0.2 million for the three months ended September 30, 2001 to $0.2 million for the same period in 2002.

Equity in earnings of unconsolidated affiliates decreased $0.2 million for the three months ended September 30, 2002 compared to the same period in 2001. This decrease was primarily the result of losses associated with the Company’s 50% investment in an ALF located in Yorba Linda, California. The facility opened in March 2002 and will be producing a net loss until it reaches stabilized occupancy. The Company currently estimates that the facility will produce a positive net operating income before debt service by the second quarter of 2003 and reach stabilized occupancy by the end of 2003.

Corporate income tax expense decreased by $0.1 million, or 50%, from $0.2 million for the three months ended September 30, 2001, to $0.1 million for the same period in 2002. This estimated tax liability is related to federal taxes due on net income earned at the Company’s skilled nursing facilities located in Hampden, Massachusetts.

Net income remained unchanged, from $0.6 million for the three months ended September 30, 2001 to $0.6 million for the same period in 2002.

Page 20

Liquidity and Capital Resources

As of September 30, 2002, the Company’s direct investment in net real estate assets totaled $170.5 million, $4.1 million in joint ventures and $1.9 million invested in notes receivable. Total debt outstanding as of September 30, 2002 totaled $190.7 million.

The Company obtains its liquidity from multiple internal and external sources. Internally, funds are derived from the operation of MOBs, SNFs, ALFs and senior care lending activities. The MOB Properties produced approximately $5.8 million of income before minority interests for the nine months ended September 30, 2002. The MOB Properties contain approximately 875,000 rentable square feet and, as of September 30, 2002, were approximately 97.5% leased to over 425 tenants with lease terms typically ranging from three to ten years. The ALFs and SNFs produced approximately $0.9 million of income before minority interests for the nine months ended September 30, 2002. All of the ALFs and SNFs, except for the three SNFs located in Hampden, Massachusetts where the Company holds the operating licenses and has entered into a management agreement with a local operator, are leased to operators who are responsible for the management of the facilities. All of the leases are for five years or less with non-credit tenants. In the event that the operators of these facilities are unable to effectively operate the facilities, the ability of the operators to make rental payments to the Company may become impaired and the Company may need to commit additional capital to the facilities in order to keep them operating. If any of these operators experience financial difficulty, the financial position of the Company and the ability of the Company to make expected distributions would likely be adversely affected.

The Company’s principal external sources of capital consist of various secured loans. As of September 30, 2002, the Company had loans outstanding of approximately $190.7 million. While the Company will still consider selective property acquisitions that are accretive to earnings, the Company’s primary goal over the next few years is to reduce the balance on the $35 million loan obtained from GMAC in October 2001. The balance on the loan as of September 30, 2002 was $33.5 million. The Company’s ability to reduce the balance on the $35 million loan along with its ability to make selective acquisitions requires continued access to capital. If the Company is unable to obtain access to new capital or to refinance its existing investments, the Company’s ability to reduce the balance on the $35 million loan and to expand and even its ability to maintain its current level of distributions to its stockholders may be impaired. The Company is also considering selling some of its assets in the future in order to provide additional liquidity.

In 1999, the Company’s board of directors approved the repurchase of up to $2 million of the Company’s Series A and Series B Preferred Stock. To date, the Company has repurchased $0.3 million of its Preferred Stock and has made no repurchases in the last two years. The Executive Committee of the board of directors has reaffirmed the Preferred Stock repurchase program on a periodic basis.

During the first nine months of 2002, the Company received proceeds of $4.6 million related to the sale of a 183-bed hospital located in Tustin, California. The Company used $2.3 million of these proceeds to repay an outstanding loan on the hospital. In addition, the Company received proceeds of $10.8 million related to the repayment of two notes receivable from Heritage Care, Inc. The Company used the proceeds to repay an outstanding loan balance of $8.3 million secured by the notes. In January 2002, the Company received $0.7 million as repayment of a promissory note secured by a recreational vehicle park in Florida. In May 2002, the Company received proceeds of $0.3 million related to the sale of a SNF located in Paso Robles, California. Also in May, the Company used the proceeds from a new $8.3 million loan secured by its ALF located in Tarzana, California to repay three notes totaling $7.3 million secured by the same property. The new loan bears interest at 6.95% and is due on May 17, 2037. The net proceeds from these refinancings and sales were used to provide working capital for the Company.

In September 2002, the Company received an extension on a $13.2 million loan due on October 1, 2002. The loan, which is secured by three SNFs located in Massachusetts, was extended until January 1, 2003. Per the terms of the extension, the interest rate on the loan was increased from Libor plus 2.75% per annum to Libor plus 4.0% per annum. The Company expects to repay this loan in 2003 using the proceeds from a new long-term loan. While the Company expects to obtain another extension on this loan, no assurances can be given that the Company will be successful, or that if an extension is obtained, the terms of the extension will be similar to the current terms of the loan.

The Company paid monthly dividends of $0.6 million to holders of the Company’s Preferred Stock on the fifteenth day of each month during the first, second and third quarters of 2002 to holders of record on the

Page 21

first day of each month. The Company declared no dividends to holders of the Company’s Common Stock during the first nine months of 2002.

While the Company is highly leveraged, the Company expects to continue meeting its short-term liquidity requirements through its working capital and cash flow provided by operations. The Company also expects to maintain stockholder distributions in accordance with REIT requirements, although no assurances can be given that the current level of distributions will be maintained. Long-term liquidity requirements such as refinancing mortgages, financing acquisitions and financing capital improvements will be accomplished through long-term borrowings and the sale of assets. The Company currently has a commitment from GMAC to fund a $4.3 million loan that will be secured by the Company’s SNF and adjacent apartment complex located in Phoenix, Arizona. The Company anticipates that this loan will close in the fourth quarter. In addition, Eagle Run, a joint venture in which the Company owns a 50% interest in an ALF located in Omaha, Nebraska, is under contract to sell the ALF. The Company estimates its share of the net sales proceeds to be $1.8 million and anticipates that this sale will occur in the fourth quarter. The Company intends to use these proceeds to fund its dividend requirements, make selective acquisitions, repurchase some of its Preferred Stock and for general corporate purposes.

Historical Cash Flows

The Company’s net cash from operating activities decreased $5.8 million, or 64%, from $9.0 million for the nine months ended September 30, 2001 to $3.2 million for the same period in 2002. The decrease is due primarily to the change of accounts payable and other liabilities of $3.8 million, a $2.3 million increase in net gain on sale of assets and a $1.6 million change in tenant rent and reimbursements receivable over 2001. These were offset by a $0.8 million change in prepaid expenses and other assets, a $0.9 million change in fair market value of the Company’s LIBOR interest rate cap and a $0.3 million increase in net income.

Net cash from investing activities increased $16.0 million from a net use of $3.2 million for the nine months ended September 30, 2001 to net cash provided of $12.8 million for the same period in 2002. The increase was primarily due to a $9.2 million increase in principal payments received from mortgage loans and notes receivable, a $1.2 million increase in distributions from unconsolidated affiliates, a $1.3 million decrease in additions to rental properties and a $5.1 million increase in the sale of real estate assets. These were offset by a $1.2 million increase in contributions to unconsolidated affiliates.

Cash flows used in financing activities increased by approximately $8.8 million from $7.3 million for the nine months ended September 30, 2001, to $16.1 million for the same period in 2002. The increase is primarily due to a $9.1 million increase in the repayment of notes payable as well as a $2.8 million decrease in notes payable proceeds. These were offset by a $1.2 million decrease in restricted cash, a $1.1 million decrease in distributions and a $0.8 million decrease in deferred loan costs.

New Accounting Pronouncements

On January 1, 2002, the Company adopted the provisions of SFAS 142 “Goodwill and Other Intangible Assets” (“SFAS 142”) and SFAS 144 “Accounting for the Impairment or Disposal of Long-Lived Assets” (SFAS 144”). SFAS 142 discontinues the practice of amortizing goodwill and other intangible assets and requires a periodic review process for impairment. SFAS 144 addresses financial accounting and reporting for the disposal of long-lived assets and supercedes FAS 121 “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of”. The adoption of these statements did not have a material effect on the Company’s results of operations or financial condition

Page 22

Recent Developments

Due to the events of September 11 and the general insurance environment, the Company expects a large increase in the cost of its property, liability and earthquake insurance upon their renewal in the third quarter of 2002. Depending on the terms of the lease between the Company and its MOB tenant, in some cases, the Company is able to pass all of the higher insurance costs onto its MOB tenants; in other cases, the Company is able to pass only a portion of the higher costs onto its MOB tenants, with the Company paying the remainder. Generally, the operators of the Company’s SNFs and ALFs pay the insurance costs. However, the higher insurance costs could affect the ability of the MOB tenants and SNF and ALF operators to pay the Company rent which could have a material adverse effect on the Company’s financial condition and results of operations.

In addition, the Company currently owns a SNF located in Hoquiam, Washington which is leased to Prestige Senior Living, LLC ("Prestige"), a Washington-based operator of skilled nursing facilities. This facility was previously covered by professional liability insurance under an insurance policy obtained by Prestige. This policy expired in August 2002, and Prestige has been unable to obtain new coverage. Both Prestige and the Company are actively seeking to obtain new coverage, however, no assurances can be given that Prestige or the Company will be successful in obtaining professional liability coverage for this facility. While the Company believes that Prestige would be responsible for the first position of liability, if a liability-creating event occurs at the facility while it is uninsured, the Company is unable to assess Prestige's capacity to discharge a significant liability. Therefore, the inability to obtain insurance coverage for the facility could have a material adverse effect on the Company's financial condition and results of operations if a liability-creating event occurs at the facility while it is uninsured.

Funds from Operations

Industry analysts generally consider FFO to be an appropriate measure of the performance of a REIT. The Company’s financial statements use the concept of FFO as defined by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”). FFO is calculated to include the minority interests’ share of income from the Operating Partnership and Senior Care Partnership since the Operating Partnership and Senior Care Partnership’s net income is allocated proportionately among all owners of Operating Partnership and Senior Care Partnership units. The combined number of Operating Partnership and Senior Care Partnership units held by the Company is identical to the number of outstanding shares of the Company’s Common Stock, and owners of Operating Partnership and Senior Care Partnership units may, at their discretion, convert their units into shares of Common Stock on a one-for-one basis.

The Company believes that in order to facilitate a clear understanding of the operating results of the Company, FFO should be examined in conjunction with the Company’s net income as presented in this Form 10-Q, the Selected Financial Data and Consolidated Financial Statements and Notes thereto included in the Company’s 2001 Annual Report on Form 10-K and the additional data presented below. The Company’s FFO for the nine months ended September 30, 2002 was $1.8 million compared to $0.9 million for the same period in 2001. The table on the following page presents an analysis of FFO and additional data for the three and nine- month periods ended September 30, 2002 and 2001.

Page 23

G&L REALTY CORP.
FUNDS FROM OPERATIONS AND ADDITIONAL DATA
(Unaudited)

		For the Three Month Periods Ended September 30,						For the Nine Month Periods Ended September 30,

		2002			2001			2002			2001

		(in thousands)
Funds from Operations⁽¹⁾
Net income		$	570		$	606		$	4,959		$	4,732
Minority interest in Operating Partnership			—			—			—			—

Income for Operating Partnership			570			606			4,959			4,732
Depreciation of real estate assets			1,332			1,326			4,023			3,890
Amortization of deferred lease costs			61			74			189			206
Net gain on sale of assets			—			—			(2,320	)		—
Lease termination income			—			—			—			(2,613	)
Depreciation from unconsolidated affiliates			166			73			382			216
Adjustment for minority interest in consolidated affiliates			(37	)		(43	)		(109	)		(123	)
Dividends on preferred stock			(1,790	)		(1,790	)		(5,371	)		(5,371	)

Funds from Operations⁽¹⁾		$	302		$	246		$	1,753		$	937

Additional Data
Cash flows:
	Operating activities	$	3,262		$	2,353		$	3,153		$	8,966
	Investing activities		(573	)		(1,898	)		12,814			(3,168	)
	Financing activities		(2,345	)		(524	)		(16,133	)		(7,317	)
Capital expenditures
	Building improvements	$	264		$	97		$	599		$	421
	Tenant improvements		120			1,445			457			2,411
	Furniture, fixtures & equipment		147			64			303			166
	Leasing commissions		37			87			105			430
Depreciation and amortization
	Depreciation of real estate assets	$	1,332		$	1,326		$	4,023		$	3,890
	Depreciation of non-real estate assets		146			122			433			368
	Amortization of deferred lease costs		61			74			189			206
	Amortization of deferred licensing costs		14			14			40			40
	Amortization of capitalized financing costs		206			167			714			515
	Accrued rent in excess of billed rent	$	102		$	44		$	419		$	125

FFO represents net income (computed in accordance with GAAP, consistently applied), excluding gains (or losses) from debt restructuring and sales of property, plus depreciation of real property, less preferred stock dividends paid to holders of preferred stock during the period and after adjustments for consolidated and unconsolidated entities in which the Company holds a partial interest. FFO is computed in accordance with the definition adopted by NAREIT. FFO should not be considered as an alternative to net income or any other indicator developed in compliance with GAAP, including measures of liquidity such as cash flows from operations, investing and financing activities. FFO is helpful in evaluating the performance of a real estate portfolio considering the fact that historical cost accounting assumes that the value of real estate diminishes predictably over time. FFO is only one of a range of indicators which should be considered in determining a company’s operating performance. The methods of calculating FFO among different companies are subject to variation, and FFO therefore may be an invalid measure for purposes of comparing companies. Also, the elimination of depreciation and gains and losses on sales of property may not be a true indication of an entity’s ability to recover its investment in properties. The Company implemented the new methods of calculating FFO effective as of the NAREIT-suggested adoption dates of January 1, 1996 and January 1, 2000, respectively.

Page 24

Item 3.

QUANTITAT IVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The primary risk inherent in the Company’s market sensitive instruments is the risk of loss resulting from interest rate fluctuations. Approximately 32% of the Company’s notes payable bear interest at a rate indexed to the one-month LIBOR rate or Prime Rate. The table below provides information as of September 30, 2002 about the Company’s long-term debt obligations that are sensitive to changes in interest rates, including principal cash flows by scheduled maturity, weighted average interest rate and estimated fair value. The weighted average interest rates presented are the actual rates as of September 30, 2002.

																				Total			Fair Market Value Sept. 30, 2002
		PRINCIPAL MATURING IN:

		2002			2003			2004			2005			2006			Thereafter

		(in thousands)
Liabilities:
Mortgage debt:
	Fixed rate	$	480		$	2,564		$	2,753		$	27,554		$	31,710		$	76,543		$	141,604		$	164,581
	Average interest rate		7.57	%		7.57	%		7.57	%		7.56	%		7.49	%		7.14	%		7.52	%
	Variable rate		517			15,167			2,231			2,590			3,006			23,470			46,981			46,981
	Average interest rate		7.96	%		9.31	%		9.31	%		9.31	%		9.31	%		9.31	%		9.02	%
Line of credit:
	Variable rate		2,144																		2,144			2,144
	Average interest rate		6.75	%																	6.75	%

		$	3,141		$	17,731		$	4,984		$	30,144		$	34,716		$	100,013		$	190,729		$	213,706

The Company’s future earnings and cash flows relating to market sensitive instruments are primarily dependent upon prevailing LIBOR market interest rate. Based upon interest rates as of September 30, 2002, a 1% increase in the LIBOR rate would decrease future earnings by $491,000 annually, and decrease future cash flow by $359,000 annually. A 1% decrease in the LIBOR rate would increase future earnings by $491,000 annually, and increase future cash flow by $359,000 annually. A 1% change in the LIBOR rate would not have a material impact on the fair value of the Company’s debt.

In November 2001, the Company purchased an interest rate cap for $0.9 million to protect against an increase in the one month LIBOR rate on a $35 million variable rate loan the Company obtained in October 2001. The interest rate cap is for a term of five years and protects the Company on a specific portion of the loan, which decreases over the term of the cap, on any increase in the one month LIBOR rate above 4.25% per annum. The one month LIBOR rate has not exceeded 4.25% since the Company purchased the interest rate cap.

Page 25

The table below provides information as of December 31, 2001 about the Company’s long-term debt obligations that are sensitive to changes in interest rates, including principal cash flows by scheduled maturity, weighted average interest rate and estimated fair value. The weighted average interest rates presented are the actual rates as of December 31, 2001.

																								Total			Fair Market Value December 31, 2001
						PRINCIPAL MATURING IN:

						2002			2003			2004			2005			2006			Thereafter

						(in thousands)
Liabilities:
Mortgage debt:
					Fixed rate	$	2,275		$	2,458		$	2,637		$	34,122		$	31,418		$	57,065		$	129,975		$	139,944
				Average interest rate			7.78	%		7.78	%		7.78	%		7.78	%		7.75	%		7.34	%		7.78	%
			Variable rate				23,905			5,589			1,542			1,542			1,542			27,163			61,283			72,503
		Average interest rate					7.34	%		7.34	%		7.34	%		7.34	%		7.34	%		7.34	%		7.34	%
Line of credit:
	Variable rate						1,440																		1,440			1,440
	Average interest rate						7.0	%																	7.0	%

						$	27,620		$	8,047		$	4,179		$	35,664		$	32,960		$	84,228		$	192,698		$	213,887

The Company’s future earnings and cash flows relating to market sensitive instruments are primarily dependent upon prevailing LIBOR market interest rate. Based upon interest rates as of December 31, 2001, a 1% increase in the LIBOR rate would decrease future earnings by $613,000, future cash flow would not be affected. A 1% decrease in the LIBOR rate would increase future earnings by $613,000, future cash flow would not be affected. A 1% change in the LIBOR rate would not have a material impact on the fair value of the Company’s debt.

Item 4.

CONTROLS AND PROCEDURES

Within 90 days prior to the date of this report, the Company evaluated the effectiveness of its disclosure controls and procedures. This evaluation was performed by the Company’s Chief Accounting Officer with the assistance of the Company’s President and the Chief Executive Officer. These disclosure controls and procedures are designed to ensure that the information required to be disclosed by the Company in its periodic reports filed with the Securities and Exchange Commission (the “Commission”) is recorded, processed, summarized and reported, within the time periods specified by the Commission’s rules and forms, and that the information is communicated to the certifying officers on a timely basis. Based on this evaluation, the certifying officers concluded that the Company's disclosure controls and procedures were effective. There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect the internal controls subsequent to the date of their evaluation.

Page 26

PART II OTHER INFORMATION

Item 1.	Legal Proceedings.

		Neither the Company or any of its consolidated or unconsolidated affiliates nor any of the assets within their portfolios of MOBs, SNFs, ALFs, parking facilities, and retail space is currently a party to any material litigation, except as discussed in Note 8 to the Condensed Consolidated Financial Statements.

Item 2	Changes in Securities.

		None.

Item 3	Defaults Upon Senior Securities.

		None.

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

		None.

Item 5	Other Information.

		During the three months ended September 30, 2002, the audit committee of the Board of Directors of the Company did not approve any non-audit services to be performed by the Company’s independent auditors.

Item 6	Exhibits and Reports on Form 8-K

		There were no reports on Form 8-K filed during the three month period ended September 30, 2002.

Page 27

(a) Exhibits

Exhibit No.		Note	Description

	2.1	(12)	The Agreement and Plan of Merger between G&L Acquisition, LLC and G&L Realty Corp.

	2.2	(13)	Amendment No. 1 to the Agreement and Plan of Merger between G&L Acquisition, LLC and G&L Realty Corp. dated September 28, 2001.

	2.3	(14)	Amendment No. 2 to the Agreement and Plan of Merger between G&L Acquisition, LLC and G&L Realty Corp. dated October 26, 2001.

	2.4	(16)	Partnership Merger Agreement dated as of May 10, 2001 by and among G&L Acquisition, LLC, G&L Partnership, LLC, G&L Realty Corp. and G&L Realty Partnership, L.P.

	3.1	(1)	Amended and Restated Articles of Incorporation of G&L Realty Corp.

	3.2	(3)	Amended and Restated Bylaws of G&L Realty Corp.

	10.3	(2)	Agreement of Limited Partnership of G&L Realty Partnership, L.P.

	10.3.2	(15)	Amendment to Agreement of Limited Partnership of G&L Realty Partnership, L.P. dated as of July 31, 2001.

	10.5	(1)	Form of Indemnity Agreement between G&L Realty Corp. and directors and certain officers.

	10.8.2	(2)	Option Notice with respect to Sherman Oaks Medical Plaza

	10.9.2	(1)	Agreement for Purchase and Sale of Limited Partnership Interests (435 North Roxbury Drive, Ltd.) between the Selling Partner (as defined therein) and G&L Development, dated as of October 29, 1993.

	10.11	(1)	Agreement for Transfer of Partnership Interests and Other Assets by and between G&L Realty Corp. and Reese Milner, Helen Milner and Milner Development Corp., dated as of October 29, 1993.

	10.12.2	(3)	Amended and Restated Mortgage Loan Agreement dated as of January 11, 1995 among G&L Financing Partnership, L.P., Nomura Asset Capital Corporation and Bankers Trust Company of New York.

	10.22	(4)	Amended and Restated Mortgage Loan Agreement by and between G&L Realty Financing Partnership II, L.P., as Borrower, and Nomura Asset Capital Corporation, as Lender, dated as of October 31, 1995.

	10.24	(4)	Property Management Agreement between G&L Realty Financing Partnership II, L.P., as owner, and G&L Realty Partnership, L.P., as agent, made August 10, 1995

	10.25	(5)	Commitment Letter between G&L Realty Partnership, L. P. and Nomura Asset Capital Corporation, dated as of September 29, 1995.

	10.30	(6)	Mortgage Loan Agreement dated as of May 24, 1996 by and between G&L Medical Partnership, L.P. as Borrower and Nomura Asset Capital Corporation as Lender.

	10.38	(7)	Limited Liability Company Agreement by and between G&L Realty Partnership, L.P., a Delaware limited partnership, and Property Acquisition Trust I, a Delaware business trust, for the purpose of creating a Limited Liability Company to be named GLN Capital Co., LLC, dated as of November 25, 1996.

	10.39	(7)	Limited Liability Company Agreement by and between G&L Realty Partnership, L.P., a Delaware limited partnership, and PHP Healthcare Corporation, a Delaware corporation, for the purpose of creating a Limited Liability Company to be named GL/PHP, LLC, dated as of February 26, 1997.

Page 28

(a) Exhibits - (continued from previous page)

Exhibit No.		Note	Description

	10.40	(7)	First Amendment To Limited Liability Company Agreement entered into as of March 31, 1997 by and between G&L Realty Partnership, L.P., a Delaware limited partnership, and Property Acquisition Trust I, a Delaware business trust, for the purpose of amending that certain Limited Liability Company Agreement of GLN Capital Co., LLC dated as of November 25, 1996.

	10.45	(8)	First Amendment to GL/PHP, LLC Limited Liability Company Agreement by and among G&L Realty Partnership, L.P., a Delaware limited partnership (the “Retiring Manager”), G&L Realty Partnership, L.P., a Delaware limited partnership (“G&L Member”), and G&L Management Delaware Corp., a Delaware corporation (“Manager Member”), made as of August 15, 1997.

	10.46	(8)	Lease Agreement between GL/PHP, a Delaware limited liability company (the “Landlord”) and Pinnacle Health Enterprises, LLC, a Delaware limited liability company wholly owned by PHP Healthcare Corporation, a Delaware corporation (the “Tenant”), dated August 15, 1997

	10.47	(8)	Guaranty of Lease by PHP Healthcare Corporation, a Delaware corporation (the “Guarantor”), dated February 15, 1997.

	10.48	(8)	Non-Negotiable 8.5% Note Due July 31, 2007 in which G&L Realty Partnership, L.P., a Delaware limited partnership (the “Maker”), promises to pay to PHP Healthcare Corporation (the “Payee”) the principal sum of $2,000,000.00, dated August 15, 1997.

	10.49	(8)	Mortgage Note in which GL/PHP, LLC a Delaware limited liability company (the “Maker”) promises to pay to the order of Nomura Asset Capital Corporation, a Delaware corporation, the principal sum of $16,000,000.00, dated August 15, 1997.

	10.50	(8)	Mortgage, Assignment of Leases and Rents and Security Agreement by GL/PHP, LLC a Delaware limited liability company (the “Mortgagor”) to Nomura Asset Capital Corporation, a Delaware corporation (the “Mortgagee”), dated August 15, 1997.

	10.51	(8)	Assignment of Leases and Rents by GL/PHP, LLC a Delaware limited liability company (the “Assignor”) to Nomura Asset Capital Corporation, a Delaware corporation (the “Assignee”), dated August 15, 1997.

	10.52	(8)	Environmental and Hazardous Substance Indemnification Agreement by GL/PHP, LLC a Delaware limited liability company (the “Borrower”) to Nomura Asset Capital Corporation, a Delaware corporation (the “Lender”), dated August 15, 1997.

	10.58	(9)	Limited Liability Company Agreement of G&L Hampden, LLC.

	10.77	(10)	Agreement for Transfer of Property by and among G&L Coronado, LLC as Transferor and G&L Realty Partnership, L.P. as Operating Partnership dated as of December 30, 1998.

	10.78	(10)	Tenant Estoppel and Real Estate Lease between G&L Coronado, LLC as Landlord and Coronado Managers Corp. as Tenant dated December 1, 1998.

	10.79	(10)	Guaranty of Lease between Steven D. Lebowitz and Daniel M. Gottlieb (collectively “Guarantor”) in favor of G&L Coronado, LLC (“Landlord”).

	10.81	(11)	Loan Agreement in the amount of $13.92 million between G&L Hampden, LLC, as Borrower, and GMAC Commercial Mortgage Corporation, as Lender.

	10.82	(15)	Credit Agreement among G&L Realty Partnership, L.P., G&L Partnership, LLC, the Several Lenders from Time to Time Parties Hereto and GMAC Commercial Mortgage Corporation, as Agent, dated as of October 29, 2001

	10.83	(15)	Guarantee and Collateral Agreement made by Daniel M. Gottlieb, Steven D. Lebowitz, G&L Realty Corp. and G&L Realty Partnership, L.P. in favor of GMAC Commercial Mortgage Corporation, as Agent, dated as of October 29, 2001.

	21		List of Subsidiaries

Page 29

1)	Previously filed as an exhibit of like number to the Registrant’s Registration Statement on Form S-11 and amendments thereto (File No. 33-68984) and incorporated herein by reference.

2)	Previously filed as an exhibit of like number to the Company’s Annual Report on Form 10-K for the year ended December 31, 1993 and incorporated herein by reference.

3)	Previously filed as an exhibit of like number to the Company’s Annual Report on Form 10-K for the year ended December 31, 1994 and incorporated herein by reference.

4)	Previously filed as Exhibits 10.1 (with respect to Exhibit 10.22), 10.2 (with respect to Exhibit 10.23), and 10.3 (with respect to Exhibit 10.24) to the Registrant’s Quarterly Report on Form 10-Q for the Quarter ended September 30, 1995 and incorporated herein by reference.

5)	Previously filed as an exhibit of like number to the Company’s Annual Report on Form 10-K for the year ended December 31, 1995 and incorporated herein by reference.

6)	Previously filed as an exhibit of like number to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1996 and incorporated herein by reference.

7)	Filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 1996 and incorporated herein by reference.

8)	Filed as an exhibit to the Company’s Current Report on Form 8-K (filed as of August 15, 1997) and incorporated herein by reference.

9)	Filed as an exhibit to the Company’s Current Report on Form 8-K (filed as of October 28, 1997) and incorporated herein by reference.

10)	Filed as an exhibit to the Company’s Annual Report on Form 10-K (filed as of April 9, 1999) for the year ended December 31, 1998 and incorporated herein by reference.

11)	Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q (filed as of November 12, 1999) for the quarter ended September 30, 1999 and incorporated herein by reference

1)	Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q (filed as of May 15, 2001) for the quarter ended March 31, 2001 and incorporated herein by reference.

2)	Filed as an exhibit to the Company’s Current Report on Form 8-K (filed as of October 4, 2001) and incorporated herein by reference.

3)	Filed as an exhibit to the Company’s Current Report on Form 8-K (filed as of October 31, 2001) and incorporated herein by reference.

4)	Filed as an exhibit to the Company’s Current Report on Form 8-K (filed as of November 13, 2001) and incorporated herein by reference.

5)	Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q (filed as of November 14, 2001) for the quarter ended September 30, 2001 and incorporated herein by reference.

c)	Management contract or compensatory plan or arrangement.

(b)	Reports on Form 8-K

	None.

Page 30

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		G&L REALTY CORP.


Date: November 14, 2002	By:	/s/ DAVID E. HAMER

		David E. Hamer Chief Accounting Officer

Page 31

CERTIFICATIONS

I, Daniel M. Gottlieb, certify that:

1. I have reviewed this quarterly report on Form 10-Q of G&L Realty Corp.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

	a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

	b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

	c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

	a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

	b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: November 14, 2002

/s/ DANIEL M. GOTTLIEB

Daniel M. Gottlieb Chief Executive Officer

Page 32

I, David E. Hamer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of G&L Realty Corp.;

	a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

	b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

	c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

	a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

	b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

Date: November 14, 2002

/s/ DAVID E. HAMER

David E. Hamer Chief Accounting Officer

Page 33

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

G&L REALTY CORP 10-Q